QAD Announcement

SANTA BARBARA, Calif.--(BUSINESS WIRE)--On June 28, 2021, QAD, Inc. (“QAD” or the “Company”) entered into a definitive agreement to be acquired by affiliates of Thoma Bravo, LP, pursuant to which (i) holders of QAD’s Class A Common Stock and Class B Common Stock would receive $87.50 in cash for each share of common stock they owned; and (ii) certain shares held by the Company’s founder Pamela M. Lopker (“Lopker”), the Lopker Living Trust dated November 18, 2013, the Estate of Karl F. Lopker, and Ms. Lopker’s children Bo Lopker and Juliana Lopker could be contributed in the post-transaction private company in exchange for certain securities in the post transaction private company (the “Merger”).

On July 2, 2021, a putative class action complaint was filed (the “Action”) in the Delaware Chancery Court (the “Chancery Court”) by Nantahala Capital Partners II Limited Partnership (“Plaintiff”), against QAD, Lopker, Anton Chilton, Scott J. Adelson, Kathleen M. Crusco, Peter R. Van Cuylenburg (collectively the “Director Defendants”), Thoma Bravo, LLC, Thoma Bravo, LP, Project Quick Ultimate Parent, LP, Project Quick Parent, LLC, and Project Quick Merger Sub Inc., (collectively, “Thoma Bravo”). Plaintiff alleged that the Company, Lopker, and the Director Defendants breached QAD’s certificate of incorporation (the “Charter”), that Lopker and the Director Defendants breached their respective fiduciary duties, and that Thoma Bravo aided and abetted Lopker and the Director Defendants’ respective breaches of fiduciary duty.

On July 15, the Chancery Court expedited discovery on certain of Plaintiff’s claims.

On August 2, 2021, the Company filed with the U.S. Securities and Exchange Commission (“SEC”) a preliminary proxy statement (the “Preliminary Proxy”) soliciting stockholder approval of the Merger.

On August 12, 2021, Plaintiff filed a motion for leave to file a supplement to the complaint (the “Complaint Supplement”), alleging that the Preliminary Proxy failed to disclose certain material information. The Court granted Plaintiff's motion for leave to file the Complaint Supplement on August 16, 2021.

On September 9, 2021, QAD filed with the SEC a definitive proxy statement (the “Definitive Proxy”), which supplemented its previously disseminated Preliminary Proxy Statement, addressing certain of Plaintiff’s disclosure claims.

On September 10, 2021, Plaintiff filed a motion for preliminary injunction, seeking to enjoin (i) the stockholder vote on the Merger until certain corrective disclosures were issued by the Company; and (ii) consummating the Merger unless and until the Merger was amended to remedy an alleged violation of QAD’s Charter.

On September 27, 2021, the Company filed with the SEC a supplement to the Definitive Proxy, addressing certain claims asserted by Plaintiff.

On October 11, 2021, the Court heard oral argument and issued a ruling granting in part and denying in part Plaintiff’s motion for a preliminary injunction, requiring that the Company issue certain additional supplemental disclosures concerning the Merger before a stockholder vote could be held, and otherwise denied Plaintiff’s motion.

On October 12, 2021, QAD filed with the SEC two separate additional supplements to the Definitive Proxy, addressing the disclosure issues upon which the Court granted the preliminary injunction.

On November 2, 2021, QAD held a special meeting of stockholders to vote on the Merger, following which the Company filed a Form 8-K with the SEC, announcing that stockholders voted to approve the Merger.

On November 5, 2021, QAD and Thoma Bravo consummated the Merger.

Following extensive arms-length negotiations, Defendants, the Company and/or their insurers subsequently agreed to pay $2,450,000.00 to Plaintiff’s counsel for attorneys’ fees and expenses in connection with the benefits conferred by the additional supplemental disclosures described above. The Chancery Court has not been asked to review, and will pass no judgment on, the payment of the attorneys’ fees and expenses or their reasonableness.