KEY IN APPROVING LEVERAGED DIVIDEND

In Delaware, boards of directors can be personally liable for approving and paying an unlawful dividend. Board members can demonstrate that they have fulfilled their fiduciary duties in dividend transactions by obtaining opinions from third- party solvency opinion experts. Solvency opinions provide critical information to the board in assessing the company’s ability to pay a special dividend.

The use of solvency opinions has arisen from requirements under state law governing a company’s capacity to pay a dividend as well as fraudulent conveyance law governing dividends and other transfers without adequate consideration. A solvency opinion consists of a set of analyses that address solvency requirements under these laws. Specifically, these analyses look at whether the company (i) assets exceed liabilities pro forma for the payment of the dividend, (ii) will not be left with unreasonably small capital to operate the business and (iii) if it is reasonable to believe the company will be able to pay its debts as they come due.

Obtaining a solvency opinion may also be advisable in other types of transactions including share repurchase programs, LBOs, refinancings, spin-offs and restructurings.

WHY VRC?

Experience – VRC has rendered over 1,000 solvency, capital adequacy, fairness and other board level opinions over its 40-year history.

Senior Level Attention – Each engagement is executed by senior level professionals and reviewed by our Financial Opinions Committee.

Independence – Unlike many competitors, VRC is focused purely on providing independent financial and valuation opinions. No conflicts from other professional services.

Quality – VRC has an excellent track record of defending its opinions.

Value – VRC offers competitively priced, high quality services.

Responsive – VRC is known for its responsiveness and customized solutions.

About VRC. Valuation Research Corporation is an independent, global valuation firm. Our global network of nearly 1,000 valuation professionals has provided objective, supportable conclusions of value for more than 40 years to domestic and international clients ranging from Fortune 500 companies to privately-held organizations of all sizes across all industries. VRC also works closely with private equity firms, attorneys, not-for-profit institutions, fiduciaries and individuals.

VALUATIONRESEARCH.COM RECENT Solvency Opinion ENGAGEMENTS

Return Path has redeemed Vista Equity Jensen Hughes has been recapitalized by Desserts LLC has been recapitalized by Partners’ shares in the company. VRC Gryphon Investors. VRC provided a solvency Gryphon Investors. VRC provided a solvency provided a solvency opinion to the company’s opinion to the company’s board of directors in opinion to the company’s board of directors in board of directors in connection with the connection with the transaction. connection with the transaction. transaction.

Sparta Systems has been recapitalized by Frontier Airlines has paid a dividend to Indigo Mu Sigma, Inc. has been recapitalized by its Thoma Bravo. VRC provided a solvency Partners. VRC provided a solvency opinion to the investors. VRC provided a solvency opinion to the opinion to the company’s board of directors in company’s board of directors in connection company’s board of directors in connection with connection with the transaction. with the transaction. the transaction.

EZE Software Group has paid a dividend to The company acquired Novusolutions and Leonard Green & Partners, L.P. and Ares Convoy Diamondback Holdings, LP has simultaneously been recapitalized by Vista Management, L.P. have recapitalized the and Convoy Diamondback Holdings II, LP. Equity Partners. VRC provided a solvency company. VRC provided a solvency opinion to VRC provided a solvency opinion to the opinion to the company’s board of directors in the company’s board of directors in connection company’s board of directors in connection connection with the transaction. with the transaction. with the transaction.

Accruent, a Genstar Capital portfolio company, has amended, extended and expanded its credit MRI Software has been recapitalized by facilities to reflect its recent growth and add to Mitratech has been recapitalized by GI Partners and TA Associates. VRC provided its acquisition capacity. VRC provided a solvency TA Associates. VRC provided a solvency a solvency opinion to the company’s board of opinion to the company’s board of directors in opinion to the company’s board of directors in directors in connection with the transaction. connection with the transaction. connection with the transaction.

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