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Transcript
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
AVG TECHNOLOGIES N.V.
(Name of Subject Company)
AVAST SOFTWARE B.V.
(Name of Filing Persons (Offeror))
AVAST HOLDING B.V.
(Name of Filing Persons (Parent of Offeror))
Ordinary shares, €0.01 nominal value per share
(Title of Class of Securities)
N07831105
(CUSIP Number of Class of Securities)
Avast Holding B.V.
Schiphol Boulevard 369
Tower F, 7th floor
1118 BJ Schiphol
The Netherlands
Attention: Alan Rassaby
+31 20 654 3225
(Name, address and telephone number of person authorized to receive notices and communications on behalf of filing persons)
with copies to:
Ian Bagshaw
Caroline Sherrell
White & Case LLP
5 Old Broad Street
London EC2N 1DW
United Kingdom
+44 20 7532 1000
Chang-Do Gong
White & Case LLP
1155 Avenue of the Americas
New York, NY 10036-2787
+1 212 819 8200
CALCULATION OF FILING FEE
Transaction Valuation*
Amount of Filing Fee**
$1,339,391,120
*
**
$134,876.69
Calculated solely for purposes of determining the filing fee. The calculation of the transaction value is determined by adding the
sum of (i) 50,730,029 ordinary shares, with a nominal value of €0.01 per share, of AVG Technologies N.V. multiplied by the
offer price of $25.00 per share, (ii) the net offer price for 2,522,480 shares issuable pursuant to outstanding options with an
exercise price less than $25.00 per share (which is calculated by multiplying the number of shares underlying such outstanding
options by an amount equal to $25.00 minus the weighted average exercise price for such options of $19.73 per share),
(iii) 690,000 shares subject to issuance pursuant to restricted stock units multiplied by the offer price of $25.00 per share and
(iv) 1,623,877 shares subject to issuance pursuant to outstanding performance-based restricted stock units multiplied by the offer
price of $25.00 per share. The foregoing share figures have been provided by the issuer to the offeror and are as of July 25, 2016,
the most recent practicable date.
The filing fee was calculated in accordance with Rule 0-11 under the Securities Exchange Act of 1934, as amended, and Fee
Rate Advisory #1 for Fiscal Year 2016, issued August 27, 2015, by multiplying the transaction value by 0.0001007.
 Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee
was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its
filing.
Amount Previously Paid: N/A
Form or Registration No.: N/A
Filing Party: N/A
Date Filed: N/A
 Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the statement relates:
 third-party tender offer subject to Rule 14d-1.
 issuer tender offer subject to Rule 13e-4.
 going-private transaction subject to Rule 13e-3.
 amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results of the tender offer: 
If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:
 Rule 13e-4(i) (Cross-Border Issuer Tender Offer)
 Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)
This Tender Offer Statement on Schedule TO (this “Schedule TO”) relates to the tender offer by Avast Software B.V., a
private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) organized under the laws of The
Netherlands (“Purchaser”) and a direct wholly owned subsidiary of Avast Holding B.V., a private company with limited liability
( besloten vennootschap met beperkte aansprakelijkheid ) organized under the laws of The Netherlands (“Parent”), for all
outstanding ordinary shares, with a nominal value of €0.01 per share (the “Shares”), of AVG Technologies N.V., a public limited
liability company ( naamloze vennootschap ) organized under the laws of The Netherlands (“AVG”) at a price of $25.00 per
share, in cash, without interest and less applicable withholding taxes or other taxes, upon the terms and conditions set forth in the
offer to purchase dated July 29, 2016 (the “Offer to Purchase”), a copy of which is attached as Exhibit (a)(1)(A), and in the
related letter of transmittal (the “Letter of Transmittal”), a copy of which is attached as Exhibit (a)(1)(B), which, together with
any other related materials, as each may be amended or supplemented from time to time, collectively constitute the “Offer.”
All the information set forth in the Offer to Purchase, including Schedule I thereto, is incorporated by reference herein in
response to Items 1 through 9 and Item 11 of this Schedule TO, and is supplemented by the information specifically provided in this
Schedule TO.
Item 1.
Summary Term Sheet
The information set forth in the section of the Offer to Purchase entitled “Summary Term Sheet” is incorporated herein by
reference.
Item 2.
Subject Company Information.
(a) Name and Address. The name, address, and telephone number of the subject company’s principal executive offices are as
follows:
AVG Technologies N.V.
Gatwickstraat 9-39,
1043 GL Amsterdam,
The Netherlands
+31 20 522 6210
(b) Securities. This Schedule TO relates to the Offer by Purchaser to purchase all outstanding Shares. AVG has advised Parent
and Purchaser that as of July 25, 2016, 50,730,029 Shares were outstanding and 5,302,357 Shares were subject to stock options,
restricted stock units and performance-based restricted stock units. The information set forth on the cover page and in the section of
the Offer to Purchase entitled “Introduction” is incorporated herein by reference.
(c) Trading Market and Price. The information set forth in the section of the Offer to Purchase entitled “Price Range of Shares;
Dividends” is incorporated herein by reference.
Item 3.
Identity and Background of Filing Person.
(a)-(c) Name and Address; Business and Background of Entities; and Business and Background of Natural Persons. The
information set forth in the sections of the Offer to Purchase entitled “Summary Term Sheet” and “Certain Information Concerning
Parent and Purchaser” and in Schedule I of the Offer to Purchase is incorporated herein by reference.
Item 4.
Terms of the Transaction.
(a) Material Terms. The information set forth in the Offer to Purchase is incorporated herein by reference.
Item 5.
Past Contacts, Transactions, Negotiations and Agreements.
(a) Transactions. The information set forth in the sections of the Offer to Purchase entitled “Summary Term Sheet” and
“Background of the Offer; Past Contacts or Negotiations with AVG” is incorporated herein by reference.
(b) Significant Corporate Events. The information set forth in the sections of the Offer to Purchase entitled “Summary Term
Sheet,” “Background of the Offer; Past Contacts or Negotiations with AVG,” “The Purchase Agreement; Other Agreements” and
“Purpose of the Offer; Plans for AVG” is incorporated herein by reference.
Item 6.
Purposes of the Transaction and Plans or Proposals.
(a) Purposes. The information set forth in the section of the Offer to Purchase entitled “Purpose of the Offer; Plans for AVG” is
incorporated herein by reference.
(c) (1)-(7) Plans. The information set forth in the sections of the Offer to Purchase entitled “Summary Term Sheet,” “Source and
Amount of Funds,” “Background of the Offer; Past Contacts or Negotiations with AVG,” “The Purchase Agreement; Other
Agreements,” “Purpose of the Offer; Plans for AVG,” “Certain Effects of the Offer,” and “Dividends and Distributions” is
incorporated herein by reference.
Item 7.
Source and Amount of Funds or Other Consideration.
(a) Source of Funds. The information set forth in the sections of the Offer to Purchase entitled “Summary Term Sheet,” “Source
and Amount of Funds,” “Background of the Offer; Past Contacts or Negotiations with AVG,” and “The Purchase Agreement; Other
Agreements” is incorporated herein by reference.
(b) Conditions. The information set forth in the sections of the Offer to Purchase entitled “Summary Term Sheet,” “Source and
Amount of Funds,” “Background of the Offer; Past Contacts or Negotiations with AVG,” “The Purchase Agreement; Other
Agreements” and “Certain Conditions of the Offer” is incorporated herein by reference.
(d) Borrowed Funds. The information set forth in the sections of the Offer to Purchase entitled “Summary Term Sheet,” “Source
and Amount of Funds,” “Background of the Offer; Past Contacts or Negotiations with AVG” and “The Purchase Agreement; Other
Agreements” is incorporated herein by reference.
Item 8.
Interest to Securities of the Subject Company.
(a) Securities Ownership. The information set forth in the sections of the Offer to Purchase entitled “Certain Information
Concerning Parent and Purchaser” and “Purpose of the Offer; Plans for AVG” and in Schedule I to the Offer to Purchase is
incorporated herein by reference.
(b) Securities Transactions. None.
Item 9.
Persons/Assets, Retained, Employed, Compensated or Used.
(a) Solicitations or Recommendations. The information set forth in the sections of the Offer to Purchase entitled “Summary
Term Sheet,” “Procedures for Accepting the Offer and Tendering Shares,” “Background of the Offer; Past Contacts or Negotiations
with AVG” and “Fees and Expenses” is incorporated herein by reference.
Item 10. Financial Statements.
(a) Financial Information. Not Applicable.
(b) Pro Forma Information. Not Applicable.
Item 11. Additional Information.
(a) Agreements, Regulatory Requirements and Legal Proceedings. The information set forth in the sections of the Offer to
Purchase entitled “Summary Term Sheet,” “Background of the Offer; Past Contacts or Negotiations with AVG,” “The Purchase
Agreement; Other Agreements,” “Purpose of the Offer; Plans for AVG,” “Certain Effects of the Offer” and “Certain Legal Matters;
Regulatory Approvals” is incorporated herein by reference:
(c) Other Material Information. The information set forth in the Offer to Purchase and the Letter of Transmittal is incorporated
herein by reference.
Item 12. Exhibits.
Exhibit
No.
Description
(a)(1)(A)
Offer to Purchase, dated July 29, 2016.*
(a)(1)(B)
Letter of Transmittal.*
(a)(1)(C)
Notice of Guaranteed Delivery.*
(a)(1)(D)
Letter from the Information Agent to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.*
(a)(1)(E)
Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.*
(a)(1)(F)
Summary Advertisement as published in The New York Times on July 29, 2016.*
(a)(2)
Not applicable.
(a)(3)
Not applicable.
(a)(4)
Not applicable.
(a)(5)(A)
Joint Press Release issued by Avast Holding B.V. and AVG Technologies N.V. on July 7, 2016 (originally filed with
the Securities and Exchange Commission by Avast Holding B.V. on July 7, 2016 on Schedule TO-C, which is
incorporated by reference herein).
(a)(5)(B)
Blog post posted by Avast Holding B.V. on its external website on July 7, 2016 (originally filed with the Securities
and Exchange Commission by Avast Holding B.V. on July 7, 2016 on Schedule TO-C, which is incorporated by
reference herein).
(a)(5)(C)
Frequently Asked Questions issued by Avast Holding B.V. and AVG Technologies N.V. on July 7, 2016 (originally
filed with the Securities and Exchange Commission by Avast Holding B.V. on July 7, 2016 on Schedule TO-C, which
is incorporated by reference herein).
(a)(5)(D)
Email Communication from Avast Holding B.V. and AVG Technologies N.V. to their respective employees sent on
July 7, 2016 (originally filed with the Securities and Exchange Commission by Avast Holding B.V. on July 7, 2016 on
Schedule TO-C, which is incorporated by reference herein).
(a)(5)(E)
Slide Presentation used in connection with a meeting with employees of AVG Technologies N.V. on July 7, 2016
(originally filed with the Securities and Exchange Commission by Avast Holding B.V. on July 7, 2016 on Schedule
TO-C, which is incorporated by reference herein).
(a)(5)(F)
Tweet from July 7, 2016 by Avast Holding B.V. (@avast_antivirus) (originally filed with the Securities and Exchange
Commission by Avast Holding B.V. on July 7, 2016 on Schedule TO-C, which is incorporated by reference herein).
(a)(5)(G)
Facebook post from July 7, 2016 by Avast Holding B.V. to the Avast Software Facebook page (originally filed with the
Securities and Exchange Commission by Avast Holding B.V. on July 7, 2016 on Schedule TO-C, which is incorporated
by reference herein).
(a)(5)(H)
LinkedIn post by Avast Holding B.V. from July 7, 2016 to the Avast Software LinkedIn page (originally filed with the
Securities and Exchange Commission by Avast Holding B.V. on July 7, 2016 on Schedule TO-C, which is incorporated
by reference herein).
(a)(5)(I)
Tweet from July 7, 2016 by Avast Holding B.V. (@avast_antivirus) (originally filed with the Securities and Exchange
Commission by Avast Holding B.V. on July 7, 2016 on Schedule TO-C, which is incorporated by reference herein).
(a)(5)(J)
Facebook post from July 14, 2016 by Avast Holding B.V. to the Avast Software Facebook page (originally filed with the
Securities and Exchange Commission by Avast Holding B.V. on July 15, 2016 on Schedule TO-C, which is incorporated
by reference herein).
(b)
Debt Commitment Letter, dated as of July 6, 2016, as amended and restated as of July 28, 2016, by and among Credit
Suisse AG, Credit Suisse Securities (USA) LLC, Jeffries Finance LLC, UBS AG, Stamford Branch, UBS Securities LLC,
Bank of America Merrill Lynch International Limited, Société Générale and Avast Software B.V.*
(d)(1)
Purchase Agreement, dated as of July 6, 2016, by and among AVG Technologies N.V., Avast Holding B.V. and Avast
Software B.V. originally filed with the Securities and Exchange Commission by AVG Technologies N.V. on July 7, 2016
as Exhibit 99.1 to the Report of Foreign Private Issuer on Form 6-K, which is incorporated by reference herein).
(d)(2)
Tender Agreement, dated as of July 6, 2016, by and among TA X L.P., TA Atlantic and Pacific VI L.P., TA Strategic
Partners Fund II L.P., TA Strategic Partners Fund II-A L.P., TA Investors III L.P., Avast Holding B.V. and Avast
Software B.V.*
(d)(3)
Tender Agreement, dated as of July 6, 2016, by and among CVP II, Inc., Avast Holding B.V. and Avast Software B.V.*
(d)(4)
Confidentiality Agreement, dated as of May 28, 2016, by and between AVG Technologies N.V. and Avast Holding B.V.*
(d)(5)
Exclusivity Agreement, dated as of June 16, 2016, by and between AVG Technologies N.V. and Avast Holding B.V.*
(g)
Not applicable.
(h)
Not applicable.
* Filed herewith.
Item 13. Information Required by Schedule 13e-3.
Not applicable.
SIGNATURES
After due inquiry and to the best of their knowledge and belief, each of the undersigned certifies that the information set forth in
this statement is true, complete and correct.
Dated: July 29, 2016
AVAST SOFTWARE B.V.
By:
Name:
Title:
/s/ Alan Rassaby
Alan Rassaby
Managing Director A
By:
Name:
Title:
/s/ Stefan Boermans
Stefan Boermans
Managing Director B
AVAST HOLDING B.V.
By:
Name:
Title:
/s/ Alan Rassaby
Alan Rassaby
Managing Director A
By:
Name:
Title:
/s/ Stefan Boermans
Stefan Boermans
Managing Director B
Exhibit
No.
Description
(a)(1)(A)
Offer to Purchase, dated July 29, 2016.*
(a)(1)(B)
Letter of Transmittal.*
(a)(1)(C)
Notice of Guaranteed Delivery.*
(a)(1)(D)
Letter from the Information Agent to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.*
(a)(1)(E)
Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.*
(a)(1)(F)
Summary Advertisement as published in The New York Times on July 29, 2016.*
(a)(2)
Not applicable.
(a)(3)
Not applicable.
(a)(4)
Not applicable.
(a)(5)(A)
Joint Press Release issued by Avast Holding B.V. and AVG Technologies N.V. on July 7, 2016 (originally filed with
the Securities and Exchange Commission by Avast Holding B.V. on July 7, 2016 on Schedule TO-C, which is
incorporated by reference herein).
(a)(5)(B)
Blog post posted by Avast Holding B.V. on its external website on July 7, 2016 (originally filed with the Securities
and Exchange Commission by Avast Holding B.V. on July 7, 2016 on Schedule TO-C, which is incorporated by
reference herein).
(a)(5)(C)
Frequently Asked Questions issued by Avast Holding B.V. and AVG Technologies N.V. on July 7, 2016 (originally
filed with the Securities and Exchange Commission by Avast Holding B.V. on July 7, 2016 on Schedule TO-C,
which is incorporated by reference herein).
(a)(5)(D)
Email Communication from Avast Holding B.V. and AVG Technologies N.V. to their respective employees sent on
July 7, 2016 (originally filed with the Securities and Exchange Commission by Avast Holding B.V. on July 7, 2016
on Schedule TO-C, which is incorporated by reference herein).
(a)(5)(E)
Slide Presentation used in connection with a meeting with employees of AVG Technologies N.V. on July 7, 2016
(originally filed with the Securities and Exchange Commission by Avast Holding B.V. on July 7, 2016 on Schedule
TO-C, which is incorporated by reference herein).
(a)(5)(F)
Tweet from July 7, 2016 by Avast Holding B.V. (@avast_antivirus) (originally filed with the Securities and
Exchange Commission by Avast Holding B.V. on July 7, 2016 on Schedule TO-C, which is incorporated by
reference herein).
(a)(5)(G)
Facebook post from July 7, 2016 by Avast Holding B.V. to the Avast Software Facebook page (originally filed with
the Securities and Exchange Commission by Avast Holding B.V. on July 7, 2016 on Schedule TO-C, which is
incorporated by reference herein).
(a)(5)(H)
LinkedIn post by Avast Holding B.V. from July 7, 2016 to the Avast Software LinkedIn page (originally filed with
the Securities and Exchange Commission by Avast Holding B.V. on July 7, 2016 on Schedule TO-C, which is
incorporated by reference herein).
(a)(5)(I)
Tweet from July 7, 2016 by Avast Holding B.V. (@avast_antivirus) (originally filed with the Securities and Exchange
Commission by Avast Holding B.V. on July 7, 2016 on Schedule TO-C, which is incorporated by reference herein).
(a)(5)(J)
Facebook post from July 14, 2016 by Avast Holding B.V. to the Avast Software Facebook page (originally filed with the
Securities and Exchange Commission by Avast Holding B.V. on July 15, 2016 on Schedule TO-C, which is incorporated
by reference herein).
(b)
Debt Commitment Letter, dated as of July 6, 2016, as amended and restated as of July 28, 2016, by and among Credit
Suisse AG, Credit Suisse Securities (USA) LLC, Jeffries Finance LLC, UBS AG, Stamford Branch, UBS Securities LLC,
Bank of America Merrill Lynch International Limited, Société Générale and Avast Software B.V.*
(d)(1)
Purchase Agreement, dated as of July 6, 2016, by and among AVG Technologies N.V., Avast Holding B.V. and Avast
Software B.V. originally filed with the Securities and Exchange Commission by AVG Technologies N.V. on July 7, 2016
as Exhibit 99.1 to the Report of Foreign Private Issuer on Form 6-K, which is incorporated by reference herein).
(d)(2)
Tender Agreement, dated as of July 6, 2016, by and among TA X L.P., TA Atlantic and Pacific VI L.P., TA Strategic
Partners Fund II L.P., TA Strategic Partners Fund II-A L.P., TA Investors III L.P., Avast Holding B.V. and Avast
Software B.V.*
(d)(3)
Tender Agreement, dated as of July 6, 2016, by and among CVP II, Inc., Avast Holding B.V. and Avast Software B.V.*
(d)(4)
Confidentiality Agreement, dated as of May 28, 2016, by and between AVG Technologies N.V. and Avast Holding B.V.*
(d)(5)
Exclusivity Agreement, dated as of June 16, 2016, by and between AVG Technologies N.V. and Avast Holding B.V.*
(g)
Not applicable.
(h)
Not applicable.
* Filed herewith.
Table of Contents
Exhibit (a)(1)(A)
OFFER TO PURCHASE FOR CASH
All Outstanding Ordinary Shares of
AVG TECHNOLOGIES N.V.
at
$25.00 Per Share
by
AVAST SOFTWARE B.V.
a direct wholly owned subsidiary of
AVAST HOLDING B.V.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON AUGUST 31,
2016, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.
Avast Software B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) organized
under the laws of The Netherlands (“Purchaser”) and a direct wholly owned subsidiary of Avast Holding B.V., a private company
with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) organized under the laws of The Netherlands
(“Parent”), is offering to purchase all outstanding ordinary shares, with a nominal value of €0.01 per share (the “Shares”), of AVG
Technologies N.V., a public limited liability company ( naamloze vennootschap ) organized under the laws of The Netherlands
(“AVG”), at a purchase price of $25.00 per Share (the “Offer Price”), in cash, without interest and less applicable withholding taxes or
other taxes, upon the terms and subject to the conditions set forth in this Offer to Purchase (the “Offer to Purchase”) and in the related
Letter of Transmittal (the “Letter of Transmittal” and, together with this Offer to Purchase, as each may be amended or supplemented
from time to time, “Offer”).
The Offer is being made pursuant to a Purchase Agreement, dated as of July 6, 2016 (as it may be amended from time to time,
the “Purchase Agreement”), by and among AVG, Purchaser and Parent. Unless the Offer is extended or earlier terminated, the Offer
will expire at 11:59 p.m., New York City time, on August 31, 2016 (the “Expiration Time,” unless the Offer is extended in accordance
with the Purchase Agreement, in which event “Expiration Time” will mean the latest time and date at which the Offer, as so extended
by Purchaser, will expire). The Purchase Agreement provides, among other things, that, subject to the terms and conditions set forth
therein, Purchaser will, promptly after the Expiration Time, accept for payment all Shares validly tendered pursuant to the Offer and
not properly withdrawn (the time of acceptance of Shares for payment, the “Acceptance Time”) and, promptly after the Acceptance
Time, pay for all such Shares (such time of payment, the “Offer Closing”). After the consummation of the Offer, we intend to cause
AVG to terminate the listing of the Shares on the New York Stock Exchange. As a result, AVG would cease to be publicly traded. In
addition, after the consummation of the Offer we intend to take steps to cause AVG to terminate or suspend its reporting obligations
with the United States Securities and Exchange Commission (the “SEC”).
After due and careful discussion and consideration, including a thorough review of the Offer with their outside legal and
financial advisors, AVG’s supervisory board (the “AVG Supervisory Board”) and management board (the “AVG Management
Board,” and together with the AVG Supervisory Board, the “AVG Boards”) by unanimous vote of all directors present or represented
and voting (a) approved the terms of, and the transactions contemplated by, the Purchase Agreement, the Asset Sale Agreement (as
defined below) and all other documents conducive to AVG’s obligations under the Purchase Agreement (collectively, the “AVG
Transaction Documents”), and approved AVG’s entry into the AVG Transaction Documents; and (b) determined to support the Offer
and to recommend that AVG shareholders accept the Offer, subject to the terms and conditions of the AVG Transaction Documents.
The AVG Boards also unanimously approved (i) the Asset Sale (as defined below), the subsequent Dissolution (as defined below) and
the Liquidation Distribution (as defined below) and the appointment of a liquidator; (ii) the terms and conditions of the Asset Sale
Agreement and the entry into the Asset Sale Agreement by AVG upon Purchaser’s request as set forth in the AVG Transaction
Documents; and (iii) the proposed amendment of the articles of association of AVG if the Asset Sale (as defined below) is pursued
and the proposed amendment of the articles of association of AVG and conversion of AVG into a private company with limited
liability if the Asset Sale is not pursued.
Table of Contents
The AVG Boards unanimously support the Offer and recommend that AVG shareholders accept the Offer. The AVG
Boards unanimously recommend that you vote “for” each of the items that contemplate a vote of AVG shareholders at the
extraordinary general meeting of AVG shareholders scheduled to be held on August 23, 2016 at 10:00 A.M., Central European
Time, at the offices of Allen & Overy LLP, Apollolaan 15, 1077 AB Amsterdam, The Netherlands (the “EGM”). At the EGM,
AVG shareholders will be requested to vote on the Asset Sale (as defined below), the Dissolution (as defined below), the
Liquidation Distribution (as defined below), the appointment of the liquidator, the appointment of directors designated by
Purchaser to the AVG Boards and other matters contemplated by the Purchase Agreement.
Following the Expiration Time, Purchaser intends to provide for a subsequent offering period (the “Subsequent Offering
Period”) of at least 10 business days in accordance with Rule 14d-11 under the Securities Exchange Act of 1934 (as amended from
time to time and, together with the rules and regulations promulgated thereunder, the “Exchange Act”) and in accordance with the
Purchase Agreement. The Subsequent Offering Period may be extended by Purchaser in accordance with the Purchase Agreement for
at least seven business days following the announcement that Purchaser or its designee intends to effect the Asset Sale (as defined
below) (such extension, the “Minority Exit Offering Period”). Under no circumstances will interest be paid on the Offer Price
paid pursuant to the Offer, regardless of any extension of the Offer, the Subsequent Offering Period (which includes the
Minority Exit Offering Period, if applicable), or any delay in making payment for Shares.
The Purchase Agreement provides, among other things, that, as promptly as practicable following the closing of the Subsequent
Offering Period (which includes the Minority Exit Offering Period, if applicable), Purchaser may complete a corporate reorganization
of AVG and its subsidiaries (the “Subsequent Reorganization”). The Subsequent Reorganization will utilize processes available to
Purchaser under Dutch law to ensure that (a) Purchaser becomes the owner of all of AVG’s business operations from and after the
consummation of the Subsequent Reorganization and (b) any AVG shareholders who do not tender their Shares pursuant to the Offer
(or during the Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable) are offered or receive the
same consideration for their Shares as those shareholders who tendered their Shares pursuant to the Offer (or during the Subsequent
Offering Period, which includes the Minority Exit Offering Period, if applicable), without interest and less applicable withholding
taxes (including Dutch dividend withholding tax ( dividendbelasting )) or other taxes. As a result of the Subsequent Reorganization, it
is anticipated that AVG will be liquidated or become wholly owned by Purchaser. The Subsequent Reorganization may also include
the conversion of AVG from a public limited liability company ( naamloze vennootschap ) to a private company with limited liability
( besloten vennootschap met beperkte aansprakelijkheid ).
If the number of Shares tendered pursuant to the Offer and not properly withdrawn (including Shares validly tendered during the
Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable, but excluding Shares tendered pursuant
to guaranteed delivery procedures that have not yet been delivered in settlement or satisfaction of such guarantee prior to the
Expiration Time), together with the Shares then owned by Parent, Purchaser and their respective subsidiaries, represents at least 95
percent of the then outstanding Shares, Purchaser intends to effect the Subsequent Reorganization by means of compulsory acquisition
of Shares held by non-tendering AVG shareholders in accordance with Section 2:92a or Section 2:201a of the Dutch Civil Code (the
“Compulsory Acquisition”).
If the number of Shares tendered pursuant to the Offer and not properly withdrawn (including Shares validly tendered during the
Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable, but excluding Shares tendered pursuant
to guaranteed delivery procedures that have not yet been delivered in settlement or satisfaction of such guarantee prior to the
Expiration Time), together with the Shares then owned by Parent, Purchaser and their respective subsidiaries, represents fewer than 95
percent but at least 80 percent of the then outstanding Shares, Purchaser intends to, or intends to cause its designee to, subject to the
approval of AVG shareholders at the EGM, promptly after the closing of the Subsequent Offering Period (which includes the Minority
Exit Offering Period, if applicable), effect the Subsequent Reorganization by means of a sale of all or substantially all of the assets of
AVG to Purchaser or its designee pursuant to an asset sale agreement (the “Asset
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Sale Agreement”) in exchange for (a) cash and a note payable in an aggregate amount equal to the Offer Price multiplied by the total
number of Shares outstanding as of the Offer Closing and (b) the assumption by Purchaser or its designee of substantially all liabilities
of AVG (the “Asset Sale”).
Any Subsequent Reorganization other than the Compulsory Acquisition or the Asset Sale and the Dissolution requires the
approval of the independent directors of AVG.
Upon consummation of the Asset Sale, Purchaser would own all of AVG’s business operations and would be the principal
shareholder in AVG, and the non-tendering AVG shareholders would continue to own Shares representing, in the aggregate, a
minority of the Shares then outstanding. Upon completion of the Asset Sale, AVG will be dissolved and liquidated in accordance with
applicable Dutch liquidation procedures (the “Dissolution”). Purchaser would then provide an indemnity or guarantee to the liquidator
for any deficit in the estate of AVG, to enable the liquidator to make an advance liquidation distribution in cash (the “Liquidation
Distribution”) to each non-tendering AVG shareholder in an amount equal to the Offer Price, without interest and less applicable
withholding taxes (including Dutch dividend withholding tax) or other taxes, for each Share then owned.
The applicable withholding taxes (including Dutch dividend withholding tax) and other taxes, if any, imposed on AVG
shareholders in respect of the Liquidation Distribution are likely to be different from, and greater than, the taxes imposed
upon such AVG shareholders had they tendered their Shares pursuant to the Offer (or during the Subsequent Offering
Period, which includes the Minority Exit Offering Period, if applicable) .
See Section 11 — “The Purchase Agreement; Other Agreements and “Section 12 — “Purpose of the Offer; Plans for AVG” of
this Offer to Purchase.
The Offer is conditioned upon, among other things, the satisfaction or waiver (to the extent permitted by the Purchase
Agreement and applicable law) of the following as of immediately prior to the Expiration Time: (a) the Minimum Condition (as
defined below), (b) the Antitrust Clearance Condition (as defined below), (c) the Restraints Condition (as defined below), (d) the
CFIUS Clearance Condition (as defined below) and (e) the Termination Condition (as defined below).
The “Minimum Condition” requires that there have been validly tendered pursuant to the Offer and not properly withdrawn a
number of Shares (excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been delivered in
settlement or satisfaction of such guarantee prior to the Expiration Time) that, together with the Shares then owned by Parent,
Purchaser and their subsidiaries, represents at least 95 percent of, or, if AVG shareholders approve the Asset Sale, the Dissolution, the
Liquidation Distribution and related matters contemplated by the Purchase Agreement at the EGM, at least 80 percent of, the Shares
outstanding immediately prior to the Expiration Time.
The “Antitrust Clearance Condition” requires the expiration or termination of any applicable waiting period (and any extension
thereof) applicable to the transactions contemplated by the Purchase Agreement under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 (as amended, and together the rules and regulations thereunder, the “HSR Act”) and the expiration or termination of the
applicable waiting period, or receipt of approval (which is in full force and effect and not subject to appeal), under the antitrust laws of
Austria and Germany. Parent and AVG filed their Premerger Notification and Report Forms with the Federal Trade Commission and
the Antitrust Division of the U.S. Department of Justice in connection with the transactions contemplated by the Purchase Agreement
on July 27, 2016. The Offer is also subject to other conditions as described in this Offer to Purchase. See Section 15 — “Certain
Conditions of the Offer.”
The “Restraints Condition” requires that there is not in effect any law, regulation, order, or injunction entered, enacted,
promulgated, enforced or issued by any court or other governmental authority of competent jurisdiction prohibiting, rendering illegal
or enjoining the consummation of the transactions contemplated by the
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Purchase Agreement, other than the application to such transactions of applicable waiting periods under the HSR Act or other antitrust
laws (excluding any antitrust laws under which criminal sanctions would be imposed if the Offer were to be consummated).
The “CFIUS Clearance Condition” requires (a) the receipt of a written notification issued by the Committee on Foreign
Investment in the United States (“CFIUS”) that it has determined that the transactions contemplated by the Purchase Agreement are
not a “covered transaction” pursuant to 31 C.F.R. 800 and 50 U.S.C. App. § 2170, as amended by the Foreign Investment and Security
Act of 2007 (“FINSA”), (b) the receipt of a written notification from CFIUS that it has completed its review (or, if applicable,
investigation) of the transactions contemplated by the Purchase Agreement under FINSA and determined that there are no unresolved
national security concerns with respect to the transactions contemplated by the Purchase Agreement, and such determination is not
conditioned upon the commitment of Parent or Purchaser to (i) propose, negotiate, commit to or effect, by consent decree, hold
separate order, agreement or otherwise, the sale, transfer, license, divestiture or other disposition of, or any prohibition or limitation on
the ownership, operation, effective control or exercise of full rights of ownership of, any of the businesses, product lines or assets of
Parent or any of its affiliates or of AVG or any of its subsidiaries, (ii) terminate existing, or create new, relationships, contractual
rights or obligations of Parent or its affiliates or, following the Acceptance Time, AVG or its subsidiaries, (iii) effect any other change
or restructuring of Parent, its affiliates, AVG, or their respective subsidiaries, or (iv) otherwise take or commit to take any actions that
interfere with Parent’s ability to control, manage or exercise full rights of ownership of AVG or its subsidiaries, or limit the freedom
of action of Parent, its affiliates, AVG, or their respective subsidiaries, with respect to, or their ability to retain, or enjoy the rights and
benefits of any assets or businesses, including, without limitation, the freedom to provide services to, or otherwise enter into, a
commercial relationship with any person, (c) that, following an investigation, CFIUS has reported the transactions contemplated by
the Purchase Agreement to the President of the United States and the President of the United States has declined to exercise his
authorities under FINSA to suspend or prohibit the transactions contemplated by the Purchase Agreement, or (d) that, following an
investigation, CFIUS has reported the transactions contemplated by the Purchase Agreement to the President of the United States and
the President of the United States has determined to take action that would not, and would not reasonably be expected to, result in a
material and adverse effect on Parent and its controlled affiliates, taken as a whole, after giving effect to the transactions contemplated
by the Purchase Agreement, or otherwise require the commitment of Parent or Purchaser to take any action described in clauses (i)
through (iv) above.
The “Termination Condition” requires that the Purchase Agreement has not been terminated in accordance with its terms.
The Offer is not subject to a financing condition but is subject to other conditions as described in this Offer to Purchase. See
Section 15 — “Certain Conditions of the Offer.”
A summary of the principal terms of the Offer appears under the heading “Summary Term Sheet.” You should read this entire
Offer to Purchase carefully before deciding whether to tender your Shares pursuant to the Offer.
July 29, 2016
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IMPORTANT
If you desire to tender all or any portion of your Shares to Purchaser pursuant to the Offer, you must, prior to the Expiration
Time, (a) complete and sign the Letter of Transmittal that accompanies this Offer to Purchase in accordance with the instructions in
the Letter of Transmittal and mail or deliver the Letter of Transmittal and all other required documents to American Stock Transfer &
Trust Company, LLC, in its capacity as depositary for the Offer (the “Depositary”), (b) follow the procedure for book-entry transfer
described in Section 3 — “Procedures for Accepting the Offer and Tendering Shares,” or (c) request that your broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for you. If you hold Shares registered in the name of a
broker, dealer, commercial bank, trust company or other nominee, you must contact that institution in order to tender your Shares to
Purchaser pursuant to the Offer. If you cannot comply in a timely manner with the procedures for tendering your Shares by book-entry
transfer, or you cannot deliver all required documents to the Depositary prior to the Expiration Time, you may tender your Shares to
Purchaser pursuant to the Offer by following the procedures for guaranteed delivery described in Section 3 — “Procedures for
Accepting the Offer and Tendering Shares.”
Questions and requests for assistance should be directed to Innisfree M&A Incorporated, the information agent for the Offer (the
“Information Agent”) at its address and telephone numbers set forth on the back cover of this Offer to Purchase. Additional copies of
this Offer to Purchase, the related Letter of Transmittal, and other materials related to the Offer may also be obtained for free from the
Information Agent. Additionally, copies of this Offer to Purchase, the related Letter of Transmittal, the notice of guaranteed delivery
and any other material related to the Offer may be obtained at the website maintained by the SEC at www.sec.gov . You may also
contact your broker, dealer, commercial bank, trust company or other nominee for assistance.
This Offer to Purchase and the Letter of Transmittal contain important information and you should read both carefully
and in their entirety before making a decision with respect to the Offer.
The Offer has not been approved or disapproved by the SEC or any state securities commission nor has the SEC or any
state securities commission passed upon the fairness or merits of or upon the accuracy or adequacy of the information
contained in this Offer to Purchase. Any representation to the contrary is unlawful.
The Information Agent for the Offer is:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Shareholders may call toll free: (888) 750-5834
Banks and brokers may call collect: (212) 750-5833
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TABLE OF CONTENTS
SUMMARY TERM SHEET
INTRODUCTION
THE TENDER OFFER
1. Terms of the Offer.
2. Acceptance for Payment and Payment for Shares.
3. Procedures for Accepting the Offer and Tendering Shares.
4. Withdrawal Rights.
5. Certain Tax Consequences
6. Price Range of Shares; Dividends.
7. Certain Information Concerning AVG.
8. Certain Information Concerning Parent and Purchaser.
9. Source and Amount of Funds.
10. Background of the Offer; Past Contacts or Negotiations with AVG.
11. The Purchase Agreement; Other Agreements.
12. Purpose of the Offer; Plans for AVG.
13. Certain Effects of the Offer.
14. Dividends and Distributions.
15. Certain Conditions of the Offer.
16. Certain Legal Matters; Regulatory Approvals.
17. Appraisal rights.
18. Fees and Expenses.
19. Miscellaneous.
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SUMMARY TERM SHEET
The information contained in this summary term sheet is a summary only and is not meant to be a substitute for the more
detailed description and information contained in this Offer to Purchase, the related Letter of Transmittal and other related
materials. You are urged to read carefully the Offer to Purchase, the Letter of Transmittal and other related materials in their
entirety. Parent and Purchaser have included cross-references in this summary term sheet to other sections of the Offer to Purchase
where you will find more complete descriptions of the topics mentioned below. The information concerning AVG contained herein and
elsewhere in the Offer to Purchase has been provided to Parent and Purchaser by AVG or has been taken from or is based upon
publicly available documents or records of AVG on file with the SEC or other public sources at the time of the Offer. Parent and
Purchaser have not independently verified the accuracy and completeness of such information. Parent and Purchaser have no
knowledge that would indicate that any statements contained herein relating to AVG provided to Parent and Purchaser or taken from
or based upon such documents and records filed with the SEC are untrue or incomplete in any material respect.
Securities Sought
All outstanding ordinary shares, with a nominal value of €0.01 per share, of
AVG Technologies N.V.
Price Offered Per Share
$25.00 in cash, without interest and less applicable withholding taxes or other
taxes.
Scheduled Expiration of Offer
11:59 p.m., New York City time, on August 31, 2016, unless the Offer is
extended or earlier terminated. See Section 1 — “Terms of the Offer.”
Purchaser
Avast Software B.V., a private company with limited liability (besloten
vennootschap met beperkte aansprakelijkheid ) organized under the laws of
The Netherlands and a direct wholly owned subsidiary of Avast Holding B.V.,
a private company with limited liability ( besloten vennootschap met beperkte
aansprakelijkheid ) organized under the laws of The Netherlands.
Who is offering to buy my Shares?
Avast Software B.V., or Purchaser, a direct wholly owned subsidiary of Avast Holding B.V., or Parent, is offering to purchase
for cash all outstanding Shares. Purchaser is a private company with limited liability ( besloten vennootschap met beperkte
aansprakelijkheid ) organized under the laws of The Netherlands.
See the “Introduction” and Section 8 — “Certain Information Concerning Parent and Purchaser.”
Unless the context indicates otherwise, in this Offer to Purchase, we use the terms “us,” “we” and “our” to refer to Purchaser
and, where appropriate, Parent. We use the term “Parent” to refer to Avast Holding B.V. alone, the term “Purchaser” to refer to Avast
Software B.V. alone and the terms “AVG” and the “Company” to refer to AVG Technologies N.V.
What are the classes and amounts of securities sought in the Offer?
We are offering to purchase all outstanding Shares at a purchase price of $25.00 per Share, in cash, without interest and less
applicable withholding taxes or other taxes, upon the terms and subject to the conditions set forth in this Offer to Purchase and the
Letter of Transmittal.
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See the “Introduction” to this Offer to Purchase and Section 1 — “Terms of the Offer.”
Is there an agreement governing the Offer?
Yes. Parent, Purchaser and AVG have entered into a Purchase Agreement, dated as of July 6, 2016. The Purchase Agreement
provides, among other things, for the terms and conditions of the Offer, the Subsequent Offering Period, which includes the Minority
Exit Offering Period, if applicable, and the Subsequent Reorganization. If the conditions to the Offer are satisfied and we consummate
the Offer, we intend to effect the Subsequent Reorganization, subject to the satisfaction of certain conditions, including, among other
conditions, in the case of the Asset Sale, the Dissolution and the Liquidation Distribution, the approval of AVG shareholders of such
transactions and related matters contemplated by the Purchase Agreement at the EGM.
See Section 11 — “The Purchase Agreement; Other Agreements,” Section 12 — “Purpose of the Offer; Plans for AVG” and
Section 15 — “Certain Conditions of the Offer.”
Why are you making the Offer?
We are making the Offer because we want to acquire the entire equity interest in AVG so that we will own and control all of
AVG’s current business. If the Offer is consummated, we intend to cause AVG to terminate the listing of the Shares on the NYSE. As
a result, AVG would cease to be publicly traded. In addition, after the consummation of the Offer we intend to cause the termination
of the registration of Shares under Exchange Act as promptly as practicable and expect to take steps to cause the suspension of all of
AVG’s reporting obligations with the SEC.
Following the Expiration Time, Purchaser intends to provide for the Subsequent Offering Period of at least 10 business days in
accordance with Rule 14d-11 under the Exchange Act and in accordance with the Purchase Agreement. The Subsequent Offering
Period may be extended by Purchaser in accordance with the Purchase Agreement by the Minority Exit Offering Period of at least
seven business days following the announcement that Purchaser or its designee intends to effect the Asset Sale. As promptly as
practicable following the closing of the Subsequent Offering Period (which includes the Minority Exit Offering Period, if applicable),
Purchaser intends to complete the Subsequent Reorganization. The Subsequent Reorganization will utilize processes available to
Purchaser to ensure that (a) Purchaser becomes the owner of all of AVG’s business operations from and after the consummation of the
Subsequent Reorganization and (b) any AVG shareholders who do not tender their Shares pursuant to the Offer (or during the
Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable) are offered or receive the same
consideration for their Shares as those shareholders who tendered their Shares pursuant to the Offer (or during the Subsequent
Offering Period, which includes the Minority Exit Offering Period, if applicable), without interest and less applicable withholding
taxes (including Dutch dividend withholding tax) or other taxes. As a result of the Subsequent Reorganization, it is anticipated that
AVG will be liquidated or become wholly owned by Purchaser.
See Section 12 — “Purpose of the Offer; Plans for AVG” of this Offer to Purchase.
How much are you offering to pay and what is the form of payment? Will I have to pay any fees or commissions?
We are offering to pay $25.00 per Share, in cash, without interest and less applicable withholding taxes or other taxes, upon the
terms and subject to the conditions set forth in the Purchase Agreement. If you are the record owner of your Shares and you tender
your Shares directly to the Depositary, you will not have to pay brokerage fees, commissions or similar expenses. If you own your
Shares through a broker, dealer, commercial bank, trust company or other nominee and your broker, dealer, commercial bank, trust
company or other nominee
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tenders your Shares on your behalf, your broker, dealer, commercial bank, trust company or nominee may charge you a fee for doing
so. You should consult your broker, dealer, commercial bank, trust company or nominee to determine whether any charges will apply.
See the “Introduction,” Section 1 — “Terms of the Offer,” and Section 2 — “Acceptance for Payment and Payment for Shares.”
Will you have the financial resources to make payment?
Yes, we anticipate that we will have sufficient resources available to us. The Offer is not subject to a financing condition. We
estimate that the total funds required to purchase all of the Shares pursuant to the Offer and to consummate the other transactions
contemplated by the Purchase Agreement (which estimate includes, among other things, payment in respect of outstanding
in-the-money options and vested and unvested restricted stock units and performance-based restricted stock units), pay related
transaction fees and expenses due and payable on or prior to the consummation of the Offer, pay or refinance all Purchaser and AVG
debt that is required to be paid or refinanced upon consummation of the Offer and satisfy all other payment obligations of Purchaser
and AVG required to be satisfied at the closing of the Offer will be approximately $1.877 billion. Purchaser has obtained
commitments from Credit Suisse AG, Jefferies Finance LLC, UBS AG, Stamford Branch, Bank of America Merrill Lynch
International Limited and Société Générale (collectively, the “Lenders”) to provide $85.0 million in a senior secured revolving credit
facility with a term of five years (the “Revolving Credit Facility”) and $1,600.0 million equivalent in senior secured term loan
facilities (which will be provided as (a) a senior secured term loan facility denominated in U.S. dollars with a term of six years (the
“Dollar Tranche Term Facility”) and (b) a senior secured term loan facility denominated in Euros with a term of six years, such Euro
amount determined based on the spot rate of exchange on the date of allocation of commitments of the Term Loan Facilities (as
defined below) in connection with primary syndication (the “Euro Tranche Term Facility” and, the Dollar Tranche Term Facility and
Euro Tranche Term Facility, collectively, the “Term Loan Facilities,” and together with the Revolving Credit Facility, the “Debt
Financing”). Parent and Purchaser anticipate that the Debt Financing and/or bank or other debt financings that may be entered into or
issued by Purchaser in lieu of all or a portion of the Debt Financing, together with certain unrestricted cash or cash equivalents
available to Purchaser (including such cash or cash equivalents of AVG that will become available to Purchaser upon the
consummation of the Offer), will be sufficient to fund the purchase of all the Shares pursuant to the Offer and to pay related
transaction fees and expenses due and payable on or prior to the consummation of the Offer, and pay or refinance all Purchaser and
AVG debt that is required to be paid or refinanced upon consummation of the Offer, in accordance with the provisions of the Debt
Financing, and satisfy all other payment obligations of Purchaser and AVG required to be satisfied upon consummation of the Offer.
Credit Suisse AG (acting through such of its affiliates or branches as it deems appropriate) will act as sole and exclusive
administrative agent and collateral agent in respect of the Debt Financing. Funding of the Debt Financing is subject to the satisfaction
of various conditions set forth in the amended and restated commitment letter pursuant to which the Debt Financing will be provided.
The documentation governing the Debt Financing has not been finalized and, accordingly, the actual terms of the Debt Financing may,
subject to the prior written consent of AVG in the case of certain changes to the Debt Financing, differ from those described in this
document. The parties to the documentation governing the Debt Financing are expected to include Parent, Purchaser, certain
subsidiaries of Purchaser, the Lenders and/or their affiliates, and other financial institutions party thereto as lenders.
See Section 9 — “Source and Amount of Funds” and Section 11 — “The Purchase Agreement; Other Agreements.”
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Is your financial condition relevant to my decision to tender my Shares pursuant to the Offer?
No. We do not think our financial condition is relevant to your decision whether to tender Shares and accept the Offer because:
•
the Offer is being made for all outstanding Shares solely for cash;
•
we have received debt commitments, which, in addition to certain unrestricted cash or cash equivalents available
to us, we anticipate will be sufficient to purchase all Shares tendered pursuant to the Offer;
•
the Offer is not subject to any financing condition; and
•
if we consummate the Offer and not all outstanding Shares are tendered pursuant to Offer or during the
Subsequent Offering Period (which includes the Minority Exit Offering Period, if applicable), we intend to (a)
commence the Compulsory Acquisition and offer each non-tendering AVG shareholder (or such AVG
shareholder must otherwise receive) the Offer Price (without interest and less applicable withholding taxes or
other taxes) for each Share then held by such non-tendering AVG shareholder, or (b) acquire all assets of AVG in
the Asset Sale such that non-tendering AVG shareholders will receive the Offer Price (without interest and less
applicable withholding taxes (including Dutch dividend withholding tax) or other taxes) as the Liquidation
Distribution.
However, in the Compulsory Acquisition, the Dutch Enterprise Chamber (Ondernemingskamer) of the Amsterdam Court of
Appeals ( Gerechtshof Amsterdam ) (the “Dutch Court”) will determine the price to be paid for the Shares, which may be greater,
equal to or less than the Offer Price.
See Section 5B — “Certain Dutch Tax Aspects of the Offer and Subsequent Reorganization.”
How long do I have to decide whether to tender my Shares pursuant to the Offer?
You will have until 11:59 p.m., New York City time, on August 31, 2016 unless we extend the Offer in accordance with the
Purchase Agreement or the Offer is earlier terminated. Furthermore, if you cannot deliver everything that is required in order to make
a valid tender in accordance with the terms of the Offer by that time, you may still participate in the Offer by using the guaranteed
delivery procedure that is described in Section 3 —“Procedures for Accepting the Offer and Tendering Shares” of this Offer to
Purchase prior to that time.
The Purchase Agreement provides, among other things, that, subject to the terms and conditions set forth therein, Purchaser will,
promptly after the Expiration Time, accept for payment all Shares validly tendered pursuant to the Offer and not properly withdrawn
and, promptly after the Acceptance Time, pay for all such Shares. See Section 1 — “Terms of the Offer” and Section 3 — “Procedures
for Accepting the Offer and Tendering Shares.”
Please give your broker, dealer, commercial bank, trust company or other nominee instructions with sufficient time to permit
such broker, dealer, commercial bank, trust company or other nominee to tender your Shares. Beneficial owners should be aware that
their broker, dealer, commercial bank, trust company or other nominee may establish its own earlier deadline for participation in the
Offer. Accordingly, beneficial owners wishing to participate in the Offer should contact their broker, dealer, commercial bank, trust
company or other nominee as soon as possible in order to determine the times by which such owner must take action in order to
participate in the Offer.
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Can the Offer be extended and under what circumstances?
Yes, subject to our rights to terminate the Purchase Agreement in accordance with its terms, we have agreed in the Purchase
Agreement that we will extend the Offer under the following circumstances:
•
if any condition to the Offer is not satisfied or waived at the Expiration Time, we must extend the Offer (the
length of such extension period to be determined by Parent or us) from time to time until such condition or
conditions to the Offer are satisfied or waived;
•
we must extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC,
the staff thereof or the NYSE applicable to the Offer or as may be required by any other governmental authority;
and
•
if the Marketing Period (as defined in Section 11 — “The Purchase Agreement; Other Agreements —Purchase
Agreement”) has not ended on the last business day prior to the Expiration Time, we must extend the Offer until
the earlier to occur of (a) any business day before or during the Marketing Period as may be specified by Parent
or us on no less than two business days’ prior notice to AVG, and (b) the first business day after the final day of
the Marketing Period.
Additionally, notwithstanding anything in the Purchase Agreement to the contrary, at the Expiration Time, we may extend the
Offer for up to 10 business days from the date the Marketing Period will otherwise end.
We are not, however, required to extend the Offer (a) beyond January 6, 2017, (b) for an individual extension period of more
than 10 business days or (c) at any time that we are permitted to terminate the Purchase Agreement. If we extend the Offer, such
extension will extend the time that you will have to tender (or withdraw) your Shares.
See Section 1 — “Terms of the Offer.”
How will I be notified if the Offer is extended?
Any extension of the Offer will be followed by a public announcement of the extension no later than 9:00 a.m., New York City
time, on the next business day after the day on which the Offer was otherwise scheduled to expire. Without limiting the manner in
which Purchaser may choose to make any public announcement, it currently intends to make announcements regarding the Offer by
issuing a press release and making any appropriate filing with the SEC.
See Section 1 — “Terms of the Offer.”
Will there be a subsequent offering period?
Yes, following the Expiration Time, Purchaser is obligated by the Purchase Agreement to provide for the Subsequent Offering
Period of at least 10 business days in accordance with Rule 14d-11 under the Exchange Act and in accordance with the Purchase
Agreement. No withdrawal rights will apply to any Shares tendered during the Subsequent Offering Period. The Subsequent Offering
Period may be extended by Purchaser in accordance with the Purchase Agreement by the Minority Exit Offering Period of at least
seven business days following the announcement that Purchaser or its designee intends to effect the Asset Sale.
See Section 1 — “Terms of the Offer.”
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What are the most significant conditions to the Offer?
The Offer is conditioned upon, among other things, the satisfaction or waiver (to the extent permitted by the Purchase Agreement
and applicable law) of the following as of immediately prior to the Expiration Time: (a) the Minimum Condition, (b) the Antitrust
Clearance Condition, (c) the Restraints Condition, (d) the CFIUS Clearance Condition and (e) the Termination Condition.
The Offer also is subject to a number of other conditions to the Offer set forth in Section 15 — “Certain Conditions of the Offer”
of this Offer to Purchase. The conditions to the Offer will be in addition to, and not a limitation of, the rights of Parent and Purchaser
to extend, terminate or modify the Offer in accordance with the terms and conditions of the Purchase Agreement. Subject to the
applicable rules and regulations of the SEC, Purchaser expressly reserves the right at any time prior to the Expiration Time to waive,
in whole or in part, any condition to the Offer and to make any change in the terms of or conditions to the Offer. However, Purchaser
will not (without the prior written consent of AVG): (a) waive or change the Minimum Condition; (b) decrease the Offer Price; (c)
change the form of consideration to be paid in the Offer; (d) decrease the number of Shares sought in the Offer; (e) extend or
otherwise change the Expiration Time other than in accordance with the Purchase Agreement; or (f) impose additional conditions to
the Offer or otherwise amend, modify or supplement any of the conditions to the Offer or terms of the Offer in a manner adverse to
AVG shareholders.
See Section 15 — “Certain Conditions of the Offer.”
Have any AVG shareholders agreed to tender their Shares?
Yes, TA X L.P., TA Atlantic and Pacific VI L.P., TA Strategic Partners Fund II L.P., TA Strategic Partners Fund II-A L.P. and
TA Investors III L.P., shareholders of AVG that together own approximately 13.1 percent of the Shares, and CVP II, Inc., that owns
approximately 2.8 percent of the Shares (in each case based on 50,730,029 Shares outstanding as of July 25, 2016), have entered into
tender agreements with Purchaser, dated as of July 6, 2016, pursuant to which each such shareholder has agreed, among other things,
to tender all of the Shares held by such shareholder into the Offer. In the tender agreements, the shareholder parties have agreed to
vote their Shares to, among other things, approve the Asset Sale, the Dissolution, the Liquidation Distribution, the appointment of
directors designated by Purchaser and other matters relating to the transactions contemplated by the Purchase Agreement. Each tender
agreement may be terminated by the applicable shareholder party upon the occurrence of certain events, including the termination of
the Purchase Agreement.
See Section 11 — “The Purchase Agreement; Other Agreements — Tender Agreements.”
How do I tender my Shares?
In order for Shares to be validly tendered pursuant to the Offer, you must follow these instructions:
•
If you are a record holder and you hold uncertificated Shares in book-entry form on the books of AVG’s transfer
agent, the following must be received by the Depositary at one of its addresses set forth in the Letter of
Transmittal before the Offer expires: (a) the Letter of Transmittal, properly completed and duly executed; and (b)
any other documents required by the Letter of Transmittal.
•
If your Shares are held in “street” name and are being tendered by book-entry transfer, the following must be
received by the Depositary at one of its addresses set forth in the Letter of Transmittal before the Offer expires:
(a) a Book-Entry Confirmation (as defined under Section 2 — “Acceptance for Payment and Payment for
Shares”); (b) the Letter of Transmittal, properly completed and duly executed, or an Agent’s Message (as defined
under Section 2 — “Acceptance for Payment and Payment for Shares”); and (c) any other documents required by
the Letter of Transmittal.
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•
If you cannot complete the procedure for delivery by book-entry transfer on a timely basis, or you otherwise
cannot deliver all required documents to the Depositary before the Offer expires, you may be able to tender your
Shares using the enclosed Notice of Guaranteed Delivery. For the tender to be valid, however, the Depositary
must receive the Notice of Guaranteed Delivery prior to the Expiration Time and must then receive the missing
items within three NYSE trading days after the date of execution of such Notice of Guaranteed Delivery. Please
contact the Information Agent for assistance.
•
If you hold Shares through a broker, dealer, commercial bank, trust company or other nominee, you must contact
your broker, dealer, commercial bank, trust company or other nominee and give instructions that your Shares be
tendered.
See Section 3 — “Procedures for Accepting the Offer and Tendering Shares.”
Until what time may I withdraw previously tendered Shares?
You may properly withdraw your previously tendered Shares at any time until the Expiration Time. In addition, pursuant to
Section 14(d)(5) of the Exchange Act, Shares may be withdrawn at any time after September 27, 2016, which is the 60th day after the
date of the commencement of the Offer, unless prior to that date Purchaser has accepted for payment the Shares validly tendered in the
Offer. There will be no withdrawal rights during the Subsequent Offering Period (which includes the Minority Exit Offering Period, if
applicable); any Shares tendered will immediately be accepted and promptly paid for.
See Section 4 — “Withdrawal Rights.”
How do I withdraw previously tendered Shares?
To properly withdraw previously tendered Shares, you must deliver a written notice of withdrawal with the required information
(as specified in this Offer to Purchase and in the related Letter of Transmittal) to the Depositary at any time at which you have the
right to withdraw Shares. If you tendered Shares by giving instructions to a broker, dealer, commercial bank, trust company or other
nominee, you must instruct such broker, dealer, commercial bank, trust company or other nominee to arrange for the withdrawal of
your Shares and such broker, dealer, commercial bank, trust company or other nominee must effectively withdraw such Shares at any
time at which you have the right to withdraw your Shares.
See Section 4 — “Withdrawal Rights.”
What do the AVG Supervisory Board and the AVG Management Board think of the Offer?
After due and careful discussion and consideration, including a thorough review of the Offer with their outside legal and
financial advisors, the AVG Boards by unanimous vote of all directors present or represented and voting (a) approved the terms of,
and the transactions contemplated by, the AVG Transaction Documents, and approved AVG’s entry into the AVG Transaction
Documents; and (b) determined to support the Offer and to recommend that AVG shareholders accept the Offer, subject to the terms
and conditions of the AVG Transaction Documents. The AVG Boards also unanimously approved (i) the Asset Sale, the subsequent
Dissolution and the Liquidation Distribution and the appointment of a liquidator; (ii) the terms and conditions of the Asset Sale
Agreement and the entry into the Asset Sale Agreement by AVG upon Purchaser’s request as set forth in the AVG Transaction
Documents; and (iii) the proposed amendment of the articles of association of AVG if the Asset Sale is pursued and the proposed
amendment of the articles of association of AVG and conversion of AVG into a private company with limited liability if the Asset
Sale is not pursued.
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The AVG Boards unanimously support the Offer and recommend that AVG shareholders accept the Offer. The AVG
Boards unanimously recommend that you vote “for” each of the items that contemplate a vote of AVG shareholders at the
EGM. At the EGM, AVG shareholders will be requested to vote on the Asset Sale, the Dissolution, the Liquidation
Distribution, the appointment of the liquidator, the appointment of directors designated by Purchaser to the AVG Boards and
other matters contemplated by the Purchase Agreement.
A more complete description of the reasons that AVG Boards approved the Offer and recommended that shareholders accept the
Offer and tender their Shares pursuant to the Offer is set forth in the Solicitation/Recommendation Statement on Schedule 14D-9 of
AVG that AVG is furnishing to shareholders in connection with the Offer.
If I decide not to tender, how will the Offer affect my Shares?
We anticipate that, after the consummation of the Offer, there may be so few remaining shareholders and publicly-held Shares
that the Shares will no longer be eligible to be traded on the NYSE or any other securities exchange. After the consummation of the
Offer, we intend to cause AVG to terminate the listing of the Shares on the NYSE. As a result, we anticipate that there will not be an
active trading market for the Shares. In addition, after the consummation of the Offer we intend to cause AVG to terminate the
registration of Shares under the Exchange Act as promptly as practicable and take steps to cause the suspension of its reporting
obligations with the SEC. As a result, AVG would no longer be required to make filings with the SEC or otherwise comply with the
rules of the SEC relating to publicly-held companies. Furthermore, the ability of “affiliates” of AVG and persons holding “restricted
securities” of AVG to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933 (as amended, and
together with the rules and regulations promulgated thereunder, the “Securities Act”), may be impaired or eliminated.
If a Subsequent Reorganization is consummated, it is anticipated that AVG shareholders who do not tender their Shares pursuant
to the Offer (or during the Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable) will be
offered or will receive the same consideration for their Shares as those shareholders who tendered their Shares pursuant to the Offer
(or during the Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable), without interest and less
applicable withholding taxes (including Dutch dividend withholding tax) or other taxes. However, in the Compulsory Acquisition, the
Dutch Court will determine the price to be paid for the Shares, which may be greater, equal to or less than the Offer Price.
As a result of the Subsequent Reorganization, it is anticipated that AVG will be liquidated or become wholly owned by
Purchaser. In addition, if the Offer and the Subsequent Reorganization are completed, another difference to you between tendering
your Shares and not tendering your Shares pursuant to the Offer is that you may be paid earlier if you tender your Shares pursuant to
the Offer.
The applicable withholding taxes (including Dutch dividend withholding tax) or other taxes, if any, imposed on AVG
shareholders who do not tender their Shares pursuant to the Offer (or during the Subsequent Offering Period, which includes the
Minority Exit Offering Period, if applicable) are likely to be different from, and greater than, the taxes imposed upon such AVG
shareholders had they tendered their Shares pursuant to the Offer (or during the Subsequent Offering Period, which includes the
Minority Exit Offering Period, if applicable). If in connection with the Asset Sale and the Subsequent Reorganization it is decided that
AVG will be dissolved and liquidated, Dutch dividend withholding tax will (unless a shareholder qualifies for an exemption or
reduction) be due at the statutory rate of 15 percent to the extent that the liquidation proceeds exceed the average paid-in capital of
those Shares as recognized for purposes of Dutch dividend withholding tax purposes. As a result, the net amount received by AVG
shareholders for Shares that are not tendered in the Offer is likely to be lower than the amount that they would have received had they
tendered their Shares pursuant to the Offer (or during the
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Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable). The amount received will depend upon
each AVG shareholder’s individual corporate income tax or personal income tax circumstances and the amount of any required
withholding or other taxes.
See the “Introduction” to this Offer to Purchase, Section 11 — “The Purchase Agreement; Other Agreements,” Section 12
— “Purpose of the Offer; Plans for AVG” and Section 13 — “Certain Effects of the Offer.”
What is the market value of my Shares as of a recent date?
On July 6, 2016, the trading day before the public announcement of the terms of the Offer, the reported closing sales price of the
Shares on the NYSE was $18.79. On July 28, 2016, the last full trading day before the commencement of the Offer, the reported
closing sales price of the Shares on the NYSE was $24.76. The Offer Price represents an approximately 33 percent premium over the
July 6, 2016 closing stock price, and an approximately 1 percent premium over the July 28, 2016 stock price.
See Section 6 — “Price Range of Shares; Dividends.”
Will I have appraisal rights in connection with the Offer?
The AVG shareholders are not entitled under Dutch law or otherwise to appraisal rights with respect to the Offer. However, in
the event that upon the Expiration Time or after the Subsequent Offering Period (which includes the Minority Exit Offering Period, if
applicable), Purchaser holds 95 percent or more of the then outstanding Shares, Purchaser may acquire the remaining Shares not
tendered and purchased by means of the Compulsory Acquisition. In such proceedings the Dutch Court will determine the cash price
to be paid for the Shares, which may be greater than, equal to or less than the Offer Price. The non-tendering AVG shareholders do not
have the right to oblige the Purchaser to buy their Shares.
See Section 17 — “Appraisal Rights.”
What will happen to my equity awards in the Offer?
At the Acceptance Time, each option to purchase Shares granted under the stock plans of AVG, including the Amended and
Restated 2013 Option Plan and the Appendix to the Amended and Restated 2013 Option Plan — RSU Plan (collectively, the “AVG
Stock Plan”) (such option, an “AVG Option”), whether vested or unvested, that is outstanding as of immediately prior to the
Acceptance Time will be cancelled and extinguished without any further action on the part of Purchaser, AVG, or any holder of an
AVG Option or any other person. To the extent that an AVG Option is vested as of the Acceptance Time (as determined in accordance
with the terms of the AVG Stock Plan and the applicable award agreement) and has an exercise price per Share that is less than the
Offer Price, at the Acceptance Time, such vested AVG Option will be converted into the right to receive a cash payment from Parent
at the Acceptance Time (less applicable withholding taxes or other taxes) equal to the product of (a) the excess, if any, of the Offer
Price over the applicable per Share exercise price of such AVG Option multiplied by (b) the number of vested Shares subject to such
AVG Option. An AVG Option that is unvested as of the Acceptance Time or has an exercise price per Share that is equal to or greater
than the Offer Price will be cancelled without any cash or other consideration being paid or provided therefor, except that if, as of the
date of the Purchase Agreement, with respect to certain AVG Options specifically identified on the confidential disclosure schedule
that AVG delivered to Parent and Purchaser concurrently with the execution of the Purchase Agreement which contain a vesting
acceleration provision that can be triggered following the Acceptance Time upon a qualifying event or termination of employment,
then upon the satisfaction of all of the conditions otherwise necessary for such vesting acceleration in accordance with the existing
rights of the holder
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of such AVG Option, Parent will, within 30 days after the date of the qualifying event or termination triggering the vesting
acceleration, provide the holder of such AVG Option with a payment (less applicable withholding taxes or other taxes) equal to the
product of (i) the excess, if any, of the Offer Price over the applicable per Share exercise price of such AVG Option multiplied by (ii)
the number of Shares subject to such AVG Option that would have vested had the AVG Option been outstanding on the date of the
event triggering the vesting acceleration right with respect to such AVG Option. No interest will be paid or accrued on any cash
payable with respect to any AVG Option.
At the Acceptance Time, and without any further action on the part of Purchaser, AVG, or any holder of any outstanding
performance-based restricted stock unit (an “AVG Performance Stock Unit”) or outstanding restricted stock unit (an “AVG Restricted
Stock Unit”) or any other person, each AVG Performance Stock Unit or AVG Restricted Stock Unit that is vested as of the
Acceptance Time (as determined in accordance with the terms of the AVG Stock Plan and the applicable award agreement) will no
longer be outstanding and will automatically be cancelled and converted into the right to receive an amount in cash from Parent at the
Acceptance Time (less applicable withholding taxes or other taxes) equal to the product of (a) the Offer Price multiplied by (b) the
number of vested Shares subject to such AVG Performance Stock Unit or AVG Restricted Stock Unit. Any AVG Performance Stock
Unit or AVG Restricted Stock Unit that is unvested as of the Acceptance Time will be cancelled without any cash or other
consideration being paid or provided therefor, except, that if, as of the date of the Purchase Agreement, with respect to certain AVG
Performance Stock Units or AVG Restricted Stock Units specifically identified on the confidential disclosure schedule that AVG
delivered to Parent and Purchaser concurrently with the execution of the Purchase Agreement which contain a vesting acceleration
provision that can be triggered following the Acceptance Time upon a qualifying event or termination of employment, then upon the
satisfaction of all of the conditions otherwise necessary for such vesting acceleration in accordance with the existing rights of the
holder of such AVG Performance Stock Unit or AVG Restricted Stock Unit, Parent will, within 30 days after the date of the
qualifying event or termination triggering the vesting acceleration, provide the holder of such AVG Performance Stock Unit or AVG
Restricted Stock Unit with a payment (less applicable withholding taxes or other taxes) equal to the product of (i) the Offer Price
multiplied by (ii) the number of Shares subject to such AVG Performance Stock Unit or AVG Restricted Stock Unit that would have
vested had such AVG Performance Stock Unit or AVG Restricted Stock Unit been outstanding on the date of the event triggering the
vesting acceleration right with respect to such AVG Performance Stock Unit or AVG Restricted Stock Unit. No interest will be paid or
accrued on any cash payable with respect to any vested AVG Performance Stock Unit or AVG Restricted Stock Unit.
See Section 11 — “The Purchase Agreement; Other Agreements — Purchase Agreement — Treatment of Equity Awards.”
What are the material U.S. federal income tax consequences of tendering Shares for U.S. shareholders?
The receipt of cash in exchange for your Shares pursuant to the Offer (or during the Subsequent Offering Period, which includes
the Minority Exit Offering Period, if applicable) (together for purposes of U.S. federal income tax discussions, the “Offer”) or the
Subsequent Reorganization generally will be a taxable transaction for U.S. federal income tax purposes and may also be a taxable
transaction under applicable state, local or non-U.S. income or other tax laws.
We urge you to consult your own tax advisor as to the particular tax consequences to you of the Offer and the Subsequent
Reorganization.
See Section 5A — “Certain Material U.S. Federal Income Tax Consequences” for a more detailed discussion of the U.S. federal
income tax consequences of the Offer, the Asset Sale and the Subsequent Reorganization for certain U.S. shareholders.
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What are the material Dutch tax consequences of having my Shares accepted for payment in the Offer?
For non-Dutch resident AVG shareholders who or that:
(a) do not have, nor are deemed not to have, directly or indirectly, a substantial interest (aanmerkelijk belang) or deemed
substantial interest ( fictief aanmerkelijk belang ) in AVG;
(b) in the case of non-Dutch resident AVG shareholders that are not individuals, (i) do not derive profits from an
enterprise that is, in whole or in part, carried on through a permanent establishment or a permanent representative in
The Netherlands to which permanent establishment or permanent representative the Shares are attributable, or (ii) are
not, other than by way of securities, entitled to a share in the profits of an enterprise or a co-entitlement to the net
worth of an enterprise, which is effectively managed in The Netherlands and to which enterprise the Shares are
attributable;
(c) in the case of non-Dutch resident AVG shareholders that are individuals, (i) do not derive profits from an enterprise
or an interest in an enterprise that is, in whole or in part, carried on through a permanent establishment or a permanent
representative in The Netherlands to which permanent establishment or permanent representative the Shares are
attributable, or (ii) do not realize income or gains with respect to the Shares that qualify as income from
miscellaneous activities in The Netherlands, which include activities with respect to the Shares that exceed regular,
active portfolio management, or (iii) are not, other than by way of securities, entitled to a share in the profits of an
enterprise that is effectively managed in The Netherlands and to which enterprise the Shares are attributable;
the receipt of cash in exchange of their Shares pursuant to the Offer (or during the Subsequent Offering Period, which includes the
Minority Exit Offering Period, if applicable) will generally not be subject to Dutch local taxation.
Depending on the circumstances, Dutch resident AVG shareholders and non-Dutch resident AVG shareholders may be subject to
Dutch local taxation on the receipt of cash in exchange of their Shares pursuant to the Offer (or during the Subsequent Offering
Period, which includes the Minority Exit Offering Period, if applicable). See Section 5B — “Certain Dutch Tax Aspects of the Offer
and Subsequent Reorganization” for a more detailed discussion of the Dutch tax consequences of the Offer.
If subsequent to the Asset Sale and in connection with the Subsequent Reorganization it is decided that AVG will be dissolved
and liquidated, Dutch dividend withholding tax will (unless a shareholder qualifies for an exemption or reduction) be due at the
statutory rate of 15 percent to the extent that the liquidation proceeds exceed the average paid-in capital of those Shares as recognized
for Dutch dividend withholding tax purposes. As a result, the net amount received in connection with the Subsequent Reorganization
by AVG shareholders for Shares that are not tendered in the Offer is likely to be lower than the amount that they would have received
had they tendered their Shares pursuant to the Offer (or during the Subsequent Offering Period, which includes the Minority Exit
Offering Period, if applicable).
See Section 5B — “Certain Dutch Tax Aspects of the Offer and Subsequent Reorganization” for a more detailed discussion of
the Dutch tax consequences of the Subsequent Reorganization.
We urge you to consult your own tax advisor as to the particular Dutch tax consequences to you of the Offer and the Subsequent
Reorganization.
Who should I call if I have questions about the Offer?
You may call Innisfree M&A Incorporated, the Information Agent, toll free at (888) 750-5834 (for shareholders) or collect at
(212) 750-5833 (for banks and brokers). Innisfree M&A Incorporated is acting as the information agent for the Offer. See the back
cover of this Offer to Purchase for additional contact information.
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INTRODUCTION
To the Holders of Ordinary Shares of AVG Technologies N.V.:
Avast Software B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) organized
under the laws of The Netherlands (“Purchaser”) and a direct wholly owned subsidiary of Avast Holding B.V., a private company
with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) organized under the laws of The Netherlands
(“Parent”) is offering to purchase all outstanding ordinary shares, with a nominal value of €0.01 per share (the “Shares”), of AVG
Technologies N.V., a public limited liability company ( naamloze vennootschap ) organized under the laws of The Netherlands
(“AVG”), at a purchase price of $25.00 per Share (the “Offer Price”), in cash, without interest and less applicable withholding taxes or
other taxes, upon the terms and subject to the conditions set forth in this Offer to Purchase (the “Offer to Purchase”) and in the related
Letter of Transmittal (the “Letter of Transmittal” and, together with this Offer to Purchase, as each may be amended or supplemented
from time to time, the “Offer”).
The Offer is being made pursuant to a Purchase Agreement, dated as of July 6, 2016 (as it may be amended from time to time,
the “Purchase Agreement”), by and among AVG, Purchaser and Parent. Unless the Offer is extended or earlier terminated, the Offer
will expire at 11:59 p.m., New York City time, on August 31, 2016 (the “Expiration Time,” unless the Offer is extended in accordance
with the Purchase Agreement, in which event “Expiration Time” will mean the latest time and date at which the Offer, as so extended
by Purchaser, will expire). The Purchase Agreement provides, among other things, that, subject to the terms and conditions set forth
therein, Purchaser will, promptly after the Expiration Time, accept for payment all Shares validly tendered pursuant to the Offer and
not properly withdrawn (the time of acceptance of Shares for payment, the “Acceptance Time”) and, promptly after the Acceptance
Time, pay for all such Shares (such time of payment, the “Offer Closing”). After the consummation of the Offer, we intend to cause
AVG to terminate the listing of the Shares on the New York Stock Exchange (the “NYSE”). As a result, AVG would cease to be
publicly traded. In addition, after the consummation of the Offer we intend to cause the termination of the registration of Shares under
the Securities Exchange Act of 1934 (as amended from time to time, and together with the rules and regulations promulgated
thereunder, the “Exchange Act”) as promptly as practicable and expect to take steps to cause the suspension of all of AVG’s reporting
obligations with the United States Securities and Exchange Commission (the “SEC”).
Tendering shareholders who are record owners of their Shares and who tender directly to American Stock Transfer & Trust
Company, LLC (the “Depositary”) will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in
Instruction 6 of the Letter of Transmittal, stock transfer taxes with respect to the purchase of Shares by Purchaser pursuant to the
Offer. Shareholders who hold their Shares through a broker, dealer, commercial bank, trust company or other nominee should consult
such broker, dealer, commercial bank, trust company or other nominee as to whether it charges any service fees or commissions.
The Offer is conditioned upon, among other things, the satisfaction or waiver (to the extent permitted by the Purchase
Agreement and applicable law) of the following as of immediately prior to the Expiration Time: (a) the Minimum Condition, (b) the
Antitrust Clearance Condition, (c) the Restraints Condition, (d) the CFIUS Clearance Condition and (e) the Termination Condition,
each as defined below.
The “Minimum Condition” requires that there have been validly tendered pursuant to the Offer and not properly withdrawn a
number of Shares (excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been delivered in
settlement or satisfaction of such guarantee prior to the Expiration Time) that, together with the Shares then owned by Parent,
Purchaser and their subsidiaries, represents at least 95 percent of, or, if AVG shareholders approve the Asset Sale (as defined below),
the Dissolution (as defined below), the Liquidation Distribution (as defined below) and related matters contemplated by the Purchase
Agreement at the EGM (as defined below), at least 80 percent of, the Shares outstanding immediately prior to the Expiration Time.
The “Antitrust Clearance Condition” requires the expiration or termination of any applicable waiting period (and any extension
thereof) applicable to the transactions contemplated by the Purchase Agreement under the
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Hart-Scott-Rodino Antitrust Improvements Act of 1976 (as amended, and together the rules and regulations thereunder, the “HSR
Act”) and the expiration or termination of the applicable waiting period, or receipt of approval (which is in full force and effect and
not subject to appeal), under the antitrust laws of Austria and Germany. Parent and AVG filed their Premerger Notification and Report
Forms with the Federal Trade Commission (the “FTC”) and the Antitrust Division of the U.S. Department of Justice (the “Antitrust
Division”) in connection with the transactions contemplated by the Purchase Agreement on July 27, 2016. The Offer is also subject to
other conditions as described in this Offer to Purchase. See Section 15 — “Certain Conditions of the Offer.”
The “Restraints Condition” requires that there is not in effect any law, regulation, order, or injunction entered, enacted,
promulgated, enforced or issued by any court or other governmental authority of competent jurisdiction prohibiting, rendering illegal
or enjoining the consummation of the transactions contemplated by the Purchase Agreement, other than the application to such
transactions of applicable waiting periods under the HSR Act or other antitrust laws (excluding any antitrust laws under which
criminal sanctions would be imposed if the Offer were to be consummated).
The “CFIUS Clearance Condition” requires (a) the receipt of a written notification issued by the Committee on Foreign
Investment in the United States (“CFIUS”) that it has determined that the transactions contemplated by the Purchase Agreement are
not a “covered transaction” pursuant to 31 C.F.R. 800 and 50 U.S.C. App. § 2170, as amended by the Foreign Investment and Security
Act of 2007 (“FINSA”), (b) the receipt of a written notification from CFIUS that it has completed its review (or, if applicable,
investigation) of the transactions contemplated by the Purchase Agreement under FINSA and determined that there are no unresolved
national security concerns with respect to the transactions contemplated by the Purchase Agreement, and such determination is not
conditioned upon the commitment of Parent or Purchaser to (i) propose, negotiate, commit to or effect, by consent decree, hold
separate order, agreement or otherwise, the sale, transfer, license, divestiture or other disposition of, or any prohibition or limitation on
the ownership, operation, effective control or exercise of full rights of ownership of, any of the businesses, product lines or assets of
Parent or any of its affiliates or of AVG or any of its subsidiaries (“Divestitures”), (ii) terminate existing, or create new, relationships,
contractual rights or obligations of Parent or its affiliates or, following the Acceptance Time, of AVG or its subsidiaries, (iii) effect
any other change or restructuring of Parent, its affiliates, AVG, or their respective subsidiaries or (iv) otherwise take or commit to take
any actions that interfere with Parent’s ability to control, manage or exercise full rights of ownership of AVG or its subsidiaries, or
limit the freedom of action of Parent, its affiliates, AVG, or their respective subsidiaries, with respect to, or their ability to retain, or
enjoy the rights and benefits of any assets or businesses, including, without limitation, the freedom to provide services to, or otherwise
enter into, a commercial relationship with any person, (c) that, following an investigation, CFIUS has reported the transactions
contemplated by the Purchase Agreement to the President of the United States and the President of the United States has declined to
exercise his authorities under FINSA to suspend or prohibit the transactions contemplated by the Purchase Agreement or (d) that,
following an investigation, CFIUS has reported the transactions contemplated by the Purchase Agreement to the President of the
United States and the President of the United States has determined to take action that would not, and would not reasonably be
expected to, result in a material and adverse effect on Parent and its controlled affiliates, taken as a whole, after giving effect to the
transactions contemplated by the Purchase Agreement, or otherwise require the commitment of Parent or Purchaser to take any action
described in clauses (i) through (iv) above.
The “Termination Condition” requires that the Purchase Agreement has not been terminated in accordance with its terms.
The Offer is not subject to a financing condition but is subject to other conditions as described in this Offer to Purchase. See
Section 15 — “Certain Conditions of the Offer.”
After due and careful discussion and consideration, including a thorough review of the Offer with their outside legal and
financial advisors, AVG’s supervisory board (the “AVG Supervisory Board”) and management
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board (the “AVG Management Board,” and together with the AVG Supervisory Board, the “AVG Boards”) by unanimous vote of all
directors present or represented and voting (a) approved the terms of, and the transactions contemplated by, the Purchase Agreement,
the Asset Sale Agreement (as defined below) and all other documents conducive to AVG’s obligations under the Purchase Agreement
(collectively, the “AVG Transaction Documents”), and approved AVG’s entry into the AVG Transaction Documents; and (b)
determined to support the Offer and to recommend that AVG shareholders accept the Offer, subject to the terms and conditions of the
AVG Transaction Documents. The AVG Boards also unanimously approved (i) the Asset Sale (as defined below), the Dissolution (as
defined below) and the Liquidation Distribution (as defined below) and the appointment of a liquidator; (ii) the terms and conditions
of the Asset Sale Agreement and the entry into the Asset Sale Agreement by AVG upon Purchaser’s request as set forth in the AVG
Transaction Documents; and (iii) the proposed amendment of the articles of association of AVG if the Asset Sale (as defined below) is
pursued and the proposed amendment of the articles of association of AVG and conversion of AVG into a private company with
limited liability if the Asset Sale is not pursued.
The AVG Boards unanimously support the Offer and recommend that AVG shareholders accept the Offer. The AVG
Boards unanimously recommend that you vote “for” each of the items that contemplate a vote of AVG shareholders at the
extraordinary general meeting of AVG shareholders scheduled to be held on August 23, 2016 at 10:00 A.M., Central European
Time, at the offices of Allen & Overy LLP, Apollolaan 15, 1077 AB Amsterdam, The Netherlands (the “EGM”). At the EGM,
AVG shareholders will be requested to vote on the Asset Sale (as defined below), the Dissolution (as defined below), the
Liquidation Distribution (as defined below), the appointment of the liquidator, the appointment of directors designated by
Purchaser to the AVG Boards and other matters contemplated by the Purchase Agreement. See the website of AVG
(www.avg.com) for the full agenda and explanatory notes for the EGM. The information on, or that can be accessed through, AVG’s
website neither constitutes a part of the Offer to Purchase nor is incorporated by reference herein.
A more complete description of the AVG Boards’ reasons for authorizing and approving the Purchase Agreement and the
transactions contemplated thereby, including the Offer, the Asset Sale and the Subsequent Reorganization (as defined below), is set
forth in AVG’s Solicitation/Recommendation Statement on Schedule 14D-9 (the “Schedule 14D-9”) that is being furnished to AVG
shareholders in connection with the Offer. AVG Shareholders should carefully read the information set forth in the Schedule 14D-9,
including the information set forth under the sub-heading “Background of the Offer and Subsequent Reorganization; Reasons for
Recommendation.”
Following the Expiration Time, Purchaser intends to provide for a subsequent offering period (the “Subsequent Offering
Period”) of at least 10 business days in accordance with Rule 14d-11 under the Exchange Act and in accordance with the Purchase
Agreement. The Subsequent Offering Period may be extended by Purchaser for at least seven business days following the
announcement that Purchaser or its designee intends to effect the Asset Sale (as defined below) (the “Minority Exit Offering Period”).
AVG shareholders tendering their Shares during the Subsequent Offering Period (which includes the Minority Exit Offering Period, if
applicable) will receive the Offer Price, in cash, without interest and less applicable withholding taxes or other taxes. Under no
circumstances will interest be paid on the Offer Price paid pursuant to the Offer, regardless of any extension of the Offer, the
Subsequent Offering Period (which includes the Minority Exit Offering Period, if applicable), or any delay in making payment
for Shares.
The Purchase Agreement provides, among other things, that, as promptly as practicable following the closing of the Subsequent
Offering Period (which includes the Minority Exit Offering Period, if applicable), Purchaser may complete a corporate reorganization
of AVG and its subsidiaries (the “Subsequent Reorganization”). The Subsequent Reorganization will utilize processes available to
Purchaser under Dutch law to ensure that (a) Purchaser becomes the owner of all of AVG’s business operations from and after the
consummation of the Subsequent Reorganization and (b) any AVG shareholders who do not tender their Shares pursuant to the Offer
(or during the Subsequent Offering Period, which includes the Minority Exit Offering
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Period, if applicable) are offered or receive the same consideration for their Shares as those shareholders who tendered their Shares
pursuant to the Offer (or during the Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable),
without interest and less applicable withholding taxes (including Dutch dividend withholding tax) or other taxes. As a result of the
Subsequent Reorganization, it is anticipated that AVG will be liquidated or become wholly owned by Purchaser. The Subsequent
Reorganization may also include the conversion of AVG from a public limited liability company ( naamloze vennootschap ) to a
private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ).
The Purchase Agreement provides, among other things, that Purchaser will, if permissible by applicable law and if the number
of Shares validly tendered pursuant to the Offer and not properly withdrawn (including Shares validly tendered during the Subsequent
Offering Period, which includes the Minority Exit Offering Period, if applicable, but excluding Shares tendered pursuant to guaranteed
delivery procedures that have not yet been delivered in settlement or satisfaction of such guarantee prior to the Expiration Time),
together with the Shares then owned by Parent, Purchaser and their respective subsidiaries, represents at least 95 percent of the then
outstanding Shares, commence the compulsory acquisition (the “Compulsory Acquisition”) of Shares held by non-tendering AVG
shareholders in accordance with Section 2:92a or Section 2:201a of the Dutch Civil Code (the “DCC”).
If the number of Shares tendered pursuant to the Offer and not properly withdrawn (including Shares validly tendered during the
Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable, but excluding Shares tendered pursuant
to guaranteed delivery procedures that have not yet been delivered in settlement or satisfaction of such guarantee prior to the
Expiration Time), together with the Shares then owned by Parent, Purchaser and their respective subsidiaries, represents fewer than 95
percent but at least 80 percent of the then outstanding Shares, Purchaser intends to, or intends to cause its designee to, subject to
receipt of the approval of AVG shareholders at the EGM, promptly after the closing of the Subsequent Offering Period (which
includes the Minority Exit Offering Period, if applicable), effect the Subsequent Reorganization by means of a sale of all or
substantially all of the assets of AVG to Purchaser or its designee pursuant to an asset sale agreement (the “Asset Sale Agreement”) in
exchange for (a) cash and a note payable in an aggregate amount equal to the Offer Price multiplied by the total number of outstanding
Shares as of the Offer Closing and (b) the assumption by Purchaser or its designee of substantially all liabilities of AVG (the “Asset
Sale”).
If Parent determines it is not reasonably practicable (which will be deemed to include adverse tax consequences) to cause the
Compulsory Acquisition or the Asset Sale and Liquidation Distribution, it will use reasonable best efforts to cause a Subsequent
Reorganization in a different manner with the prior approval of the independent directors of AVG (the “Independent Directors”). The
Compulsory Acquisition and the Asset Sale and Dissolution have been unanimously approved by the AVG Boards (including the
Independent Directors).
The governance of AVG and role of the Independent Directors following the Offer Closing are described in Section 12
— “Purpose of the Offer; Plans for AVG.”
It is possible that Purchaser may not be able to implement any proposed Subsequent Reorganization promptly after the
consummation of the Offer, that such Subsequent Reorganization may be delayed or that such Subsequent Reorganization may not be
able to take place at all. Any Subsequent Reorganization could be the subject of litigation, and a court could delay the Subsequent
Reorganization or prohibit it from occurring on the terms described in this Offer to Purchase, or from occurring at all. Moreover, even
if Purchaser is able to effect any proposed Subsequent Reorganization, the consideration that AVG shareholders receive therein may
be substantially lower and/or different in form than the consideration that they would have received had they tendered their Shares in
the Offer (and they may also be subject to additional taxes).
Upon consummation of the Asset Sale, Purchaser would own all of AVG’s business operations and would be the principal
shareholder in AVG, and the non-tendering AVG shareholders would continue to own Shares representing, in the aggregate, a
minority of the Shares then outstanding. Upon completion of the Asset Sale, AVG will be dissolved and liquidated in accordance with
applicable Dutch liquidation procedures (the
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“Dissolution”). Purchaser would then provide an indemnity or guarantee to the liquidator for any deficit in the estate of AVG, to
enable the liquidator to make an advance liquidation distribution in cash (the “Liquidation Distribution”) to each non-tendering AVG
shareholder in an amount equal to the Offer Price, without interest and less applicable withholding taxes (including Dutch dividend
withholding tax) or other taxes, for each Share then owned.
The Asset Sale and the Liquidation Distribution will result in all non-tendering AVG shareholders receiving, for each Share then
held, cash in an amount equal to the Offer Price, in each case, without interest and less applicable withholding taxes (including Dutch
dividend withholding tax) or other taxes. In connection with the Compulsory Acquisition, Purchaser must offer AVG shareholders (or
such AVG shareholders must otherwise receive) the Offer Price, without interest and less applicable withholding taxes or other taxes,
for each Share held by such AVG shareholder. However, in the Compulsory Acquisition, the Enterprise Chamber (
Ondernemingskamer ) of the Amsterdam Court of Appeals ( Gerechtshof Amsterdam ) (the “Dutch Court”) will determine a cash price
to be paid for the Shares, which may be greater, equal to or less than the Offer Price (as described below).
After the consummation of the Offer, we intend to cause AVG to terminate the listing of the Shares on the NYSE. In addition,
after the consummation of the Offer, we intend to cause the termination of the registration of Shares under the Exchange Act as
promptly as practicable and expect to take steps to cause the suspension of all of AVG’s reporting obligations with the SEC.
AVG has advised Parent and Purchaser that, as of the close of business on July 25, 2016, (a) 54,763,151 Shares were issued and
50,730,029 Shares were outstanding, (b) 2,988,480 Shares were subject to options to purchase Shares (the “AVG Options”) granted
and outstanding under the stock plans of AVG, including the Amended and Restated 2013 Option Plan and the Appendix to the
Amended and Restated 2013 Option Plan —RSU Plan (collectively, the “AVG Stock Plan”), (c) 690,000 Shares were subject to
restricted stock units (the “AVG Restricted Stock Units”) granted and outstanding under the AVG Stock Plan and (d) 1,623,877
Shares were subject to performance-based restricted stock units (the “AVG Performance Stock Units”) granted and outstanding under
the AVG Stock Plan. Assuming that all equity interests remain outstanding, that no other Shares are issued after July 25, 2016 and that
AVG shareholders approve the Asset Sale, the Minimum Condition will be satisfied if at least 40,584,024 Shares are validly tendered
and not properly withdrawn prior to the Expiration Time (excluding Shares tendered pursuant to guaranteed delivery procedures that
have not yet been delivered in settlement or satisfaction of such guarantee prior to the Expiration Time). Assuming that all equity
interests remain outstanding, that no other Shares are issued after July 25, 2016 and that AVG shareholders do not approve the Asset
Sale, the Minimum Condition will be satisfied if at least 48,193,528 Shares are validly tendered and not properly withdrawn prior to
the Expiration Time (excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been delivered in
settlement or satisfaction of such guarantee prior to the Expiration Time). The actual number of outstanding Shares that are required to
be tendered to satisfy the Minimum Condition (as defined in Section 15 — “Certain Conditions of the Offer”) will depend on the
actual number of Shares outstanding at the time of the Expiration Time.
Certain material U.S. federal income tax consequences and Dutch law income tax consequences of the sale of Shares pursuant to
the Offer and pursuant to the Subsequent Reorganization are described in Section 5 —“Certain Tax Consequences.” The applicable
withholding taxes (including Dutch dividend withholding tax) or other taxes, if any, imposed on AVG shareholders in respect
of the Liquidation Distribution are likely to be different from, and greater than, the taxes imposed upon such AVG
shareholders had they tendered their Shares pursuant to the Offer (or during the Subsequent Offering Period, which includes
the Minority Exit Offering Period, if applicable) . For example, except with respect to payments to shareholders that are eligible for
an exemption, if any, AVG will be obligated to withhold Dutch dividend withholding tax in respect of the Offer Price if it is paid as a
liquidation distribution or an advance distribution on Shares not tendered and purchased pursuant to the Offer (or during the
Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable), while no Dutch dividend withholding
tax will be due or withheld in respect of the
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Offer Price payable by Purchaser for Shares tendered pursuant to the Offer (or during the Subsequent Offering Period, which includes
the Minority Exit Offering Period, if applicable). As a result, unless an exemption applies to a shareholder, the net amount received by
a AVG shareholder for Shares that are not tendered in the Offer (or during the Subsequent Offering Period, which includes the
Minority Exit Offering Period, if applicable) will be lower than the amount that would have been received by that AVG shareholder
had such shareholder tendered his Shares pursuant to the Offer (or during the Subsequent Offering Period, which includes the
Minority Exit Offering Period, if applicable). Shareholders are urged to consult with their tax advisers with regard to the tax
consequences of tendering their shares pursuant to the Offer and the Subsequent Reorganization . See Section 5B — “Certain
Material Dutch Tax Consequences.”
This Offer to Purchase does not constitute a solicitation of proxies, and Purchaser is not soliciting proxies in connection with the
Offer.
This Offer to Purchase and the Letter of Transmittal contain important information that should be read carefully before
any decision is made with respect to the Offer.
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THE TENDER OFFER
1.
Terms of the Offer.
Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and
conditions of such extension or amendment), we will, promptly after the Expiration Time, accept for payment all Shares validly
tendered pursuant to the Offer and not properly withdrawn (as permitted under Section 4 — “Withdrawal Rights) and, promptly after
the Acceptance Time, pay for all such Shares.
The Offer is conditioned upon, among other things, the satisfaction or waiver (to the extent permitted by the Purchase
Agreement and applicable law) of the following as of immediately prior to the Expiration Time: (a) the satisfaction of the Minimum
Condition, (b) the satisfaction or waiver of the Antitrust Clearance Condition, (c) the satisfaction or waiver of the Restraints
Condition, (d) the satisfaction or waiver of the CFIUS Clearance Condition and (e) the Termination Condition. The Offer is not
subject to a financing condition but is subject to other conditions as described in this Offer to Purchase. See Section 15 — “Certain
Conditions of the Offer.
Subject to Purchaser’s right to terminate the Purchase Agreement in accordance with its terms, Purchaser has agreed in the
Purchase Agreement that:
•
if any condition to the Offer is not satisfied or waived at the Expiration Time, we must extend the Offer (the length of
such extension period to be determined by Parent or us) from time to time until such condition or conditions to the
Offer are satisfied or waived;
•
we must extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC, the staff
thereof or the NYSE applicable to the Offer or as may be required by any other governmental authority; and
•
if the Marketing Period (as defined in Section 11 — “The Purchase Agreement; Other Agreements —Purchase
Agreement”) has not ended on the last business day prior to the Expiration Time, we must extend the Offer until the
earlier to occur of (a) any business day before or during the Marketing Period as may be specified by Parent or us on no
less than two business days’ prior notice to AVG, and (b) the first business day after the final day of the Marketing
Period.
Additionally, notwithstanding anything in the Purchase Agreement to the contrary, at the Expiration Time, we may extend the
Offer for up to 10 business days from the day the Marketing Period will otherwise end. We are not, however, required to extend the
Offer (a) beyond January 6, 2017 (the “End Date”), (b) for an individual extension period of more than 10 business days or (c) at any
time that we are permitted to terminate the Purchase Agreement.
Subject to the applicable rules and regulations of the SEC, Purchaser expressly reserves the right at any time prior to the
Expiration Time to waive, in whole or in part, any condition to the Offer and to make any change in the terms of or conditions to the
Offer. However, Purchaser will not (without the prior written consent of AVG): (a) waive or change the Minimum Condition; (b)
decrease the Offer Price; (c) change the form of consideration to be paid in the Offer; (d) decrease the number of Shares sought in the
Offer; (e) extend or otherwise change the Expiration Time other than in accordance with the Purchase Agreement; or (f) impose
additional conditions to the Offer or otherwise amend, modify or supplement any of the conditions to the Offer or terms of the Offer in
a manner adverse to AVG shareholders.
Any extension of the Offer will be followed by a public announcement of the extension no later than 9:00 a.m., New York City
time, on the next business day after the day on which the Offer was otherwise scheduled to expire. Without limiting the manner in
which Purchaser may choose to make any public announcement, it currently intends to make announcements regarding the Offer by
issuing a press release and making any appropriate filing with the SEC.
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If Purchaser extends the Offer, is delayed in its acceptance for payment of or payment (whether before or after its acceptance for
payment for Shares) for Shares or is unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice
to its rights under the Offer and the Purchase Agreement, the Depositary may retain tendered Shares on Purchaser’s behalf, and such
Shares may not be withdrawn except to the extent that tendering shareholders are entitled to withdrawal rights as described in this
Offer to Purchase under Section 4 — “Withdrawal Rights.” However, Purchaser’s ability to delay the payment for Shares that it has
accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires Purchaser to promptly pay the consideration
offered or return the securities deposited by or on behalf of shareholders promptly after the termination or withdrawal of the Offer.
If, subject to the terms of the Purchase Agreement, Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or if Purchaser waives a material condition of the Offer, Purchaser will disseminate additional tender
offer materials and extend the Offer if and to the extent required by Rules 14d-4(d)(1), 14d-6(c) and 14e-1 under the Exchange Act.
The minimum period during which an offer must remain open following material changes in the terms of the Offer or information
concerning the Offer, other than a change in price or a change in percentage of securities sought, will depend upon the facts and
circumstances, including the relative materiality of the terms or information changes. Purchaser understands that in the SEC’s view, an
offer should remain open for a minimum of five business days from the date the material change is first published, sent or given to
shareholders, and with respect to a change in price or a change in percentage of securities sought, a minimum 10 business day period
generally is required to allow for adequate dissemination to shareholders and investor response.
If, on or before the Expiration Time, Purchaser increases the consideration being paid for Shares accepted for payment in the
Offer, such increased consideration will be paid to all shareholders whose Shares are purchased in the Offer, whether or not such
Shares were tendered before the announcement of the increase in consideration.
Following the Expiration Time, Purchaser will provide for the Subsequent Offering Period (which includes the Minority Exit
Offering Period, if applicable), in accordance with Rule 14d-11 under the Exchange Act of at least 10 business days. For purposes of
the Offer, a “business day” means any day on which the principal offices of the SEC in Washington, D.C. are open to accept filings,
or, in the case of determining a date when any payment is due, any day other than a Saturday or Sunday on which banks are not
required or authorized to close in New York City, New York, or Amsterdam, The Netherlands and consists of the time period from
12:01 a.m. through 12:00 midnight, New York City time. The Subsequent Offering Period (which includes the Minority Exit Offering
Period, if applicable) is not an extension of the Offer. The Subsequent Offering Period would be an additional period of time,
following the Expiration Time, in which shareholders may tender Shares previously tendered pursuant to the Offer. Purchaser will
announce additional details with respect to the Subsequent Offering Period in accordance with applicable rules, regulations and
interpretations of the SEC. To commence the Subsequent Offering Period (which includes the Minority Exit Offering Period, if
applicable), the length of the Subsequent Offering Period and the approximate number and percentage of the Shares deposited as of
the Expiration Time, will be announced no later than 9:00 a.m., New York City time, on the next business day after the Expiration
Time. There will be no withdrawal rights during the Subsequent Offering Period (which includes the Minority Exit Offering Period, if
applicable); any Shares tendered will immediately be accepted and promptly paid for. Any shares tendered during the Subsequent
Offering Period (which includes the Minority Exit Offering Period, if applicable) will be acquired by Purchaser at the Offer Price, in
cash, without interest and less applicable withholding taxes or other taxes.
Purchaser expressly reserves the right, in its sole discretion, subject to the terms and conditions of the Purchase Agreement and
the applicable rules and regulations of the SEC, not to accept for payment any Shares if, at the Expiration Time, any of the conditions
to the Offer have not been satisfied. See Section 15 — “Certain Conditions of the Offer.” Under certain circumstances, Purchaser may
terminate the Purchase Agreement and the Offer. Without limiting the generality of the foregoing, if the Purchase Agreement is
validly terminated pursuant to its terms, Purchaser will promptly (and in any event within 24 hours following such termination),
irrevocably and unconditionally terminate the Offer.
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AVG has provided us with AVG’s shareholder list and security position listings for the purpose of disseminating this Offer to
Purchase, the related Letter of Transmittal and other related materials to AVG shareholders. This Offer to Purchase and the Letter of
Transmittal, together with the Schedule 14D-9, will be mailed to record holders of Shares whose names appear on AVG’s shareholder
list and will be furnished, for subsequent transmittal to beneficial owners of Shares, to brokers, dealers, commercial banks, trust
companies and other nominees whose names, or the names of whose nominees, appear on the shareholder list or, if applicable, who
are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of Shares.
2.
Acceptance for Payment and Payment for Shares.
Subject to the satisfaction or waiver by Purchaser (to the extent such waiver is permitted by applicable law and the terms of the
Purchase Agreement) of all the conditions to the Offer set forth in Section 15 — “Certain Conditions of the Offer,” we will, promptly
after the Expiration Time, accept for payment all Shares validly tendered pursuant to the Offer and not properly withdrawn and,
promptly after the Acceptance Time, pay for all such Shares. See Section 1 — “Terms of the Offer.”
During the Subsequent Offering Period (which includes the Minority Exit Offering Period, if applicable), we will immediately
accept for payment and promptly pay for all additional Shares tendered during such Subsequent Offering Period (which includes the
Minority Exit Offering Period, if applicable), subject to and in compliance with the requirements of Rule 14d-11(e) under the
Exchange Act. Subject to compliance with Rule 14e-1(c) under the Exchange Act, we expressly reserve the right to delay payment for
Shares in order to comply in whole or in part with any applicable law, including, without limitation, the HSR Act and any other
applicable foreign antitrust, competition or merger control laws. See Section 16 — “Certain Legal Matters; Regulatory Approvals.”
In all cases, we will pay for Shares tendered and accepted for payment pursuant to the Offer only after timely receipt by the
Depositary of (a) if you are a record holder and you hold uncertificated Shares in book-entry form on the books of AVG’s transfer
agent, (i) the Letter of Transmittal, properly completed and duly executed, and (ii) any other documents required by the Letter of
Transmittal and (b) if your Shares are held in “street” name and are being tendered by book-entry transfer, (i) confirmation of a
book-entry transfer of such Shares (“Book-Entry Confirmation”) into the Depositary’s account at The Depository Trust Company (the
“Book-Entry Transfer Facility”) pursuant to the procedures set forth in Section 3 — “Procedures for Accepting the Offer and
Tendering Shares,” (ii) the Letter of Transmittal, properly completed and duly executed, with any required signature guarantees, or an
Agent’s Message (as defined below) in lieu of a Letter of Transmittal and (iii) any other documents required by the Letter of
Transmittal. Accordingly, tendering shareholders may be paid at different times depending upon when the foregoing documents with
respect to Shares are actually received by the Depositary. Under no circumstances will interest be paid on the Offer Price paid
pursuant to the Offer, regardless of any extension of the Offer, the Subsequent Offering Period (which includes the Minority
Exit Offering Period, if applicable), or any delay in making payment for Shares.
The term “Agent’s Message” means a message, transmitted by the Book-Entry Transfer Facility to, and received by, the
Depositary and forming a part of a Book-Entry Confirmation, stating that the Book-Entry Transfer Facility has received an express
acknowledgment from the participant in the Book-Entry Transfer Facility tendering Shares that are the subject of such Book-Entry
Confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against such participant. The term “Agent’s Message” also includes any hard copy printout evidencing
such message generated by a computer terminal maintained at the Depositary’s office.
On the terms of and subject to the conditions to the Offer, we will, promptly after the Expiration Time, accept for payment all
Shares validly tendered pursuant to the Offer and not properly withdrawn and, promptly after the Acceptance Time, pay for all such
Shares. For purposes of the Offer, we will be deemed to have
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accepted for payment, and thereby purchased, Shares validly tendered pursuant to the Offer and not properly withdrawn as, if and
when we give oral or written notice to the Depositary of our acceptance for payment of such Shares pursuant to the Offer. Upon the
terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by
deposit of the Offer Price for such Shares with the Depositary, which will act as paying agent for tendering shareholders for the
purpose of receiving payments from us and transmitting such payments to tendering shareholders whose Shares have been accepted
for payment. If we extend the Offer, are delayed in our acceptance for payment of Shares or are unable to accept Shares for payment
pursuant to the Offer for any reason, then, without prejudice to our rights under the Offer and the Purchase Agreement, the Depositary
may retain tendered Shares on our behalf, and such Shares may not be withdrawn except to the extent that tendering shareholders are
entitled to withdrawal rights as described herein under Section 4 — “Withdrawal Rights” and as otherwise required by Rule 14e-1(c)
under the Exchange Act.
If any tendered Shares are not accepted for payment for any reason pursuant to the terms and conditions of the Offer, such
unpurchased Shares will be returned, without expense to the tendering shareholder (or, in the case of Shares tendered by book-entry
transfer into the Depositary’s account at the Book-Entry Transfer Facility pursuant to the procedure set forth in Section 3
— “Procedures for Accepting the Offer and Tendering Shares,” such Shares will be credited to an account maintained at the
Book-Entry Transfer Facility), promptly following the expiration or termination of the Offer.
All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of
Shares will be determined by Purchaser, in its sole discretion, which determination will be final and binding upon the
tendering party .
Shares tendered by a Notice of Guaranteed Delivery (as defined below) will not be deemed validly tendered for purposes
of satisfying the Minimum Condition unless and until the Shares to which such Notice of Guaranteed Delivery (as defined
below) relates are delivered to the Depositary.
3.
Procedures for Accepting the Offer and Tendering Shares.
Valid Tenders. In order for Shares to be validly tendered pursuant to the Offer, you must follow these instructions:
•
If you are a record holder and you hold uncertificated Shares in book-entry form on the books of AVG’s transfer agent,
the following must be received by the Depositary at one of its addresses set forth in the Letter of Transmittal before the
Offer expires: (a) the Letter of Transmittal, properly completed and duly executed; and (b) any other documents
required by the Letter of Transmittal.
•
If your Shares are held in “street” name and are being tendered by book-entry transfer, the following must be received
by the Depositary at one of its addresses set forth in the Letter of Transmittal before the Offer expires: (a) a Book-Entry
Confirmation; (b) the Letter of Transmittal, properly completed and duly executed, or an Agent’s Message; and (c) any
other documents required by the Letter of Transmittal.
•
If you cannot complete the procedure for delivery by book-entry transfer on a timely basis, or you otherwise cannot
deliver all required documents to the Depositary before the Offer expires, you may be able to tender your Shares using
the enclosed Notice of Guaranteed Delivery. For the tender to be valid, however, the Depositary must receive the
Notice of Guaranteed Delivery prior to the Expiration Time and must then receive the missing items within three
NYSE trading days after the date of the execution of such Notice of Guaranteed Delivery. Please contact Innisfree
M&A Incorporated, the information agent for the Offer (the “Information Agent”) for assistance.
•
If you hold Shares through a broker, dealer, commercial bank, trust company or other nominee, you must contact your
broker, dealer, commercial bank, trust company or other nominee and give instructions that your Shares be tendered.
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Book-Entry Transfer. The Depositary will establish an account with respect to Shares at the Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in
the system of the Book-Entry Transfer Facility may make a book-entry delivery of Shares by causing the Book-Entry Transfer Facility
to transfer such Shares into the Depositary’s account at the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer
Facility’s procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer at the
Book-Entry Transfer Facility, either the Letter of Transmittal, properly completed and duly executed, together with any required
signature guarantees, or an Agent’s Message, and any other required documents, must, in any case, be received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Time, or the tendering shareholder
must comply with the guaranteed delivery procedure described below. Delivery of documents to the Book-Entry Transfer
Facility does not constitute delivery to the Depositary.
Guarantee of Signatures. No signature guarantee is required on the Letter of Transmittal if: (a) the Letter of Transmittal is
signed by the registered holder(s) (which term, for purposes of this Section 3, includes any participant in the Book-Entry Transfer
Facility’s system whose name appears on a security position listing as the owner of Shares) of Shares tendered therewith, unless such
registered holder has completed either the box entitled “Special Delivery Instructions” or the box entitled “Special Payment
Instructions” on the Letter of Transmittal; or (b) Shares are tendered for the account of a financial institution (including most
commercial banks, savings and loan associations and brokerage houses) that is a member of or participant in a recognized “Medallion
Program” approved by the Securities Transfer Association Inc., including the Security Transfer Agents Medallion Program (STAMP),
the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange Medallion Signature Program (MSP), or any
other “eligible guarantor institution,” as such term is defined in Rule 17Ad-15 promulgated under the Exchange Act (each, an
“Eligible Institution” and collectively, “Eligible Institutions”). In all other cases, all signatures on a Letter of Transmittal must be
guaranteed by an Eligible Institution. See Instruction 1 of the Letter of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to the Offer but such shareholder cannot deliver the
required documents to the Depositary prior to the Expiration Time, or such shareholder cannot complete the procedure for delivery by
book-entry transfer on a timely basis, such Shares may nevertheless be tendered; provided, that all of the following conditions are
satisfied
•
such tender is made by or through an Eligible Institution;
•
a properly completed and duly executed “Notice of Guaranteed Delivery,” substantially in the form made available by
Purchaser, is received prior to the Expiration Time by the Depositary as provided below; and
•
the following must be received by the Depositary at one of its addresses set forth in the Letter of Transmittal within
three trading days after the date of execution of such Notice of Guaranteed Delivery: (a) if you are a record holder and
you hold uncertificated Shares in book-entry form on the books of AVG’s transfer agent, (i) the Letter of Transmittal,
properly completed and duly executed, and (ii) any other documents required by the Letter of Transmittal and (b) if
your Shares are held in “street” name and are being tendered by book-entry transfer, (i) Book-Entry Confirmation into
the Depositary’s account at the Book-Entry Transfer Facility pursuant to the procedures set forth in this Section 3, (ii)
the Letter of Transmittal, properly completed and duly executed, with any required signature guarantees, or an Agent’s
Message and (iii) any other documents required by the Letter of Transmittal.
The Notice of Guaranteed Delivery may be delivered by overnight courier or transmitted by facsimile transmission or mailed to
the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the form of Notice of Guaranteed
Delivery made available by Purchaser. In the case of Shares held through the Book-Entry Transfer Facility, the Notice of Guaranteed
Delivery must be delivered to the Depositary by a participant by means of the confirmation system of the Book-Entry Transfer
Facility.
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The method of delivery of the Letter of Transmittal and all other required documents, including delivery through the
Book-Entry Transfer Facility, is at the option and risk of the tendering shareholder, and the delivery of all such documents
will be deemed made only when actually received by the Depositary (including, in the case of a book-entry transfer, receipt of
a Book-Entry Confirmation). If delivery is by mail, registered mail with return receipt requested, properly insured, is
recommended. In all cases, sufficient time should be allowed to ensure timely delivery prior to the Expiration Time.
The tender of Shares pursuant to any one of the procedures described above will constitute the tendering shareholder’s
acceptance of the terms and conditions of the Offer, as well as the tendering shareholder’s representation and warranty that such
shareholder has the full power and authority to tender and transfer the Shares tendered, as specified in the Letter of Transmittal, and
that when Purchaser accepts the Shares for payment, it will acquire good and unencumbered title, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claims. Purchaser’s acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the tendering shareholder and Purchaser upon the terms and subject
to the conditions of the Offer.
Irregularities. The tender of Shares pursuant to any one of the procedures described above will constitute the tendering
shareholder’s acceptance of the Offer, as well as the tendering shareholder’s representation and warranty that such shareholder has the
full power and authority to tender and assign the Shares tendered, as specified in the Letter of Transmittal. Our acceptance for
payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the tendering shareholder and us upon
the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms of or the conditions to any such
extension or amendment).
Determination of Validity. All questions as to the validity, form, eligibility (including time of receipt) and acceptance for
payment of any tender of Shares will be determined by us, in our sole discretion. We reserve the absolute right to reject any and
all tenders determined by us not to be in proper form or the acceptance for payment of which may, in the opinion of our counsel, be
unlawful. We also reserve the absolute right to waive any defect or irregularity in the tender of any Shares of any particular
shareholder, whether or not similar defects or irregularities are waived in the case of other shareholders. No tender of Shares will be
deemed to have been validly made until all defects and irregularities have been waived or cured within such time as Purchaser may
determine. None of Parent, Purchaser, the Depositary, the Information Agent or any other person will be under any duty to give notice
of any defects or irregularities in tenders or incur any liability for failure to give any such notice. Any determinations made by us with
respect to the terms and conditions of the Offer may be challenged by AVG shareholders, to the extent permitted by law, and are
subject to review by a court of competent jurisdiction.
Appointment. By executing the Letter of Transmittal as set forth above, the tendering shareholder will irrevocably appoint
designees of Purchaser as such shareholder’s attorneys-in-fact and proxies in the manner set forth in the Letter of Transmittal, each
with full power of substitution, to the full extent of such shareholder’s rights with respect to the Shares tendered by such shareholder
and accepted for payment by Purchaser and with respect to any and all other Shares or other securities or rights issued or issuable in
respect of such Shares. All such powers of attorney and proxies will be considered irrevocable and coupled with an interest in the
tendered Shares. Such appointment will be effective when, and only to the extent that, we accept for payment Shares tendered by such
shareholder as provided in this Offer to Purchase. Upon such appointment, all prior powers of attorney, proxies and consents given by
such shareholder with respect to such Shares or other securities or rights will, without further action, be revoked and no subsequent
powers of attorney, proxies, consents or revocations may be given by such shareholder (and, if given, will not be deemed effective).
The designees of Purchaser will thereby be empowered to exercise all voting and other rights with respect to such Shares and other
securities or rights, including, without limitation, in respect of any annual or extraordinary general meeting of AVG shareholders or
otherwise, as they in their sole discretion deem proper. We reserve the right to require that, in order for Shares to be deemed validly
tendered, immediately upon our acceptance for payment of such Shares,
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Purchaser or its designees must be able to exercise full voting, consent and other rights with respect to such Shares and other related
securities or rights, including voting at any meeting of AVG shareholders.
U.S. Federal Income Tax Information Reporting and Backup Withholding. Payments made to shareholders of AVG in the Offer
or the Subsequent Reorganization generally will be subject to U.S. federal income tax information reporting and may be subject to
backup withholding. To avoid backup withholding, a U.S. shareholder should complete and return the Form W-9 included in the
Letter of Transmittal, certifying that (a) such shareholder is a U.S. person, (b) the taxpayer identification number provided is correct,
and (c) that such shareholder is not subject to backup withholding. Non-U.S. shareholders should submit an appropriate and properly
completed Internal Revenue Service (“IRS”) Form W-8, a copy of which may be obtained from the Depositary, in order to avoid
backup withholding. Such shareholders should consult a tax advisor to determine which Form W-8 is appropriate.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a
refund or a credit against a shareholder’s U.S. federal income tax liability, provided the required information is timely furnished in the
appropriate manner to the IRS.
4.
Withdrawal Rights.
Except as otherwise provided in this Section 4, tenders of Shares made pursuant to the Offer are irrevocable.
Shares tendered pursuant to the Offer may be properly withdrawn at any time prior to the Expiration Time and, unless
theretofore accepted for payment by Purchaser pursuant to the Offer, may also be withdrawn at any time after September 27, 2016,
which is the 60th day after the date of the commencement of the Offer.
For a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by
the Depositary at one of its addresses set forth on the back cover page of this Offer to Purchase. Any such notice of withdrawal must
specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of such Shares, if different from that of the person who tendered such Shares. If Shares have been tendered pursuant
to the procedure for book-entry transfer as set forth in Section 3 — “Procedures for Accepting the Offer and Tendering Shares,” any
notice of withdrawal must also specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Shares.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn will thereafter be deemed not to have been validly
tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered by again following one of the procedures
described in Section 3 — “Procedures for Accepting the Offer and Tendering Shares” at any time prior to the Expiration Time.
No withdrawal rights will apply to Shares tendered during the Subsequent Offering Period (which includes the Minority Exit
Offering Period, if applicable) and no withdrawal rights apply during the Subsequent Offering Period (which includes the Minority
Exit Offering Period, if applicable) with respect to Shares tendered in the Offer and accepted for payment. See Section 1 — “Terms of
the Offer.”
We will determine, in our sole discretion, all questions as to the form and validity (including time of receipt) of any notice
of withdrawal. Purchaser also reserves the absolute right to waive any defect or irregularity in the withdrawal of any Shares
by any particular shareholder, regardless of whether or not similar defects or irregularities are waived in the case of other
shareholders. None of Purchaser, the Depositary, the Information Agent or any other person will be under any duty to give
notice of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such
notification. Any determinations made by us with respect to the terms and conditions of the Offer may be challenged by AVG
shareholders, to the extent permitted by law, and are subject to review by a court of competent jurisdiction.
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5.
Certain Tax Consequences
5A. Certain Material U.S. Federal Income Tax Consequences.
The following is a summary of certain material U.S. federal income tax consequences of the Offer and the Subsequent
Reorganization to U.S. Holders (as defined below) of AVG whose Shares are tendered and accepted for payment pursuant to the Offer
or whose Shares are not tendered and are offered or receive cash in the Subsequent Reorganization. The summary is for general
information only and does not consider all aspects of U.S. federal income taxation that might be relevant to shareholders of AVG. The
summary is based on current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), existing, proposed and
temporary regulations thereunder and administrative and judicial interpretations thereof, all of which are subject to change, possibly
with retroactive effect. We have not sought, and do not currently intend to seek, any ruling from the IRS with respect to the statements
made and the conclusions reached in the following summary, and no assurance can be given that the IRS will agree with the views
expressed herein, or that a court will not sustain any challenge by the IRS in the event of litigation.
The summary applies only to U.S. Holders of AVG in whose hands Shares are capital assets within the meaning of Section 1221
of the Code. This summary does not address non-U.S., state or local tax consequences of the Offer or the Subsequent Reorganization,
nor does it address the U.S. federal income tax consequences of the transactions to shareholders who will actually or constructively
(under the rules of Section 318 of the Code) own any stock of AVG following the Offer and the Subsequent Reorganization, to
holders of equity awards under AVG’s equity compensation plans, holders of AVG Options, or to special classes of taxpayers who
may be subject to special tax rules, including without limitation non-U.S. shareholders, small business investment companies,
regulated investment companies, real estate investment trusts, grantor trusts, controlled foreign corporations within the meaning of
Section 957 of the Code, passive foreign investment companies within the meaning of Section 1297 of the Code (“PFICs”),
cooperatives, banks and certain other financial institutions, insurance companies, tax- exempt organizations, retirement plans,
shareholders that are, or hold Shares through, partnerships or other pass-through entities for U.S. federal income tax purposes, U.S.
persons whose functional currency is not the U.S. dollar, dealers in securities or non-U.S. currency, traders that mark-to-market their
securities, expatriates and former long-term residents of the United States, persons subject to the alternative minimum tax,
shareholders holding Shares that are part of a straddle, hedging, constructive sale or conversion transaction, shareholders who received
Shares in compensatory transactions, pursuant to the exercise of employee stock options, stock purchase rights, or stock appreciation
rights, as restricted stock, or otherwise as compensation, and shareholders that beneficially own directly, indirectly or constructively
10 percent or more of the outstanding voting Shares of AVG. In addition, this summary does not address U.S. federal taxes other than
income taxes.
For purposes of this summary, the term “U.S. Holder” means a beneficial owner of Shares that, for U.S. federal income tax
purposes, is: (a) an individual citizen or resident of the United States, including an alien individual who is a lawful permanent resident
of the United States or meets the substantial presence test under Section 7701(b) of the Code; (b) a corporation, or an entity treated as
a corporation for U.S. federal income tax purposes, created or organized under the laws of the United States, or of any state or the
District of Columbia; (c) an estate, the income of which is subject to U.S. federal income tax regardless of its source; or (d) a trust, if
(i) a U.S. court is able to exercise primary supervision over the trust’s administration and one or more U.S. persons, within the
meaning of Section 7701(a)(30) of the Code, have authority to control all of the trust’s substantial decisions or (ii) the trust has validly
elected to be treated as a U.S. person for U.S. federal income tax purposes.
If a partnership, or any other entity treated as a partnership for U.S. federal income tax purposes, holds Shares, the tax treatment
of its partners or members generally will depend upon the status of the partner or member and the partnership’s activities.
Accordingly, partnerships or other entities treated as partnerships for U.S. federal income tax purposes that hold Shares, and partners
or members in those entities, are urged to consult their tax advisors regarding the specific U.S. federal income tax consequences to
them of the Offer and the Subsequent Reorganization.
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Because individual circumstances may differ and this description is not intended to constitute a complete analysis of all U.S.
federal income tax consequences relating to the Offer or the Subsequent Reorganization, each shareholder should consult its own tax
advisor to determine the applicability of the rules discussed below and the particular tax consequences of the Offer and the Subsequent
Reorganization on a beneficial owner of Shares, including the application and effect of the alternative minimum tax and any state,
local and non-U.S. laws and changes in any laws.
The Receipt of Cash in Exchange for Shares Pursuant to the Offer.
The exchange of Shares for cash pursuant to the Offer will be a taxable transaction to U.S. Holders for U.S. federal income tax
purposes. In general, a U.S. Holder who exchanges Shares for cash pursuant to the Offer will recognize gain or loss for U.S. federal
income tax purposes in an amount equal to the difference, if any, between the amount of cash received (determined before the
deduction, if any, of any withholding tax) and the U.S. Holder’s adjusted tax basis in the Shares exchanged. Any such gain or loss will
be long-term capital gain or loss if a U.S. Holder’s holding period for such Shares is more than one year. Long-term capital gain
recognized by an individual is generally taxable at a lower rate than the ordinary income tax rate. Long-term capital gain recognized
by a corporation is currently taxed at ordinary income tax rates. In the case of Shares that have been held for one year or less, capital
gain or loss recognized by a U.S. Holder on the exchange of such Shares generally will be short-term capital gain or loss. Any such
short-term capital gain recognized pursuant to the Offer will be subject to tax at ordinary income tax rates. The deductibility of any
short-term and long-term capital losses recognized pursuant to the Offer is subject to certain limitations.
Gain or loss will generally be determined separately for each block of Shares (that is, Shares acquired at the same cost in a single
transaction) tendered pursuant to the Offer or exchanged for cash pursuant to the Subsequent Reorganization.
A U.S. Holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax,
is subject to a U.S. federal tax of 3.8% on the lesser of (a) such U.S. Holder’s “net investment income” (or undistributed “net
investment income” in the case of estates and trusts) for the relevant taxable year and (b) the excess of such U.S. Holder’s modified
adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will be between $125,000 and
$250,000, depending on the individual’s circumstances). A U.S. Holder’s “net investment income” will generally include the amount
of gain such U.S. Holder recognizes on the exchange of Shares for cash pursuant to the Offer. A U.S. Holder that is an individual,
estate or trust should consult its own tax advisor regarding the applicability of this additional tax to such U.S. Holder’s income and
gain in respect of Shares exchanged for cash pursuant to the Offer.
The foregoing discussion assumes that AVG is not currently, and has not been a PFIC for U.S. federal income tax purposes.
AVG believes it is not, and has not ever been, a PFIC. In general, the test for determining whether AVG is or has been a PFIC is
applied annually and is based upon the composition of AVG’s and certain of its affiliates’ income and assets for such taxable year. In
general, a corporation organized or incorporated outside the United States is a PFIC in any given taxable year in which, after taking
into account the income and assets of certain subsidiaries, either (a) 75 percent or more of its gross income is classified as “passive
income” or (b) 50 percent or more of the average quarterly value of its assets is attributable to its assets which produce or are held for
the production of passive income. If AVG were a PFIC in the current taxable year or in any prior taxable year in which the tendering
U.S. Holder has held the Shares, then such U.S. Holder generally would be subject to adverse U.S. federal income tax consequences
with respect to gain recognized on any sale or exchange of such Shares, including an exchange of such Shares pursuant to the Offer,
unless such U.S. Holder has in effect certain elections. Such adverse consequences generally would include the ratable allocation of
such gain over the U.S. Holder’s holding period for such Shares, with the amount that is allocated to each taxable year being subject to
tax at the highest ordinary income rate in effect for such taxable year and the imposition of a special “interest charge” on the tax on
such income. U.S. Holders of AVG should consult their own tax advisors concerning whether AVG is or has been a PFIC for any
given taxable year during which such U.S. Holder has owned Shares and the tax consequences of tendering Shares pursuant to the
Offer.
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Receipt of Cash in Exchange for Shares Pursuant to the Subsequent Reorganization.
Although not free from doubt, in the event a U.S. Holder receives cash for Shares in the Subsequent Reorganization, the U.S.
federal income tax consequences to such U.S. Holder would likely be the same as described above. As further described in the Dutch
Tax Aspects of the Offer and Subsequent Reorganization, you may be subject to Dutch dividend withholding tax. It is possible that
you may be able to obtain a deduction or a credit for such withholding tax; however, the calculation of deductions and U.S. foreign tax
credits involves the application of complex rules and limitations may apply. Each U.S. Holder should consult its own tax advisor
concerning the tax consequences of exchanging Shares pursuant to the Subsequent Reorganization.
U.S. Federal Income Tax Information Reporting Requirements and Backup Withholding.
A U.S. Holder who exchanges Shares pursuant to the Offer or the Subsequent Reorganization is subject to information reporting
and may be subject to backup withholding unless certain information is provided to the Depositary or an exemption applies. See
Section 3 — “Procedures for Accepting the Offer and Tendering Shares.”
5B. Certain Dutch Tax Aspects of the Offer and Subsequent Reorganization
The following is a summary of Dutch tax consequences of the Offer and the Subsequent Reorganization to the shareholders of
AVG whose Shares are tendered and accepted for payment pursuant to the Offer or whose Shares are converted into the right to
receive cash in the Subsequent Reorganization. It does not address tax consequences applicable to holders of AVG Options. The
summary is for general information only and does not consider all possible tax considerations or consequences that may be relevant to
all categories of investors, some of which may be subject to special treatment under applicable law (such as trusts or other similar
arrangements), and in view of its general nature, this summary should be treated with corresponding caution. Shareholders are
expressly urged to consult with their tax advisers with regard to the tax consequences of tendering their shares pursuant to the Offer
and the Subsequent Reorganization.
Please note that this summary does not describe the tax considerations for:
(a)
AVG shareholders, if such shareholders, and in the case of individuals, his/her partner, certain other relatives or certain
persons sharing his/her household, alone or together, directly or indirectly have a substantial interest ( aanmerkelijk belang
) or deemed substantial interest ( fictief aanmerkelijk belang ) in AVG under the Dutch Personal Income Tax Act 2001 (
Wet inkomstenbelasting 2001 ) or the Dutch Corporate Income Tax Act 1969 ( Wet op de vennootschapsbelasting 1969 ) .
In general, a substantial interest in AVG is considered present if the shareholder, and in the case of individuals, his/her
partner, certain other relatives or certain persons sharing his/her household, alone or together, directly or indirectly holds
shares representing five percent or more of the total issued and outstanding capital of AVG and/or is entitled to five percent
of AVG’s annual profit, and/or five percent of the proceeds upon liquidation of AVG. A deemed substantial interest arises
if a substantial interest (or part thereof) has been disposed of, or is deemed to have been disposed of, on a non-recognition
basis.
(b) AVG shareholders that are corporate legal entities that derive benefits from the Shares that are exempt under the
participation exemption regime ( deelnemingsvrijstelling ) as laid down in the Dutch Corporate Income Tax Act 1969 or
would have been exempt under the participation exemption regime if such shareholder were a taxpayer in The
Netherlands. In general, an interest of five percent or more of the nominal paid-up share capital should qualify for the
participation exemption regime. A shareholder may also have a qualifying participation if such AVG shareholder does not
have a five percent interest but a related entity (a statutorily defined term) does, or if AVG is a related entity (a statutorily
defined term) of the AVG shareholder.
(c)
Shareholders who are individuals and for whom the Shares or any benefit derived from the Shares are a remuneration or
deemed to be a remuneration for activities performed by such AVG shareholders or certain individuals related to such
shareholder (as defined in the Dutch Personal Income Tax Act 2001).
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(d) Shareholders who are individuals and for whom the Shares or any benefit derived from the Shares are attributable to
employment activities the income from which is taxable in The Netherlands.
(e)
Pension funds, investment institutions (fiscale beleggingsinstellingen), exempt investment institutions (vrijgestelde
beleggingsinstellingen ) and other entities that are not subject to or are exempt (in full or in part) from corporate income tax
in The Netherlands or another state of the European Union, Norway, Liechtenstein or Iceland.
(f)
Shareholders who or that are not considered the beneficial owner (uiteindelijk gerechtigde) of these Shares or the benefits
derived from or realized in respect of these Shares.
This summary only addresses the Dutch national tax legislation and published regulations, as in effect on the date of this Offer
and as interpreted in published case law until this date, without prejudice to any amendment introduced at a later date and
implemented with or without retro-active effect.
Where this summary refers to The Netherlands, such reference is restricted to the part of the Kingdom of The Netherlands that is
situated in Europe and the legislation applicable in that part of the Kingdom of The Netherlands.
5B.1. Certain Dutch Tax Aspects of the Offer
Dutch resident individual shareholders
An individual shareholder who is resident or deemed to be resident of The Netherlands for Dutch tax purposes will become
subject to Dutch personal income tax ( inkomstenbelasting ) on any capital gains realized or income derived upon the Offer (or during
the Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable) at the progressive rates with a
maximum of 52 percent if;
(a)
the Shares are attributable to an enterprise from which the individual derives a share of the profit, whether as an
entrepreneur ( ondernemer ) or as a person who has a co-entitlement to the net worth of such enterprise, without being an
entrepreneur or a shareholder as defined in the Dutch Personal Income Tax Act 2001; or
(b) such income or capital gains qualify as income from miscellaneous activities (resultaat uit overige werkzaamheden), which
includes activities with respect to the Shares that exceed regular, active portfolio management ( normaal, actief
vermogensbeheer ).
If the abovementioned conditions (a) and (b) do not apply to the individual shareholder, the Shares will be subject annually to
Dutch personal income tax imposed on a fictitious yield on such Shares. The Shares held by such individual shareholder will be taxed
under the regime for savings and investments ( inkomen uit sparen en beleggen ). Irrespective of the actual income or capital gains
realized, currently the annual taxable yield of all the assets and liabilities of such individual shareholder that are taxed under this
regime, including the Shares, is set at a fixed amount. The fixed amount equals four percent of the fair market value of the assets
reduced by the liabilities and measured, in general, exclusively at the beginning of every calendar year. Pursuant to the Dutch Tax
Bill, as of 2017, the fixed amount will become variable and will increase progressively depending on the amount of the yield
basis. The tax rate under the regime for savings and investments is a flat rate of 30 percent. By virtue of the deemed income
recognized, the actual benefits derived (including profit distributions and capital gains) are not as such subject to Dutch personal
income tax.
Dutch resident corporate shareholders
Corporate shareholders who are resident or deemed to be resident in The Netherlands for Dutch corporate income tax purposes
will generally be subject to Dutch corporate income tax for any gains realized or income
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derived upon the Offer (or during the Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable) up
to a maximum rate of 25 percent.
Non-Dutch resident shareholders
A shareholder that is not a resident or deemed to be a resident of The Netherlands will not be subject to Dutch taxes on income
and capital gains on the Shares in respect of any gain realized on the Offer (or during the Subsequent Offering Period, which includes
the Minority Exit Offering Period, if applicable); provided that:
(a)
in the case of a non-Dutch resident shareholder that is not an individual, such shareholder (i) does not derive profits from an
enterprise that is, in whole or in part, carried on through a permanent establishment or a permanent representative in The
Netherlands to which permanent establishment or permanent representative the Shares are attributable, or (ii) is not, other
than by way of securities, entitled to a share in the profits of an enterprise or a co-entitlement to the net worth of an
enterprise, which is effectively managed in The Netherlands and to which enterprise the Shares are attributable; or
(b) in the case of a non-Dutch resident shareholder that is an individual, such shareholder (i) does not derive profits from an
enterprise or an interest in an enterprise that is, in whole or in part, carried on through a permanent establishment or a
permanent representative in The Netherlands to which permanent establishment or permanent representative the Shares are
attributable, or (ii) does not realize income or gains with respect to the Shares that qualify as income from miscellaneous
activities in The Netherlands, which include activities with respect to the Shares that exceed regular, active portfolio
management, or (iii) is not, other than by way of securities, entitled to a share in the profits of an enterprise that is
effectively managed in The Netherlands and to which enterprise the Shares are attributable.
In the case of a non-Dutch resident shareholder that is taxable in The Netherlands, such shareholder will generally be taxed in
the same way as Dutch resident taxpayers, as described above.
Other Taxes and Duties
No Dutch VAT and no Dutch registration tax, customs duty, stamp duty or any other similar documentary tax or duty will be
payable by a shareholder on any payment in consideration for the disposal of the Shares upon the Offer.
5B.2. Certain Dutch Tax Aspects of the Subsequent Reorganization
Compulsory Acquisition
For an outline of the Dutch taxation on the shareholders upon the disposal of the Shares by means of the Compulsory
Acquisition see the above discussion under the heading “Dutch Tax Aspects of the Offer and Post Closing Reorganization — Certain
Dutch Tax Aspects of the Offer.”
Asset Sale
In principal capital gains realized by AVG upon the transfer of its assets and liabilities by means of the Asset Sale will be subject
to Dutch corporate income tax at a rate of 25 percent. However, if the assets of AVG include only shares in subsidiaries that are and
have always been eligible for the Dutch participation exemption regime, AVG will be exempt from Dutch corporate income tax (
vennootschapsbelasting ) on any capital gains realized upon the Asset Sale.
Liquidation Distribution
If subsequent to the Asset Sale and in connection with the Subsequent Reorganization it is decided that AVG will be dissolved
and liquidated, Dutch dividend withholding tax will be due at the statutory rate of 15
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percent to the extent that the liquidation proceeds exceed the average paid-in capital on the Shares as recognized for Dutch dividend
withholding tax purposes, an exemption from or a reduction in such withholding tax is unlikely to be available.
Shareholders who are a resident or deemed to be resident in The Netherlands for Dutch tax purposes, other than individuals who
have opted to be taxed as a resident of The Netherlands for Dutch personal income tax purposes, can generally credit the Dutch
dividend withholding tax against their Dutch personal income tax or corporate income tax liability. The same generally applies to
shareholders that are neither resident nor deemed to be resident of The Netherlands if the Shares are attributable to a Dutch permanent
establishment of such non-resident shareholder.
6.
Price Range of Shares; Dividends.
The Shares currently trade on the NYSE under the ticker symbol “AVG.” AVG has advised Parent and Purchaser that, as of the
close of business on July 25, 2016, (a) 54,763,151 Shares were issued and 50,730,029 Shares were outstanding, (b) 2,988,480 Shares
were subject to AVG Options granted and outstanding under the AVG Stock Plan, (c) 690,000 Shares were subject to AVG Restricted
Stock Units granted and outstanding under the AVG Stock Plan and (d) 1,623,877 Shares were subject to AVG Performance Stock
Units granted and outstanding under the AVG Stock Plan.
The following table sets forth, for the periods indicated, the high and low sale prices per Share for each quarterly period within
the three preceding fiscal years, as reported on the NYSE.
Year Ended December 31, 2014
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Year Ended December 31, 2015
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Year Ended December 31, 2016
First Quarter
Second Quarter
Third Quarter (through July 28, 2016)
High
Low
$ 21.35
21.15
20.41
20.69
$ 15.19
17.77
16.10
16.00
$ 22.90
29.09
29.15
24.49
$ 19.09
20.67
20.25
17.91
$ 21.00
20.99
24.87
$ 16.12
17.94
18.41
On July 6, 2016, the trading day before the public announcement of the terms of the Offer, the reported closing sales price of the
Shares on the NYSE was $18.79. On July 28, 2016, the last full trading day before the commencement of the Offer, the reported
closing sales price of the Shares on the NYSE was $24.76. The Offer Price represents an approximately 33 percent premium over the
July 6, 2016 closing stock price, and an approximately 1 percent premium over the July 28, 2016 stock price.
According to AVG’s Annual Report on Form 20-F for the fiscal year ended December 31, 2015, AVG has never declared or
paid any cash dividends on its share capital, and intends to retain future earnings, if any, to finance the growth and development of
AVG’s business and to provide additional liquidity and does not expect to pay any cash dividends in the foreseeable future.
7.
Certain Information Concerning AVG.
Except as specifically set forth in this Offer to Purchase, the information concerning AVG contained in this Offer to Purchase
has been taken from or is based upon information furnished by AVG or its representatives or
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upon publicly available documents and records on file with the SEC and other public sources. The summary information set forth
below is qualified in its entirety by reference to AVG’s public filings with the SEC (which may be obtained and inspected as described
below) and should be considered in conjunction with the more comprehensive financial and other information in such reports and
other publicly available information. We have no knowledge that would indicate that any statements contained herein based on such
documents and records are untrue. However, none of Parent, Purchaser or any of their respective affiliates or assigns, the Information
Agent or the Depositary assumes any responsibility for the accuracy or completeness of the information concerning AVG, whether
furnished by AVG or contained in such documents and records, or for any failure by AVG to disclose events which may have
occurred or which may affect the significance or accuracy of any such information which is unknown to Parent, Purchaser or any of
their respective affiliates or assigns, the Information Agent or the Depositary, as applicable.
General. AVG’s legal name is AVG Technologies N.V. and its commercial name is AVG or AVG Technologies. AVG is a
public company with limited liability ( naamloze vennootschap ) incorporated under the laws of The Netherlands. AVG is registered
with the Trade Register of the Chamber of Commerce of Amsterdam under number 52197204 and has an official seat in Amsterdam,
The Netherlands. AVG’s registered office address is at Gatwickstraat 9-39, 1043 GL Amsterdam, The Netherlands, with telephone
number +31 20 522 6210. AVG’s principal executive offices are located at that address. AVG’s principal website address is
www.avg.com. The information contained in, or that can be accessed through, AVG’s website neither constitutes a part of the Offer to
Purchase nor is incorporated by reference herein.
AVG was incorporated in The Netherlands on March 3, 2011 by a notarial deed of incorporation as a cooperative ( coöperatie )
under the laws of The Netherlands under the name AVG Holding Coöperatief U.A. On November 25, 2011, AVG entered into a legal
merger with its predecessor company and wholly owned subsidiary AVG Technologies N.V., and on November 25, 2011, AVG was
converted into a public company with limited liability. Upon this conversion, the membership rights held by the members of the
cooperative were converted into shares.
AVG was founded in 1991 as a consumer-focused IT security company. While AVG has increased the breadth of its solutions
over the years, AVG remains focused on its core mission of delivering products and services to make people’s digital lives easier to
secure, simpler to navigate and more enjoyable to experience.
AVG provides software and online services that deliver peace of mind to users by simplifying, optimizing and securing their
Internet experiences. AVG seeks to protect devices, the data that is transmitted by and stored on those devices, and the people who
ultimately use and rely on those devices. AVG’s business model, based on delivering high-quality solutions in high volume and at no
cost to its users, enables it to rapidly acquire new users. Through its large user community, AVG is able to better understand the needs
of its users, become a trusted provider of peace-of-mind software solutions, and thereby intelligently monetize its user base through
premium products and value-added online services. AVG’s solutions, which today range from desktop, laptop and mobile software to
dynamic secure Internet search solutions, can be accessed and utilized with minimal effort and limited technical know-how from the
user. In choosing AVG’s solutions, which can be downloaded from the Internet, users become part of a trusted global community that
benefits from network effects such as the mutual protection and support of a large user base. AVG’s sales and marketing activities
benefit from word-of-mouth recommendations from its large user network to create a viral marketing effect, which is amplified by the
speed and ease of use of its products and allows it to gain new customers at a low acquisition cost. This strategy has allowed AVG to
support its user base of approximately 193 million active users as of March 31, 2016.
AVG believes that the quality of the approximately 193 million active users in its community is one of its most valuable assets.
AVG establishes a trusted relationship with its community through its solutions with the goal of driving greater user engagement.
Community engagement provides important contributions to AVG’s product development initiatives, enables rapid response to online
threats and assists in its customer support initiatives, enabling AVG to accurately deliver compelling products and online services that
meet the evolving
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needs of its users. The contributions from AVG’s community lower AVG’s costs, enabling it to offer free and low-cost offerings that
further build upon the value AVG can deliver. AVG believes further monetization of its user base through additional products and
online services represents a significant market opportunity for AVG.
AVG’s product portfolio targets the consumer and small and medium business, or SMB, markets across multiple devices and
operating systems and includes Internet security, PC performance optimization, online backup, identity protection, family safety,
mobile control and location services, dynamic secure search, remote control, network auditing, monitoring and alerting software.
While a significant majority of AVG’s active users have been users of AVG’s free products and online services, AVG also offers
products with premium functionality and enhanced customer support when customers purchase an annual or multi-year subscription.
Following the acquisition of Privax in 2015, AVG’s product portfolio expanded to include virtual private network services.
As of December 31, 2015, AVG had approximately 14 million subscription users and 102 million mobile users.
Available Information. AVG is a “Foreign Private Issuer” as such term is defined under Rule 3b-4 of the Exchange Act. The
Shares are registered under the Exchange Act. Accordingly, AVG is subject to certain of the information reporting requirements of the
Exchange Act and, in accordance therewith, is required to file annual reports with the SEC and to furnish other information to the SEC
relating to its business, financial condition and other matters. You may read and copy any such reports, statements or other
information at SEC Headquarters at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information. Copies of such information may be obtainable by mail, upon payment of the SEC’s customary charges, by writing to the
SEC at the address above. The SEC also maintains a web site on the Internet at www.sec.gov that contains reports, proxy statements
and other information regarding registrants, including AVG that file electronically with the SEC.
8.
Certain Information Concerning Parent and Purchaser.
Parent is a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) organized under the
laws of The Netherlands and a holding company. Purchaser is a private company with limited liability ( besloten vennootschap met
beperkte aansprakelijkheid ) organized under the laws of The Netherlands and a holding company.
Purchaser is a leading global provider of security software delivered to the consumer through a freemium model. Its software is
currently the world’s most widely-used consumer security software, with over 230 million actively protected devices as of July 2016
in almost every country in the world. In addition to its consumer business, Purchaser also makes security software available to small
and medium businesses, known as the SMB market. Purchaser’s success has been driven by its community-focused threat detection
network and online-based freemium business model, through which it provides its users with a high-quality security product for free.
Purchaser then offers users the opportunity to either purchase or upgrade to its premium paid products that provide advanced
functionalities. Purchaser also seeks to provide additional value-added solutions to its users over time. Purchaser’s business model and
its high quality security products have enabled it to build a strong brand and loyal user community, which in turn has driven
highly-efficient “viral” marketing for its products. Purchaser’s service offerings have expanded in recent years to include a mobile
enterprise platform that allows corporations to isolate and secure corporate data in BYOD (Bring Your Own Device) environments; a
utilities offering that removes junk files on personal computers and mobile phones; a password manager; a virtual private network;
and a secure browser.
The office address of each of Parent and Purchaser is Schiphol Boulevard 369, Tower F, 7th floor, 1118 BJ Schiphol, The
Netherlands and the telephone number is +31 20 654 3225. The name, citizenship, business address, present principal occupation or
employment and five-year employment history of each of the members, directors or executive officers of Parent and Purchaser are set
forth in Schedule I to this Offer to Purchase.
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During the last five years, none of the Parent or Purchaser or, after due inquiry and to the best knowledge and belief of Parent
and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase (a) has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (b) was a party to any judicial or administrative proceeding (except for
matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining such person
from future violations of, or prohibiting activities subject to, U.S. federal or state securities laws, or a finding of any violation of U.S.
federal or state securities laws.
Except as described elsewhere in this Offer to Purchase (including Schedule I to this Offer to Purchase), (a) none of Parent or
Purchaser or, after due inquiry and to the best knowledge and belief of Parent and Purchaser, any of the persons listed in Schedule I to
this Offer to Purchase or any associate or majority-owned subsidiary of Parent or Purchaser or any of the persons so listed beneficially
owns or has any right to acquire, directly or indirectly, any Shares and (b) none of Parent, Purchaser or, after due inquiry and to the
best knowledge and belief of Parent and Purchaser, any of the persons or entities referred to in clause (a) above or any of their
executive officers, directors or subsidiaries has effected any transaction in respect of any Shares during the 60-day period preceding
the date of this Offer to Purchase.
Except as described elsewhere in this Offer to Purchase, (a) none of Parent or Purchaser or, after due inquiry and to the best
knowledge and belief of Parent and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase, has any contract,
arrangement, understanding or relationship with any other person with respect to any securities of AVG (including, but not limited to,
any contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures,
loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss, or the giving or withholding of proxies,
consents or authorizations) and (b) during the two-year period preceding the date of this Offer to Purchase, there have been no
transactions that would require reporting under the rules and regulations of the SEC between Parent, Purchaser or any of its or their
affiliates or, after due inquiry and to the best knowledge and belief of Parent and Purchaser, any of the persons listed in Schedule I to
this Offer to Purchase, on the one hand, and AVG or any of its executive officers, directors and/or affiliates, on the other hand.
Except as set forth in this Offer to Purchase, none of Parent or Purchaser or, after due inquiry and to the best knowledge and
belief of Parent and Purchaser, any of the persons listed in Schedule I hereto, has had any business relationship or transaction with
AVG or any of its executive officers, directors or affiliates that is required to be reported under the rules and regulations of the SEC
applicable to the Offer. Except as set forth in this Offer to Purchase, there have been no contacts, negotiations or transactions between
Parent or any of its subsidiaries or, after due inquiry and to the best knowledge and belief of Parent and Purchaser, any of the persons
listed in Schedule I to this Offer to Purchase, on the one hand, and AVG or its affiliates, on the other hand, concerning a merger,
consolidation or acquisition, tender offer or other acquisition of any class of AVG’s securities, an election of AVG’s directors or a sale
or other transfer of a material amount of assets of AVG during the past two years.
Available Information. Pursuant to Rule 14d-3 under the Exchange Act, we have filed with the SEC a Tender Offer Statement on
Schedule TO (the “Schedule TO”), of which this Offer to Purchase forms a part, and exhibits to the Schedule TO. You may read and
copy the Schedule TO and the exhibits thereto at SEC Headquarters at 100 F Street, N.E., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information. Copies of such information may be obtainable by mail, upon payment of the SEC’s
customary charges, by writing to the SEC at the address above. The SEC also maintains a web site on the Internet at www.sec.gov
that contains the Schedule TO and the exhibits thereto and other information that Purchaser has filed electronically with the SEC.
9.
Source and Amount of Funds.
The Offer is not conditioned upon Purchaser or Parent obtaining financing to fund the purchase of Shares pursuant to the Offer
and to fund the Subsequent Reorganization. Because (a) the Offer is being made for all
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outstanding Shares solely for cash, (b) we have received debt commitments, which, in addition to certain unrestricted cash or cash
equivalents available to us, we anticipate will be sufficient to purchase all Shares tendered pursuant to the Offer, (c) the Offer is not
subject to any financing condition and (d) if we consummate the Offer and not all outstanding Shares are tendered pursuant to Offer or
during the Subsequent Offering Period (which includes the Minority Exit Offering Period, if applicable), and we intend to (i)
commence the Compulsory Acquisition and offer each non-tendering AVG shareholder (or such AVG shareholder must otherwise
receive) the Offer Price (without interest and less applicable withholding taxes or other taxes) for each Share then held by such
non-tendering AVG shareholder, or (ii) acquire all assets of AVG in the Asset Sale, non-tendering AVG shareholders will receive the
Offer Price (without interest and less applicable withholding taxes (including Dutch dividend withholding tax) or other taxes) as the
Liquidation Distribution (provided, however, that in the Compulsory Acquisition, the Dutch Court will determine the price to be paid
for the Shares, which may be greater, equal to or less than the Offer Price), we believe the financial condition of Parent and Purchaser
is not material to a decision by a holder of Shares whether to sell, hold or tender Shares pursuant to the Offer.
Parent and Purchaser estimate that the total funds required to purchase all of the Shares pursuant to the Offer, to consummate the
Asset Sale and Subsequent Reorganization (which estimate includes, among other things, payment in respect of outstanding
in-the-money options), pay related transaction fees and expenses due and payable on or prior to the consummation of the Offer, pay or
refinance all Purchaser and AVG debt that is required to be paid or refinanced upon consummation of the Offer and satisfy all other
payment obligations of Purchaser and AVG required to be satisfied at the closing of the Offer will be approximately $1.877 billion.
Purchaser has obtained commitments from Credit Suisse AG, Jefferies Finance LLC, UBS AG, Stamford Branch, Bank of America
Merrill Lynch International Limited and Société Générale (collectively, the “Lenders”) to provide $85.0 million in a senior secured
revolving credit facility with a term of five years (the “Revolving Credit Facility”) and $1,600.0 million equivalent in senior secured
term loan facilities (which will be provided as (a) a senior secured term loan facility denominated in U.S. dollars with a term of six
years (the “Dollar Tranche Term Facility”) and (b) a senior secured term loan facility denominated in Euros with a term of six years,
such Euro amount determined based on the spot rate of exchange on the date of allocation of commitments of the Term Loan Facilities
(as defined below) in connection with primary syndication (the “Euro Tranche Term Facility” and, the Dollar Tranche Term Facility
and Euro Tranche Term Facility, collectively, the “Term Loan Facilities,” and together with the Revolving Credit Facility, the “Debt
Financing”). Parent and Purchaser anticipate that the Debt Financing and/or bank or other debt financings that may be entered into or
issued by Purchaser in lieu of all or a portion of the Debt Financing, together with certain unrestricted cash or cash equivalents
available to Purchaser (including such cash or cash equivalents of AVG that will become available to Purchaser upon the
consummation of the Offer), will be sufficient to fund the purchase of all the Shares pursuant to the Offer and to pay related
transaction fees and expenses due and payable on or prior to the consummation of the Offer, and pay or refinance all Purchaser and
AVG debt that is required to be paid or refinanced upon consummation of the Offer, in accordance with the provisions of the Debt
Financing, and satisfy all other payment obligations of Purchaser and AVG required to be satisfied upon consummation of the Offer.
Credit Suisse AG (acting through such of its affiliates or branches as it deems appropriate) will act as sole and exclusive
administrative agent and collateral agent in respect of the Debt Financing. Funding of the Debt Financing is subject to the satisfaction
of various conditions set forth in the amended and restated commitment letter pursuant to which the Debt Financing will be provided
(together with the exhibits thereto, the “Debt Commitment Letter”). The documentation governing the Debt Financing has not been
finalized and, accordingly, the actual terms of the Debt Financing may, subject to the prior written consent of AVG in the case of
certain changes to the Debt Financing, differ from those described in this document. The parties to the documentation governing the
Debt Financing are expected to include Parent, Purchaser, certain subsidiaries of Purchaser, the Lenders and/or their affiliates, and
other financial institutions party thereto as lenders.
Revolving Credit Facility and Term Loan Facilities.
Interest Rate. Loans under the Revolving Credit Facility are expected to bear interest, at the option of the Purchaser and the
other borrowers under the Revolving Credit Facility (collectively, the “Revolving Borrowers”),
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at a rate equal to the adjusted LIBOR, the EURIBOR or an alternate base rate, in each case plus a spread. Loans under the Term Loan
Facilities are expected to bear interest (a) in the case of the Dollar Tranche Term Facility, at the option of the Purchaser and the other
borrowers under the Term Loan Facilities (collectively, the “Term Borrowers” and together with the Revolving Borrowers, the
“Borrowers”), at a rate equal to the adjusted LIBOR or an alternate base rate and (b) in the case of the Euro Tranche Term Facility, at
a rate equal to the EURIBOR, in each case plus a spread. After the Purchaser delivers financial statements for the first full fiscal
quarter ending after the date of initial funding pursuant to the Debt Financing (the “Funding Date”), interest rate margins under the
Revolving Credit Facility and the Term Loan Facilities will be subject to reductions based upon a net first lien leverage ratio as agreed
upon between the Purchaser and the arrangers under the Debt Financing.
Repayments. The Revolving Borrowers will be permitted to make voluntary prepayments with respect to the Revolving Credit
Facility and voluntarily reduce the unutilized portion of the Revolving Credit Facility at any time in minimum principal amounts to be
agreed upon, without premium or penalty, subject to reimbursement of the redeployment costs of the lenders under the definitive debt
documents in the case of a prepayment of adjusted LIBOR and EURIBOR borrowings other than on the last day of the relevant
interest period. The Revolving Borrowers will be required to repay the aggregate principal amount of the Revolving Credit Facility
outstanding at maturity. The Term Borrowers will be permitted to make voluntary prepayments with respect to the Term Loan
Facilities at any time in minimum principal amounts to be agreed upon, without premium or penalty (other than payment of a
prepayment premium in certain repricing transactions in an amount as agreed upon between the Purchaser and the arrangers under the
Debt Financing for any such prepayment (or certain other repricing events) prior to the six-month anniversary of the Funding Date), in
each case, subject to reimbursement of the redeployment costs of the lenders under the definitive debt documents in the case of a
prepayment of adjusted LIBOR and EURIBOR borrowings other than on the last day of the relevant interest period. The Term
Borrowers will be required to (i) make quarterly amortization payments with respect to the Term Loan Facilities in an amount as
agreed upon between the Purchaser and the arrangers under the Debt Financing and (ii) repay the aggregate principal amount of the
Term Loan Facilities outstanding at maturity.
Guarantors. All obligations of the Borrowers under the Revolving Credit Facility and the Term Loan Facilities and, at the option
of the Purchaser, under certain hedging agreements and cash management arrangements, will in each case be guaranteed by Parent and
certain existing and future direct and indirect material restricted subsidiaries of the Purchaser (subject to customary exceptions).
Security. The obligations of the Purchaser and the guarantors under the Revolving Credit Facility and the Term Loan Facilities
and under certain hedging agreements and cash management arrangements will be secured, subject to permitted liens and other agreed
upon exceptions, on a first priority basis by a perfected security interest in substantially all of the material owned assets of the
Purchaser, each other borrower and each guarantor, in each case, whether owned on the Funding Date or thereafter acquired and
subject to customary exceptions.
Other Terms. The documentation governing the Revolving Credit Facility and the Term Loan Facilities will contain customary
representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on
indebtedness, investments, sales of assets, mergers and acquisitions, transactions with affiliates, liens and dividends and other
distributions. The documentation governing the Revolving Credit Facility and the Term Loan Facilities will also include customary
events of defaults including a change of control to be defined.
Conditions. Funding of the Debt Financing is subject to the satisfaction of various conditions set forth in the Debt Commitment
Letter. The funding of the Debt Financing is subject to, among other things:
(a)
the satisfaction of the conditions to the Offer pursuant to the terms of the Purchase Agreement without giving effect to any
modifications, amendments, consents or express waivers thereto that are materially adverse to the lenders under the Debt
Financing without the approval of the arrangers under the Debt Financing;
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(b) the payment of certain fees and expenses required by the Debt Commitment Letter to be paid on or prior to the Funding
Date;
(c)
the execution and delivery of a definitive credit agreement and related documentation;
(d) the conclusion of a period of 10 consecutive business days (subject to substantially same blackout periods as the
“Marketing Period” (as defined in Section 11 — “The Purchase Agreement; Other Agreements — Purchase Agreement”))
prior to the date of the Offer Closing following the receipt by Credit Suisse Securities (USA) LLC, Jefferies Finance LLC
and UBS Securities LLC, as initial lead arrangers, from Purchaser of a confidential information memorandum (excluding
any sections that would customarily be provided by a lead arranger) in respect of the Debt Financing to syndicate the Term
Loan Facilities;
(e)
the accuracy of certain representations and warranties;
(f)
the repayment in full of the outstanding indebtedness of Purchaser and its subsidiaries under that certain Credit Agreement,
dated as of March 20, 2014, by and among, among others, Parent, Purchaser, certain wholly owned subsidiaries of
Purchaser, the lenders from time to time party thereto and Credit Suisse International, as administrative and collateral agent;
and
(g)
the receipt by the arrangers under the Debt Financing of certain financial information (including pro forma financial
information) and certain “know your customer” information relating to Purchaser and AVG.
In the event that the Funding Date does not occur on or before the earliest of (i) the consummation of the Offer Closing with or
without the funding of the Debt Financing (but without excusing any breach of the Debt Commitment Letter if any initial lender
thereunder refuses to fund the Debt Financing), (ii) 11:59 p.m., New York City time, on the third business day (as defined in the
Purchase Agreement) following the End Date if the Offer Closing has not occurred on or prior to such date and (iii) 11:59 p.m., New
York City time, on the third business day (as defined in the Purchase Agreement) following the date occurring six months after July 6,
2016, then the Debt Commitment Letter and the Debt Financing commitments and undertakings of the Lenders thereunder will
automatically terminate unless each of the Lenders, in its sole discretion, agrees to an extension.
The foregoing summary does not purport to be complete and is qualified in its entirety by the full text of the Debt Commitment
Letter and the exhibits thereto, copies of which have been filed as Exhibit (b) to the Schedule TO and which are incorporated herein
by reference.
Purchaser currently intends to use cash generated by it and its subsidiaries’ operations to repay the Debt Financing in the
ordinary course of business. Purchaser currently has no plans or arrangements to refinance the Debt Financing.
10. Background of the Offer; Past Contacts or Negotiations with AVG.
The following chronology summarizes the key meetings and events between representatives of Parent and Purchaser and
representatives of AVG that led to the signing of the Purchase Agreement. The following chronology does not purport to catalogue
every conversation among representatives of Parent, Purchaser and AVG. For a review of AVG’s additional activities relating to
these contacts, please refer to AVG’s Schedule 14D-9 being mailed to AVG shareholders with this Offer to Purchase. For purposes of
this discussion, “Avast” refers to Parent and its direct and indirect subsidiaries.
Parent regularly evaluates its business and plans and considers a variety of potential transactions to enhance its business. Parent
has considered a number of alternatives for developing its businesses, including investments, partnerships and acquisitions of other
companies and businesses.
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In early November 2014, representatives of Avast contacted representatives of AVG to determine whether there was interest in a
potential strategic transaction. On November 11, 2014, Parent and AVG entered into a mutual non-disclosure agreement to permit the
exchange of non-public information to facilitate the parties’ preliminary discussions regarding a possible strategic transaction. During
the subsequent three-week period, Parent and its advisors, Jefferies and Goldman Sachs & Co. (“Goldman Sachs”), conducted a
high-level due diligence review of AVG’s business.
On November 15, 2014, Vincent Steckler, Chief Executive Officer of Avast, and Ondřej Vlček, Chief Operating Officer of
Avast, met with Gary Kovacs, Chief Executive Officer of AVG, and Todd Simpson, Chief Strategy Officer of AVG to discuss a
possible strategic transaction between the two companies, which was followed by additional meetings between Mr. Kovacs, Mr.
Steckler and representatives of each company during the following three weeks.
On December 5, 2014, Parent submitted to the AVG Boards a written non-binding indicative offer to acquire AVG at a price per
Share of between $21 and $24. On December 23, 2014, the AVG Boards informed Parent that they were not prepared to accept the
December 5 proposal, citing inadequacy of the offer price and the level of detail provided in the proposal.
In September 2015, representatives of Parent, including Mr. Steckler, were in contact with representatives of AVG, including
Mr. Kovacs, to express continued interest in a potential strategic transaction. Parent and AVG resumed discussions regarding a
potential strategic transaction in late November 2015 and signed a new mutual non-disclosure agreement on December 4, 2015. Parent
and AVG and their respective financial advisors had various discussions over the following three months concerning the possible
structure and terms of a potential business combination between Parent and AVG. On December 1 and 23, 2015, February 5 and 23,
2016, and March 3, 2016, representatives of Jefferies and representatives of Morgan Stanley discussed the possible business
combination between Parent and AVG on behalf of their respective clients and shared their respective clients’ preliminary views
regarding the potential business combination. The financial advisors also discussed the process which would be followed to assess the
proposed transaction. During this period, each of AVG and Parent conducted preliminary financial and operational due diligence
review of the other party. This round of discussions ended in mid-March 2016 when the parties were unable to reach consensus on the
valuations of their respective businesses.
On May 15, 2016, representatives of Parent contacted representatives of AVG to express interest in acquiring AVG at a price per
Share of $25.00
On May 19, 2016, Parent submitted to the AVG Boards a written non-binding indicative offer to acquire AVG at a price per
Share of $25.00, which included a request for a three-week exclusivity period that would commence after completion of initial due
diligence. On May 20, 2016, AVG responded in writing that it was prepared to allow Parent to undertake a due diligence review of
AVG and discuss the possible transaction on a non-exclusive basis.
On May 24, 2016, representatives of each of AVG and Parent held a meeting in London at the offices of White & Case LLP
(“White & Case”), legal counsel to Parent, to discuss the initial scope and timetable for the first phase of legal, financial and tax due
diligence. AVG’s management team also provided a presentation on AVG’s financial position and business outlook.
On May 25, 2016, representatives of each of AVG, Parent, Ernst & Young LLP, information technology, tax and accounting
advisor to Parent (“EY”), and Jefferies met telephonically to discuss the tax affairs of AVG.
On May 28, 2016, AVG and Parent signed a new mutual non-disclosure agreement and on May 30, 2016 agreed on a “clean
team” protocol to allow Parent and its advisors to conduct a due diligence review of certain commercial information relating to AVG.
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During the period beginning on May 28, 2016 and ending on June 11, 2016, representatives of Parent, AVG and their respective
advisors met in person or telephonically to discuss the possible transaction and address various questions raised by Parent in the
course of its then-ongoing due diligence review of AVG.
On June 1, 2016, Mr. Steckler and Mr. Kovacs met to discuss Parent’s ongoing due diligence process and the status of
negotiations around high-level issues and terms. Mr. Steckler informed Mr. Kovacs that the previously indicated $25.00 price per
Share would be challenging for Parent to confirm for various reasons. Mr. Kovacs reiterated to Mr. Steckler that any price below the
$25.00 price per Share would not be acceptable to AVG and its Boards.
Throughout June 2016, representatives of Parent and its advisors held discussions with AVG and its advisors regarding Parent’s
ongoing due diligence review of AVG, covering, among other subject matters, financial, operational, legal and tax matters.
On June 11, 2016, Parent confirmed in writing its nonbinding proposal to acquire AVG at a price of $25.00 per Share, subject to
confirmatory due diligence, which Parent proposed to carry out during a three-week exclusivity period. Parent also provided AVG
with “highly confident” letters from debt financing sources relating to debt commitments under negotiation between Parent and such
debt financing sources.
On June 13, 2016, AVG and its advisors requested further information from Parent regarding Parent’s strategy with respect to
employees and customers, Parent’s proposed sources and uses of funds for the transaction and further information on the proposed
scope of Parent’s confirmatory due diligence.
On June 14, 2016, Parent provided a supplementary letter that, among other things, outlined funding sources, provided further
detail on the scope of the proposed confirmatory due diligence, outlined the premium that its offer represented to the market price of
the Shares and the benefits of a potential combination to AVG’s. On that same day, AVG agreed in writing to permit further due
diligence by Parent and to grant a Parent a period of exclusivity.
On June 15 and 16, 2016, representatives of each of White & Case and Orrick, Herrington & Sutcliffe LLP (“Orrick”), U.S.
legal counsel to AVG, met telephonically to discuss the terms of a possible exclusivity arrangement between AVG and Parent. On
June 16, 2016, Parent and AVG entered into an exclusivity agreement providing Parent with a period of exclusivity until July 7, 2016.
On June 20, 2016, AVG, in accordance with its obligations under the exclusivity agreement, informed Parent that it had received
two inbound inquiries regarding a potential acquisition proposal.
On June 22, 2016, a representative of White & Case delivered an initial draft of the Purchase Agreement to representatives of
Orrick and Allen & Overy LLP (“Allen & Overy”), Dutch legal counsel to AVG.
On June 26, 2016, a representative of Orrick provided a revised draft of the Purchase Agreement to White & Case and De Brauw
Blackstone Westbroek N.V. (“De Brauw”), Dutch legal counsel to Parent.
From June 29 through July 6, 2016, representatives of Parent and AVG, and their respective financial and legal advisors
conducted numerous telephonic meetings to discuss the terms and conditions of the draft Purchase Agreement. During such time,
discussions included details of the scope of the representations, warranties and covenants contained in the draft Purchase Agreement,
the conditions under which Parent would be obligated to close the tender offer, the allocation of risk between the parties with respect
to regulatory matters, the no-solicitation covenant, the certainty of Parent’s sources of funds and financing commitments, the amount
of the termination fees contemplated by the draft Purchase Agreement and the circumstances under which such termination fees would
be required to be paid, Dutch corporate governance-related provisions and the structure of the proposed transaction, particularly
relating to the Asset Sale. White & Case and Orrick also exchanged revised
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drafts of the Purchase Agreement, including the disclosure schedules related to the Purchase Agreement, and Allen & Overy and De
Brauw exchanged revised drafts of the Asset Sale Agreement. Also during this period, affiliates of TA Associates and CVP, each
significant shareholders of AVG, agreed to enter into tender and support agreements with Parent to tender all of their Shares in the
Offer and vote in support of the transactions contemplated by the Purchase Agreement.
During the period from July 3 to July 6, 2016, representatives of the respective legal and financial advisors of Parent and AVG
held several discussions regarding the acquisition financing of the transaction, including the terms and conditions of such financing,
and AVG’s legal and financial advisors were provided drafts of the Debt Commitment Letter and related documents to which they
provided comments.
On July 4, 2016, Mr. Steckler and Mr. Kovacs met telephonically to discuss the status of negotiations. Mr. Steckler informed
Mr. Kovacs that based on Parent’s confirmatory diligence, Parent was considering a valuation of AVG at a price below the proposed
$25.00 price per Share, and suggested they would need to address issues around price. Mr. Kovacs told Mr. Steckler that AVG would
not engage in any further negotiations and would terminate the process if Parent were to reduce its proposed price.
On July 6, 2016, Parent held meetings of its Management Board and Supervisory Board at the offices of De Brauw, located in
Amsterdam, The Netherlands, at which the directors of Parent approved, among other things, the Purchase Agreement and the
transactions contemplated by the Purchase Agreement. Later that day, Parent, Purchaser and AVG entered into the Purchase
Agreement.
Prior to opening of the markets in the United States on July 7, 2016, Parent and AVG jointly announced the execution of the
Purchase Agreement.
For more information on the Purchase Agreement and the other agreements between AVG and Parent, Purchaser and their
respective related parties, see Section 8 — “Certain Information Concerning Parent and Purchaser,” Section 9 — “Source and Amount
of Funds,” and Section 11 — “The Purchase Agreement, Other Agreements.”
11. The Purchase Agreement; Other Agreements.
The Purchase Agreement
The following summary of certain provisions of the Purchase Agreement and all other provisions of the Purchase Agreement
discussed herein are qualified by reference to the Purchase Agreement itself, which is incorporated herein by reference and filed as
Exhibit (d)(1) to the Schedule TO. The Purchase Agreement may be examined and copies may be obtained at the places and in the
manner set forth in Section 8 — “Certain Information Concerning Parent and Purchaser.” Shareholders and other interested parties
should read the Purchase Agreement for a more complete description of the provisions summarized below. Capitalized terms used
herein and not otherwise defined have the respective meanings set forth in the Purchase Agreement.
This summary of the Purchase Agreement has been included to provide investors with information regarding its terms. It is not
intended to provide any other factual disclosures about Parent, Purchaser, AVG or their respective affiliates. The Purchase
Agreement contains representations, warranties and covenants that are the product of negotiations among the parties thereto and
made to, and solely for the benefit of, each other as of specified dates. The assertions embodied in those representations, warranties
and covenants are subject to qualifications and limitations agreed to by the respective parties and are also qualified in important part
by a confidential disclosure schedule delivered by AVG to Parent in connection with the Purchase Agreement. The representations,
warranties and covenants in the Purchase Agreement were made for the purpose of allocating contractual risk between the parties
thereto and governing contractual rights and relationships between the parties thereto instead of establishing these matters as facts,
and may be subject to standards of materiality
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applicable to the contracting parties that differ from those applicable to security holders of Parent or AVG. In reviewing the
representations, warranties and covenants contained in the Purchase Agreement or any descriptions thereof in this Section 11, it is
important to bear in mind that such representations, warranties and covenants or any descriptions thereof were not intended by the
parties to the Purchase Agreement to be characterizations of the actual state of facts or conditions of Parent, Purchaser, AVG or their
respective affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may have
changed since the date of the Purchase Agreement and may change after the date hereof, and such subsequent information may or
may not be fully reflected in public disclosures. For the foregoing reasons, such representations, warranties and covenants or
descriptions thereof should not be read alone and should instead be read in conjunction with the other information contained in the
reports, statements and filings that Parent and AVG publicly file.
The Offer. Purchaser has agreed to commence (within the meaning of Rule 14d-2 promulgated under the Exchange Act) the
Offer as promptly as reasonably practicable after the date of the Purchase Agreement, but in no event later than 15 business days
following the date of the Purchase Agreement. Subject to the satisfaction or waiver of the conditions to the Offer, Purchaser has
agreed to, at or as promptly as practicable following the Expiration Time (but in any event, within three business days of the
Expiration Time), accept for payment and, at or as promptly as practicable following the Acceptance Time (but in any event within
three business days of the Acceptance Time), pay for all Shares validly tendered pursuant to the Offer and not properly withdrawn.
Purchaser expressly reserves the right at any time prior to the Expiration Time, at its sole discretion, to waive, in whole or in
part, any condition to the Offer and to make any change in the terms of or conditions to the Offer. However, Purchaser will not
(without the prior written consent of AVG): (i) waive or change the Minimum Condition; (ii) decrease the Offer Price; (iii) change the
form of consideration to be paid in the Offer; (iv) decrease the number of Shares sought in the Offer; (v) extend or otherwise change
the Expiration Time except as otherwise provided in the Purchase Agreement; or (vi) impose additional conditions to the Offer or
otherwise amend, modify or supplement any of the conditions to the Offer or the terms of the Offer in a manner adverse to AVG
shareholders.
Extensions of the Offer. Unless the Offer is extended or earlier terminated, the Offer will expire at 11:59 p.m., New York City
time, on August 31, 2016. In the Purchase Agreement, the parties agreed that unless extended as provided in the Purchase Agreement,
the Offer will expire at 12:00 midnight (New York City time) ( i.e. , one minute after 11:59 p.m. (New York City time)) on the date
that is the later of (i) 20 business days (calculated as set forth in Rule 14d-1(g)(3) promulgated under the Exchange Act) after the date
of commencement of the Offer and (ii) such date that is six business days after the date of the EGM. If any condition to the Offer is
not satisfied or waived at the then-scheduled Expiration Time, Purchaser has agreed to extend the Offer (the length of such extension
period to be determined by Parent or Purchaser) from time to time until such condition or conditions to the Offer are satisfied or
waived. Purchaser, however, is not required to extend the Offer (A) beyond January 6, 2017, (B) in an individual extension period of
more than 10 business days, or (C) at any time that Parent or Purchaser is permitted to terminate the Purchase Agreement. Purchaser
has agreed to (1) extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC, the staff
thereof or the NYSE applicable to the Offer or as may be required by any other governmental authority, and (2) if the Marketing
Period (as defined below) has not ended on the last business day prior to the expiration of the Offer, extend the Offer until the earliest
to occur of (x) any business day before or during the Marketing Period as may be specified by Parent or Purchaser on no less than two
business days’ prior notice to AVG, and (y) the first business day after the final day of the Marketing Period. Notwithstanding
anything in the Purchase Agreement to the contrary, at the then-scheduled Expiration Time, Purchaser may extend the Offer for up to
10 business days from the day the Marketing Period will otherwise end. Following the Expiration Time, Purchaser will (and the Offer
documents will so indicate) provide the Subsequent Offering Period of not less than 10 business days. The Offer may not be
terminated prior to then-scheduled Expiration Time unless the Purchase Agreement has been validly terminated in accordance with the
Purchase Agreement.
Marketing Period. For purposes of the Purchase Agreement, “Marketing Period” means the first period of 15 consecutive
business days commencing on the date of delivery by AVG to Parent of the (i) audited
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consolidated balance sheets and related statements of income, shareholders’ equity and cash flows related to AVG for the three most
recently completed fiscal years ended at least 90 days before the Acceptance Time and (ii) unaudited consolidated balance sheets and
related unaudited statements of income, shareholders’ equity and cash flows related to AVG, for each subsequent fiscal quarter (other
than the fourth fiscal quarter) ended at least 45 days before the Acceptance Time (such information described in clauses (i) and (ii),
the “Required Financial Information”) and ending prior to the Acceptance Time. Notwithstanding anything in the Purchase Agreement
to the contrary, (a) to the extent the Marketing Period has not been completed on or prior to August 19, 2016, the Marketing Period
will not be deemed to have commenced prior to September 6, 2016, (b) the Marketing Period will not be required to be consecutive to
the extent it would include November 24, 2016 and November 25, 2016 (which dates will not count for purposes of the 15 business
day period), (c) to the extent the Marketing Period has not been completed on or prior to December 16, 2016, the Marketing Period
will not be deemed to have commenced prior to January 2, 2017 and (d) the Marketing Period will end on any earlier date that is the
date on which the proceeds of the Debt Financing are obtained. If AVG in good faith reasonably believes that it has delivered the
Required Financial Information, AVG may deliver to Parent written notice to that effect (stating when it believes it completed any
such delivery), in which case AVG will be deemed to have satisfied its requirements under the definition of Marketing Period on the
date specified in such notice and the Marketing Period will be deemed to have commenced on the date specified in such notice, in
each case unless Parent in good faith reasonably believes that AVG has not delivered the Required Financial Information and, within
two business days after its receipt of such notice from AVG, delivers a written notice to AVG to that effect (stating with reasonable
specificity which information is required to satisfy AVG’s requirements to provide the Required Financial Information for purposes of
compliance with the definition of Marketing Period only (in which case, AVG will be deemed to have satisfied its requirements under
the definition of Marketing Period on the date such information required to satisfy AVG’s requirements to provide the Required
Financial Information is delivered to Parent)).
Treatment of AVG Equity Awards. At the Acceptance Time, each AVG Option, whether vested or unvested, that is outstanding
as of immediately prior to the Acceptance Time will be cancelled and extinguished without any further action on the part of Purchaser,
AVG, or any holder of an AVG Option or any other person. To the extent that an AVG Option is vested as of the Acceptance Time (as
determined in accordance with the AVG Stock Plan and the award agreement) and has an exercise price per Share that is less than the
Offer Price, at the Acceptance Time, such vested AVG Option will be converted into the right to receive a cash payment from Parent
at the Acceptance Time (less applicable withholding taxes or other taxes) equal to the product of (i) the excess, if any, of the Offer
Price over the applicable per Share exercise price of such AVG Option multiplied by (ii) the number of vested Shares subject to such
AVG Option. An AVG Option that is unvested as of the Acceptance Time or has an exercise price per Share that is equal to or greater
than the Offer Price will be cancelled without any cash or other consideration being paid or provided therefor, except that if, as of the
date of the Purchase Agreement, with respect to certain AVG Options specifically identified on the confidential disclosure schedule
that AVG delivered to Parent and Purchaser concurrently with the execution of the Purchase Agreement which contain a vesting
acceleration provision that can be triggered following the Acceptance Time upon a qualifying event or termination of employment,
then upon the satisfaction of all of the conditions otherwise necessary for such vesting acceleration in accordance with the existing
rights of the holder of such AVG Option, Parent will, within 30 days after the date of the qualifying event or termination triggering the
vesting acceleration, provide the holder of such AVG Option with a payment (less applicable withholding taxes or other taxes) equal
to the product of (a) the excess, if any, of the Offer Price over the applicable per Share exercise price of such AVG Option multiplied
by (b) the number of Shares subject to such AVG Option that would have vested had the AVG Option been outstanding on the date of
the event triggering the vesting acceleration right with respect to such AVG Option. No interest will be paid or accrued on any cash
payable with respect to any AVG Option.
At the Acceptance Time, and without any further action on the part of Purchaser, AVG, or any holder of any AVG Performance
Stock Unit or AVG Restricted Stock Unit or any other person, each AVG Performance Stock Unit or AVG Restricted Stock Unit that
is vested as of the Acceptance Time (as determined in accordance with
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the AVG Stock Plan and the award agreement) will no longer be outstanding and will automatically be cancelled and converted into
the right to receive an amount in cash from Parent at the Acceptance Time (less applicable withholding taxes or other taxes) equal to
the product of (i) the Offer Price multiplied by (ii) the number of vested Shares subject to such AVG Performance Stock Unit or AVG
Restricted Stock Unit. Any AVG Performance Stock Unit or AVG Restricted Stock Unit that is unvested as of the Acceptance Time
will be cancelled without any cash or other consideration being paid or provided therefor, except, that if, as of the date of the Purchase
Agreement, with respect to certain AVG Performance Stock Units or AVG Restricted Stock Units specifically identified on the
confidential disclosure schedule that AVG delivered to Parent and Purchaser concurrently with the execution of the Purchase
Agreement which contain a vesting acceleration provision that can be triggered following the Acceptance Time upon a qualifying
event or termination of employment, then upon the satisfaction of all of the conditions otherwise necessary for such vesting
acceleration in accordance with the existing rights of the holder of such AVG Performance Stock Unit or AVG Restricted Stock Unit,
Parent will, within 30 days after the date of the qualifying event or termination triggering the vesting acceleration, provide the holder
of such AVG Performance Stock Unit or AVG Restricted Stock Unit with a payment (less applicable withholding taxes or other taxes)
equal to the product of (i) the Offer Price multiplied by (ii) the number of Shares subject to such AVG Performance Stock Unit or
AVG Restricted Stock Unit that would have vested had such AVG Performance Stock Unit or AVG Restricted Stock Unit been
outstanding on the date of the event triggering the vesting acceleration right with respect to such AVG Performance Stock Unit or
AVG Restricted Stock Unit. No interest will be paid or accrued on any cash payable with respect to any vested AVG Performance
Stock Unit or AVG Restricted Stock Unit.
Extraordinary General Meeting. AVG has agreed to hold the EGM to:
(i)
provide information regarding the Offer and discuss the Offer;
(ii) adopt a resolution effective upon the Acceptance Time to (A) provide discharge to all of the existing members of the AVG
Boards and Mr. J. Little (former member of the AVG Management Board) and (B) appoint such new members to the AVG
Boards as designated by Purchaser, upon the binding nomination of the AVG Supervisory Board, to replace the resigning
members of the AVG Boards;
(iii) adopt a resolution to, conditional upon the number of Shares tendered pursuant to the Offer (or during the Subsequent
Offering Period (which includes the Minority Exit Offering Period)) representing less than 95 percent but at least 80
percent of the outstanding Shares (the “Asset Sale Range”), approve the Asset Sale;
(iv) adopt a resolution to, subject to the number of Shares tendered pursuant to the Offer (or during the Subsequent Offering
Period (which includes the Minority Exit Offering Period)) falling within the Asset Sale Range, amend the articles of
association of AVG for the purpose of, among other things, permitting the appointment by the general meeting of AVG of a
liquidator, including the authorization of all members of the AVG Management Board and any and all lawyers and
paralegals practicing with De Brauw Blackstone Westbroek N.V. to execute such deed of amendment of the articles of
association of AVG.
(v)
adopt a resolution to, subject to (A) delisting of the Shares from the NYSE, (B) the Asset Sale not being pursued, and (C)
the number of Shares tendered pursuant to the Offer (or during the Subsequent Offering Period (which includes the
Minority Exit Offering Period)) representing at least 80 percent of the outstanding Shares, (1) convert AVG from a public
limited liability company ( naamloze vennootschap ) to a private company with limited liability ( besloten vennootschap
met beperkte aansprakelijkheid ), and (2) amend AVG’s articles of association in connection with the matters described in
the foregoing clause (1), including the authorization of all members of the AVG Management Board and any and all
lawyers and paralegals practicing with De Brauw Blackstone Westbroek N.V. to execute such deed of amendment of the
articles of association of AVG; and
(vi) adopt a resolution to, subject to (A) the number of Shares tendered pursuant to the Offer (or during the Subsequent Offering
Period (which includes the Minority Exit Offering Period)) falling within the
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Asset Sale Range, (B) the deed of amendment of the articles of association effecting the changes referred to under clause
(iv) above having been executed and (C) completion of the Asset Sale, appoint as liquidator Stichting Vereffening AVG
Technologies, a foundation to be organized and existing under Dutch law (the “Foundation”), dissolve AVG (resulting in a
liquidation) and approve the payment of the Liquidation Distribution to each non-tendering AVG shareholder.
AVG has agreed that its obligation to duly call, give notice of, convene and hold the EGM in accordance with and subject to the
terms of the Purchase Agreement will not be affected by the commencement, public proposal, public disclosure or communication to
AVG of any Alternative Transaction Proposal (as defined below) (whether or not a Superior Proposal (as defined below)); provided
that, AVG will be permitted to cancel the EGM after an Adverse Recommendation Change (as defined below) or upon the termination
of the Purchase Agreement in accordance with the terms of the Purchase Agreement. Unless the Purchase Agreement is terminated in
accordance with the terms of the Purchase Agreement, AVG has agreed not to submit to the vote of the shareholders of AVG any
Alternative Transaction Proposal (whether or not a Superior Proposal) prior to the vote of the shareholders of AVG with respect to the
matters set forth in clauses (i) through (vi) above.
In connection with the Asset Sale and the Liquidation Distribution, Parent and Purchaser have agreed to provide a guarantee, in
a form and substance reasonable and customary in The Netherlands, to the liquidator as to any deficit in the estate of AVG to enable
the liquidator to pay the Offer Price by means of an advance liquidation distribution to AVG shareholders that were not tendered
pursuant to the Offer. The approval of AVG shareholders at the EGM of the Asset Sale will be conditional upon the number of Shares
tendered pursuant to the Offer (or during the Subsequent Offering Period (which includes the Minority Exit Offering Period)) falling
within the Asset Sale Range.
Directors. Under the Purchase Agreement, Purchaser agreed that, as soon as practicable after the date of the Purchase
Agreement, and no later than two business days prior to the convocation of the EGM, Purchaser will designate in writing to AVG the
new members for the AVG Boards for purposes of the shareholder vote at the EGM. Purchaser has designated the proposed new
members of the AVG Supervisory Board, René Bienz, Gagandeep Singh and Glenn Taylor, and the proposed new members of the
AVG Management Board, Alan Rassaby, Stefan Boermans and Dick Haarsma.
Asset Sale and Subsequent Reorganization. As promptly as practicable following the closing of the Subsequent Offering Period
(which includes the Minority Exit Offering Period), Purchaser may effectuate the Subsequent Reorganization of AVG and its
subsidiaries, which may include, (i) if permissible under applicable law, the commencement by Purchaser of the Compulsory
Acquisition or (ii) unless Purchaser can commence the Compulsory Acquisition, the Asset Sale and the Liquidation Distribution. If (a)
the approval of AVG shareholders at the EGM of the Asset Sale has been obtained, (b) the Subsequent Offering Period (which
includes the Minority Exit Offering Period) has expired and (c) the number of Shares validly tendered pursuant to the Offer and not
properly withdrawn (including Shares validly tendered during the Subsequent Offering Period, which includes the Minority Exit
Offering Period, but excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been delivered in
settlement or satisfaction of such guarantee prior to the expiration of the Offer), together with the Shares then owned by Parent,
Purchaser and their subsidiaries, falls within the Asset Sale Range, then Parent and Purchaser may require AVG to enter into the Asset
Sale Agreement and, subject to the conditions of the Purchase Agreement and the Asset Sale Agreement, the Parent, Purchaser and
AVG will promptly implement the Asset Sale and Liquidation Distribution and take the steps and complete the actions and
transactions set forth in the Asset Sale Agreement. The Subsequent Reorganization, if completed, will result in all minority
shareholders being offered or receiving in the Subsequent Reorganization for each Share then held cash in an amount equal to the
Offer Price, as soon as reasonably possible after the Acceptance Time, unless the Compulsory Acquisition is commenced by
Purchaser, in which case the cash amount received for each Share not tendered pursuant to the Offer will be determined by the Dutch
Court.
Certain Adjustments. In the event that, during the period between the date of the Purchase Agreement and the Expiration Time,
the number of outstanding Shares or securities convertible or exchangeable into or
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exercisable for Shares is changed into a different number of shares or securities or a different class as a result of a reclassification,
stock split (including a reverse stock split), stock dividend or distribution, recapitalization, merger, issuer tender or exchange offer or
other similar transaction, then the Offer Price and any other amounts payable pursuant to the Purchase Agreement will be equitably
adjusted, without duplication, to reflect such change.
Representations and Warranties. In the Purchase Agreement, AVG has made customary representations and warranties to Parent
and Purchaser which are subject to specified exemptions and qualifications contained in the Purchase Agreement and the confidential
disclosure schedule that AVG delivered to Parent and Purchaser concurrently with the execution of the Purchase Agreement and to
certain disclosures in AVG’s SEC filings filed or furnished on or after January 1, 2014 and publicly available at least two business
days prior to the date of the Purchase Agreement, including representations relating to, among other things: its organization, valid
existence and standing under the laws of the jurisdiction in which its business is being conducted; its subsidiaries; its articles of
association and bylaws; its capitalization; its corporate power and authority relative to the Purchase Agreement and the transactions
contemplated by the Purchase Agreement; required governmental authorizations or filings or other consents and approvals, and no
violations of organizational documents; public SEC filings and financial statements; certain business practices, including controls and
procedures over disclosures and financial reporting; the absence of certain changes or events; accuracy of information supplied for
purposes of the Offer documents and AVG’s Schedule 14D-9; the absence of undisclosed material liabilities; compliance with laws,
including sanctions laws, and regulatory matters; absence of litigation; real property; intellectual property matters, including software,
IT systems and data privacy; tax matters; employee benefit plan matters; labor and employment matters; material contracts; finders’
and brokers’ fees and expenses; opinion of AVG’s financial advisor with respect to the fairness of the Offer Price; insurance;
transactions with affiliates; regulatory compliance; anti-takeover measures; accuracy of information supplied for purposes of the Offer
documents and the Schedule 14D-9; and customers and suppliers.
The representations and warranties in the Purchase Agreement made by AVG are, in certain cases, modified by “knowledge,”
“materiality” and “Company Material Adverse Effect” qualifiers. For purposes of the Purchase Agreement, “Company Material
Adverse Effect” means any change, event, development, occurrence or effect that, individually or in the aggregate, (i) has or would
reasonably be expected to have a material adverse effect on the business, assets, properties, liabilities, results of operations or financial
condition of AVG and its subsidiaries, taken as a whole, or (ii) prevents or materially delays the ability of AVG to consummate the
transactions contemplated by the Purchase Agreement (for the avoidance of doubt, for purposes of this clause (ii) only, if, based on the
results of the Offer, it has been determined that AVG is not required to consummate the Asset Sale because Purchaser is able to
consummate the Compulsory Acquisition, then any effect that prevents or materially delays the ability of AVG and its subsidiaries to
consummate the Asset Sale will not be deemed a Company Material Adverse Effect); provided, however, that none of the following
effects will be taken into account in determining whether there has been or would reasonably be expected to be a Company Material
Adverse Effect: (a) changes or proposed changes in applicable law, accounting standards (including International Financial Reporting
Standards or GAAP) or stock exchange rules or listing standards, or interpretations thereof; (b) changes in the financial, capital, credit
or securities markets or general economic or political conditions in The Netherlands, the United States or any other country or region
in which AVG and its subsidiaries operate, including any adverse development regarding the European Union, its member states
(including member states leaving the European Union) and the Eurozone (including one or more member states leaving or forced to
leave the Eurozone); (c) changes (including changes of applicable law or interpretations thereof) or conditions generally affecting the
industry in which AVG and its subsidiaries operate; (d) acts of war (whether declared or not declared), sabotage or terrorism or natural
or man-made disasters; (e) any action taken (or omitted to be taken) at the request of Parent or Purchaser or resulting from a breach of
the Purchase Agreement, or violation of applicable law, by Purchaser or Parent; (f) any action taken by AVG and/or its subsidiaries
that is required or expressly contemplated or permitted by the Purchase Agreement, including any actions required under the Purchase
Agreement to obtain any approval or authorization under applicable antitrust laws for the consummation of the Offer; (g) a change in
the price and/or trading volume of Shares on the NYSE or any other
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market in which such securities are quoted for purchase and sale (provided that the underlying facts and circumstances giving rise to
such changes, unless otherwise excluded by this definition, may be deemed to constitute, and may be taken into account in
determining whether there has been a Company Material Adverse Effect); (h) any effects resulting from or arising out of the
announcement or pendency of the transactions contemplated by the Purchase Agreement or the identity of or any facts or
circumstances relating to Parent, including the impact of any of the foregoing on the relationships, contractual or otherwise, of AVG
and any of its subsidiaries with employees, governmental authorities or any other persons; or (i) any failure in and of itself by AVG or
any of its subsidiaries to meet any internal or published budgets, projections, forecasts or predictions of financial performance for any
period (provided that the underlying facts and circumstances giving rise to such failures, unless otherwise excluded by the definition
of Company Material Adverse Effect, may be deemed to constitute, and may be taken into account in determining whether there has
been, a Company Material Adverse Effect); provided, however, that in the case of the exceptions in clauses (a) through (d), to the
extent such effect disproportionately impacts AVG and its subsidiaries, taken as a whole, as compared to other persons engaged in the
business in which AVG and its subsidiaries engage, the incremental disproportionate impact may be taken into account in determining
whether there has been a Company Material Adverse Effect.
Additionally, the Purchase Agreement provides, among other things, that AVG has represented that the AVG Boards, at a
meeting duly called and held, have unanimously (i) determined that the Purchase Agreement and the transactions contemplated by the
Purchase Agreement are in the best interests of AVG, its business and strategy and its shareholders, employees and other relevant
stakeholders, (ii) approved the Purchase Agreement and the transactions contemplated by the Purchase Agreement and (iii) resolved,
on the terms and subject to the conditions set forth in the Purchase Agreement, to support the Offer and the other transactions
contemplated by the Purchase Agreement and to recommend acceptance of the Offer by the shareholders of AVG and to recommend
approval and adoption of the shareholder approvals at the EGM (such recommendation, the “AVG Boards Recommendation”).
In the Purchase Agreement, Parent and Purchaser have also made customary representations and warranties to AVG that are
subject to specified exemptions and qualifications contained in the Purchase Agreement and the confidential disclosure schedule that
Parent and Purchaser delivered to AVG concurrently with the execution of the Purchase Agreement. Parent’s and Purchaser’s
representations and warranties are, in certain cases, modified by “knowledge,” “materiality,” and “Parent Material Adverse Effect.”
For purposes of the Purchase Agreement, “Parent Material Adverse Effect” means any effect which, individually or in the aggregate,
would reasonably be expected to prevent or materially delay the ability of Parent or Purchaser to consummate the Offer.
Parent’s and Purchaser’s representations and warranties include representations relating to, among other things: organization,
valid existence and standing of Parent and Purchaser; corporate power and authority relative to the Purchase Agreement and the
transactions contemplated by the Purchase Agreement; required governmental authorizations or filings or other consents and
approvals, and no violations of organizational documents; accuracy of information supplied for purposes of the Offer documents and
the Schedule 14D-9; finders’ and brokers’ fees and expenses; Parent’s ability to obtain sufficient financing for the transactions
contemplated by the Purchase Agreement; absence of litigation; and lack of ownership of Shares.
None of the representations and warranties contained in the Purchase Agreement will survive the Acceptance Time.
Conduct of AVG Pending the Offer Closing. From the date of the Purchase Agreement until the Offer Closing or the earlier
termination of the Purchase Agreement in accordance with its terms, except as (i) expressly required or expressly contemplated by the
Purchase Agreement, (ii) set forth on the confidential disclosure schedule that AVG delivered to Parent and Purchaser concurrently
with the execution of the Purchase Agreement, (iii) required by applicable law or (iv) consented to in advance in writing by Parent
(such consent not to be unreasonably withheld, conditioned or delayed), AVG has agreed to (a) conduct its business in the ordinary
course consistent with past practice, (b) use its commercially reasonable efforts to preserve intact its business
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organization and goodwill and relationships with customers, suppliers, licensors, licensees, distributors, governmental authorities and
other third parties and to keep available the services of its current officers and employees and (c) use its commercially reasonable
efforts to protect its intellectual property. From the date of the Purchase Agreement until the Offer Closing or the earlier termination of
the Purchase Agreement in accordance with its terms, except as (w) expressly required or expressly contemplated by the Purchase
Agreement, (x) set forth on the confidential disclosure schedule that AVG delivered to Parent and Purchaser concurrently with the
execution of the Purchase Agreement, (y) required by applicable law or (z) as consented to in advance by Parent in writing (provided
that Parent has agreed to respond to any written request for consent within two business days of receipt thereof), AVG will not, and
will cause its subsidiaries not to:
(a)
amend its articles of association, bylaws or other similar organizational documents;
(b) (i) split, combine, subdivide, exchange or reclassify any shares in its share capital or other equity interests, (ii) declare, set
aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect
of its shares or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares in its share
capital or other equity interests, except for dividends by any of its wholly owned subsidiaries to AVG or other wholly
owned subsidiaries, (iii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any
securities of AVG or any of its subsidiaries, except as required by the terms of any benefit plan or (iv) enter into any
contract, agreement or understanding with respect to the voting or registration of its share capital;
(c)
(i) issue, pledge, dispose, grant, transfer, encumber (or otherwise cause to be subject to any lien), deliver or sell, or
authorize the issuance, pledge, disposition, grant, transfer, accelerate the vesting of, delivery of or sale of, any shares of any
securities of AVG or any of its subsidiaries, other than the issuance of (A) any Shares upon the exercise of AVG Options
that are outstanding on the date of the Purchase Agreement in accordance with such AVG Options as of the date of the
Purchase Agreement and (B) any securities of any subsidiaries of AVG to AVG or any other wholly owned subsidiary of
AVG or (ii) adjust or amend the rights of or any term of any security of AVG (including AVG Options) or any of its
subsidiaries;
(d) acquire (by merger, consolidation, acquisition of shares, assets or otherwise), directly or indirectly, any material amount of
assets, securities, properties, interests or businesses, other than acquisitions of supplies and inventories in the ordinary
course of business consistent with past practice;
(e)
sell, lease, license, mortgage, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise transfer or dispose
of any of its assets, securities, properties, interests or businesses (other than intellectual property that is the subject of
clauses (f) and (g) below) that are material, individually or in the aggregate;
(f)
sell, convey, assign, license, sublicense, covenant not to assert, disclose (in the case of trade secrets or other confidential or
proprietary information), transfer, pledge, encumber or otherwise dispose of (whether by merger, consolidation, purchase,
sale or otherwise) any material intellectual property owned by or licensed to AVG or any of its subsidiaries, in each case,
other than pursuant to non-exclusive licenses granted pursuant to standard outbound intellectual property agreements;
(g)
abandon, cancel, let lapse, allow to be dedicated to the public domain, fail to renew, or fail to continue to prosecute, protect
or defend any material intellectual property owned by or licensed to AVG or any of its subsidiaries, in each case other than
in the ordinary course of business consistent with past practice;
(h)
distribute, modify, embed, integrate, bundle, link, incorporate, or otherwise use any open source software in any manner
that would subject any source code to any compulsory copyleft license terms;
(i)
make any loans, advances or capital contributions to, or investments in, any other person (other than loans or advances
among AVG and any of its wholly owned subsidiaries and capital contributions to or investments in its wholly owned
subsidiaries);
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(j)
incur, create, assume or otherwise become liable for any indebtedness for borrowed money or guarantees thereof (directly,
contingently or otherwise), other than (i) incurred between AVG and any of its wholly owned subsidiaries or between any
of such wholly owned subsidiaries or guarantees by AVG of indebtedness of any wholly owned subsidiary of AVG or (ii)
incurred in the ordinary course of business consistent with past practice;
(k)
(i) increase the compensation or benefits of any company service provider, (ii) grant any equity (or equity-based) award or
rights to severance, termination pay, retention or change in control benefit or agreement to any current or future company
service provider, (iii) pay or award any bonus or incentive compensation (including any discretionary cash payments) to
any company service provider, (iv) establish, adopt, enter into or amend any benefit plan (or any award granted under any
benefit plan) or any plan, policy, program or agreement that would be an benefit plan if in existence on the date of the
Purchase Agreement, (v) amend or waive any performance or vesting criteria or accelerate the vesting or lapsing of
restrictions with respect to any compensation, benefits, equity-based compensation (including, without limitation, any
company equity award), incentive compensation or the forgiveness of indebtedness of any loan, (vi) make any changes to
existing employment or other agreements with employees or enter into any new employment agreements, (vii) hire or
terminate the employment of any company service provider (other than a termination for “cause”), (viii) create any
retention-related pools of cash, shares or other payments, (ix) cause the funding of any rabbi trust or similar arrangement or
take any action to fund or in any other way secure the payment of compensation or benefits under any benefit plan, (x) enter
into any collective bargaining agreement or other agreement with a labor union, works council or similar organization, (xi)
change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan, except as
may be required by GAAP or applicable law or (xii) waive or materially amend any restrictive covenant entered into by any
company service provider;
(l)
(i) terminate any material contract (other than terminations pursuant to existing terms), (ii) enter into any contract that, if in
effect as of the date of the Purchase Agreement, would constitute a material contract or (iii) modify, amend or waive,
release or assign any material rights or claims under any material contract or any contract that, if in effect as of the date of
the Purchase Agreement, would constitute a material contract;
(m) make or commit to any capital expenditure, except for capital expenditures which, in the aggregate, do not exceed
$2,000,000;
(n)
cancel any material indebtedness owed to AVG;
(o) pay, discharge, compromise, settle or satisfy any action requiring payments by AVG or any of its subsidiaries in excess of
$250,000 in any individual case or series of related cases or $2,000,000 in the aggregate, other than (i) claims reserved
against in the consolidated balance sheet of AVG as of December 31, 2015 or (ii) payments, discharges, compromises,
settlements or satisfactions that do not exceed AVG’s insurance coverage for such claim; provided that, in each case, the
discharge, settlement or satisfaction of such action does not include any material obligation (other than the payment of
money) to be performed by AVG or any of its subsidiaries;
(p) convene any general or special meeting of the shareholders of AVG other than an EGM pursuant to the Purchase
Agreement (unless such a meeting is required by applicable law);
(q) write up, write down or write off the book value of any assets, in the aggregate, in excess of $1,000,000, except (i) for
depreciation and amortization in accordance with GAAP consistently applied, (ii) as otherwise required under GAAP
(including to increase any reserves for contingent liabilities) or (iii) in the ordinary course of business consistent with past
practice as may be consistent with GAAP;
(r)
change AVG’s methods of accounting, except as required by concurrent changes in GAAP or in Regulation S-X of the
Exchange Act, as agreed to by its independent public accountants;
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(s)
make or change any material tax election, change any annual tax accounting period, adopt or change any material method
of tax accounting, materially amend any material tax returns or file claims for material tax refunds, surrender any right to
claim a material tax refund, offset or other reduction in tax liability, or enter into, terminate or materially amend any
compromise, settlement agreement, closing agreement or any material tax claim, audit, assessment or ruling with any taxing
authority;
(t)
withdraw or modify, or permit the withdrawal or modification of, the compensation arrangement approvals;
(u)
adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization, merger or other
reorganization (other than in connection with the Subsequent Reorganization);
(v)
form or commence the operation of any business or any partnership, joint venture or other similar business organization or
enter into a new line of business that is material to AVG and its subsidiaries, taken as a whole;
(w) adopt or implement any anti-takeover measure that adversely impacts Parent’s or Purchaser’s ability to consummate the
transactions contemplated by the Purchase Agreement;
(x)
take any action that prevents, materially delays or impedes, or omit to take any action where such omission would
reasonably be expected to prevent, materially delay or impede, consummation of the Offer or any of the other transactions
contemplated by the Purchase Agreement except as otherwise expressly permitted under the no solicitation covenant in the
Purchase Agreement; or
(y)
agree, resolve or commit to do any of the foregoing.
No Solicitation. AVG has agreed not to, and has agreed to cause its subsidiaries and the representatives of AVG or any of its
subsidiaries not to, directly or indirectly, solicit, initiate or knowingly facilitate, induce or encourage any inquiries or the making of
any proposal or offer that constitutes or could reasonably be expected to lead to an Alternative Transaction Proposal (as defined
below), or, other than informing persons of the provisions contained in the no solicitation covenant, enter into, continue or otherwise
participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or otherwise
knowingly cooperate in any way that could otherwise be expected to lead to, any Alternative Transaction Proposal.
AVG has also agreed to, and has also agreed to cause each of its subsidiaries and each of the representatives of AVG and its
subsidiaries to, immediately cease and cause to be terminated any and all existing activities, discussions or negotiations with any
person conducted prior to the date of the Purchase Agreement with respect to any Alternative Transaction Proposal, and has agreed
not to modify, amend or terminate, or waive, release or assign, any provisions of, any confidentiality or standstill agreement (or any
similar agreement) to which AVG or any of its subsidiaries is a party relating to any such Alternative Transaction Proposal and has
agreed to enforce, to the fullest extent permitted under applicable law, the provisions of any such agreement, including by obtaining
injunctions to prevent any breaches of such agreements and to enforce specifically the terms and provisions thereof in any court
having jurisdiction. AVG, however, will be permitted to (i) release or waive the standstill obligations solely to the extent necessary to
permit the party referenced therein to submit an Alternative Transaction Proposal to the AVG Boards on a confidential basis and (ii)
contact and engage in discussions with any person or group and their respective representatives who has made an Alternative
Transaction Proposal that was not solicited in breach of the no solicitation covenant solely for the purpose of clarifying such
Alternative Transaction Proposal and the terms thereof.
If AVG receives prior to the Offer Closing or the earlier termination of the Purchase Agreement in accordance with its terms, an
unsolicited, bona fide written Alternative Transaction Proposal, AVG may then take the following actions (but only if (x) (a) the AVG
Boards conclude in good faith, after consultation with its outside legal counsel, that it is required to do so in order to comply with its
fiduciary duties under the laws of The Netherlands and (b) the AVG Boards determine in good faith that after consultation with its
outside legal counsel
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and financial advisors that such Alternative Transaction Proposal is, or is reasonably likely to lead to, a Superior Proposal (as defined
below) and (y) the submission of such Alternative Transaction Proposal did not result from the breach of the no solicitation covenant):
(i) furnish nonpublic information with respect to AVG and its subsidiaries to the person or group making such Alternative Transaction
Proposal; provided, that (A) prior to furnishing any such nonpublic information, it receives from such person or group an executed
confidentiality agreement (a copy of which will be provided, promptly after its execution, to Parent) containing confidentiality terms
at least as restrictive in the aggregate as the terms contained in the Confidentiality Agreement (as defined below), and which may not
contain any exclusivity provision or other term that would restrict, in any manner, AVG’s ability to consummate the transactions
contemplated by the Purchase Agreement or to comply with its disclosure obligations to Parent pursuant to the Purchase Agreement
and (B) contemporaneously with furnishing any such nonpublic information to such person or group, it furnishes such nonpublic
information to Parent to the extent Parent has not previously been provided with such information; and (ii) engage in discussions or
negotiations with such person or group with respect to such Alternative Transaction Proposal.
As promptly as practicable (and in any event within 24 hours) after receipt of any Alternative Transaction Proposal or any
request for nonpublic information or any inquiry relating in any way to, or that could reasonably be expected to lead to, any
Alternative Transaction Proposal, AVG has agreed to provide Parent with oral and written notice of the material terms and conditions
of such Alternative Transaction Proposal, request or inquiry, and the identity of the person or group making any such Alternative
Transaction Proposal, request or inquiry. Commencing upon the provision of any notice referred to above and continuing until such
Alternative Transaction Proposal, request or inquiry is withdrawn, (i) AVG (or its outside legal counsel) is obligated to keep Parent (or
its outside legal counsel) fully informed in all material respects of all oral or written communications regarding, and the status and
terms of, and changes, developments, discussions or negotiations in, any such Alternative Transaction Proposal, request or inquiry on
the request of Parent and on a prompt basis (and in any event within 24 hours of any changes, developments, discussions or
negotiations regarding such Alternative Transaction Proposal, request or inquiry) and (ii) AVG has agreed to, as promptly as
reasonably practicable following the receipt or delivery thereof, provide Parent (or its outside legal counsel) with unredacted copies of
all written materials (including schedules and exhibits thereto and any materials provided by email or otherwise in electronic format)
relating to such Alternative Transaction Proposal. AVG has agreed to provide Parent with 72 hours prior notice (or such lesser prior
notice as is provided to the members of the AVG Boards) of any meeting of the AVG Boards at which the AVG Boards are
reasonably expected to consider any Alternative Transaction Proposal. Any material amendment (including the form, amount and
timing of payment of consideration) to any Alternative Transaction Proposal will be deemed to be a new Alternative Transaction
Proposal for the purposes of the no solicitation covenant.
For the purposes of the Purchase Agreement, an “Alternative Transaction” means any of the following transactions:
(i)
any merger, consolidation, share exchange, tender offer, business combination, joint venture, restructuring, refinancing,
recapitalization, liquidation, dissolution or other similar transaction (whether or not subject to any pre-conditions), or any
revisions thereof, involving AVG or any of its subsidiaries that would constitute a “significant subsidiary” (as such term is
defined in Rule 1-02 of Regulation S-X promulgated under the Exchange Act, except that references to “25 percent” in
such definition will be deemed to be references to “20 percent”);
(ii) any direct or indirect acquisition, purchase, lease, exchange, transfer or license, by any person or group of persons, in a
single transaction or a series of related transactions, including by means of the acquisition of shares of any of its
subsidiaries, of assets or properties that constitute 20 percent or more of the assets and properties (based on fair market
value) of AVG and its subsidiaries, taken as a whole, immediately prior to such transaction;
(iii) any direct or indirect acquisition or purchase, in a single transaction or a series of related transactions, by any person or
group of persons of beneficial ownership, or the right to acquire beneficial ownership, of 20 percent or more of the voting
power or any class of equity securities of AVG;
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(iv) any issuance or sale or other disposition (including by way of merger, consolidation, share exchange, business combination,
reorganization, recapitalization or other similar transaction) in a single transaction or a series of related transactions of 20
percent or more of the voting power or any class of equity securities of AVG;
(v)
the grant of any option or pre-emptive right in respect of any equity securities of AVG (other than the grant of options to
employees in the ordinary course of business consistent with past practice) or in respect of 20 percent or more of the assets
or properties (based on fair market value) of AVG and its subsidiaries, taken as whole; or
(vi) any other transaction having a similar effect (including such actions that would preclude or materially restrict or
delay the implementation of the Offer, the Asset Sale or the Liquidation Distribution) to those described in the
points above, in each case, other than the transactions contemplated by the Purchase Agreement, including the
Offer, the Asset Sale and the Liquidation Distribution.
For the purposes of the Purchase Agreement, an “Alternative Transaction Proposal” means any bona fide written or oral offer,
inquiry, proposal, letter of intent or indication of interest (whether binding or non-binding), made by any person or group of persons
(other than Parent and Purchaser) to AVG or its shareholders relating to an Alternative Transaction.
For the purposes of the Purchase Agreement, a “Superior Proposal” means an unsolicited, bona fide written Alternative
Transaction Proposal that did not result from a breach of the no solicitation covenant in the Purchase Agreement or any material
breach of any other provision of the Purchase Agreement, which the AVG Boards determine in good faith (after consultation with
their outside legal counsel and an independent financial advisor of nationally recognized reputation), taking into account all legal,
financial, regulatory, timing and other aspects of the proposal (including financing, shareholder litigation and breakup fee and expense
reimbursement provisions) and the person making the proposal, (i) is more beneficial to AVG, its business and strategy and its
shareholders, employees and other stakeholders, taken as a whole, than the transactions contemplated by the Purchase Agreement, (ii)
is reasonably likely to be consummated on the terms proposed, (iii) to the extent third-party financing is required, such financing is
then fully committed on customary terms and conditions and (iv) is on terms that are superior, from a financial point of view, to the
transactions contemplated by the Purchase Agreement; provided, however, that for purposes of this definition of “Superior Proposal,”
the term “Alternative Transaction” (as used in the definition of “Alternative Transaction Proposal”) has the meaning assigned to such
term above, except that the reference to “20 percent or more of the assets and properties (based on fair market value) of AVG and its
subsidiaries, taken as a whole” will be deemed to be a reference to “all or substantially all of the assets and properties (based on fair
market value) of AVG and its subsidiaries, taken as a whole” and the reference to “20 percent or more of any class of equity
securities” will be deemed to be a reference to “50 percent or more of its total voting power.”
AVG Boards Recommendation. AVG has agreed that neither of the AVG Boards will, nor any committee of either of the AVG
Boards will, directly or indirectly,
(i)
withhold, withdraw or qualify (or amend or modify in a manner adverse to Parent), publicly propose to withhold, withdraw
or qualify (or amend or modify in a manner adverse to Parent) the AVG Boards Recommendation or fail to make the
approval, recommendation or declaration of advisability by the AVG Boards or any committee thereof of the Purchase
Agreement, or the Offer or any of the other transactions contemplated by the Purchase Agreement, or take any public action
or make any public statement inconsistent with the AVG Boards Recommendation;
(ii) recommend, adopt or approve, or propose publicly to recommend, adopt or approve, any Alternative Transaction Proposal;
or
(iii) publicly make any recommendation in connection with an Alternative Transaction Proposal other than a recommendation
against such proposal
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(any action described in clauses (i) through (iii) above, an “Adverse Recommendation Change”).
In addition, AVG has agreed that neither of the AVG Boards will, nor any committee of either of the AVG Boards will, directly
or indirectly, approve or recommend, or publicly propose to approve or recommend, or allow AVG or any of its affiliates to execute or
enter into, any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement,
option agreement, joint venture agreement, partnership agreement or other similar agreement, arrangement or understanding (which,
for the avoidance of doubt, will not include any confidentiality agreement) (i) relating to any Alternative Transaction Proposal or any
offer or proposal that could reasonably be expected to lead to an Alternative Transaction Proposal or (ii) requiring it (or that would
require it) to abandon, terminate or fail to consummate the transactions contemplated by the Purchase Agreement.
Solely in response to a Superior Proposal, the AVG Boards may make an Adverse Recommendation Change or terminate the
Purchase Agreement to enter into a definitive agreement with respect to such Superior Proposal, only if all of the following conditions
are met:
(i)
a Superior Proposal has been made and has not been withdrawn and continues to be a Superior Proposal;
(ii) the Acceptance Time has not passed;
(iii) AVG has (a) provided to Parent four business days’ prior written notice, which will state expressly (1) that it has received a
Superior Proposal, (2) the material terms and conditions of the Superior Proposal (including the per Share value of the
consideration offered therein and the identity of the person or group making the Superior Proposal), and has
contemporaneously provided an unredacted copy of the relevant proposed transaction agreements with the person or group
making such Superior Proposal and other material documents (the “Alternative Acquisition Agreement”) (it being
understood and agreed that any amendment to the financial terms or any other material term of such Superior Proposal will
require a new notice and a new four business day period) and (3) that it intends to effect an Adverse Recommendation
Change and the manner in which it intends to do so or that it intends to terminate the Purchase Agreement in order to enter
into the Alternative Acquisition Agreement, as applicable, and (b) prior to making such an Adverse Recommendation
Change or terminating the Purchase Agreement, to the extent requested by Parent, engaged in good faith negotiations with
Parent during such four business day period to amend the Purchase Agreement in such a manner that the Alternative
Acquisition Agreement ceases to constitute a Superior Proposal;
(iv) the AVG Boards have determined in good faith, after consultation with its outside legal counsel, that, in light of such
Superior Proposal and taking into account any revised terms offered by Parent, they are required to make an Adverse
Recommendation Change or terminate the Purchase Agreement, as applicable, in order to comply with their fiduciary
duties under the laws of The Netherlands; and
(v)
AVG has complied in all material respects with the no solicitation covenant in the Purchase Agreement.
Nothing contained in the Purchase Agreement may prohibit AVG or the AVG Boards from (A) taking and disclosing to AVG
shareholders a position contemplated by Rule 14d-9 and Rule 14e-2(a) promulgated under the Exchange Act (or any similar
communication to shareholders in connection with the making or amendment of a tender offer or exchange offer) or from making any
legally required disclosure to shareholders with regard to the transactions contemplated by the Purchase Agreement or an Alternative
Transaction Proposal or (B) issuing a “stop, look and listen” disclosure or similar communication of the type contemplated by Rule
14d-9(f) promulgated under the Exchange Act (provided that, in the cases of both clauses (A) and (B) above, any such disclosure or
communication does not contain an Adverse Recommendation Change).
Compensation Arrangements. Prior to the Expiration Time, AVG will take all steps that may be required, necessary or advisable
to cause each benefit plan or similar arrangement that has been or after the date of the
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Purchase Agreement will be entered into by AVG or any of its subsidiaries with any of its directors, officers or employees pursuant to
which consideration is payable to any director, officer or employee to be approved by the Remuneration Committee of the AVG
Supervisory Board as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule
14d-10(d)(2) promulgated under the Exchange Act and to satisfy the requirements of the non-exclusive safe harbor set forth in Rule
14d-10(d) promulgated under the Exchange Act. At the time of the taking of such steps described in this provision, the Remuneration
Committee of the AVG Supervisory Board will be composed solely of “independent directors” within the meaning of Rule
14d-10(d)(2) promulgated under the Exchange Act and the instructions thereto.
Anti-Takeover Measures. The Company has agreed that AVG and the AVG Boards will take all actions within their power and
authority necessary so that the restrictions of any anti-takeover measures do not prevent or materially delay any and all of the
transactions contemplated by the Purchase Agreement and the Tender Agreements (as defined below). If any anti-takeover measure
becomes applicable to any of the transactions contemplated by the Purchase Agreement and the Tender Agreements, to the extent
reasonably possible, AVG and the AVG Boards will grant such approvals and take such actions within their power and authority as
are necessary, so that any such Transactions and the Tender Agreements may be consummated as promptly as practicable on the terms
contemplated by the Purchase Agreement or the Tender Agreements, as applicable, and otherwise act within their power and authority
to eliminate or minimize the effects of such anti-takeover measures on such transactions.
Director and Officer Liability. For six years after the consummation of the Offer, Parent has agreed to cause AVG and is
subsidiaries to indemnify and hold harmless the present and former directors or officers of AVG and its subsidiaries in respect of acts
or omissions occurring at or prior to the Offer Closing and in connection with the Asset Sale and the Liquidation Distribution (and
resulting liquidation) to the fullest extent permitted by applicable law or provided under AVG’s organizational documents in effect on
the date of the Purchase Agreement.
For six years following the Offer Closing, Parent has agreed to cause AVG to maintain in effect the current policies (whether
through purchase of a “tail” policy or otherwise) of directors’ and officers’ and fiduciary liability insurance (“D&O Insurance”)
maintained by AVG, in respect of acts or omissions occurring at or prior to the Offer Closing, covering each person covered by the
D&O Insurance immediately prior to the Offer Closing, on terms with respect to the coverage and amounts no less favorable in the
aggregate than those of the D&O Insurance in effect on the date of the Purchase Agreement. Parent or AVG may substitute therefor
policies of at least the same coverage and amounts containing terms and conditions which are no less advantageous in the aggregate to
former officers and directors of AVG. If the aggregate annual premiums for such policies at any time during such period exceed 300
percent of the per year premium rate paid by AVG and its subsidiaries as of the date of the Purchase Agreement for such policies, then
Parent and AVG will only be required to provide such coverage as will then be available at an annual premium equal to 300 percent of
such rate.
Employee Matters. For a one-year period beginning on the date of the Offer Closing (or, such shorter period of employment, as
the case may be), each continuing employee will receive from Parent or Purchaser compensation (including, base salary and annual
bonus opportunity) that is substantially comparable in the aggregate as to what such continuing employee was entitled to immediately
prior to the date of the Offer Closing and benefits (including, but not limited to, non-qualified benefits but excluding equity awards)
that are substantially comparable in the aggregate to either those benefits (including non-qualified benefits but excluding equity
awards) that are generally made available as of the date of the Purchase Agreement by AVG to such employees or by Parent to
similarly situated employees of Parent, as determined by Parent in its sole discretion.
Regulatory Undertakings. Each party to the Purchase Agreement has agreed to use reasonable best efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties to the Purchase Agreement in doing,
all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Offer and
the other transactions contemplated by the
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Purchase Agreement, including: (i) preparing and filing as soon as practicable after the date of the Purchase Agreement with any
governmental authority or other third party all documentation to effect all necessary filings, notices, petitions, statements,
registrations, submissions of information, applications and other documents; (ii) obtaining and maintaining all approvals, consents,
orders, exemptions or waivers required to be obtained from any governmental authority or other third party that are necessary, proper
or advisable to consummate the Offer or the other transactions contemplated by the Purchase Agreement, including but not limited to
filing a Notification and Report Form pursuant to the HSR Act with the FTC and the Antitrust Division as promptly as reasonably
practicable and in any event within 15 business days of the date of the Purchase Agreement (unless otherwise agreed upon by the
parties to the Purchase Agreement in writing); (iii) defending any actions challenging the Purchase Agreement or the consummation of
the Offer or any of the other transactions contemplated by the Purchase Agreement, including seeking to have vacated or reversed any
order that would restrain, prevent or delay the Acceptance Time; and (iv) executing and delivering any additional instruments
necessary to consummate the Offer and the other transactions contemplated by the Purchase Agreement and to fully carry out the
purposes of the Purchase Agreement.
Each party to the Purchase Agreement has agreed to use its reasonable best efforts to file or cause to be filed, as promptly as
reasonably practicable, all required filings under the HSR Act and all required filings under other applicable antitrust laws of the
Federal Republic of Germany and the Republic of Austria, to consult and cooperate with each other in the preparation of such filings,
and to promptly inform the other parties to the Purchase Agreement of any material communication received by such party from any
governmental authority regarding the transactions contemplated by the Purchase Agreement. Neither AVG, on the one hand, nor
Parent and Purchaser, on the other hand, may agree to any voluntary extension of any statutory deadline or waiting period or to any
voluntary delay of the consummation of the transactions contemplated by the Purchase Agreement at the behest of any governmental
authority without the written consent of Parent or Purchaser or AVG, respectively.
Unless Parent and AVG agree otherwise in writing, Parent and AVG will (a) prepare and submit, as promptly as reasonably
practicable, to CFIUS a draft joint voluntary notice under FINSA with respect to the transactions contemplated by the Purchase
Agreement, (b) file, at least five business days thereafter, with CFIUS a joint voluntary notice under FINSA and (c) supply, as
promptly as reasonably practicable and in any event within such time as permitted by CFIUS, any additional information and
documents that may be requested in connection with the CFIUS review and, if applicable, investigation process. The parties to the
Purchase Agreement have agreed that Parent and Purchaser will be permitted to control or manage the approval process and
implement its strategy with respect to CFIUS, and AVG has agreed that it will not take a position in any filing, meeting or
communication with any governmental authority that is contrary to, or inconsistent with, the strategy and positions of Parent and
Purchaser.
If any objections are asserted with respect to the transactions contemplated by the Purchase Agreement under any antitrust law
or FINSA or if any action is instituted (or threatened to be instituted) by the FTC, the United States Department of Justice, CFIUS or
any other applicable governmental authority challenging any of the transactions contemplated by the Purchase Agreement or which
would otherwise prohibit, materially impair or materially delay the consummation of the transactions contemplated by the Purchase
Agreement, the parties to the Purchase Agreement have agreed to take all actions necessary to resolve any such objections or actions
(or threatened actions) so as to permit consummation of the transactions contemplated by the Purchase Agreement to close as soon as
reasonably practicable. AVG, however, has agreed not to propose, negotiate, commit to or effect, by consent decree, hold separate
order, or otherwise, any Divestiture without the prior written consent of Parent. Parent’s and Purchaser’s obligations to use reasonable
best efforts do not include proposing, negotiating, committing to or effecting, by consent decree, hold separate order, agreement or
otherwise, any Divestiture with respect to Parent or any of its affiliates. Parent and Purchaser will not be obligated to, in response to
any objection or any action (or threatened action) with respect to any of the applicable antitrust approvals of Germany or Austria or
under any antitrust laws, propose, negotiate, commit to or effect, by consent decree, hold separate order, agreement or otherwise, any
Divestiture with respect to AVG or any of its subsidiaries that, in the aggregate, would cause a material and adverse impact on AVG
and its subsidiaries, taken as a whole.
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With respect to the CFIUS Clearance Condition, (1) Parent and Purchaser have no obligation to (a) propose, negotiate, commit
to or effect, by consent decree, hold separate order, agreement or otherwise, Divestitures, (b) terminate existing, or create new,
relationships, contractual rights or obligations of Parent or its affiliates or, following the Acceptance Time, of AVG or its subsidiaries,
(c) effect any other change or restructuring of Parent, its affiliates, AVG, or their respective subsidiaries or (d) otherwise take or
commit to take any actions that interfere with Parent’s ability to control, manage or exercise full rights of ownership of AVG or its
subsidiaries, or limit the freedom of action of Parent, its affiliates, AVG, or their respective subsidiaries, with respect to, or their
ability to retain, or enjoy the rights and benefits of, any assets or businesses, including, without limitation, the freedom to provide
services to, or otherwise enter into, a commercial relationship with any person and (2) AVG is prohibited from taking or agreeing to
take any of the foregoing actions without the prior written consent of Parent.
Financing. Parent has agreed to use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to arrange and obtain the proceeds of the Debt Financing on the terms and conditions,
taken as a whole, described in the Debt Commitment Letter, prior to or concurrent with the Offer Closing.
Parent has agreed not to or permit any amendment, supplement, modification or replacement of, or grant any waiver of, any
condition, remedy or other provision under the Debt Commitment Letter without the prior written consent of AVG if such
amendment, supplement, modification, replacement or waiver would or would reasonably be expected to (i) reduce the aggregate
amount of the Debt Financing from that contemplated by the Debt Commitment Letter delivered as of the date of the Purchase
Agreement (provided that Parent may decrease the amount of the Debt Financing so long as the proceeds of such reduced amount of
Debt Financing, when taken together with cash on hand of Parent and its subsidiaries and AVG and its subsidiaries, are sufficient in
amount to provide Parent with the funds necessary for it to consummate the transactions contemplated by the Purchase Agreement at
the Offer Closing and to satisfy its obligations under the Purchase Agreement at the Offer Closing and consummate the other
transactions contemplated in the Debt Commitment Letter that are conditions to the Debt Financing) or (ii) impose new or additional
conditions or otherwise expand, amend or modify any of the conditions to the receipt of the Debt Financing in a manner that would
reasonably be expected to (A) prevent or materially impede, interfere with, hinder, delay the consummation of the Debt Financing on
the date of the Offer Closing (including by preventing or materially impeding, interfering with, hindering or delaying the satisfaction
of the conditions to obtaining the Debt Financing on the date of the Offer Closing) or (B) adversely impact the ability of Parent to
enforce its rights against the other parties to the Debt Commitment Letter. Parent and Purchaser may modify, supplement or amend the
Debt Commitment Letter to add lenders, lead arrangers, bookrunners, syndication agents, documentation agents or entities in similar
roles. Parent has agreed not to agree to the withdrawal, termination, repudiation or rescission of the Debt Commitment Letter without
the prior written consent of AVG.
In the event that all or any portion of the Debt Financing becomes unavailable for any reason or the Debt Commitment Letter is
withdrawn, terminated, repudiated or rescinded for any reason, (i) Parent has agreed to promptly so notify AVG and (ii) Parent has
agreed to use its reasonable best efforts to arrange and obtain, as promptly as reasonably practicable following the occurrence of such
event (and in any event no later than the Offer Closing), and to negotiate and enter into definitive agreements with respect to,
alternative debt financing from the same or alternative debt financing sources (the “Alternative Financing”) in an amount sufficient,
when taken together with amounts that remain available under the Debt Financing and cash on hand of Parent and its subsidiaries and
AVG and its subsidiaries, to consummate the transactions contemplated by the Purchase Agreement (or replace any unavailable
portion of the Debt Financing), and to obtain a new financing commitment letter (including any associated engagement letter and
related fee letter) with respect to such Alternative Financing. Parent, however, will not be required to obtain Alternative Financing on
terms and conditions that are materially less favorable, taken as a whole, to Parent than those in the Debt Commitment Letter that such
Alternative Financing and new Debt Commitment Letter would replace.
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Although the Debt Financing described in this document is not subject to a due diligence or “market out” condition, such
financing may not be considered assured. As of the date hereof, no plans or arrangements in respect of any Alternative Financing have
been made in the event the Debt Financing described herein is not available. The Offer is not subject to a financing condition but is
subject to other conditions as described in this Offer to Purchase.
Financing Cooperation. AVG has agreed to reasonably cooperate in connection with the arrangement of the Debt Financing as
may be reasonably requested by Parent, provided that such requested cooperation does not unreasonably interfere with the ongoing
operations of AVG or its subsidiaries.
Other Covenants. The Purchase Agreement contains other customary covenants and agreements, including, but not limited to,
covenants related to employee matters, public announcements, notices of certain events and confidentiality obligations.
Termination of the Purchase Agreement. The Purchase Agreement may be terminated and the transactions contemplated by the
Purchase Agreement may be abandoned at any time prior to the Acceptance Time:
•
by mutual written agreement of AVG and Parent;
•
by either AVG or Parent, if:
•
the Acceptance Time has not occurred on or before the End Date (an “End Date Termination”), except that the
right to terminate the Purchase Agreement pursuant to the End Date Termination will not be available to any party
to the Purchase Agreement whose breach of any provision of the Purchase Agreement results in the failure of the
Acceptance Time to be consummated by such time;
•
(A) there is any applicable law or order issued by a court of competent jurisdiction permanently restraining,
making illegal or otherwise prohibiting consummation of (1) the Offer or (2) to the extent, following the
Expiration Time, Parent and AVG are unable to effect the Compulsory Acquisition, the Asset Sale or the
Liquidation Distribution, and (B) such injunction or other order is or has become final and non-appealable (a
“Restraints Termination”), except that a Restraints Termination will only be available if the party to the Purchase
Agreement seeking to terminate the Purchase Agreement has used its reasonable best efforts to have such order or
other action vacated or made inapplicable to the Offer, the Asset Sale or the Liquidation Distribution;
•
the Offer has expired without all of the conditions to the Offer having been satisfied (a “Condition Failure
Termination”), except that a Condition Failure Termination will not be available to any party to the Purchase
Agreement whose breach of any provision of the Purchase Agreement results in the Offer having expired without
all of the conditions to the Offer having been satisfied and will not be available to Parent if Parent has not caused
Purchaser to extend the Offer in circumstances where Purchaser is required to extend the Offer under the Purchase
Agreement; or
•
by Parent:
•
if, prior to the Acceptance Time, a breach of any representation or warranty or failure to perform any covenant or
agreement on the part of AVG set forth in the Purchase Agreement has occurred that would cause certain
conditions to fail to be satisfied and is incapable of being cured by the End Date or, if curable, is not cured by
AVG by the earlier of (A) 30 days after receipt by AVG of written notice of such breach or failure and (B) the
expiration of the Offer (a “Breach Termination”), except that a Breach Termination will not be available if Parent
or Purchaser is in material breach of its obligations under the Purchase Agreement at the time at which Parent
would otherwise exercise such termination right; or
•
at any time prior to the Acceptance Time, if AVG, the AVG Boards or any committee thereof, for any reason, has
(A) effected an Adverse Recommendation Change or (B) failed (1) to include the
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AVG Boards Recommendation in the Schedule 14D-9, (2) to recommend against an Alternative Transaction
Proposal or reaffirm (publicly, if so requested by Parent) the AVG Boards Recommendation on or prior to the fifth
business day after the Alternative Transaction Proposal has been publicly announced or disclosed, including, in the
case of a tender or exchange offer relating to securities of AVG involving a person or group unaffiliated with Parent
which has first been published or announced, having failed to send or give to AVG shareholders pursuant to Rule
14e-2 promulgated under the Exchange Act a statement disclosing that the AVG Boards recommend rejection of
such tender or exchange offer within such five business day period or (3) after a reasonable request by Parent, but
excluding under circumstances where an Alternative Transaction Proposal has been submitted and is being
considered by the AVG Boards, to reaffirm the AVG Boards Recommendation after the fifth business day after
receipt by AVG of such request (an “Adverse Recommendation Change Termination”).
•
by AVG:
•
prior to the Acceptance Time, if (A) AVG has received a Superior Proposal, (B) AVG has complied in all
material respects with its obligations under the no solicitation covenant in the Purchase Agreement, (C) the AVG
Boards approve, and AVG concurrently with, or promptly following, the termination of the Purchase Agreement,
enters into, such Alternative Acquisition Agreement with respect to such Superior Proposal and (D) prior to or
concurrently with such termination, AVG pays to Parent the termination fee (a “Superior Proposal Termination”);
•
if, prior to the Acceptance Time, a breach in any material respect of any representation or warranty or failure to
perform any covenant or agreement on the part of Parent or Purchaser set forth in the Purchase Agreement has
occurred that (A) has or would reasonably be expected to prevent or materially delay the ability of Parent or
Purchaser to consummate the Offer and (B) is incapable of being cured by the End Date or, if curable, is not cured
by Parent or Purchaser by the earlier of (1) 30 days after receipt by AVG of written notice of such breach or
failure and (2) the Expiration Time; provided that, at the time at which AVG would otherwise exercise such
termination right, AVG will not be in material breach of its obligations under the Purchase Agreement; or
•
if, prior to the Acceptance Time, (A) the Expiration Time has occurred, (B) all of the conditions to the Offer have
been and continue to be satisfied or waived by Purchaser, (C) Parent and Purchaser fail to accept for payment all
Shares validly tendered pursuant to the Offer and not properly withdrawn, (D) AVG has delivered an irrevocable
written notice to Parent certifying as to the matters described in the immediately preceding clause (B) and that
AVG stands ready, willing and able to consummate the Offer and, if required, the Asset Sale and the Liquidation
Distribution as soon as reasonably practicable and (E) Parent and Purchaser fail to consummate the Offer by the
third business day after the delivery of the notice described in the immediately preceding clause (D) (an “Offer
Closing Failure Termination”).
Effect of Termination. If the Purchase Agreement is validly terminated in accordance with its terms, the Purchase Agreement
will become null and void and (other than certain provisions regarding termination and other miscellaneous provisions) there will be
no liability under the Purchase Agreement on the part of any party to the Purchase Agreement (or any shareholder, director, officer,
employee, agent, consultant or representative of such party to the Purchase Agreement) to another, except that no such termination
will relieve any party to the Purchase Agreement from (i) any liabilities or damages resulting from any fraud or willful breach of the
Purchase Agreement prior to or in connection with such termination or (ii) any obligation to pay a termination fee pursuant to the
Purchase Agreement.
Termination Fees. AVG has agreed to pay Parent a termination fee equal to $42,412,500 if:
•
Parent terminates the Purchase Agreement pursuant to an Adverse Recommendation Change Termination;
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•
(A) the Purchase Agreement is terminated (1) by Parent or AVG pursuant to an End Date Termination (except where
AVG also would have been entitled to terminate the Purchase Agreement pursuant to an Offer Closing Failure
Termination) or (2) by Parent pursuant to a Breach Termination and prior to such termination, an Alternative
Transaction Proposal has been made and (B) within 12 months of such termination, AVG enters into a definitive
agreement with any third party to consummate, or consummates, an Alternative Transaction Proposal; or
•
AVG terminates the Purchase Agreement pursuant to a Superior Proposal Termination.
Parent has agreed to pay AVG a termination fee equal to $73,080,000 if:
•
Parent or AVG terminates the Purchase Agreement pursuant to an End Date Termination, in circumstances in which
AVG would have been entitled to terminate the Purchase Agreement pursuant to an Offer Closing Failure Termination;
or
•
AVG terminates the Purchase Agreement pursuant to an Offer Closing Failure Termination.
The parties to the Purchase Agreement have agreed that the termination fee and Parent termination fee will, as applicable and
except for claims for the willful breach of the Purchase Agreement or specific performance of the terms of the Purchase Agreement
pursuant to the terms of and on the conditions set forth in the Purchase Agreement, be the sole and exclusive remedy of (i) Parent and
Purchaser, and their respective affiliates, on one hand, against AVG and its former, current or future shareholders, directors, officers,
affiliates, agents or other representatives, on the other hand, and (ii) AVG and its affiliates, on one hand, against the Parent and
Purchaser and their respective former, current or future shareholders, directors, officers, affiliates, agents or other representatives or
any Financing Source (as defined below), on the other hand, in each case, for any loss suffered as a result of any breach of any
representation, warranty, covenant or agreement in the Purchase Agreement or the transactions contemplated by the Purchase
Agreement or the Debt Financing, the Alternative Financing, any commitment letters or engagement letters relating thereto or the
transactions contemplated thereby.
For the purposes of the Purchase Agreement, a “Financing Source” means the Lenders and any other persons (other than AVG
or any of its subsidiaries) that have committed to provide or have otherwise entered into agreements (including the Debt Commitment
Letter), in each case, in connection with the Debt Financing or any Alternative Financing, and any joinder agreements, indentures or
credit agreements entered into pursuant thereto, including the Lenders, together with their affiliates, and any of their or their affiliates’
respective current or future shareholders, managers, members, directors, officers, employees, agents, advisors, other representatives or
successors or assignees of any of the foregoing; it being understood that Parent and Purchaser will not be “Financing Sources” for any
purposes under the Purchase Agreement.
Fees and Expenses. Each party to the Purchase Agreement has agreed to bear its own expenses in connection with the Purchase
Agreement and the transactions contemplated by the Purchase Agreement, except that Parent has agreed to pay any and all filing fees
under the HSR Act and any other applicable antitrust laws. In the event that the Purchase Agreement is terminated by Parent pursuant
to a Breach Termination, then AVG, in addition to payment of the termination fee in respect of such termination, will reimburse
Parent for up to $8,000,000 of Parent’s expenses, except that, in the event that Parent terminates the Purchase Agreement pursuant to a
Breach Termination due to a breach by AVG that is not a willful breach, (i) any termination fee to be paid by AVG to Parent in
connection with such termination will be reduced by the amount of Parent’s expenses previously reimbursed (if any) by AVG to
Parent and (ii) upon receipt by Parent of such termination fee, AVG will not be obligated to make any additional payment to Parent in
respect of its expenses.
Governing Law. The Purchase Agreement will be governed by and construed in accordance with Delaware law, except that any
matters concerning or implicating the AVG Boards’ fiduciary duties will be governed by and construed in accordance with the
applicable fiduciary duty laws of The Netherlands and any action involving any Financing Source, any Debt Financing, any
Alternative Financing or the performance of services thereunder will be governed by New York law.
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Specific Performance. The parties to the Purchase Agreement have agreed that irreparable damage would occur if any provision
of the Purchase Agreement was not performed in accordance with the Purchase Agreement and that the parties to the Purchase
Agreement will be entitled to injunctive relief to prevent breaches of the Purchase Agreement or to enforce specifically the
performance of the terms and provisions of the Purchase Agreement, in addition to any other remedy to which they are entitled at law
or in equity.
Conditions to the Offer. The conditions to the Offer are described in Section 15 — “Certain Conditions of the Offer.”
Tender Agreements
The following summary description of the Tender Agreements (as defined below) and all other provisions of the Tender
Agreements discussed herein are qualified by reference to such Tender Agreements, which have been filed as Exhibits (d)(2) and
(d)(3) to the Schedule TO filed with the SEC in connection with the Offer. The Tender Agreements may be examined and copies may
be obtained at the places and in the manner set forth in Section 8 — “Certain Information Concerning Parent and Purchaser.”
Shareholders and other interested parties should read the Tender Agreements for a more complete description of the provisions
summarized below.
Parent and Purchaser entered into two tender agreements (the “Tender Agreements”), both dated as of July 6, 2016, one with TA
X L.P., TA Atlantic and Pacific VI L.P., TA Strategic Partners Fund II L.P., TA Strategic Partners Fund II-A L.P. and TA Investors III
L.P. (collectively, the “TA Shareholders”), and one with CVP II, Inc. (the “CVP Shareholder,” and together with the TA Shareholders,
the “Committed Shareholders”) pursuant to which the Committed Shareholders agreed to tender all Shares owned by such Committed
Shareholders into the Offer, promptly, and in any event no later than ten business days, following the commencement of the Offer.
The Committed Shareholders collectively hold 8,036,720 Shares, constituting approximately 15.8 percent of the outstanding Shares
(assuming 50,730,029 Shares issued and outstanding as of July 25, 2016, as advised by AVG).
Upon the Committed Shareholders’ tender of their 8,036,720 Shares pursuant to the Tender Agreements, approximately 15.8
percent of the issued and outstanding Shares will have been tendered in the Offer (assuming no additional Shares are issued after July
25, 2016). Accordingly, the Minimum Condition to the Offer will be satisfied if an additional approximately 64.2 percent of the
outstanding Shares are validly tendered and not properly withdrawn.
Under the Tender Agreements, the Committed Shareholders have agreed to vote (or cause to be voted) by proxy or in person all
Shares beneficially owned by the Committed Shareholders as of the record date:
(a)
for a resolution to, effective upon the Acceptance Time, (i) provide discharge to all existing members of the AVG
Management Board and Mr. J. Little (former member of the AVG Management Board) and all of the existing members of
the AVG Supervisory Board and (ii) subject to the Purchase Agreement, appoint such new members to the AVG Boards as
designated by Purchaser, upon the binding domination of the AVG Supervisory Board, to replace the resigning members of
the AVG Boards;
(b) for the Asset Sale;
(c)
for a resolution to, subject to the number of Shares tendered pursuant to the Offer (or during the Subsequent Offering
Period (which includes the Minority Exit Offering Period)) falling within the Asset Sale Range, amend the articles of
association of AVG for the purpose of, among other things, permitting the appointment by the general meeting of AVG of a
liquidator, including the authorization of all members of the AVG Management Board and any and all lawyers and
paralegals practicing with De Brauw Blackstone Westbroek N.V. to execute such deed of amendment of the articles of
association of AVG;
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(d) for a resolution to, subject to (i) delisting of the Shares from the NYSE, (ii) the Asset Sale not being pursued, and (iii) the
number of Shares tendered pursuant to the Offer (or during the Subsequent Offering Period (which includes the Minority
Exit Offering Period)) representing at least 80 percent of the outstanding Shares, (A) convert AVG from a public limited
liability company ( naamloze vennootschap ) to a private company with limited liability ( besloten vennootschap met
beperkte aansprakelijkheid ) and (B) amend AVG’s articles of association in connection with the matters described in
clause (A), including the authorization of all members of the AVG Management Board and any and all lawyers and
paralegals practicing with De Brauw Blackstone Westbroek N.V. to execute such deed of amendment of the articles of
association of AVG;
(e)
for the resolution to dissolve AVG and appoint as liquidator the Foundation, and for the Liquidation Distribution;
(f)
against any Alternative Transaction Proposal or any proposal relating to an Alternative Transaction Proposal;
(g)
against any Alternative Acquisition Agreement or merger, consolidation, combination, sale of substantial assets,
reorganization, recapitalization, dissolution, liquidation or winding up of or by AVG or its subsidiaries (other than the
Purchase Agreement, the Asset Sale Agreement and the Subsequent Reorganization);
(h)
against any proposal, action or agreement that would reasonably be expected to (i) prevent or nullify any provision of
Tender Agreements, (ii) result in a material breach of any covenant, representation or warranty or any other obligation or
agreement contained in the Purchase Agreement, or (iii) result in any of the conditions to the Offer not being fulfilled, or
(iv) prevent or materially delay or impede the consummation of the Offer or the Asset Sale; and
(i)
for any other matter submitted by AVG for shareholder approval at the EGM at the request of Purchaser and related to the
transactions contemplated by the Purchase Agreement; provided, however, that (i) the AVG Boards have made, and not
withdrawn in accordance with the Purchase Agreement, the AVG Boards Recommendation, and (ii) nothing in the Tender
Agreements will be interpreted as creating an obligation of AVG to submit any such request of Purchaser for such
shareholder approval.
In addition, the Committed Shareholders have agreed that they will not, other than pursuant to the Tender Agreements, (a)
transfer, offer to transfer, or consent to any transfer of any or all of the Committed Shareholders’ Shares or any interest therein without
the prior written consent of Parent (subject to certain exceptions), (b) enter into any contract, option or other agreement with respect to
any transfer of any or all the Committed Shareholders’ Shares or any interest therein, (c) grant any proxy, power-of-attorney or other
authorization or consent in or with respect to any or all of Committed Shareholders’ Shares inconsistent with such Committed
Shareholder’s voting or consent obligations under the Tender Agreements, or (d) deposit any or all of the Committed Shareholders’
Shares into a voting trust or enter into a voting agreement or arrangement with respect to any or all of the Committed Shareholders’
Shares inconsistent with such Committed Shareholder’s voting or consent obligations.
Except as expressly permitted by the Purchase Agreement, each Committed Shareholder also agreed in the Tender Agreements
not to, and to cause its controlled affiliates and its or their respective representatives not to, to (a) solicit, initiate or take any action to
knowingly facilitate, induce or encourage any inquiries or the making of any proposal or offer that constitutes or could reasonably be
expected to lead to an Alternative Transaction Proposal, or (b) enter into, continue or otherwise knowingly participate in any
discussions or negotiations regarding, or furnish to any person any information with respect to, or otherwise cooperate in any way that
could otherwise be expected to lead to, any Alternative Transaction Proposal. Additionally, each Committed Shareholder has agreed in
the Tender Agreements to, and to cause each of its controlled affiliates and its and their respective representatives to, (i) immediately
cease and cause to be terminated any and all existing discussions or negotiations with any person conducted prior to the date of the
Tender Agreements with respect to
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any Alternative Transaction Proposal and (ii) immediately cease and terminate any existing solicitation, discussion or negotiation with
any third-party with respect to any Alternative Transaction Proposal conducted by such Committed Shareholder, its controlled
affiliates or its and their respective representatives.
The Tender Agreements may be terminated upon (a) the mutual written agreement of Parent and the Committed Shareholder, (b)
the Offer Closing, (c) the acquisition by Parent or Purchaser of 100 percent of the outstanding Shares, (d) the termination of the
Purchase Agreement in accordance with its terms or (e) the date on which there is any material modification, waiver or amendment to
the Purchase Agreement in a manner that decreases the Offer Price or changes the form of the Offer consideration.
Confidentiality Agreement
The following summary description of the Confidentiality Agreement (as defined below) and all other provisions of the
Confidentiality Agreement discussed herein are qualified by reference to such Confidentiality Agreement, which has been filed as
Exhibit (d)(4) to the Schedule TO filed with the SEC in connection with the Offer. The Confidentiality Agreement may be examined
and copies may be obtained at the places and in the manner set forth in Section 8 — “Certain Information Concerning Parent and
Purchaser.” Shareholders and other interested parties should read the Confidentiality Agreement for a more complete description of
the provisions summarized below.
Parent and AVG entered into a confidentiality agreement, dated as of May 28, 2016 (as it may be amended from time to time,
the “Confidentiality Agreement”). Under the Confidentiality Agreement, the parties agreed to undertake reasonable precautions to
keep confidential, subject to certain exceptions, information furnished by the other party in furtherance of the proposed transaction
between the parties, and to use such information solely for the purpose of evaluating, negotiating, financing and consummating the
proposed transaction between the parties. The parties agreed to certain standstill provisions that prohibit Parent and its affiliates from
taking certain actions involving or with respect to AVG for a one-year period, subject to certain exceptions set forth in the
Confidentiality Agreement. The standstill provisions would automatically terminate if a competing transaction were to occur. Parent
also agreed, subject to certain exceptions, that it and its representatives would not, for a period of one year from the date of the
Confidentiality Agreement, solicit the employment of any director, officer or employee of AVG or any of its subsidiaries, in each
case, with whom Parent first has had contact in connection with the process contemplated by the Confidentiality Agreement.
Exclusivity Agreement
The following summary description of the Exclusivity Agreement (as defined below) and all other provisions of the Exclusivity
Agreement discussed herein are qualified by reference to such Exclusivity Agreement, which has been filed as Exhibit (d)(5) to the
Schedule TO filed with the SEC in connection with the Offer. The Exclusivity Agreement may be examined and copies may be obtained
at the places and in the manner set forth in Section 8 — “Certain Information Concerning Parent and Purchaser.” Shareholders and
other interested parties should read the Exclusivity Agreement for a more complete description of the provisions summarized below.
AVG and Parent entered into an exclusivity agreement on June 16, 2016 (as it may be amended from time to time, the
“Exclusivity Agreement”), pursuant to which AVG agreed, among other things, that from the date thereof through 11:59 p.m., London
time, on July 7, 2016, neither AVG nor any of its affiliates or any of its and their respective directors, officers, employees, consultants,
agents, advisers, bankers and other representatives, would solicit, directly or indirectly, initiate, negotiate, accept, discuss or otherwise
seek to procure any inquiries, proposals or approaches from any persons in respect or in connection with any proposal to acquire 20
percent or more of the Shares by the shareholders, or 20 percent or more of the assets of, AVG or any of its affiliates.
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12. Purpose of the Offer; Plans for AVG.
Purpose of the Offer. We are making the Offer because we want to acquire all of AVG’s outstanding equity interests so that we
will own and control all of AVG’s current business, which will enhance Purchaser’s and AVG’s ability to achieve their strategic goals,
and will create a more efficient capital structure from a tax perspective and a financing perspective. The purpose of the Asset Sale or
any other transaction constituting the Subsequent Reorganization is to acquire all outstanding Shares not tendered and purchased
pursuant to the Offer and the Subsequent Offering Period (including the Minority Exit Offering Period) or all of AVG’s business. If
the Offer Closing occurs, Purchaser intends to consummate a Subsequent Reorganization as described below.
Following the Expiration Time, Purchaser intends to provide for the Subsequent Offering Period of at least 10 business days in
accordance with Rule 14d-11 under the Exchange Act and in accordance with the Purchase Agreement. The Subsequent Offering
Period may be extended by Purchaser in accordance with the Purchase Agreement by the Minority Exit Offering Period following the
announcement that Purchaser or its designee intends to effect the Asset Sale. The purpose of the Subsequent Offering Period and
Minority Exit Offering Period is to acquire outstanding Shares that were not tendered pursuant to the Offer.
If the Offer is consummated, we expect that all of the current directors of the AVG Boards will resign, other than Jan G. Haars
and Colin Tenwick, or at least two directors as otherwise mutually agreed upon by Purchaser and AVG, who we expect will remain on
the AVG Supervisory Board until the earlier of (a) such time after the Offer Closing as Purchaser owns 100 percent of the outstanding
Shares and (b) the date the liquidation of AVG has been duly completed. We expect that, subject to the receipt of approval of AVG
shareholders at the EGM, René Bienz, Gagandeep Singh and Glenn Taylor, each our designee, will be appointed to the AVG
Supervisory Board, and, subject to the receipt of approval of AVG shareholders at the EGM, Alan Rassaby, Stefan Boermans and
Dick Haarsma, each our designee, will be appointed to the AVG Management Board.
After the consummation of the Offer, we intend to cause AVG to terminate the listing of the Shares on the NYSE. As a result,
AVG would cease to be publicly traded. In addition, after the consummation of the Offer, we intend to cause the termination of the
registration of Shares under the Exchange Act as promptly as practicable and expect to take steps to cause the suspension of all of
AVG’s reporting obligations with the SEC.
If you sell your Shares pursuant to the Offer (or during the Subsequent Offering Period, which includes the Minority Exit
Offering Period, if applicable), you will cease to have any equity interest in AVG or any right to participate in its earnings and future
growth. If you do not tender your Shares, but the Asset Sale, the Dissolution, the Compulsory Acquisition or any other transaction
constituting the Subsequent Reorganization is consummated, you also will no longer have an equity interest in AVG. Similarly, after
selling your Shares pursuant to the Offer (or during the Subsequent Offering Period, which includes the Minority Exit Offering Period,
if applicable), you will not bear the risk of any decrease in the value of AVG.
Subsequent Reorganization. As promptly as practicable following the closing of the Subsequent Offering Period (which includes
the Minority Exit Offering Period, if applicable), Purchaser intends to complete the Subsequent Reorganization. The Subsequent
Reorganization will utilize processes available to Purchaser under Dutch law to ensure that (a) Purchaser becomes the owner of all of
AVG’s business operations from and after the consummation of the Subsequent Reorganization and (b) any AVG shareholders who
do not tender their Shares pursuant to the Offer (or during the Subsequent Offering Period, which includes the Minority Exit Offering
Period, if applicable) are offered or receive the same consideration for their Shares as those shareholders who tendered their Shares
pursuant to the Offer (or during the Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable),
without interest and less applicable withholding taxes (including Dutch dividend withholding tax) or other taxes. As a result of the
Subsequent Reorganization, it is anticipated that AVG will be liquidated or become wholly owned by Purchaser. The Subsequent
Reorganization may also include the conversion of AVG from a public limited liability company ( naamloze vennootschap ) to a
private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ).
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Compulsory Acquisition. If the number of Shares tendered pursuant to the Offer and not properly withdrawn (including Shares
validly tendered during the Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable, but excluding
Shares tendered pursuant to guaranteed delivery procedures that have not yet been delivered in settlement or satisfaction of such
guarantee prior to the Expiration Time), together with the Shares then owned by Parent, Purchaser and their respective subsidiaries,
represents at least 95 percent of the then outstanding Shares, Purchaser intends to effect the Subsequent Reorganization by means of
compulsory acquisition (the “Compulsory Acquisition”) ( uitkoopprocedure ) of Shares held by non-tendering AVG shareholders in
accordance with Section 2:92a or Section 2:201a of the DCC. Under these sections of the DCC, as soon as Purchaser and its affiliates,
other than AVG, hold for their own account at least 95 percent of the Shares then outstanding, Purchaser and such affiliates may
commence proceedings to consummate the Compulsory Acquisition to require non-tendering AVG shareholders to transfer their
Shares to Purchaser. Compulsory Acquisition proceedings may be initiated before the Dutch Court at any time after Purchaser
acquires at least 95 percent of the then outstanding Shares.
The Purchase Agreement requires that in connection with the Compulsory Acquisition proceedings, Purchaser must offer each
non-tendering AVG shareholder (or such non-tendering AVG shareholder must otherwise receive) the Offer Price (without interest
and less applicable withholding taxes or other taxes) for each Share then owned by such non-tendering AVG shareholder. However, in
the Compulsory Acquisition, the Dutch Court will determine a cash price to be paid for the Shares, which may be greater, equal to or
less than the Offer Price. The Dutch Court may appoint one or three experts to provide a valuation of the Shares that were not tendered
pursuant to the Offer. If the Dutch Court sets the price to be paid for the Shares that were not tendered pursuant to the Offer, such
price will be increased with the statutory interest rate applicable in The Netherlands (currently two percent per annum) for the period
beginning on the date the price is determined by the Dutch Court and the date Purchaser pays for the Shares then owned by the
non-tendering AVG shareholders. Any dividend or other distribution made by AVG to the AVG shareholders during such period will
be credited against the amount to be paid by Purchaser to the non-tendering AVG shareholders.
Asset Sale, Dissolution and Liquidation Distribution. If the number of Shares tendered pursuant to the Offer and not properly
withdrawn (including Shares validly tendered during the Subsequent Offering Period, which includes the Minority Exit Offering
Period, if applicable, but excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been delivered in
settlement or satisfaction of such guarantee prior to the Expiration Time), together with the Shares then owned by Parent, Purchaser
and their respective subsidiaries, represents fewer than 95 percent but at least 80 percent of the then outstanding Shares, Purchaser
intends to, or intends to cause its designee to, subject to receipt of the approval of AVG shareholders at the EGM, promptly after the
closing of the Subsequent Offering Period (which includes the Minority Exit Offering Period, if applicable), effect the Subsequent
Reorganization by means of a sale of all or substantially all of the assets of AVG to Purchaser or its designee in exchange for (a) cash
and a note payable in an aggregate amount equal to the Offer Price multiplied by the total number of outstanding Shares as of the
Offer Closing and (b) the assumption by Purchaser or its designee of substantially all liabilities of AVG.
Upon consummation of the Asset Sale, Purchaser would own all of AVG’s business operations and would be the principal
shareholder in AVG, and the non-tendering AVG shareholders would continue to own Shares representing, in the aggregate, a
minority of the Shares then outstanding. Upon completion of the Asset Sale, AVG will be dissolved and liquidated in accordance with
applicable Dutch liquidation procedures. Purchaser would then provide an indemnity or guarantee to the liquidator for any deficit in
the estate of AVG, to enable the liquidator to make an advance liquidation distribution in cash to each non-tendering AVG shareholder
in an amount equal to the Offer Price, without interest and less applicable withholding taxes (including Dutch dividend withholding
tax) or other taxes, for each Share then owned.
The liquidator will be appointed at the EGM in accordance with section 2:23 of the DCC. Subject to shareholder approval at the
EGM, AVG has proposed the Foundation will be appointed as the liquidator to carry out the liquidation of the assets once AVG’s
dissolution has become effective. The board of the Foundation will
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initially consist of one member designated by Purchaser and two members designated by AVG ultimately five business days before
the EGM. Parent, Purchaser and AVG will designate one or more professional liquidator(s) (natural person(s) or a professional
liquidator service provider) as member(s) of the board of the liquidator, under supervision of the AVG Supervisory Board, including
two of the current directors of AVG to be Jan G. Haars and Colin Tenwick or as otherwise mutually agreed upon by Purchaser and
AVG, whose affirmative vote will be required for the appointment and dismissal of such board members. Parent, Purchaser and AVG
will use their reasonable best efforts to designate such professional liquidator (service provider) to replace the initial board members
as soon as possible after the EGM and timely reach agreement with such service provider so that the professional liquidator (service
provider) is appointed prior to the contemplated Liquidation Distribution.
The Asset Sale and the Liquidation Distribution will result in all non-tendering AVG shareholders receiving, for each Share then
held, cash in an amount equal to the Offer Price, in each case, without interest and less applicable withholding taxes (including Dutch
dividend withholding tax) or other taxes.
Other Subsequent Reorganization Measures. If Parent determines it is not reasonably practicable (which will be deemed to
include adverse tax consequences) to cause the Compulsory Acquisition or the Asset Sale, the Dissolution and the Liquidation
Distribution, it will use reasonable best efforts to cause a Subsequent Reorganization in a different manner with the prior approval of
the Independent Directors (to the extent such alternative Subsequent Reorganization measures have not been approved by the AVG
Boards (including the Independent Directors)). In the implementation of any measure, due consideration will be given to the interests
of all stakeholders including any non-tendering AVG shareholders, and the requirement for the members of the AVG Supervisory
Board to form their independent view of the relevant matter. In connection with an alternative Subsequent Reorganization, Purchaser
must offer AVG shareholders (or such AVG shareholders must otherwise receive) the Offer Price, without interest and less applicable
withholding taxes (including Dutch dividend withholding tax) or other taxes, for each Share held by such AVG
shareholder. Alternative Subsequent Reorganization measures may include:
•
a subsequent public tender offer for any AVG ordinary shares held by minority shareholders;
•
a statutory cross-border or domestic (bilateral or triangular) legal merger (juridische driehoeks-fusie) in accordance
with article 2:309 et seq. of the DCC between AVG, Purchaser, and any of Purchaser’s affiliates;
•
a statutory legal demerger (juridische splitsing) of AVG in accordance with article 2:334a et seq. of the DCC;
•
a contribution of cash and/or assets by Purchaser or any of its affiliates in exchange for ordinary shares or preference
shares in AVG’s share capital, in which the pre-emptive rights ( voorkeursrechten ), if any, of minority shareholders of
AVG may be excluded;
•
a distribution of proceeds, cash and/or assets to the shareholders of AVG or share buybacks;
•
a sale and transfer of assets and liabilities by Purchaser or any of its affiliates to AVG or any of its affiliates, or a sale
and transfer of assets and liabilities by AVG or any of its affiliates to Purchaser or any of its affiliates;
•
the conversion of AVG into a private company with limited liability (besloten vennootschap met beperkte
aansprakelijkheid );
•
any transaction between AVG and Purchaser or their respective affiliates at terms that are not at arm’s length;
•
any transaction, including a sale and/or transfer of any material asset, between AVG and its affiliates or between AVG
and Purchaser or their respective affiliates with the objective of utilizing any carry forward tax losses available to
AVG, Purchaser or any of their respective affiliates;
•
amending AVG’s articles of association;
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•
any combination of the foregoing; or
•
any transactions, restructurings, share issues, procedures and/or proceedings in relation to AVG and/or one or more of
its affiliates required to effect the aforementioned objectives.
It is possible that Purchaser may not be able to implement any proposed Subsequent Reorganization promptly after the
consummation of the Offer, that such Subsequent Reorganization may be delayed or that such Subsequent Reorganization may not be
able to take place at all. Any Subsequent Reorganization could be the subject of litigation, and a court could delay the Subsequent
Reorganization or prohibit it from occurring on the terms described in this Offer to Purchase, or from occurring at all. Moreover, even
if Purchaser is able to effect any proposed Subsequent Reorganization, the consideration that AVG shareholders receive therein may
be substantially lower and/or different in form than the consideration that they would have received had they tendered their Shares in
the Offer (and they may also be subject to additional taxes).
Under no circumstances will interest be paid on the Offer Price paid pursuant to the Offer, regardless of any extension of
the Offer, the Subsequent Offering Period (which includes the Minority Exit Offering Period, if applicable), or any delay in
making payment for Shares.
The affirmative vote of the Independent Directors will be required for approving (a) any restructuring which could reasonably be
expected to lead to a dilution of the shareholdings of the non-tendering AVG shareholders, other than (i) pursuant to a rights issue by
AVG or any other share issue where the non-tendering AVG shareholders have been offered an opportunity to subscribe pro rata to
their then existing shareholding in AVG ( voorkeursrecht ), (ii) the Asset Sale, the Dissolution and the Liquidation Distribution and
(iii) the Compulsory Acquisition and (b) any other form of unequal treatment which prejudices or could reasonably be expected to
prejudice or negatively affect the value of the Shares or voting rights attached to the Shares held by the non-tendering AVG
shareholders, other than (i) the Asset Sale, the Dissolution and the Liquidation Distribution or (ii) the Compulsory Acquisition.
Debt Push Down. If Purchaser acquires pursuant to the Offer a number of Shares that, together with the Shares then owned by
Parent, Purchaser and their subsidiaries, represents at least 95 percent of the Shares then outstanding, Purchaser may push down a
portion of the Debt Financing that will be borrowed by Purchaser to AVG or its subsidiaries, by way of an upstream loan by AVG or
its subsidiaries to Purchaser or certain subsidiaries of Purchaser (other than AVG and its subsidiaries). If a debt push down is effected
by way of an upstream loan by AVG or its subsidiaries to Purchaser, a lesser amount of funds may be available to distribute to
shareholders (for example, as a dividend), if any such distribution was to be made.
Debt Service. If Purchaser acquires pursuant to the Offer a number of Shares that, together with the Shares then owned by
Parent, Purchaser and their subsidiaries, represents at least 95 percent of the Shares then outstanding, AVG and certain of its
subsidiaries may provide guarantees and security in support of the Debt Financing, and Purchaser and AVG and their respective
subsidiaries are likely to dedicate more of their cash flow from operations to fund (in the case of AVG and its subsidiaries, by way of
upstream loans from AVG or its subsidiaries or repayment of any downstream loan made by Purchaser to AVG) the service by
Purchaser of Purchaser’s debt (to the extent not pushed down into AVG or its subsidiaries) under the Debt Financing, as the aggregate
amount drawn under the Debt Financing will exceed the currently drawn debt financing facilities of Purchaser, AVG and their
respective subsidiaries. If service of Purchaser’s debt is funded by way of an upstream loan by AVG or its subsidiaries to Purchaser, a
lesser amount of funds may be available to distribute to shareholders (for example, as a dividend), if any such distribution was to be
made.
Plans for AVG. Parent will evaluate the business and operations of AVG during the pendency of the Offer and intends to transfer
AVG’s business and operations to Purchaser and/or one or more of its designees as part of the Subsequent Reorganization and will
take such actions as it deems appropriate under the circumstances then existing. Thereafter, Parent intends to review such information
as part of a comprehensive review of AVG’s former business, operations, capitalization and management with a view to optimizing
development of the potential of AVG’s former business.
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To the best knowledge of Purchaser and Parent, except for certain pre-existing agreements described in the Schedule 14D-9, no
employment, equity contribution, or other agreement, arrangement or understanding between any executive officer or director of
AVG, on the one hand, and Parent, Purchaser or AVG, on the other hand, existed as of the date of the Purchase Agreement, and the
Offer is not conditioned upon any executive officer or director of AVG entering into any such agreement, arrangement or
understanding.
It is possible that certain members of AVG’s current management team will enter into new employment arrangements with AVG
after the completion of the Offer and the transactions contemplated by the Purchase Agreement. Such arrangements may include the
right to purchase or participate in the equity of Purchaser or its affiliates. There can be no assurance that any parties will reach an
agreement on any terms, or at all.
13. Certain Effects of the Offer.
Market for the Shares. The purchase of Shares pursuant to the Offer will reduce the number of AVG shareholders and the
number of Shares that might otherwise trade publicly, which could adversely affect the liquidity and market value of the remaining
Shares. We cannot predict whether the reduction in the number of Shares that might otherwise trade publicly would have an adverse or
beneficial effect on the market price for, or marketability of, the Shares or whether such reduction would cause future market prices to
be greater or less than the Offer Price.
NYSE Listing. Depending upon the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the
standards for continued listing on the NYSE. According to the NYSE’s published guidelines, the Shares would not meet the criteria
for continued listing on the NYSE if, among other things, the total number of AVG shareholders is not at least 400. If, as a result of
the purchase of the Shares pursuant to the Offer, the Shares no longer meet these criteria, the listing of Shares on the NYSE would be
discontinued and the market for the Shares will be adversely affected. After the consummation of the Offer, we intend to cause AVG
to terminate the listing of the Shares on the NYSE.
Margin Regulations. The Shares are currently “margin securities” under the Regulations of the Board of Governors of the
Federal Reserve System (the “Federal Reserve Board”), which has the effect, among other things, of allowing brokers to extend credit
on the collateral of the Shares. Depending upon factors similar to those described above regarding the market for the Shares and
listing, it is possible that, following the Offer, the Shares would no longer constitute “margin securities” for the purposes of the margin
regulations of the Federal Reserve Board and, therefore, could no longer be used as collateral for loans made by brokers.
Exchange Act Registration. The Shares are currently registered under the Exchange Act. Such registration may be terminated
upon application by AVG to the SEC if the Shares are neither listed on a national securities exchange nor held by 300 or more holders
of record, subject to fulfilling certain conditions. Termination of registration of the Shares under the Exchange Act would substantially
reduce the information required to be furnished by AVG to its shareholders and to the SEC and would make certain provisions of the
Exchange Act no longer applicable to AVG. Furthermore, the ability of “affiliates” of AVG and persons holding “restricted securities”
of AVG to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act may be impaired or eliminated. If
registration of the Shares under the Exchange Act were terminated, the Shares would no longer be “margin securities” or be eligible
for listing on the NYSE as described above. We intend and will cause AVG to terminate the registration of the Shares under the
Exchange Act as promptly as practicable after consummation of the Offer and expect to take steps to cause the suspension of all of
AVG’s reporting obligations under the Exchange Act. If registration of the Shares is not terminated prior to the Subsequent
Reorganization, the registration of the Shares under the Exchange Act will be terminated following the consummation of Subsequent
Reorganization.
Other measures. Subject to the terms and conditions of the Purchase Agreement and this Offer to Purchase, the Purchaser
reserves the right to submit proposals for a vote at the EGM in order to change the corporate
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structure and the capital structure of AVG and/or achieve an optimal financial or other structuring, including amendments to AVG’s
articles of association and change in the accounting policies applied in AVG and its subsidiaries, all in accordance with Dutch law and
the articles of association of AVG.
14. Dividends and Distributions.
The Purchase Agreement provides, among other things, that from the date thereof to the Offer Closing or the earlier termination
of the Purchase Agreement, without the prior written consent of Purchaser, AVG will not, and will not allow its subsidiaries, unless
required by Purchase Agreement or relevant law, to, declare, set aside, make or pay any dividend or other distribution, payable in
cash, stock or other securities, property or otherwise, with respect to any of AVG’s capital stock.
15. Certain Conditions of the Offer.
Notwithstanding any other term of the Offer or the Purchase Agreement, but subject to compliance with any applicable rules and
regulations of the SEC, including Rule 14e-1(c) promulgated under the Exchange Act relating to Purchaser’s obligation to accept and
pay for or return tendered shares of AVG after the termination of the Offer, Purchaser will not be required to accept for purchase or
pay for any AVG Shares unless each of the following conditions to the Offer has been satisfied or waived (to the extent such waiver is
permitted by applicable law and the terms of the Purchase Agreement) in accordance with the Purchase Agreement:
(a)
the Minimum Condition has been satisfied;
(b) any applicable waiting period (and any extension thereof) applicable to the transactions contemplated by the Purchase
Agreement under HSR Act has expired and the applicable waiting period or approval under the antitrust laws of Austria and
Germany has expired or been terminated or duly obtained, made or given and is in full force and effect and not subject to
appeal;
(c)
no applicable law, regulation, order or injunction entered, enacted, promulgated, enforce or issued by any court or other
governmental authority of competent jurisdiction is in effect prohibiting, rendering illegal or enjoining the consummation
of the transactions contemplated by the Purchase Agreement, other than the application to such transactions of applicable
waiting periods under the HSR Act or other antitrust laws (excluding any antitrust laws under which criminal sanctions
would be imposed if the offer were to be consummated);
(d) (i) the representations and warranties of AVG (A) contained in Sections 3.05 and 3.06 of the Purchase Agreement are true
and correct in all respects as of the Expiration Time other than for inaccuracies that are in the aggregate de minimis in both
amount and nature, (B) contained in Sections 3.01(a), 3.02, 3.11(a) and 3.22 of the Purchase Agreement are true and correct
in all respects as of the Expiration Time as though made on and as of such date (except to the extent such representations
and warranties expressly relate to an earlier date, in which case as of such earlier date), and (C) contained in Article III of
the Purchase Agreement (other than the sections of Article III of the Purchase Agreement referred to in clauses (A) or (B)
above) are true and correct in all respects (without giving effect to any “materiality,” “Company Material Adverse Effect”
or similar materiality qualifiers contained in any such representations and warranties) as of the Expiration Time as though
made on and as of such date (except to the extent such representations and warranties expressly relate to an earlier date, in
which case as of such earlier date), except where the failures of any such representations and warranties to be so true and
correct, in the aggregate, have not had and would not reasonable be expected to have, individually or in the aggregate, a
Company Material Adverse Effect;
(e)
AVG has performed or complied with in all material respects each of the obligations, agreements and covenants required to
be performed by, or complied with by, it under the Purchase Agreement at or prior to the Expiration Time;
(f)
since the date of the Purchase Agreement, a Company Material Adverse Effect has not occurred;
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(g)
the resignations of all but two directors from the AVG Boards have been obtained in accordance with the Purchase
Agreement;
(h)
AVG has delivered to Parent a certificate signed by an authorized officer of AVG dated as of the date on which the Offer
expires certifying that the conditions to the Offer specified in (d) through (f) above have been satisfied;
(i)
no anti-takeover measure has been implemented by AVG in relation to the Offer or the Tender Agreements;
(j)
Parent has received a duly executed certification that meets the requirements of Treasury Regulations Section
1.1445-2(c)(3) issued by AVG dated as of the Acceptance Time certifying that AVG is not, and has not been at any time
during the five-year period ending on the Acceptance Time, a “United States real property holding corporation” within the
meaning of Section 897(c)(2) of the Code;
(k)
with respect to the filing with CFIUS, one of the following has occurred: (i) AVG, Parent and Purchaser have received a
written notification issued by CFIUS that it has determined that the transactions contemplated by the Purchase Agreement
are not a “covered transaction” pursuant to FINSA; (ii) AVG, Parent and Purchaser have received a written confirmation
from CFIUS that it has completed its review (or, if applicable, investigation) of the transactions contemplated by the
Purchase Agreement under FINSA and determined that there are no unresolved national security concerns with respect to
the transactions contemplated by the Purchase Agreement, and such determination is not conditioned upon the commitment
of Parent or Purchaser to (A) propose, negotiate, commit to or effect, by consent decree, hold separate order, agreement or
otherwise, any Divestitures, (B) terminate existing, or create new, relationships, contractual rights or obligations of Parent
or its affiliates or, following the Acceptance Time, AVG or its subsidiaries, (C) effect any other change or restructuring of
Parent, its affiliates, AVG, or their respective subsidiaries or (D) otherwise take or commit to take any actions that interfere
with Parent’s ability to control, manage or exercise full rights of ownership of AVG or its subsidiaries, or limit the freedom
of action of Parent, its affiliates, AVG, or their respective subsidiaries, with respect to, or their ability to retain, or enjoy the
rights and benefits of any assets or businesses, including, without limitation, the freedom to provide services to, or
otherwise enter into, a commercial relationship with any person; (iii) following an investigation, CFIUS has reported the
transactions contemplated by the Purchase Agreement to the President of the United States and the President of the United
States has declined to exercise his authorities under FINSA to suspend or prohibit the transactions contemplated by the
Purchase Agreement; or (iv) following an investigation, CFIUS has reported the transactions contemplated by the Purchase
Agreement to the President of the United States and the President of the United States has determined to take action that
would not, and would not reasonably be expected to, result in a material and adverse effect on Parent and its controlled
affiliates, taken as a whole, after giving effect to the transactions contemplated by the Purchase Agreement, or otherwise
require the commitment of Parent or Purchaser to take any action described in clauses (A) through (D) above; and
(l)
the Purchase Agreement has not been terminated in accordance with its terms.
The foregoing conditions are in addition to, and not a limitation of, the rights of Parent and Purchaser to extend, terminate or
modify the Offer in accordance with the terms and conditions of the Purchase Agreement. Subject to the applicable rules and
regulations of the SEC, Purchaser expressly reserves the right at any time prior to the Expiration Time, at its sole discretion, to waive,
in whole or in part, any condition to the Offer and to make any change in the terms of or conditions to the Offer. However, Purchaser
will not (without the prior written consent of AVG): (a) waive or change the Minimum Condition; (b) decrease the Offer Price; (c)
change the form of consideration to be paid in the Offer; (d) decrease the number of Shares sought in the Offer; (e) extend or
otherwise change the Expiration Time except as otherwise provided in the Purchase Agreement; or (f) impose additional conditions to
the Offer or otherwise amend, modify or supplement any of the conditions to the Offer or terms of the Offer in a manner adverse to
AVG shareholders.
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The foregoing conditions are for the sole benefit of Parent and Purchaser and may be asserted by Parent or Purchaser regardless
of the circumstances giving rise to any such condition or may be waived by Parent or Purchaser in its sole discretion, in each case
subject to the terms of the Purchase Agreement and applicable rules and regulations of the SEC. In addition, each of the foregoing
conditions is independent of any of the other foregoing conditions; the exclusion of any event from a particular condition does not
mean that such event may not be included in another condition. Notwithstanding the fact that Parent and Purchaser reserve the right to
assert the existence of any condition to the Offer, Parent and Purchaser understand that all conditions to the Offer, other than those
dependent upon the receipt of necessary governmental regulatory approvals, must be satisfied or waived prior to the Expiration Time.
16. Certain Legal Matters; Regulatory Approvals.
General. Except as described in this Section 16, based on our examination of publicly available information filed by AVG with
the SEC and other information provided by AVG, we are not aware of any governmental license or regulatory permit that appears to
be material to AVG’s business that might be adversely affected by our acquisition of Shares as contemplated in this Offer to Purchase
or of any approval or other action by any governmental, administrative or regulatory authority or agency, domestic or foreign, that
would be required for the acquisition or ownership of Shares by Purchaser or Parent as contemplated in this Offer to Purchase. Should
any such approval or other action be required, we currently contemplate that such approval or other action will be sought. While
Purchaser does not currently intend to delay acceptance for payment of Shares tendered pursuant to the Offer pending the outcome of
any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained
without substantial conditions or that if such approvals were not obtained or such other actions were not taken, adverse consequences
might not result to AVG’s business, any of which under certain conditions specified in the Purchase Agreement, could cause
Purchaser to elect to terminate the Offer without the purchase of Shares thereunder under certain conditions. See
Section 15 — “Certain Conditions of the Offer.”
Antitrust Compliance. Under the HSR Act, and the related rules and regulations that have been issued by the FTC, certain
transactions may not be consummated until specified information and documentary material (“Premerger Notification and Report
Forms”) have been furnished to the FTC and the Antitrust Division and certain waiting periods have been terminated or expired.
These requirements of the HSR Act apply to the acquisition of Shares pursuant to the Offer and the Purchase Agreement.
Under the HSR Act, our purchase of Shares pursuant to the Offer may not be completed until the expiration of a 15 calendar day
waiting period following the filing by Purchaser, of its Premerger Notification and Report Form concerning the Offer with the FTC
and the Antitrust Division, unless the waiting period is earlier terminated or extended by the FTC or the Antitrust Division. Purchaser
and AVG filed their Premerger Notification and Report Forms with the FTC and the Antitrust Division in connection with the
purchase of Shares pursuant to the Offer on July 27, 2016. The required waiting period with respect to the Offer and the Purchase
Agreement will expire at 11:59 p.m., New York City time, 15 calendar days thereafter (unless the 15th day falls on a weekend or
holiday, in which case the 15th day is extended to the next business day), unless the waiting period is earlier terminated by the FTC or
the Antitrust Division, unless Purchaser pulls its Premerger Notification and Report Form before the expiration of the initial 15
calendar day waiting period and refiles it thereafter, and unless the FTC or the Antitrust Division extends the waiting period by issuing
a request for additional information and documentary material (a “Second Request”) prior to expiry of the initial waiting period. If
within the initial waiting period, Purchaser pulls and re-files its Premerger Notification and Report Form, the waiting period will
restart and will expire 15 calendar days following the re-filing of the Premerger Notification and Report Form unless the waiting
period is earlier terminated by the FTC or the Antitrust Division, and unless the FTC or the Antitrust Division extends the waiting
period by issuing a Second Request prior to expiry of the initial waiting period. If within the initial waiting period either the FTC or
the Antitrust Division issues a Second Request, the waiting period with respect to the Offer and the Purchase Agreement would be
extended until 10 calendar days following the date of substantial compliance by Purchaser with that
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request, unless the FTC or the Antitrust Division terminates the additional waiting period before its expiration. After the expiration of
the 10 calendar day waiting period following substantial compliance with the Second Request by Purchaser, the waiting period could
be extended only by court order or with Purchaser’s consent. In practice, complying with a Second Request can take a significant
period of time. Although AVG is required to file certain information and documentary material with the FTC and the Antitrust
Division in connection with the Offer, neither AVG’s failure to make those filings nor a request for additional documents and
information issued to AVG from the FTC or the Antitrust Division will extend the waiting period with respect to the purchase of
Shares pursuant to the Offer and the Purchase Agreement.
The FTC and the Antitrust Division will scrutinize the legality under the antitrust laws of Purchaser’s proposed acquisition of
AVG. At any time before or after Purchaser’s acceptance for payment of Shares pursuant to the Offer, if the Antitrust Division or the
FTC believes that the Offer would violate the U.S. federal antitrust laws by substantially lessening competition in any line of
commerce affecting U.S. consumers, the FTC and the Antitrust Division have the authority to challenge the transaction by seeking a
federal court order enjoining the transaction or, if shares have already been acquired, requiring disposition of such Shares, or the
divestiture of substantial assets of Purchaser, AVG, or any of their respective subsidiaries or affiliates or requiring other conduct relief.
Each of Parent, Purchaser and AVG has agreed to use reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other parties to the Purchase Agreement in doing, all things necessary, proper
or advisable to consummate and make effective, in the most expeditious manner practicable, the Offer and the other transactions
contemplated by the Purchase Agreement, including: (a) preparing and filing as soon as practicable after the date of the Purchase
Agreement with any governmental authority or other third party all documentation to effect all necessary filings, notices, petitions,
statements, registrations, submissions of information, applications and other documents; (b) obtaining and maintaining all approvals,
consents, orders, exemptions or waivers required to be obtained from any governmental authority or other third party that are
necessary, proper or advisable to consummate the Offer or the other transactions contemplated by the Purchase Agreement, including
but not limited to filing a Premerger Notification and Report Form pursuant to the HSR Act with the FTC and the Antitrust Division
as promptly as reasonably practicable and in any event within 15 business days of the date of the Purchase Agreement (unless
otherwise agreed upon by the parties to the Purchase Agreement in writing); (c) defending any actions challenging the Purchase
Agreement or the consummation of the Offer or any of the other transactions contemplated by the Purchase Agreement, including
seeking to have vacated or reversed any order that would restrain, prevent or delay the Acceptance Time; and (d) executing and
delivering any additional instruments necessary to consummate the Offer and the other transactions contemplated by the Purchase
Agreement and to fully carry out the purposes of the Purchase Agreement.
In furtherance of the foregoing, each of Parent, Purchaser and AVG has agreed to use their reasonable best efforts to file or
cause to be filed, as promptly as reasonably practicable, all required filings under the HSR Act and all required filings under other
applicable antitrust laws of the Federal Republic of Germany and the Republic of Austria, to consult and cooperate with each other in
the preparation of such filings, and to promptly inform the other parties to the Purchase Agreement of any material communication
received by such party from any governmental authority regarding the transactions contemplated by the Purchase Agreement. Neither
AVG, on the one hand, nor Parent and Purchaser, on the other hand, may agree to any voluntary extension of any statutory deadline or
waiting period or to any voluntary delay of the consummation of the transactions contemplated by the Purchase Agreement at the
behest of any governmental authority without the written consent of Parent or Purchaser or AVG, respectively.
Notwithstanding the foregoing, if any objections are asserted with respect to the transactions contemplated by the Purchase
Agreement under any antitrust law or if any action is instituted (or threatened to be instituted) by the FTC, the United States
Department of Justice or any other applicable governmental authority challenging any of the transactions contemplated by the
Purchase Agreement or which would otherwise prohibit, materially
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impair or materially delay the consummation of the transactions contemplated by the Purchase Agreement, Parent, Purchaser and
AVG have agreed to take all actions necessary to resolve any such objections or actions (or threatened actions) so as to permit
consummation of the transactions contemplated by the Purchase Agreement to close as soon as reasonably practicable. AVG,
however, has agreed not to propose, negotiate, commit to or effect, by consent decree, hold separate order, or otherwise, the sale,
transfer, license, divestiture or other disposition of, or any prohibition or limitation on the ownership, operation, effective control or
exercise of full rights of ownership of, any of the businesses, product lines or assets of Parent or any of its affiliates or of AVG or any
of its subsidiaries without the prior written consent of Parent. Parent’s and Purchaser’s obligations to use reasonable best efforts does
not include proposing, negotiating, committing to or effecting, by consent decree, hold separate order, agreement or otherwise, any
Divestiture with respect to Parent or any of its affiliates. Parent and Purchaser will not be obligated to, in response to any objection or
any action (or threatened action) with respect to any of the applicable antitrust approvals of Germany or Austria or under any antitrust
laws, propose, negotiate, commit to or effect, by consent decree, hold separate order, agreement or otherwise, any Divestiture with
respect to AVG or any of its subsidiaries that, in the aggregate, would cause a material and adverse impact on AVG and its
subsidiaries, taken as a whole.
United States state attorneys general and private persons may also bring legal action under the antitrust laws seeking similar
relief or seeking conditions to the completion of the Offer. While Parent believes that consummation of the Offer would not violate
any antitrust laws, there can be no assurance that a challenge to the Offer on antitrust grounds will not be made or, if a challenge is
made, what the result will be. If any such action is threatened or commenced by the FTC, the Antitrust Division or any state or any
other person, Purchaser may not be obligated to consummate the Offer. See Section 15 — “Certain Conditions of the Offer.”
AVG and Purchaser and certain of their respective subsidiaries conduct business in several countries outside of the United
States. Based on a review of the information currently available about the businesses in which Purchaser and AVG are engaged, a
filing with Germany’s Federal Cartel Office (“FCO”) and observation of the applicable waiting period under the German Act Against
Restraints of Competition is required before the transactions contemplated by the Purchase Agreement may close. The initial waiting
period is one month from filing of the German notification, unless the waiting period is terminated earlier by the FCO. The waiting
period may be extended for an additional three months or, with the notifying party’s consent, for an even longer period of time for an
in-depth investigation. The notification by the parties to the Purchase Agreement will be submitted to the FCO as promptly as
reasonably practicable.
Additionally, based on a review of the information currently available about the businesses in which Purchaser and AVG are
engaged, an antitrust notification must be made to the Austrian Federal Competition Authority (the “AFCA”). Under the Austrian
Cartel Act, Purchaser’s purchase of Shares pursuant to the Offer may not be consummated until the expiration of a four-week waiting
period following the complete filing of a notification concerning the transactions contemplated by the Purchase Agreement with the
AFCA, unless the waiting period is earlier terminated. This waiting period can be extended by two weeks in case the Purchaser
requests such extension. The AFCA or the Federal Cartel Attorney may also request that the transaction be reviewed by the Cartel
Court. Following such request, the Cartel Court has five months to reach a decision on the transaction. Purchaser will file the
Premerger Notification Form with the AFCA as promptly as reasonably practicable.
Parent and Purchaser are not aware of any other pre-closing antitrust or competition law filings required in connection with the
transactions contemplated by the Purchase Agreement.
Committee on Foreign Investment in the United States. FINSA empowers the President of the United States to suspend or
prohibit an acquisition of, or investment in, a U.S. business by a foreign person if the President of the United States determines that
the foreign person’s control over the U.S. business threatens to impair the national security of the United States. Pursuant to FINSA,
CFIUS conducts reviews and, if necessary, investigations of transactions subject to FINSA. Where it determines the transaction
presents national security
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concerns, CFIUS can require mitigation measures or submit a recommendation to the President of the United States to suspend or
prohibit the transaction or to require divestiture of a completed transaction. CFIUS review is generally a voluntary process in which
the parties submit a joint notice regarding the proposed transaction. CFIUS also has the power to initiate reviews on its own in the
absence of a voluntary notification.
The parties expect to pre-file a joint voluntary notice with CFIUS pursuant to FINSA on or about August 1, 2016 in connection
with the transactions contemplated by the Purchase Agreement. Purchaser’s obligation to accept for payment, and pay for, Shares
tendered pursuant to the Offer is subject to satisfaction or waiver by Purchaser of the CFIUS Clearance Condition. See Section 15
— “Certain Conditions of the Offer.”
17. Appraisal rights.
AVG shareholders are not entitled under Dutch law or otherwise to appraisal rights with respect to the Offer. However, in the
event that upon the Expiration Time or after the Subsequent Offering Period (which includes the Minority Exit Offering Period, if
applicable), Purchaser holds 95 percent or more of the then outstanding Shares, Purchaser may acquire the remaining Shares not
tendered and purchased pursuant to the Offer by means of the Compulsory Acquisition. In such proceedings the Dutch Court will
determine the cash price to be paid for the Shares, which may be greater than, equal to or less than the Offer Price. The non-tendering
AVG shareholders do not have the right to oblige Purchaser to buy their Shares.
18. Fees and Expenses.
Parent and Purchaser have retained Innisfree M&A Incorporated to be the Information Agent and American Stock Transfer &
Trust Company, LLC to be the Depositary in connection with the Offer. As part of the services included in such retention, the
Information Agent may contact AVG shareholders by mail, telephone, telecopy, telegraph, personal interview, electronic mail and
other methods of electronic communication and may request brokers, dealers, commercial banks, trust companies and other nominees
to forward materials relating to the Offer to beneficial owners of Shares.
The Information Agent and the Depositary each will receive reasonable and customary compensation for their respective
services in connection with the Offer, will be reimbursed for reasonable out-of-pocket expenses and will be indemnified against
certain liabilities and expenses in connection therewith, including certain liabilities under federal securities laws.
Except as set forth above, neither Parent nor Purchaser will pay any fees or commissions to any broker or dealer or to any other
person (other than to the Depositary and the Information Agent) in connection with the solicitation of tenders of Shares pursuant to the
Offer. Brokers, dealers, commercial banks, trust companies and other nominees will, upon request, be reimbursed by Purchaser for
customary mailing and handling expenses incurred by them in forwarding offering materials to their customers. In those jurisdictions
where applicable laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of
Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by Purchaser.
19. Miscellaneous.
The Offer is not being made to (nor will tenders be accepted from or on behalf of) AVG shareholders in any jurisdiction in
which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such
jurisdiction. However, we may, in our discretion, take such action as we deem necessary to make the Offer comply with the laws of
any such jurisdiction and extend the Offer to AVG shareholders in such jurisdiction in compliance with applicable laws. In those
jurisdictions where applicable laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made
on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by
Purchaser.
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No person has been authorized to give any information or to make any representation on behalf of Parent or Purchaser
not contained herein or in the Letter of Transmittal, and, if given or made, such information or representation must not be
relied upon as having been authorized. No broker, dealer, bank, trust company, fiduciary or other person will be deemed to be
the agent of Parent, Purchaser, the Depositary, or the Information Agent for the purpose of the Offer.
Parent and Purchaser have filed with the SEC a Tender Offer Statement on Schedule TO pursuant to Rule 14d-3 of the General
Rules and Regulations under the Exchange Act, together with exhibits furnishing certain additional information with respect to the
Offer, and may file amendments thereto. A copy of such documents, and any amendments thereto, may be examined at, and copies
may be obtained from, the SEC in the manner set forth under Section 8 — “Certain Information Concerning Parent and Purchaser.”
AVG is required under the rules of the SEC to file its Solicitation/Recommendation Statement with the SEC on Schedule 14D-9
no later than 10 business days from the date of this Offer to Purchase, setting forth the recommendation of the AVG Boards with
respect to the Offer and the reasons for such recommendation and furnishing certain additional related information. A copy of such
documents, and any amendments thereto, may, when filed, be examined at, and copies may be obtained from, the SEC in the manner
set forth under Section 7 —“Certain Information Concerning AVG” above.
Avast Software B.V.
Avast Holding B.V.
July 29, 2016
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SCHEDULE I
INFORMATION RELATING TO PURCHASER AND THE PARENT
Parent. The following table sets forth the name, business address and telephone number, citizenship, present principal
occupation and employment history and past material occupations, positions, offices or employment for at least the past five years of
each of the executive officers and directors of Parent. The current business address of each person is Schiphol Boulevard 369, Tower
F, 7th floor, 1118 BJ Schiphol, The Netherlands. As used in this Schedule I, “Avast” refers to Parent and its direct and indirect
subsidiaries.
Name
Pavel Baudiš
Citizenship
Czech Republic
Present Principal Occupation or Employment (all have served five years or more in present
position unless otherwise noted)
Function: Director, Supervisory Board.
Professional Background: Pavel Baudiš co-founded Avast with Eduard Kučera. He has
served on the Supervisory Board of Parent since March 2014. From August 2010 to
March 2014, Mr. Baudiš served on the board of directors of Avast Software B.V. and Avast
Software N.V., the then parent company of Avast. From December 2006 to December 2011,
Mr. Baudiš also was Vice-Chairman of the board of directors of AVAST Software a.s.
(formerly ALWIL Software a.s.), the principal operating subsidiary of Avast. Pavel Baudiš
beneficially owns 100 Shares.
Rene-Heinrich
Bienz
Switzerland
Function: Chief Financial Officer, Avast Software s.r.o.
Professional Background: Rene-Heinrich Bienz has served as Chief Financial Officer of
Avast since October 2014. Previously Mr. Bienz was Chief Financial Officer of Fastweb SpA,
a telecommunications company located in Milan, Italy, from July 2011 to June 2014.
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Name
Stefan Boermans
Citizenship
The Netherlands
Present Principal Occupation or Employment (all have served five years or more in present
position unless otherwise noted)
Function: Managing Director B.
Professional Background: Stefan Boermans has served on the Management Board of Parent
since January 2014. Mr. Boermans also serves as a Director, Corporate Administration at
CVC Administration Services NL Branch, a private equity firm, since January 2012.
Mr. Boermans currently serves as a Director at Acordis Beheer B.V. since December 2012,
Acordis Holding B.V. since December 2012, Asia Outsourcing Netherlands B.V. since
February 2013, Avast Operations B.V. since June 2016, CL Intermediate Holdings I B.V.
since September 2012, Global Viewcomp Holdings B.V. since December 2012, HC
Investments B.V. since December 2010, HC Investments S.à r.l. since March 2012, HCI
Holdings S.à r.l. since March 2012, HCI S.A. March 2012, Hexagon Investments B.V. since
March 2012, Kameleon Luxembourg S.A. since October 2015, OLE Investments B.V. since
April 2014, Oleum S.à r.l. since June 2015, Red Earth Holdings B.V. since February 2012,
Restaurant Investment Asia B.V. since April 2014, Stichting Administratiekantoor DIA since
December 2014, Stichting Administratiekantoor Ria since November 2014, Stichting
Administratiekantoor Secura Holdings since January 2015, Stichting Administratiekantoor
Secura Investments since April 2015, Stichting Disroca Luxembourg since March 2016, and
Winiamando Holdings B.V. since February 2012. Mr. Boermans previously served as a
Director of ACR I B.V. from June 2015 to July 2015, ACR II B.V. from June 2015 to
July 2015, ACR III B.V. from June 2015 to July 2015, Admentus Holding B.V., radiée from
March 2014 to August 2015, Admentus Investments B.V., radiée from March 2014 to
August 2015, Briareus Holding B.V., radiée from March 2014 to August 2015, Briareus
Investments B.V., radiée from March 2014 to August 2015, Cacus Holding B.V., radiée from
March 2014 to August 2015, Cacus Investments B.V., radiée from March 2014 to
August 2015, CAP I B.V. from June 2015 to July 2015, CAP II B.V. from June 2015 to
July 2015, CAP III B.V. from June 2015 to July 2015, ChemicaInvest Holding B.V. from
February 2015 to July 2015, ChemInvest Holdings II S.à r.l. from October 2014 to May 2015,
Corsadii B.V. from December 2012 to February 2015, Deianira Holding B.V., radiée from
March 2014 to August 2015, Deianira Investments B.V., radiée from March 2014 to
August 2015, ElektroPower Investments B.V., radiée from October 2014 to April 2015,
Evadne Holding B.V., radiée from March 2014 to August 2015, Evadne Investments B.V.,
radiée from March 2014 to August 2015, Ninive Holdings S.A., en liquidation volontaire
from March 2012 to December 2015, Ninive International B.V. (in liquidation) from
December 2009 to June 2016, Ninive Investments S.à r.l., en liquidation volontaire from
March 2012 to December 2015, Otto Healthcare S.à r.l., radiée from September 2013 to
August 2014, Stichting Administratiekantoor Benelux Investeringen Vision, radiée from
November 2015 to April 2016, Stichting Administratiekantoor Betafence Holding, radiée
from February 2015 to February 2016, Trebol Holdings S.à r.l., en liquidation volontaire from
March 2012 to December 2015, Trebol International B.V. (in liquidation) from June 2010 to
June 2016, Venini Holdings S.A., en liquidation volontaire from March 2012 to
December 2015, Venini Investments S.à r.l., en liquidation volontaire from March 2012 to
December 2015, and Venini Netherlands B.V. (in liquidation) from July 2010 to June 2016.
Previously, Mr. Boermans was Vice Managing Director at Citco Nederland B.V., a financial
services firm, from August 2005 to December 2011.
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Name
Citizenship
Present Principal Occupation or Employment (all have served five years or more in present
position unless otherwise noted)
Ulf Henry
Claesson
Sweden and
Switzerland
Function: Director, Supervisory Board.
Scott Collins
United Kingdom
and United States
Function: Director, Supervisory Board.
Warren Alan
Finegold
United Kingdom
Function: Director, Supervisory Board.
Erwin Sylvain
Gunst
Belgium
Professional Background: Ulf Claesson has served on the Supervisory Board of Parent since
March 2014. From October 2012 to March 2014, Mr. Claesson served on the board of
directors of Avast Software B.V. and Avast Software N.V., the then parent company of Avast.
Since 2009, Mr. Claesson has served as a Partner at BLR & Partners AG, a private equity firm
located in Zurich, Switzerland. Mr. Claesson has served as CEO and Board director at
Clinerion Ltd, a Big Data solutions company in Basel, Switzerland since 2012. Mr. Claesson
has served as a member of the board of the Swiss Federal Commission for Innovation and
Technology since 2009 and is a lecturer and has taught Entrepreneurship at the Swiss Federal
Institute of Technology in Zurich since 2010.
Professional Background: Scott Collins has served on the Supervisory Board of Parent since
March 2014. From August 2010 to March 2014, Mr. Collins served on the board of directors
of Avast Software B.V. and Avast Software N.V., the then parent company of Avast. Mr.
Collins is a Managing Director of Summit Partners, LLP, a global growth equity firm. Mr.
Collins joined Summit in 1996 and founded the firm’s London office, which he currently
manages. Mr. Collins has served as a member of the board of directors of Acturis Limited, an
information technology and services company, since June 2010, and vente-privee.com SAS, a
members-only online provider of high-end consumer products, since May 2007. Mr. Collins
previously served as a member of the board of directors of Actix Limited, a mobile network
analytics and optimization company from March 2005 to September 2013, Bigpoint GmbH,
an online gaming company from April 2011 to April 2016, Multifonds (IGEFI Group Sàrl), a
fund accounting and transfer agency software company from June 2006 to March 2015,
Ogone SA/NV, an online payment service provider from May 2010 to March 2013, and
Welltec International, provider of precision robotic solutions for oil and gas wells from
July 2007 to October 2015.
Professional Background: Warren Finegold has served on the Supervisory Board of Parent
since February 2015. Mr. Finegold previously served as a director of Vodafone Group
Services Ltd (a subsidiary of Vodafone Group Plc) from April 2006 to June 2016, where he
was a member of the Vodafone Group Executive Committee since 2006, most recently
serving as Group Business Development Director until his retirement in June 2016.
Function: Director, Supervisory Board.
Professional Background: Erwin Gunst has served on the Supervisory Board of Parent since
March, 2014. From October 2012 to March 2014, Mr. Baudiš served on the board of
directors of Avast Software B.V. and Avast Software N.V., the then parent company of Avast.
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Name
Dick Haarsma
Citizenship
The Netherlands
Present Principal Occupation or Employment (all have served five years or more in present
position unless otherwise noted)
Function: Managing Director B.
Professional Background: Dick Haarsma has served as Managing Director B since
March 2014. Mr. Haarsma has also served as Chairman of the supervisory board of Algarve
International BV since 2010. Since 2011, Mr. Haarsma has served as a director of Guess?
Europe, B.V. and Guess? Euro-Canada B.V. Since 2013, Mr. Haarsma has served as a
supervisory board Member of Verizon Nederland B.V. Since 2014, Mr. Haarsma has served
as a Director of Ole Investments B.V. Mr. Haarsma also served as a director of Acordis
Beheer B.V. from 2014 to 2015, Briareaus Investments B.V. from 2014 to 2015, Ninive
International B.V. from 2013 to June 2016, and Venini Netherlands B.V. from 2013 to
June 2016.
Eduard Kučera
Czech Republic
Function: Director, Supervisory Board.
Professional Background: Eduard Kučera co-founded Avast with Pavel Baudiš. Mr. Kučera
has served on the Supervisory Board of Parent since March 2014. From August 2010 to
March 2014, Mr. Kučera served on the board of directors of Avast Software B.V. and Avast
Software N.V., the then parent company of Avast. From December 2006 to December 2011,
Mr. Kučera also was Chairman of the board of directors, and from December 2011 to
March 2014, a member of the board of directors of AVAST Software a.s. (subsequently
renamed AVAST Software s.r.o.) (formerly ALWIL Software a.s.), the principal operating
subsidiary of Avast. Mr. Kučera beneficially owns 1,000 Shares.
Siddharth
Tapaswin Patel
United Kingdom
Function: Director, Supervisory Board.
Alan Arthur
Rassaby
Australia and
United States
Function: Managing Director A
John G. Schwarz
Canada
Function: Director, Supervisory Board.
Professional Background: Siddharth Patel has served on Parent’s Supervisory Board since
March 2014. Siddharth Patel is a Senior Managing Director at CVC Capital Partners Ltd., a
private equity firm, in its Telecommunications, Media, and Technology team. Mr. Patel joined
CVC in 2010.
Professional Background: Alan Rassaby has served as Managing Director A of Parent since
March 2014. Mr. Rassaby has served as General Counsel and Company Secretary of Avast
since February 2013. He has been Parent’s Head of Human Resources since April 2016. From
2000 to 2012, he was the General Counsel of RightNow Technologies, Inc. (NASDAQ:
RNOW) where he also spent several years as Company Secretary and SVP of Global Human
Resources.
Professional Background John Schwarz has served as Chairman of the Supervisory Board of
Parent since March 2014. From December 2010 to January 2014, Mr. Schwarz served as a
member of the Supervisory Board of, and from January to March 2014 as Chairman of the
Supervisory Board of, Avast Software B.V. and Avast Software N.V., the then parent
company of Avast. Since May 2010, Dr. Schwarz has served as Chief Executive Officer of
Visier Inc., a business analytics software firm which he co-founded. Also since 2010,
Dr. Schwarz has served as a director of Synopsys, Inc. and as a director of Teradata
Corporation.
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Name
Citizenship
Lorne Rupert
Somerville
United Kingdom
Vincent Wayne
Steckler
United States
Onduej Vlček
Czech Republic
Present Principal Occupation or Employment (all have served five years or more in present
position unless otherwise noted)
Function: Director, Supervisory Board.
Professional Background: Lorne Somerville has served on the Supervisory Board of Parent
since March 2014 . Since July 2008, Mr. Somerville has been a partner at CVC Capital
Partners Ltd.
Function: Director, Supervisory Board.
Professional Background: Mr. Steckler has served on the Supervisory Board of Parent since
March 2014. From December 2011 to March 2014, Mr. Steckler served on the board of
directors of Avast Software B.V. and Avast Software N.V., the then parent company of Avast.
Mr. Steckler has served as Chief Executive Officer of Avast since May 2009.
Function: Director, Supervisory Board.
Professional Background: Mr. Vlček has served on the Supervisory Board of Parent since
March 2014. From December 2012 to March 2014, Mr. Vlček served on the board of
directors of Avast Software B.V. and Avast Software N.V., the then parent company of Avast.
Mr. Vlček has served as Chief Operating Officer of Avast since January 2014 and served as
Parent’s Chief Technology Officer from January 2007 to December 2013.
Purchaser. The following table sets forth the name, business address and telephone number, citizenship, present principal
occupation and employment history and past material occupations, positions, offices or employment for at least the past five years of
each of the executive officers of Purchaser. The current business address of each person is Schiphol Boulevard 369, Tower F, 7th
floor, 1118 BJ Schiphol, The Netherlands. As used in this Schedule I, “Avast” refers to Parent and its direct and indirect subsidiaries.
The managing director of Purchaser is Parent.
Name
Rene-Heinrich
Bienz
Citizenship
Switzerland
Present Principal Occupation or Employment (all have served five years or more in present
position unless otherwise noted)
Function: Chief Financial Officer, Avast Software s.r.o.
Professional Background: Rene-Heinrich Bienz has served as Chief Financial Officer of
Avast since October 2014. Previously Mr. Bienz was Chief Financial Officer of Fastweb SpA,
a telecommunications company located in Milan, Italy, from July 2011 to June 2014.
Alan Arthur
Rassaby
Australia and
United States
Function: Managing Director A
Professional Background: Alan Rassaby has served as Managing Director A of Parent since
March 2014. Mr. Rassaby has served as General Counsel and Company Secretary of Avast
since February 2013. He has been Parent’s Head of Human Resources since April 2016. From
2000 to 2012, he was the General Counsel of RightNow Technologies, Inc. (NASDAQ:
RNOW) where he also spent several years as Company Secretary and SVP of Global Human
Resources.
Vincent Wayne
Steckler
United States
Function: Director, Supervisory Board.
Professional Background: Mr. Steckler has served on the Supervisory Board of Parent since
March 2014. From December 2011 to March 2014, Mr. Steckler served on the board of
directors of Avast Software B.V. and Avast Software N.V., the then parent company of Avast.
Mr. Steckler has served as Chief Executive Officer of Avast since May 2009.
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Name
Ondřej Vlček
Citizenship
Present Principal Occupation or Employment (all have served five years or more in present
position unless otherwise noted)
Czech Republic
Function: Director, Supervisory Board.
Professional Background: Mr. Vlček has served on the Supervisory Board of Parent since
March 2014. From December 2012 to March 2014, Mr. Vlček served on the board of
directors of Avast Software B.V. and Avast Software N.V., the then parent company of Avast.
Mr. Vlček has served as Chief Operating Officer of Avast since January 2014 and served as
Parent’s Chief Technology Officer from January 2007 to December 2013.
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The Letter of Transmittal and any other required documents should be sent or delivered by each shareholder or its, his or her broker,
dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below:
The Depositary for the Offer is:
If delivering by mail:
If delivering by hand or courier:
American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
P.O. Box 2042
New York, New York 10272-2042
American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
6201 15th Avenue
Brooklyn, New York 11219
Questions and requests for assistance may be directed to the Information Agent at its address and telephone numbers set forth below.
Requests for copies of the Offer to Purchase, the related Letter of Transmittal, and the Notice of Guaranteed Delivery may be directed
to the Information Agent. Such copies will be furnished promptly at Purchaser’s expense. Shareholders may also contact brokers,
dealers, commercial banks or trust companies for assistance concerning the Offer. Purchaser will not pay any fees or commissions to
any broker or dealer or any other person (other than the Information Agent or the Depositary) for soliciting tenders of Shares pursuant
to the Offer.
The Information Agent for the Offer is:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Shareholders may call toll free: (888) 750-5834
Banks and brokers may call collect: (212) 750-5833
Exhibit (a)(1)(B)
Letter of Transmittal
To Tender Ordinary Shares
of
AVG TECHNOLOGIES N.V.
at $25.00 Per Share, in Cash,
Pursuant to the Offer to Purchase dated July 29, 2016
by
AVAST SOFTWARE B.V.,
a direct wholly owned subsidiary of
AVAST HOLDING B.V.
The undersigned represents that I (we) have full authority to tender without restriction the Shares (as defined below) listed below. You
are hereby authorized and instructed to deliver to one of the addresses indicated below (unless otherwise instructed in the boxes in the
following page) a check representing a cash payment for ordinary shares, with a nominal value of €0.01 per share (the “Shares”), of
AVG Technologies N.V. (“AVG”) tendered pursuant to this Letter of Transmittal, at a price of $25.00 per share, in cash, without
interest and less applicable withholding taxes or other taxes, upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated July 29, 2016 (as it may be amended or supplemented from time to time, the “Offer to Purchase” and, together with
this Letter of Transmittal, as it may be amended or supplemented from time to time, the “Offer”).
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M.,
NEW YORK CITY TIME, ON AUGUST 31, 2016 (SUCH DATE AND TIME, AS IT MAY BE EXTENDED, THE
“EXPIRATION TIME”), UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.
Mail or deliver this Letter of Transmittal to:
If delivering by mail:
If delivering by hand or courier:
American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
P.O. Box 2042
New York, New York 10272-2042
American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
6201 15th Avenue
Brooklyn, New York 11219
Pursuant to the offer of Avast Software B.V. to purchase all outstanding Shares of AVG, the undersigned encloses herewith and
tenders the following Shares of AVG:
DESCRIPTION OF SHARES TENDERED
Name(s) and Address(es) of Registered Holder(s)
Shares Tendered
(attached additional list if necessary)
Total Number of Shares
Represented by Book Entry*
Total Number of Shares Tendered*
Total Shares
*
Unless otherwise indicated, it will be assumed that all
Book-Entry Shares within the account are being tendered
hereby. See Instruction 4.
PLEASE READ THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL CAREFULLY
BEFORE COMPLETING THIS LETTER OF TRANSMITTAL.
IF YOU WOULD LIKE ADDITIONAL COPIES OF THIS LETTER OF TRANSMITTAL OR ANY OF THE OTHER
OFFERING DOCUMENTS, YOU SHOULD CONTACT INNISFREE M&A INCORPORATED, THE INFORMATION
AGENT FOR THE OFFER (“THE INFORMATION AGENT”), TOLL FREE AT (888) 750-5834 (FOR SHAREHOLDERS)
OR COLLECT AT (212) 750-5833 (FOR BANKS AND BROKERS).
You have received this Letter of Transmittal in connection with the offer of Avast Software B.V., a private company with
limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) organized under the laws of The Netherlands (“Purchaser”)
and a direct wholly owned subsidiary of Avast Holding B.V., a private company with limited liability ( besloten vennootschap met
beperkte aansprakelijkheid ) organized under the laws of The Netherlands (“Parent”), to purchase all outstanding ordinary shares, with
a nominal value of €0.01 per share (the “Shares”), of AVG Technologies N.V., a public limited liability company ( naamloze
vennootschap ) organized under the laws of The Netherlands (“AVG”), at a purchase price of $25.00 per Share (the “Offer Price”), in
cash, without interest and less applicable withholding taxes or other taxes, as described in the Offer to Purchase, dated July 29, 2016
(as it may be amended or supplemented from time to time, the “Offer to Purchase” and, together with this Letter of Transmittal, as it
may be amended or supplemented from time to time, the “Offer”).
The Offer is not being made to (nor will tenders be accepted from or on behalf of) AVG shareholders in any jurisdiction in
which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such
jurisdiction. However, Purchaser may, in its discretion, take such action as Purchaser deems necessary to make the Offer comply with
the laws of any such jurisdiction and extend the Offer to AVG shareholders in such jurisdiction in compliance with applicable laws.
You should use this Letter of Transmittal to deliver to American Stock Transfer & Trust Company (the “Depositary”) Shares,
for tender, if (a) you are a record holder and you hold uncertificated Shares in book-entry form on the books of AVG’s transfer agent
or (b) unless an Agent’s Message (as defined in Instruction 2 below) in lieu of this Letter Transmittal is utilized, if your Shares are
held in “street” name and are being tendered by book-entry transfer into the Depositary’s account at The Depository Trust Company
(the “Book-Entry Transfer Facility”).
If you cannot complete the procedure for delivery by book-entry transfer on a timely basis, or you otherwise cannot deliver all
required documents to the Depositary before the Expiration Time, you may nevertheless tender your Shares according to the
guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. See Instruction 2 below. Delivery of documents to
the Book-Entry Transfer Facility will not constitute delivery to the Depositary.
CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER INTO THE
DEPOSITARY’S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING
(ONLY FINANCIAL INSTITUTIONS THAT ARE PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY
MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering
Institution:
DTC Participant
Number:
Transaction Code
Number:
2
CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING (PLEASE
ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY):
Name(s) of Registered Holder(s):
Window Ticket Number (if any) or DTC Participant
Number:
Date of Execution of Notice of Guaranteed
Delivery:
Name of Institution which Guaranteed
Delivery:
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
 CHECK HERE IF THE TENDERED SHARES ARE DIRECTLY REGISTERED IN YOUR OWN NAME IN AVG’S
SHAREHOLDER REGISTER.
SUBJECT TO, AND UPON, ACCEPTANCE FOR PAYMENT OF THE SHARES VALIDLY TENDERED HEREWITH AND NOT
PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION TIME IN ACCORDANCE WITH THE TERMS AND CONDITIONS
OF THE OFFER, THE COMPLETION AND SIGNING OF THIS LETTER OF TRANSMITTAL WILL (IN ACCORDANCE WITH
DUTCH LAW AND AVG’S ARTICLES OF ASSOCIATION) (A) CONSTITUTE THE TRANSFER OF THE SHARES TO THE
PURCHASER AND (B) AVG’S ACKNOWLEDGEMENT OF THE TRANSFER OF SHARES.
Share Number(s) reflected in AVG’s shareholders’ register:
(Please contact the Depositary (using the contact information on the last page of this Letter of Transmittal) if your shares are directly
registered in your own name in AVG’s shareholders’ register and you do not have the numbers reflected in that register readily
available).
3
Ladies and Gentlemen:
The undersigned hereby tenders to Avast Software B.V., a private company with limited liability (besloten vennootschap met
beperkte aansprakelijkheid ) organized under the laws of The Netherlands (“Purchaser”) and a direct wholly owned subsidiary of
Avast Holding B.V., a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) organized
under the laws of The Netherlands (“Parent”), the above-described ordinary shares (the “Shares”), with a nominal value of €0.01 per
share, of AVG Technologies N.V., a public limited liability company ( naamloze vennootschap ) organized under the laws of The
Netherlands (“AVG”), at a purchase price of $25.00 per Share (the “Offer Price”), in cash, without interest and less applicable
withholding taxes or other taxes, on the terms and subject to the conditions set forth in the Offer to Purchase dated July 29, 2016 (the
“Offer to Purchase”), receipt of which is hereby acknowledged, and this Letter of Transmittal (as it may be amended or supplemented
from time to time, this “Letter of Transmittal” and, together with the Offer to Purchase, as it may be amended or supplemented from
time to time, the “Offer”). The undersigned understands that Purchaser reserves the right to transfer or assign, from time to time, in
whole or in part, to one or more of its affiliates, the right to purchase the Shares tendered herewith.
On the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions
of such extension or amendment), subject to, and effective upon, acceptance for payment and payment for the Shares validly tendered
herewith, and not properly withdrawn, prior to the Expiration Time in accordance with the terms of the Offer, the undersigned hereby
sells, assigns and transfers to, or upon the order of, Purchaser, all right, title and interest in and to all of the Shares being tendered
hereby (and any and all cash dividends, distributions, rights, other Shares or other securities issued or issuable in respect of such
Shares on or after the date hereof (collectively, “Distributions”)). In addition, the undersigned hereby irrevocably constitutes and
appoints American Stock Transfer & Trust Company, LLC (the “Depositary”) the true and lawful agent and attorney-in-fact and proxy
of the undersigned with respect to such Shares (and any and all Distributions) with full power of substitution (such proxies and power
of attorney being deemed to be an irrevocable power coupled with an interest in the Shares tendered by this Letter of Transmittal) to
the full extent of such shareholder’s rights with respect to such Shares (and any and all Distributions) to (a) transfer ownership of such
Shares (and any and all Distributions) on the account books maintained by the Book-Entry Transfer Facility (as defined in Section 2
— “Acceptance for Payment and Payment for Shares” of the Offer to Purchase), together with all accompanying evidences of transfer
and authenticity, to or upon the order of Purchaser, (b) present such Shares (and any and all Distributions) for transfer on the books of
AVG, and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any and all
Distributions), all in accordance with the terms and subject to the conditions of the Offer.
By executing this Letter of Transmittal (or taking action resulting in the delivery of an Agent’s Message (as defined in
Instruction 2 below)), the undersigned hereby irrevocably appoints each of the designees of Purchaser the attorneys-in-fact and proxies
of the undersigned, each with full power of substitution, to the full extent of such shareholder’s rights, to (a) vote at any annual or
extraordinary general meeting of AVG shareholders or otherwise in such manner as each such attorney-in-fact and proxy or its, his or
her substitute shall in its, his or her sole discretion deem proper with respect to, (b) execute any written consent concerning any matter
as each such attorney-in-fact and proxy or its, his or her substitute shall in its, his or her sole discretion deem proper with respect to
and (c) to otherwise act as each such attorney-in-fact and proxy or its, his or her substitute shall in its, his or her sole discretion deem
proper with respect to, all of the Shares (and any and all Distributions) tendered hereby and accepted for payment by Purchaser. This
proxy and power of attorney will be irrevocable and coupled with an interest in the Shares tendered hereby in accordance with the
terms of the Offer. Such appointment is effective when, and only to the extent that, Purchaser accepts the Shares tendered hereby for
payment pursuant to the Offer. Upon the effectiveness of such appointment, without further action, all prior powers of attorney,
proxies and consents given by the undersigned with respect to such Shares (and any and all associated Distributions) will be revoked
and no subsequent powers of attorney, proxies, consents or revocations may be given by the undersigned with respect thereto (and, if
given, will not be deemed effective). Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered,
immediately upon Purchaser’s acceptance
4
for payment of such Shares, Purchaser or its designees must be able to exercise full voting, consent and other rights, to the extent
permitted under applicable law, with respect to such Shares (and any and all associated Distributions), including voting at any meeting
of AVG shareholders or executing a written consent concerning any matter.
The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and
transfer any and all of the Shares tendered with this Letter Transmittal (and any and all Distributions) and that, when the same are
accepted for payment by Purchaser, Purchaser will acquire good, marketable and unencumbered title to such Shares (and such
Distributions), free and clear of all liens, restrictions, charges and encumbrances and the same will not be subject to any adverse
claims. The undersigned hereby represents and warrants that the undersigned is the registered owner of the Shares or the undersigned
is a participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of the Shares. The
undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or Purchaser to be necessary
or desirable to complete the sale, assignment and transfer of the Shares tendered hereby (and any and all Distributions). In addition,
the undersigned shall promptly remit and transfer to the Depositary for the account of Purchaser any and all Distributions in respect of
any and all of the Shares tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance or
appropriate assurance thereof, Purchaser shall be entitled to all rights and privileges as owner of each such Distribution and may
withhold the entire purchase price of the Shares tendered hereby or deduct from such purchase price the amount or value of such
Distribution, as determined by Purchaser in its sole discretion.
It is understood that the undersigned will not receive payment for the Shares unless and until the Shares are accepted for
payment and ownership of Shares is validly transferred on the account books maintained by Book-Entry Transfer Facility, and until
the same are processed for payment by the Depositary.
IT IS UNDERSTOOD THAT THE METHOD OF DELIVERY OF THE SHARES AND ALL OTHER REQUIRED
DOCUMENTS (INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY) IS AT THE OPTION
AND RISK OF THE UNDERSIGNED AND THAT THE RISK OF LOSS OF SUCH SHARES, AND OTHER DOCUMENTS
SHALL PASS ONLY AFTER THE DEPOSITARY HAS ACTUALLY RECEIVED THE SHARES (INCLUDING, IN THE
CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION (AS DEFINED IN SECTION 3 —
“PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES” OF THE OFFER TO PURCHASE)). IF
DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT BY PROPERLY
INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
All authority conferred or agreed to be conferred pursuant to this Letter of Transmittal shall not be affected by, and shall survive,
the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, executors,
administrators, trustees in bankruptcy, personal representatives, successors and assigns of the undersigned. Except as stated in the
Offer to Purchase, this tender is irrevocable.
The undersigned understands that the valid tender of Shares tendered pursuant to one of the procedures described in the Offer to
Purchase and in the instructions hereto will constitute the undersigned’s acceptance of the terms and conditions of the Offer.
Purchaser’s acceptance of such Shares for payment will constitute a binding agreement between the undersigned and Purchaser upon
the terms and conditions of the Offer (and if the Offer is extended or amended, upon the terms and subject to the conditions of any
such extension or amendment). The undersigned recognizes that under certain circumstances set forth in the Offer, Purchaser may not
be required to accept for payment any Shares tendered hereby.
Unless otherwise indicated herein under “Special Payment Instructions,” please issue the check for the purchase price of all
Shares purchased in the name(s) of the registered holder(s) appearing under “Description of
5
Shares Tendered.” Similarly, unless otherwise indicated under “Special Delivery Instructions,” please mail the check for the purchase
price of all Shares purchased to the address(es) of the registered holder(s) appearing under “Description of Shares Tendered.” In the
event that both the “Special Delivery Instructions” and the “Special Payment Instructions” are completed, please issue the check for
the purchase price of all Shares purchased in the name of, and deliver such check to, the person or persons so indicated. Unless
otherwise indicated herein in the box titled “Special Payment Instructions,” please credit any Shares tendered by this Letter of
Transmittal or by an Agent’s Message and delivered by book-entry transfer, but which are not accepted for payment, by crediting the
account at the Book-Entry Transfer Facility designated above. The undersigned recognizes that Purchaser has no obligation pursuant
to the “Special Payment Instructions” to transfer any Shares from the name of the registered holder(s) thereof if Purchaser does not
accept for payment any of the Shares so tendered.
6
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 4, 5 and 7)
To be completed ONLY if the check for the purchase price in consideration of Shares accepted for payment are to be
issued in the name of someone other than the undersigned or if Shares tendered by book-entry transfer which are not
accepted for payment are to be returned by credit to an account maintained at the Book-Entry Transfer Facility other than
that designated above.
Issue: 
Check to:
Name:
(Please Print)
Address:
(Include Zip Code)
(Tax Identification or Social Security Number)
 Credit Shares tendered by book-entry transfer that are not accepted for payment to the Book-Entry Transfer
Facility account set forth below.
(DTC Account Number)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 4, 5 and 7)
To be completed ONLY if the check for the purchase price of Shares accepted for payment are to be sent to
someone other than the undersigned or to the undersigned at an address other than that shown in the box titled
“Description of Shares Tendered” above.
Deliver: 
Check(s) to:
Name:
(Please Print)
Address:
(Include Zip Code)
7
IMPORTANT—SIGN HERE
(U.S. Holders Please Also Complete the Enclosed Internal Revenue Service Form W-9)
(Non-U.S. Holders Please Obtain and Complete Internal Revenue Service Form W-8BEN or Other Applicable Internal
Revenue Service Form W-8)
(Signature(s) of Shareholder(s))
Dated:
, 2016
(Must be signed by registered holder(s) exactly as name(s) appear(s) on a security position listing or by person(s) authorized to
become registered holder(s) by documents transmitted herewith. If signature is by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please set forth full title and see
Instruction 5. For information concerning signature guarantees, see Instruction 1.)
Name(s):
(Please Print)
Capacity (full title):
Address:
(Include Zip Code)
Area Code and Telephone Number:
Tax Identification or Social Security No.:
GUARANTEE OF SIGNATURE(S)
(For use by Eligible Institutions only;
see Instructions 1 and 5)
Name of Firm:
(Include Zip Code)
Authorized Signature:
Name:
(Please Type or Print)
Area Code and Telephone Number:
Dated:
, 2016
Place medallion guarantee in space below:
8
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise provided below, all signatures on this Letter of Transmittal must be
guaranteed by a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a
member of or participant in a recognized “Medallion Program” approved by the Securities Transfer Association Inc., including the
Security Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock
Exchange Medallion Signature Program (MSP), or any other “eligible guarantor institution,” as such term is defined in Rule 17Ad-15
promulgated under the Securities Exchange Act of 1934 (each, an “Eligible Institution” and collectively, “Eligible Institutions”).
Signatures on this Letter of Transmittal need not be guaranteed (a) if signed by the registered holder(s) (which term, for purposes of
this Instruction 1, includes any participant in the Book-Entry Transfer Facility’s systems whose name appears on a security position
listing as the owner of Shares) of Shares tendered therewith, unless such registered holder has completed either the section entitled
“Special Delivery Instructions” or the section entitled “Special Payment Instructions” on this Letter of Transmittal or (b) if such
Shares are tendered for the account of an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal or Book-Entry Confirmations. This Letter of Transmittal is to be completed (a) if you
are a record holder and you hold uncertificated Shares in book-entry form on the books of AVG’s transfer agent or (b) unless an
Agent’s Message in lieu of this Letter Transmittal is utilized, if your Shares are held in “street” name and are being tendered by
book-entry transfer into the Depositary’s account at Book-Entry Transfer Facility (as defined in Section 3 — “Procedures for
Accepting the Offer and Tendering Shares” of the Offer to Purchase) pursuant to the procedures set forth in Section 3 — “Procedures
for Accepting the Offer and Tendering Shares” of the Offer to Purchase. The following must be received by the Depositary at one of
its addresses set forth herein before the Expiration Time (unless the tender is made during the Subsequent Offering Period (as defined
in the Offer to Purchase) (which includes the Minority Exit Offering Period (as defined in the Offer to Purchase), if applicable), in
which case the Shares, the Letter of Transmittal and other documents must be received prior to the expiration of the Subsequent
Offering Period (which includes the Minority Exit Offering Period, if applicable)): (i) if you are a record holder and you hold
uncertificated Shares in book-entry form on the books of AVG’s transfer agent, (A) this Letter of Transmittal, properly completed and
duly executed, and (B) any other documents required by this Letter of Transmittal or (ii) if your Shares are held in “street” name and
are being tendered by book-entry transfer, (A) a Book-Entry Confirmation into the Depositary’s account at the Book-Entry Transfer
Facility pursuant to the procedures set forth in Section 3 — “Procedures for Accepting the Offer and Tendering Shares” of the Offer to
Purchase, (B) this Letter of Transmittal, properly completed and duly executed, with any required signature guarantees, or an Agent’s
Message (as defined below) in lieu of a Letter of Transmittal and (C) any other documents required by this Letter of Transmittal.
Shareholders who cannot deliver all required documents to the Depositary prior to the Expiration Time or who cannot complete
the procedures for book-entry transfer on a timely basis may nevertheless tender their Shares by properly completing and duly
executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in Section 3 — “Procedures for
Accepting the Offer and Tendering Shares” of the Offer to Purchase. Pursuant to such procedure: (a) such tender must be made by or
through an Eligible Institution, (b) a properly completed and duly executed Notice of Guaranteed Delivery substantially in the form
provided by Purchaser must be received by the Depositary prior to the Expiration Time (or prior to the expiration of the Subsequent
Offering Period (which includes the Minority Exit Offering Period, if applicable)), and (c) the following must be received by the
Depositary at one of its addresses set forth in this Letter of Transmittal within three trading days after the date of execution of such
Notice of Guaranteed Delivery: (i) if you are a record holder and you hold uncertificated Shares in book-entry form on the books of
AVG’s transfer agent, (A) this Letter of Transmittal, properly completed and duly executed, and (B) any other documents required by
this Letter of Transmittal or (ii) if your Shares are held in “street” name and are being tendered by book-entry transfer, (A)
Book-Entry Confirmation into the Depositary’s account at the Book-Entry Transfer Facility pursuant to the
9
procedures set forth in Section 3 — “Procedures for Accepting the Offer and Tendering Shares” of the Offer to Purchase, (B) this
Letter of Transmittal, properly completed and duly executed, with any required signature guarantees, or an Agent’s Message and (C)
any other documents required by this Letter of Transmittal.
The term “Agent’s Message” means a message, transmitted by the Book-Entry Transfer Facility to, and received by, the
Depositary and forming a part of a Book-Entry Confirmation, stating that the Book-Entry Transfer Facility has received an express
acknowledgment from the participant in the Book-Entry Transfer Facility tendering Shares that are the subject of such Book-Entry
Confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against such participant. The term “Agent’s Message” also includes any hard copy printout evidencing
such message generated by a computer terminal maintained at the Depositary’s office. For Shares to be validly tendered during the
Subsequent Offering Period (which includes the Minority Exit Offering Period, if applicable), the tendering shareholder must comply
with the foregoing procedures, except that the required documents and certificates must be received before the expiration of the
Subsequent Offering Period (which includes the Minority Exit Offering Period, if applicable) and no guaranteed delivery procedure
will be available during the Subsequent Offering Period (which includes the Minority Exit Offering Period, if applicable).
Beneficial owners should be aware that their broker, dealer, commercial bank, trust company or other nominee may establish its
own earlier deadline for participation in the Offer. Accordingly, beneficial owners wishing to participate in the Offer should contact
their broker, dealer, commercial bank, trust company or other nominee as soon as possible in order to determine the times by which
such owner must take action in order to participate in the Offer.
THE METHOD OF DELIVERY OF THE SHARES, THIS LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT
THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. DELIVERY OF ALL SUCH DOCUMENTS WILL
BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A
BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF SUCH DELIVERY IS BY MAIL, IT IS
RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT BY PROPERLY INSURED REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE
TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. All tendering
shareholders, by execution of this Letter of Transmittal (or facsimile thereof), waive any right to receive any notice of the acceptance
of their Shares for payment.
3. Inadequate Space. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares tendered
should be listed on a separate schedule attached hereto and separately signed on each page thereof in the same manner as this Letter of
Transmittal is signed.
4. Partial Tenders. If fewer than all Shares evidenced by any book-entry position are to be tendered, fill in the number of
Shares which are to be tendered in the box entitled “Total Number of Shares Tendered.” In such case, a new book-entry position for
the remainder of Shares evidenced by the book-entry position will be established for, as applicable, the person(s) signing this Letter of
Transmittal, unless otherwise provided in the appropriate box in this Letter of Transmittal, as promptly as practicable following the
expiration or termination of the Offer. All Shares evidenced by book-entry positions delivered to the Depositary will be deemed to
have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements.
(a) Exact Signatures. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the
signature(s) must correspond with the name(s) as written on the books of the Depositary without alteration or any other change
whatsoever.
10
(b) Joint Holders. If any of the Shares tendered hereby are owned of record by two or more joint owners, all such owners
must sign this Letter of Transmittal.
(c) Evidence of Fiduciary Capacity. If this Letter of Transmittal is signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other legal entity or other person acting in a fiduciary or representative capacity, such
person should so indicate when signing, and proper evidence satisfactory to the Depositary of the authority of such person so to act
must be submitted and all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. Proper evidence of
authority includes a power of attorney, a letter of testamentary or a letter of appointment.
6. Stock Transfer Taxes. Purchaser or any successor entity thereto will pay any transfer taxes with respect to the transfer and
sale of any Shares to it or to its order pursuant to the Offer (for the avoidance of doubt, transfer taxes do not include U.S. federal
income or backup withholding taxes). If, however, payment of the purchase price for any of the Shares tendered hereby is to be made
to any person other than the registered holder(s), Purchaser will not be responsible for any stock transfer or similar taxes (whether
imposed on the registered holder(s) or such other person(s) or otherwise) payable on account of the transfer to such other person(s)
and no consideration shall be paid in respect of such Share(s) unless evidence satisfactory to Purchaser of the payment of such taxes,
or exemption therefrom, is submitted.
Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Share
Certificates listed in this Letter of Transmittal.
7. Special Payment and Delivery Instructions. If a check for the purchase price of any Shares tendered hereby is to be issued
in the name of a person other than the signer(s) of this Letter of Transmittal or to an address other than that shown in the box titled
“Description of Shares Tendered” above, the appropriate boxes on this Letter of Transmittal should be completed. Shareholders
delivering Shares tendered hereby or by Agent’s Message by book-entry transfer may request that Shares not purchased be credited to
an account maintained at the Book-Entry Transfer Facility as such shareholder may designate in the section titled “Special Payment
Instructions” herein. If no such instructions are given, all such Shares not purchased will be returned by crediting the same account at
the Book-Entry Transfer Facility as the account from which such Shares were delivered.
8. Requests for Assistance or Additional Copies. Questions or requests for assistance may be directed to the Information
Agent its address and telephone number set forth below or to your broker, dealer, commercial bank, trust company or other
nominee. Additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and other tender
offer materials may be obtained from the Information Agent as set forth below, and will be furnished at Purchaser’s expense.
9. Backup Withholding. In order to avoid U.S. federal backup withholding (currently at a rate of 28 percent) on payments of
the purchase price with respect to Shares tendered pursuant to the Offer, each tendering shareholder that is a “U.S. Person” (as defined
in Section 7701(a)(30) of the U.S. Internal Revenue Code), must provide the Depositary with a properly completed Internal Revenue
Service (“IRS”) Form W-9 furnishing such shareholder’s correct taxpayer identification number (“TIN”) and certifying, under
penalties of perjury, that such number is correct, such shareholder is not subject to U.S. federal backup withholding and such
shareholder is a U.S. Person, or by otherwise establishing a basis for exemption. If a tendering shareholder that is a U.S. Person does
not have a TIN, such shareholder should consult the instructions to IRS Form W-9 for information on applying for a TIN and apply for
a TIN immediately. If a tendering shareholder that is a U.S. Person does not provide its TIN to the Depositary by the time of payment,
U.S. federal backup withholding may apply. Certain shareholders (including, among others, certain corporations, non-resident
non-U.S. individuals and non-U.S. entities) may not be subject to the U.S. federal backup withholding and reporting requirements.
In order for a tendering shareholder that is not a U.S. Person to avoid U.S. federal backup withholding on payments of the
purchase price with respect to Shares tendered pursuant to the Offer, each such tendering
11
shareholder must provide the Depositary with a properly completed copy of the appropriate IRS Form W-8, certifying, under penalties
of perjury, that such shareholder is not a U.S. Person and is the beneficial owner of payments received pursuant to the Offer. The
applicable IRS Form W-8 may be obtained from the Depositary or downloaded from the IRS’s website at the following address:
http://www.irs.gov.
Failure to provide the Depositary with a properly completed IRS Form W-9 or appropriate IRS Form W-8 will not, by itself,
cause Shares to be deemed invalidly tendered, but may require the Depositary to withhold on payments of the purchase price with
respect to Shares tendered pursuant to the Offer. Please consult your tax advisor or the Depositary for further guidance regarding the
completion of IRS Form W-9 or the appropriate IRS Form W-8 to claim exemption from U.S. federal backup withholding.
NOTE: FAILURE TO COMPLETE AND RETURN IRS FORM W-9 OR THE APPROPRIATE IRS FORM W-8 MAY
RESULT IN U.S. FEDERAL BACKUP WITHHOLDING ON A PORTION OF ANY PAYMENTS MADE TO YOU
PURSUANT TO THE OFFER. PLEASE REVIEW THE “IMPORTANT TAX INFORMATION” SECTION BELOW.
10. Irregularities. All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by Purchaser, in its sole discretion. Purchaser reserves the absolute right to reject any
and all tenders determined by it not to be in proper form or the acceptance for payment of which may, in the opinion of its counsel, be
unlawful. Purchaser also reserves the absolute right to waive any defect or irregularity in the tender of any Shares of any particular
shareholder, whether or not similar defects or irregularities are waived in the case of other shareholders. No tender of Shares will be
deemed to have been validly made until all defects and irregularities have been waived or cured within such time as Purchaser may
determine. None of Parent, Purchaser, the Depositary, the Information Agent or any other person will be under any duty to give notice
of any defects or irregularities in tenders or incur any liability for failure to give any such notice. Any determinations made by
Purchaser with respect to the terms and conditions of the Offer may be challenged by AVG shareholders, to the extent permitted by
law, and are subject to review by a court of competent jurisdiction.
11. Waiver of Conditions. Subject to the terms and conditions of the Purchase Agreement (as defined in the Offer to Purchase)
and the applicable rules and regulations of the Securities and Exchange Commission, Purchaser expressly reserves the reserves the
right at any time prior to the Expiration Time to waive, in whole or in part, any condition to the Offer and to make any change in the
terms of or conditions to the Offer. However, Purchaser will not (without the prior written consent of AVG): (a) waive or change the
Minimum Condition (as defined in the Offer to Purchase); (b) decrease the Offer Price; (c) change the form of consideration to be paid
in the Offer; (d) decrease the number of Shares sought in the Offer; (e) extend or otherwise change the Expiration Time other than in
accordance with the Purchase Agreement; or (f) impose additional conditions to the Offer or otherwise amend, modify or supplement
any of the conditions to the Offer or terms of the Offer in a manner adverse to AVG shareholders.
If you are a record holder and you hold uncertificated Shares in book-entry form on the books of AVG’s transfer agent, (a)
this Letter of Transmittal, properly completed and duly executed, and (b) any other documents required by this Letter of
Transmittal or, if your Shares are held in “street” name and are being tendered by book-entry transfer, (i) a Book-Entry
Confirmation, (ii) this Letter of Transmittal, properly completed and duly executed, or an Agent’s Message and (iii) any other
documents required by this Letter of Transmittal, must be received before the Expiration Time.
12
IMPORTANT TAX INFORMATION
Under U.S. federal income tax laws, to prevent U.S. federal backup withholding on payments of the purchase price with respect
to Shares tendered pursuant to the Offer to a tendering shareholder that is a U.S. Person, such shareholder is generally required to
provide the Depositary (as payor) with its correct TIN by completing the attached IRS Form W-9 and certifying, under penalties of
perjury, that the TIN provided on IRS Form W-9 is correct (or that such shareholder is awaiting a TIN), such shareholder is not
subject to U.S. federal backup withholding and such shareholder is a U.S. Person, or otherwise establish a basis for exemption. A TIN
is generally an individual shareholder’s social security number or a non-individual shareholder’s employer identification number. If
the Depositary is not provided with the correct TIN, a penalty may be imposed by the IRS and payments made with respect to Shares
purchased pursuant to the Offer may be subject to U.S. federal backup withholding. Failure to comply truthfully with the U.S. federal
backup withholding requirements may also result in the imposition of criminal and/or civil fines and penalties. If a tendering
shareholder that is a U.S. Person has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future,
such shareholder should write “Applied For” in Part I of the IRS Form W-9. Notwithstanding that “Applied For” is written in Part I of
the IRS Form W-9, the Depositary will withhold 28 percent of all payments of the purchase price with respect to Shares tendered
pursuant to the Offer to such shareholder until a TIN is provided to the Depositary. Under certain circumstances, a shareholder’s IRS
Form W-9, including its TIN, may be transferred from the Depositary to AVG’s paying agent.
Certain shareholders (including certain corporations, non-resident non-U.S. individuals and non-U.S. entities) may not be subject
to the U.S. federal backup withholding requirements. An exempt shareholder that is a U.S. Person should provide the Depositary with
a properly completed IRS Form W-9 that furnishes such shareholder’s correct TIN and any applicable “exempt payee codes” in the
“Exemptions” box of the IRS Form W-9. A shareholder (whether an individual or an entity) that is not a U.S. Person may qualify as
an exempt recipient by submitting to the Depositary a properly completed IRS Form W-8BEN, Form W-8BEN-E or Form W-8ECI (or
other applicable IRS Form W-8) certifying, under penalties of perjury, that such shareholder is not a U.S. Person and is the beneficial
owner of payments received pursuant to the Offer. In general, a person is not a beneficial owner of income if the person receives the
income as nominee, agent or custodian, or to the extent the person is a conduit whose participation in the transaction is disregarded.
Please consult your tax advisor for more information. The appropriate IRS Form W-8 can be obtained from the Depositary or
downloaded from the IRS’s website at the following address: http://www.irs.gov.
Please consult your accountant or tax advisor or the Depositary for further guidance regarding the completion of IRS
Form W-9, Form W-8BEN, Form W-8BEN-E or Form W-8ECI (or other applicable IRS Form W-8) to claim exemption from
U.S. federal backup withholding.
If U.S. federal backup withholding applies, the Depositary is required to withhold and pay over to the IRS a portion of
any payment made to a shareholder. U.S. federal backup withholding is not an additional U.S. federal income tax. Rather, the
U.S. federal income tax liability of persons subject to U.S. federal backup withholding will be reduced by the amount of tax
withheld. If U.S. federal backup withholding results in an overpayment of taxes, a refund may be obtained from the IRS,
provided that the required information is properly furnished to the IRS.
13
W-9
Form
(Rev. December 2014)
Department of the Treasury
Internal Revenue Service
Give Form to the
requester. Do not
send to the IRS.
Request for Taxpayer
Identification Number and Certification
1 Name (as shown on your income tax return). Name is required on this line; do not leave this line blank.
2 Business name/disregarded entity name, if different from above
4 Exemptions (codes apply only to
certain entities, not individuals; see
instructions on page 3):
Exempt payee code (if any)
Print or
type
3 Check appropriate box for federal tax classification; check only one of the following seven boxes:
See

C Corporation

S Corporation
Specific  Individual/sole proprietor or
single-member LLC
Instructio
ns
on page 2.  Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=partnership) 
Note. For a single-member LLC that is disregarded, do not check LLC; check the appropriate box in the
line above for the tax classification of the single-member owner.
 Other (see instructions) 
Exemption from FATCA reporting
code (if any)
(Applies to accounts maintained outside the U.S.)

Partnership
5 Address (number, street, and apt. or suite no.)

Trust/estate
Requester’s name and address (optional)
6 City, state, and ZIP code
7 List account number(s) here (optional)
Part I
Taxpayer Identification Number (TIN)
Social security number
Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid
backup withholding. For individuals, this is generally your social security number (SSN). However, for a
resident alien, sole proprietor, or disregarded entity, see the Part I instructions on page 3. For other
entities, it is your employer identification number (EIN). If you do not have a number, see How to get a
TIN on page 3.
–
or
Note. If the account is in more than one name, see the instructions for line 1 and the chart on page 4 for
guidelines on whose number to enter.
Part II
–
Employer identification number
–
Certification
Under penalties of perjury, I certify that:
1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and
2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS)
that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup
withholding; and
3. I am a U.S. citizen or other U.S. person (defined below); and
4. The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct.
Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you
have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or
abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and
dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions on page 3.
Sign
Here
Signature of
U.S. person 
Date

General Instructions
Section references are to the Internal Revenue Code unless otherwise noted.
Future developments. Information about developments affecting Form W-9 (such as legislation enacted after we release it) is at www.irs.gov/fw9.
Purpose of Form
An individual or entity (Form W-9 requester) who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN)
which may be your social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer
identification number (EIN), to report on an information return the amount paid to you, or other amount reportable on an information return. Examples of information
returns include, but are not limited to, the following:
● Form 1099-INT (interest earned or paid)
● Form 1099-DIV (dividends, including those from stocks or mutual funds)
● Form 1099-MISC (various types of income, prizes, awards, or gross proceeds)
● Form 1099-B (stock or mutual fund sales and certain other transactions by brokers)
● Form 1099-S (proceeds from real estate transactions)
● Form 1099-K (merchant card and third party network transactions)
● Form 1098 (home mortgage interest), 1098-E (student loan interest), 1098-T (tuition)
● Form 1099-C (canceled debt)
● Form 1099-A (acquisition or abandonment of secured property)
Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN.
If you do not return Form W-9 to the requester with a TIN, you might be subject to backup withholding. See What is backup withholding? on page 2.
By signing the filled-out form, you:
1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued),
2. Certify that you are not subject to backup withholding, or
3. Claim exemption from backup withholding if you are a U.S. exempt payee. If applicable, you are also certifying that as a U.S. person, your allocable share of any
partnership income from a U.S. trade or business is not subject to the withholding tax on foreign partners’ share of effectively connected income, and
4. Certify that FATCA code(s) entered on this form (if any) indicating that you are exempt from the FATCA reporting, is correct. See What is FATCA reporting?
on page 2 for further information.
Cat. No. 10231X
Form
W-9 (Rev. 12-2014)
Form W-9 (Rev. 12-2014)
Page
2
Note. If you are a U.S. person and a requester gives you a form other than Form W-9 to request your TIN, you must use the requester’s form if it is substantially similar to this
Form W-9.
Definition of a U.S. person. For federal tax purposes, you are considered a U.S. person if you are:
● An individual who is a U.S. citizen or U.S. resident alien;
● A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States;
● An estate (other than a foreign estate); or
● A domestic trust (as defined in Regulations section 301.7701-7).
Special rules for partnerships. Partnerships that conduct a trade or business in the United States are generally required to pay a withholding tax under section 1446 on any
foreign partners’ share of effectively connected taxable income from such business. Further, in certain cases where a Form W-9 has not been received, the rules under section 1446
require a partnership to presume that a partner is a foreign person, and pay the section 1446 withholding tax. Therefore, if you are a U.S. person that is a partner in a partnership
conducting a trade or business in the United States, provide Form W-9 to the partnership to establish your U.S. status and avoid section 1446 withholding on your share of
partnership income.
In the cases below, the following person must give Form W-9 to the partnership for purposes of establishing its U.S. status and avoiding withholding on its allocable share of net
income from the partnership conducting a trade or business in the United States:
● In the case of a disregarded entity with a U.S. owner, the U.S. owner of the disregarded entity and not the entity;
● In the case of a grantor trust with a U.S. grantor or other U.S. owner, generally, the U.S. grantor or other U.S. owner of the grantor trust and not the trust; and
● In the case of a U.S. trust (other than a grantor trust), the U.S. trust (other than a grantor trust) and not the beneficiaries of the trust.
Foreign person. If you are a foreign person or the U.S. branch of a foreign bank that has elected to be treated as a U.S. person, do not use Form W-9. Instead, use the appropriate
Form W-8 or Form 8233 (see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities).
Nonresident alien who becomes a resident alien. Generally, only a nonresident alien individual may use the terms of a tax treaty to reduce or eliminate U.S. tax on certain types
of income. However, most tax treaties contain a provision known as a “saving clause.” Exceptions specified in the saving clause may permit an exemption from tax to continue for
certain types of income even after the payee has otherwise become a U.S. resident alien for tax purposes.
If you are a U.S. resident alien who is relying on an exception contained in the saving clause of a tax treaty to claim an exemption from U.S. tax on certain types of income, you
must attach a statement to Form W-9 that specifies the following five items:
1. The treaty country. Generally, this must be the same treaty under which you claimed exemption from tax as a nonresident alien.
2. The treaty article addressing the income.
3. The article number (or location) in the tax treaty that contains the saving clause and its exceptions.
4. The type and amount of income that qualifies for the exemption from tax.
5. Sufficient facts to justify the exemption from tax under the terms of the treaty article.
Example. Article 20 of the U.S.-China income tax treaty allows an exemption from tax for scholarship income received by a Chinese student temporarily present in the United
States. Under U.S. law, this student will become a resident alien for tax purposes if his or her stay in the United States exceeds 5 calendar years. However, paragraph 2 of the first
Protocol to the U.S.-China treaty (dated April 30, 1984) allows the provisions of Article 20 to continue to apply even after the Chinese student becomes a resident alien of the
United States. A Chinese student who qualifies for this exception (under paragraph 2 of the first protocol) and is relying on this exception to claim an exemption from tax on his or
her scholarship or fellowship income would attach to Form W-9 a statement that includes the information described above to support that exemption.
If you are a nonresident alien or a foreign entity, give the requester the appropriate completed Form W-8 or Form 8233.
Backup Withholding
What is backup withholding? Persons making certain payments to you must under certain conditions withhold and pay to the IRS 28% of such payments. This is called “backup
withholding.” Payments that may be subject to backup withholding include interest, tax-exempt interest, dividends, broker and barter exchange transactions, rents, royalties,
nonemployee pay, payments made in settlement of payment card and third party network transactions, and certain payments from fishing boat operators. Real estate transactions
are not subject to backup withholding.
You will not be subject to backup withholding on payments you receive if you give the requester your correct TIN, make the proper certifications, and report all your taxable
interest and dividends on your tax return.
Payments you receive will be subject to backup withholding if:
1. You do not furnish your TIN to the requester,
2. You do not certify your TIN when required (see the Part II instructions on page 3 for details),
3. The IRS tells the requester that you furnished an incorrect TIN,
4. The IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return (for reportable interest and
dividends only), or
5. You do not certify to the requester that you are not subject to backup withholding under 4 above (for reportable interest and dividend accounts opened after 1983 only).
Certain payees and payments are exempt from backup withholding. See Exempt payee code on page 3 and the separate Instructions for the Requester of Form W-9 for more
information.
Also see Special rules for partnerships above.
What is FATCA reporting?
The Foreign Account Tax Compliance Act (FATCA) requires a participating foreign financial institution to report all United States account holders that are specified United
States persons. Certain payees are exempt from FATCA reporting. See Exemption from FATCA reporting code on page 3 and the Instructions for the Requester of Form W-9
for more information.
Updating Your Information
You must provide updated information to any person to whom you claimed to be an exempt payee if you are no longer an exempt payee and anticipate receiving reportable
payments in the future from this person. For example, you may need to provide updated information if you are a C corporation that elects to be an S corporation, or if you no
longer are tax exempt. In addition, you must furnish a new Form W-9 if the name or TIN changes for the account; for example, if the grantor of a grantor trust dies.
Penalties
Failure to furnish TIN. If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
Civil penalty for false information with respect to withholding. If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to
a $500 penalty.
Criminal penalty for falsifying information. Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.
Misuse of TINs. If the requester discloses or uses TINs in violation of federal law, the requester may be subject to civil and criminal penalties.
Specific Instructions
Line 1
You must enter one of the following on this line; do not leave this line blank. The name should match the name on your tax return.
If this Form W-9 is for a joint account, list first, and then circle, the name of the person or entity whose number you entered in Part I of Form W-9.
a. Individual. Generally, enter the name shown on your tax return. If you have changed your last name without informing the Social Security Administration (SSA) of the name
change, enter your first name, the last name as shown on your social security card, and your new last name.
Note. ITIN applicant: Enter your individual name as it was entered on your Form W-7 application, line 1a. This should also be the same as the name you entered on the Form
1040/1040A/1040EZ you filed with your application.
b. Sole proprietor or single-member LLC. Enter your individual name as shown on your 1040/1040A/1040EZ on line 1. You may enter your business, trade, or “doing
business as” (DBA) name on line 2.
c. Partnership, LLC that is not a single-member LLC, C Corporation, or S Corporation. Enter the entity’s name as shown on the entity’s tax return on line 1 and any
business, trade, or DBA name on line 2.
d. Other entities. Enter your name as shown on required U.S. federal tax documents on line 1. This name should match the name shown on the charter or other legal document
creating the entity. You may enter any business, trade, or DBA name on line 2.
e. Disregarded entity. For U.S. federal tax purposes, an entity that is disregarded as an entity separate from its owner is treated as a “disregarded entity.” See Regulations
section 301.7701-2(c)(2)(iii). Enter the owner’s name on line 1. The name of the entity entered on line 1 should never be a disregarded entity. The name on line 1 should be the
name shown on the income tax return on which the income should be reported. For example, if a foreign LLC that is treated as a disregarded entity for U.S. federal tax purposes
has a single owner that is a U.S. person, the U.S. owner’s name is required to be provided on line 1. If the direct owner of the entity is also a disregarded entity, enter the first
owner that is not disregarded for federal tax purposes. Enter the disregarded entity’s name on line 2, “Business name/disregarded entity name.” If the owner of the disregarded
entity is a foreign person, the owner must complete an appropriate Form W-8 instead of a Form W-9. This is the case even if the foreign person has a U.S. TIN.
Form W-9 (Rev. 12-2014)
Page
3
Line 2
If you have a business name, trade name, DBA name, or disregarded entity name, you may enter it on line 2.
Line 3
Check the appropriate box in line 3 for the U.S. federal tax classification of the person whose name is entered on line 1. Check only one box in line 3.
Limited Liability Company (LLC). If the name on line 1 is an LLC treated as a partnership for U.S. federal tax purposes, check the “Limited Liability Company” box and enter
“P” in the space provided. If the LLC has filed Form 8832 or 2553 to be taxed as a corporation, check the “Limited Liability Company” box and in the space provided enter “C”
for C corporation or “S” for S corporation. If it is a single-member LLC that is a disregarded entity, do not check the “Limited Liability Company” box; instead check the first box
in line 3 “Individual/sole proprietor or single-member LLC.”
Line 4, Exemptions
If you are exempt from backup withholding and/or FATCA reporting, enter in the appropriate space in line 4 any code(s) that may apply to you.
Exempt payee code.
● Generally, individuals (including sole proprietors) are not exempt from backup withholding.
● Except as provided below, corporations are exempt from backup withholding for certain payments, including interest and dividends.
● Corporations are not exempt from backup withholding for payments made in settlement of payment card or third party network transactions.
● Corporations are not exempt from backup withholding with respect to attorneys’ fees or gross proceeds paid to attorneys, and corporations that provide medical or health care
services are not exempt with respect to payments reportable on Form 1099-MISC.
The following codes identify payees that are exempt from backup withholding. Enter the appropriate code in the space in line 4.
1—An organization exempt from tax under section 501(a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401(f)(2)
2—The United States or any of its agencies or instrumentalities
3—A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities
4—A foreign government or any of its political subdivisions, agencies, or instrumentalities
5—A corporation
6—A dealer in securities or commodities required to register in the United States, the District of Columbia, or a U.S. commonwealth or possession
7—A futures commission merchant registered with the Commodity Futures Trading Commission
8—A real estate investment trust
9—An entity registered at all times during the tax year under the Investment Company Act of 1940
10—A common trust fund operated by a bank under section 584(a)
11—A financial institution
12—A middleman known in the investment community as a nominee or custodian
13—A trust exempt from tax under section 664 or described in section 4947
The following chart shows types of payments that may be exempt from backup withholding. The chart applies to the exempt payees listed above, 1 through 13.
IF the payment is for . . .
Interest and dividend payments
THEN the payment is exempt for . . .
Broker transactions
Exempt payees 1 through 4 and 6 through 11 and all C corporations. S corporations
must not enter an exempt payee code because they are exempt only for sales of
noncovered securities acquired prior to 2012.
Barter exchange transactions and patronage dividends
Exempt payees 1 through 4
Payments over $600 required to be reported and direct sales over $5,000 1
Generally, exempt payees 1 through 52
Payments made in settlement of payment card or third party network transactions
Exempt payees 1 through 4
All exempt payees except for 7
1
See Form 1099-MISC, Miscellaneous Income, and its instructions.
2
However, the following payments made to a corporation and reportable on Form 1099-MISC are not exempt from backup withholding: medical and health care payments, attorneys’ fees,
gross proceeds paid to an attorney reportable under section 6045(f), and payments for services paid by a federal executive agency.
Exemption from FATCA reporting code. The following codes identify payees that are exempt from reporting under FATCA. These codes apply to persons submitting this form
for accounts maintained outside of the United States by certain foreign financial institutions. Therefore, if you are only submitting this form for an account you hold in the United
States, you may leave this field blank. Consult with the person requesting this form if you are uncertain if the financial institution is subject to these requirements. A requester
may indicate that a code is not required by providing you with a Form W-9 with “Not Applicable” (or any similar indication) written or printed on the line for a FATCA
exemption code.
A—An organization exempt from tax under section 501(a) or any individual retirement plan as defined in section 7701(a)(37)
B—The United States or any of its agencies or instrumentalities
C—A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities
D—A corporation the stock of which is regularly traded on one or more established securities markets, as described in Regulations section 1.1472-1(c)(1)(i)
E—A corporation that is a member of the same expanded affiliated group as a corporation described in Regulations section 1.1472-1(c)(1)(i)
F—A dealer in securities, commodities, or derivative financial instruments (including notional principal contracts, futures, forwards, and options) that is registered as such
under the laws of the United States or any state
G—A real estate investment trust
H—A regulated investment company as defined in section 851 or an entity registered at all times during the tax year under the Investment Company Act of 1940
I—A common trust fund as defined in section 584(a)
J—A bank as defined in section 581
K—A broker
L—A trust exempt from tax under section 664 or described in section 4947(a)(1)
M—A tax exempt trust under a section 403(b) plan or section 457(g) plan
Note. You may wish to consult with the financial institution requesting this form to determine whether the FATCA code and/or exempt payee code should be completed.
Line 5
Enter your address (number, street, and apartment or suite number). This is where the requester of this Form W-9 will mail your information returns.
Line 6
Enter your city, state, and ZIP code.
Part I. Taxpayer Identification Number (TIN)
Enter your TIN in the appropriate box. If you are a resident alien and you do not have and are not eligible to get an SSN, your TIN is your IRS individual taxpayer
identification number (ITIN). Enter it in the social security number box. If you do not have an ITIN, see How to get a TIN below.
If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN. However, the IRS prefers that you use your SSN.
If you are a single-member LLC that is disregarded as an entity separate from its owner (see Limited Liability Company (LLC) on this page), enter the owner’s SSN (or EIN, if
the owner has one). Do not enter the disregarded entity’s EIN. If the LLC is classified as a corporation or partnership, enter the entity’s EIN.
Note. See the chart on page 4 for further clarification of name and TIN combinations.
How to get a TIN. If you do not have a TIN, apply for one immediately. To apply for an SSN, get Form SS-5, Application for a Social Security Card, from your local SSA office
or get this form online at www.ssa.gov. You may also get this form by calling 1-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer Identification
Number, to apply for an ITIN, or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can apply for an EIN online by accessing the IRS
website at www.irs.gov/businesses and clicking on Employer Identification Number (EIN) under Starting a Business. You can get Forms W-7 and SS-4 from the IRS by
visiting IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676).
If you are asked to complete Form W-9 but do not have a TIN, apply for a TIN and write “Applied For” in the space for the TIN, sign and date the form, and give it to the
requester. For interest and dividend payments, and certain payments made with respect to readily tradable instruments, generally you will have 60 days to get a TIN and give it to
the requester before you are subject to backup withholding on payments. The 60-day rule does not apply to other types of payments. You will be subject to backup withholding on
all such payments until you provide your TIN to the requester.
Note. Entering “Applied For” means that you have already applied for a TIN or that you intend to apply for one soon.
Caution: A disregarded U.S. entity that has a foreign owner must use the appropriate Form W-8.
Form W-9 (Rev. 12-2014)
Page
4
Part II. Certification
To establish to the withholding agent that you are a U.S. person, or resident alien, sign Form W-9. You may be requested to sign by the withholding agent even if items 1, 4, or 5
below indicate otherwise.
For a joint account, only the person whose TIN is shown in Part I should sign (when required). In the case of a disregarded entity, the person identified on line 1 must sign.
Exempt payees, see Exempt payee code earlier.
Signature requirements. Complete the certification as indicated in items 1 through 5 below.
1. Interest, dividend, and barter exchange accounts opened before 1984 and broker accounts considered active during 1983. You must give your correct TIN, but you do
not have to sign the certification.
2. Interest, dividend, broker, and barter exchange accounts opened after 1983 and broker accounts considered inactive during 1983. You must sign the certification or
backup withholding will apply. If you are subject to backup withholding and you are merely providing your correct TIN to the requester, you must cross out item 2 in the
certification before signing the form.
3. Real estate transactions. You must sign the certification. You may cross out item 2 of the certification.
4. Other payments. You must give your correct TIN, but you do not have to sign the certification unless you have been notified that you have previously given an incorrect
TIN. “Other payments” include payments made in the course of the requester’s trade or business for rents, royalties, goods (other than bills for merchandise), medical and health
care services (including payments to corporations), payments to a nonemployee for services, payments made in settlement of payment card and third party network transactions,
payments to certain fishing boat crew members and fishermen, and gross proceeds paid to attorneys (including payments to corporations).
5. Mortgage interest paid by you, acquisition or abandonment of secured property, cancellation of debt, qualified tuition program payments (under section 529), IRA,
Coverdell ESA, Archer MSA or HSA contributions or distributions, and pension distributions. You must give your correct TIN, but you do not have to sign the
certification.
What Name and Number To Give the Requester
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
For this type of account:
Individual
Two or more individuals (joint account)
Custodian account of a minor (Uniform Gift to Minors Act)
a. The usual revocable savings trust (grantor is also trustee)
b. So-called trust account that is not a legal or valid trust under state law
Sole proprietorship or disregarded entity owned by an individual
Grantor trust filing under Optional Form 1099 Filing Method 1 (see Regulations
section 1.671-4(b)(2)(i)(A))
For this type of account:
Disregarded entity not owned by an individual
A valid trust, estate, or pension trust
Corporation or LLC electing corporate status on Form 8832 or Form 2553
Association, club, religious, charitable, educational, or other tax-exempt
organization
Partnership or multi-member LLC
A broker or registered nominee
Account with the Department of Agriculture in the name of a public entity
(such as a state or local government, school district, or prison) that receives
agricultural program payments
Grantor trust filing under the Form 1041 Filing Method or the Optional Form
1099 Filing Method 2 (see Regulations section 1.671-4(b)(2)(i)(B))
Give name and SSN of:
The individual
The actual owner of the account or, if combined funds, the first individual on the
account 1
The minor2
The grantor-trustee1
The actual owner1
The owner3
The grantor*
Give name and EIN of:
The owner
Legal entity4
The corporation
The organization
The partnership
The broker or nominee
The public entity
The trust
1
List first and circle the name of the person whose number you furnish. If only one person on a joint account has an SSN, that person’s number must be furnished.
2
Circle the minor’s name and furnish the minor’s SSN.
3
You must show your individual name and you may also enter your business or DBA name on the “Business name/disregarded entity” name line. You may use either your SSN or EIN
(if you have one), but the IRS encourages you to use your SSN.
4
List first and circle the name of the trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in
the account title.) Also see Special rules for partnerships on page 2.
* Note. Grantor also must provide a Form W-9 to trustee of trust.
Note. If no name is circled when more than one name is listed, the number will be considered to be that of the first name listed.
Secure Your Tax Records from Identity Theft
Identity theft occurs when someone uses your personal information such as your name, SSN, or other identifying information, without your permission, to commit fraud or other
crimes. An identity thief may use your SSN to get a job or may file a tax return using your SSN to receive a refund.
To reduce your risk:
● Protect your SSN,
● Ensure your employer is protecting your SSN, and
● Be careful when choosing a tax preparer.
If your tax records are affected by identity theft and you receive a notice from the IRS, respond right away to the name and phone number printed on the IRS notice or letter.
If your tax records are not currently affected by identity theft but you think you are at risk due to a lost or stolen purse or wallet, questionable credit card activity or credit report,
contact the IRS Identity Theft Hotline at 1-800-908-4490 or submit Form 14039.
For more information, see Publication 4535, Identity Theft Prevention and Victim Assistance.
Victims of identity theft who are experiencing economic harm or a system problem, or are seeking help in resolving tax problems that have not been resolved through normal
channels, may be eligible for Taxpayer Advocate Service (TAS) assistance. You can reach TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD
1-800-829-4059.
Protect yourself from suspicious emails or phishing schemes. Phishing is the creation and use of email and websites designed to mimic legitimate business emails and
websites. The most common act is sending an email to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private
information that will be used for identity theft.
The IRS does not initiate contacts with taxpayers via emails. Also, the IRS does not request personal detailed information through email or ask taxpayers for the PIN numbers,
passwords, or similar secret access information for their credit card, bank, or other financial accounts.
If you receive an unsolicited email claiming to be from the IRS, forward this message to [email protected] You may also report misuse of the IRS name, logo, or other IRS
property to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484. You can forward suspicious emails to the Federal Trade Commission at:
[email protected] or contact them at www.ftc.gov/idtheft or 1-877-IDTHEFT (1-877-438-4338).
Visit IRS.gov to learn more about identity theft and how to reduce your risk.
Privacy Act Notice
Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons (including federal agencies) who are required to file information returns with the
IRS to report interest, dividends, or certain other income paid to you; mortgage interest you paid; the acquisition or abandonment of secured property; the cancellation of debt; or
contributions you made to an IRA, Archer MSA, or HSA. The person collecting this form uses the information on the form to file information returns with the IRS, reporting the
above information. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation and to cities, states, the District of Columbia, and
U.S. commonwealths and possessions for use in administering their laws. The information also may be disclosed to other countries under a treaty, to federal and state agencies to
enforce civil and criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. You must provide your TIN whether or not you are required to file a
tax return. Under section 3406, payers must generally withhold a percentage of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to the
payer. Certain penalties may also apply for providing false or fraudulent information.
The Depositary for the Offer to Purchase is:
If delivering by mail:
If delivering by hand or courier:
American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
P.O. Box 2042
New York, New York 10272-2042
American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
6201 15th Avenue
Brooklyn, New York 11219
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL
NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
Any questions or requests for assistance may be directed to the Information Agent at its telephone number and location listed
below. Requests for additional copies of this Offer to Purchase and the Letter of Transmittal may be directed either to the Information
Agent at its telephone number and location listed below. You may also contact your broker, dealer, commercial bank or trust company
or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Shareholders may call toll free: (888) 750-5834
Banks and brokers may call collect: (212) 750-5833
Exhibit (a)(1)(C)
NOTICE OF GUARANTEED DELIVERY
For Tender of All Outstanding Ordinary Shares
of
AVG TECHNOLOGIES N.V.
at
$25.00 Per Share
Pursuant to the Offer to Purchase dated July 29, 2016
by
AVAST SOFTWARE B.V.
a direct wholly owned subsidiary of
AVAST HOLDING B.V.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON AUGUST 31,
2016, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.
This Notice of Guaranteed Delivery, or one substantially in the form hereof, must be used to accept the Offer (as defined below)
if (a) the procedure for delivery of book-entry transfer of ordinary shares, with a nominal value of €0.01 per share, of AVG
Technologies N.V., a public limited liability company ( naamloze vennootschap ) organized under the laws of The Netherlands,
cannot be completed prior to 11:59 p.m., New York City time, on August 31, 2016 (the “Expiration Time,” unless the Offer is
extended in accordance with the Purchase Agreement (as defined in the Offer to Purchase), in which event “Expiration Time” will
mean the latest time and date at which the Offer, as so extended by Purchaser (as defined below), will expire), (b) the procedure for
book-entry transfer cannot be completed on a timely basis or (c) time will not permit delivery of all of the required documents to the
American Stock Transfer & Trust Company, LLC (the “Depositary”) prior to the Expiration Time. This Notice of Guaranteed
Delivery may be delivered by overnight courier or transmitted by facsimile or mailed to the Depositary. See Section 3 — “Procedures
for Accepting the Offer and Tendering Shares” of the Offer to Purchase (as defined below).
The Depositary for the Tender Offer is:
American Stock Transfer & Trust Company, LLC
If delivering by mail:
American Stock Transfer & Trust
Company, LLC
Operations Center
Attn: Reorganization Department
P.O. Box 2042
New York, New York 10272-2042
By Facsimile Transmission:
(For Eligible Institutions Only)
(718) 234-5001
If delivering by hand or courier:
(by 5:00p.m. ET)
American Stock Transfer & Trust
Company, LLC
Operations Center
Attn: Reorganization Department
6201 15th Avenue
Brooklyn, New York 11219
Confirm Facsimile by
Telephone:
(877)248-6417
(For Confirmation Only)
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA
FACSIMILE TRANSMISSION, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY TO THE DEPOSITARY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF
TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE
INSTITUTION (AS DEFINED IN SECTION 3 — “PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING
SHARES” OF THE OFFER TO PURCHASE) UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE
GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE
APPROPRIATE LETTER OF TRANSMITTAL.
The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the
Letter of Transmittal (as defined below) or an Agent’s Message (as defined in Section 2 — “Acceptance for Payment and
Payment for Shares” of the Offer to Purchase) to the Depositary within the time period shown herein. Failure to do so could
result in a financial loss to such Eligible Institution.
Ladies and Gentlemen:
The undersigned hereby tenders to Avast Software B.V., a private company with limited liability (besloten vennootschap met
beperkte aansprakelijkheid ) organized under the laws of The Netherlands (“Purchaser”) and a direct wholly owned subsidiary of
Avast Holding B.V., a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) organized
under the laws of The Netherlands, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated July 29, 2016
(the “Offer to Purchase”), and the related Letter of Transmittal (the “Letter of Transmittal” and, together with the Offer to Purchase, as
each may be amended or supplemented from time to time, the “Offer”), receipt of which is hereby acknowledged, the number of
ordinary shares, with a nominal value of €0.01 per share (the “Shares”), of AVG Technologies N.V., a public limited liability
company ( naamloze vennootschap ) organized under the laws of The Netherlands, specified below, pursuant to the guaranteed
delivery procedure set forth in Section 3 — “Procedures for Accepting the Offer and Tendering Shares” of the Offer to Purchase.
Shares tendered by the Notice of Guaranteed Delivery will be excluded from the calculation of the Minimum Condition (as defined in
the Offer to Purchase), unless such Shares and other required documents are received by the Depositary by the Expiration Time.
Number of Shares:
 Check here if Shares will be tendered by book entry transfer
DTC Account Number:
Name of Tendering Institution:
Date:
Name(s) of Holder(s)::
(Please Print)
Signature(s):
Address(es):
(Zip Code)
Area Code and Telephone Number(s):
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, an Eligible Institution (as defined in Section 3 — “Procedures for Accepting the Offer and Tendering Shares”
of the Offer to Purchase), hereby (a) represents that the tender of Shares effected hereby complies with Rule 14e-4 under the Securities
Exchange Act of 1934, as amended, and, (b) within three New York Stock Exchange trading days after the date hereof, guarantees
delivery to the Depositary, at its address set forth above, of a confirmation of a book-entry transfer of such Shares into the
Depositary’s account at the Depositary Trust Company (pursuant to the procedures set forth in Section 3 — “Procedures for Accepting
the Offer and Tendering Shares” of the Offer to Purchase), together with a properly completed and duly executed Letter of Transmittal
or an Agent’s Message (as defined in Section 2 — “Acceptance for Payment and Payment for Shares” of the Offer to Purchase), and
any other documents required by the Letter of Transmittal.
Name of Firm:
Authorized Signature
Addre
ss:
Name
:
Zip Code
Please Type or Print
Title:
Area Code and Tel. No.:
Dated:
Exhibit (a)(1)(D)
Offer To Purchase For Cash
All Outstanding Ordinary Shares of
AVG TECHNOLOGIES N.V.
at
$25.00 Per Share
Pursuant to the Offer to Purchase dated July 29, 2016
by
AVAST SOFTWARE B.V.
a direct wholly owned subsidiary of
AVAST HOLDING B.V.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON AUGUST 31,
2016, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.
July 29, 2016
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been engaged by Avast Software B.V., a private company with limited liability (besloten vennootschap met beperkte
aansprakelijkheid ) organized under the laws of The Netherlands (“Purchaser”) and a direct wholly owned subsidiary of Avast
Holding B.V., a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) organized under the
laws of The Netherlands (“Parent”), to act as Information Agent (the “Information Agent”) in connection with Purchaser’s offer to
purchase all outstanding ordinary shares, with a nominal value of €0.01 per share (the “Shares”), of AVG Technologies N.V., a public
limited liability company ( naamloze vennootschap ) organized under the laws of The Netherlands (“AVG”), at a purchase price of
$25.00 per Share (the “Offer Price”), in cash, without interest and less applicable withholding taxes or other taxes, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated July 29, 2016 (the “Offer to Purchase”), and the related Letter of
Transmittal (the “Letter of Transmittal” and, together with the Offer to Purchase, as each may be amended or supplemented from time
to time, the “Offer”) enclosed herewith. Please furnish copies of the enclosed materials to those of your clients for whom you hold
Shares registered in your name or in the name of your nominee.
The Offer is not subject to a financing condition. Certain conditions to the Offer are described in Section 15 — “Certain
Conditions of the Offer” of the Offer to Purchase.
For your information and for forwarding to your clients for whom you hold Shares registered in your name or in the name of
your nominee, we are enclosing the following documents:
1. The Offer to Purchase;
2. The Solicitation/Recommendation Statement on Schedule 14D-9 of AVG;
3. The Letter of Transmittal for your use in accepting the Offer and tendering Shares and for the information of your clients,
together with the included Internal Revenue Service Form W-9;
4. A Notice of Guaranteed Delivery to be used to accept the Offer if the Shares and all other required documents cannot be
delivered to American Stock Transfer & Trust Company, LLC (the “Depositary”) by 11:59 p.m., New York City time, on August 31,
2016 (the “Expiration Time,” unless the Offer is extended in accordance with the Purchase Agreement (as defined below), in which
event “Expiration Time” will mean the latest time and date at which the Offer, as so extended by Purchaser, will expire) or if the
procedure for book-entry transfer cannot be completed by the Expiration Time;
5. A form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name
of your nominee, with space provided for obtaining such clients’ instructions with regard to the Offer; and
6. A return envelope addressed to the “Depositary for your use only.”
We urge you to contact your clients as promptly as possible. Please note that the Offer and withdrawal rights will expire
at 11:59 p.m., New York City time, on August 31, 2016, unless the Offer is extended or earlier terminated.
The Offer is being made pursuant to a Purchase Agreement, dated as of July 6, 2016 (as it may be amended from time to time,
the “Purchase Agreement”), by and among AVG, Purchaser and Parent. The Purchase Agreement provides, among other things, that,
subject to the terms and conditions set forth therein, Purchaser will, promptly after the Expiration Time, accept for payment all Shares
validly tendered pursuant to the Offer and not properly withdrawn (the time of acceptance of Shares for payment, the “Acceptance
Time”) and, promptly after the Acceptance Time, pay for all such Shares (such time of payment, the “Offer Closing”).
Following the Expiration Time, Purchaser intends to provide for a subsequent offering period (the “Subsequent Offering
Period”) of at least 10 business days in accordance with Rule 14d-11 under the Securities Exchange Act of 1934 and in accordance
with the Purchase Agreement. The Subsequent Offering Period may be extended by Purchaser in accordance with the Purchase
Agreement for at least seven business days following the announcement that Purchaser or its designee intends to effect the Asset Sale
(as defined below) (such extension, the “Minority Exit Offering Period”).
The Purchase Agreement provides, among other things, that, as promptly as practicable following the closing of the Subsequent
Offering Period (which includes the Minority Exit Offering Period, if applicable), Purchaser may complete a corporate reorganization
of AVG and its subsidiaries (the “Subsequent Reorganization”). The Subsequent Reorganization will utilize processes available to
Purchaser under Dutch law to ensure that (a) Purchaser becomes the owner of all of AVG’s business operations from and after the
consummation of the Subsequent Reorganization and (b) any AVG shareholders who do not tender their Shares pursuant to the Offer
(or during the Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable) are offered or receive the
same consideration for their Shares as those shareholders who tendered their Shares pursuant to the Offer (or during the Subsequent
Offering Period, which includes the Minority Exit Offering Period, if applicable), without interest and less applicable withholding
taxes (including Dutch dividend withholding tax ( dividendbelasting )) or other taxes. As a result of the Subsequent Reorganization, it
is anticipated that AVG will be liquidated or become wholly owned by Purchaser. The Subsequent Reorganization may also include
the conversion of AVG from a public limited liability company ( naamloze vennootschap ) to a private company with limited liability
( besloten vennootschap met beperkte aansprakelijkheid ).
If the number of Shares tendered pursuant to the Offer and not properly withdrawn (including Shares validly tendered during the
Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable, but excluding Shares tendered pursuant
to guaranteed delivery procedures that have not yet been delivered in settlement or satisfaction of such guarantee prior to the
Expiration Time), together with the Shares then owned by Parent, Purchaser and their respective subsidiaries, represents at least 95
percent of the then outstanding Shares, Purchaser intends to effect the Subsequent Reorganization by means of compulsory acquisition
of Shares held by non-tendering AVG shareholders in accordance with Section 2:92a or Section 2:201a of the Dutch Civil Code (the
“Compulsory Acquisition”).
If the number of Shares tendered pursuant to the Offer and not properly withdrawn (including Shares validly tendered during the
Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable, but excluding Shares tendered pursuant
to guaranteed delivery procedures that have not yet been delivered in settlement or satisfaction of such guarantee prior to the
Expiration Time), together with the Shares then owned by Parent, Purchaser and their respective subsidiaries, represents fewer than 95
percent but at least 80 percent of the then outstanding Shares, Purchaser intends to, or intends to cause its designee to, subject to the
approval of AVG shareholders at the EGM (as defined below), promptly after the closing of the Subsequent Offering Period (which
includes the Minority Exit Offering Period, if applicable), effect the Subsequent Reorganization by means of a sale of all or
substantially all of the assets of AVG to Purchaser or its designee in exchange for (a) cash and a
note payable in an aggregate amount equal to the Offer Price multiplied by the total number of Shares outstanding as of the Offer
Closing and (b) the assumption by Purchaser or its designee of substantially all liabilities of AVG (the “Asset Sale”).
If Parent determines it is not reasonably practicable (which will be deemed to include adverse tax consequences) to cause the
Compulsory Acquisition or the Asset Sale and Liquidation Distribution, it will use reasonable best efforts to cause a Subsequent
Reorganization in a different manner with the prior approval of the independent directors of AVG (the “Independent Directors”). The
Compulsory Acquisition and the Asset Sale and Dissolution have been unanimously approved by the AVG Boards (as defined below)
(including the Independent Directors).
Upon consummation of the Asset Sale, Purchaser would own all of AVG’s business operations and would be the principal
shareholder in AVG, and the non-tendering AVG shareholders would continue to own Shares representing, in the aggregate, a
minority of the Shares then outstanding. Upon completion of the Asset Sale, AVG will be dissolved and liquidated in accordance with
applicable Dutch liquidation procedures (the “Dissolution”). Purchaser would then provide an indemnity or guarantee to the liquidator
for any deficit in the estate of AVG, to enable the liquidator to make an advance liquidation distribution in cash (the “Liquidation
Distribution”) to each AVG shareholder in an amount equal to the Offer Price, without interest and less applicable withholding taxes
(including Dutch dividend withholding tax) or other taxes, for each Share then owned.
After due and careful discussion and consideration, including a thorough review of the Offer with their outside legal and
financial advisors, AVG’s supervisory board (the “AVG Supervisory Board”) and management board (the “AVG Management
Board,” and together with the AVG Supervisory Board, the “AVG Boards”) by unanimous vote of all directors present or represented
and voting (a) approved the terms of, and the transactions contemplated by, the Purchase Agreement, the Asset Sale Agreement (as
defined in the Offer to Purchase) and all other documents conducive to AVG’s obligations under the Purchase Agreement
(collectively, the “AVG Transaction Documents”), and approved AVG’s entry into the AVG Transaction Documents; and (b)
determined to support the Offer and to recommend that AVG shareholders accept the Offer, subject to the terms and conditions of the
AVG Transaction Documents. The AVG Boards also unanimously approved (i) the Asset Sale, the subsequent Dissolution and the
Liquidation Distribution and the appointment of a liquidator; (ii) the terms and conditions of the Asset Sale Agreement and the entry
into the Asset Sale Agreement by AVG upon Purchaser’s request as set forth in the AVG Transaction Documents; and (iii) the
proposed amendment of the articles of association of AVG if the Asset Sale is pursued and the proposed amendment of the articles of
association of AVG and conversion of AVG into a private company with limited liability if the Asset Sale is not pursued.
The AVG Boards unanimously support the Offer and recommend that AVG shareholders accept the Offer. The AVG
Boards unanimously recommend that you vote “for” each of the items that contemplate a vote of AVG shareholders at the
extraordinary general meeting of AVG shareholders scheduled to be held on August 23, 2016 at 10:00 A.M., Central European
Time, at the offices of Allen & Overy LLP, Apollolaan 15, 1077 AB Amsterdam, The Netherlands (the “EGM”). At the EGM,
AVG shareholders will be requested to vote on the Asset Sale, the Dissolution, the Liquidation Distribution, the appointment
of the liquidator, the appointment of directors designated by Purchaser to the AVG Boards and other matters contemplated
by the Purchase Agreement. See the website of AVG (www.avg.com) for the full agenda and explanatory notes for the EGM. The
information on, or that can be accessed through, AVG’s website neither constitutes a part of the Offer to Purchase nor is incorporated
by reference therein.
In order for a shareholder to validly tender Shares pursuant to the Offer, either (a) confirmation of a book-entry transfer of such
Shares into the Depositary’s account at the Depositary Trust Company pursuant to the procedures set forth in Section 3 —
“Procedures for Accepting the Offer and Tendering Shares” of the Offer to Purchase, together with the Letter of Transmittal, properly
completed and duly executed, with any required signature guarantees or an Agent’s Message (as defined in Section 2 — “Acceptance
for Payment and Payment for Shares” of the Offer to Purchase) in lieu of a Letter of Transmittal and any other documents required by
the
Letter of Transmittal must be received by the Depositary at its addresses set forth on the back cover of the Offer to Purchase and, or
(b) the tendering shareholder must comply with the guaranteed delivery procedures described in the Offer to Purchase. No alternative,
conditional or contingent tenders will be accepted. Shares tendered by the Notice of Guaranteed Delivery will be excluded from the
calculation of the Minimum Condition (as defined in the Offer to Purchase), unless such Shares and other required documents are
received by the Depositary by the Expiration Time.
Except as set forth in the Offer to Purchase, neither Parent nor Purchaser will pay any fees or commissions to any broker or
dealer or to any other person (other than to the Depositary and to the Information Agent) in connection with the solicitation of tenders
of Shares pursuant to the Offer. Brokers, dealers, commercial banks, trust companies and other nominees will, upon request, be
reimbursed by Purchaser for customary mailing and handling expenses incurred by them in forwarding offering materials to their
customers. Purchaser will pay all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, subject to Instruction 6
of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to, and additional copies of the enclosed materials
may be obtained from, the undersigned at the address and telephone numbers set forth below.
Very truly yours,
Innisfree M&A Incorporated
Nothing contained herein or in the enclosed documents shall render you the agent of Purchaser, the Information Agent or the
Depositary or any affiliate of any of them or authorize you or any other person to use any document or make any statement on
behalf of any of them in connection with the Offer other than the enclosed documents and the statements contained therein.
The Information Agent for the Offer is:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Shareholders may call toll free: (888) 750-5834
Banks and brokers may call collect: (212) 750-5833
Exhibit (a)(1)(E)
Offer To Purchase For Cash
All Outstanding Ordinary Shares
of
AVG TECHNOLOGIES N.V.
at
$25.00 Per Share
Pursuant to the Offer to Purchase dated July 29, 2016 by
AVAST SOFTWARE B.V.
a direct wholly owned subsidiary of
AVAST HOLDING B.V.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON AUGUST 31,
2016, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.
July 29, 2016
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated July 29, 2016 (the “Offer to Purchase”), and the related Letter
of Transmittal (the “Letter of Transmittal” and, together with the Offer to Purchase, as each may be amended or supplemented from
time to time, the “Offer”) in connection with the offer by Avast Software B.V., a private company with limited liability ( besloten
vennootschap met beperkte aansprakelijkheid ) organized under the laws of The Netherlands (“Purchaser”) and a wholly owned direct
subsidiary of Avast Holding B.V., a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid )
organized under the laws of The Netherlands (“Parent”), to purchase all outstanding ordinary shares, with a nominal value of €0.01
per share (the “Shares”), of AVG Technologies N.V., a public limited liability company ( naamloze vennootschap ) organized under
the laws of The Netherlands (“AVG”), at a purchase price of $25.00 per Share (the “Offer Price”), in cash, without interest and less
applicable withholding taxes or other taxes, upon the terms and subject to the conditions of the Offer.
We or our nominees are the holder of record of Shares held for your account. A tender of such Shares can be made only by us as
the holder of record and pursuant to your instructions. The Letter of Transmittal accompanying this letter is furnished to you for your
information only and cannot be used by you to tender Shares held by us for your account.
We request instructions as to whether you wish us to tender any or all of the Shares held by us for your account, upon
the terms and subject to the conditions set forth in the enclosed Offer to Purchase and the Letter of Transmittal .
Please note carefully the following:
1. The Offer Price for the Offer is $25.00 per Share, in cash, without interest and less applicable withholding taxes or other
taxes.
2. The Offer is being made for all outstanding Shares.
3. The Offer is being made pursuant to a Purchase Agreement, dated as of July 6, 2016 (as it may be amended from time to time,
the “Purchase Agreement”), by and among AVG, Purchaser and Parent. The Purchase Agreement provides, among other things, that,
subject to the terms and conditions set forth therein, Purchaser will, promptly after the Expiration Time (as defined below), accept for
payment all Shares validly tendered pursuant to the Offer and not properly withdrawn (the time of acceptance of Shares for payment,
the “Acceptance Time”) and, promptly after the Acceptance Time, pay for all such Shares (such time of payment, the “Offer
Closing”).
Following the Expiration Time, Purchaser intends to provide for a subsequent offering period (the “Subsequent Offering
Period”) of at least 10 business days in accordance with Rule 14d-11 under the Securities
Exchange Act of 1934 and in accordance with the Purchase Agreement. The Subsequent Offering Period may be extended by
Purchaser in accordance with the Purchase Agreement for at least seven business days following the announcement that Purchaser or
its designee intends to effect the Asset Sale (as defined below) (such extension, the “Minority Exit Offering Period”).
The Purchase Agreement provides, among other things, that, as promptly as practicable following the closing of the Subsequent
Offering Period (which includes the Minority Exit Offering Period, if applicable), Purchaser may complete a corporate reorganization
of AVG and its subsidiaries (the “Subsequent Reorganization”). The Subsequent Reorganization will utilize processes available to
Purchaser under Dutch law to ensure that (a) Purchaser becomes the owner of all of AVG’s business operations from and after the
consummation of the Subsequent Reorganization and (b) any AVG shareholders who do not tender their Shares pursuant to the Offer
(or during the Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable) are offered or receive the
same consideration for their Shares as those shareholders who tendered their Shares pursuant to the Offer (or during the Subsequent
Offering Period, which includes the Minority Exit Offering Period, if applicable), without interest and less applicable withholding
taxes (including Dutch dividend withholding tax ( dividendbelasting )) or other taxes. As a result of the Subsequent Reorganization, it
is anticipated that AVG will be liquidated or become wholly owned by Purchaser. The Subsequent Reorganization may also include
the conversion of AVG from a public limited liability company ( naamloze vennootschap ) to a private company with limited liability
( besloten vennootschap met beperkte aansprakelijkheid ).
If the number of Shares tendered pursuant to the Offer and not properly withdrawn (including Shares validly tendered during the
Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable, but excluding Shares tendered pursuant
to guaranteed delivery procedures that have not yet been delivered in settlement or satisfaction of such guarantee prior to the
Expiration Time), together with the Shares then owned by Parent, Purchaser and their respective subsidiaries, represents at least 95
percent of the then outstanding Shares, Purchaser intends to effect the Subsequent Reorganization by means of compulsory acquisition
of Shares held by non-tendering AVG shareholders in accordance with Section 2:92a or Section 2:201a of the Dutch Civil Code (the
“Compulsory Acquisition”).
If the number of Shares tendered pursuant to the Offer and not properly withdrawn (including Shares validly tendered during the
Subsequent Offering Period, which includes the Minority Exit Offering Period, if applicable, but excluding Shares tendered pursuant
to guaranteed delivery procedures that have not yet been delivered in settlement or satisfaction of such guarantee prior to the
Expiration Time), together with the Shares then owned by Parent, Purchaser and their respective subsidiaries, represents fewer than 95
percent but at least 80 percent of the then outstanding Shares, Purchaser intends to, or intends to cause its designee to, subject to the
approval of AVG shareholders at the EGM (as defined below), promptly after the closing of the Subsequent Offering Period (which
includes the Minority Exit Offering Period, if applicable), effect the Subsequent Reorganization by means of a sale of all or
substantially all of the assets of AVG to Purchaser or its designee in exchange for (a) cash and a note payable in an aggregate amount
equal to the Offer Price multiplied by the total number of Shares outstanding as of the Offer Closing and (b) the assumption by
Purchaser or its designee of substantially all liabilities of AVG (the “Asset Sale”).
If Parent determines it is not reasonably practicable (which will be deemed to include adverse tax consequences) to cause the
Compulsory Acquisition or the Asset Sale and Liquidation Distribution, it will use reasonable best efforts to cause a Subsequent
Reorganization in a different manner with the prior approval of the independent directors of AVG (the “Independent Directors”). The
Compulsory Acquisition and the Asset Sale and Dissolution have been unanimously approved by the AVG Boards (as defined below)
(including the Independent Directors).
Upon consummation of the Asset Sale, Purchaser would own all of AVG’s business operations and would be the principal
shareholder in AVG, and the non-tendering AVG shareholders would continue to own Shares representing, in the aggregate, a
minority of the Shares then outstanding. Upon completion of the Asset Sale, AVG will be dissolved and liquidated in accordance with
applicable Dutch liquidation procedures (the
“Dissolution”). Purchaser would then provide an indemnity or guarantee to the liquidator for any deficit in the estate of AVG, to
enable the liquidator to make an advance liquidation distribution in cash (the “Liquidation Distribution”) to each AVG shareholder in
an amount equal to the Offer Price, without interest and less applicable withholding taxes (including Dutch dividend withholding tax)
or other taxes, for each Share then owned.
4. After due and careful discussion and consideration, including a thorough review of the Offer with their outside legal and
financial advisors, AVG’s supervisory board (the “AVG Supervisory Board”) and management board (the “AVG Management
Board,” and together with the AVG Supervisory Board, the “AVG Boards”) by unanimous vote of all directors present or represented
and voting (a) approved the terms of, and the transactions contemplated by, the Purchase Agreement, the Asset Sale Agreement (as
defined in the Offer to Purchase) and all other documents conducive to AVG’s obligations under the Purchase Agreement
(collectively, the “AVG Transaction Documents”), and approved AVG’s entry into the AVG Transaction Documents; and (b)
determined to support the Offer and to recommend that AVG shareholders accept the Offer, subject to the terms and conditions of the
AVG Transaction Documents. The AVG Boards also unanimously approved (i) the the Asset Sale, the subsequent Dissolution and the
Liquidation Distribution and the appointment of a liquidator; (ii) the terms and conditions of the Asset Sale Agreement and the entry
into the Asset Sale Agreement by AVG upon Purchaser’s request as set forth in the AVG Transaction Documents; and (iii) the
proposed amendment of the articles of association of AVG if the Asset Sale is pursued and the proposed amendment of the articles of
association of AVG and conversion of AVG into a private company with limited liability if the Asset Sale is not pursued.
The AVG Boards unanimously support the Offer and recommend that AVG shareholders accept the Offer. The AVG
Boards unanimously recommend that you vote “for” each of the items that contemplate a vote of AVG shareholders at the
extraordinary general meeting of AVG shareholders scheduled to be held on August 23, 2016 at 10:00 A.M., Central European
Time, at the offices of Allen & Overy LLP, Apollolaan 15, 1077 AB Amsterdam, The Netherlands (the “EGM”). At the EGM,
AVG shareholders will be requested to vote on the Asset Sale, the Dissolution, the Liquidation Distribution, the appointment
of the liquidator, the appointment of directors designated by Purchaser to the AVG Boards and other matters contemplated
by the Purchase Agreement. See the website of AVG (www.avg.com) for the full agenda and explanatory notes for the EGM. The
information on, or that can be accessed through, AVG’s website neither constitutes a part of the Offer to Purchase nor is incorporated
by reference therein.
5. The Offer and withdrawal rights will expire at 11:59 p.m., New York City time, on August 31, 2016 (the “Expiration Time,”
unless the Offer is extended in accordance with the Purchase Agreement, in which event “Expiration Time” will mean the latest time
and date at which the Offer, as so extended by Purchaser, will expire), unless the Offer is extended by Purchaser or earlier terminated.
6. The Offer is subject to certain conditions described in Section 15 — “Certain Conditions of the Offer” of the Offer to
Purchase.
7. Tendering shareholders who are record owners of their Shares and who tender directly to American Stock Transfer & Trust
Company, LLC (the “Depositary”) will not be obligated to pay brokerage fees, commissions or similar expenses except as set forth in
the Offer to Purchase or, except as otherwise provided in Instruction 6 of the Letter of Transmittal, stock transfer taxes with respect to
the purchase of Shares by Purchaser pursuant to the Offer.
If you wish to have us tender any or all of your Shares, then please so instruct us by completing, executing, detaching and
returning to us the Instruction Form on the detachable part hereof. An envelope to return your instructions to us is enclosed. If you
authorize tender of your Shares, then all such Shares will be tendered unless otherwise specified on the Instruction Form.
Your prompt action is requested. Your Instruction Form should be forwarded to us in ample time to permit us to submit
the tender on your behalf before the Expiration Time .
The Offer is not being made to (nor will tenders be accepted from or on behalf of) AVG shareholders in any jurisdiction in
which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of
such jurisdiction. However, we may, in our discretion, take such action as we deem necessary to make the Offer comply with the
laws of any such jurisdiction and extend the Offer to AVG shareholders in such jurisdiction in compliance with applicable
laws. In those jurisdictions where applicable laws require the Offer to be made by a licensed broker or dealer, the Offer will be
deemed to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such
jurisdiction to be designated by Purchaser.
INSTRUCTION FORM
With Respect to the Offer to Purchase for Cash
All Outstanding Ordinary Shares
of
AVG TECHNOLOGIES N.V.
at
$25.00 Per Share
Pursuant to the Offer to Purchase dated July 29, 2016
by
AVAST SOFTWARE B.V.
a direct wholly owned subsidiary of
AVAST HOLDING B.V.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON AUGUST 31,
2016, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated July 29, 2016 (the “Offer to
Purchase”), and the related Letter of Transmittal (the “Letter of Transmittal” and, together with the Offer to Purchase, as each may be
amended or supplemented from time to time, we the “Offer”), in connection with the offer by Avast Software B.V., a private company
with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) organized under the laws of The Netherlands
(“Purchaser”) and a direct wholly owned subsidiary of Avast Holding B.V., a private company with limited liability ( besloten
vennootschap met beperkte aansprakelijkheid ) organized under the laws of The Netherlands, to purchase all outstanding ordinary
shares, with a nominal value of €0.01 per share (the “Shares”), of AVG Technologies N.V., a public limited liability company (
naamloze vennootschap ) organized under the laws of The Netherlands, at a purchase price of $25.00 per Share, in cash, without
interest and less applicable withholding taxes or other taxes, upon the terms and subject to the conditions of the Offer.
The undersigned hereby instruct(s) you to tender to Purchaser the number of Shares indicated below or, if no number is
indicated, all Shares held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the
Offer. The undersigned understands and acknowledges that all questions as to the validity, form, eligibility (including time of receipt)
and acceptance for payment of any tender of Shares will be determined by Purchaser, in its sole discretion, which determination will
be final and binding upon the tendering party.
The method of delivery of this document is at the election and risk of the tendering shareholder. If delivery is by mail,
then registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be
allowed to ensure timely delivery prior to the Expiration Time (as defined in the Offer to Purchase).
Dated:
Number of Shares to be Tendered:
Shares*
Account Number:
Capacity**:
Signature(s):
Dated:
Please Type or Print Name(s) above
Please Type or Print Address(es) above (Including Zip Code)
Area Code and Telephone Number
Taxpayer Identification or Social Security Number(s)
*
**
Unless otherwise indicated, you are deemed to have instructed us to tender all Shares held by us for your account.
Please provide if signature is by an attorney-in-fact, executor, administrator, trustee, guardian, officer of a corporation or other
person acting in a fiduciary or representative capacity.
Please return this form to the brokerage firm or other nominee maintaining your account.
Exhibit (a)(1)(F)
This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below), and the provisions
herein are subject in their entirety to the provisions of the Offer (as defined below). The Offer is made solely by the Offer to Purchase
(as defined below), dated July 29, 2016, and the related Letter of Transmittal (as defined below) and any amendments or supplements
thereto, and is being made to all holders of Shares. The Offer is not being made to (nor will tenders be accepted from or on behalf of)
holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the
securities, “blue sky” or other laws of such jurisdiction or any administrative or judicial action pursuant thereto. In those
jurisdictions where applicable laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made
on behalf of Purchaser (as defined below) by one or more registered brokers or dealers licensed under the laws of such jurisdiction to
be designated by Purchaser .
Notice of Offer to Purchase for Cash
All Outstanding Ordinary Shares
of
AVG Technologies N.V.
at
$25.00 Per Share
Pursuant to the Offer to Purchase dated July 29, 2016
by
Avast Software B.V.
a direct wholly owned subsidiary of
Avast Holding B.V.
Avast Software B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) organized
under the laws of The Netherlands (“Purchaser”) and a direct wholly owned subsidiary of Avast Holding B.V., a private company
with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) organized under the laws of The Netherlands
(“Parent”), is offering to purchase all outstanding ordinary shares, with a nominal value of €0.01 per share (the “Shares”), of AVG
Technologies N.V., a public limited liability company ( naamloze vennootschap ) organized under the laws of The Netherlands
(“AVG”), at a purchase price of $25.00 per Share (the “Offer Price”), in cash, without interest and less applicable withholding taxes or
other taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated July 29, 2016 (the “Offer to
Purchase”), and in the related Letter of Transmittal (the “Letter of Transmittal” and, together with the Offer to Purchase, as each may
be amended or supplemented from time to time, the “Offer”).
Tendering shareholders who are record owners of their Shares and who tender directly to American Stock Transfer & Trust Company,
LLC (the “Depositary”) will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 6
of the Letter of Transmittal, stock transfer taxes with respect to the purchase of Shares by Purchaser pursuant to the Offer.
Shareholders who hold their Shares through a broker, dealer, commercial bank, trust company or other nominee should consult with
such broker, dealer, commercial bank, trust company or other nominee as to whether it charges any service fees or commissions.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON AUGUST 31,
2016 (THE “EXPIRATION TIME”), UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED .
The Offer is being made pursuant to a Purchase Agreement, dated as of July 6, 2016 (as it may be amended from time to time, the
“Purchase Agreement”), by and among AVG, Purchaser and Parent. The Purchase Agreement provides, among other things, that,
subject to the terms and conditions set forth therein, Purchaser will, promptly after the Expiration Time, accept for payment all Shares
validly tendered pursuant to the Offer and not properly withdrawn (the time of acceptance of Shares for payment, the “Acceptance
Time”) and, promptly after the Acceptance Time, pay for all such Shares. The terms and conditions of the Offer are more fully
described in the Offer to Purchase
After the consummation of the Offer, Purchaser intends to cause AVG to terminate the listing of the Shares on the New York Stock
Exchange (the “NYSE”). In addition, after the consummation of the Offer, Purchaser intends to cause the termination of the
registration of the Shares under the Securities Exchange Act of 1934 (as amended from time to time and, together with the rules and
regulations promulgated thereunder, the “Exchange Act”) as promptly as practicable and expects to take steps to cause the suspension
of all of AVG’s reporting obligations with the United States Securities and Exchange Commission (the “SEC”).
The Offer is conditioned upon, among other things, the satisfaction or waiver (to the extent permitted by the Purchase Agreement and
applicable law) of the following as of immediately prior to the Expiration Time: (a) the Minimum Condition (as defined below);
(b) clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the applicable antitrust laws of Germany and
Austria; and (c) clearance by the Committee on Foreign Investment in the United States.
The “Minimum Condition” requires that there have been validly tendered pursuant to the Offer and not properly withdrawn a number
of Shares (excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been delivered in settlement or
satisfaction of such guarantee prior to the Expiration Time) that, together with the Shares then owned by Parent, Purchaser and their
subsidiaries, represents at least 95% of, or, if certain approvals of AVG shareholders are obtained at the EGM (as defined below), at
least 80% of, the Shares outstanding immediately prior to the Expiration Time. The Offer is not subject to a financing condition but is
subject to other conditions as more fully described in the Offer to Purchase.
After due and careful discussion and consideration, including a thorough review of the Offer with their outside legal and financial
advisors, AVG’s supervisory board (the “AVG Supervisory Board”) and management board (the “AVG Management Board,” and
together with the AVG Supervisory Board, the “AVG Boards”) by unanimous vote of all directors present or represented and voting
(a) approved the terms of, and the transactions contemplated by, the Purchase Agreement, the Asset Sale Agreement (as defined in the
Offer to Purchase) and all other documents conducive to AVG’s obligations under the Purchase Agreement (collectively, the “AVG
Transaction Documents”), and approved AVG’s entry into the AVG Transaction Documents; and (b) determined to support the Offer
and the transactions contemplated by the Offer and to recommend the Offer, subject to the terms and conditions of the AVG
Transaction Documents. The AVG Boards also unanimously approved (i) the conditional sale and transfer of all assets and business of
AVG to Purchaser, the subsequent dissolution and liquidation of AVG and the distribution of the liquidation proceeds and the
appointment of a liquidator and custodian; (ii) the terms and conditions of the Asset Sale Agreement and the entry into the Asset Sale
Agreement by AVG upon Purchaser’s request as set forth in the AVG Transaction Documents; and (iii) the proposed amendment of
the articles of association of AVG if the Asset Sale (as defined below) is pursued and the proposed amendment of the articles of
association of AVG and conversion of AVG into a private company with limited liability if the Compulsory Acquisition (as defined
below) is pursued.
The AVG Boards unanimously recommend that you vote “for” each of the items that contemplate a vote of AVG shareholders
at the extraordinary general meeting of AVG shareholders scheduled to be held on August 23, 2016 at 10:00 A.M., Central
European Time, at the offices of Allen & Overy LLP, Apollolaan 15, 1077 AB Amsterdam, The Netherlands (the “EGM”). At
the EGM, AVG shareholders will be requested to vote on the Asset Sale, the Dissolution (as defined below), the Liquidation
Distribution (as defined below), the appointment of the liquidator, the appointment of directors designated by Purchaser to
the AVG Boards and other matters contemplated by the Purchase Agreement. See the website of AVG (www.avg.com) for the
full agenda and explanatory notes for the EGM. The information on, or that can be accessed through, AVG’s website neither
constitutes a part of the Offer to Purchase nor is incorporated by reference therein.
Following the Expiration Time, Purchaser intends to provide for a subsequent offering period (the “Subsequent Offering Period”) of at
least 10 business days in accordance with Rule 14d-11 under the Exchange Act and in accordance with the Purchase Agreement. The
Subsequent Offering Period may be extended by Purchaser in accordance with the Purchase Agreement for at least seven business
days following the announcement that Purchaser or its designee intends to effect the Asset Sale (such extension, the “Minority Exit
Offering Period”).
The Purchase Agreement provides, among other things, that, as promptly as practicable following the closing of the Subsequent
Offering Period (which includes the Minority Exit Offering Period, if applicable), Purchaser may complete a corporate reorganization
of AVG and its subsidiaries (the “Subsequent Reorganization”). If the number of Shares tendered pursuant to the Offer and not
properly withdrawn represents at least 95% of the then outstanding Shares, Purchaser intends to effect the Subsequent Reorganization
by means of compulsory acquisition of Shares held by non-tendering AVG shareholders in accordance with Section 2:92a or
Section 2:201a of the Dutch Civil Code (the “Compulsory Acquisition”). If the number of Shares tendered pursuant to the Offer and
not properly withdrawn represents fewer than 95% but at least 80% of the then outstanding Shares, Purchaser intends to, or intends to
cause its designee to, subject to the approval of AVG shareholders at the EGM, promptly after the closing of the Subsequent Offering
Period (which includes the Minority Exit Offering Period, if applicable), effect the Subsequent Reorganization by means of a sale of
all or substantially all of the assets of AVG to Purchaser (the “Asset Sale”). Upon consummation of the Asset Sale, Purchaser would
own all of AVG’s business operations and would be the principal shareholder in AVG, and the non-tendering AVG shareholders
would continue to own Shares representing, in the aggregate, a minority of the Shares then outstanding. Upon completion of the Asset
Sale, Purchaser or its designee, as the case may be, would cause AVG to be dissolved and liquidated in accordance with applicable
Dutch liquidation procedures (the “Dissolution”). Purchaser would then provide an indemnity or guarantee to the liquidator for any
deficit in the estate of AVG, to enable the liquidator to make an advance liquidation distribution in cash (the “Liquidation
Distribution”) to each non-tendering AVG shareholder in an amount equal to the Offer Price, without interest and less applicable
withholding taxes (including Dutch dividend withholding tax) or other taxes, for each Share then owned. The Subsequent
Reorganization is more fully described in the Offer to Purchase.
Pursuant to the Purchase Agreement, subject to the Purchaser’s rights to terminate the Purchase Agreement in accordance with its
terms: (a) if any condition to the Offer is not satisfied or waived at the Expiration Time, Purchaser must extend the Offer (the length of
such extension period to be determined by Parent or Purchaser) from time to time until such condition or conditions to the Offer are
satisfied or waived; (b) Purchaser must extend the Offer for any period required by any rule, regulation, interpretation or position of
the SEC, the staff thereof or the NYSE applicable to the Offer or as may be required by any other governmental authority; and (c) if
the Marketing Period (as defined in the Offer to Purchase) has not ended on the last business day prior to the expiration of the Offer,
Purchaser must extend the Offer until the earlier to occur of (i) any business day before or during the Marketing Period as may be
specified by Parent or Purchaser on no less than two business days’ prior notice to AVG and (ii) the first business day after the final
day of the Marketing Period.
Additionally, notwithstanding anything in the Purchase Agreement to the contrary, at the Expiration Time, Purchaser may extend the
Offer for up to 10 business days from the day the Marketing Period will otherwise end. Purchaser is not, however, required to extend
the Offer (a) beyond January 6, 2017, (b) for an individual extension period of more than 10 business days or (c) at any time that
Purchaser is permitted to terminate the Purchase Agreement.
Any extension of the Offer will be followed by a public announcement of the extension no later than 9:00 a.m., New York City time,
on the next business day after the day on which the Offer was otherwise scheduled to expire. Without limiting the manner in which
Purchaser may choose to make any public announcement, it currently intends to make announcements regarding the Offer by issuing a
press release and making any appropriate filing with the SEC.
Subject to the applicable rules and regulations of the SEC and the provisions of the Purchase Agreement, Purchaser expressly reserves
the right at any time prior to the Expiration Time to waive, in whole or in part, any condition to the Offer and to make any change in
the terms or conditions of the Offer.
On the terms of and subject to the conditions to the Offer, Purchaser will, promptly after the Expiration Time, accept for payment all
Shares validly tendered pursuant to the Offer and not properly withdrawn and, promptly after the Acceptance Time, pay for all such
Shares. During the Subsequent Offering Period (which includes the Minority Exit Offering Period, if applicable), Purchaser will
immediately accept for payment and promptly pay for all additional Shares tendered during such Subsequent Offering Period (which
includes the Minority Exit Offering Period, if applicable), subject to and in compliance with the requirements of Rule 14d-11(e) under
the Exchange Act.
For purposes of the Offer, Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered
pursuant to the Offer and not properly withdrawn as, if and when Purchaser gives oral or written notice to the Depositary of its
acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of the Offer Price for such Shares with the Depositary,
which will act as paying agent for tendering shareholders for the purpose of receiving payments from Purchaser and transmitting such
payments to tendering shareholders whose Shares have been accepted for payment. If Purchaser extends the Offer, is delayed in its
acceptance for payment of Shares or is unable to accept Shares for payment pursuant to the Offer for any reason, then, without
prejudice to its rights under the Offer and the Purchase Agreement, the Depositary may retain tendered Shares on its behalf, and such
Shares may not be withdrawn except to the extent that tendering shareholders are entitled to withdrawal rights as described in the
Offer to Purchase and as otherwise required by Rule 14e-1(c) under the Exchange Act.
In all cases, Purchaser will pay for Shares tendered and accepted for payment pursuant to the Offer only after timely receipt by the
Depositary of (a) if the shareholder is a record holder and holds uncertificated Shares in book-entry form on the books of AVG’s
transfer agent, (i) the Letter of Transmittal, properly completed and duly executed and (ii) any other documents required by the Letter
of Transmittal and (b) if the shareholder’s Shares are held in “street” name and are being tendered by book-entry transfer,
(i) confirmation of a book-entry transfer of such Shares into the Depositary’s account at The Depository Trust Company (the
“Book-Entry Transfer Facility”) pursuant to the procedures set forth in the Offer to Purchase, (ii) the Letter of Transmittal, properly
completed and duly executed, with any required signature guarantees, or an Agent’s Message (as described in the Offer to Purchase)
in lieu of the Letter of Transmittal and (iii) any other documents required by the Letter of Transmittal. Accordingly, tendering
shareholders may be paid at different times depending upon when the foregoing documents with respect to Shares are actually
received by the Depositary. Under no circumstances will interest be paid on the Offer Price paid pursuant to the Offer,
regardless of any extension of the Offer, the Subsequent Offering Period (which includes the Minority Exit Offering Period, if
applicable) or any delay in making payment for Shares .
Shares tendered pursuant to the Offer may be properly withdrawn at any time prior to the Expiration Time and, unless theretofore
accepted for payment by Purchaser pursuant to the Offer, may also be withdrawn at any time after September 27, 2016, which is the
60th day after the date of the commencement of the Offer.
For a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover page of the Offer to Purchase. Any such notice of withdrawal must
specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of such Shares, if different from that of the person who tendered such Shares. If Shares have been tendered pursuant
to the procedure for book-entry transfer as set forth in the Offer to Purchase, any notice of withdrawal must also specify the name and
number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn will thereafter be deemed not to have been validly
tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered by again following one of the procedures
described in the Offer to Purchase at any time prior to the Expiration Time.
No withdrawal rights will apply to Shares tendered during the Subsequent Offering Period (which includes the Minority Exit Offering
Period, if applicable) and no withdrawal rights will apply during the Subsequent Offering Period (which includes the Minority Exit
Offering Period, if applicable) with respect to Shares tendered pursuant to the Offer and accepted for payment.
Purchaser will determine, in its sole discretion, all questions as to the form and validity (including time of receipt) of any
notice of withdrawal. None of Purchaser, the Depositary, Innisfree M&A Incorporated, the information agent for the Offer
(the “Information Agent”), or any other person will be under any duty to give notification of any defects or irregularities in
any notice of withdrawal or incur any liability for failure to give any such notification.
The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Exchange
Act is contained in the Offer to Purchase and is incorporated herein by reference.
AVG has provided Purchaser with AVG’s shareholder list and security position listings for the purpose of disseminating the Offer to
Purchase, the related Letter of Transmittal and other related materials to AVG shareholders. The Offer to Purchase and the Letter of
Transmittal, together with AVG’s Solicitation/Recommendation Statement on Schedule 14D-9, will be mailed to record holders of
Shares whose names appear on AVG’s shareholder list and will be furnished, for subsequent transmittal to beneficial owners of
Shares, to brokers, dealers, commercial banks, trust companies and other nominees whose names, or the names of whose nominees,
appear on the shareholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing for
subsequent transmittal to beneficial owners of Shares.
Each holder of Shares should consult with its tax advisor as to the particular tax consequences to such holder of exchanging
Shares for cash in the Offer (or during the Subsequent Offering Period, which includes the Minority Exit Offering Period, if
applicable) or the Subsequent Reorganization . See the Offer to Purchase for a more detailed discussion of the tax treatment of the
Offer.
The Offer to Purchase and the related Letter of Transmittal contain important information. Holders of Shares should
carefully read both documents in their entirety before any decision is made with respect to the Offer .
Questions and requests for assistance may be directed to the Information Agent at its address and telephone numbers set forth below.
Requests for copies of the Offer to Purchase, the related Letter of Transmittal and the notice of guaranteed delivery may be directed to
the Information Agent. Such copies will be furnished promptly at Purchaser’s expense. Shareholders may also contact brokers,
dealers, commercial banks or trust companies for assistance concerning the Offer. Purchaser will not pay any fees or commissions to
any broker or dealer or any other person (other than the Information Agent or the Depositary) for soliciting tenders of Shares pursuant
to the Offer.
The Information Agent for the Offer is:
501 Madison Avenue, 20th Floor
New York, New York 10022
Shareholders may call toll free: (888) 750-5834
Banks and brokers may call collect: (212) 750-5833
July 29, 2016
Exhibit (b)
EXECUTION VERSION
CREDIT SUISSE
SECURITIES (USA)
LLC
CREDIT SUISSE AG
Eleven Madison
Avenue
New York, New York
10010
JEFFERIES
FINANCE LLC
520 Madison Avenue
New York, New York
10022
UBS AG, STAMFORD
BRANCH
677 Washington
Boulevard
Stamford, Connecticut
06901
BANK OF AMERICA
MERRILL LYNCH
INTERNATIONAL
LIMITED
2 King Edward Street
London EC1A 1HQ
United Kingdom
SOCIÉTÉ
GÉNÉRALE
245 Park Avenue
New York, New York
10167
UBS SECURITIES
LLC
1285 Avenue of the
Americas
New York, New York
10019
CONFIDENTIAL
July 28, 2016
Avast Software B.V.
Schiphol Boulevard 369
Tower F, 7th floor
1118BJ Schiphol
The Netherlands
Attention: Rene Bienz
and
CVC Capital Partners Limited
111 Strand
London, WC2R 0AG
United Kingdom
Attention: Alex Fotakidis & Phil Robertson
Project Phoenix
$85,000,000 Senior Secured Revolving Credit Facility
$1,600,000,000 Senior Secured Term Facilities
Amended and Restated Commitment Letter
Ladies and Gentlemen:
Avast Software B.V., a company organized under the laws of The Netherlands with corporate seat in Amsterdam, The
Netherlands (“ you ” or the “ Company ”), has advised each of Credit Suisse AG (acting through such of its affiliates or branches as it
deems appropriate, “ CS ”), Credit Suisse Securities (USA) LLC (“ CS Securities ”; CS and CS Securities, collectively, “ Credit
Suisse ”), Jefferies Finance LLC (acting through such of its affiliates or branches as it deems appropriate, “ Jefferies ”), UBS AG,
Stamford Branch (“ UBS ”), UBS Securities LLC (“ UBSS ”), Bank of America Merrill Lynch International Limited (acting through
such of its affiliates or branches as it deems appropriate, “ Bank of America ”) and Société Générale (acting through such of its
affiliates or branches as it deems appropriate, “ Soc Gen ”, and together with Credit Suisse, Jefferies, UBS, UBSS and Bank of
America, the “ Agents ”, “ we ” or “ us ”) that you or a newly
formed wholly owned subsidiary of the Company organized in The Netherlands (such acquiring entity, the “ Acquirer ”) intend to
acquire, directly or indirectly, shares of the company previously identified to us and code-named “Phoenix” (the “ Target ”) and to
consummate the other Transactions described in the Transaction Description attached hereto as Exhibit A (the “ Transaction
Description ”). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Transaction Description,
the Summary of Principal Terms and Conditions attached hereto as Exhibit B (the “ Term Sheet ”) or in the Summary of
Additional Conditions attached hereto as Exhibit C (the “ Summary of Additional Conditions ”, and together with this amended
and restated commitment letter, the Transaction Description and the Term Sheet, collectively, the “ Commitment Letter ”). All
references to “ USD ”, “ U.S. Dollars ”, “ dollars ” or “ $ ” in this Commitment Letter are references to United States dollars and all
references to “ EUR ”, “ euros ” or “ € ” in this Commitment Letter are references to the single currency of the Participating Member
States (where “ Participating Member States ” means any member state of the European Union that has the euro as its lawful currency
in accordance with legislation of the European Union relating to Economic and Monetary Union).
You have advised the Agents that, in connection therewith, it is intended that the financing for the Transactions will include the
senior secured credit facilities (the “ Senior Secured Facilities ”) described in the Term Sheet, in an aggregate principal amount of
$1,685.0 million, comprised of (a) $1,600.0 million of senior secured term loan facilities, which shall be provided as (i) a senior
secured term loan facility (the “ Dollar Tranche Term Facility ”) available in U.S. Dollars and (ii) a senior secured term loan facility
available in euros, in each case, as set forth in the Term Sheet (the “ Euro Tranche Term Facility ”, and together with the Dollar
Tranche Term Facility, the “ Term Loan Facilities ”) (with the allocation of the $1,600.0 million between the Dollar Tranche Term
Facility and the Euro Tranche Term Facility to be determined by the Initial Lead Arrangers (as defined below) in consultation with the
Company (it being understood and agreed that the Dollar Tranche Term Facility shall be in an aggregate principal amount of at least
$800.0 million)) and (b) a senior secured revolving credit facility in an aggregate principal amount of $85.0 million (available in U.S.
Dollars and other currencies as set forth in the Term Sheet) (as such applicable aggregate amounts under the Senior Secured Facilities
may, at the option of the Company, be increased to fund any original issue discount or upfront fees in connection with the “flex”
provisions in the Fee Letter (as defined below)).
1.
Commitments.
In connection with the foregoing, (a) CS is pleased to advise you of its several and not joint commitment to provide (x) 45.0% of
the aggregate principal amount of each of the Term Loan Facilities and (y) $35.0 million of the aggregate principal amount of the
Revolving Facility, (b) Jefferies is pleased to advise you of its several and not joint commitment to provide (x) 22.5% of the aggregate
principal amount of each of the Term Loan Facilities and (y) $17.5 million of the aggregate principal amount of the Revolving
Facility, (c) UBS is pleased to advise you of its several and not joint commitment to provide (x) 22.5% of the aggregate principal
amount of each of the Term Loan Facilities and (y) $17.5 million of the aggregate principal amount of the Revolving Facility, (d)
Bank of America is pleased to advise you of its several and not joint commitment to provide (x) 5.0% of the aggregate principal
amount of each of the Term Loan Facilities and (y) $7.5 million of the aggregate principal amount of the Revolving Facility and (e)
Soc Gen (together with CS, Jefferies, UBS and Bank of America, the “ Initial Lenders ”) is pleased to advise you of its several and
not joint commitment to provide (x) 5.0% of the aggregate principal amount of each of the Term Loan Facilities and (y) $7.5 million
of the aggregate principal amount of the Revolving Facility, in each case, subject only to the satisfaction or waiver by the Initial Lead
Arrangers of the conditions set forth in Exhibit C hereto.
2
2.
Titles and Roles.
It is agreed that CS Securities, Jefferies and UBSS (each of CS Securities, Jefferies and UBSS in such capacity, an “ Initial Lead
Arranger ”, and together with Bank of America and Soc Gen, the “ Lead Arrangers ”) and Bank of America and Soc Gen will act as
joint lead arrangers and joint bookrunners for each of the Senior Secured Facilities. It is further agreed that CS will act as
administrative agent for each of the Senior Secured Facilities (in such capacity, the “ Administrative Agent ”). It is further agreed that
CS Securities will act as a Syndication Agent for each of the Senior Secured Facilities and each of Jefferies and UBSS will act as a
co-documentation agent for each of the Senior Secured Facilities. Credit Suisse will have “left” placement in all marketing materials
or other documentation used in connection with the Senior Secured Facilities (and all associated rights). You agree that no other
agents, co-agents, arrangers, bookrunners or managers will be appointed and no other titles will be awarded and no compensation
(other than as expressly contemplated in this Commitment Letter and the Fee Letter) will be paid to any Lender in connection with
obtaining Lenders’ commitments to any of the Senior Secured Facilities unless you and the Initial Lead Arrangers shall so agree.
3.
Syndication.
The Agents reserve the right, prior to or after the execution of the Senior Credit Documentation, to syndicate all or a portion of
the Initial Lenders’ respective commitments hereunder to a group of financial institutions (together with the Initial Lenders, the “
Lenders ”) identified by the Agents in consultation with you and reasonably acceptable to you with respect to the identity of such
Lender and in consultation with you in respect of the amount of such Lender’s commitments; provided that, notwithstanding each
Agent’s right to syndicate the Senior Secured Facilities and receive commitments with respect thereto, it is agreed that any syndication
of, or receipt of commitments in respect of, all or any portion of an Initial Lender’s commitments hereunder prior to the initial funding
under the Senior Secured Facilities shall not be a condition to such Initial Lender’s commitments nor reduce such Initial Lender’s
commitments hereunder with respect to any of the Senior Secured Facilities, no assignments may be made prior to the initial funding
of the Senior Secured Facilities and, unless you otherwise agree in writing, the Initial Lenders shall retain exclusive control over all
rights and obligations with respect to its commitments, including all rights with respect to consents, modifications and amendments,
until the Closing Date has occurred; provided further that, in any event, the Agents agree not to syndicate any of the commitments
with respect to the Senior Secured Facilities to (x) any financial institutions, investors or other persons designated in writing by you to
the Initial Lead Arrangers prior to July 6, 2016 (or affiliates of the foregoing designated in writing) or (y) any of your, the Target’s or
your or its respective subsidiaries’ competitors that is in the same or a similar line of business as you, the Target and your or its
respective subsidiaries designated in writing by you from time to time (or any affiliate of such a competitor that is not a bona fide debt
fund or investment vehicle that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of business which is managed, sponsored or advised by any person controlling, controlled
by or under common control with such affiliate and for which no personnel involved with the investment in such affiliate (i) makes (or
has the right to make or participate with others in making) any investment decisions or (ii) has access to any information (other than
information that is publicly available) relating to Holdings or any entity that forms a part of Holdings’ business (including subsidiaries
of Holdings))) (collectively, “ Disqualified Lenders ”). The Agents intend to commence syndication efforts promptly upon the
execution of this Commitment Letter by you and as part of its syndication efforts, it is our intent to have Lenders commit to the Senior
Secured Facilities prior to the Closing Date (subject to the limitations set forth in the provisos to the preceding sentence). Until the
date that is the earlier of (a) the Closing Date and (b) the date on which a Successful Syndication (as defined in the Fee Letter) is
achieved (such period, the “ Syndication Period ”), you agree to use your commercially reasonable efforts to assist the Agents in
completing a syndication that is reasonably satisfactory to the Initial Lead Arrangers and you. Such assistance shall include (a) your
using commercially reasonable
3
efforts to ensure that any syndication efforts benefit materially from your existing lending and investment banking relationships and,
to the extent practical and appropriate, the existing lending and investment banking relationships of the Target, (b) direct contact
between senior management, non-legal representatives and advisors of you, on the one hand, and the proposed Lenders, on the other
hand (and your using commercially reasonable efforts to provide contact between senior management, non-legal representatives and
advisors of the Target, on the one hand, and the proposed Lenders, on the other hand), in all such cases at times mutually agreed upon,
(c) to the extent requested by CS Securities, your assistance, and your using commercially reasonable efforts to cause the Target to
assist, in the preparation of a customary confidential information memorandum for the Senior Secured Facilities (the “ Confidential
Information Memorandum ”) and other customary marketing materials to be used in connection with syndication, (d) using your
commercially reasonable efforts to procure an updated corporate credit rating and a corporate family rating (but not specific ratings) in
respect of the Company from Standard & Poor’s Ratings Services (“ S&P ”) and Moody’s Investors Service, Inc. (“ Moody’s ”),
respectively, and ratings (but not specific ratings) for each of the Term Loan Facilities from each of S&P and Moody’s and (e) the
hosting, with the Initial Lead Arrangers, of two meetings of prospective Lenders at times and locations to be mutually agreed upon. In
addition, you hereby agree that, unless the Initial Lead Arrangers otherwise agree, you shall use your commercially reasonable efforts
to ensure that until the expiration of the Syndication Period, there shall be no competing issues of debt securities or syndicated credit
facilities of the Company, the Target or any of their respective subsidiaries offered, placed or arranged (other than the Senior Secured
Facilities, replacements, extensions and renewals of existing indebtedness that matures during the Syndication Period, indebtedness of
the Company and its subsidiaries and the Target and its subsidiaries for ordinary course working capital requirements and ordinary
course capital lease, purchase money and equipment financings and any other indebtedness of the Target and its subsidiaries permitted
to be incurred pursuant to the Purchase Agreement or disclosed to the Initial Lead Arrangers in writing prior to July 6, 2016) if such
debt securities or syndicated credit facilities would materially and adversely affect the primary syndication of the Term Loan
Facilities. Notwithstanding anything to the contrary contained in this Commitment Letter or the Fee Letter, (i) the obtaining of the
ratings referenced above shall not constitute a condition to the commitments hereunder or the funding of the Senior Secured Facilities
on the Closing Date and (ii) neither the commencement nor completion of the syndication of the Senior Secured Facilities shall
constitute a condition to the availability of the Senior Secured Facilities on the Closing Date or at any time thereafter.
CS Securities will, in consultation with you and the other Initial Lead Arrangers, manage all aspects of any syndication of the
Senior Secured Facilities (in each case subject to the provisions set forth in this Commitment Letter and to your consent rights set
forth in the preceding paragraph), including decisions as to the selection of institutions to be approached (which may not be
Disqualified Lenders) and when they will be approached, when their commitments will be accepted, which institutions will participate
(which institutions shall be reasonably acceptable to you), the allocation of the commitments among the Lenders and the amount and
distribution of fees among the Lenders. To assist the Lead Arrangers in their syndication efforts, you agree promptly to prepare and
provide (and to use commercially reasonable efforts to cause the Target to provide) to the Lead Arrangers all reasonably available
material information with respect to you, your subsidiaries, the Target and its subsidiaries and the Transactions, including all financial
information and projections reasonably acceptable to you (including financial estimates, budgets, forecasts and other forward-looking
information, the “ Projections ”), as CS Securities may reasonably request in connection with the structuring, arrangement and
syndication of the Senior Secured Facilities. For the avoidance of doubt, you will not be required to provide any information to the
extent that the provision thereof would violate any attorney-client privilege, law, rule or regulation, or any obligation of confidentiality
binding you, the Target or your or its respective affiliates (provided that in the event that you do not provide information in reliance on
the exclusions in this sentence, you shall use commercially reasonable efforts to provide notice to the Lead Arrangers promptly upon
obtaining knowledge that such information is being withheld and you shall use your commercially reasonable efforts to communicate,
to
4
the extent permitted, the applicable information in a way that would not violate such restrictions and to eliminate such
restrictions). Notwithstanding anything herein to the contrary, no financial statements shall be required to be provided to the Lead
Arrangers in connection with the structuring, arrangement and syndication of the Senior Secured Facilities in addition to those
delivered prior to July 6, 2016 (other than as set forth in paragraph 8 of Exhibit C ). You hereby represent and warrant (but the
accuracy of such representation and warranty shall not be a condition to the commitments hereunder or the funding of the Senior
Secured Facilities on the Closing Date) that (in the case of information regarding the Target and its subsidiaries, to your knowledge),
(a) all written information and written data other than the Projections and information of a general economic or general industry nature
in connection with the transactions contemplated hereby (the “ Information ”) that has been or will be made available to the Agents
by any of your representatives on your behalf in connection with the transactions contemplated hereby, taken as a whole, is or will be,
when furnished, correct in all material respects and, taken as a whole, does not or will not, when furnished, contain any untrue
statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially
misleading in light of the circumstances under which such statements are made (after giving effect to all supplements thereto from
time to time) and (b) the Projections that have been or will be made available to the Agents by you or by any of your representatives
on your behalf in connection with the transactions contemplated hereby have been or will be prepared in good faith based upon
assumptions that you believe to be reasonable at the time made and at the time the related Projections are made available to the
Agents; it being understood that the Projections (i) are as to future events, are not to be viewed as facts and the Projections are subject
to significant uncertainties and contingencies, many of which are beyond your control, that no assurance can be given that any
particular Projections will be realized and that actual results during the period or periods covered by any such Projections may differ
significantly from the projected results and such differences may be material and (ii) are not a guarantee of performance. You agree
that if at any time prior to the Closing Date you become aware that any of the representations in the preceding sentence would be, to
your knowledge (in the case of information regarding the Target and its subsidiaries), incorrect in any material respect if the
Information and Projections were being furnished, and such representations were being made, at such time, then you will use
commercially reasonable efforts to cause, to the extent practical, appropriate and reasonable, the Target to supplement the Information
and the Projections so that, to your knowledge (in the case of information regarding the Target and its subsidiaries), such
representations will be correct in all material respects under those circumstances it being understood that any such supplement shall
cure any breach of such representation. In structuring, arranging and syndicating the Senior Secured Facilities, the Agents will be
entitled to use and rely primarily on the Information and the Projections without responsibility for independent verification thereof.
You hereby acknowledge that (a) the Agents will make available Information and Projections to the proposed syndicate of
Lenders by posting such Information and Projections on IntraLinks, SyndTrak Online or similar electronic means and (b) certain of
the Lenders may be “public side” Lenders (i.e., Lenders that do not wish to receive (x) material non-public information (within the
meaning of the United States federal and state securities laws and applicable foreign securities laws) with respect to the Target, its
subsidiaries or their respective securities or (y) information of the type that would be material non-public information (within the
meaning of the United States federal and state securities laws) with respect to you, your subsidiaries or your or their respective
securities if you or your subsidiaries, as applicable, were public reporting companies (all such information, “ MNPI ”)) (each, a “
Public Lender ” and collectively, the “ Public Lenders ”). If reasonably requested by CS Securities, you agree to assist us in preparing
an additional version of the confidential information memorandum to be used by Public Lenders. It is understood that in connection
with your assistance described above, a customary authorization letter will be included in the confidential information memorandum
that authorizes the distribution of the confidential information memorandum to prospective Lenders, containing a confirmation to the
Lead Arrangers named in such confidential information memorandum by you, or at your option the Target, that the public-side version
does not include MNPI and exculpating you, the Target and your and its respective affiliates and us
5
with respect to any liability related to the use of the contents of the confidential information memorandum or any related marketing
material by the recipients thereof in violation of United States federal and state and applicable foreign securities laws. At the request
of CS Securities, you agree to identify that portion of the Information that may be distributed to the Public Lenders as “PUBLIC” and
you agree that you shall be deemed to have authorized the Public Lenders to treat such Information marked “PUBLIC” as not
containing any MNPI (other than information about the Transactions and the Senior Secured Facilities) and we and the proposed
Lenders will be entitled to treat any Information and Projections that are not specifically identified as “PUBLIC” as being suitable for
posting only on the portion of any platform not available to or accessible by Public Lenders. You acknowledge and agree that the
following documents may be distributed (including by e-mail) to Public Lenders (unless you promptly notify us otherwise and
provided that you have been given a reasonable opportunity to review such documents and comply with the U.S. Securities and
Exchange Commission (the “ SEC ”) disclosure requirements and disclosure obligations under applicable law): (a) drafts and final
definitive documentation and term sheets with respect to the Senior Secured Facilities; (b) administrative materials prepared by the
Lead Arrangers for prospective Lenders (such as a lender meeting invitation, allocations and funding and closing memoranda); and (c)
notifications of changes in the terms of the Senior Secured Facilities. All Information shall be treated as being suitable for posting to
Public Lenders unless otherwise specified by you.
4.
Fee Letter.
As consideration for the commitments of the Agents hereunder and their agreements to perform the services described herein,
you agree to pay (or cause to be paid) the fees set forth in the Term Sheet and in the Amended and Restated Fee Letter dated as of the
date hereof and delivered herewith with respect to the Senior Secured Facilities (as the same may be amended, restated, supplemented
or otherwise modified from time to time, the “ Fee Letter ”) on the terms and subject to the conditions set forth therein. Once paid,
such fees shall not be refundable under any circumstances except as otherwise provided in the Fee Letter.
5.
Certain Funds Provision.
The commitments of each Initial Lender hereunder and each Agent’s agreement to perform the services described herein are
subject only to the satisfaction or waiver by the Initial Lead Arrangers of the conditions set forth in Exhibit C hereto.
Notwithstanding anything in this Commitment Letter, the Fee Letter, the Senior Credit Documentation or any other letter agreement or
other undertaking concerning the financing of the Transactions to the contrary, (i) the only representations and warranties the accuracy
of which shall be a condition to the availability of the Senior Secured Facilities on the Closing Date shall be (x) the Specified
Representations (as defined below) and (y) such of the representations and warranties made with respect to the Target and its
subsidiaries by the Target in the Purchase Agreement to the extent a breach of such representations and warranties is material to the
interests of the Lenders (the “ Specified Purchase Agreement Representations ”); provided that, notwithstanding anything set forth
in this Commitment Letter, the Fee Letter, the Senior Credit Documentation or any other agreement or other undertaking concerning
the financing of the Transactions to the contrary, a failure of any Specified Purchase Agreement Representation to be true and correct
will not result in a failure of a condition to the availability of the Senior Secured Facilities on the Closing Date or a Default or Event of
Default under the applicable Senior Credit Documentation, unless such failure gives the Company (or its affiliates) the right to
terminate the Company’s (or its affiliates’) obligation to consummate the Acquisition (or the right pursuant to the Purchase Agreement
not to consummate the Acquisition) and (ii) the terms of the Senior Credit Documentation shall be in a form such that they do not
impair availability of the Senior Secured Facilities on the Closing Date if the conditions set forth in Exhibit C hereto are satisfied or
waived by the Initial Lead Arrangers. Those matters that are not covered by or made clear under the provisions of this Commitment
Letter are subject to the approval and agreement of the Initial Lead Arrangers and you; provided that such approvals and
agreements shall be in a manner that is consistent with the Term Sheet
6
and, with respect to other terms, the Documentation Principles and shall be subject to the Certain Funds Provision. For purposes
hereof, “ Specified Representations ” means the representations and warranties made by, and solely in respect of, Holdings, the
Company and the US Borrower in the Senior Credit Documentation and set forth in the Term Sheet relating to corporate or other
organizational existence of Holdings, the Company and the US Borrower, power and authority of Holdings, the Company and the US
Borrower (as it relates to the due authorization, execution and delivery of the Senior Credit Documentation by, and the enforceability
of the Senior Credit Documentation against, Holdings, the Company and the US Borrower), the execution and delivery of the Senior
Credit Documentation by, and the enforceability of the Senior Credit Documentation against, Holdings, the Company and the US
Borrower, and Federal Reserve margin regulations consistent with the representation set for in Annex II to Exhibit B , the use of
the proceeds not violating OFAC or FCPA, solvency (defined in a manner consistent with the Existing Avast Credit Agreement) as of
the Closing Date (after giving effect to the Transactions) of Holdings and its subsidiaries on a consolidated basis and the Investment
Company Act. This paragraph is referred to as the “ Certain Funds Provision. ” Without limiting the conditions precedent provided
herein to funding the consummation of the Acquisition with the proceeds of the Senior Secured Facilities, the Lead Arrangers will
cooperate with you as reasonably requested in coordinating the timing and procedures for the funding of the Senior Secured Facilities
in a manner consistent with the Purchase Agreement.
6.
Indemnification; Expenses.
You agree (a) to indemnify and hold harmless each of the Agents and its affiliates and the respective officers, directors,
employees, agents and members of each of the foregoing (each, an “ Indemnified Person ” and collectively, the “ Indemnified
Persons ”) from and against any and all losses, claims, damages, liabilities and expenses, joint or several, of any kind or nature
whatsoever to which any such Indemnified Person may become subject arising out of or in connection with this Commitment Letter,
the Original Commitment Letter, the Fee Letter, the Original Fee Letter (as defined in the Fee Letter), the Transactions, the Senior
Secured Facilities or any related transaction or any claim, litigation, investigation or proceeding, actual or threatened, relating to any
of the foregoing (any of the foregoing, a “ Proceeding ”), regardless of whether any such Indemnified Person is a party thereto, and to
reimburse each such Indemnified Person within 30 days after written demand (together with reasonably detailed backup
documentation supporting such demand) for any reasonable and documented out-of-pocket legal expenses of one firm of counsel for
all Indemnified Persons (taken as a whole) and, if necessary, one firm of local counsel in each appropriate jurisdiction, in each case for
all Indemnified Parties (taken as a whole) (and, in the case of an actual or perceived conflict of interest where the Indemnified Person
affected by such conflict informs you of such conflict and thereafter retains its own counsel, of one additional firm of counsel for all
such affected Indemnified Persons taken as a whole, but no other third party advisors without your prior consent) or other reasonable
and documented out-of-pocket expenses incurred in connection with investigating or defending any of the foregoing; provided that
the foregoing indemnity will not, as to any Indemnified Person, apply to losses, claims, damages, liabilities or related expenses (i) to
the extent they have resulted from the willful misconduct, bad faith or gross negligence of such Indemnified Person or any Related
Person (as defined below) of such Indemnified Person (as determined by a court of competent jurisdiction in a final and
non-appealable decision), (ii) arising from a material breach of the obligations of such Indemnified Person or any Related Person
under this Commitment Letter, the Fee Letter or the Senior Credit Documentation (as determined by a court of competent jurisdiction
in a final and non-appealable decision) or (iii) arising out of, or in connection with, any Proceeding that does not involve an act or
omission by you or any of your controlling persons and that is brought by an Indemnified Person against any other Indemnified Person
(other than any Proceeding brought against any agent or a Lead Arranger solely in its capacity as, or in the fulfillment of its role as, an
Agent, a Lead Arranger or another similar role under the Senior Secured Facilities), and (b) to reimburse the Agents from time to time,
upon presentation of a summary statement, for all reasonable and documented out-of-pocket expenses (including but not limited to
expenses of the Lead Arrangers’ due diligence investigation, syndication expenses, travel
7
expenses and reasonable and documented out-of-pocket legal fees and disbursements of one firm of counsel to the Agents (taken as a
whole) identified in the Term Sheet and one firm of local counsel to the Agents in each appropriate jurisdiction (except allocated costs
of in-house counsel)), in each case, to the extent any such expenses were incurred in connection with the Senior Secured Facilities and
the preparation of this Commitment Letter, the Fee Letter, the Senior Credit Documentation and any security arrangements in
connection therewith (collectively, the “ Expenses ”); provided that, you shall not be required to reimburse any of the Expenses in
the event the Closing Date does not occur. Notwithstanding any other provision of this Commitment Letter, (i) without in any way
qualifying your other obligations hereunder (including with respect to your indemnification obligations above), no Indemnified Person
nor the Company or any direct or indirect shareholder thereof shall be liable for any damages arising from the use by others of
information or other materials obtained through electronic, telecommunications or other information transmission systems (including
IntraLinks or SyndTrak Online), except to the extent such damages have resulted from the willful misconduct, bad faith or gross
negligence of such person or any Related Person of such person (as determined by a court of competent jurisdiction in a final and
non-appealable decision) or (ii) without in any way qualifying your other obligations hereunder (including with respect to your
indemnification obligations above), neither (x) any Indemnified Person, nor (y) you (or any of your subsidiaries or affiliates) or the
Target (or any of its subsidiaries or affiliates) shall be liable for any indirect, special, punitive or consequential damages (other than in
respect of any such damages paid or required to be paid by an Indemnified Person to a third party and otherwise indemnified under
this paragraph 6) in connection with your or its activities related to the Senior Secured Facilities, this Commitment Letter or the Fee
Letter. For purposes hereof, a “ Related Person ” of an Indemnified Person means any of such Indemnified Person (including but not
limited to in its capacities as an Agent or a Lead Arranger or any Lender) and their respective controlled affiliates and controlling
persons and its or their respective directors, officers, employees, agents acting at the direction of such Indemnified Person, and
members thereof.
Notwithstanding the above, (a) you shall not be liable for any settlement of any Proceedings effected without your consent
(which consent shall not be unreasonably withheld, delayed or conditioned), but if settled with your written consent or if there is a
final and non-appealable judgment for the plaintiff against any Indemnified Person in any such Proceedings, you agree to indemnify
and hold harmless each Indemnified Person from and against any and all losses, claims, damages, liabilities and reasonable and
documented out-of-pocket expenses by reason of such settlement or judgment in accordance with the preceding paragraph and (b)
each Indemnified Person shall be obligated to refund or return any and all amounts paid by you under the preceding paragraph to such
Indemnified Person for any losses, claims, damages liabilities or expenses to the extent such Indemnified Person is not entitled to
payment of such amounts in accordance with the terms hereof. No Indemnified Person shall, without your prior written consent
(which consent shall not be unreasonably withheld), consent to the entry of any judgment in or otherwise seek to terminate any
Proceeding referred to herein.
You shall not, without the prior written consent of any Indemnified Person (which consent shall not be unreasonably withheld,
delayed or conditioned), effect any settlement of any pending or threatened Proceedings in respect of which indemnity could have
been sought hereunder by such Indemnified Person unless such settlement (a) includes an unconditional release of such Indemnified
Person from all liability arising out of such Proceedings and (b) does not include any statement as to, or any admission of, fault,
culpability, wrongdoing or a failure to act by or on behalf of such Indemnified Person.
Each Indemnified Person shall give (subject to restrictions pursuant to attorney-client privilege, law, rule or regulation, or any
obligation of confidentiality) such information and assistance to you as you may reasonably request in connection with any Proceeding
in connection with any losses, claims, damages, liabilities and expenses, unless the Indemnified Person reasonably determines there
are conflicts of interest between you and the Indemnified Person.
8
In case any Proceeding is instituted involving any Indemnified Person for which indemnification is to be sought hereunder
by such Indemnified Person, then such Indemnified Person will promptly notify you of the commencement of such Proceeding;
provided , that the failure so to notify you will not relieve you from any liability that you may have to such Indemnified Person
pursuant to this numbered paragraph 6 or from any liability that you may have to such Indemnified Person other than
pursuant to this numbered paragraph 6 , except to the extent that you are materially prejudiced by such
failure. Notwithstanding the above, following such notification, you may elect in writing to assume the defense of any such
Proceeding brought by a third party, and, upon such election, you will not be liable for any legal costs subsequently incurred by
such Indemnified Person (other than reasonable costs of investigation and providing evidence) in connection therewith, unless (i)
you have failed to provide counsel reasonably satisfactory to such Indemnified Person in a timely manner, (ii) counsel provided
by you reasonably determines its representation of such Indemnified Person would present it with a conflict of interest or (iii) the
Indemnified Person reasonably determines that there are actual conflicts of interest between you and the Indemnified Person,
including situations in which there may be legal defenses available to it which are different from or in addition to those available
to you. In connection with any one Proceeding, you will not be responsible for the fees and expenses of more than one separate
law firm for all Indemnified Persons plus additional conflicts and local counsel as provided herein.
Your indemnity and reimbursement obligations hereunder will be in addition to any liability which you may otherwise have and
will be binding upon and inure to the benefit of any of your successors and assigns and the Indemnified Persons.
7.
Sharing of Information; Absence of Fiduciary Relationship.
You acknowledge that the Agents and their respective affiliates may be providing debt financing, equity capital or other services
(including financial advisory services) to other persons in respect of which you may have conflicting interests regarding the
transactions described herein and otherwise. Neither the Agents nor any of their affiliates will use confidential information obtained
from you by virtue of the transactions contemplated by this Commitment Letter or its other relationships with you in connection with
the performance by it of services for other persons, and neither the Agents nor any of their affiliates will furnish any such information
to other persons except as permitted under the second paragraph of Section 10 hereof. You also acknowledge that neither the Agents
nor any of their affiliates have any obligation to use in connection with the transactions contemplated by this Commitment Letter, or to
furnish to you, confidential information obtained by them from other persons.
As you know, each Agent is a full service securities firm engaged, either directly or through its affiliates, in various activities,
including securities trading, commodities trading, investment management, financing and brokerage activities and financial planning
and benefits counseling for both companies and individuals. In the ordinary course of these activities, each Agent and its affiliates may
actively engage in commodities trading or trade the debt and equity securities (or related derivative securities) and financial
instruments (including bank loans and other obligations) of the Target and other companies which may be the subject of the
arrangements contemplated by this letter for their own account and for the accounts of their customers and may at any time hold long
and short positions in such securities. Each Agent or its affiliates may also co-invest with, make direct investments in, and invest or
co-invest client monies in or with funds or other investment vehicles managed by other parties, and such funds or other investment
vehicles may trade or make investments in securities of you, the Target or other companies which may be the subject of the
arrangements contemplated by this Commitment Letter or engage in commodities trading with any thereof.
The Agents and their respective affiliates may have economic interests that conflict with those of the Target and you. You agree
that the Agents will act under this letter as an independent contractor and
9
that nothing in this Commitment Letter or the Fee Letter or otherwise will be deemed to create an advisory, fiduciary or agency
relationship or fiduciary or other implied duty between the Agents and you and the Target, your and their respective stockholders or
your and their respective affiliates. You acknowledge and agree that (i) the transactions contemplated by this Commitment Letter and
the Fee Letter are arm’s-length commercial transactions between the Agents, on the one hand, and you and the Target, on the other,
(ii) in connection therewith and with the process leading to such transaction each Agent is acting solely as a principal and not as
agents or fiduciaries of you, the Target, your and their management, stockholders, creditors or any other person, (iii) the Agents have
not assumed an advisory or fiduciary responsibility or any other obligation in favor of you with respect to the transactions
contemplated hereby or the process leading thereto (irrespective of whether the Agents or any of their respective affiliates have
advised or are currently advising you or the Target on other matters) except the obligations expressly set forth in this Commitment
Letter and the Fee Letter and (iv) you have consulted your own legal and financial advisors to the extent you deemed appropriate. You
further acknowledge and agree that you are responsible for making your own independent judgment with respect to such transactions
and the process leading thereto. Please note that the Agents and their respective affiliates do not provide tax, accounting or legal
advice.
8.
Assignability; Amendments; Counterparts.
This Commitment Letter and the commitments hereunder shall not be assignable by any party hereto (other than by you to any
Borrower, or, to the extent the Lead Arrangers shall have received all reasonably requested documentation and information about such
entities required by U.S. regulatory authorities under applicable “know your customer” and anti-money laundering rules and
regulations, including without limitation the PATRIOT Act, to other entities established in connection with the Transactions and
controlled, directly or indirectly, by you, with all your obligations and liabilities hereunder being assumed by the applicable Borrower
or such other entities upon the effectiveness of such assignment) without the prior written consent of each other party hereto, not to be
unreasonably withheld, delayed or conditioned (and any attempted assignment without such consent shall be null and void), are
intended to be solely for the benefit of the parties hereto (and Indemnified Persons to the extent expressly set forth herein), are not
intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto (and Indemnified
Persons to the extent expressly set forth herein) and is not intended to create a fiduciary relationship among the parties hereto. Any
and all obligations of, and services to be provided by, the Agents hereunder may be performed and any and all rights of the Agents
hereunder may be exercised by or through any of their respective affiliates or branches; provided that with respect to the
commitments, any assignments, and the rights and obligations with respect thereto, shall be subject to the limitations set forth in
numbered paragraph 3 of this Commitment Letter entitled “Syndication.” This Commitment Letter may not be amended or any
provision hereof waived or modified except as otherwise specified herein or by an instrument in writing signed by the Agents and
you. This Commitment Letter may be executed in any number of counterparts, each of which shall be an original and all of which,
when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Commitment
Letter by facsimile transmission or other electronic transmission (i.e., a “ pdf ” or “ tif ”) shall be effective as delivery of a manually
executed counterpart hereof. This commitment letter (including the exhibits hereto) and, together with the Fee Letter, (i) are the only
agreements that have been entered into among the parties hereto with respect to the Senior Secured Facilities and (ii) supersede all
prior understandings, whether written or oral, among us with respect to the Senior Secured Facilities and set forth the entire
understanding of the parties hereto with respect thereto.
9.
Governing Law; Waiver of Jury Trial; Service of Process.
THIS COMMITMENT LETTER AND THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER AND ANY CLAIM,
CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS COMMITMENT LETTER SHALL BE GOVERNED
BY, AND CONSTRUED IN
10
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK; PROVIDED THAT THE INTERPRETATION OF ANY
PROVISION OF THE PURCHASE AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE DETERMINATION OF THE
ACCURACY OF ANY REPRESENTATION OR WARRANTY (AND WHETHER AS A RESULT OF AN INACCURACY OF
ANY SUCH REPRESENTATION OR WARRANTY THE COMPANY (OR ANY OF ITS AFFILIATES) HAVE THE RIGHT TO
TERMINATE THE COMPANY’S (OR ITS AFFILIATE’S) OBLIGATION TO CONSUMMATE THE ACQUISITION (OR THE
RIGHT PURSUANT TO THE PURCHASE AGREEMENT NOT TO CONSUMMATE THE ACQUISITION)) OR THE
SATISFACTION OF ANY CONDITION CONTAINED THEREIN (INCLUDING, WITHOUT LIMITATION, ANY
DETERMINATION OR DISPUTE CONCERNING A “COMPANY MATERIAL ADVERSE EFFECT” (AS DEFINED IN THE
PURCHASE AGREEMENT)) SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (OR FOR ANY
MATTER CONCERNING OR IMPLICATING THE BOARDS’ (AS DEFINED IN THE PURCHASE AGREEMENT) FIDUCIARY
DUTIES, THE APPLICABLE FIDUCIARY DUTY LAWS OF THE NETHERLANDS) REGARDLESS OF THE LAWS THAT
MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF, AND SECTION
9.06(a) OF THE PURCHASE AGREEMENT SHALL GOVERN WITH RESPECT THERETO.
EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING
OUT OF THIS COMMITMENT LETTER OR THE PERFORMANCE OF SERVICES HEREUNDER.
Each of the parties hereto hereby irrevocably and unconditionally (a) submits, for itself and its property, to the exclusive
jurisdiction of any New York State court or federal court of the United States of America sitting in the county of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or relating to this Commitment Letter, the Fee Letter, the
Transactions or the transactions contemplated hereby, or for recognition or enforcement of any judgment, and agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in
such federal court, (b) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or relating to this Commitment Letter, the Fee Letter, the
Transactions or the transactions contemplated hereby in any such New York State or federal court and (c) waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. Each of the
parties hereto agrees to commence any such action, suit, proceeding or claim either in the United States District Court for the Southern
District of New York or in the Supreme Court of the State of New York, New York County located in the Borough of Manhattan.
You irrevocably designate and appoint the US Borrower (the “Process Agent”) as your authorized agent upon which process
may be served in any action, suit or proceeding arising out of or relating to this Commitment Letter or the Fee Letter that may be
instituted by CS Securities or any other Indemnified Person in any Federal court or New York State court. You hereby agree that
service of any process, summons, notice or document by U.S. registered mail addressed to the Process Agent, with written notice of
said service to you at the address above, shall be effective service of process for any suit, action or proceeding brought in any such
court.
10. Confidentiality.
This Commitment Letter is entered into on the understanding that the Fee Letter and its respective terms or substance, and, prior
to your acceptance hereof, this Commitment Letter and its terms or substance shall not be disclosed, directly or indirectly, to any other
person or entity (including other lenders,
11
underwriters, placement agents, advisors or any similar persons) except (a) to you and to your affiliates, officers, directors, agents,
employees, partners, direct and indirect equity holders, members, stockholders, controlling persons, attorneys, accountants and
advisors on a confidential basis, (b) if the Initial Lead Arrangers consent to such proposed disclosure (such consent not to be
unreasonably withheld, delayed or conditioned), (c) as may be required by the rules, regulations, schedules and forms of the SEC or
any other applicable rules of any national securities exchange and/or applicable federal or foreign securities laws in connection with
the Transactions or any filings made with the SEC in connection with the Transactions (in which case you agree to use commercially
reasonable efforts to inform us promptly thereof to the extent lawfully permitted to do so) (including this Commitment Letter (but not
the Fee Letter, other than the aggregate fee amount, unless required by the SEC or such other applicable national securities exchange
or applicable federal or foreign securities laws, in which case you shall provide only a version redacted in a customary manner after
review by counsel to the Agents, unless an unredacted version is requested or required, in which case an unredacted version may be
provided); provided that you agree to use commercially reasonable efforts to ensure that the Fee Letter, if required to be disclosed,
shall be treated as confidential by the applicable recipient) or (d) pursuant to the order of any court or administrative agency in any
pending legal or administrative proceeding, or otherwise as required by applicable law or legal process or, to the extent requested or
required by governmental and/or regulatory authorities, in each case based on the reasonable advice of counsel (in which case, to the
extent permitted by law, you agree to use commercially reasonable efforts to inform us promptly thereof); provided that (i) you may
disclose this Commitment Letter and the contents hereof to the Target and its affiliates, and its and their respective officers, directors,
agents, equity holders, members, stockholders, controlling persons, employees, attorneys, accountants and advisors, on a confidential
basis, (ii) you may disclose this Commitment Letter, and the contents hereof, to any potential, prospective or actual equity investors,
counterparties to any swap or derivative transaction and lenders or participants or prospective lenders or participants and officers,
directors, employees, attorneys, accountants and advisors of any of the foregoing and to rating agencies in connection with obtaining
ratings for the Company and the Senior Secured Facilities, (iii) you may disclose the existence thereof and the fees contained in the
Fee Letter as part of projections, pro forma information and generic disclosure of aggregate sources and uses related to fee amounts to
the extent customary or required in marketing materials, any proxy or other public filing or any prospectus or other offering
memorandum, (iv) you may disclose the Fee Letter and the contents thereof to the Target and officers, directors, equity holders,
employees, attorneys, accountants and advisors of any of the foregoing, on a confidential basis, (v) the Fee Letter may be disclosed to
persons performing customary accounting functions, including accounting for deferred financing costs and (vi) this Commitment
Letter and the contents hereof may be disclosed in any syndication of the Senior Secured Facilities or in any proxy statement or other
public filing in connection with the Acquisition. You agree that you will permit us to review and approve (such approval not to be
unreasonably withheld or delayed) any reference to us or any of our affiliates in connection with the Senior Secured Facilities or the
transactions contemplated hereby contained in any press release or similar written public disclosure prior to public release (excluding
case studies and other marketing materials).
The Agents and their affiliates will use all information provided to them or such affiliates in connection with the Transactions
and any related transaction solely for the purpose of providing the services which are the subject of this Commitment Letter and shall
treat confidentially all such information and shall not publish, disclose or otherwise divulge such information; provided that nothing
herein shall prevent the Agents from disclosing any such information (a) pursuant to the order of any court or administrative agency or
in any pending legal or administrative proceeding, or otherwise as required by applicable law or legal process (in which case the
Agents, to the extent permitted by applicable law, agree (except in connection with any request as part of any regulatory audit or
examination conducted by accountants or any governmental or regulatory authority exercising examination or regulatory authority) to
inform you promptly thereof), (b) upon the request or demand of any regulatory authority having jurisdiction over the Agents or any
of its affiliates (in which case the Agents (except in connection with any
12
request as part of any regulatory audit or examination conducted by accountants or any governmental or regulatory authority
exercising examination or regulatory authority), to the extent permitted by law, agree to inform you promptly thereof), (c) to the extent
that such information becomes publicly available other than by reason of improper disclosure by the Agents or any of their affiliates or
any Related Person of the foregoing in violation of any confidentiality obligations owing to you, the Target or any of your or its
affiliates (including those set forth in this paragraph), (d) to the Agents’ affiliates and the Agents’ and such affiliates’ officers,
directors, partners, employees, legal counsel, independent auditors and other experts or agents who need to know such information in
connection with the Transactions and are made aware and are instructed to comply with the provisions of this paragraph, in each case
on a confidential basis, (e) to potential or prospective Lenders, participants, assignees or any direct or indirect contractual
counterparties to any swap or derivative transaction relating to the Company and its obligations under the Senior Secured Facilities,
subject to the proviso below or (f) subject to your prior approval of the information to be disclosed, information supplied on a
customary basis to rating agencies in connection with attempting to obtain a rating as required pursuant to this Commitment Letter
and/or the Senior Secured Facilities; provided that (x) the disclosure of any such information to any potential or prospective
Lenders, participants, assignees or direct or indirect contractual counterparties referred to above shall be made subject to the
acknowledgment and acceptance by such potential or prospective Lender, participant, assignee or direct or indirect contractual
counterparty that such information is being disseminated on a confidential basis (on substantially the terms set forth in this paragraph
or as is otherwise reasonably acceptable to you, including, without limitation, as set forth in any confidential information
memorandum or other marketing materials) in accordance with the standard syndication processes of such Agent or customary market
standards for dissemination of such type of information, which shall in any event require “click through” or other affirmative action on
the part of the recipient to access such information and (y) no such disclosure shall be made by such Agent or any of its affiliates to
any Disqualified Lender. The Agents’ obligations under this paragraph shall automatically terminate and be superseded by the
confidentiality provisions in the Senior Credit Documentation upon the initial funding thereunder and shall in any event terminate on
July 6, 2018.
11. Miscellaneous.
The reimbursement (if applicable), compensation (if applicable), indemnification, confidentiality, jurisdiction, governing law
and waiver of jury trial provisions contained herein and in the Fee Letter shall remain in full force and effect regardless of whether
Senior Credit Documentation shall be executed and delivered and notwithstanding the termination of this Commitment Letter or the
Agents’ commitments hereunder; provided that your obligations under this Commitment Letter, other than those relating to
confidentiality of the Fee Letter and to the syndication of the Senior Secured Facilities (which shall survive only until the expiration of
the Syndication Period), shall automatically terminate and be superseded by the Senior Credit Documentation upon the initial funding
thereunder and the payment of all amounts owing at such time hereunder and under the Fee Letter, and you shall be automatically
released from all liability in connection therewith at such time.
Each of the parties hereto agrees that this Commitment Letter is a binding and enforceable agreement with respect to the subject
matter herein, including the execution and delivery of the Senior Credit Documentation by the parties hereto in a manner consistent
with this Commitment Letter (including the Documentation Principles); it being acknowledged and agreed that the commitments
provided hereunder are subject only to the satisfaction or waiver by the Initial Lead Arrangers of the conditions set forth in Exhibit C
hereto.
We hereby notify you that pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law
October 26, 2001) (as amended from time to time, the “ PATRIOT Act ”), the Agents and each other Lender is required to obtain,
verify and record information that identifies each
13
borrower and each guarantor, which information includes the name, address, tax identification number and other information
regarding each borrower and each guarantor that will allow the Agents or such Lender to identify such borrower or guarantor in
accordance with the PATRIOT Act. This notice is given in accordance with the requirements of the PATRIOT Act and is effective as
to the Agents and each Lender.
If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms of this Commitment Letter and
of the Fee Letter by returning to the Initial Lead Arrangers executed counterparts hereof and of the Fee Letter not later than 11:59
p.m., New York City time, on July 28, 2016. The Agents’ commitments hereunder and agreements contained herein will expire at
such time in the event that the Initial Lead Arrangers have not received such executed counterparts in accordance with the
immediately preceding sentence. In the event that the initial borrowing in respect of the Senior Secured Facilities does not occur on or
before the earliest of (i) the consummation of the Acquisition with or without the funding of the Senior Secured Facilities (but without
excusing any breach of this Commitment Letter if any Initial Lender refuses to fund the Senior Secured Facilities), (ii) 11:59 p.m.,
New York City time, on the third Business Day (as defined in the Purchase Agreement) following the End Date (as defined in the
Purchase Agreement and as such date may be extended pursuant to the terms of the Purchase Agreement) if the Acquisition shall not
have occurred on or prior to such date and (iii) 11:59 p.m., New York City time, on the third Business Day (as defined in the Purchase
Agreement) following the date occurring six months after July 6, 2016, then this Commitment Letter and the commitments and
undertakings of the Agents hereunder shall automatically terminate unless each of the Agents shall, in their sole discretion, agree to an
extension. You shall have the right to terminate this Commitment Letter and the commitments of the Lenders hereunder (or a portion
thereof) at any time upon written notice to them from you, subject to your surviving obligations as set forth in the fourth to last
paragraph of this Commitment Letter and in the Fee Letter.
This Commitment Letter amends and restates in its entirety the commitment letter, dated as of July 6, 2016, from CS, CS
Securities, Jefferies, UBS and UBSS to you concerning the Senior Secured Facilities and the Transactions (the “ Original
Commitment Letter ”), and such Original Commitment Letter is automatically superseded as of the date hereof without the need for
any further notice.
[Remainder of this page intentionally left blank]
14
The Agents are pleased to have been given the opportunity to assist you in connection with this financing.
Very truly yours,
CREDIT SUISSE AG,
CAYMAN ISLANDS BRANCH
By:
/s/ Robert Hetu
Name:
Title:
Robert Hetu
Authorized Signatory
By:
/s/ Nicholas Goss
Name:
Title:
Nicholas Goss
Authorized Signatory
CREDIT SUISSE SECURITIES (USA) LLC
By:
/s/ Ryan Williams
Name:
Title:
Ryan Williams
Director
[Project Phoenix 2016 – Commitment Letter]
JEFFERIES FINANCE LLC
By:
/s/ R. Kumar
Name:
Title:
R. Kumar
Senior Vice President
[Project Phoenix 2016 – Commitment Letter]
UBS AG, STAMFORD BRANCH
By:
/s/ Michael Lawton
Name:
Title:
Michael Lawton
Managing Director
By:
/s/ Kevin T. Pluff
Name:
Title:
Kevin T. Pluff
Managing Director
UBS SECURITIES LLC
By:
/s/ Michael Lawton
Name:
Title:
Michael Lawton
Managing Director
By:
/s/ Kevin T. Pluff
Name:
Title:
Kevin T. Pluff
Managing Director
[Project Phoenix 2016 – Commitment Letter]
BANK OF AMERICA MERRILL LYNCH
INTERNATIONAL LIMITED
By:
/s/ Itay Singer
Name:
Title:
Itay Singer
Managing Director
[Project Phoenix 2016 – Commitment Letter]
SOCIÉTÉ GÉNÉRALE
By:
/s/ Michael Finkelman
Name:
Title:
Michael Finkelman
Managing Director
[Project Phoenix 2016 – Commitment Letter]
Accepted and agreed to as of
the date first above written:
AVAST SOFTWARE B.V.
By: Avast Holding B.V., its sole managing director
By:
/s/ Dick Haarsma
Name:
Title:
By:
Dick Haarsma
Managing Director B
/s/ Alan Arthur Rassaby
Name:
Title:
Alan Arthur Rassaby
Managing Director A
[Project Phoenix 2016 – Commitment Letter]
EXHIBIT A
CONFIDENTIAL
Project Phoenix
Transaction Description
Capitalized terms used but not defined in this Exhibit A shall have the meanings set forth in the other
Exhibits to the Commitment Letter or in the Commitment Letter.
The Company and certain of its subsidiaries, as applicable, intend to consummate the Transactions described
below.
In connection with the foregoing, it is intended that:
a)
Pursuant to that certain Purchase Agreement, dated as of July 6, 2016 (together with the disclosure schedules thereto, the “
Purchase Agreement ”), between the Acquirer, Holdings and the Target, the Acquirer will make a tender offer (as may be
amended as provided in the Purchase Agreement in accordance with the provisions of paragraph 1 of Exhibit C to the
Commitment Letter, the “ Offer ”) to purchase outstanding Shares (as defined in the Purchase Agreement) of the Target
(the “ Target Shares ”) (which may be subject to a minimum condition for the tender and purchase of, when taken together
with Target Shares owned by Holdings or any of its subsidiaries, at least 95% of the outstanding Target Shares, which
percentage may be reduced, but shall, unless the Initial Lead Arrangers agree, be equal to or greater than 80%) at the price
per share specified in the Offer (the initial acquisition of any Target Shares pursuant to the Offer, the “ Acquisition ”).
b)
The applicable Borrowers (as set forth in the Term Sheet) will obtain $1,685.0 million under the Senior Secured Facilities
consisting of (a) $1,600.0 million under term loan facilities, which shall be provided as (i) a senior secured term loan
facility available in U.S. Dollars and (ii) a senior secured term loan facility available in euros, in each case, as set forth in
the Term Sheet (with the allocation of the $1,600.0 million between the Dollar Tranche Term Facility and the Euro Tranche
Term Facility to be determined by the Initial Lead Arrangers in consultation with the Company (it being understood and
agreed that the Dollar Tranche Term Facility (as defined below) shall be in an aggregate principal amount of at least $800.0
million) and as such amounts may be increased as set forth in clause (A) under the heading “Senior Secured Facilities” in
the Term Sheet) and (b) an $85.0 million revolving credit facility (available in U.S. Dollars and other currencies as set forth
in clause (B) under the heading “Senior Secured Facilities” in the Term Sheet).
c)
On the Closing Date, the Company will use a portion of the proceeds of the Senior Secured Facilities to:
a.
provide for all indebtedness of the Company and its subsidiaries under that certain Credit Agreement, dated as
of March 20, 2014, among, inter alios , the Company, the US Borrower, AVAST Software s.r.o., Holdings,
the lenders from time to time party thereto and Credit Suisse International, as administrative and collateral
agent (as amended, the “ Existing Avast Credit Agreement ”) to be repaid in full, and all commitments,
security interests and guaranties in connection therewith terminated and released, it being understood that any
letters of credit, bank guarantees and similar accommodations outstanding thereunder may remain outstanding
to the extent “grandfathered” into the Revolving Facility or otherwise cash collateralized or backstopped by a
letter of credit under the Revolving Facility on the date of such repayment in full (the “ Avast Refinancing ”);
and
b.
advance an interest bearing intercompany loan to the Czech Subsidiary (which loan may be contributed, in
whole or in part, by the Company to one or more of its direct wholly owned
A-1
EXHIBIT A
CONFIDENTIAL
subsidiaries), the proceeds of which shall promptly thereafter be used to consummate certain other
intercompany transactions among one or more of the Company and its direct wholly owned subsidiaries
(including, without limitation, repayments of certain intercompany indebtedness and reduction of share
premium of certain of the Company’s subsidiaries) (collectively, the “ Intercompany Transactions ”).
d)
Prior to, or promptly upon, the consummation of the Intercompany Transactions, the Company will directly or indirectly,
including through the Acquirer (if not the Company), use a portion of the proceeds of the Senior Secured Facilities,
together with cash on hand of the Company and its subsidiaries and the Target and its subsidiaries, to:
a.
provide for all indebtedness of the Target and its subsidiaries under that certain Credit and Guaranty Agreement
(as amended, the “ Existing Target Credit Agreement ”), dated October 15, 2014, among, inter alios , the
Target, the lenders from time to time party thereto and HSBC Bank USA, N.A., as administrative and collateral
agent to be repaid in full, and all commitments, security interests and guaranties in connection therewith
terminated and released, it being understood that any letters of credit, bank guarantees and similar
accommodations outstanding thereunder may remain outstanding to the extent “grandfathered” into the
Revolving Facility or otherwise cash collateralized or backstopped by a letter of credit under the Revolving
Facility on the date of such repayment in full (the “ Target Refinancing ”, and together with the Avast
Refinancing, the “ Refinancing ”); and
b.
fund the initial purchase of Target Shares tendered pursuant to the Offer.
e)
Upon the initial purchase of Target Shares tendered pursuant to the Offer, the Target will become a direct or indirect
subsidiary of the Company.
f)
As promptly as practicable following the initial purchase of Target Shares tendered pursuant to the Offer, the Company
shall directly or indirectly effectuate a Reorganization (as defined in the Purchase Agreement) as set forth in Section 2.07 of
the Purchase Agreement, which may, at the option of the Company, include consummation of the Asset Sale (as defined in
the Purchase Agreement).
g)
After giving effect to the Transactions and the use of proceeds of the Senior Secured Facilities, the Company and its
subsidiaries shall not have any third party debt for borrowed money other than (i) the Senior Secured Facilities, (ii)
indebtedness permitted to remain outstanding under the Purchase Agreement, (iii) indebtedness permitted to be incurred
under the Purchase Agreement prior to the Closing Date, (iv) ordinary course capital leases, purchase money indebtedness,
equipment financings, letters of credit, bank guarantees, surety bonds and short-term working capital facilities and (v)
certain other debt for borrowed money that you and the Initial Lead Arrangers reasonably agree may remain outstanding
after the Closing Date (the foregoing indebtedness, together with any replacements, extensions and renewals of any such
indebtedness that matures or will be terminated on or prior to the Closing Date, collectively, the “ Permitted Surviving
Debt ”).
h)
The fees, premiums, expenses (including without limitation, legal fees and expenses, title premiums, survey charges and
recording taxes and fees) and other transaction costs incurred in connection with the Transactions (including to fund any
original issue discount and upfront fees) (the “ Transaction Costs ” and, together with the amount required to consummate
the Acquisition, the “ Acquisition Costs ”) will be paid.
A-2
EXHIBIT A
CONFIDENTIAL
The transactions described above and the payment of related fees and expenses are collectively referred to herein as the “
Transactions ”. For purposes of this Commitment Letter and the Fee Letter, “ Closing Date ” shall mean the date of the initial funding
under the Senior Secured Facilities. For the avoidance of doubt, the consummation of any Transaction shall not be a condition to the
initial funding under the Senior Secured Facilities except to the extent specifically set forth in Exhibit C to the Commitment Letter.
A-3
EXHIBIT B
CONFIDENTIAL
Project Phoenix
$1,685,000,000 Senior Secured Credit Facilities
Summary of Principal Terms and Conditions
All capitalized terms used but not defined herein shall have the meanings given to them in the Commitment Letter to which this term
sheet is attached, including Exhibit A thereto or in Exhibit C thereto.
Term Borrowers:
Avast Software B.V., a company organized in the Netherlands (the “ Company ”) and
Sybil Software LLC, a Delaware limited liability company and wholly owned
subsidiary of the Company (the “ US Borrower ”, and together with the Company, the
“ Term Borrowers ”), on a joint and several basis.
Revolving Borrowers:
Each Term Borrower, AVAST Software s.r.o., a Czech s.r.o. entity (the “ Czech
Subsidiary ”) and any additional subsidiaries of the Company designated by the
Company from time to time as revolving borrowers subject to customary conditions
(collectively, the “ Revolving Borrowers ”, and together with the Term Borrowers,
collectively, the “ Borrowers ”), on a several, and not joint, basis.
Holdings:
Avast Holding B.V., an entity organized under the laws of the Netherlands (“ Holdings
”).
Transaction:
As set forth in Exhibit A to the Commitment Letter.
Agents:
Credit Suisse AG (acting through such of its affiliates or branches as it deems
appropriate, “ CS ”) will act as sole and exclusive administrative agent and collateral
agent (in such capacities, the “ Administrative Agent ”) in respect of the Senior
Secured Facilities, Credit Suisse Securities (USA), LLC (“ CS Securities ”) will act as
syndication agent for the Senior Secured Facilities and UBS Securities LLC (“ UBSS
”) and Jefferies Finance LLC (acting through such of its affiliates or branches as it
deems appropriate, “ Jefferies ”) will act as co-documentation agents for the Senior
Secured Facilities, in each case for the Lenders (as defined below), and will perform
the duties customarily associated with such roles.
Joint Bookrunners and Joint Lead Arrangers
:
CS Securities, UBSS, Jefferies, Bank of America and Soc Gen.
Lenders:
A syndicate of banks, financial institutions and other entities, but excluding
Disqualified Lenders, arranged by the Initial Lead Arrangers and reasonably acceptable
to the Company (collectively, and together with any party that becomes a lender by
assignment as set forth under “Assignments and Participations” below, the “ Lenders
”).
B-1
Senior Secured Facilities:
(A)
Senior secured term loan facilities in an aggregate principal amount of $1,600.0
million (which shall be provided as (i) a senior secured term loan facility (the “
Dollar Tranche Term Facility ”) and (ii) a senior secured term loan facility (the “
Euro Tranche Term Facility ”), with the allocation of the $1,600.0 million
between the Dollar Tranche Term Facility and the Euro Tranche Term Facility to
be determined by the Initial Lead Arrangers in consultation with the Company (it
being understood and agreed that the Dollar Tranche Term Facility shall be in an
aggregate principal amount of at least $800.0 million)), plus at the Company’s
election, an amount (allocated to the Dollar Tranche Term Facility and/or the
Euro Tranche Term Facility in such amounts as the Company may determine in
its sole discretion) sufficient to fund any original issue discount or upfront fees in
connection with the “flex” provisions in the Fee Letter (collectively, the “ Term
Loan Facilities ”; the loans made pursuant to the Dollar Tranche Term Facility
(the “ Dollar Term Loans ”) and the loans made pursuant to the Euro Tranche
Term Facility (the “ Euro Term Loans ”), collectively, the “ Term Loans ”).
Dollar Term Loans will be available to the Term Borrowers in U.S. Dollars. Euro
Term Loans will be available to the Term Borrowers in euros. The amount of
euros available under the Euro Tranche Term Facility will be determined by
converting the U.S. Dollars commitment amount under the Euro Tranche Term
Facility as determined above to euros at the Administrative Agent’s spot rate of
exchange on the earlier of the Closing Date and the date of allocation of
commitments of the Term Loan Facilities in connection with primary syndication.
(B)
A senior secured revolving credit facility in an aggregate principal amount of
$85.0 million (the “ Revolving Facility ”; the loans thereunder, the “ Revolving
Loans ”, and together with the Term Loans, the “ Loans ”), of which up to an
amount to be mutually agreed between the Company and the Initial Lead
Arrangers (but not less than $25.0 million) will be available in the form of letters
of credit. The Revolving Loans and Letters of Credit shall be available in U.S.
Dollars, Euros, Pounds Sterling, Czech Koruna and such other currencies as
agreed by the Revolving Borrowers and the Initial Lead Arrangers. Adjusted
LIBOR or EURIBOR borrowings under the Revolving Facility shall be
B-2
available on a same-day basis in U.S. Dollars, Euros and Pounds Sterling (with
exceptions similar to existing arrangements, which may remain in place as agreed
between the Initial Lead Arrangers).
Incremental Loans:
The Senior Credit Documentation will permit any Borrower from time to time to add one or
more incremental term loan facilities to the Senior Secured Facilities (each, an “
Incremental Term Loan Facility ”), and/or add one or more incremental revolving facilities
and/or increase commitments under the Revolving Facility (each, an “ Incremental
Revolving Facility ”; together with any Incremental Term Loan Facilities, the “ Incremental
Facilities ”) in an aggregate principal amount of up to (the “ Available Incremental Amount
”):
(A) an amount if, after giving effect to the incurrence of such additional amount, the Total
Net First Lien Leverage Ratio (as defined below) is equal to or less than 3.50:1.00;
provided that (x) in the case of any single transaction that provides for the incurrence
and/or increase of loans and/or commitments under this clause (A) and clause (B)
(including in the form of Incremental Equivalent Debt), compliance with the above
applicable leverage ratios shall be determined for purposes of this clause (A) by giving
the single transaction pro forma effect but excluding in such determination the
aggregate amount of indebtedness (and deemed indebtedness) from any such incurrence
and increase utilizing clause (B) and (y) any Incremental Equivalent Debt incurred
pursuant to paragraph (A) in this “Incremental Loans” section will be treated as first
lien secured debt at the time of incurrence thereof for purposes of determining
compliance with the Total Net First Lien Leverage Ratio set forth therein whether or
not such Incremental Equivalent Debt is so secured; plus
(B) the sum of (i) $300.0 million plus (ii) all voluntary prepayments of the Term Loans plus
(iii) all permanent commitment reductions in the Revolving Facility (in each case, or
the equivalent thereof if denominated in a currency other than U.S. Dollars) (which
shall not be reduced by any amount incurred pursuant to the immediately preceding
clause (A)); provided that
(i)
no existing Lender will be required to participate in any such Incremental
Facility;
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(ii) no event of default exists, or would exist, after giving effect thereto, subject to
customary “SunGard” or “European Certain Funds” limitations to the extent the
proceeds of any Incremental Facility are used to finance an acquisition or any
other permitted investment;
(iii) in the case of any Incremental Term Loan Facility (1) the final maturity date and
the weighted average life of any such Incremental Term Loan Facility shall not
be earlier than, or shorter than, as the case may be, the maturity date or the
weighted average life, as applicable, of the Term Loan Facilities and (2) the
interest rates and amortization schedule applicable to any such Incremental Term
Loan Facility shall be determined by the Company and the lenders thereunder;
provided that until the 18 month anniversary from the Closing Date, if the applicable
interest rate relating to any Incremental Term Loan Facility that is pari passu in
right of payment and security exceeds the applicable interest rate relating to any
applicable tranche of the Term Loan Facilities denominated in the same currency that
was funded on the Closing Date by more than 0.50%, the applicable interest rate
relating to such tranche of the Term Loan Facilities denominated in the same currency
shall be adjusted to be equal to the applicable interest rate relating to such Incremental
Term Loan Facility denominated in such currency minus 0.50% (it being agreed that
any increase in yield to any existing facility required due to the application of an
Adjusted LIBOR or ABR floor on any Incremental Facility shall be effected, at the
option of the applicable Borrower, through an increase in (or implementation of, as
applicable) any Adjusted LIBOR or EURIBOR or ABR floor applicable to such
existing facility or an increase in the applicable margin or a combination thereof);
provided further that in determining such applicable interest rates, (x) original issue
discount (“ OID ”) or upfront fees (which shall be deemed to constitute a like amount
of OID) paid by the applicable Borrower to the lenders under the Incremental Term
Loan Facility and the applicable tranche of the existing Term Loan Facilities
denominated in the same currency in the initial primary syndication thereof
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shall be included and equated to the interest rate (with OID being equated to interest
based on an assumed four-year life to maturity), (y) any amendments to the applicable
margin on the applicable tranche of the existing Term Loan Facilities that became
effective subsequent to the Closing Date but prior to the time of such Incremental Term
Loan Facility denominated in the same currency shall also be included in such
calculations and (z) any arrangement, structuring or other fees payable in connection
therewith that are not shared with all lenders providing such Incremental Term Loan
Facility denominated in the same currency shall not be included and equated to interest
rate;
provided further that if Adjusted LIBOR (as defined below) in respect of such
Incremental Term Loan Facility includes a floor greater than the LIBOR floor applicable
to the applicable tranche of the existing Term Loan Facilities denominated in the same
currency, such excess amount shall be equated to interest margin for purposes of
determining any increase to the applicable interest margin under the applicable tranche
of the existing Term Loan Facilities;
provided further that the interest rate shall take into account any interest rate benchmark
floors,
(iv)
in the case of any Incremental Revolving Facility (1) the final maturity date of
any such Incremental Revolving Facility shall not be earlier than the maturity
date of the Revolving Facility and (2) the interest rates applicable to any such
Incremental Revolving Facility shall be determined by the applicable borrower
and the lenders thereunder;
(v)
the Incremental Facilities will rank pari passu in right of payment and pari
passu , with respect to security with the other Senior Secured Facilities;
(vi)
(x) any Incremental Revolving Facility may provide for the ability to
permanently repay and terminate revolving commitments on a pro rata basis or
a less than pro rata basis with other then-outstanding revolving credit facilities
under the Revolving Facility and (y) any Incremental Term Loan Facility may
provide for the ability to participate (I) on a
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pro rata basis or less than pro rata basis in any voluntary prepayments of the
Term Loans and (II) on a pro rata basis or less than pro rata basis in any
mandatory prepayments of the Term Loans; and
(vii) all terms and documentation with respect to any Incremental Facility which
differ from those with respect to the Loans under the applicable Senior Secured
Facility (as reasonably determined by the Company) (except to the extent
permitted by clauses (iii), (iv), (v) or (vi) above) shall be reasonably
satisfactory to the Administrative Agent or reflect market terms and conditions at
the time of incurrence or issuance thereof as determined by the Company (it
being understood that terms differing from those with respect to the Senior
Secured Facility applicable only after the maturity date of the comparable Senior
Secured Facility are acceptable).
The proceeds of the Incremental Facilities will be used for general corporate purposes
of the Company and its subsidiaries (including for capital expenditures, acquisitions,
restricted payments, refinancing of indebtedness and any other transaction not
prohibited by the Senior Credit Documentation).
The Senior Credit Documentation shall be amended to give effect to any Incremental
Facility by documentation executed by the Lender or Lenders (or such other persons)
making the commitments with respect thereto, the Administrative Agent and the
Company and without the consent of any other existing Lender.
In addition, the Company may, in lieu of adding Incremental Term Loan Facilities,
utilize any part of the Available Incremental Amount at any time by issuing or
incurring Incremental Equivalent Debt (as defined below).
As used herein:
1.
“Total Net First Lien Leverage Ratio” means the ratio of total consolidated first
lien net debt for borrowed money (calculated net of unrestricted cash and cash
equivalents (other than the
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proceeds of any Incremental Term Loan Facilities and/or Incremental Revolving
Facility borrowed at the time of determination; provided that to the extent
proceeds of any such Incremental Facility are to be used to repay indebtedness, the
Company shall be permitted to give pro forma effect to such repayment of
indebtedness), and cash and cash equivalents restricted in favor of the
Administrative Agent for the benefit of the Lenders) to trailing four-quarter
EBITDA (as defined below) for which financial statements have been provided. It
is understood and agreed that any Total Net First Lien Leverage Ratio levels set
forth in this term sheet shall be revised upward to reflect any additional debt
incurred to fund any OID or upfront fees pursuant to the market flex provisions in
the Fee Letter.
2. “Total Net Senior Secured Leverage Ratio” means the ratio of total consolidated
senior secured net debt for borrowed money (calculated net of unrestricted cash
and cash equivalents (other than the proceeds of any Incremental Term Loan
Facilities and/or Incremental Revolving Facility borrowed at the time of
determination; provided that to the extent proceeds of any such Incremental
Facility are to be used to repay indebtedness, the Company shall be permitted to
give pro forma effect to such repayment of indebtedness), and cash and cash
equivalents restricted in favor of the Administrative Agent for the benefit of the
Lenders) to trailing four-quarter EBITDA (as defined below) for which financial
statements have been provided. It is understood and agreed that any Total Net
Senior Secured Leverage Ratio levels set forth in this term sheet shall be revised
upward to reflect any additional debt incurred to fund any OID or upfront fees
pursuant to the market flex provisions of the Fee Letter.
3. “Incremental Equivalent Debt” means indebtedness in an amount not to exceed
the then available Available Incremental Amount consisting of one or more credit
or debt facilities ( pari passu senior secured, junior secured or unsecured), the
issuance of senior secured first lien or junior lien notes, subordinated notes or
senior unsecured notes, in each case issued in a public offering, Rule 144A or
other private
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placement or bridge facility in lieu of the foregoing, or secured or unsecured
“mezzanine” debt, in each case on customary terms and conditions (with all such
facilities being herein called “Incremental Equivalent Facilities”); provided that
(i) such Incremental Equivalent Debt consisting of pari passu senior secured
term loans or notes shall be subject to the requirement set forth in the provisos to
clause (iii) of the first paragraph in this “Incremental Facilities” section, (ii) the
maturity date of such Incremental Equivalent Debt will be no earlier than the
maturity date of the Term Loan Facilities, (iii) the weighted average life to
maturity of such Incremental Equivalent Debt may not be shorter than the
remaining weighted average life to maturity of the Term Loan Facilities, and (iv)
if such Incremental Equivalent Debt is secured equally and ratably with the Term
Loan Facilities or by liens that are junior to the liens securing the Term Loan
Facilities, such Incremental Equivalent Debt will be subject to the intercreditor
arrangements provided for in the Senior Credit Documentation.
4. “EBITDA” is to be defined in a manner consistent with the Documentation
Principles (as defined below) as modified to reflect any adjustments and
add-backs specifically identified in the Company’s model provided to Credit
Suisse, Jefferies and UBSS under the Original Commitment Letter on June 24,
2016.
Refinancing Facilities:
The Senior Credit Documentation will permit the Borrowers to refinance loans under
any Term Loan Facility or any Incremental Term Loan Facility or loans or commitments
under the Revolving Facility or any Incremental Revolving Facility from time to time, in
whole or in part, with (a) one or more new term facilities (each, a “ Refinancing Term
Loan Facility ”) or one or more new revolving credit facilities (each, a “ Refinancing
Revolving Facility ”; the Refinancing Term Loan Facilities and the Refinancing
Revolving Facilities are collectively referred to as “ Refinancing Facilities ”),
respectively, under the Senior Credit Documentation with the consent of the institutions
providing such Refinancing Term Loan Facility or Refinancing Revolving Facility, as
applicable, (b) one or more additional series of senior unsecured notes or loans, (c) one
or more additional series of senior secured notes or loans that will be secured by the
Collateral on a pari passu basis with the Senior Secured
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Facilities, or (d) one or more additional series of junior lien senior secured notes or loans
that will be secured by the Collateral on a subordinated basis to the Senior Secured
Facilities and will be subject to customary intercreditor arrangements (any such notes or
loans described in the foregoing clauses (b), (c) and (d), “ Refinancing Notes ”), subject, in
each case, solely to the following terms and conditions: (i) any Refinancing Term Loan
Facility or Refinancing Notes do not mature prior to the maturity date of, or have a shorter
weighted average life to maturity than, the loans under the Term Loan Facilities (or
Incremental Term Loan Facility) being refinanced; (ii) any Refinancing Revolving Facility,
Refinancing Term Loan Facility or Refinancing Notes do not mature prior to the maturity
date of the revolving commitments being refinanced; and (iii) the other terms and conditions
of such Refinancing Facility or Refinancing Notes (excluding pricing and optional
prepayment or redemption terms) are (x) no more favorable than the Term Loan Facilities
or Revolving Facility (or Incremental Facility), as the case may be, being refinanced or (y)
reflect market terms and conditions at the time of incurrence or issuance thereof as
determined by the Company. In connection with any Refinancing Facility or Refinancing
Notes, the Senior Credit Documentation will provide the Borrowers the right to require the
applicable Lenders to assign their loans and commitments to the providers of any such
Refinancing Facility or Refinancing Notes.
Purpose:
(A)
The proceeds of borrowings under the Term Loan Facilities will be used by the
Company and certain of its subsidiaries, on the Closing Date, together with the
proceeds of borrowings under the Revolving Facility (if any), to finance a portion of
the Transactions, including the payment of the Transaction Costs, advancing loans to
the Czech Subsidiary so that the Czech Subsidiary can repay some of its intra-group
liabilities owing to the Company and certain of its subsidiaries and/or fund a
repayment of share premium to its immediate parent and for working capital and
other general corporate purposes (including to fund OID or upfront fees with respect
to the Senior Secured Facilities payable pursuant to the market flex provisions of the
Fee Letter).
(B)
The letters of credit and proceeds of borrowings under the Revolving Facility will be
used by the Revolving Borrowers and their respective subsidiaries to finance a
portion of the Transactions, and for working capital, capital expenditures and for
other general corporate purposes (including to fund OID or upfront fees in
connection with the Facilities payable pursuant to the market flex provisions of the
Fee Letter).
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Availability:
(A) Each Term Loan Facility will be available in a single drawing on the Closing Date.
Amounts borrowed under the Term Loan Facilities that are repaid or prepaid may not
be reborrowed.
(B) Up to $15.0 million in Revolving Loans under the Revolving Facility (exclusive of
letter of credit usage) plus any amounts required to fund original issue discount or
upfront fees in connection with the Facilities payable pursuant to the market flex
provisions of the Fee Letter shall be made available on the Closing Date other than to
finance the purchase price of the Acquisition. Additionally, Letters of Credit shall be
issued on the Closing Date if requested by a Revolving Borrower in order to backstop
or replace letters of credit outstanding on the Closing Date under the facilities no
longer available to the Company, the Target or any of their respective affiliates as of
the Closing Date and for other general corporate purposes. Otherwise, Revolving
Loans will be available at any time after the Closing Date and prior to the final
maturity of the Revolving Facility, in minimum principal amounts to be agreed upon
between the Company and the Initial Lead Arrangers. Amounts repaid under the
Revolving Facility may be reborrowed.
Interest Rates and Fees:
As set forth on Annex I hereto.
Default Rate:
With respect to overdue principal, the applicable interest rate plus 2.00% per annum, and
with respect to overdue interest or fees, the interest rate applicable to ABR loans (as
defined in Annex I ) plus 2.00% per annum.
Letters of Credit:
An aggregate amount of up to an amount to be mutually agreed between the Company and
the Initial Lead Arrangers (but not less than $25.0 million) of the Revolving Facility will
be available to the Revolving Borrowers for the purpose of issuing letters of credit (the “
Letters of Credit ”). Letters of Credit will be issued by each of the Initial Lenders and each
other Lender acceptable to the Revolving Borrowers and the Administrative Agent (each,
an “ Issuing Lender ”) on a pro rata basis (with exceptions similar to existing
arrangements, which may remain in place as agreed between the Initial Lead Arrangers).
Each Letter of Credit shall expire not later than the earlier of (a) 12 months after its date of
issuance or such longer period of time as may be agreed by the applicable
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Issuing Lender and (b) the third business day prior to the final maturity of the Revolving
Facility; provided that any Letter of Credit may provide for renewal thereof for
additional periods of up to 12 months or such longer period of time as may be agreed by
the applicable Issuing Lender (which in no event shall extend beyond the date referred to
in clause (b ) above, except to the extent cash collateralized or backstopped pursuant to
arrangements reasonably acceptable to the relevant Issuing Lender).
A drawing under any Letter of Credit shall be reimbursed by the applicable Revolving
Borrower (whether with its own funds or with the proceeds of borrowings under the
Revolving Facility) within two business days after notice of such drawing is received by
such Revolving Borrower from the relevant Issuing Lender. To the extent that such
Revolving Borrower does not reimburse the Issuing Lender within the time period
specified above, the Lenders under the Revolving Facility shall be irrevocably obligated to
reimburse the Issuing Lender pro rata based upon their respective Revolving Facility
commitments.
The Senior Credit Documentation will contain provisions consistent with the
Documentation Principles to be agreed between the Company and the Initial Lead
Arrangers with respect to Letters of Credit outstanding or to be issued when a Lender
under the Revolving Facility is a Defaulting Lender.
Final Maturity and Amortization:
(A)
Term Loan Facilities
The Term Loan Facilities will mature on the date that is six years after the Closing Date
and will amortize in equal quarterly installments in aggregate annual amounts equal to
1.00% of the original principal amount of the Term Loan Facilities commencing with the
first full fiscal quarter after the Closing Date with the balance payable on the sixth
anniversary of the Closing Date; provided , that the Senior Credit Documentation shall
provide the right for the Company to extend commitments and/or outstandings pursuant to
one or more tranches with only the consent of the respective extending Lenders (it being
understood that each Lender under the tranche that is being extended shall have been
offered the opportunity to participate in such extension on the same terms and conditions
as each other Lender under such tranche).
(B)
Revolving Facility
The Revolving Facility will mature, and lending commitments will terminate, on the date
that is five years after the Closing
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Date; provided, that the Senior Credit Documentation shall provide the right for the
Revolving Borrowers to extend commitments and/or outstandings pursuant to one or
more tranches with only the consent of the respective extending Lenders; it being
understood that each Lender under the tranche that is being extended shall have been
offered the opportunity to participate in such extension on the same terms and
conditions as each other Lender under such tranche.
Guarantees:
Subject to the Certain Funds Provision, all obligations of (i) the Term Borrowers under
the Term Loan Facilities and the Revolving Borrowers under the Revolving Facility
(the “ Borrower Obligations ”) and (ii) at the election of the Company, any Borrower
or any Guarantor (as defined below) under interest rate protection, commodity trading
or hedging, currency exchange or other non-speculative hedging or swap arrangements
(other than any obligation of any Guarantor to pay or perform under any agreement,
contract, or transaction that constitutes a “swap” within the meaning of Section 1a(47)
of the Commodity Exchange Act (a “ Swap ”), if, and to the extent that, all or a portion
of the guarantee by such Guarantor of, or the grant by such Loan Party of a security
interest to secure, such Swap (or any guarantee thereof) is or becomes illegal or
unlawful under the Commodity Exchange Act or any rule, regulation, or order of the
Commodity Futures Trading Commission (or the application or official interpretation
of any thereof)) or cash management arrangements entered into with any Lead
Arranger, any Lender or any affiliate of a Lead Arranger or Lender at the time of the
entering into of such arrangements (the “ Hedging/Cash Management Arrangements
”) will be, subject to the Agreed Security Principles (as defined below),
unconditionally guaranteed jointly and severally on a senior secured basis (the “
Guarantees ”) by Holdings, the Company and each existing and subsequently acquired
or organized direct or indirect wholly-owned material restricted subsidiary of the
Company (such materiality for this purpose determined on an individual basis) (other
than (x) any Borrower in respect of its primary obligations and (y) any Excluded
Subsidiary (as defined below)) (the “ Subsidiary Guarantors ” and, together with
Holdings and the Company, the “ Loan Parties ”); provided that the delivery of
guarantees by wholly owned subsidiaries of the Company (including the Czech
Subsidiary) that are required to be a Subsidiary Guarantor pursuant this paragraph shall
not constitute a condition precedent to the availability of the Senior Secured Facilities
on the Closing Date but shall be required to be delivered after the Closing Date (and in
any event, within 120 days after the Closing Date (or, in the case of subsidiaries of the
Company on July 6, 2016 that are Guarantors (as defined in the Existing Avast Credit
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Agreement), 45 days after the Closing Date) plus any extensions granted by the
Administrative Agent in its reasonable discretion) pursuant to arrangements to be
mutually agreed between the Company and the Initial Lead Arrangers; provided that
the Target and any other subsidiary of the Company or the Target that would be
required to become a Subsidiary Guarantor or any such subsidiary that the Company
agrees in the Senior Credit Documentation shall become a Subsidiary Guarantor (in the
case of the Target and its subsidiaries, as such requirement would be determined if
Target was a wholly-owned subsidiary of the Company on the Closing Date) shall be
deemed a Subsidiary Guarantor for the purposes of the negative covenants in the
Senior Credit Documentation; provided , further , that if the Company owns,
directly or indirectly, at least 95% of the equity interests of the Target, then, subject to
the Agreed Security Principles, the Target and any wholly owned subsidiaries of the
Target shall be deemed to be wholly owned subsidiaries of the Company upon
occurrence of the Closing Date for purposes of this paragraph.
Subject to the investment covenant in the Senior Credit Documentation, the Company
may designate (and redesignate) any subsidiary as an “unrestricted subsidiary” and
designate (and redesignate) any such unrestricted subsidiary as a restricted subsidiary;
provided that after giving effect to such designation or redesignation the Company
shall be in compliance with the Financial Covenant to the extent then in effect and no
event of default exists or would result therefrom. Unrestricted subsidiaries will not be
subject to the mandatory prepayment, representations and warranties, covenants, events
of default or other provisions of the Senior Credit Documentation, and the results of
operations and indebtedness of unrestricted subsidiaries will not be taken into account
for purposes of calculating any financial metric contained in the Senior Credit
Documentation except to the extent of distributions received therefrom.
Notwithstanding the above, it is understood and agreed that, at the election of the
Company, Jumpshot, Inc., a Delaware corporation, and its subsidiaries shall be
unrestricted subsidiaries pursuant to the Senior Credit Documentation on the Closing
Date without requiring the use of, or otherwise reducing availability under, the
“baskets” or other exceptions to the investments covenant in the Senior Credit
Documentation.
“Excluded Subsidiary” means (i) any subsidiary excluded from providing a Guarantee
pursuant to Agreed Security Principles consistent with the Documentation Principles or
otherwise consistent with the other European financings of portfolio companies of
CVC and taking into account, without
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limitation, maximizing tax and cost efficiencies (the “Agreed Security Principles ”),
(ii) any subsidiary whose directors may be subject to liabilities as a result thereof or
that is not permitted by law (including, without limitation, financial assistance laws,
corporate benefit laws or otherwise), regulation or contract to provide such guarantee,
or would require governmental (including regulatory) consent, approval, license or
authorization to provide such guarantee, unless such consent, approval, license or
authorization has been received, or for which the provision of such guarantee would
result in an adverse tax, accounting or regulatory cost or consequence to the Company
or one of its subsidiaries (as reasonably determined by the Company in consultation
with the Administrative Agent), (iii) any subsidiary where the Company and the
Administrative Agent reasonably determine that the cost, difficulty, burden or
consequences of providing such a guarantee is excessive in relation to the value
afforded thereby and (iv) any unrestricted subsidiaries, captive insurance companies,
not-for-profit subsidiaries, special purpose entities, immaterial subsidiaries, and other
subsidiaries consistent with the Documentation Principles or as may be otherwise
agreed upon between the Company and the Initial Lead Arrangers.
Subject to the Documentation Principles and the Agreed Security Principles, (a)
commencing on the 121 st day following the Closing Date (plus any extensions
granted by the Administrative Agent in its reasonable discretion) and (b) within 90
days following the date that the applicable financial statements are required to be
delivered (commencing with the fiscal year ending on December 31, 2016), the
aggregate EBITDA for the Loan Parties shall be no less than 80% of the aggregate
EBITDA for the Company and its restricted subsidiaries as of the end of any fiscal
quarter or fiscal year ending on June 30 th or December 31 st , respectively (as
calculated in a manner and with exclusions consistent with the Documentation
Principles).
Security:
Subject to the limitations set forth below in this section, the Borrower Obligations, the
Guarantees and any Hedging/Cash Management Arrangements will be secured, subject
to the Agreed Security Principles, by in the case of the Company and the Guarantee by
Holdings and the Subsidiary Guarantors, (a) a perfected pledge of all the capital stock
of each direct, wholly owned material restricted subsidiary directly held by Holdings,
any Borrower or any Subsidiary Guarantor and (b) perfected security interests in, and
mortgages on, substantially all other tangible and intangible assets of any Loan Party,
in each case excluding the Excluded Assets (as defined below) (collectively, the “
Collateral ”); provided that the requirement
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to grant security interests in Collateral and the perfection thereof by any Loan Party
pursuant this paragraph shall not constitute a condition precedent to the availability of
the Senior Secured Facilities on the Closing Date (other than as specifically set forth in
paragraph 4 of Exhibit C to the Commitment Letter) but shall be required to be
delivered after the Closing Date (and in any event, within 120 days after the Closing
Date (or, in the case of subsidiaries of the Company on July 6, 2016 that are
Guarantors (as defined in the Existing Avast Credit Agreement), 45 days after the
Closing Date) plus any extensions granted by the Administrative Agent in its
reasonable discretion) pursuant to arrangements to be mutually agreed between the
Company and the Initial Lead Arrangers; provided , further , that if the Company
owns, directly or indirectly, at least 95% of the equity interests of the Target, then,
subject to the Agreed Security Principles, the Target and any wholly owned
subsidiaries of the Target shall be deemed to be wholly owned subsidiaries of the
Company upon occurrence of the Closing Date for purposes of this paragraph.
Notwithstanding anything to the contrary, the Collateral shall exclude the following: (i)
any owned real property with a fair market value consistent with the Documentation
Principles (with all required mortgages being permitted to be delivered post-closing)
and all leasehold property (it being understood that there shall be no requirement to
obtain any landlord waivers, estoppels or collateral access letters), (ii) vehicles and
other assets subject to certificates of title, aircraft, letter of credit rights and tort claims,
(iii) cash and cash equivalents, deposit, commodities and securities accounts (including
securities entitlements and related assets) and any other assets requiring perfection
through control agreements or perfection by “control” (other than in respect of
certificated equity interests in the Company and material wholly-owned restricted
subsidiaries of the Company or a Subsidiary Guarantor otherwise required to be
pledged), (iv) assets for which the grant is prohibited by law (including, without
limitation, financial assistance laws, corporate benefit laws or otherwise), rule,
regulation or contract, would trigger termination pursuant to any “change of control” or
similar provision, requires governmental authority or third party consent or results in
adverse tax, accounting or regulatory costs or consequences as determined by the
Company in consultation with the Administrative Agent, (v) margin stock and equity
interests in any person other than material wholly-owned restricted subsidiaries of the
Company or any Subsidiary Guarantor, (vi) any asset for which the cost, difficulty,
burden or consequences of obtaining a security interest in, or perfection of, such assets
exceeds the practical
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benefit to the Lenders afforded thereby as reasonably determined by the Company and
the Administrative Agent, (vii) interests in partnerships, joint ventures and
non-wholly-owned subsidiaries which cannot be pledged without the consent of one or
more third parties, (viii) any “intent-to-use” trademark applications prior to the filing of
a “Statement of Use” or “Amendment to Allege Use” with respect thereto, to the
extent, if any, that, and solely during the period, if any, in which, the grant of a security
interest therein would impair the validity or enforceability of such intent-to-use
trademark application under applicable federal law, (ix) to the extent applicable, capital
stock of any affiliate to the extent such pledge would result in additional financial
reporting requirements under Rule 3-16 under Regulation S-X, (x) any lease, license or
agreement, or any property subject to a purchase money security interest, capital lease
obligation or similar arrangement, in each case to the extent that a grant of a security
interest therein would violate or invalidate such lease, license or agreement or purchase
money arrangement or create a right of termination in favor of any other party thereto
after giving effect to the applicable anti-assignment provisions of applicable law, other
than proceeds and receivables thereof, the assignment of which is expressly deemed
effective under applicable law notwithstanding such prohibition, (xi) any property or
assets excluded pursuant to the Agreed Security Principles, and (xii) other exceptions
to be mutually agreed upon between the Company and the Initial Lead Arrangers or
that are usual and customary for facilities of this type consistent with the
Documentation Principles. The foregoing described in clauses (i) through (xii) are,
collectively, the “ Excluded Assets ”.
In addition, (i) no action shall be required in any jurisdiction or required by the laws of
any jurisdiction other than (x) the jurisdiction of organization of the relevant entity to
create or perfect a security interest in assets of such entity, including any intellectual
property registered outside such jurisdiction of organization (other than intellectual
property registered in the United States) and (y) solely in the case of a security interest
securing the equity interests in an entity, the jurisdiction of organization of any
Borrower or Guarantor and (ii) all the above-described pledges, security interests and
mortgages shall be created and perfected on terms, and pursuant to documentation,
subject to the Agreed Security Principles and the limitations set forth above, and
otherwise consistent with the Commitment Letter, and none of the Collateral shall be
subject to any other pledges, security interests or mortgages (subject to customary
exceptions for financings of this kind consistent with the Documentation
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Principles, permitted under the Senior Credit Documentation or as otherwise agreed
upon between the Company and the Initial Lead Arrangers).
Mandatory Prepayments:
The Term Loans shall be prepaid with (a) commencing with the first full fiscal year of
the Company to occur after the Closing Date, 50% of Excess Cash Flow (to be defined
consistent with the Documentation Principles), with a reduction to 25% and
elimination based upon achievement of Total Net First Lien Leverage Ratios not
exceeding 3.00:1.00 and 2.50:1.00, respectively; provided that (i) any voluntary
prepayments of the Term Loans, any Incremental Term Loan Facility, the Revolving
Facility, any Incremental Revolving Facility, any Incremental Equivalent Facility, any
Refinancing Facility and any Refinancing Notes (in the case of any revolving credit
facility, to the extent accompanied by a permanent reduction of the relevant
commitment) made during such fiscal year or after year-end and prior to the time such
Excess Cash Flow prepayment is due (including in connection with loan buy-backs
pursuant to Dutch auctions or purchases of such indebtedness at a discount to par);
other than prepayments funded with the proceeds of incurrences of long term
indebtedness, in each case shall be credited against excess cash flow prepayment
obligations on a dollar-for-dollar basis, (ii) Excess Cash Flow shall be determined in a
manner consistent with the Documentation Principles and (iii) any such Excess Cash
Flow prepayments shall be required only to the extent by which the amount of the
prepayment exceeds $40.0 million; (b) 100% of the net cash proceeds of all
non-ordinary course asset sales or other dispositions of property by the Company and
its restricted subsidiaries (including insurance and condemnation proceeds) in excess of
$20.0 million per transaction and $60.0 million in the aggregate per fiscal year and
subject to the right of the Company to reinvest such proceeds if such proceeds are
reinvested (or committed to be reinvested) within 12 months and, if so committed to
reinvestment, reinvested within six months after such initial 12 month period, and other
exceptions to be agreed upon between the Company and the Initial Lead Arrangers;
and (c) 100% of the net cash proceeds received from the incurrence of indebtedness for
borrowed money by the Company or any of its restricted subsidiaries (other than
indebtedness permitted under the Senior Credit Documentation other than Refinancing
Debt). Notwithstanding the foregoing, all mandatory prepayments from Excess Cash
Flow and asset sales (including insurance and condemnation proceeds) will be limited
to the extent resulting in adverse tax consequences and shall be subject to
permissibility under (i) local law of upstreaming proceeds (including financial
assistance and corporate benefit
B-17
restrictions and fiduciary and statutory duties of the relevant directors) and (ii) material
constituent document restrictions (including as a result of minority ownership) and
other material agreements. The non-application of any mandatory prepayment amounts
as a consequence of the foregoing provisions will not, for the avoidance of doubt,
constitute a default or an event of default, and such amounts shall be available for
working capital purposes of the Company and its subsidiaries.
Within the Term Loan Facilities, mandatory prepayments shall be applied, without
premium or penalty, subject to reimbursement of the Lenders’ usual and customary
breakage costs (excluding loss of profit), first, to accrued interest and fees due on the
amount of the prepayment under the Term Loan Facilities and second, to the scheduled
installments of principal of the Term Loan Facilities as directed by the Company (or, in
case of no direction, in direct order of maturity); provided that, at the election of the
Company, a portion of such amounts may be ratably applied to indebtedness that is
secured on a pari passu basis with the Term Loan Facilities (“ Pari Passu
Indebtedness ”) pursuant to a mandatory prepayment, redemption or offer applicable to
such Pari Passu Indebtedness.
Any Lender may elect not to accept any mandatory prepayment (other than with
respect to Refinancing Notes and Refinancing Facilities) (each a “ Declining Lender
”). Any prepayment amount declined by a Declining Lender or by a lender or holder of
Pari Passu Indebtedness pursuant to a mandatory prepayment, redemption or offer
applicable to such Pari Passu Indebtedness may be retained by the Company.
Voluntary Prepayments and Reductions in
Commitments :
Voluntary reductions of the unutilized portion of the Revolving Facility commitments
and prepayments of borrowings under the Senior Secured Facilities will be permitted at
any time, in minimum principal amounts to be agreed upon between the Company and
the Initial Lead Arrangers, without premium or penalty (except as set forth below under
the heading “Term Loan Prepayment Fee”), subject to reimbursement of the Lenders’
redeployment costs actually incurred in the case of a prepayment of Adjusted LIBOR
or EURIBOR borrowings other than on the last day of the relevant interest period. All
voluntary prepayments of the Term Loan Facilities will be applied among the tranches
as directed by the Company (or, in the case of no direction, pro rata among the
tranches) and within a tranche to the remaining amortization payments under such
tranche as directed by the Company (or, in case of no direction, in direct order of
maturity).
B-18
Term Loan Prepayment Fee:
In connection with any Repricing Event (as defined below) prior to the six-month
anniversary of the Closing Date, the Company will be subject to a prepayment
premium of 1.0% on the principal amount of the Term Loans prepaid or, in the case of
any amendment, the principal amount of the relevant Term Loans subject to such
amendment.
“Repricing Event” shall mean (i) any prepayment or repayment of Term Loans with
the proceeds of, or any conversion of Term Loans into, any new or replacement tranche
of term loans the primary purpose of which is to reduce the all-in yield applicable to
the Term Loans and (ii) any amendment to the Term Loan Facilities the primary
purpose of which is to reduce the all-in yield applicable to the Term Loans (in each
case, the all-in yield shall exclude any structuring, commitment and arranger fees or
other similar fees), but excluding, in any such case, any refinancing or repricing of
Term Loans in connection with any acquisition, investment, “change of control”
transaction or initial public offering.
Documentation:
Definitive documentation for the Senior Secured Facilities (the “Senior Credit
Documentation ”) shall be negotiated in good faith to finalize the documentation for
the Senior Secured Facilities, giving effect to the Certain Funds Provision, as promptly
as reasonably practicable, shall be based upon (i) the Existing Avast Credit Agreement
and the other Loan Documents (as defined in the Existing Avast Credit Agreement)
and (ii) to the extent no less favorable to the Company than the Existing Avast Credit
Agreement, that certain Term Loan Credit Agreement, dated as of January 26, 2016,
among Pet Acquisition Merger Sub LLC, Petco Animal Supplies, Inc., the lenders
party thereto and Citibank, N.A., as administrative agent and collateral agent, and shall
contain the terms and conditions set forth in this Exhibit B and shall otherwise be usual
and customary for financings of this kind and reflect the operational and strategic
requirements of the Company and its subsidiaries in light of their size, industries,
practices, matters disclosed in the Purchase Agreement and the Company’s proposed
business plan (collectively, the “ Documentation Principles ”). The Senior Credit
Documentation shall contain only those payments, conditions to borrowing, mandatory
prepayments, representations and warranties, covenants and events of default expressly
set forth in this Exhibit B, with, unless otherwise specified herein, standards,
qualifications, thresholds, exceptions and grace and cure periods consistent with the
Documentation Principles; provided that all dollar thresholds and other “basket”
amounts
B-19
(other than any leverage ratios) shall be increased by a multiple of at least 4 from the
levels set forth in the Existing Avast Credit Agreement, with the percentage of
consolidated EBITDA in baskets under the Existing Avast Credit Agreement based on
the greater of a specified dollar amount and a percentage of consolidated EBITDA to
be increased to a percentage equal to the percentage such applicable dollar amount
represents as a percentage of Closing Date EBITDA (after giving pro forma effect to
the Transactions) rounded up to the nearest 5%.
Representations and Warranties:
Consistent with the Documentation Principles and limited to the following (to be
applicable to Holdings (solely as it relates to its organizational status, authority, and
enforceability; qualification; and with respect to its guarantee and its pledge of equity
interests of the Company, no violation of, or conflict with, applicable law, charter
documents or agreements), the Company and its restricted subsidiaries only):
organizational status; authority and enforceability; qualification; with respect to Senior
Credit Documentation, no violation of, or conflict with, applicable law, charter
documents or agreements; no material litigation; margin regulations as set forth on
Annex II hereto; governmental approvals; Investment Company Act; accuracy of
disclosure as of the Closing Date; accuracy of historical financial statements; no
Material Adverse Effect (as defined below) (after the Closing Date); taxes; ERISA;
labor matters; insurance; solvency; use of proceeds; compliance with laws (including
FCPA and other applicable anti-bribery laws); OFAC; subsidiaries; intellectual
property; subject to the restrictions described under “Security”, creation and perfection
of security interests; environmental laws; and properties, subject, in the case of each of
the foregoing representations and warranties, to qualifications and limitations for
materiality consistent with the Documentation Principles.
“Material Adverse Effect” means (a) a material adverse effect on the business, assets,
financial condition or results of operations of the Company and its restricted
subsidiaries, taken as a whole, (b) a material and adverse effect on the rights and
remedies of the Lenders, the Issuing Lenders and the Administrative Agent, taken as a
whole, under any Senior Credit Documentation and (c) a material and adverse effect on
the ability of the Borrowers and the Guarantors, taken as a whole, to perform their
material payment obligations under the Senior Credit Documentation.
Conditions Precedent to Initial Borrowing:
The initial borrowing under the Senior Secured Facilities will be subject solely to the
satisfaction or waiver by the Initial Lead Arrangers of the conditions set forth in
Exhibit C to the
B-20
Commitment Letter. For the avoidance of doubt, it is agreed that the conditions on the
Closing Date set forth in Exhibit C to the Commitment Letter are subject, in all
respects, to the Certain Funds Provision.
Conditions Precedent to All Subsequent
Borrowings :
After the Closing Date, each extension of credit will be conditioned upon: delivery of
notice, accuracy of representations and warranties in all material respects and absence
of defaults. Notwithstanding the above, to the extent the proceeds of such extension of
credit are pursuant to an Incremental Facility that is used to finance, in whole or in part,
an acquisition (or any other permitted investment), such extension of credit shall only
be conditioned upon the delivery of notice and accuracy of representations and
warranties in all material respects, subject to customary “SunGard” or European
“Certain Funds” limitations, to the extent agreed by the Lenders providing such
Incremental Facility.
Affirmative Covenants:
Consistent with the Documentation Principles and limited to the following (to be
applicable to the Company and its restricted subsidiaries only): delivery of annual
financial statements within 120 days of fiscal year end (or, in the case of the first fiscal
year ending after the Closing Date, 150 days) and quarterly financial statements within
45 days of the end of the first three quarters of each fiscal year (or, in the case of the
first two fiscal quarters ending after the Closing Date, 60 days) (accompanied, in the
case of annual financial statements, by an audit opinion from nationally recognized
auditors that is not subject to qualification as to “going concern” or the scope of such
audit (other than a “going concern” statement that is due to the impending maturity of
any indebtedness or any prospective default of any financial covenant); annual budget
reports (with delivery time periods to be consistent with the delivery requirements for
the audited financial statements), accountants’ letters, officers certificates and other
information to the extent readily available that is reasonably requested by the
Administrative Agent; delivery of notices of events of default and litigation that could
reasonably be expected to result in a Material Adverse Effect; commercially reasonable
efforts to maintain corporate ratings (but not to maintain a specific rating); inspections
(subject to frequency and cost reimbursement limitations consistent with the
Documentation Principles and other than information subject to confidentiality
obligations or attorney-client privilege (subject to exceptions and mitigation
obligations with respect to such information consistent with the syndication of the
Commitment Letter)); maintenance of organizational existence and rights and
privileges; maintenance of property (subject to casualty, condemnation and normal
wear and tear) and customary insurance; payment
B-21
of material taxes; compliance with laws (including ERISA, FCPA and other applicable
anti-bribery laws); additional guarantors and collateral (subject to limitations set forth
above in “ Security ”); use of proceeds; changes in lines of business; use commercially
reasonable efforts to effect a delisting of the Target’s publicly traded shares from the
New York Stock Exchange as soon as reasonably practicable following the
consummation of the Offer; and further assurances on collateral matters, subject, in the
case of each of the foregoing covenants, to exceptions and qualifications consistent
with the Documentation Principles.
Negative Covenants:
Consistent with the Documentation Principles and limited to the following (to be
applicable to Holdings (solely with respect to the passive nature of Holdings), the
Company and its restricted subsidiaries only): incurrence-based limitations on the
incurrence of debt; liens; fundamental changes; asset sales; investments (including
acquisitions); prepayment of debt that is contractually subordinated to the Senior
Secured Facilities in right of payment (with exceptions for AHYDO “catch up”
payments if applicable) or amendments to debt documents governing such
contractually subordinated debt or to organizational documents to the extent such
amendments are materially adverse to the applicable Lenders; transactions with
affiliates above an agreed-upon between the Company and the Initial Lead Arrangers
threshold (with exceptions to include, among other things, transactions approved by a
majority of disinterested directors); further negative pledges with respect to the
Collateral securing the Senior Secured Facilities; limitations on distributions by
subsidiaries; dividends or distributions on, or redemptions of, the Company’s capital
stock; changes in fiscal year; and passive nature of Holdings, in the case of each of the
foregoing covenants subject to the exceptions set forth in the “Certain Specified
Exceptions” section below and other exceptions, qualifications and, as appropriate,
baskets to be agreed upon consistent between the Company and the Initial Lead
Arrangers with the Documentation Principles.
The negative covenants will be subject, in the case of each of the foregoing covenants
to exceptions, qualifications and “baskets” to be set forth in the Senior Credit
Documentation, including (x) certain baskets to be based on the greater of an amount
consistent with the Documentation Principles and a percentage of consolidated
EBITDA consistent with the Documentation Principles and (y) an “ Available Amount
Basket ”, that will be built by, among other things, (a) the greater of $40.0 million and
10% of consolidated EBITDA, plus (b) retained excess cash flow determined in a
manner consistent with the Documentation Principles, plus (c) the
B-22
cash proceeds of new public or private equity issuances of the Company (other than
disqualified stock), plus (d) capital contributions to the Company made in cash, cash
equivalents or property (at the fair market value thereof) (other than disqualified stock),
plus (e) the net cash proceeds of debt and disqualified equity of the Company and its
restricted subsidiaries, in each case issued after the Closing Date, which have been
exchanged or converted into qualified equity of the Company or any direct or indirect
parent of the Company, plus (f) the net cash proceeds to the Company and its restricted
subsidiaries of sales of investments made using the Available Amount Basket, plus
(g) returns, profits, distributions and similar amounts received in cash or cash
equivalents by the Company and its restricted subsidiaries made using the Available
Amount Basket on investments, plus (h) the aggregate amount of cash (and the fair
market value of property other than cash) received by the Company or any of its
restricted subsidiaries after the Closing Date from (i) the sale (other than to Holdings or
any restricted subsidiary) of the equity interests of any unrestricted subsidiary or (ii)
any dividend or other distribution (including any payment on intercompany
indebtedness) by any such unrestricted subsidiary, plus (i) in the event any unrestricted
subsidiary becomes a restricted subsidiary or has been merged, consolidated or
amalgamated with or into, or transfers or conveys its assets to, or is liquidated into,
Holdings, the Company or any restricted subsidiary, the fair market value (as
determined in good faith by the Company) of the investments of the Company or any
other subsidiary in such unrestricted subsidiary at the time such unrestricted subsidiary
becomes a restricted subsidiary or at the time of such merger, consolidation,
amalgamation, transfer or liquidation (or of the assets transferred or conveyed, as
applicable), plus (j) any mandatory prepayment declined by a Lender, plus (k) certain
other items to be agreed between the Company and the Initial Lead Arrangers. The
Available Amount Basket may be used for, among other things, investments, restricted
payments and the prepayment, repurchase or redemption of subordinated debt;
provided that any use of the Available Amount Basket shall be subject to the absence
of any continuing event of default and the use of the Available Amount Basket for
restricted payments shall be subject to Total Net Leverage Ratio being equal to or less
than 3.00:1.00 on a pro forma basis.
In the case of the incurrence of any indebtedness or liens or the making of any
investments, restricted payments, prepayments of junior, unsecured or subordinated
debt, asset sales or fundamental changes or the designation of any restricted
subsidiaries or unrestricted subsidiaries, in each case in
B-23
connection with any acquisition or permitted investment by the Company or one or more of
its subsidiaries permitted pursuant to the Senior Credit Documentation, the consummation of
which is not conditioned on the availability of, or on obtaining, third party financing (a “
Limited Condition Acquisition ”), at the Company’s option, the relevant ratios and baskets
shall be determined, the accuracy of representations and warranties in all material respects
shall be determined, and any default or event of default blocker shall be tested, as of the date
the definitive acquisition agreements for such Limited Condition Acquisition are entered into
and calculated as if the acquisition or permitted investment and other pro forma events in
connection therewith were consummated on such date; provided that if the Company has
made such an election, in connection with the calculation of any ratio or basket with respect
to the making of any investments on or following such date and prior to the earlier of the date
on which such acquisition or permitted investment is consummated or the definitive
agreement for such acquisition or permitted investment is terminated, any such ratio or basket
shall be calculated on a pro forma basis assuming such acquisition or permitted investment
and other pro forma events in connection therewith (including any incurrence of
indebtedness) have been consummated.
Certain Specified Exceptions
The Senior Credit Documentation will contain exceptions to the covenants consistent with the
Documentation Principles and including, without limitation:
•
Asset sales on an unlimited basis permitted subject to (i) at least 75% of
the proceeds in excess of a threshold amount to consist of cash or cash
equivalents (subject to customary exceptions to the cash consideration
requirement to be set forth in the Senior Credit Documentation, including
a basket in an amount to be agreed between the Company and the Initial
Lead Arrangers for non-cash consideration that may be designated as
cash consideration), (ii) receiving fair market value (as determined by the
Company in good faith), and (iii) a requirement that the net cash
proceeds of asset sales be applied in accordance with “Mandatory
Prepayments” above (without limiting the reinvestment rights applicable
thereto).
•
Acquisitions (“Permitted Acquisitions”) permitted so long as (i) there is
no event of default on the date the agreement for such Permitted
Acquisition is entered into, (ii) the acquired entity or assets are in the
same
B-24
or generally related or ancillary lines of business as the Company and its
restricted subsidiaries; (iii) the acquired entity and its subsidiaries (subject to
limitations in “Guarantees” and “Security” above) will become Guarantors and
pledge their Collateral to the Administrative Agent; (iv) after giving effect to
any Permitted Acquisitions with aggregate consideration in excess of the
greater of $60.0 million and 15% of consolidated EBITDA, the Company shall
be in compliance with the Financial Covenant to the extent then in effect; and
(v) acquisitions of entities that do not become Guarantors will be limited to an
aggregate amount consistent with the Documentation Principles.
•
Dividends/distributions exceptions to include (i) a carve-out for the payment of
a regular dividend following an initial public offering (an “ IPO ”) of up to an
amount to be agreed between the Company and the Initial Lead Arrangers but
no less than (x) 6.00% per annum of the net proceeds received by or
contributed to the Company in or from any such IPO or (y) 5.00% per annum
of the greater of (I) the Company’s market capitalization immediately prior to
the consummation of the IPO and (II) the Company’s post-IPO market
capitalization so long as the Total Net First Lien Leverage Ratio is equal to or
less than 3.50:1.00, increasing to 7.00% per annum so long as the Total Net
First Lien Leverage Ratio is equal to or less than 3.00:1.00, (ii) cashless
exchanges of unsecured notes and/or subordinated debt for indebtedness
meeting permitted refinancing indebtedness conditions, (iii) restricted
payments to pay (or to make restricted payments to any direct or indirect parent
of the Company to pay) management fees and transaction fees in accordance
with the management agreement among the Sponsor and the other parties
thereto, (iv) a carve-out for distributions to equity holders of the Company to
pay franchise and similar taxes and fees and tax distributions to equity holders
of the Company at the highest combined federal, state and local corporate and
individual income tax rates applicable to the item of income in question to
permit such direct or indirect equity holders to pay their own taxes and to make
tax distributions under their respective organizational documents, (v) a basket
for dividends/distributions funded with qualified equity proceeds that do not
increase the Available Basket Amount (other than a Specified Equity
Contribution), (vi) a general basket
B-25
of the greater of a dollar amount and a percentage of consolidated EBITDA
consistent with the Documentation Principles, (vii) a carve-out for unlimited
dividends/distributions, so long as no event of default exists and pro forma
Total Net Leverage Ratio is equal to or less than 2.00:1.00 and (viii) to the
extent constituting a restricted payment, the consummation of the Transactions.
•
Investment exceptions to include (i) a general basket for investments in an
outstanding amount not to exceed the greater of a dollar amount and a
percentage of consolidated EBITDA consistent with the Documentation
Principles, (ii) a basket for investments in similar businesses in an outstanding
amount not to exceed the greater of a dollar amount and a percentage of
consolidated EBITDA consistent with the Documentation Principles,
(iii) additional investments in joint ventures subject to limitations consistent
with the Documentation Principles, (iv) unlimited intercompany investments
among the Company and its restricted subsidiaries (including intercompany
loans), reorganizations and other similar activities subject to a limit consistent
with the Documentation Principles on investments in subsidiaries that are not
Guarantors and reorganizations and other similar activities with respect to
subsidiaries that are not Guarantors, (v) a carve-out for unlimited investments,
so long as pro forma Total Net Leverage Ratio is equal to or less than
2.75:1.00, (vi) a basket for investments funded with qualified equity proceeds
or consideration paid in equity that does not build the Available Amount
Basket (other than a Specified Equity Contribution) and (vii) to the extent
constituting an investment, the consummation of the Transactions.
•
Lien exceptions to include liens (i) securing Permitted Surviving Debt (as
defined below), (ii) securing Incremental Facilities and Incremental Equivalent
Debt, (iii) securing indebtedness ranking pari passu with the Senior Secured
Facilities, provided that at the time of incurrence of such indebtedness the
Total Net First Lien Leverage Ratio is equal to or less than 3.50:1.00, subject
to a limit to be agreed between the Company and the Initial Lead Arrangers on
such indebtedness incurred by subsidiaries that are not Guarantors and to
certain other limitations consistent with the Documentation Principles
including the requirements set forth in the provisos to clause (iii) of
B-26
paragraph (B) of the “Incremental Loans” section in the case of any such
indebtedness in the form of loans and (iv) a general liens basket of at least
the greater of a dollar amount and a percentage of consolidated EBITDA
consistent with the Documentation Principles.
•
Permitted to:
•
incur purchase money debt/capital lease obligations not to exceed the
greater of a dollar amount and a percentage of consolidated EBITDA
consistent with the Documentation Principles.
•
incur secured or unsecured indebtedness so long as the net cash proceeds
of such indebtedness are used to repay the Term Loans or shall be issued
in exchange for Term Loans (with any Term Loans that are exchanged to
be immediately cancelled).
•
incur senior secured indebtedness so long as (i) the liens are permitted to
be incurred under the Senior Credit Documentation, (ii) the stated final
maturity of such indebtedness shall not be earlier than the final stated
maturity of the Term Loan Facilities, (iii) such indebtedness has a
weighted average maturity not earlier than that for the Term Loan
Facilities and (iv) such indebtedness is subject to customary intercreditor
arrangements.
•
incur senior unsecured indebtedness or subordinated indebtedness so long
as after giving effect thereto the Total Net Leverage Ratio would not
exceed 5.00:1.00, subject to a limit consistent with the Documentation
Principles on such indebtedness incurred by subsidiaries that are not
Guarantors, so long as (i) the stated final maturity of such indebtedness
shall not be earlier than the final stated maturity of the Term Loan
Facilities and (ii) such indebtedness has a weighted average maturity not
earlier than that for the Term Loan Facilities.
•
non-Guarantor subsidiaries or affiliates may incur other indebtedness in an
outstanding principal amount not to exceed the greater of a dollar amount
and a percentage of consolidated EBITDA consistent with the
Documentation Principles.
•
incur intercompany indebtedness among the Company and/or its restricted
subsidiaries, subject to a limit consistent with the Documentation
Principles for subsidiaries that are not Guarantors.
B-27
•
incur other indebtedness under a general basket in an outstanding principal
amount not to exceed the greater of an amount and a percentage of
consolidated EBITDA consistent with the Documentation Principles.
•
(a) assume or incur secured or unsecured indebtedness of any Person that
becomes a restricted subsidiary of the Company so long as such indebtedness
is not incurred in contemplation of such Person becoming a restricted
subsidiary of the Company and (b) assume secured or unsecured indebtedness
in connection with any Permitted Acquisition or other permitted investment;
provided that, in the case of this clause (b), (i) (A) if such indebtedness is
secured on a first lien basis, the Total Net First Lien Leverage Ratio would not
exceed 3.50:1.00 and (B) if such indebtedness is unsecured the Total Net
Leverage Ratio would not exceed 5.00:1.00 and (ii) the aggregate principal
amount of any such assumed indebtedness of restricted subsidiaries that are
not Guarantors may not exceed the greater of a dollar amount and a
percentage of consolidated EBITDA consistent with the Documentation
Principles at any one time outstanding, and any permitted refinancing
indebtedness incurred to refinance such indebtedness described in clauses (a)
and (b) above, in each case subject to certain other limitations consistent with
the Documentation Principles.
As used herein, the “Total Net Leverage Ratio” means the ratio of total consolidated net
debt for borrowed money of the Company and its restricted subsidiaries (calculated net of
unrestricted cash and cash equivalents and cash and cash equivalents restricted in favor of
the Administrative Agent for the benefit of the Lenders) to trailing four-quarter EBITDA
for which financial statements have been provided.
Financial Covenant:
Term Loan Facilities: None.
Revolving Facility:
If, on the last day of any fiscal quarter a Compliance Requirement (as defined below) then
exists, the Company will be required to maintain a maximum Total Net First Lien
Leverage Ratio equal to or less than 6.50:1.00 which shall be
B-28
tested at the end of such fiscal quarter with respect to the Company and its restricted
subsidiaries on a consolidated basis (with the first covenant test to commence not earlier
than the first full fiscal quarter ending after the Closing Date); provided that such ratio
level shall be increased to reflect additional debt incurred to fund any flex exercised under
the Fee Letter and shall not include any step-downs. The financial covenant shall be
measured at the end of the first full fiscal quarter ending after the Closing Date and at the
end of each fiscal quarter thereafter when applicable. The financial covenant shall only be
applicable to the Revolving Facility, and the Term Loan Facilities shall not have the benefit
of, or any rights with respect to, the financial covenant under the Revolving Facility
(including, without limitation, as to amendments, modifications and waivers).
“Compliance Requirement” means credit extensions in excess of $25.0 million are
outstanding under the Revolving Facility (other than undrawn Letters of Credit, Letters of
Credit that are cash collateralized and credit extensions under the Revolving Facility that are
made on the Closing Date to fund any OID or upfront fees in connection with the “flex”
provisions in the Fee Letter).
For purposes of determining compliance with the financial covenant, any cash equity
contribution (which equity shall be common equity or qualified equity) made, directly or
indirectly, to the Company after the end of a fiscal quarter and on or prior to the day that is
15 business days after the day on which financial statements are required to be delivered for
such fiscal quarter will, at the request of the Company, be included in the calculation of
EBITDA for the purposes of determining compliance with such financial covenant at the end
of such fiscal quarter and applicable subsequent periods which include such fiscal quarter
(any such equity contribution so included in the calculation of EBITDA, a “ Specified
Equity Contribution ”); provided that, (a) there shall be no more than two quarters in
each four consecutive fiscal quarter period in respect of which a Specified Equity
Contribution is made, (b) during the term of the Senior Secured Facilities there shall be no
more than five Specified Equity Contributions, (c) the amount of any Specified Equity
Contribution shall be no more than the amount required to cause the Company to be in pro
forma compliance with the financial covenant, and (d) all Specified Equity Contributions
shall be disregarded for purposes of any financial ratio determination and all other purposes
under the Senior Credit Documentation other than for determining compliance with the
financial covenant during the period included in the calculation of EBITDA. The Senior
Credit Documentation
B-29
will contain a customary standstill provision with regard to exercise of remedies during the
period in which any Specified Equity Contribution can be made (except to the extent the
Company has confirmed in writing that it does not intend to provide such a Specified
Equity Contribution).
Events of Default:
Limited to the following (to be applicable to (Holdings, solely to the extent set forth below,
the Company and its restricted subsidiaries only): nonpayment of principal, interest or fees
(with grace period of 5 business days for interest and fees); violation of covenants (subject,
in the case of affirmative covenants (subject to certain customary exceptions), to a 30 day
grace period following written notice from the Administrative Agent and applicable to
Holdings); and incorrectness of any representations and warranties when made or deemed
made in any material respect (including by Holdings); cross default (other than in the case
of any financial maintenance covenant) and cross acceleration to material indebtedness
(including of Holdings); bankruptcy and insolvency of Holdings, the Company and its
significant subsidiaries (with a 60 day grace period for involuntary events); material unpaid,
non-appealable monetary judgments (to the extent not covered by insurance) (including any
such judgments against Holdings); ERISA events that could reasonably be expected to
result in a Material Adverse Effect; actual or asserted in writing invalidity of material
guarantees or security documents (including of Holdings); and change of control (to include
a pre- and post-IPO provision), in the case of each of the foregoing defaults subject to
materiality, threshold, notice and grace period provisions consistent with the
Documentation Principles.
Notwithstanding the above, during the first 90 days after the Closing Date (the “ Clean-up
Period ”), subject to certain customary limitations to be agreed between the Company and
the Initial Lead Arrangers, any event or circumstance with relates solely to the Target or
any of its subsidiaries and would otherwise constitute or give rise to a breach of a
representation or warranty or covenant or cause a default shall be deemed not cause or give
rise to the same, nor constitute a drawstop or allow acceleration and if cured prior to the end
of the Clean-up Period, shall be deemed to have never arisen.
Any event of default relating to the Financial Covenant shall only permit acceleration and
termination of the Revolving Facility by Lenders under the Revolving Facility holding
more than 50% of the commitments under the Revolving Facility, but the Term Loan
Facilities shall be entitled to a cross-acceleration right.
B-30
Voting:
Amendments and waivers of the Senior Credit Documentation will require the approval of
non-Defaulting Lenders holding more than 50% of the aggregate amount of the loans and
commitments under the Senior Secured Facilities held by non-Defaulting Lenders (the “
Required Lenders ”), except that (i) the consent of each Lender directly and adversely
affected thereby and the Required Lenders shall be required with respect to: (A) increases in
the commitment of such Lender (it being understood that a waiver of any condition precedent
or the waiver of any default, event of default or mandatory prepayment shall not constitute an
extension or increase of any commitment), (B) reductions of principal (it being understood
that a waiver of any condition precedent or the waiver of any default, event of default or
mandatory prepayment shall not constitute a reduction in principal), rate of interest (other
than a waiver of default interest or a default waiver or change to a financial ratio) or fees
owing to such Lender, (C) extensions of final maturity, and (D) releases of all or substantially
all the value of the Guarantees or releases of liens on all or substantially all of the Collateral
(in each case, other than in connection with permitted asset sales, dispositions, mergers,
liquidations or dissolutions or as otherwise permitted under the Senior Credit
Documentation), (ii) the consent of 100% of the Lenders will be required with respect to
reduction of any of the voting percentages set forth in the definition of “Required Lenders”
and (iii) customary protections for the Administrative Agent and the Issuing Lenders will be
provided. Notwithstanding the foregoing, amendments and waivers of the Financial Covenant
(or its component financial definitions, to the extent applicable thereto) will require only the
approval of Lenders under the Revolving Facility holding more than 50% of the commitments
under the Revolving Facility.
The Senior Credit Documentation shall contain provisions permitting the Company to replace
the commitments with respect to (i) non-consenting Lenders in connection with amendments
and waivers requiring the consent of all Lenders or of all Lenders directly and adversely
affected thereby so long as the Required Lenders shall have consented thereto and (ii)
Defaulting Lenders or a Lender seeking indemnity for increased costs or grossed-up tax
payments and other defaulting lender provisions consistent with the Documentation
Principles.
The Senior Credit Documentation will permit amendments thereof without the approval or
consent of the Lenders to effect extensions of the maturity of loans under the Term Loan
Facilities and extensions of the maturity of commitments under the Revolving Facility, in
each case as further described under the heading “Final Maturity and Amortization” above.
B-31
The Senior Credit Documentation will permit amendments thereof without the approval or
consent of the Lenders to effect a permitted “repricing transaction” other than any Lender
holding loans subject to such “repricing transaction” that will continue as a Lender in
respect of the repriced tranche of the loans.
Modifications to provisions requiring pro rata payments or sharing of payments shall only
require approval of the Required Lenders and non pro rata distributions and commitment
reductions will be permitted in connection with loan buy back or similar programs, “amend
and extend” transactions or the addition of one or more tranches of debt and the like as
permitted by the Senior Credit Documentation.
In addition, if the Administrative Agent and the Company shall have jointly identified an
obvious error or any error or omission of a technical nature in the Senior Credit
Documentation, then the Administrative Agent and the Company shall be permitted to
amend such provision without any further action or consent of any other party if the same is
not objected to in writing by the Required Lenders to the Administrative Agent within 5
business days following receipt of notice thereof.
Cost and Yield Protection:
The Senior Credit Documentation shall contain provisions usual for facilities and
transactions of this type and consistent with the Documentation Principles protecting the
Lenders against increased costs or loss of yield resulting from changes in reserve, capital
adequacy and other requirements of law including with respect to the Dodd-Frank Wall
Street Reform and Consumer Protection Act and Basel III ( provided that requests for such
additional payments shall be limited to circumstances generally affecting the banking
market and when a majority of Lenders have made such a request) and from the imposition
of or changes in certain withholding or other taxes subject, in each case, to customary
limitations and exceptions. The Senior Credit Documentation shall contain provisions
regarding the timing for asserting a claim under these provisions and permitting the
Company to replace the commitments with respect to a Lender who asserts such claim
without premium or penalty.
The Senior Credit Documentation shall contain provisions usual for facilities and
transactions of this type and consistent with the Documentation Principles indemnifying the
Lenders for “breakage costs” incurred in connection with, among other things, any
prepayment of a Eurodollar Loan on a day other than the last day of an interest period with
respect thereto.
B-32
The Senior Credit Documentation shall provide provisions usual for facilities and
transactions of this type and consistent with the Documentation Principles protecting the
Company from withholding tax liabilities in form and substance reasonably satisfactory to
the Company and the Administrative Agent. Additionally, the Senior Credit Documentation
shall contain customary provisions relating to EU Bail-In regime, including a provision that
a Lender subject to a bail-in action is a Defaulting Lender (to be defined in the Senior
Credit Documentation in a manner consistent with the Documentation Principles).
Defaulting Lenders:
The Senior Credit Documentation shall contain customary limitations on and protections
with respect to Defaulting Lenders, including, but not limited to, non-payment/escrow of
amounts owed to any such Defaulting Lender to secure its obligations (including its
obligation to fund Revolving Loans), exclusion for purposes of voting (subject to customary
exceptions), customary cash collateralization of Letters of Credit (after reallocation to
non-Defaulting Lenders with a commitment under the Revolving Facility).
Assignments and Participations:
The Lenders will be permitted to assign (other than to a Disqualified Lender) (a) Term
Loans with the consent of the Company (not to be unreasonably withheld or delayed) and
(b) loans and commitments under the Revolving Facility with the consent of the Company
(not to be unreasonably withheld or delayed) and the Issuing Lenders; provided that (i) no
consent of the Company shall be required (x) after the occurrence and during the
continuance of a payment or bankruptcy (with respect to the Company) event of default or
(y) in the case of the Term Loan Facilities, for assignments of loans to any existing Lender,
an affiliate of an existing Lender or an approved fund of an existing Lender and (ii) the
consent of the Company shall be deemed to have been given if the Company has not
responded within 10 business days after the Administrative Agent has received written
confirmation from the Company of receipt of the request for consent. All assignments will
require the consent of the Administrative Agent, unless such assignment is to another
Lender, an affiliate of a Lender or an approved fund of an existing Lender, not to be
unreasonably withheld, delayed or conditioned. Assignments to any Disqualified Lender
and natural persons shall be prohibited. Each assignment will be (i) with respect to the Term
Loan Facilities, in a minimum denomination of $1.0 million or in an amount of an integral
multiple of $1.0 million in excess thereof and (ii) with respect
B-33
to the Revolving Facility, in an amount of an integral multiple of $5.0 million or, in each case,
if less, all of such Lender’s remaining loans and commitments of the applicable class.
Assignments will be by novation and will not be required to be pro rata among the Senior
Secured Facilities. The Administrative Agent shall receive a processing and recordation fee of
$3,500 for each assignment (unless waived by the Administrative Agent).
The Lenders will be permitted to sell participations in Term Loans without restriction, other
than as set forth in the next two sentences, and in accordance with applicable law. Voting rights
of participants shall be limited to matters in respect of (a) increases in commitments participated
to such participants, (b) reductions of principal, rate of interest or fees, (c) extensions of final
maturity and (d) releases of all or substantially all of the value of the Guarantees or all or
substantially all of the Collateral (in each case, other than as permitted under the Senior Credit
Documentation). Participations to any Disqualified Lenders and natural persons shall be
prohibited.
The list of Disqualified Lenders shall be made available by the Company to Lenders upon
request therefor. Each assignment and assumption shall include a representation that the
assignee is not a Disqualified Lender (and the Administrative Agent may rely conclusively on
such representation), and the Administrative Agent shall in no circumstances have any liability
with respect to (i) any assignment or participation to an affiliate of a financial institution,
investor or competitor that has not been identified in writing by the Company, (ii) any
assignment or participation to a Disqualified Lender to which the Company has consented
(including deemed consent) or (iii) any other assignment or participation to a Disqualified
Lender except to the extent determined by a court of competent jurisdiction in a final and
non-appealable decision to have resulted from the gross negligence or willful misconduct of the
Administrative Agent.
The Senior Credit Documentation shall provide that, so long as no event of default is
continuing, (a) Term Loans may be purchased and assigned on a non-pro rata basis through (i)
open market purchases and/or (ii) Dutch auction or similar procedures to be agreed between the
Company and the Initial Lead Arrangers that are offered to all Lenders on a pro rata basis and
(b) the Company and any other affiliates of the Company shall be eligible assignees; provided
that (i) any such Term Loans acquired by the Company or any of its subsidiaries shall be
cancelled immediately upon acquisition thereof (or contribution thereto, including as
contemplated by
B-34
the following clause (ii)), (ii) any such Term Loans acquired by any direct or indirect equity
holders of the Company or any of their respective affiliates may, with the consent of the
Company, be contributed to the Company (whether through any of its direct or indirect
parent entities or otherwise) and exchanged for debt or equity securities of any such parent
entity or the Company that are otherwise permitted to be issued by such entity at such time,
(iii) proceeds of loans borrowed under the Revolving Facility are not used to finance such
purchase and (iv) neither the Company nor any of its affiliates shall be required to make any
representation that it is not in possession of material non-public information with respect to
the Company and its subsidiaries or their respective securities and all parties to the relevant
transactions shall render customary “big boy” disclaimer letters.
Assignments of Term Loans to any equity holders of the Company and their respective
affiliates (other than (x) the Company and its subsidiaries or (y) any such affiliate that is a
bona fide debt fund or investment vehicle that is engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit in the ordinary
course of business which is managed, sponsored or advised by any person controlling,
controlled by or under common control with such affiliate and for which no personnel
involved with the investment in such affiliate (i) makes (or has the right to make or
participate with others in making) any investment decisions or (ii) has access to any
information (other than information that is publicly available) relating to Holdings or any
entity that forms a part of Holdings’ business (including subsidiaries of Holdings) (“
Affiliated Debt Fund ”), which shall be permitted subject to the foregoing provisions only)
(each, an “ Affiliated Lender ”) shall be permitted subject to the following limitations:
(i)
Affiliated Lenders will not receive information provided solely to Lenders
and will not be permitted to attend/participate in Lender meetings.
(ii)
(A) for purposes of determining whether the Required Lenders have
consented (or not consented) to any amendment, waiver or modification of
the Senior Credit Documentation, or directed or required the Administrative
Agent or any Lender to undertake any action (or refrain from taking any
action) under the Senior Credit Documentation, the Term Loan and all loans
under any Incremental Term Loan Facility held by Affiliated Lenders shall be
deemed to be not outstanding for all purposes of calculating whether
B-35
the Required Lenders have consented (or not consented), acted or taken any
actions (or directed the taking of any actions) and (B) except with respect to any
amendment, modification, waiver or consent (x) requiring the vote of all Lenders
or all affected Lenders or (y) that disproportionately, directly and adversely
affects such Affiliated Lender in its capacity as a Lender (as compared to other
Lenders that are not Affiliated Lenders), the consent or approval of Affiliated
Lenders shall not otherwise be required to effect any other amendment, waiver or
modification to the Senior Credit Documentation;
(iii)
the amount of Term Loans held by Affiliated Lenders immediately following a
purchase of Term Loans by an Affiliated Lender shall not exceed 25.0% of the
aggregate outstanding amount of Term Loans at such time; and
(iv)
all parties to the relevant transactions shall render customary “big boy”
disclaimer letters.
For avoidance of doubt, the foregoing limitations shall not be applicable to Affiliated
Debt Funds; provided that Affiliated Debt Funds cannot, in the aggregate, account for
more than 49.9% of the amounts included in determining whether the Required Lenders
have consented to any amendment, waiver or other action.
Successor Administrative Agent:
The Administrative Agent may resign or, if it or a controlling affiliate thereof is subject
to an Agent Related Distress Event (as defined below), be removed by the Company or
the Required Lenders, in each case upon ten days’ notice by the applicable parties and in
each case subject to continuation by the Administrative Agent of certain collateral
administration related issues until the appointment of a successor administrative
agent. Such successor shall be approved by the Company, which approval shall not be
unreasonably withheld if such successor is a commercial bank with a combined capital
and surplus of at least $5 billion, and otherwise may be withheld in the Company’s sole
discretion; provided that such approval shall not be required during the continuance of
a payment or bankruptcy event of default. The Company shall have no obligation to pay
any fee to any successor that is greater than or in addition to the fees payable to the
Senior Administrative Agent on the Closing Date.
“Agent-Related Distress Event” shall mean with respect to the Administrative Agent or
any person that directly or
B-36
indirectly controls the Administrative Agent (each, a “Distressed Agent-Related Person ”),
a voluntary or involuntary case with respect to such Distressed Agent-Related Person under
any debt relief law, or a custodian, conservator, receiver or similar official is appointed for
such Distressed Agent-Related Person or any substantial part of such Distressed
Agent-Related Person’s assets, or such Distressed Agent-Related Person makes a general
assignment for the benefit of creditors or is otherwise adjudicated as, or determined by any
governmental authority (having regulatory authority over such Distressed Agent-Related
Person) to be, insolvent or bankrupt, or such Distressed Agent-Related Person becomes the
subject of a bail-in action in connection with Article 55 of Directive 2014/59/EU of the
European Parliament and of the Council of the European Union; provided that an
Agent-Related Distress Event shall not be deemed to have occurred solely by virtue of the
ownership or acquisition of any equity interests in the Administrative Agent or any person
that directly or indirectly controls the Administrative Agent by a governmental authority or
an instrumentality thereof.
Confidentiality:
The Senior Credit Documentation will contain customary confidentiality provisions with
respect to information regarding the Company, its subsidiaries, their business, operations,
assets and related matters, which shall in any event prohibit disclosure of any confidential
information to Disqualified Lenders.
Expenses and Indemnification:
The Company shall pay, if the Closing Date occurs, all reasonable and documented
out-of-pocket expenses of the Administrative Agent and the Lead Arrangers (without
duplication) in connection with the syndication of the Senior Secured Facilities and the
preparation, execution, delivery, administration, amendment, waiver or modification and
enforcement of the Senior Credit Documentation (including the reasonable and
documented out-of-pocket fees, disbursements and other charges of counsel identified
herein and, to the extent retained with the Company’s consent (such consent not to be
unreasonably withheld or delayed), of a single local counsel to the Administrative Agent
and the Lead Arrangers (taken as a whole) in each relevant material jurisdiction (except
allocated costs of in-house counsel)) incurred in connection with the Senior Secured
Facilities and the preparation of the Commitment Letter, the Fee Letter, the Senior Credit
Documentation and any security arrangements in connection therewith and (ii) all
reasonable and documented out-of-pocket expenses of the Administrative Agent, the Lead
Arrangers, the Lenders and the Issuing Lenders (without duplication) in connection with
the
B-37
enforcement of the Senior Credit Documentation (including the reasonable and documented
out-of-pocket fees, disbursements and other charges of counsel identified herein and, to the
extent retained with the Company’s consent (such consent not to be unreasonably withheld
or delayed), of a single local counsel to the Administrative Agent and the Lead Arrangers
(taken as a whole) in each relevant material jurisdiction (and, in the case of an actual or
perceived conflict of interest where the indemnified party affected by such conflict informs
the Company of such conflict and thereafter retains its own counsel, of one additional firm
of counsel for all such affected indemnified parties taken as a whole) (except allocated
costs of in-house counsel)).
The Company will indemnify the Administrative Agent, the Lead Arrangers and the
Lenders (and their affiliates and their respective officers, directors, employees, advisors and
agents) in a manner consistent with the Documentation Principles.
Governing Law and Forum:
New York.
Counsel to the Agent and Lead
Arrangers :
Milbank, Tweed, Hadley & McCloy LLP.
B-38
ANNEX I to
EXHIBIT B
Interest Rates:
The interest rates under the Senior Secured Facilities will be as follows:
Revolving Facility
At the option of the Revolving Borrowers, initially, Adjusted LIBOR or EURIBOR
plus 3.75% or ABR plus 2.75%. From and after the delivery by the Company to the
Administrative Agent of financial statements for the first full fiscal quarter ended after
the Closing Date, interest rates under the Revolving Facility and letter of credit fees
based on the spread over ABR, Adjusted LIBOR or EURIBOR, as the case may be,
shall be subject to two step downs of 25 basis points based upon meeting Total Net
First Lien Leverage Ratios of 3.50:1.00 and 3.00:1.00, respectively.
Term Loan Facilities
In respect of the Dollar Tranche Term Facility, at the option of the Company, initially,
Adjusted LIBOR or EURIBOR plus 4.50% or ABR plus 3.50%.
In respect of the Euro Tranche Term Facility, initially, EURIBOR plus 4.50%.
From and after the delivery by the Company to the Administrative Agent of financial
statements for the first full fiscal quarter ended after the Closing Date, interest rates
under the Term Loan Facilities based on the spread over ABR, Adjusted LIBOR or
EURIBOR, as the case may be, shall be subject to one step down of 25 basis points
based upon meeting a Total Net First Lien Leverage Ratio of 3.00:1.00
All Senior Secured Facilities
The applicable Borrower may elect interest periods of one, three or six months (or, if
available to all relevant Lenders, 12 months or a shorter period) for Adjusted LIBOR or
EURIBOR borrowings.
Calculation of interest shall be on the basis of the actual days elapsed in a year of 360
days (or 365 or 366 days, as the case may be, in the case of ABR loans based on the
Prime Rate) and interest shall be payable at the end of each interest period and, in any
event, at least every three months.
“ABR” is the Alternate Base Rate, which is the higher of the rate of interest announced
by the Administrative Agent as its prime rate in effect at its principal office in New
York City (the “ Prime Rate ”) and the federal funds effective rate from time to time
plus 1/2 of 1.0%; provided , that ABR shall not be less than one month Published
LIBOR Rate plus 1% per annum.
B-I-1
“Adjusted LIBOR” is the London interbank offered rate for dollars appearing on
Reuters Screen LIBOR01 Page (or otherwise on the Reuters Screen) (the “ Published
LIBOR Rate ”), adjusted for statutory reserve requirements; provided , that in the
case of Term Loans, the Adjusted LIBOR shall not be less than 1.00% per annum and
in the case of Revolving Loans, the Adjusted LIBOR shall not be less than 0.00% per
annum.
“EURIBOR” shall mean EURIBOR (to be defined with respect to each currency other
than U.S. Dollars on a basis reasonably acceptable to the Administrative Agent) for the
applicable interest period on the date of determination; provided , that in the case of
Term Loans, the EURIBOR shall not be less than 1.00% per annum and in the case of
Revolving Loans, the EURIBOR shall not be less than 0.00%.
Letter of Credit Fees:
A per annum fee equal to 100% of the spread over Adjusted LIBOR under the
Revolving Facility, will accrue for the account of non-Defaulting Lenders on the
aggregate face amount of outstanding Letters of Credit, payable in arrears at the end of
each quarter and upon the termination of the Revolving Facility, in each case for the
actual number of days elapsed over a 360 day year. Such fees shall be distributed to the
non-Defaulting Lenders participating in the Revolving Facility pro rata in accordance
with the amount of each such Lender’s Revolving Facility commitment. In addition,
the applicable Revolving Borrower shall pay to the relevant Issuing Lender, for its own
account, (a) a fronting fee equal to 0.125% of the aggregate face amount of outstanding
Letters of Credit or such other amount as may be agreed by such Revolving Borrower
and such Issuing Lender, payable in arrears at the end of each quarter and upon the
termination of the Revolving Facility, calculated based upon the actual number of days
elapsed over a 360 day year, and (b) customary issuance and administration fees.
Commitment Fees:
Initially, 0.50% per annum on the undrawn portion of the commitments in respect of
the Revolving Facility (subject to a step-down to 0.375% following delivery of
financial statements for the first full fiscal quarter of the Company completed after the
Closing Date, based on meeting a Total Net First Lien Leverage Ratio of 3.00:1.00),
payable to non-Defaulting Lenders quarterly in arrears after the Closing Date and upon
the termination of the commitments, calculated based on the number of days elapsed in
a 360 day year.
B-I-2
ANNEX II to
EXHIBIT B
Margin Regulations Representation
No part of the proceeds of the Loans will be used by any Borrower, whether directly or indirectly, for any purpose that entails a
violation of the provisions of Regulation U and Regulation X (issued by the Board of Governors of the Federal Reserve System of the
United States).
B-II-1
EXHIBIT C
Project Phoenix
Summary of Conditions Precedent
All capitalized terms used but not defined herein shall have the meanings given to them in the Commitment Letter to which this
Exhibit C is attached, including Exhibits A and B thereto.
Except as otherwise set forth below, the initial borrowing availability under each of the Senior Secured Facilities shall be subject only
to the satisfaction or waiver by the Initial Lead Arrangers of the following conditions which shall be subject to the Certain Funds
Provision and the Documentation Principles in all respects:
1. The conditions to the Offer pursuant to the terms of the Purchase Agreement shall have been satisfied, or substantially
concurrently with the initial borrowing under the Senior Secured Facilities shall be satisfied, without giving effect to any
modifications, amendments, consents or express waivers thereto that are materially adverse to the Lenders without the approval of the
Initial Lead Arrangers (such approval not to be unreasonably withheld, conditioned or delayed) (it being understood and agreed that
(a) any increase in the price per share payable in the Offer as provided in the Purchase Agreement shall not be materially adverse to
the Lenders so long as such increase is funded by amounts available to be drawn under the Senior Secured Facilities, cash on hand at
the Company or any of its subsidiaries or Target or any of its subsidiaries or contributions to the common equity interests of the
Company or proceeds of an issuance of common equity interests of the Company), (b) the granting of any consent under the Purchase
Agreement that is not materially adverse to the interests of the Lenders will not otherwise constitute an amendment, modification or
waiver, (c) any modification or amendment to the definition of “Minimum Condition” in the Purchase Agreement or any consent or
waiver in satisfaction of the Minimum Condition as a condition to the consummation of the Offer shall be permitted, and shall not be
materially adverse to the Lenders, so long as the number of outstanding Target Shares tendered pursuant to the Offer, when taken
together with any Target Shares owned by Holdings or any of its subsidiaries, is at least 80% of the outstanding Target Shares and
(d) any amendment, modification or waiver to the definition of “Company Material Adverse Effect” in the Purchase Agreement will
be deemed materially adverse to the interests of the Lenders.
2. All Transaction Costs required to be paid on the Closing Date under the Commitment Letter and the Fee Letter payable to the
Lead Arrangers, the Agent or the Lenders shall have been, or substantially concurrently with the initial borrowing under the Senior
Secured Facilities shall be, paid to the extent due and to the extent a reasonably detailed invoice has been delivered to the Company at
least three Business Days prior to the Closing Date.
3. The definitive credit agreement with respect to the Senior Secured Facilities (which the Lead Arrangers agree will be drafted
by counsel for the Company) shall be executed and delivered by the Company, the US Borrower, the Czech Subsidiary (to the extent it
is a Borrower on the Closing Date) and Holdings, together with customary evidences of authority, customary officer’s incumbency
certificates and charter documents, in each case, of Holdings, the Company, the Czech Subsidiary (to the extent it is a Borrower on the
Closing Date) and the US Borrower, customary confirmation by the Company that the incurrence of indebtedness under such credit
agreement will not breach any borrowing, guaranteeing or similar limit binding on the Company, a customary borrowing notice
(which may be delivered on or prior to the Closing Date) and customary legal opinions with respect to the Senior Secured Facilities, in
each case consistent with the Commitment Letter and Fee Letter and the Documentation Principles, subject to the Certain Funds
Provision.
C-1
EXHIBIT C
4. The following documents (which the Lead Arrangers agree will be drafted by counsel for the Company) shall be executed and
delivered by Holdings, the Company, the Czech Subsidiary (to the extent it is a Borrower on the Closing Date) or the US Borrower, as
applicable, in each case consistent with the Documentation Principles, the Agreed Security Principles and subject to the Certain Funds
Provision: (a) a guarantee by Holdings of the obligations of the Borrowers under the Senior Secured Facilities; (b) a pledge by
Holdings of its equity interests in the Company; (c) a pledge by the Company of its equity interests in the US Borrower; (d) a pledge
by the Company of its equity interests in the Acquirer (if the Acquirer is not the Company) ; and (e) a New York law governed
security agreement granting a security interest in substantially all of the personal property assets (other than any Excluded Assets) of
the US Borrower over which a security interest may be granted under the Uniform Commercial Code as in effect in the State of New
York.
5. The Initial Lead Arrangers shall have had a period (the “Bank Marketing Period”) of 10 consecutive Business Days prior to
the Closing Date to syndicate the Term Loan Facilities following the Initial Lead Arrangers’ receipt from the Company of a
Confidential Information Memorandum (excluding any sections that would customarily be provided by a lead arranger) provided
that, notwithstanding anything herein to the contrary, (i) to the extent the Bank Marketing Period has not been completed on or prior to
August 19, 2016, the Bank Marketing Period shall not be deemed to have commenced prior to September 6, 2016 and to the extent the
Bank Marketing Period has not been completed on or prior to December 16, 2016, the Bank Marketing Period shall not be deemed to
have commenced prior to January 2, 2017 and (ii) the Bank Marketing Period shall not be required to be consecutive to the extent it
would include November 24, 2016 and November 25, 2016 (which dates shall not count for purposes of the 10 Business Day period).
If the Company reasonably believes that it has delivered a suitable Confidential Information Memorandum, it may deliver to the Initial
Lead Arrangers written notice to that effect (stating when it believes it completed such delivery), in which case it will be deemed to
have delivered a suitable Confidential Information Memorandum, unless the Initial Lead Arrangers in good faith reasonably believe
that it has not done so and, within two Business Days after their receipt of such notice from the Company, the Initial Lead Arrangers
deliver a written notice to the Company to that effect (stating with reasonable specificity what portions of the Confidential Information
Memorandum are missing or unsuitable).
6. The Lead Arrangers shall have received at least three Business Days prior to the Closing Date all documentation and
information as is reasonably requested in writing by the Lead Arrangers at least seven Business Days prior to the Closing Date about
Holdings, the Company, the US Borrower and the Czech Subsidiary (to the extent it is a Borrower on the Closing Date) required by
U.S. regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including
without limitation the PATRIOT Act; provided that each Lead Arranger confirms that it has requested and received all
documentation and information required by U.S. regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including without limitation the PATRIOT Act, that it requires in respect of Holdings, the Company,
the US Borrower and the Czech Subsidiary as they exist on the date hereof.
7. The Specified Representations shall be true and correct in all material respects and the Specified Purchase Agreement
Representations shall be true and correct in all material respects, but only to the extent that the failure of any Specified Purchase
Agreement Representation to be true and correct in all material respects gives the Company (or its affiliate) the right to terminate the
Company’s (or its affiliate’s) obligation to consummate the Acquisition (or the right pursuant to the Purchase Agreement not to
consummate the Acquisition).
C-2
EXHIBIT C
8. The Initial Lead Arrangers shall have received (a) unaudited condensed consolidated balance sheets and related condensed
consolidated statements of income and cash flows of Holdings for each fiscal quarter, if any, ended on or after June 30, 2016 (other
than the fourth fiscal quarter of the Company) and at least 45 days prior to the Closing Date and (b) a pro forma condensed
consolidated balance sheet of the Company as of March 31, 2016 (or, if later, the most recent fiscal quarter of the Company prior to
the Closing Date for which both (x) financial statements are required to be delivered to satisfy the condition set forth in the preceding
clause (a) and (y) unaudited consolidated balance sheets and related unaudited statements of income and cash flows of the Target for
such fiscal quarter under clause (x) have been made available to the Company at least 10 Business Days prior to the Closing Date (the
“ Later FQ End Date ”)) and a pro forma unaudited income statement of the Company for the four quarter period ended March 31,
2016 (or, if later, the Later FQ End Date), in each case, giving effect to the Transactions as if the Transactions had occurred as of such
date (in the case of such balance sheet) or at the beginning of such period (in the case of the statement of income).
9. On the Closing Date, after giving effect to the use of proceeds of the Senior Secured Facilities, the Avast Refinancing shall be
consummated.
For purposes of this Exhibit C, “Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in
New York, New York, United States are authorized or required by applicable law to close.
C-3
Exhibit (d)(2)
Execution Version
TENDER AGREEMENT
This TENDER AGREEMENT (this “Agreement”), dated as of July 6, 2016, is entered into by and among, TA X L.P., a
Delaware limited partnership, TA Atlantic and Pacific VI L.P., a Delaware limited partnership, TA Strategic Partners Fund II L.P., a
Delaware limited partnership, TA Strategic Partners Fund II-A L.P., a Delaware limited partnership and TA Investors III L.P. a
Delaware limited partnership (each a “Shareholder” and, together, the “Shareholders”), Avast Holding B.V., a private company with
limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) organized under the laws of The Netherlands (“ Parent ”),
and Avast Software B.V., a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) organized
under the laws of The Netherlands and a direct wholly owned subsidiary of Parent (“ Buyer ”).
WHEREAS, contemporaneously with the execution of this Agreement, Parent, Buyer and AVG Technologies N.V., a public
limited liability company ( naamloze vennootschap ) organized under the laws of The Netherlands (the “ Company ”), are entering
into a Purchase Agreement, dated as of the date hereof (as the same may be amended or modified after the date hereof, the “ Purchase
Agreement ”), providing for, among other things, (a) Buyer to commence a tender offer (such offer, as the same may be amended or
modified from time to time as permitted by the Purchase Agreement, the “ Offer ”) for each issued and outstanding ordinary share,
with a nominal value of €0.01 per share, of the Company (the “ Shares ”), and (b) the Reorganization, including, if applicable, the
Asset Sale (each as defined in the Purchase Agreement) of the Company following the Offer; and
WHEREAS, as a condition of and inducement to, Parent’s and Buyer’s willingness to enter into the Purchase Agreement, Parent
and Buyer have required that each Shareholder enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and upon the terms and subject to the
conditions set forth in this Agreement, the parties hereby agree as follows:
Section 1 Certain Definitions. For the purposes of this Agreement, capitalized terms used and not otherwise defined in this
Agreement shall have the respective meanings ascribed to them in this Section 1 , or if not defined in this Section 1 , the respective
meanings ascribed to them in the Purchase Agreement: “ Acquisition Agreement ” means a letter of intent, agreement-in-principle,
definitive acquisition agreement or similar agreement that contemplates an Alternative Transaction Proposal.
“Additional Owned Shares” means all Shares and any other Company Securities that are beneficially owned by each
Shareholder or any of its respective controlled Affiliates and are acquired after the date hereof and prior to the termination of this
Agreement.
“Affiliate” has the meaning set forth in the Purchase Agreement; provided, however, that the Company shall not be deemed to
be an Affiliate of Shareholders.
“beneficial ownership” (and related terms such as “beneficially owned” or “beneficial owner”) has the meaning set forth in Rule
13d-3 promulgated under the 1934 Act.
“Covered Shares” means the Owned Shares and Additional Owned Shares.
“Disclosed Owned Shares” has the meaning assigned thereto in Section 6(a) hereof.
“Equity Interests” means any share of capital stock of a Person or any securities (including debt securities) convertible into, or
exchangeable or exercisable for, any such shares of capital stock or any options, warrants, calls, subscriptions or other rights,
convertible securities, agreements or commitments obligating such Person to issue, transfer or sell any shares of capital stock or other
equity interest in such Person.
“Owned Shares” means all 6,628,369 Shares which are beneficially owned by Shareholders or any of its respective controlled
Affiliates as of the date hereof.
“Permitted Transfer” means (a) a Transfer of Covered Shares by any Shareholder to a controlled Affiliate of such Shareholder;
provided that (i) such controlled Affiliate shall remain a controlled Affiliate of such Shareholder at all times following such Transfer
and (ii) prior to the effectiveness of such Transfer, such transferee executes and delivers to Parent and Buyer a written agreement, in
form and substance reasonably acceptable to Parent, to assume all of such Shareholder’s obligations hereunder in respect of the
securities subject to such Transfer and to be bound by the terms of this Agreement, with respect to the securities subject to such
Transfer, to the same extent as such Shareholder is bound hereunder and to make each of the representations and warranties hereunder
in respect of the securities transferred as such Shareholder shall have made hereunder or (b) the Transfer of Covered Shares made with
Buyer’s prior written consent.
“Transfer” means, with respect to a Covered Share, the transfer, pledge, hypothecation, encumbrance, assignment or other
disposition (whether by sale, merger, consolidation, liquidation, dissolution, dividend, distribution or otherwise) of such Covered
Share or the beneficial ownership thereof, the offer to make such a transfer or other disposition, and each option, agreement,
arrangement or understanding, whether or not in writing, to effect any of the foregoing. As a verb, “ Transfer ” shall have a correlative
meaning.
2
Section 2 Tender of the Shares. (a) Each Shareholder hereby agrees that it shall tender its Covered Shares or cause its
Covered Shares to be tendered, into the Offer (i) in the case of Owned Shares, promptly and in any event no later than ten
(10) Business Days following the commencement of the Offer, and (ii) in the case of Additional Owned Shares that are Shares,
promptly after such Shares were obtained but, in each case, if each Shareholder has not received the Offer Documents by such
time, within five (5) Business Days following receipt of such documents, but in any event prior to the Expiration Time, free and
clear of all Liens. Subject to Section 8 hereof, each Shareholder agrees that it will not withdraw such Covered Shares, or cause
such Covered Shares to be withdrawn, from the Offer at any time. If the Offer is terminated or withdrawn by Buyer, this
Agreement is terminated pursuant to Section 8 or the Purchase Agreement is terminated in accordance with the terms thereof
prior to the purchase of the Covered Shares in the Offer, Parent and Buyer shall promptly return, and shall cause any depository
acting on behalf of Parent and Buyer to return, all the Covered Shares tendered by each Shareholder in the Offer to such
Shareholder.
Section 3 Voting Agreement. At any meeting of the shareholders of the Company, including the EGM, and at every
adjournment or postponement thereof, or in any other circumstance in which the vote, consent or other approval of the shareholders of
the Company is sought as to a matter described in any of clauses (a) through (i) below (each, a “ Company Shareholders Meeting ”),
each Shareholder agrees that it shall, and if shares are held by a nominee for such Shareholder, shall cause the holder of record of any
Covered Shares to (i) appear at each such meeting or otherwise cause all Covered Shares beneficially owned by it as of the record date
to be counted as present thereat for purposes of calculating a quorum (as applicable) and (ii) vote (or cause to be voted), by proxy or in
person, all Covered Shares beneficially owned as of the record date: for a resolution to, effective upon the Acceptance Time,
(i) provide discharge to all of the existing members of the Management Board and Mr. J. Little (former member of the Management
Board) and all of the existing members of the Supervisory Board and (ii) subject to Sections 2.04(f) and 2.05 of the Purchase
Agreement, appoint such new members to the Boards as designated by Buyer, upon the binding nomination of the Supervisory Board,
to replace the resigning members of the Boards;
(b) for the Asset Sale;
(c) for (i) a resolution to, subject to the number of Shares tendered pursuant to the Offer (including during the Subsequent
Offering Period and during the Minority Exit Offering Period) falling within the Asset Sale Range, amend the articles of association of
the Company for the purpose of, among other things, permitting the appointment by the general meeting of the Company of a
liquidator, including the authorization of all members of the Management Board and any and all lawyers and paralegals practicing
with De Brauw Blackstone Westbroek N.V. to execute such deed of amendment of the articles of association of the Company and
(ii) a resolution to, subject to (A) the number of Shares tendered pursuant to the Offer (including during the Subsequent Offering
Period and during the Minority Exit Offering Period) falling within the Asset Sale Range, (B) the amendment of the articles of
association referred to under Section 2.04(iv)(A) of the Purchase Agreement and (C) completion of the Asset Sale, appoint as
liquidator Stichting Vereffening AVG Technologies, a foundation ( stichting ) to be incorporated under Dutch law;
3
(d) for a resolution to, subject to (i) delisting of the Shares from the NYSE, (ii) the Asset Sale not being
pursued, and (iii) the number of Shares tendered pursuant to the Offer (including during the Subsequent Offering Period
and during the Minority Exit Offering Period) representing at least 80% of the outstanding Shares, (A) convert the
Company from a public limited liability company ( naamloze vennootschap ) to a private company with limited liability (
besloten vennootschap met beperkte aansprakelijkheid ), and (B) amend the Company’s articles of association in
connection with the matters described in clause (A), including the authorization of all members of the Management Board
and any and all lawyers and paralegals practicing with De Brauw Blackstone Westbroek N.V. to execute such deed of
amendment of the articles of association of the Company;
(e) for the Second Step Distribution;
(f) against any Alternative Transaction Proposal or any proposal relating to an Alternative Transaction Proposal;
(g) against any Acquisition Agreement or merger, consolidation, combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by the Company or its Subsidiaries (other than the Purchase Agreement,
the Asset Sale Agreement and the Reorganization);
(h) against any proposal, action or agreement that would reasonably be expected to (i) prevent or nullify any provision of
this Agreement, (ii) result in a material breach of any covenant, representation or warranty or any other obligation or agreement
contained in the Purchase Agreement, or (iii) result in any of the conditions set forth in Annex I of the Purchase Agreement not being
fulfilled, or (iv) prevent or materially delay or impede the consummation of the Offer or the Asset Sale; and
(i) for any other matter submitted by the Company for shareholder approval at the EGM at the request of Buyer and related
to the transactions contemplated by the Purchase Agreement; provided , however that (i) the Boards have made, and not
withdrawn in accordance with the Purchase Agreement, the Company Recommendation, and (ii) nothing in this Agreement shall be
interpreted as creating an obligation of the Company to submit any such request of Buyer for such shareholder approval.
Additionally, no Shareholder shall propose, commit or agree to take any action inconsistent with any of the foregoing clauses
(a) through (i).
Section 4 No Disposition or Solicitation. (a) No Disposition or Adverse Act. Each Shareholder hereby covenants and agrees
that, except as contemplated by this Agreement, the Purchase Agreement or the Offer Documents, such Shareholder shall not (i) offer
to Transfer, Transfer or consent to any Transfer of any or all of the Covered Shares, Equity Interests in the Company or any interest
therein without the prior written consent of Parent (other than Permitted Transfers or transfers by operation of law, provided in each
case this Agreement shall bind any transferee), (ii) enter into any contract, option or other agreement with respect to any Transfer of
any or all Covered Shares, Equity Interests in the Company or any interest therein, (iii) grant any proxy, power-of-attorney or other
authorization or consent in or with respect to any or all of the Covered Shares or Equity Interests in the Company inconsistent with
such Shareholder’s voting
4
or consent obligations in Section 3 hereof or (iv) deposit any or all of the Covered Shares into a voting trust or enter into a voting
agreement or arrangement with respect to any or all of the Covered Shares or Equity Interests in the Company inconsistent with such
Shareholder’s voting or consent obligations in Section 3 hereof. Any attempted Transfer of Covered Shares, Equity Interests in the
Company or any interest therein in violation of this Section 4(a) shall be null and void. Non-Solicitation . Subject to Section 9
hereof and except to the extent expressly permitted by the Purchase Agreement, each Shareholder shall not, and shall cause its
controlled Affiliates and its or their respective Representatives not to, directly or indirectly, (A) solicit, initiate or take any action to
knowingly facilitate, induce or encourage any inquiries or the making of any proposal or offer that constitutes or could reasonably be
expected to lead to an Alternative Transaction Proposal, or (B) enter into, continue or otherwise knowingly participate in any
discussions or negotiations regarding, or furnish to any Person any information with respect to, or otherwise cooperate in any way that
could otherwise be expected to lead to, any Alternative Transaction Proposal. Each Shareholder shall, and shall cause each of its
controlled Affiliates and its and their respective Representatives to, immediately cease and cause to be terminated any and all existing
discussions or negotiations with any Person conducted heretofore with respect to any Alternative Transaction Proposal. Each
Shareholder shall, and shall cause its controlled Affiliates and their respective Representatives to, immediately cease and terminate
any existing solicitation, discussion or negotiation with any third-party with respect to any Alternative Transaction Proposal conducted
by such Shareholder, its controlled Affiliates or its and their respective Representatives. Nothing in this Section 4 shall prohibit a
Shareholder, its Subsidiaries and its and their respective Representatives from informing any Person of the existence of the provisions
contained in this Section 4 .
Section 5 Additional Agreements. (a) Certain Events. In the event of any stock split, consolidation, stock dividend, merger,
demerger, reorganization, recapitalization or other change in the capital structure of the Company affecting the Covered Shares or the
acquisition by any Shareholder or any of its controlled Affiliates of Additional Owned Shares or other Equity Interests of the
Company, (i) the type and number of Covered Shares shall be adjusted appropriately, and (ii) this Agreement and the obligations
hereunder shall automatically attach to any additional Covered Shares or other Equity Interests issued to or acquired by any
Shareholder or any of their controlled Affiliates. Stop Transfer . In furtherance of this Agreement, each Shareholder hereby
authorizes and instructs the Company (including through the Company’s transfer agent) to enter a stop transfer order to give effect to
Section 4(a) with respect to all the Covered Shares. Each Shareholder agrees that it will cause the Company, as promptly as
practicable after the date of this Agreement, to make a notation on its records and give instructions to the transfer agent for the
Covered Shares not to permit, during the term of this Agreement, the Transfer of the Covered Shares in violation of the terms of this
Agreement.
(c) Communications. Unless required by Applicable Law, each Shareholder shall, and shall cause its Representatives to,
consult with Parent before issuing any press release or otherwise making any public statement with respect to the Offer, the Purchase
Agreement or this Agreement. Each Shareholder hereby (i) consents to and authorizes the publication and disclosure by Parent of such
Shareholder’s identity and holding of Covered Shares, and the nature of such Shareholder’s commitments, arrangements and
understandings under this Agreement in any public disclosure document required by Applicable Law in connection with the Offer or
the Reorganization or any other transactions contemplated by the Purchase
5
Agreement and (ii) agrees as promptly as practicable to notify Parent of any required corrections with respect to any written
information supplied by Shareholder specifically for use in any such disclosure document.
Section 6 Representations and Warranties of each Shareholders. Each Shareholder hereby represents and warrants to Parent
as follows: Title . As of the date hereof, each Shareholder is the sole record and beneficial owner of the Shares and beneficial owner
of the other Equity Interests in the Company, in each case, set forth on Schedule I (the “ Disclosed Owned Shares ”). The Disclosed
Owned Shares constitute all the Shares and other Equity Interests owned of record or beneficially by each Shareholder or its controlled
Affiliates on the date hereof, and such Shareholder and its respective controlled Affiliates is not the beneficial owner of any other
Shares or other Equity Interests. Such Shareholder has sole voting power, sole power of disposition and sole power to issue
instructions with respect to the matters set forth in Section 4 and Section 5 hereof and all other matters set forth in this
Agreement, in each case with respect to all of the Covered Shares with no limitations, qualifications or restrictions on such rights that
would prevent such Shareholder from performing its obligations under this Agreement, subject to applicable securities laws and the
terms of this Agreement. Except as permitted by this Agreement, the Covered Shares are now, and at all time during the term hereof
will be, held by such Shareholder, or by a nominee or custodian for the benefit of such Shareholder, free and clear of any Liens that
would prevent such Shareholder from performing its obligations under this Agreement.
(b) Authority. Each Shareholder has all necessary power and authority to execute and deliver this Agreement, to perform
such Shareholder’s obligations hereunder and to consummate the transactions contemplated hereby. In the event that any Shareholder
is, or any of such Shareholder’s Covered Shares are held by, a Person that is not an individual, the execution, delivery and
performance by such Person of this Agreement, the performance by such Person of its obligations hereunder and the consummation by
such Person of the transactions contemplated hereby have been duly and validly authorized by such Person and no other actions or
proceedings on the part of such Person are necessary to authorize the execution and delivery by it of this Agreement, the performance
by such Person of its obligations hereunder or the consummation by such Person of the transactions contemplated hereby. This
Agreement has been duly authorized and validly executed and delivered by each Shareholder, and, assuming due authorization,
execution and delivery by Parent and Buyer, constitutes a legal, valid and binding obligation of such Shareholder, enforceable against
such Shareholder in accordance with its terms subject to the effect of any applicable bankruptcy, insolvency (including, without
limitation, all Applicable Laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors’ rights
generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in
equity).
(c) No Conflict or Default. Except for any competition, antitrust and investment Applicable Laws or regulations of foreign
jurisdictions and the 1934 Act, no filing with, and no permit, authorization, consent or approval of, any Governmental Authority or
any other Person is necessary for the execution and delivery of this Agreement by Shareholder, the consummation by Shareholder of
the transactions contemplated hereby and the compliance by each Shareholder with the provisions hereof. None of the execution and
delivery of this Agreement by each Shareholder, the consummation by each Shareholder of the transactions
6
contemplated hereby or compliance by each Shareholder with any of the provisions hereof will (i) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give rise to any third party right of termination, cancellation,
modification or acceleration) under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license,
permit, contract, commitment, arrangement, understanding, agreement or other instrument or obligation of any kind, including any
voting agreement, proxy arrangement, pledge agreement, shareholders agreement or voting trust, to which such Shareholder is a party
or by which such Shareholder or any of such Shareholder’s properties or assets may be bound, (ii) violate any judgment, order, writ,
injunction, decree or award of any court, administrative agency or other Governmental Authority that is applicable to such
Shareholder or any of such Shareholder’s properties or assets, (iii) constitute a violation by such Shareholder of any Applicable Law
or regulation of any jurisdiction or (iv) contravene or conflict with such Shareholder’s memorandum and articles of association (as
applicable), in each case, except for any conflict, breach, default or violation described above which would not adversely affect in any
material respect the ability of such Shareholder to perform its obligations hereunder or to consummate the transactions contemplated
hereby.
(d) No Litigation. As of the date hereof, there is no Action pending or, to the knowledge of each Shareholder, threatened in
writing against such Shareholder at law or in equity before or by any Governmental Authority that would reasonably be expected to
materially impair or delay the ability of such Shareholder to perform timely its obligations under this Agreement or to tender its
Shares into the Offer as contemplated by Section 2(a) .
(e) No Fees. No Shareholder has employed any investment banker, broker, financial advisor, finder or other intermediary
in connection with the transactions contemplated by this Agreement which would be entitled to any investment banking, brokerage,
finder’s, financial advisory or similar fee or commission from Parent or Buyer in connection with this Agreement or the transactions
contemplated by this Agreement.
(f) Receipt; Reliance. Each Shareholder has received and reviewed a copy of the Purchase Agreement. Each Shareholder
understands and acknowledges that Parent and Buyer are entering into the Purchase Agreement in reliance upon such Shareholder’s
execution, delivery and performance of this Agreement.
7
Section 7 Representations and Warranties of Parent and Buyer. Parent hereby represents and warrants to Shareholder
as follows: Authority . Each of Parent and Buyer has all necessary power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and
performance by each of Parent and Buyer of this Agreement, the performance by each of Parent and Buyer of its respective
obligations hereunder and the consummation by each of Parent and Buyer of the transactions contemplated hereby have been
duly and validly authorized by each of Parent and Buyer, as applicable, and no other actions or proceedings on the part of each of
Parent and Buyer are necessary to authorize the execution and delivery by it of this Agreement, the performance by each of
Parent and Buyer of its obligations hereunder or the consummation by each of Parent and Buyer of the transactions contemplated
hereby. This Agreement has been duly authorized and validly executed and delivered by each of Parent and Buyer and, assuming
due authorization, execution and delivery by Shareholders, constitutes a legal, valid and binding obligation of each of Parent and
Buyer, enforceable against each of Parent and Buyer, as applicable, in accordance with its terms subject to the effect of any
applicable bankruptcy, insolvency (including, without limitation, all Applicable Laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting creditors’ rights generally and subject to the effect of general principles of
equity (regardless of whether considered in a proceeding at law or in equity).
(b) No Conflict or Default. Except for any competition, antitrust and investment Applicable Laws or regulations of foreign
jurisdictions and the 1934 Act, no filing with, and no permit, authorization, consent or approval of, any Governmental Authority or
any other Person is necessary for the execution and delivery of this Agreement by each of Parent and Buyer, the consummation by
each of Parent and Buyer of the transactions contemplated hereby and the compliance by each of Parent and Buyer with the provisions
hereof. None of the execution and delivery of this Agreement by each of Parent and Buyer, the consummation by each of Parent and
Buyer of the transactions contemplated hereby or compliance by each of Parent and Buyer with any of the provisions hereof will
(i) result in a violation or breach of, or constitute (with or without notice or lapse of time or both) a default (or give rise to any
third-party right of termination, cancellation, modification or acceleration) under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, lease, license, permit, contract, commitment, arrangement, understanding, agreement or other
instrument or obligation of any kind, including any voting agreement, proxy arrangement, pledge agreement, shareholders agreement
or voting trust, to which each of Parent and Buyer is a party or by which each of Parent and Buyer, as applicable, or any of each of
Parent’s and Buyer’s, as applicable properties or assets may be bound, (ii) violate any judgment, order, writ, injunction, decree or
award of any court, administrative agency or other Governmental Authority that is applicable to each of Parent and Buyer or any of
each of Parent’s and Buyer’s properties or assets, (iii) constitute a violation by either Parent or Buyer of any Applicable Law or
regulation of any jurisdiction or (iv) contravene or conflict with either of Parent’s or Buyer’s memorandum and articles of association
(as applicable), in each case, except for any conflict, breach, default or violation described above which would not adversely affect in
any material respect the ability of either Parent or Buyer to perform its obligations hereunder or to consummate the transactions
contemplated hereby.
8
(c) Other Tender Agreements. As of the date hereof, each of Parent and Buyer represents and warrants that it
has not entered into any agreement with another shareholder of the Company covering the matters contemplated hereby
which contains terms more favorable in any material respect to such shareholder than are provided to each Shareholder in
this Agreement.
Section 8 Termination. This Agreement shall terminate upon the earliest of (a) the mutual written agreement of Parent and
Shareholders, (b) the Closing, (c) the acquisition by Parent or Buyer of 100% of the outstanding Shares (d) the termination of the
Purchase Agreement in accordance with its terms, or (e) the date of any modification, waiver or amendment to the Purchase
Agreement in a manner that decreases the Offer Consideration or changes the form of the Offer Consideration; provided that
(i) nothing in this Agreement shall relieve any party hereto from liability for any breach of this Agreement prior to its termination and
(ii) Section 9 hereof shall survive any termination of this Agreement. No Limitation . Nothing in this Agreement shall be
construed to prohibit, limit or affect any Shareholder or any of the Representatives of Shareholders who is an officer of the Company
or member of the Boards from (i) taking any action (or omitting to take any action) in his or her capacity as an officer of the Company
or member of the Boards, including in exercising rights under the Purchase Agreement, and/or from taking any action with respect to
any Alternative Transaction Proposal in his or her capacity as such an officer or director and (ii) exercising its or their fiduciary duties
as an officer or director to the Company or its stakeholders. Miscellaneous . (a) Entire Agreement; Third-Party Beneficiaries . This
Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof and thereof. This Agreement shall be binding upon and inure solely to the benefit of
each party hereto, and nothing in this Agreement, express or implied, is intended to confer upon any other Person any rights or
remedies of any nature whatsoever under or by reason of this Agreement. Reasonable Efforts . Subject to the terms and conditions of
this Agreement and the Purchase Agreement, each Shareholder agrees to use reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or advisable under Applicable Law to consummate and make
effective the arrangements contemplated hereby. Upon Parent’s reasonable request and without further consideration, each
Shareholder shall execute and deliver such additional documents and take all such further lawful action as may be necessary or
desirable to consummate and make effective, in the most expeditious manner practicable, the arrangements contemplated hereby.
Without limiting the foregoing, each Shareholder shall execute and deliver to Parent and any of its designees any proxies, including
with respect to Additional Owned Shares, reasonably requested by Parent with respect to such Shareholder’s voting and consent
obligations under this Agreement.
(c) No Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties (whether by operation of law or otherwise) without the prior written consent of the other parties, and any attempted
or purported assignment in violation of this Section 10(c) will be null and void; provided , however , that each of Parent or Buyer
may assign this Agreement and any of their respective rights and obligations hereunder to any Affiliate of Parent without the consent
of each Shareholder, but no such assignment shall relieve Parent or Buyer, as the case may be, of its obligations hereunder. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties hereto and their
respective permitted successors and assigns.
9
(d) Binding Successors. Without limiting any other rights Parent may have hereunder in respect of any Transfer
of the Covered Shares, each Shareholder agrees that this Agreement and the obligations hereunder shall attach to the
Covered Shares beneficially owned by such Shareholder and its controlled Affiliates and shall be binding upon any Person
to which legal or beneficial ownership of such Covered Shares shall pass, whether by operation of law or otherwise,
including, without limitation, Shareholder’s heirs, guardians, administrators, representatives or successors.
(e) Modification or Amendments. Subject to the provisions of Applicable Law, this Agreement may be amended, modified
and supplemented in any and all respects by written agreement of the parties hereto with respect to any of the terms contained herein.
(f) Notice. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and
shall be deemed given (i) on the date of delivery if delivered personally or sent via facsimile or electronic mail (receipt confirmed),
(ii) on the first (1st) Business Day following the date of dispatch if sent by a nationally recognized overnight courier (providing proof
of delivery) or (iii) on the third (3rd) Business Day following the date of mailing if delivered by registered or certified mail, return
receipt requested, postage prepaid, in each case to the parties at the following addresses (or at such other address for a party as shall be
specified by like notice):
if to Parent or Buyer, to:
Avast Holding B.V.
c/o Avast Software s.r.o.
Trianon Office Building
Budejovicka 1518/13A
140 00 Prague 4 – Michle
Czech Republic
Attention:
Alan Rassaby
Email:
[email protected]
with a copy, which shall not constitute notice, to:
White & Case LLP
5 Old Broad Street
London EC2N 1DW
United Kingdom
Attention:
Ian Bagshaw, Esq.
Caroline Sherrell, Esq.
Facsimile:
+44 20 7532 1001
Email:
[email protected]
[email protected]
and
10
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036-2787
Attention:
Chang-Do Gong, Esq.
Facsimile:
(212) 354 8113
Email:
[email protected]
and
De Brauw Blackstone Westbroek N.V.
Claude Debussylaan 80
1070 AB Amsterdam
PO Box 75084
Amsterdam 1070 AB
Netherlands
Attention:
Ton Schutte
Email:
[email protected]
if to Shareholders:
At the address and facsimile number set forth on Schedule I hereto.
(g) Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the
application thereof to any Person or any circumstance, is found by a court or other Governmental Authority of competent jurisdiction
to be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other Persons or
circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, the provision shall be interpreted to be only so broad as would be enforceable.
(h) Specific Performance and Other Remedies. The parties hereto agree that irreparable harm would occur if any of the
provisions of this Agreement were not performed in accordance with their specific terms on a timely basis or were otherwise
breached. It is accordingly agreed that, without posting bond or other undertaking, the parties shall be entitled to injunctive or other
equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any
court of competent jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity. In the event
that any such action is brought in equity to enforce the provisions of this Agreement, no party will allege, and each party hereby
waives the defense or counterclaim, that there is an adequate remedy at law. The parties hereto further agree that (i) by seeking any
remedy provided for in this Section 10(h) , a party shall not in any respect waive its right to seek any other form of relief that may be
available to such party under this Agreement and (ii) nothing contained in this Section 10(h) shall require any party hereto to institute
any action for (or limit such party’s right to institute any action for) specific performance under this Section 10(h) before exercising
any other right under this Agreement.
11
(i) No Waiver. The failure of any party hereto to exercise any right, power or remedy provided under this
Agreement or otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other party
hereto with such party’s obligations hereunder, and any custom or practice of the parties at variance with the terms hereof,
shall not constitute a waiver by such party of such party’s right to exercise any such or other right, power or remedy or to
demand such compliance.
(j) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of
Delaware, without regard to the conflicts of law rules of such state.
(k) Submission to Jurisdiction. The parties hereto agree that any Action seeking to enforce any provision of, or based on
any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby (whether brought by any party
or any of its Affiliates or against any party or any of its Affiliates) shall be brought in any state or United States federal court located
in the State of Delaware, United States, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such Action and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any such Action in any such court or that any such Action
brought in any such court has been brought in an inconvenient forum. Process in any such Action may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees
that service of process on such party as provided in Section 10(f) shall be deemed effective service of process on such party.
(l) Waiver of Jury Trial. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES
AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
SUCH PARTY MAY HAVE TO A TRIAL BY JURY FOR ANY DISPUTE ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE BREACH, TERMINATION OR VALIDITY THEREOF OR ANY TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (i) NEITHER THE OTHER
PARTY HERETO NOR ITS REPRESENTATIVES, AGENTS OR ATTORNEYS HAVE REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, (ii) EACH PARTY HERETO UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF
THIS WAIVER, (iii) EACH PARTY HERETO MAKES THIS WAIVER VOLUNTARILY AND (iv) EACH PARTY HERETO
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS OF THIS SECTION 10(l) . ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
12
(m) Interpretation. The descriptive headings used in this Agreement are inserted for convenience of reference
only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. The words “include,”
“includes” and “including” shall be deemed to be followed by “without limitation” whether or not they are in fact followed
by such words or words of like import. The parties hereto have participated jointly in the negotiation and drafting of this
Agreement. No provision of this Agreement shall be interpreted for or against any party hereto because that party or its
legal representatives drafted the provision. The words “hereof,” “hereto,” “hereby,” “herein,” “hereunder” and words of
similar import, when used in this Agreement, shall refer to this Agreement as a whole and not any particular section in
which such words appear.
(n) Counterparts. This Agreement may be executed in counterparts, each of which will be deemed to constitute an original,
but all of which shall constitute one and the same agreement, and may be delivered by facsimile or other electronic means intended to
preserve the original graphic or pictorial appearance of a document.
(o) Expenses. Except as otherwise expressly provided in this Agreement, all direct and indirect costs and expenses
incurred in connection with this Agreement shall be borne by the party incurring such expenses.
(p) No Ownership Interest. Each Shareholder has agreed to enter into this Agreement and act in the manner specified in
this Agreement for consideration. Except as expressly set forth in this Agreement, nothing contained in this Agreement shall be
deemed, upon execution, to vest in Parent or Buyer any direct or indirect ownership or incidence of ownership of or with respect to
any Covered Shares. All rights, ownership and economic benefits of and relating to the Covered Shares shall remain vested in and
belong to Shareholders, and Parent shall have no authority to manage, direct, superintend, restrict, regulate, govern or administer any
of the policies or operations of the Company or exercise any power or authority to direct each Shareholder in the voting of any of the
Covered Shares, except as otherwise provided in this Agreement. Nothing in this Agreement shall be interpreted as creating or
forming a “group” with any other Person, including Parent, for purposes of Rule 13d-5(b)(1) of the 1934 Act or any other similar
provision of Applicable Law.
[Signature page follows.]
13
IN WITNESS WHEREOF, each of Parent, Buyer and Shareholders has caused this Agreement to be signed by its duly
authorized officer as of the date first written above.
Avast Holding B.V.
By:
/s/ Alan Rassaby
Name: Alan Rassaby
Title: Managing Director A
By:
/s/ Stefan Boermans
Name: Stefan Boermans
Title: Managing Director B
Avast Software B.V.
By:
/s/ Alan Rassaby
Name: Alan Rassaby
Title: Managing Director A
By:
/s/ Stefan Boermans
Name: Stefan Boermans
Title: Managing Director B
[Signature Page to Tender Agreement]
IN WITNESS WHEREOF, each of Parent, Buyer and Shareholders has caused this Agreement to be signed by its duly
authorized officer as of the date first written above.
TA X L.P.
By:
TA Associates X L.P., its General Partner
By:
TA Associates, L.P., its General Partner
By:
/s/ Jonathan Meeks
Name: Jonathan Meeks
Title: Managing Director
TA Atlantic and Pacific VI L.P.
By:
TA Associates AP VI L.P., its General
Partner
By:
TA Associates, L.P., its General Partner
By:
/s/ Jonathan Meeks
Name: Jonathan Meeks
Title: Managing Director
TA Strategic Partners Fund II L.P.
By:
TA Associates SPF II L.P., its General
Partner
By:
TA Associates, L.P., its General Partner
By:
/s/ Jonathan Meeks
Name: Jonathan Meeks
Title: Managing Director
TA Strategic Partners Fund II-A L.P.
By:
TA Associates SPF II L.P., its General
Partner
By:
TA Associates, L.P., its General Partner
By:
/s/ Jonathan Meeks
Name: Jonathan Meeks
Title: Managing Director
TA Investors III L.P.
By:
TA Associates, L.P., its General Partner
By:
/s/ Jonathan Meeks
Name: Jonathan Meeks
Title: Managing Director
[Signature Page to Tender Agreement]
Schedule I
Name of Shareholder
Number of Shares
TA X L.P.
TA Atlantic and Pacific VI L.P.
TA Strategic Partners Fund II L.P.
TA Strategic Partners Fund II-A L.P.
TA Investors III L.P.
Total:
4,260,730
2,130,402
105,235
3,480
128,522
6,628,369
TA Associates
200 Clarendon Street, 56th Floor
Boston, MA 02116
Attention: Thomas P. Alber
Facsimile No.: 617-574-6789
Email: [email protected]
S-1
Exhibit (d)(3)
Execution Version
TENDER AGREEMENT
This TENDER AGREEMENT (this “Agreement”), dated as of July 6, 2016, is entered into by and among, CVP II, Inc., an
international business company organized and existing under the laws of Anguilla (“ Shareholder ”), Avast Holding B.V., a private
company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) organized under the laws of The Netherlands
(“ Parent ”), and Avast Software B.V., a private company with limited liability ( besloten vennootschap met beperkte
aansprakelijkheid ) organized under the laws of The Netherlands and a direct wholly owned subsidiary of Parent (“ Buyer ”).
WHEREAS, contemporaneously with the execution of this Agreement, Parent, Buyer and AVG Technologies N.V., a public
limited liability company ( naamloze vennootschap ) organized under the laws of The Netherlands (the “ Company ”), are entering
into a Purchase Agreement, dated as of the date hereof (as the same may be amended or modified after the date hereof, the “ Purchase
Agreement ”), providing for, among other things, (a) Buyer to commence a tender offer (such offer, as the same may be amended or
modified from time to time as permitted by the Purchase Agreement, the “ Offer ”) for each issued and outstanding ordinary share,
with a nominal value of €0.01 per share, of the Company (the “ Shares ”), and (b) the Reorganization, including, if applicable, the
Asset Sale (each as defined in the Purchase Agreement) of the Company following the Offer; and
WHEREAS, as a condition of and inducement to, Parent’s and Buyer’s willingness to enter into the Purchase Agreement, Parent
and Buyer have required that Shareholder enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and upon the terms and subject to the
conditions set forth in this Agreement, the parties hereby agree as follows:
Section 1 Certain Definitions. For the purposes of this Agreement, capitalized terms used and not otherwise defined in this
Agreement shall have the respective meanings ascribed to them in this Section 1 , or if not defined in this Section 1 , the respective
meanings ascribed to them in the Purchase Agreement:
“Acquisition Agreement” means a letter of intent, agreement-in-principle, definitive acquisition agreement or similar agreement
that contemplates an Alternative Transaction Proposal.
“Additional Owned Shares” means all Shares and any other Company Securities that are beneficially owned by Shareholder or
any of its respective controlled Affiliates and are acquired after the date hereof and prior to the termination of this Agreement.
“Affiliate” has the meaning set forth in the Purchase Agreement; provided, however, that the Company shall not be deemed to
be an Affiliate of Shareholder.
“beneficial ownership” (and related terms such as “beneficially owned” or “beneficial owner”) has the meaning set forth in Rule
13d-3 promulgated under the 1934 Act.
“Covered Shares” means the Owned Shares and Additional Owned Shares.
“Disclosed Owned Shares” has the meaning assigned thereto in Section 6(a) hereof.
“Equity Interests” means any share of capital stock of a Person or any securities (including debt securities) convertible into, or
exchangeable or exercisable for, any such shares of capital stock or any options, warrants, calls, subscriptions or other rights,
convertible securities, agreements or commitments obligating such Person to issue, transfer or sell any shares of capital stock or other
equity interest in such Person.
“Owned Shares” means all 1,408,351 Shares which are beneficially owned by Shareholder or any of its respective controlled
Affiliates as of the date hereof.
“Permitted Transfer” means (a) a Transfer of Covered Shares by any Shareholder to a controlled Affiliate of such Shareholder;
provided that (i) such controlled Affiliate shall remain a controlled Affiliate of such Shareholder at all times following such Transfer
and (ii) prior to the effectiveness of such Transfer, such transferee executes and delivers to Parent and Buyer a written agreement, in
form and substance reasonably acceptable to Parent, to assume all of such Shareholder’s obligations hereunder in respect of the
securities subject to such Transfer and to be bound by the terms of this Agreement, with respect to the securities subject to such
Transfer, to the same extent as such Shareholder is bound hereunder and to make each of the representations and warranties hereunder
in respect of the securities transferred as such Shareholder shall have made hereunder or (b) the Transfer of Covered Shares made with
Buyer’s prior written consent.
“Transfer” means, with respect to a Covered Share, the transfer, pledge, hypothecation, encumbrance, assignment or other
disposition (whether by sale, merger, consolidation, liquidation, dissolution, dividend, distribution or otherwise) of such Covered
Share or the beneficial ownership thereof, the offer to make such a transfer or other disposition, and each option, agreement,
arrangement or understanding, whether or not in writing, to effect any of the foregoing. As a verb, “ Transfer ” shall have a correlative
meaning.
Section 2 Tender of the Shares. (a) Shareholder hereby agrees that it shall tender its Covered Shares or cause its Covered
Shares to be tendered, into the Offer (i) in the case of Owned Shares, promptly and in any event no later than ten (10) Business Days
following the commencement of the Offer, and (ii) in the case of Additional Owned Shares that are Shares, promptly after such Shares
were obtained but, in each case, if Shareholder has not received the Offer Documents by such time, within five (5) Business Days
following receipt of such documents, but in any event prior to the Expiration Time, free and clear of all Liens. Subject to Section 8
hereof, Shareholder agrees that it will not withdraw such Covered Shares, or cause such Covered Shares to be withdrawn, from the
Offer at any time.
(b) If the Offer is terminated or withdrawn by Buyer, this Agreement is terminated pursuant to Section 8 or the Purchase
Agreement is terminated in accordance with the terms thereof prior to the purchase of the Covered Shares in the Offer, Parent and
Buyer shall promptly return, and shall cause any depository acting on behalf of Parent and Buyer to return, all the Covered Shares
tendered by Shareholder in the Offer to such Shareholder.
2
Section 3 Voting Agreement. At any meeting of the shareholders of the Company, including the EGM, and at every
adjournment or postponement thereof, or in any other circumstance in which the vote, consent or other approval of the
shareholders of the Company is sought as to a matter described in any of clauses (a) through (i) below (each, a “ Company
Shareholders Meeting ”), each Shareholder agrees that it shall, and if shares are held by a nominee for such Shareholder, shall
cause the holder of record of any Covered Shares to (i) appear at each such meeting or otherwise cause all Covered Shares
beneficially owned by it as of the record date to be counted as present thereat for purposes of calculating a quorum (as
applicable) and (ii) vote (or cause to be voted), by proxy or in person, all Covered Shares beneficially owned as of the record
date:
(a) for a resolution to, effective upon the Acceptance Time, (i) provide discharge to all of the existing members of the
Management Board and Mr. J. Little (former member of the Management Board) and all of the existing members of the Supervisory
Board and (ii) subject to Sections 2.04(f) and 2.05 of the Purchase Agreement, appoint such new members to the Boards as designated
by Buyer, upon the binding nomination of the Supervisory Board, to replace the resigning members of the Boards;
(b) for the Asset Sale;
(c) for (i) a resolution to, subject to the number of Shares tendered pursuant to the Offer (including during the Subsequent
Offering Period and during the Minority Exit Offering Period) falling within the Asset Sale Range, amend the articles of association of
the Company for the purpose of, among other things, permitting the appointment by the general meeting of the Company of a
liquidator, including the authorization of all members of the Management Board and any and all lawyers and paralegals practicing
with De Brauw Blackstone Westbroek N.V. to execute such deed of amendment of the articles of association of the Company and
(ii) a resolution to, subject to (A) the number of Shares tendered pursuant to the Offer (including during the Subsequent Offering
Period and during the Minority Exit Offering Period) falling within the Asset Sale Range, (B) the amendment of the articles of
association referred to under Section 2.04(iv)(A) of the Purchase Agreement and (C) completion of the Asset Sale, appoint as
liquidator Stichting Vereffening AVG Technologies, a foundation ( stichting ) to be incorporated under Dutch law;
(d) for a resolution to, subject to (i) delisting of the Shares from the NYSE, (ii) the Asset Sale not being pursued, and
(iii) the number of Shares tendered pursuant to the Offer (including during the Subsequent Offering Period and during the Minority
Exit Offering Period) representing at least 80% of the outstanding Shares, (A) convert the Company from a public limited liability
company ( naamloze vennootschap ) to a private company with limited liability ( besloten vennootschap met beperkte
aansprakelijkheid ), and (B) amend the Company’s articles of association in connection with the matters described in clause (A),
including the authorization of all members of the Management Board and any and all lawyers and paralegals practicing with De
Brauw Blackstone Westbroek N.V. to execute such deed of amendment of the articles of association of the Company;
(e) for the Second Step Distribution;
3
(f) against any Alternative Transaction Proposal or any proposal relating to an Alternative Transaction
Proposal;
(g) against any Acquisition Agreement or merger, consolidation, combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by the Company or its Subsidiaries (other than the Purchase Agreement,
the Asset Sale Agreement and the Reorganization);
(h) against any proposal, action or agreement that would reasonably be expected to (i) prevent or nullify any provision of
this Agreement, (ii) result in a material breach of any covenant, representation or warranty or any other obligation or agreement
contained in the Purchase Agreement, or (iii) result in any of the conditions set forth in Annex I of the Purchase Agreement not being
fulfilled, or (iv) prevent or materially delay or impede the consummation of the Offer or the Asset Sale; and
(i) for any other matter submitted by the Company for shareholder approval at the EGM at the request of Buyer and related
to the transactions contemplated by the Purchase Agreement; provided , however that (i) the Boards have made, and not
withdrawn in accordance with the Purchase Agreement, the Company Recommendation, and (ii) nothing in this Agreement shall be
interpreted as creating an obligation of the Company to submit any such request of Buyer for such shareholder approval.
Additionally, no Shareholder shall propose, commit or agree to take any action inconsistent with any of the foregoing clauses
(a) through (i).
Section 4 No Disposition or Solicitation. (a) No Disposition or Adverse Act. Shareholder hereby covenants and agrees that,
except as contemplated by this Agreement, the Purchase Agreement or the Offer Documents, such Shareholder shall not (i) offer to
Transfer, Transfer or consent to any Transfer of any or all of the Covered Shares, Equity Interests in the Company or any interest
therein without the prior written consent of Parent (other than Permitted Transfers or transfers by operation of law, provided in each
case this Agreement shall bind any transferee), (ii) enter into any contract, option or other agreement with respect to any Transfer of
any or all Covered Shares, Equity Interests in the Company or any interest therein, (iii) grant any proxy, power-of-attorney or other
authorization or consent in or with respect to any or all of the Covered Shares or Equity Interests in the Company inconsistent with
such Shareholder’s voting or consent obligations in Section 3 hereof or (iv) deposit any or all of the Covered Shares into a voting
trust or enter into a voting agreement or arrangement with respect to any or all of the Covered Shares or Equity Interests in the
Company inconsistent with such Shareholder’s voting or consent obligations in Section 3 hereof. Any attempted Transfer of
Covered Shares, Equity Interests in the Company or any interest therein in violation of this Section 4(a) shall be null and void.
(b) Non-Solicitation. Subject to Section 9 hereof and except to the extent expressly permitted by the Purchase Agreement,
Shareholder shall not, and shall cause its controlled Affiliates and its or their respective Representatives not to, directly or indirectly,
(A) solicit, initiate or take any action to knowingly facilitate, induce or encourage any inquiries or the making of any proposal or offer
that constitutes or could reasonably be expected to lead to an Alternative Transaction Proposal, or (B) enter into, continue or otherwise
knowingly
4
participate in any discussions or negotiations regarding, or furnish to any Person any information with respect to, or otherwise
cooperate in any way that could otherwise be expected to lead to, any Alternative Transaction Proposal. Shareholder shall, and shall
cause each of its controlled Affiliates and its and their respective Representatives to, immediately cease and cause to be terminated
any and all existing discussions or negotiations with any Person conducted heretofore with respect to any Alternative Transaction
Proposal. Shareholder shall, and shall cause its controlled Affiliates and their respective Representatives to, immediately cease and
terminate any existing solicitation, discussion or negotiation with any third-party with respect to any Alternative Transaction Proposal
conducted by such Shareholder, its controlled Affiliates or its and their respective Representatives. Nothing in this Section 4 shall
prohibit a Shareholder, its Subsidiaries and its and their respective Representatives from informing any Person of the existence of the
provisions contained in this Section 4.
Section 5 Additional Agreements. (a) Certain Events. In the event of any stock split, consolidation, stock dividend, merger,
demerger, reorganization, recapitalization or other change in the capital structure of the Company affecting the Covered Shares or the
acquisition by any Shareholder or any of its controlled Affiliates of Additional Owned Shares or other Equity Interests of the
Company, (i) the type and number of Covered Shares shall be adjusted appropriately, and (ii) this Agreement and the obligations
hereunder shall automatically attach to any additional Covered Shares or other Equity Interests issued to or acquired by any
Shareholder or any of their controlled Affiliates.
(b) Stop Transfer. In furtherance of this Agreement, Shareholder hereby authorizes and instructs the Company (including
through the Company’s transfer agent) to enter a stop transfer order to give effect to Section 4(a) with respect to all the Covered
Shares. Shareholder agrees that it will cause the Company, as promptly as practicable after the date of this Agreement, to make a
notation on its records and give instructions to the transfer agent for the Covered Shares not to permit, during the term of this
Agreement, the Transfer of the Covered Shares in violation of the terms of this Agreement.
(c) Communications. Unless required by Applicable Law, Shareholder shall, and shall cause its Representatives to, consult
with Parent before issuing any press release or otherwise making any public statement with respect to the Offer, the Purchase
Agreement or this Agreement. Shareholder hereby (i) consents to and authorizes the publication and disclosure by Parent of such
Shareholder’s identity and holding of Covered Shares, and the nature of such Shareholder’s commitments, arrangements and
understandings under this Agreement in any public disclosure document required by Applicable Law in connection with the Offer or
the Reorganization or any other transactions contemplated by the Purchase Agreement and (ii) agrees as promptly as practicable to
notify Parent of any required corrections with respect to any written information supplied by Shareholder specifically for use in any
such disclosure document.
Section 6 Representations and Warranties of Shareholder. Shareholder hereby represents and warrants to Parent as follows:
(a) Title. As of the date hereof, Shareholder is the sole record and beneficial owner of the Shares and beneficial owner of
the other Equity Interests in the Company, in each case, set forth on Schedule I (the “ Disclosed Owned Shares ”). The Disclosed
Owned Shares
5
constitute all the Shares and other Equity Interests owned of record or beneficially by Shareholder or its controlled Affiliates on the
date hereof, and such Shareholder and its respective controlled Affiliates is not the beneficial owner of any other Shares or other
Equity Interests. Such Shareholder has sole voting power, sole power of disposition and sole power to issue instructions with respect
to the matters set forth in Section 4 and Section 5 hereof and all other matters set forth in this Agreement, in each case with
respect to all of the Covered Shares with no limitations, qualifications or restrictions on such rights that would prevent such
Shareholder from performing its obligations under this Agreement, subject to applicable securities laws and the terms of this
Agreement. Except as permitted by this Agreement, the Covered Shares are now, and at all time during the term hereof will be, held
by such Shareholder, or by a nominee or custodian for the benefit of such Shareholder, free and clear of any Liens that would prevent
such Shareholder from performing its obligations under this Agreement.
(b) Authority. Shareholder has all necessary power and authority to execute and deliver this Agreement, to perform such
Shareholder’s obligations hereunder and to consummate the transactions contemplated hereby. In the event that any Shareholder is, or
any of such Shareholder’s Covered Shares are held by, a Person that is not an individual, the execution, delivery and performance by
such Person of this Agreement, the performance by such Person of its obligations hereunder and the consummation by such Person of
the transactions contemplated hereby have been duly and validly authorized by such Person and no other actions or proceedings on the
part of such Person are necessary to authorize the execution and delivery by it of this Agreement, the performance by such Person of
its obligations hereunder or the consummation by such Person of the transactions contemplated hereby. This Agreement has been duly
authorized and validly executed and delivered by Shareholder, and, assuming due authorization, execution and delivery by Parent and
Buyer, constitutes a legal, valid and binding obligation of such Shareholder, enforceable against such Shareholder in accordance with
its terms subject to the effect of any applicable bankruptcy, insolvency (including, without limitation, all Applicable Laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting creditors’ rights generally and subject to the effect of
general principles of equity (regardless of whether considered in a proceeding at law or in equity).
(c) No Conflict or Default. Except for any competition, antitrust and investment Applicable Laws or regulations of foreign
jurisdictions and the 1934 Act, no filing with, and no permit, authorization, consent or approval of, any Governmental Authority or
any other Person is necessary for the execution and delivery of this Agreement by Shareholder, the consummation by Shareholder of
the transactions contemplated hereby and the compliance by Shareholder with the provisions hereof. None of the execution and
delivery of this Agreement by Shareholder, the consummation by Shareholder of the transactions contemplated hereby or compliance
by Shareholder with any of the provisions hereof will (i) result in a violation or breach of, or constitute (with or without notice or lapse
of time or both) a default (or give rise to any third party right of termination, cancellation, modification or acceleration) under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, permit, contract, commitment, arrangement,
understanding, agreement or other instrument or obligation of any kind, including any voting agreement, proxy arrangement, pledge
agreement, shareholders agreement or voting trust, to which such Shareholder is a party or by which such Shareholder or any of such
Shareholder’s properties or assets may be bound, (ii) violate any judgment, order,
6
writ, injunction, decree or award of any court, administrative agency or other Governmental Authority that is applicable to such
Shareholder or any of such Shareholder’s properties or assets, (iii) constitute a violation by such Shareholder of any Applicable Law
or regulation of any jurisdiction or (iv) contravene or conflict with such Shareholder’s memorandum and articles of association (as
applicable), in each case, except for any conflict, breach, default or violation described above which would not adversely affect in any
material respect the ability of such Shareholder to perform its obligations hereunder or to consummate the transactions contemplated
hereby.
(d) No Litigation. As of the date hereof, there is no Action pending or, to the knowledge of Shareholder, threatened in
writing against such Shareholder at law or in equity before or by any Governmental Authority that would reasonably be expected to
materially impair or delay the ability of such Shareholder to perform timely its obligations under this Agreement or to tender its
Shares into the Offer as contemplated by Section 2(a) .
(e) No Fees. No Shareholder has employed any investment banker, broker, financial advisor, finder or other intermediary
in connection with the transactions contemplated by this Agreement which would be entitled to any investment banking, brokerage,
finder’s, financial advisory or similar fee or commission from Parent or Buyer in connection with this Agreement or the transactions
contemplated by this Agreement.
(f) Receipt; Reliance. Shareholder has received and reviewed a copy of the Purchase Agreement. Shareholder understands
and acknowledges that Parent and Buyer are entering into the Purchase Agreement in reliance upon such Shareholder’s execution,
delivery and performance of this Agreement.
Section 7 Representations and Warranties of Parent and Buyer. Parent hereby represents and warrants to Shareholder as
follows:
(a) Authority. Each of Parent and Buyer has all necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance
by each of Parent and Buyer of this Agreement, the performance by each of Parent and Buyer of its respective obligations hereunder
and the consummation by each of Parent and Buyer of the transactions contemplated hereby have been duly and validly authorized by
each of Parent and Buyer, as applicable, and no other actions or proceedings on the part of each of Parent and Buyer are necessary to
authorize the execution and delivery by it of this Agreement, the performance by each of Parent and Buyer of its obligations hereunder
or the consummation by each of Parent and Buyer of the transactions contemplated hereby. This Agreement has been duly authorized
and validly executed and delivered by each of Parent and Buyer and, assuming due authorization, execution and delivery by
Shareholder, constitutes a legal, valid and binding obligation of each of Parent and Buyer, enforceable against each of Parent and
Buyer, as applicable, in accordance with its terms subject to the effect of any applicable bankruptcy, insolvency (including, without
limitation, all Applicable Laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors’ rights
generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in
equity).
7
(b) No Conflict or Default. Except for any competition, antitrust and investment Applicable Laws or regulations
of foreign jurisdictions and the 1934 Act, no filing with, and no permit, authorization, consent or approval of, any
Governmental Authority or any other Person is necessary for the execution and delivery of this Agreement by each of
Parent and Buyer, the consummation by each of Parent and Buyer of the transactions contemplated hereby and the
compliance by each of Parent and Buyer with the provisions hereof. None of the execution and delivery of this Agreement
by each of Parent and Buyer, the consummation by each of Parent and Buyer of the transactions contemplated hereby or
compliance by each of Parent and Buyer with any of the provisions hereof will (i) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give rise to any third-party right of termination,
cancellation, modification or acceleration) under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, permit, contract, commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind, including any voting agreement, proxy arrangement, pledge agreement, shareholders agreement or
voting trust, to which each of Parent and Buyer is a party or by which each of Parent and Buyer, as applicable, or any of
each of Parent’s and Buyer’s, as applicable properties or assets may be bound, (ii) violate any judgment, order, writ,
injunction, decree or award of any court, administrative agency or other Governmental Authority that is applicable to each
of Parent and Buyer or any of each of Parent’s and Buyer’s properties or assets, (iii) constitute a violation by either Parent
or Buyer of any Applicable Law or regulation of any jurisdiction or (iv) contravene or conflict with either of Parent’s or
Buyer’s memorandum and articles of association (as applicable), in each case, except for any conflict, breach, default or
violation described above which would not adversely affect in any material respect the ability of either Parent or Buyer to
perform its obligations hereunder or to consummate the transactions contemplated hereby.
(c) Other Tender Agreements. As of the date hereof, each of Parent and Buyer represents and warrants that it has not
entered into any agreement with another shareholder of the Company covering the matters contemplated hereby which contains terms
more favorable in any material respect to such shareholder than are provided to Shareholder in this Agreement.
Section 8 Termination. This Agreement shall terminate upon the earliest of (a) the mutual written agreement of Parent and
Shareholder, (b) the Closing, (c) the acquisition by Parent or Buyer of 100% of the outstanding Shares (d) the termination of the
Purchase Agreement in accordance with its terms, or (e) the date of any modification, waiver or amendment to the Purchase
Agreement in a manner that decreases the Offer Consideration or changes the form of the Offer Consideration; provided that
(i) nothing in this Agreement shall relieve any party hereto from liability for any breach of this Agreement prior to its termination and
(ii) Section 9 hereof shall survive any termination of this Agreement.
Section 9 No Limitation. Nothing in this Agreement shall be construed to prohibit, limit or affect any Shareholder or any of the
Representatives of Shareholder who is an officer of the Company or member of the Boards from (i) taking any action (or omitting to
take any action) in his or her capacity as an officer of the Company or member of the Boards, including in exercising rights under the
Purchase Agreement, and/or from taking any action with respect to any Alternative Transaction Proposal in his or her capacity as such
an officer or director and (ii) exercising its or their fiduciary duties as an officer or director to the Company or its stakeholders.
8
Section 10 Miscellaneous. (a) Entire Agreement; Third-Party Beneficiaries. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and
nothing in this Agreement, express or implied, is intended to confer upon any other Person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
(b) Reasonable Efforts. Subject to the terms and conditions of this Agreement and the Purchase Agreement, Shareholder
agrees to use reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or
advisable under Applicable Law to consummate and make effective the arrangements contemplated hereby. Upon Parent’s reasonable
request and without further consideration, Shareholder shall execute and deliver such additional documents and take all such further
lawful action as may be necessary or desirable to consummate and make effective, in the most expeditious manner practicable, the
arrangements contemplated hereby. Without limiting the foregoing, Shareholder shall execute and deliver to Parent and any of its
designees any proxies, including with respect to Additional Owned Shares, reasonably requested by Parent with respect to such
Shareholder’s voting and consent obligations under this Agreement.
(c) No Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties (whether by operation of law or otherwise) without the prior written consent of the other parties, and any attempted
or purported assignment in violation of this Section 10(c) will be null and void; provided , however , that each of Parent or Buyer
may assign this Agreement and any of their respective rights and obligations hereunder to any Affiliate of Parent without the consent
of Shareholder, but no such assignment shall relieve Parent or Buyer, as the case may be, of its obligations hereunder. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties hereto and their
respective permitted successors and assigns.
(d) Binding Successors. Without limiting any other rights Parent may have hereunder in respect of any Transfer of the
Covered Shares, Shareholder agrees that this Agreement and the obligations hereunder shall attach to the Covered Shares beneficially
owned by such Shareholder and its controlled Affiliates and shall be binding upon any Person to which legal or beneficial ownership
of such Covered Shares shall pass, whether by operation of law or otherwise, including, without limitation, Shareholder’s heirs,
guardians, administrators, representatives or successors.
(e) Modification or Amendments. Subject to the provisions of Applicable Law, this Agreement may be amended, modified
and supplemented in any and all respects by written agreement of the parties hereto with respect to any of the terms contained herein.
(f) Notice. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and
shall be deemed given (i) on the date of delivery if delivered personally or sent via facsimile or electronic mail (receipt confirmed),
(ii) on the first (1st) Business Day following the date of dispatch if sent by a nationally recognized overnight
9
courier (providing proof of delivery) or (iii) on the third (3rd) Business Day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid, in each case to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
if to Parent or Buyer, to:
Avast Holding B.V.
c/o Avast Software s.r.o.
Trianon Office Building
Budejovicka 1518/13A
140 00 Prague 4 – Michle
Czech Republic
Attention:
Alan Rassaby
Email:
[email protected]
with a copy, which shall not constitute notice, to:
White & Case LLP
5 Old Broad Street
London EC2N 1DW
United Kingdom
Attention:
Ian Bagshaw, Esq.
Caroline Sherrell, Esq.
Facsimile:
+44 20 7532 1001
Email:
[email protected]
[email protected]
and
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036-2787
Attention:
Chang-Do Gong, Esq.
Facsimile:
(212) 354 8113
Email:
[email protected]
and
De Brauw Blackstone Westbroek N.V.
Claude Debussylaan 80
1070 AB Amsterdam
PO Box 75084
Amsterdam 1070 AB
Netherlands
Attention:
Ton Schutte
Email:
[email protected]
10
if to Shareholder:
At the address and facsimile number set forth on Schedule I hereto, to:
with copies, which shall not constitute notice, to:
Van Campen Liem
J.J. Viottastraat 52
1071 JT Amsterdam
Attention: Marc Van Campen
Facsimile: + 31 20 760 1699
Email: [email protected]
(g) Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the
application thereof to any Person or any circumstance, is found by a court or other Governmental Authority of competent jurisdiction
to be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other Persons or
circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, the provision shall be interpreted to be only so broad as would be enforceable.
(h) Specific Performance and Other Remedies. The parties hereto agree that irreparable harm would occur if any of the
provisions of this Agreement were not performed in accordance with their specific terms on a timely basis or were otherwise
breached. It is accordingly agreed that, without posting bond or other undertaking, the parties shall be entitled to injunctive or other
equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any
court of competent jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity. In the event
that any such action is brought in equity to enforce the provisions of this Agreement, no party will allege, and each party hereby
waives the defense or counterclaim, that there is an adequate remedy at law. The parties hereto further agree that (i) by seeking any
remedy provided for in this Section 10(h) , a party shall not in any respect waive its right to seek any other form of relief that may be
available to such party under this Agreement and (ii) nothing contained in this Section 10(h) shall require any party hereto to institute
any action for (or limit such party’s right to institute any action for) specific performance under this Section 10(h) before exercising
any other right under this Agreement.
(i) No Waiver. The failure of any party hereto to exercise any right, power or remedy provided under this Agreement or
otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other party hereto with such party’s
obligations hereunder, and any custom or practice of the parties at variance with the terms hereof, shall not constitute a waiver by such
party of such party’s right to exercise any such or other right, power or remedy or to demand such compliance.
11
(j) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, without regard to the conflicts of law rules of such state.
(k) Submission to Jurisdiction. The parties hereto agree that any Action seeking to enforce any provision of, or based on
any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby (whether brought by any party
or any of its Affiliates or against any party or any of its Affiliates) shall be brought in any state or United States federal court located
in the State of Delaware, United States, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such Action and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any such Action in any such court or that any such Action
brought in any such court has been brought in an inconvenient forum. Process in any such Action may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees
that service of process on such party as provided in Section 10(f) shall be deemed effective service of process on such party.
(l) Waiver of Jury Trial. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES
AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
SUCH PARTY MAY HAVE TO A TRIAL BY JURY FOR ANY DISPUTE ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE BREACH, TERMINATION OR VALIDITY THEREOF OR ANY TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (i) NEITHER THE OTHER
PARTY HERETO NOR ITS REPRESENTATIVES, AGENTS OR ATTORNEYS HAVE REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, (ii) EACH PARTY HERETO UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF
THIS WAIVER, (iii) EACH PARTY HERETO MAKES THIS WAIVER VOLUNTARILY AND (iv) EACH PARTY HERETO
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS OF THIS SECTION 10(l) . ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(m) Interpretation. The descriptive headings used in this Agreement are inserted for convenience of reference only and are
not intended to be part of or to affect the meaning or interpretation of this Agreement. The words “include,” “includes” and
“including” shall be deemed to be followed by “without limitation” whether or not they are in fact followed by such words or words of
like import. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. No provision of this
Agreement shall be interpreted for or against any party hereto because that party or its legal representatives drafted the provision. The
words “hereof,” “hereto,” “hereby,” “herein,” “hereunder” and words of similar import, when used in this Agreement, shall refer to
this Agreement as a whole and not any particular section in which such words appear.
12
(n) Counterparts. This Agreement may be executed in counterparts, each of which will be deemed to constitute
an original, but all of which shall constitute one and the same agreement, and may be delivered by facsimile or other
electronic means intended to preserve the original graphic or pictorial appearance of a document.
(o) Expenses. Except as otherwise expressly provided in this Agreement, all direct and indirect costs and expenses
incurred in connection with this Agreement shall be borne by the party incurring such expenses.
(p) No Ownership Interest. Shareholder has agreed to enter into this Agreement and act in the manner specified in this
Agreement for consideration. Except as expressly set forth in this Agreement, nothing contained in this Agreement shall be deemed,
upon execution, to vest in Parent or Buyer any direct or indirect ownership or incidence of ownership of or with respect to any
Covered Shares. All rights, ownership and economic benefits of and relating to the Covered Shares shall remain vested in and belong
to Shareholder, and Parent shall have no authority to manage, direct, superintend, restrict, regulate, govern or administer any of the
policies or operations of the Company or exercise any power or authority to direct Shareholder in the voting of any of the Covered
Shares, except as otherwise provided in this Agreement. Nothing in this Agreement shall be interpreted as creating or forming a
“group” with any other Person, including Parent, for purposes of Rule 13d-5(b)(1) of the 1934 Act or any other similar provision of
Applicable Law.
[Signature page follows.]
13
IN WITNESS WHEREOF, each of Parent, Buyer and Shareholder has caused this Agreement to be signed by its duly
authorized officer as of the date first written above.
Avast Holding B.V.
By:
Name:
Title:
By:
Name:
Title:
/s/ Alan Rassaby
Alan Rassaby
Managing Director A
/s/ Stefan Boermans
Stefan Boermans
Managing Director B
Avast Software B.V.
By:
Name:
Title:
By:
Name:
Title:
/s/ Alan Rassaby
Alan Rassaby
Managing Director A
/s/ Stefan Boermans
Stefan Boermans
Managing Director B
[Signature Page to Tender Agreement]
IN WITNESS WHEREOF, each of Parent, Buyer and Shareholder has caused this Agreement to be signed by its duly
authorized officer as of the date first written above.
CVP II, Inc. by its sole Managing Director
PES (Anguilla) Ltd.
By:
/s/ Tyrzka Tweeboom
By:
Its:
By:
Its:
PES (Anguilla) Ltd.
Managing director
Tyrzka Tweeboom
Director
[Signature Page to Tender Agreement]
Schedule I
Name of Shareholder
Number of Shares
CVP II, Inc.
1,408,351
CVP II, Inc.
201 The Rogers Office Building
Edwin Wallace Rey Drive
George HilL, Anguilla
Attention: Tyrzka Tweeboom
Email: [email protected]
Facsimile: +5999 465 4864
S-1
Exhibit (d)(4)
CONFIDENTIALITY AGREEMENT
May 28, 2016
AVAST Holding B.V.
Bezoekadres Schipol Boulevard 369, Tower F, 7 th Floor
1118 BJ Schipol Netherlands
Attention:
John Schwartz, Chairman of Supervisory Board
Vince Steckler, Chief Executive Officer
Ladies and Gentlemen:
In connection with your consideration of a possible negotiated transaction (the “Transaction”) between AVG Technologies
N.V., a public limited liability company ( naamloze vennootschap ) incorporated under the laws of the Netherlands (together with its
subsidiaries, the “ Company ”), and AVAST Holding B.V. (“ Acquiror ”) that is supported by the Company’s Boards and
recommended to the Company’s shareholders, and in order to allow Acquiror and the Company to evaluate and pursue the
Transaction, it is expected that each of the Company and its Representatives (as defined below), on the one hand, and Acquiror and its
Representatives, on the other hand (each such party when disclosing such information hereunder, a “ Disclosing Party ”), will furnish
or otherwise make available to the other (each such party when receiving such information hereunder, a “ Receiving Party ”) certain
information regarding its business, operations and affairs. Such information (whether oral, written, electronic or otherwise), regardless
of the form in which it is provided or maintained and whether prepared by the Disclosing Party, its Representatives or otherwise and
whether provided before, on or after the date hereof, together with any notes, analyses, compilations, studies, interpretations or other
documents prepared by the Receiving Party or any of its Representatives that contain or otherwise reflect or are based in whole or in
part on such information is hereinafter referred to as “ Confidential Information ,” except that “Confidential Information” does not
include any information that (i) was publicly available prior to the date of this agreement or hereafter becomes publicly available
without any violation of this agreement on the part of the Receiving Party or any of its Representatives, (ii) was available to or
otherwise known by the Receiving Party or any of its Representatives on a non-confidential basis prior to its disclosure, provided
that the source of such information was not subject to any legally binding obligation to keep such information confidential or (iii) is or
becomes available to the Receiving Party or any of its Representatives on a non-confidential basis from a person other than the
Disclosing Party or its Representatives who, to the knowledge of the Receiving Party at the time of such disclosure, is not subject to
any legally binding obligation to keep such information confidential or (iv) is independently developed by the Receiving Party or any
of its Representatives without the use of Confidential Information and the Receiving Party can provide sufficient documentation
evidencing the same. As used in this
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AVAST Holding B.V.
May 28, 2016
agreement, “person” means an individual or entity and the “Representatives” of any person means the affiliates (other than Indirect
Affiliates, as defined below) of such person and the officers, supervisory directors, managing directors, employees, managing
members, general partners, attorneys, accountants, financial advisors, agents and other representatives of such person and its affiliates
(other than Indirect Affiliates), and, subject to Section 5, actual or potential sources of equity or debt financing for the Transaction.
In consideration of each Receiving Party being provided with Confidential Information and being offered the opportunity to
evaluate the business and operations of the Disclosing Party, the parties hereby agree as follows:
1. The Receiving Party and its Representatives will not use Confidential Information for any purpose except for the limited
purpose of evaluating, negotiating, financing and consummating the Transaction and for no other purpose or reason whatsoever,
including for competitive purposes or to attempt to divert any business or customer of the Company.
2. The Receiving Party agrees that the Confidential Information will be kept confidential and will not be disclosed, in whole or
in part, by the Receiving Party or any of its Representatives to any person other than those of its Representatives who need to know
such Confidential Information for the purpose of assisting the Receiving Party in evaluating, negotiating and consummating the
Transaction or as permitted by Section 5. The Receiving Party shall require its Representatives to be bound by the terms of this
agreement to the fullest extent as if they were parties hereto. The Receiving Party shall be responsible for any breach of this agreement
by the Receiving Party or any of its Representatives; provided that the Receiving Party will not be responsible for a breach of the
terms of this Agreement by any Representative who has executed a joinder to this Agreement or has entered into a confidentiality
agreement with the Company in respect of the Confidential Information. The Receiving Party shall, and shall cause its Representatives
to, safeguard the Confidential Information in the same manner and with the same level of care (but no less than reasonable care) that
the Receiving Party uses in safeguarding and handling its own confidential and proprietary information. Notwithstanding anything
contained herein to the contrary, none of the terms of this agreement shall apply to or restrict any portfolio company or other affiliate
of Acquiror or any direct and/or indirect shareholder of the Acquiror (but excluding, for the avoidance of doubt, the Acquiror and its
controlled affiliates) (each, an “ Indirect Affiliate ”), provided that such Indirect Affiliates do not receive Confidential Information.
3. Without the prior written consent of the Disclosing Party, except to the extent required by applicable law, applicable rules or
regulations of any national securities exchange or legal process, the Receiving Party will not disclose to any person except to its
Representatives the fact that any investigations, discussions or negotiations are taking place concerning the Transaction, or that the
Receiving Party has received Confidential Information from the Disclosing Party or Confidential Information has been made available
by the Disclosing Party, or any of the terms, conditions or other facts with respect to the Transaction, including the status thereof.
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AVAST Holding B.V.
May 28, 2016
4. If the Receiving Party or any of its Representatives is requested or required (based on the advice of its legal counsel) by any
law, regulation or legal process (including, without limitation, oral questions, interrogatories, requests for information or documents,
subpoenas, civil investigative demand or other similar legal process) to disclose any of the Confidential Information or the fact that
discussions or negotiations are taking place between the parties concerning a possible Transaction, or any of the terms, conditions or
other facts with respect thereto, or the Receiving Party determines, based on the advice of its legal counsel, that any such disclosure is
required under applicable law or applicable rules or regulations of any national securities exchange, then the Receiving Party will, to
the extent permitted by applicable law, rule or regulation, provide the Disclosing Party with prior written notice thereof as promptly as
reasonably practicable after receipt of such request or determination so that the Disclosing Party may seek, at its sole expense, a
protective order or other appropriate remedy and/or waive the Receiving Party’s compliance with the provisions of this agreement;
provided that no such notice shall be required to be given in the case of routine examination by any regulators that are not
specifically directed at the Transaction or the Confidential Information. The Receiving Party agrees that it will, at the Disclosing
Party’s request, exercise its reasonable efforts to assist the Disclosing Party in obtaining such protective order or other appropriate
remedy, at the Disclosing Party’s sole expense. If such protective order or other remedy is denied, and the Receiving Party or any of
its Representatives are nonetheless legally compelled to disclose such information, then the Receiving Party and its Representatives
may make such disclosure without liability under this Agreement; provided that the Receiving Party or its Representatives, as the case
may be, will furnish only that portion of the Confidential Information that is legally required, based on the advice of its legal counsel,
and will exercise its reasonable efforts to obtain reliable assurances that confidential treatment will be accorded the Confidential
Information.
5. Acquiror represents that neither it nor, to its knowledge, any of its Representatives on behalf of Acquiror or its affiliates has
entered into (and, except with the prior written consent of the Company, agrees that it will not, and will use its commercially
reasonable efforts to ensure that its Representatives will not, enter into) any agreement, arrangement or understanding with any person
(other than its and their respective Representatives) that would reasonably be likely to restrict the ability of any other person to
provide financing (debt, equity or other) for a possible strategic transaction involving the Company. Notwithstanding anything to the
contrary contained herein, without the prior written consent of the Company, Acquiror agrees not to disclose (and to use its
commercially reasonable efforts to cause its Representatives not to disclose) any Confidential Information to any actual or potential
sources of financing (debt, equity or otherwise), other than (i) bona fide third party institutional lenders who are or may be engaged
to provide debt financing to Acquiror or its affiliates in connection with the Transaction and are disclosed to the Company and
(ii) potential sources of equity financing who are disclosed to the Company prior to the sharing of Confidential Information; provided
that (i) Acquiror shall not be entitled to share Confidential Information with a potential source of equity financing if, promptly
following Acquiror’s disclosure of its intention to share Confidential Information with such person, the Company informs Acquiror
that the Company is in active discussions with such person regarding a possible strategic transaction involving the Company and (ii) if
the potential source of equity financing is a direct or indirect equity holder of Acquiror or limited partner of such direct or indirect
equity holder, then such disclosure to the Company shall not be required.
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AVAST Holding B.V.
May 28, 2016
6. Acquiror agrees that all communications by it or any of its Representatives intended for the Company concerning the
Transaction and its due diligence investigation (including requests for additional Confidential Information, meetings with management
and site visits) shall be directed solely to Dana Marohn, at Morgan Stanley at (650) 234-5687 or [email protected]
and Emily Tian at Morgan Stanley at (650) 234-5534 or [email protected] , with a copy to Mariëlle Reints at AVG
Technologies N.V. at (415) 609-7124 or Email: [email protected], except as may otherwise be approved in advance and in
writing by the Company.
7. If either party hereto determines not to proceed with its consideration of the Transaction, the party that has made such
determination agrees to inform the other party promptly of such determination. As promptly as reasonably practicable following the
Disclosing Party’s request, the Receiving Party shall, at its option, either destroy or return to the Disclosing Party, and use reasonable
efforts to cause its Representatives, at their option, to destroy or return to the Disclosing Party, all Confidential Information in the
Receiving Party’s or its Representatives’ possession. Upon the request of the Disclosing Party, the Receiving Party will promptly (and
in any event within ten business days) provide the Disclosing Party written certification by an authorized officer confirming its
compliance with the prior sentence. Notwithstanding the foregoing, the Receiving Party’s legal department may maintain a copy of the
Confidential Information in its restricted access files for actual or anticipated litigation, regulatory compliance or corporate record
keeping purposes, and neither the Receiving Party nor any of its Representatives shall be required to destroy any computer records or
files containing any Confidential Information that have been created pursuant to automatic electronic archiving and back-up
procedures in the ordinary course of business.
8. To the extent that any Confidential Information includes materials or other information that may be subject to attorney-client
privilege, work product doctrine or any other applicable privilege or doctrine, both parties acknowledge that they have a commonality
of interest with respect to such matters, and agree that it is their mutual desire, intention and understanding that the sharing of such
materials and other information is not intended to, and shall not, affect the confidentiality of any of such materials or other information
or waive or diminish the continued protection of any of such materials or other information under the attorney-client privilege, work
product doctrine or other applicable privilege or doctrine. Accordingly, all Confidential Information that is entitled to protection under
the attorney-client privilege, work product doctrine or other applicable privilege or doctrine shall remain entitled to protection
thereunder and shall be entitled to protection under the joint defense doctrine, and both parties agree to take all commercially
reasonable measures to preserve, to the fullest extent possible, the applicability of all such privileges and doctrines.
9. Acquiror further agrees that for a period of twelve months following the date hereof, Acquiror will not and ensure that its
Representatives over whom Acquiror exercises control, and any person acting on behalf of or in concert with Acquiror or such
Representatives will not, directly or indirectly, solicit for employment or hire any supervisory director, managing director, member of
the executive management team reporting to the Chief Executive Officer or other employees of the Company or any of its
subsidiaries, in each case, with whom Acquiror first has
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AVAST Holding B.V.
May 28, 2016
had contact in connection with the process contemplated by this agreement (each such person, a “Restricted Person ”). The
restrictions of this Section 9 shall not prohibit Acquiror, however, from (i) conducting any general solicitations for employment, such
as any newspaper or Internet help wanted advertisement, directly or through any agent (including placement and recruiting agencies)
that is not directed at a Restricted Person, or (ii) hiring any Restricted Person (A) who approaches Acquiror in response to such
advertisements or general solicitations, (B) who contacts Acquiror on his or her own initiative without any solicitation from Acquiror
or its affiliates or Representatives or (C) whose employment or engagement, as applicable, with the Company ceased at least six
(6) months prior to such hiring.
10. All proprietary and intellectual property rights in and to the Confidential Information furnished to the Receiving Party and its
Representatives by the Disclosing Party shall remain the sole property of the Disclosing Party, and nothing in this agreement shall be
construed in any way to grant to the Receiving Party or any of its Representatives any express or implied option, license or other right,
title or interest in or to any Confidential Information, or to any intellectual property rights embodied in such Confidential Information.
11. Neither the Disclosing Party nor any of its Representatives shall have any liability to the Receiving Party or any of its
Representatives resulting from the selection or use of the Confidential Information or any errors therein or omission therefrom, except
as may be provided under a definitive transaction agreement when, as, and if finally executed and delivered by the parties hereto.
Neither the Disclosing Party nor its Representatives makes any representations or warranties, express or implied, with respect to the
Confidential Information, except for any representations and warranties that may be expressly made to the other party in a definitive
transaction agreement when, as, and if finally executed, and subject to such limitations and restrictions as may be specified therein.
Unless and until the parties shall have executed and delivered a definitive transaction agreement, neither party will be under any legal
obligation of any kind whatsoever with respect to the Transaction by virtue of this agreement except for the matters specifically agreed
to herein. Acquiror understands and agrees that the Company shall be free to establish and/or change any process or procedure with
respect to the Transaction as the Company in its sole discretion may determine including, without limitation, (i) rejecting any and all
proposals made by Acquiror, (ii) terminating discussions and negotiations with Acquiror, (iii) negotiating with any other interested
party or entering into a final definitive agreement relating to the Transaction with any other party or (iv) withdrawing from
consideration the possibility of engaging in a transaction. The Receiving Party further agrees that, notwithstanding anything else in
this agreement to the contrary, the Disclosing Party and its Representatives will not be under any legal obligation of any kind
whatsoever to provide any Confidential Information, and the Disclosing Party may terminate the Receiving Party’s and its
Representatives’ access to the Confidential Information at any time.
12. Acquiror hereby acknowledges that in its examination of the Confidential Information, Acquiror and its Representatives may
have access to material non-public information concerning the Company. Acquiror acknowledges that it is aware (and that its
Representatives have been or will be advised by Acquiror) that the United States and other applicable securities laws prohibit any
person who has received from an issuer material nonpublic information relating
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AVAST Holding B.V.
May 28, 2016
to an issuer of securities from purchasing or selling securities of such issuer or from communicating such information to any other
person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities on the
basis of such information.
13. Acquiror agrees that, for a period of one year following the date hereof (the “Standstill Period”), Acquiror will not (and will
cause its affiliates who received Confidential Information in connection with the Transaction and any person acting on behalf of or in
concert with Acquiror or such affiliates not to), directly or indirectly, without the prior written consent of the Company (i) acquire,
agree to acquire or offer to acquire any securities or material assets of the Company or any of its subsidiaries, or any warrant, option or
other right to acquire any such securities or assets (other than acquisition of assets in the ordinary course of business), (ii) enter, agree
to enter or offer to enter, into any merger, business combination, recapitalization, restructuring or other extraordinary transaction
involving the Company or any of its subsidiaries, (iii) make, or in any way participate or engage in, any solicitation of proxies to vote,
or seek to advise or influence any person with respect to the voting of, any voting securities of the Company, (iv) form, join or in any
way participate in a “group” (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) with
respect to any voting securities of the Company, (v) call, request the calling of, or otherwise seek or assist in the calling of a special
meeting of the shareholders of the other party, (vi) otherwise act, alone or in concert with others, to seek to control or influence the
management or the policies of the Company, (vii) disclose any intention, plan or arrangement prohibited by, or inconsistent with, the
foregoing or (viii) advise, assist or encourage or enter into any discussions, negotiations, agreements or arrangements with any other
persons in connection with the foregoing. Acquiror further agrees that during the Standstill Period, it will not (and will cause its
affiliates who received Confidential Information in connection with the Transaction and any person acting on behalf of or in concert
with Acquiror or such affiliates not to) take any action that would reasonably be expected to require the Company to make a public
announcement regarding the possibility of a business combination, merger or other type of transaction described in this Section with
Acquiror or any of its affiliates. Notwithstanding anything to the contrary in this Agreement, this Section shall in no way prohibit or
restrict Acquiror or its affiliates from making confidential proposals respecting a transaction involving the Company to the board of
directors of the Company (or an authorized committee thereof) at any time. Notwithstanding anything to the contrary in this
Agreement, all of the obligations and restrictions set forth in this Section shall terminate immediately in the event (i) the Company
enters into an agreement with a third party involving any transaction, immediately following which the shareholders of the Company
as of immediately prior to such transaction will own less than a majority of the voting securities of the surviving corporation in such
transaction (a “ Change of Control ”), or a sale of all or substantially all of the assets of the Company or (ii) a bona fide third party
commences a tender or exchange offer which, if consummated, would constitute a Change of Control. The Company represents that it
has not entered into any confidentiality or other agreement with any party relating to a possible transaction or series of transactions
that could be an alternative transaction to the possible Transaction with standstill provisions that are less restrictive than the provisions
of this Section. The Company agrees that if the Company enters into any confidentiality or other agreement (or any amendment
thereto or waiver thereof) in connection with such a transaction or series of transactions with any party which contains any provision
which,
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AVAST Holding B.V.
May 28, 2016
if currently in effect, would make the representation in the preceding sentence inaccurate, then the Company shall promptly provide
the Acquiror notice thereof and, unless the Acquiror elects otherwise within five business days of such notice, this Agreement shall be
deemed to be amended to conform the provisions of this Agreement with such less restrictive provision.
14. This agreement also constitutes notice to Acquiror that the Company has engaged Allen & Overy LLP (“ A&O ”) as its
Dutch legal counsel and Orrick, Herrington & Sutcliffe LLP (“ Orrick ”) as its U.S. legal counsel in connection with the possible
Transaction, and that Acquiror hereby (i) consents to the continued representation of the Company by A&O and Orrick in relation to
the possible Transaction notwithstanding the fact that each of A&O and Orrick may have represented, and may currently or in the
future represent, Acquiror and/or any of its affiliates with respect to unrelated matters and (ii) waives any actual or alleged conflict and
actual or alleged violation of ethical or comparable rules applicable to A&O or Orrick that may arise from its representation of the
Company in connection with the possible Transaction, including but not limited to representing the Company against Acquiror or any
of its affiliates in litigation, arbitration, or mediation in connection therewith. In addition, Acquiror hereby acknowledges that its
consent and waiver under this Section 14 is voluntary and informed, and that Acquiror has obtained independent legal advice with
respect to this consent and waiver. Each party further agrees that Acquiror is aware of the extent of its relationship, if any, with A&O
and Orrick, and Acquiror does not require additional information from A&O or Orrick in order to understand the nature of this
consent. If Acquiror has any questions regarding this Section 14, please contact Peter M. Lamb at Orrick at (650) 289-7117 or Jan
Louis Burggraaf at A&O at +31 (20)-6741191. Each of A&O and Orrick is an express third party beneficiary of this Section 14.
15. Each party agrees that the other would be irreparably injured by a breach of this agreement by it or its Representatives and
that, in the event of a breach or threatened breach, the other party shall be entitled, in addition to any and all other remedies, to seek
injunctive relief and specific performance without the necessity of providing any bond or other security, and each party hereby
irrevocably consents to such relief.
16. No failure or delay by a party in exercising any right, power or privilege hereunder shall operate as a waiver thereof or
preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.
17. If any term or provision of this agreement or any application hereof shall be invalid and unenforceable, the remainder of this
agreement and any other application of such term or provision shall not be affected thereby. The terms of this agreement shall control
over any prior confidentiality agreement entered into between the parties and over any additional purported confidentiality agreements
imposed by any web-based database or similar repository of Confidential Information to which the Receiving Party or any of its
Representatives is granted access in connection with the evaluation, negotiation or consummation of the Transaction, notwithstanding
acceptance of the terms of any such other confidentiality agreement, it being understood and agreed that the Receiving Party’s
confidentiality obligations with respect to the Confidential Information are governed exclusively by this agreement.
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AVAST Holding B.V.
May 28, 2016
18. This agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to
principles of conflict or choice of laws. Each party hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the
competent courts in the state or federal courts sitting in the State of New York, County of New York, U.S., irrevocably consents to the
jurisdiction of such courts in any such suit, action or proceeding arising out of or relating to this agreement or the transactions
contemplated hereby and irrevocably waives to the fullest extent permitted by law, any objection that it may now or hereafter have to
the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum. Each party agrees that a final judgment in any such suit, action or
proceeding brought in any such court shall be conclusive and binding upon it and may be enforced in any other courts to whose
jurisdiction it is or may be subject by suit upon such judgment.
19. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT.
20. This agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This agreement may be modified or waived only by an instrument signed by the parties hereto. This agreement may
not be assigned by any party hereto without the express prior written consent of the other party hereto; provided that the Company
may assign its rights and obligations hereunder to an acquirer of the Company or of all or substantially all of the Company’s assets.
21. By signing this agreement, the parties agree that the Mutual Nondisclosure Agreement dated 4 December 2015 and entered
into between the parties is hereby terminated and shall cease to have any further force or effect from the date hereof, and that this
agreement constitutes the entire agreement between the parties with respect to the subject matter hereof.
22. Save where a shorter period is set out herein, this agreement will terminate and be of no further force or effect (i) as regards
(A) Confidential Information constituting a trade secret and (B) the other Sections of this agreement (other than Sections 14, 18 and
19), five years from the date hereof, (ii) as regards other Confidential Information, three years from the date hereof; provided that
Sections 14, 18 and 19 shall be binding in perpetuity or until the latest date permitted by law. For the avoidance of doubt,
notwithstanding any decision by either party to terminate its consideration of the Transaction or the return or destruction of
Confidential Information pursuant to Section 7, each party and its Representatives will continue to be bound in accordance with the
terms hereof.
23. This agreement may be executed in one or more counterparts. Each shall be deemed an original, but together shall constitute
one and the same instrument. This agreement may be executed and delivered by facsimile or electronic mail. Any signatures delivered
by means of facsimile or electronic mail shall have the same legal effect as manual signatures.
8
If you are in agreement with the foregoing, please sign and return the enclosed copy of this letter which will constitute the agreement
between the parties with respect to the subject matter of this letter as of the date first above written.
Very truly yours,
AVG Technologies N.V.
By:
/s/ Mariëlle Reints
Name: Mariëlle Reints
Title: Associate General Counsel
Accepted and agreed:
AVAST Holding B.V.
By:
/s/ Alan Rassaby
Name: Alan Rassaby
Title: Managing Director A
9
Exhibit (d)(5)
From: AVG Technologies N.V.
Gatwickstraat 9-39
1043 GL Amsterdam
The Netherlands
(the “Target”)
To:
Avast Holding B.V.
Schiphol Boulevard 369
7th Floor, Tower F
1118 BJ Schiphol
The Netherlands
(the “Prospective Purchaser”)
STRICTLY PRIVATE AND CONFIDENTIAL
June 16, 2016
Dear Sirs
Project Phoenix - Exclusivity Letter
We refer to the discussions between the parties concerning the potential acquisition of the Target by the Prospective Purchaser or a
member of its Group (the “ Transaction ”). In consideration of each party committing time and personnel to further investigate the
affairs of the Target and its subsidiaries and to make necessary preparations for the purposes of the Transaction, each party undertakes
to the other in the terms outlined in this letter (the “ Exclusivity Letter ”).
1.
Exclusivity
1.1 The Target undertakes to the Prospective Purchaser that from the date of this Exclusivity Letter until 23:59 (London time) on
July 7, 2016 (such period being the “ Exclusivity Period ”) or until the parties agree in writing to terminate negotiations relating
to the Transaction, whichever is earlier, the Target shall, and shall procure that each member of the Target and its Group (the “
Target Group ”) and its and their directors, officers, employees, consultants, agents, advisers, bankers and other representatives
(collectively, its “ Representatives ”) shall:
(a)
procure that the Prospective Purchaser has an exclusive right to negotiate the Transaction;
(b) cease pursuing any discussions, negotiations or communications existing at the date of this Exclusivity Letter with any
other person relating to or involving any Third Party Transaction;
(c)
not solicit, directly or indirectly, initiate, negotiate, accept, discuss or otherwise seek to procure any inquiries, proposals or
approaches from any persons in respect of or in connection with a Third Party Transaction;
(d) not approve, endorse, recommend or publicly propose or announce an intention to approve, endorse or recommend, any
Third Party Transaction;
(e)
not provide any third party unconnected with the Prospective Purchaser with access to any non-public information in
relation to the Target Group and a potential Third Party Transaction and, in the event that any third parties have access at
present to any non-public information provided by the Target Group or its Representatives in relation to the Target Group
and a potential Third Party Transaction, request that such information is returned to the Target Group or destroyed as soon
as possible; and
(f)
not enter into a refinancing of, or implement any steps linked to any refinancing of, any material debt facility of the
Target Group.
1.2 The Target shall provide the Prospective Purchaser, members of its Group and its and their directors, officers, employees,
consultants and advisers with appropriate and reasonable (a) information and (b) access to relevant personnel to enable the
Prospective Purchaser to carry out financial, legal, commercial, tax and other diligence in relation to the Target Group; provided,
however, that Target may withhold any information if necessary to comply, as determined in Target’s sole discretion, and
notwithstanding the “clean team” protocols agreed between the parties in connection with the Transaction, with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules promulgated thereunder, and any similar laws
in any jurisdictions applicable to Target.
1.3 If, at any time, Target notifies Prospective Purchaser in writing that Target no longer wishes to pursue a Transaction, the
provisions of Section 1.2 shall terminate with no further force or effect.
1.4 During the Exclusivity Period, the Target shall promptly notify the Prospective Purchaser in writing if it or any member of its
Group or any of its or their Representatives receives any inquiries, offers or proposals relating to any Third Party Transaction.
1.5 The Prospective Purchaser and Target agree that if, at any time during the Exclusivity Period, the Prospective Purchaser
negotiates or otherwise proposes a price per share for the Transaction that is less than the Proposed Price, then the provisions of
this Exclusivity Letter shall terminate with no further force or effect.
1.6 If the Prospective Purchaser requests an extension to the Exclusivity Period, the Target agrees to reasonably consider such
request, provided that the Prospective Purchaser is continuing to operate in good faith to consummate the Transaction.
2.
Prospective Purchaser Undertaking
The Prospective Purchaser undertakes to the Target to promptly notify the Target in writing if at any time during the Exclusivity
Period it no longer wishes to proceed with the Transaction.
3.
Equity awards
3.1 During the Exclusivity Period the Target Group shall not, without the Prospective Purchaser’s prior written consent, issue any
new Equity Awards other than in the ordinary course of business and consistent with past practice, accelerate the vesting of any
Equity Award, amend the terms and conditions on which any Equity Awards have been granted or agree to do any of these
things. Notwithstanding the foregoing, the Target Group may
(a)
Issue new Equity Awards that have been approved by the Target Group’s Remuneration Committee before the date of this
Exclusivity Letter;
(b) amend the terms of those Equity Awards described in the schedule to this Exclusivity Letter to provide for (or give effect
to) full vesting of any unvested awards if, in connection with the Transaction, the relevant employee’s position at the Target
2
Group is eliminated, provided that such amendment is necessary to give effect to the original intention of the Target Group
and grantee, as determined by the Target Group’s Remuneration Committee; and
(c)
in addition to ability to amend Equity Awards under paragraph 3.1(b) above, in respect of the Equity Award for Gary
Kovacs issued on 17 May 2016, amend the terms of such Equity Award described in the schedule to this Exclusivity Letter
to provide for (or give effect to) vesting acceleration of any unvested awards, including, without limitation, a portion
vesting upon the consummation of the Transaction and full vesting acceleration if, in connection with the Transaction, the
Mr. Kovacs’ position at the Target Group is eliminated, provided that such amendment is necessary to give effect to the
original intention of the Target Group and Mr. Kovacs, as determined by the Target Group’s Remuneration Committee.
Before amending the terms of the Equity Awards described in the schedule to this Exclusivity Letter, the Target Group shall provide
a copy of the proposed amendment to the Prospective Purchaser and afford the Prospective Purchaser a reasonable opportunity to
comment; provided that the Target Group will not be required to accept any revisions that are not consistent with the intent of the
Target Group’s Remuneration Committee with respect to the vesting acceleration provisions to be included in the Equity Awards.
4.
General
4.1 In this Exclusivity Letter:
“Equity Awards” means all options, restricted share units (with or without performance based vesting) and other equity awards in
the Target;
“Group” means, in relation to any person, its subsidiaries and its affiliates (as such term as defined in Rule 12b-2 of the Securities
Exchange Act of 1934);
“Proposed Price” means the price set out in that certain letter from the Prospective Purchaser to the Target dated June 11, 2016
pursuant to which the Prospective Purchaser has reconfirmed the price it presently proposes to pay for the shares in the Target; and
“Third Party Transaction” means any proposal in respect of an acquisition, offer, merger or business combination or similar
transaction (whether or not subject to any pre-conditions), or any revisions thereof, proposed by a third party which is not acting in
concert with the Prospective Purchaser and the purpose of which is to enable that third party (or any other person) to acquire all or a
significant proportion (being 20 percent or more when aggregated with shares already held by the third party and anybody acting in
concert with that third party) of the Target or any member of the Target Group, or all or a significant proportion (being 20 percent or
more) of its assets, or any other arrangement or transaction or series of the same by: (i) an acquisition of shares, a tender offer or an
exchange offer for shares; (ii) a merger, consolidation, recapitalization, restructuring or refinancing; (iii) another business
combination or similar transaction involving the Target or any member of the Target Group which would preclude or materially
restrict or delay implementation of the Transaction; (iv) the sale, lease, exchange, transfer, licence or other disposition of assets of the
Target or any member of the Target Group (in each case outside of the ordinary course of business of the Target); or (v) the grant of
any option or pre-emptive right in respect of the foregoing.
4.2 Each party to this Exclusivity Letter acknowledges to the other that the existence of and terms contained within this Exclusivity
Letter constitute “Confidential Information” for the purposes of the confidentiality agreement entered into between the parties
dated May 28, 2016 (the “ Confidentiality Agreement ”) and that, as a result, the provisions of the Confidentiality Agreement
will apply to this Exclusivity Letter.
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4.3 Each party to this Exclusivity Letter has the legal right and full power and authority (including all necessary consents,
authorizations, confirmations, permissions, certificates, approvals, authorities or other corporate action as may be required) to
provide and perform the obligations and undertakings contained in this Exclusivity Letter which when executed will constitute
legal, valid and binding obligations on it in accordance with its respective terms and will not conflict with any document, law or
regulation which is binding on it where the result of any such conflict would prevent them complying with any of their respective
obligations pursuant to this letter.
4.4 The provisions of this Exclusivity Letter shall be binding upon the Parties and their respective legal representatives, successors
and assigns.
4.5 Without prejudice to any other rights and remedies which the Prospective Purchaser may have, the Target acknowledges and
agrees that damages may not be an adequate remedy for any breach by the Target of its obligations under this Exclusivity Letter
and the Prospective Purchaser shall be entitled to seek the remedies of injunction, specific performance and other equitable relief
for any actual or threatened breach of any provision of this Exclusivity Letter and the Target shall not contest the appropriateness
or availability of such remedies.
4.6 No variation of this Exclusivity Letter shall be effective unless in writing and signed by or on behalf of all of the parties.
4.7 This Exclusivity Letter may be entered into in any number of counterparts, all of which taken together shall constitute one and
the same Exclusivity Letter. Either party may enter into this Exclusivity Letter by signing any such counterpart.
4.8 This Exclusivity Letter is solely for the benefit of the parties hereto and a person who is not party to this Exclusivity Letter is not
intended to benefit from, nor shall such a person be entitled to rely upon or have any right to enforce, any term of this Exclusivity
Letter.
4.9 This Exclusivity Letter shall be governed by, and construed in accordance with, the laws of the State of Delaware, USA without
regard to principles of conflict or choice of laws; provided however that Dutch law shall apply to the interpretation of the
fiduciary duties of the directors of the Target. Each party hereby irrevocably and unconditionally submits to the exclusive
jurisdiction of the competent courts in Amsterdam, the Netherlands, irrevocably consents to the jurisdiction of such courts in any
such suit, action or proceeding arising out of or relating to this Exclusivity Letter or the transactions contemplated hereby and
irrevocably waives to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum. Each party agrees that a final judgment in any such suit, action or proceeding
brought in any such court shall be conclusive and binding upon it and may be enforced in any other courts to whose jurisdiction
it is or may be subject by suit upon such judgment.
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Please indicate your acceptance of these terms by signing the enclosed duplicate of this Exclusivity Letter and returning it to us.
Yours faithfully
/s/ Gary Kovacs
For and on behalf of AVG Technologies N.V.
We hereby agree to the terms of your letter dated 6/16/2016, a copy of which is set out above.
/s/ Alan Rassaby
For and on behalf of Avast Holding B.V.
Dated: 6/17/2016
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