Consideration Conversion of Shares. (a) Upon the terms and subject to the conditions set forth in this Agreement, the aggregate consideration to be paid for the entire fully diluted equity interest of the Company shall be Fifty-Three Million Dollars ($53,000,000) (the "Base Merger Consideration"), subject to adjustment as set forth in this Section 2.4 and Section 2.5 (the Base Merger Consideration as adjusted pursuant to Sections 2.4 and 2.5 is referred to hereinafter as the "Merger Consideration"). The Base Merger Consideration shall be adjusted as follows: (i) the Base Merger Consideration shall be decreased to the extent of any Debt (other than the mortgage Debt with a balance as of July 31, 2002 of $1,105,366 shown on the interim balance sheets dated as of July 31, 2002 previously delivered to Parent) on the Preliminary Closing Date Balance Sheet; (ii) the Base Merger Consideration shall be decreased to the extent Shareholders' Equity as set forth on the Preliminary Closing Date Balance Sheet is less than $500,000 without giving effect to (A) any liabilities that may be created by reason of the payment of a bonus to Joseph P. Delaney in the approximate amount of $2,880,000, or (B) any ▇▇▇▇▇▇▇ ▇iability created or item of expense resulting from the issuance of the Company Incentive Shares (the "Shareholders' Equity Threshold"); (iii) the Base Merger Consideration shall be decreased (A) to the extent that the sum of cash and cash equivalents shown on the Preliminary Closing Date Balance Sheet is less than the sum of (1) $1 million plus (2) an amount equal to the dollar value of customer deposits by the Company prior to the Closing Date relative to customer orders on which the Company has not yet started performance, and (B) to the extent of any earned but unpaid compensation relative to (1) accrued but unpaid bonuses, (2) accrued but unpaid outside commissions, (3) accrued but unpaid profit sharing distributions, and (4) accrued but unpaid 401(k) Plan contributions; (iv) the Base Merger Consideration shall be increased to the extent that the sum of cash and cash equivalents shown on the Preliminary Closing Date Balance Sheet is greater than the sum of (A) $1 million; plus (B) an amount equal to the dollar value of customer deposits received by the Company prior to the Closing Date relative to customer orders on which the Company has not yet started performance. (v) the Base Merger Consideration shall be decreased to the extent non-cash working capital level on the Preliminary Closing Date Balance Sheet are less than that set forth on the interim balance sheets dated as of July 31, 2002 previously delivered to Parent, without giving effect to (A) any liabilities that may be created by reason of the payment of a bonus to Joseph P. Delaney in the approximate amount of $2,880,000, or (▇) ▇▇▇ ▇▇▇▇▇▇▇ ▇iability created or item of expense resulting from the issuance of the Company Incentive Shares, or (C) any decrease in the non-cash working capital level since July 31, 2002, which is attributable to the distribution of cash (provided that the sum of cash and cash equivalents on the Closing Date is not less than the sum of (1) $1 million plus (2) the dollar value of customer deposits received by the Company prior to the Closing Date relative to customer orders on which the Company has not yet started performance) or (D) an amount equal to any earned but unpaid compensation relative to (1) accrued but unpaid bonuses, (2) accrued but unpaid outside commissions, (3) accrued but unpaid profit sharing distributions, and (4) accrued but unpaid 401(k) Plan contributions); and (vi) the Base Merger Consideration shall be decreased to the extent the estimated liability for all transfer, sales and use, registration, stamp and similar Taxes and Taxes resulting from the application of Section 1374 of the Code (or any analogous provision of state or local law) imposed on the Company, or for which the Company may be liable, as a result of any transaction contemplated by this Agreement is reflected on the Preliminary Closing Date Balance Sheet. Subject to the provisions of Section 2.6 regarding fractional shares, and Section 2.4(c) regarding the escrow of a portion of the Stock Consideration, the Stock Consideration shall be delivered on the Effective Date to the Holders in the form of stock certificates of FNIS Common Stock, duly issued in the name of the Holders and bearing the appropriate restrictive legends as described in Section 2.8; provided, however, that if any Holder fails to deliver at the Closing (A) the certificates representing such Holder's shares of Company Stock duly endorsed in blank or accompanied by stock powers duly endorsed in blank, in proper form for transfer, or (B) in the case of lost certificates, an affidavit and indemnification agreement in form and substance satisfactory to Parent, then Parent and Merger Sub shall not be required to deliver to such Holder the Merger Consideration with respect to the shares of Company Stock represented by such Holder's certificates until such time as such certificates or such affidavit and indemnification agreement are so delivered to Parent and Merger Sub. (b) As of the Effective Date, by virtue of the Merger and without any action on the part of Parent, Merger Sub, Company or any Shareholder: (i) Each of the Company Incentive Shares (other than Dissenting Shares) shall automatically be converted into the right to receive a number of shares of FNIS Common Stock equal to the quotient of (A) the Total Incentive Merger Shares divided by (B) the total Company Incentive Shares outstanding immediately prior to the Effective Date. (ii) Each share of Company Stock issued and outstanding immediately prior to the Effective Date (other than Dissenting Shares and Company Incentive Shares) shall automatically be converted into the right to receive (A) cash in an amount equal to the quotient of (1) the Cash Consideration, divided by (2) the total number of shares of Company Stock (other than Company Incentive Shares) outstanding immediately prior to the Effective Date ("Company Precedent Shares"), and (B) a number of shares of FNIS Common Stock equal to the quotient of (1) the Total Precedent Merger Shares divided by (2) the Company Precedent Shares. Each stock certificate which immediately prior to the Effective Date represented shares of Company Stock (each, a "Certificate"), other than Certificates representing Dissenting Shares, shall represent for all purposes only the right to receive the Merger Consideration. (iii) Each share of Company Stock held in the treasury of the Company (if any) immediately prior to the Effective Date shall automatically be canceled and retired and cease to exist and no payment shall be made with respect thereto. (iv) Each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Date shall constitute a validly issued, fully paid and nonassessable share of the common stock of the Surviving Corporation. (c) On the Effective Date, and subject to and in accordance with the provisions of Escrow Terms, Parent shall, on behalf of the Shareholders, deliver to the Escrow Agent, in trust and pursuant to the terms of the Escrow Agreement, certificates representing the Escrow Shares. The Escrow Shares shall be registered in the name of the Escrow Agent as nominee for each Shareholder. The Escrow Fund shall be beneficially owned by the Shareholders and shall be held in escrow and shall be available for any payments to be made to Parent for certain Losses as provided in Section 9.9 and the Escrow Terms. To the extent not used for such purposes, the Escrow Fund shall be released as provided in the Escrow Terms. The availability to Parent of the Escrow Fund shall not limit any other rights or remedies to which Parent is otherwise entitled under this Agreement. (i) Notwithstanding anything in this Agreement to the contrary, shares of Company Stock held by any Holder who becomes entitled to the payment of the fair value for such shares under Section 1930 of the PABCL, if such law provides for such payment in connection with the Merger (the "Dissenting Shares"), if any, shall be entitled to payment for such shares only to the extent permitted by and in accordance with the provisions of the PABCL. Notwithstanding the foregoing, if in accordance with the PABCL, any holder of Dissenting Shares shall forfeit such right to payment of the fair market value of such shares of Company Stock, such shares shall thereupon be deemed to have been converted into and to have become exchangeable for, as of the Effective Date, the right to receive the Merger Consideration on the same terms as the Holders of non-Dissenting Shares in accordance with this Agreement. (ii) The Company shall give Parent (A) prompt notice of any written notice of intention to demand pursuant to Section 1574 of the PABCL, and any other instruments served pursuant to the PABCL and received by Company relating to shareholders' rights to dissent, and (B) the opportunity to direct all negotiations and proceedings with respect to demands for payment or appraisal under Subchapter D of Title 15 of the PABCL. Company shall not, without the prior consent of Parent, voluntarily make any payment with respect to any demands for payment or appraisals of the capital stock of Company, offer to settle or settle any demands, or approve any withdrawal of any such demands. Notwithstanding the foregoing, Company may take any actions reasonably necessary to comply with Subchapter D of Title 15 of the PABCL if compliance with this Section 2.4(c)(ii) would result in a violation of Subchapter D of Title 15 of the PABCL.
Appears in 1 contract
Sources: Merger Agreement (Fidelity National Information Solutions Inc)
Consideration Conversion of Shares. (a) Upon the terms and subject to the conditions set forth in this Agreement, the aggregate consideration to be paid for the entire fully diluted equity interest of the Company shall be Fifty-Three Million Dollars ($53,000,000) (the "Base Merger Consideration"), subject to adjustment as set forth in this Section 2.4 and Section 2.5 (the Base Merger Consideration as adjusted pursuant to Sections 2.4 and 2.5 is referred to hereinafter as the "Merger Consideration"). The Base Merger Consideration shall be adjusted as follows:
(i) the Base Merger Consideration shall be decreased to the extent of any Debt (other than the mortgage Debt with a balance as of July 31, 2002 of $1,105,366 shown on the interim balance sheets dated as of July 31, 2002 previously delivered to Parent) on the Preliminary Closing Date Balance Sheet;
(ii) the Base Merger Consideration shall be decreased to the extent Shareholders' Equity as set forth on the Preliminary Closing Date Balance Sheet is less than $500,000 without giving effect to (A) any liabilities that may be created by reason of the payment of a bonus to Joseph P. Delaney in the approximate amount of $2,880,000, or (B) any ▇▇▇▇▇▇▇ ▇iability created or item of expense resulting from the issuance of the Company Incentive Shares (the "Shareholders' Equity Threshold");
(iii) the Base Merger Consideration shall be decreased (A) to the extent that the sum of cash and cash equivalents shown on the Preliminary Closing Date Balance Sheet is less than the sum of (1) $1 million plus (2) an amount equal to the dollar value of customer deposits by the Company prior to the Closing Date relative to customer orders on which the Company has not yet started performance, and (B) to the extent of any earned but unpaid compensation relative to (1) accrued but unpaid bonuses, (2) accrued but unpaid outside commissions, (3) accrued but unpaid profit sharing distributions, and (4) accrued but unpaid 401(k) Plan contributions;
(iv) the Base Merger Consideration shall be increased to the extent that the sum of cash and cash equivalents shown on the Preliminary Closing Date Balance Sheet is greater than the sum of (A) $1 million; plus (B) an amount equal to the dollar value of customer deposits received by the Company prior to the Closing Date relative to customer orders on which the Company has not yet started performance.
(v) the Base Merger Consideration shall be decreased to the extent non-cash working capital level on the Preliminary Closing Date Balance Sheet are less than that set forth on the interim balance sheets dated as of July 31, 2002 previously delivered to Parent, without giving effect to (A) any liabilities that may be created by reason of the payment of a bonus to Joseph P. Delaney in the approximate amount of $2,880,000, or (▇) ▇▇▇ ▇▇▇▇▇▇▇ ▇iability created or item of expense resulting from the issuance of the Company Incentive Shares, or (C) any decrease in the non-cash working capital level since July 31, 2002, which is attributable to the distribution of cash (provided that the sum of cash and cash equivalents on the Closing Date is not less than the sum of (1) $1 million plus (2) the dollar value of customer deposits received by the Company prior to the Closing Date relative to customer orders on which the Company has not yet started performance) or (D) an amount equal to any earned but unpaid compensation relative to (1) accrued but unpaid bonuses, (2) accrued but unpaid outside commissions, (3) accrued but unpaid profit sharing distributions, and (4) accrued but unpaid 401(k) Plan contributions); and
(vi) the Base Merger Consideration shall be decreased to the extent the estimated liability for all transfer, sales and use, registration, stamp and similar Taxes and Taxes resulting from the application of Section 1374 of the Code (or any analogous provision of state or local law) imposed on the Company, or for which the Company may be liable, as a result of any transaction contemplated by this Agreement is reflected on the Preliminary Closing Date Balance Sheet. Subject to the provisions of Section 2.6 regarding fractional shares, and Section 2.4(c) regarding the escrow of a portion of the Stock Consideration, the Stock Consideration shall be delivered on At the Effective Date to the Holders in the form of stock certificates of FNIS Common Stock, duly issued in the name of the Holders and bearing the appropriate restrictive legends as described in Section 2.8; provided, however, that if any Holder fails to deliver at the Closing (A) the certificates representing such Holder's shares of Company Stock duly endorsed in blank or accompanied by stock powers duly endorsed in blank, in proper form for transfer, or (B) in the case of lost certificates, an affidavit and indemnification agreement in form and substance satisfactory to Parent, then Parent and Merger Sub shall not be required to deliver to such Holder the Merger Consideration with respect to the shares of Company Stock represented by such Holder's certificates until such time as such certificates or such affidavit and indemnification agreement are so delivered to Parent and Merger Sub.
(b) As of the Effective DateTime, by virtue of the Merger and without any action on the part of Parentthe parties hereto, Merger Subexcept as provided in paragraph (b) below, Company or any Shareholder:
(i) Each 11,043,645 shares of GA REIT Common Stock (corresponding to 11,043,645 Class A Partnership Units then owned by, or concurrently being received upon conversion of the Company Incentive Shares (other than Dissenting SharesClass C Partnership Units by, GA REIT as limited partner of the Partnership) shall be cancelled and converted automatically into 11,043,645 newly issued shares of Class A Common Stock of QTS REIT, (ii) 3,600,000 share of GA REIT Common Stock (corresponding to 3,600,000 Class A Partnership Units then owned by, or concurrently being received upon conversion of the Class D Partnership Units by, GA REIT as limited partner of the Partnership) shall be cancelled and converted automatically into 3,600,000 newly issued shares of Class A Common Stock of QTS REIT (the shares of Class A Common Stock of QTS REIT set forth in the foregoing clauses (i) and (ii) collectively, the “Stock Merger Consideration”), which shares of QTS REIT shall be delivered to GA Stockholder upon Closing, and (iii) each share of GA REIT Preferred Stock shall be cancelled and converted automatically into the right to receive a number cash in the amount of shares of FNIS Common Stock $1,000, plus an amount equal to any accrued and unpaid dividends thereon pursuant to Section 6.3(b)(i) of the quotient GA REIT Articles of (A) the Total Incentive Merger Shares divided by (B) the total Company Incentive Shares outstanding immediately prior Incorporation to the Effective Datedate of such payment (the “Cash Merger Consideration” and collectively with the Stock Merger Consideration, the “Merger Consideration”).
(iib) Each share of Company GA REIT Common Stock issued and outstanding immediately prior to the Effective Date (other than Dissenting Shares Time that is directly owned by QTS REIT, if any, shall no longer be outstanding and Company Incentive Shares) shall automatically be converted into the right to receive (A) cash in an amount equal to the quotient of (1) the Cash Consideration, divided by (2) the total number of shares of Company Stock (other than Company Incentive Shares) outstanding immediately prior to the Effective Date ("Company Precedent Shares"), cancelled and (B) a number of shares of FNIS Common Stock equal to the quotient of (1) the Total Precedent Merger Shares divided by (2) the Company Precedent Shares. Each stock certificate which immediately prior to the Effective Date represented shares of Company Stock (each, a "Certificate"), other than Certificates representing Dissenting Shares, shall represent for all purposes only the right to receive the Merger Consideration.
(iii) Each share of Company Stock held in the treasury of the Company (if any) immediately prior to the Effective Date shall automatically be canceled and retired and cease to exist and no payment Class A Common Stock or other consideration shall be made issued with respect thereto.
(iv) Each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Date shall constitute a validly issued, fully paid and nonassessable share of the common stock of the Surviving Corporation.
(c) On the Effective Date, and subject to and in accordance with the provisions No fractional shares of Escrow Terms, Parent shall, on behalf of the Shareholders, deliver to the Escrow Agent, in trust and pursuant to the terms of the Escrow Agreement, certificates representing the Escrow Shares. The Escrow Shares shall Class A Common Stock will be registered issued in the name of the Escrow Agent as nominee for each Shareholder. The Escrow Fund shall be beneficially owned by the Shareholders and shall be held in escrow and shall be available for any payments to be made to Parent for certain Losses as provided in Section 9.9 and the Escrow Terms. To the extent not used for such purposes, the Escrow Fund shall be released as provided in the Escrow Terms. The availability to Parent of the Escrow Fund shall not limit any other rights or remedies to which Parent is otherwise entitled under this AgreementMergers.
(i) Notwithstanding anything in this Agreement to the contrary, shares of Company Stock held by any Holder who becomes entitled to the payment of the fair value for such shares under Section 1930 of the PABCL, if such law provides for such payment in connection with the Merger (the "Dissenting Shares"), if any, shall be entitled to payment for such shares only to the extent permitted by and in accordance with the provisions of the PABCL. Notwithstanding the foregoing, if in accordance with the PABCL, any holder of Dissenting Shares shall forfeit such right to payment of the fair market value of such shares of Company Stock, such shares shall thereupon be deemed to have been converted into and to have become exchangeable for, as of the Effective Date, the right to receive the Merger Consideration on the same terms as the Holders of non-Dissenting Shares in accordance with this Agreement.
(ii) The Company shall give Parent (A) prompt notice of any written notice of intention to demand pursuant to Section 1574 of the PABCL, and any other instruments served pursuant to the PABCL and received by Company relating to shareholders' rights to dissent, and (B) the opportunity to direct all negotiations and proceedings with respect to demands for payment or appraisal under Subchapter D of Title 15 of the PABCL. Company shall not, without the prior consent of Parent, voluntarily make any payment with respect to any demands for payment or appraisals of the capital stock of Company, offer to settle or settle any demands, or approve any withdrawal of any such demands. Notwithstanding the foregoing, Company may take any actions reasonably necessary to comply with Subchapter D of Title 15 of the PABCL if compliance with this Section 2.4(c)(ii) would result in a violation of Subchapter D of Title 15 of the PABCL.
Appears in 1 contract