Common use of Payment of Aggregate Merger Consideration Clause in Contracts

Payment of Aggregate Merger Consideration. (a) The aggregate consideration to be paid by Parent in the Merger (the "Aggregate Merger Consideration") will consist of the following: ------------------------------ (i) 4,100,000 shares of Parent's Series B Preferred Stock, $.001 par value per share (the "Series B Preferred Stock"), having the rights, powers and ------------------------ preferences set forth in Exhibit A, each of which shares shall convert on a --------- mandatory basis into two (2) shares of Parent's Common Stock (as adjusted as provided in accordance with the rights of the Series B Convertible Preferred Stock) and shall have a number of votes equal to the number of shares of Common Stock issuable upon conversion; (ii) 4,000,000 warrants (the "Parent Stock Warrants") to acquire --------------------- shares of Parent Common Stock, in accordance with the terms and conditions set forth in Exhibit B; and --------- (iii) 500,000 warrants (the "Parent Performance Warrants") to acquire --------------------------- shares of Parent Common Stock, in accordance with the terms and conditions set forth in Exhibit C. --------- (iv) Beginning as of the date of this Agreement and continuing until Parent receives, in the aggregate, $6.5 Million in cash from sales of Common Stock (or Common Stock equivalents) (the "New Securities") of Parent (not -------------- including issuances of stock underlying currently outstanding options and warrants), Parent will, simultaneously with the issuance of the New Securities, issue to the Stockholders, without further payment of cash or other consideration by the Stockholders, ninety-five percent (95%) of the New Securities (the "Antidilution Shares") for each whole share of Common Stock ------------------- included in the New Securities or issuable upon conversion, exercise or exchange of New Securities; provided, however, that if the New Securities either (i) are -------- ------- not voting securities or (ii) constitute nonqualified preferred stock within the meaning of Section 351(g)(2) of the Code, then instead of issuing New Securities to the Stockholders (the "Substitute Securities"), the Stockholders shall --------------------- receive a number of shares of Common Stock of Parent equal to ninety-five percent (95%) of the shares of Common Stock issuable upon exercise or exchange of the Substitute Securities. (b) Each share of Company Common Stock outstanding at the Effective Time shall be entitled to receive a pro rata allocation of each component of the Aggregate Merger Consideration. Such pro rata allocation shall be determined by dividing the total number of shares of Series B Preferred Stock, the total number of Parent Stock Warrants and the total number of Parent Performance Warrants, as provided above, and the total number of Substitute Securities issued, by the total number of shares of Company Common Stock outstanding immediately prior to the Merger. (c) Notwithstanding any other provision of this Agreement to the contrary, no fractional shares or warrants will be issued in the Merger. Any holder of Company Common Stock who would otherwise be entitled to receive a fractional share or warrant hereunder will receive the number of shares or warrants such holder is entitled to receive hereunder, rounded up or down, as the case may be, to the nearest whole number of shares or warrants. (d) Parent and Company agree that a portion of the Aggregate Merger Consideration to be paid by Parent after the Closing Date will be treated as interest under Section 1.483-4 of the U.S. Treasury Regulations. With respect to such Aggregate Merger Consideration that is issued in Parent Common Stock, Parent shall issue separate certificates for the portion of such Aggregate Merger Consideration that constitutes interest under the applicable U.S. Treasury Regulations.

Payment of Aggregate Merger Consideration. (a) The aggregate consideration to be paid by Parent in the Merger (the "Aggregate Merger Consideration") will consist of the following: ------------------------------ (i) 4,100,000 shares of Parent's Series B Preferred Stock, $.001 par value per share (At the "Series B Preferred Stock"), having the rights, powers and ------------------------ preferences set forth in Exhibit AEffective Time, each of which shares shall convert on a --------- mandatory basis into two (2) shares of Parent's Common Stock (as adjusted as provided in accordance with the rights of the Series B Convertible Preferred Stock) and shall have a number of votes equal to the number of shares of Common Stock issuable upon conversion; (ii) 4,000,000 warrants (the "Parent Stock Warrants") to acquire --------------------- shares of Parent Common Stock, in accordance with the terms and conditions set forth in Exhibit B; and --------- (iii) 500,000 warrants (the "Parent Performance Warrants") to acquire --------------------------- shares of Parent Common Stock, in accordance with the terms and conditions set forth in Exhibit C. --------- (iv) Beginning as of the date of this Agreement and continuing until Parent receives, in the aggregate, $6.5 Million in cash from sales of Common Stock (or Common Stock equivalents) (the "New Securities") of Parent (not -------------- including issuances of stock underlying currently outstanding options and warrants), Parent will, simultaneously with the issuance of the New Securities, issue to the Stockholders, without further payment of cash or other consideration by the Stockholders, ninety-five percent (95%) of the New Securities (the "Antidilution Shares") for each whole share of Common Stock ------------------- included in the New Securities or issuable upon conversion, exercise or exchange of New Securities; provided, however, that if the New Securities either (i) are -------- ------- not voting securities or (ii) constitute nonqualified preferred stock within the meaning of Section 351(g)(2) of the Code, then instead of issuing New Securities to the Stockholders (the "Substitute Securities"), the Stockholders shall --------------------- receive a number of shares of Common Stock of Parent equal to ninety-five percent (95%) of the shares of Common Stock issuable upon exercise or exchange of the Substitute Securities. (b) Each share of Company Common Stock outstanding at the Effective Time shall be entitled to receive a pro rata allocation of each component of the Aggregate Merger Consideration. Such pro rata allocation shall be determined by dividing the total number of shares of Series B Preferred Stock, the total number of Parent Stock Warrants and the total number of Parent Performance Warrants, as provided above, and the total number of Substitute Securities issued, by the total number of shares holder of Company Common Stock outstanding immediately prior to the MergerEffective Time (other than shares cancelled pursuant to Section 2.7(f) and those shares as to which dissenters’ rights have been perfected under the VSCA), subject to (A) the delivery of a Shareholder Release Agreement, (B) surrender of his or her Certificate or other instrument representing his or her shares of Company Common Stock, and (C) to the terms of this Section 2.7, shall by virtue of the Merger be entitled to receive, and the Buyer shall pay or cause to be paid to or on behalf of such holder, an amount equal to his or her Pro Rata Interest of the Closing Purchase Price as set forth on the Certificate of Share Ownership to be delivered by the Company to Buyer at Closing. (cii) Notwithstanding any other provision of this Agreement to In accordance with Section 2.10 and at the contrarytime or times provided in Section 2.10, no fractional shares or warrants will be issued in the Merger. Any holder of Company Common Stock who would otherwise each Shareholder shall be entitled to receive a fractional share his or warrant hereunder will receive her Pro Rata Interest as set forth on the number Certificate of shares or warrants such holder is entitled to receive hereunder, rounded up or down, as the case may be, to the nearest whole number Share Ownership of shares or warrants. (d) Parent and Company agree that a portion of the Aggregate Merger Consideration any Purchase Price Adjustment Final Payment to be paid by Parent the Buyer or shall pay his or her Pro Rata Interest as set forth on the Certificate of Share Ownership of any Purchase Price Adjustment Final Payment to be paid by the Shareholders. (iii) Finally, after termination of the Escrow Agreement and resolution of any claims made against the Escrow Amount pursuant to the Escrow Agreement, in accordance with the terms of the Escrow Agreement, each Shareholder shall by virtue of the Merger be entitled to receive an amount equal to his or her Pro Rata Interest of any remaining Escrow Amount in accordance with the percentages set forth on the Certificate of Share Ownership hereto. (iv) All cash payments shall be made by wire transfer of immediately available funds; provided, however, that Buyer shall not be required to make any payment by wire transfer in an amount less than Five Hundred Thousand Dollars ($500,000) and may issue checks written against immediately available funds in lieu of wire transfer for such payments. All payments of Closing Purchase Price to Shareholders pursuant to this Agreement and payment and delivery of the Escrow Amount to the Escrow Agent on behalf of the Shareholders shall be made in such amounts and pursuant to such percentages (which percentages shall be equal to their Pro Rata Interests) as are set forth in the spreadsheet to be provided by the Shareholder Representative no later than three (3) Business Days prior to the Closing Date will be treated as interest under Section 1.483-4 in the form set forth in the Certificate of Share Ownership, rounded to the U.S. Treasury Regulations. With respect to such Aggregate Merger Consideration that is issued in Parent Common Stock, Parent shall issue separate certificates for the portion of such Aggregate Merger Consideration that constitutes interest under the applicable U.S. Treasury Regulationsnearest cent.

Payment of Aggregate Merger Consideration. The Aggregate Merger Consideration shall be payable as set forth below: (a) The aggregate consideration At the Effective Time, Holding shall make available in cash, and each Participating Stockholder listed on Exhibit 1.3 (a) hereto (the Participating ------- ------ Stockholders so listed being referred to collectively as the "Escrowed -------- Stockholders") shall be paid by Parent entitled to receive, upon surrender to the Surviving ------------ Company or its representatives of any Certificate of Certificates (as defined below) evidencing such Participating Stockholder's Converted Shares for cancellation in accordance with Section 2.1 hereof, an amount in cash equal to the Merger product of (i) the Per Share Consideration minus $3.3975 (the "Aggregate Merger ConsiderationHoldback ----- -------- Amount", being the ------ Maximum AGI Indemnity Amount divided by the Fully Diluted Number of Shares) will consist times (ii) the number of Converted Shares represented by the Certificates so surrendered. Further, at the Effective Time, Holding shall place into escrow with the Escrow Agent, pursuant to the terms of the following: ------------------------------ Escrow Agreement (ieach as defined in Section 1.4(d) 4,100,000 shares below), an amount equal to the product of Parent's Series B Preferred Stockthe Holdback Amount times the number of Converted Shares owned by each of the Escrowed Stockholders immediately prior to the Effective Time, $.001 par value per share which amount otherwise would be payable to the Escrowed Stockholders (the "Series B Preferred StockShare Escrow Amount" and, ----- ------ ------ collectively with the Aggregate Option Holdback Amount, as defined in Section 1.3(d) hereof, the "Escrow Amount"), having . The Escrow Amount shall be held in escrow ------ ------ by the rights, powers Escrow Agent and ------------------------ preferences set forth in Exhibit A, each of which shares shall convert on a --------- mandatory basis into two (2) shares of Parent's Common Stock (as adjusted as provided distributed to the Escrowed Stockholders pursuant to and in accordance with the rights terms of the Series B Convertible Preferred Stock) and Escrow Agreement, for the purpose of providing payment with respect to claims for indemnification made against the Escrowed Stockholders pursuant to Article 8 hereof. Any amounts remaining in escrow under the Escrow Agreement one year after the Closing shall have a number of votes equal be distributed to the number of shares of Common Stock issuable upon conversion; (ii) 4,000,000 warrants (the "Parent Stock Warrants") to acquire --------------------- shares of Parent Common StockEscrowed Stockholders, in accordance with the terms of the Escrow Agreement, pro rata in accordance with the number of Converted Shares --- ---- held by each Escrowed Stockholder immediately prior to the Effective Time, except that if there is outstanding any claim pursuant to Article 8 for indemnity from the Escrowed Stockholders, then Holding shall have the right to require the Escrow Agent to retain an amount which equals the amount of such claim and conditions set forth in Exhibit B; and --------- (iii) 500,000 warrants (if, upon final resolution of such claim, a portion shall be distributed to the "Parent Performance Warrants") to acquire --------------------------- shares of Parent Common StockEscrowed Stockholders, such portion shall be distributed in accordance with the terms and conditions set forth in Exhibit C. --------- (iv) Beginning as of the date Escrow Agreement, pro rata in accordance with --- ---- the number of Converted Shares held by each Escrowed Stockholder immediately prior to the Effective Time. In the event of any inconsistency between the description contained in this Agreement and continuing until Parent receives, in Section 1.3(a) regarding the aggregate, $6.5 Million in cash from sales of Common Stock (or Common Stock equivalents) (the "New Securities") of Parent (not -------------- including issuances of stock underlying currently outstanding options and warrants), Parent will, simultaneously with the issuance distribution of the New Securities, issue to Escrow Amount and the Stockholders, without further payment of cash or other consideration by the Stockholders, ninety-five percent (95%) terms of the New Securities (Escrow Agreement, the "Antidilution Shares") for each whole share of Common Stock ------------------- included in the New Securities or issuable upon conversion, exercise or exchange of New Securities; provided, however, that if the New Securities either (i) are -------- ------- not voting securities or (ii) constitute nonqualified preferred stock within the meaning of Section 351(g)(2) terms of the Code, then instead of issuing New Securities to the Stockholders (the "Substitute Securities"), the Stockholders Escrow Agreement shall --------------------- receive a number of shares of Common Stock of Parent equal to ninety-five percent (95%) of the shares of Common Stock issuable upon exercise or exchange of the Substitute Securitiesprevail. (b) Each share of Company Common Stock outstanding at At the Effective Time Time, Holding shall make available, and each Participating Stockholder listed on Exhibit 1.3(b) hereto (the Participating ------- ------ Stockholders so listed being referred to collectively as the "Non-Escrowed ------------ Stockholders") shall be entitled to receive a pro rata allocation receive, upon surrender to the Surviving ------------ Company or its representatives of each component any Certificates for cancellation in accordance with Section 2.1 hereof, an amount equal to the product of (i) the Aggregate Merger Consideration. Such pro rata allocation shall be determined by dividing Per Share Consideration times (ii) the total number of shares of Series B Preferred Stock, the total number of Parent Converted Stock Warrants and the total number of Parent Performance Warrants, as provided above, and the total number of Substitute Securities issued, represented by the total number of shares of Company Common Stock Certificates so surrendered, which amounts shall be payable in cash or by set-off against any amounts outstanding immediately prior under notes issued by such Non-Escrowed Stockholder and payable to Holding pursuant to the MergerInvestment Agreement. (c) Notwithstanding At the Effective Time, Holding shall pay to each holder of SARs (collectively, the "SAR Holders") an amount, with respect to each SAR held by --- ------- such SAR Holder, the amount determined in accordance with Section 1.2(d)(i)(E) hereof, such amounts to be paid by the Company by set-off against any other provision of this Agreement amounts outstanding under notes issued by such SAR Holder and payable to Holding pursuant to the contrary, no fractional shares or warrants will be issued in the Merger. Any holder of Company Common Stock who would otherwise be entitled to receive a fractional share or warrant hereunder will receive the number of shares or warrants such holder is entitled to receive hereunder, rounded up or down, as the case may be, to the nearest whole number of shares or warrantsInvestment Agreement. (d) Parent At the Effective Time, Holding shall make available, and Company agree that a portion the holder of the Aggregate Merger Consideration ▇▇▇▇▇▇▇▇ Option shall be entitled to be paid by Parent after receive, upon surrender to the Closing Date will be treated as interest under Section 1.483-4 Surviving Corporation or its representative of the U.S. Treasury Regulations▇▇▇▇▇▇▇▇ Option for cancellation in accordance with Section 2.1 hereof, an amount in cash equal to the Option Consideration minus the product (the "Aggregate Option Holdback --------- ------ -------- Amount") of (i) the Holdback Amount times (ii) 25,000. With respect Further, at the Effective ------ Time, Holding shall place into escrow with the Escrow Agent, pursuant to such the terms of the Escrow Agreement, an amount equal to the Aggregate Merger Consideration that is issued in Parent Common Stock, Parent shall issue separate certificates for the portion of such Aggregate Merger Consideration that constitutes interest under the applicable U.S. Treasury RegulationsOption Holdback Amount.

Payment of Aggregate Merger Consideration. (a) The aggregate consideration to be paid by Parent in the Merger (the "Aggregate Merger Consideration") will consist of the following: ------------------------------ (i) 4,100,000 shares of Parent's Series B Preferred StockPrior to the Effective Time, $.001 par value per share Buyer shall appoint a financial or other institution reasonably acceptable to the Company to act as paying agent (the "Series B Preferred Stock"), having “Paying Agent”) with respect to the rights, powers and ------------------------ preferences set forth in Exhibit A, each of which shares shall convert on a --------- mandatory basis into two (2) shares of Parent's Common Stock (as adjusted as provided in accordance with the rights payment of the Series B Convertible Preferred Stock) and shall have a number of votes equal Closing Purchase Price to the number of shares of Common Stock issuable upon conversion; (ii) 4,000,000 warrants (the "Parent Stock Warrants") to acquire --------------------- shares of Parent Common Stock, in accordance with the terms and conditions set forth in Exhibit B; and --------- (iii) 500,000 warrants (the "Parent Performance Warrants") to acquire --------------------------- shares of Parent Common Stock, in accordance with the terms and conditions set forth in Exhibit C. --------- (iv) Beginning as of the date of this Agreement and continuing until Parent receives, in the aggregate, $6.5 Million in cash from sales of Common Stock (or Common Stock equivalents) (the "New Securities") of Parent (not -------------- including issuances of stock underlying currently outstanding options and warrants), Parent will, simultaneously with the issuance of the New Securities, issue to the Stockholders, without further payment of cash or other consideration by the Stockholders, ninety-five percent (95%) of the New Securities (the "Antidilution Shares") for each whole share of Common Stock ------------------- included in the New Securities or issuable upon conversion, exercise or exchange of New Securities; provided, however, that if the New Securities either (i) are -------- ------- not voting securities or (ii) constitute nonqualified preferred stock within the meaning of Section 351(g)(2) of the Code, then instead of issuing New Securities to the Stockholders (the "Substitute Securities"), the Stockholders shall --------------------- receive a number of shares of Common Stock of Parent equal to ninety-five percent (95%) of the shares of Common Stock issuable upon exercise or exchange of the Substitute Securities. (b) Each share holders of Company Common Stock outstanding at upon surrender of their Certificates. On or before the Closing, the Buyer shall deposit with the Paying Agent, for the benefit of the Shareholders, for use in the payment of the Closing Purchase Price and the Purchase Price Adjustment Final Payments (such cash being hereinafter referred to as the “Exchange Fund”). Buyer shall instruct the Paying Agent to mail as soon as reasonably practicable, but not later than five (5) days after the Effective Time, to each holder of record of a Certificate (i) a letter of transmittal (which shall provide for the appointment and indemnification of the Shareholder Representative in accordance with Section 10.1, specifying that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Paying Agent, and containing an IRS Back-Up Withholding Form W-9 and shall be in such form and have such other provisions as the Buyer may reasonably specify and as approved by the Company (which approval shall not be unreasonably withheld)) (the “Letter of Transmittal”) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Closing Purchase Price and the Purchase Price Adjustment Final Payment. Any portion of the Exchange Fund that remains undistributed to the holders of the Company Common Stock twelve (12) months after the Effective Time shall be entitled delivered to receive a pro rata allocation of each component the Buyer, upon demand, and any holder of the Aggregate Merger Consideration. Such pro rata allocation Company Common Stock who has not theretofore complied with this Section 2.7(g) shall be determined by dividing thereafter look only to the total number of shares of Series B Preferred StockBuyer for payment. (ii) At the Effective Time, the total number of Parent Stock Warrants and the total number of Parent Performance Warrants, as provided above, and the total number of Substitute Securities issued, by the total number of shares each holder of Company Common Stock outstanding immediately prior to the MergerEffective Time (other than Dissenting Shares) shall by virtue of the Merger be entitled to receive, and the Buyer shall cause the Paying Agent to pay to such holders an amount equal to his or her Pro Rata Shareholder Interest of the Closing Purchase Price. (ciii) Notwithstanding any other provision of this Agreement to In accordance with Section 2.10 and at the contrarytime or times provided in Section 2.10, no fractional shares or warrants will be issued in the Merger. Any holder of Company Common Stock who would otherwise each Seller Party shall be entitled to receive a fractional share his or warrant hereunder will receive her Pro Rata Equity Percentage of any Purchase Price Adjustment Final Payment to be paid by the number Buyer. If, however, any Purchase Price Adjustment Final Payment is required to be paid to Buyer, such payment shall be made from the Escrow Account (subject to the provisions of shares or warrants such holder is Section 2.10(d)). (iv) Promptly after the First General Escrow Fund Distribution Date, each Seller Party shall by virtue of the Merger be entitled to receive hereunderan amount equal to his or her Pro Rata Equity Percentage of the First General Escrow Fund Distribution Amount, rounded up or down, as the case may beif any, to the nearest whole number extent and in the manner set forth in Article VII hereof and in the Escrow Agreement. Additionally, upon resolution of shares any Unresolved General Escrow Fund Indemnification Claim, if any, each Seller Party shall by virtue of the Merger be entitled to receive an amount equal to his or warrantsher Pro Rata Equity Percentage of any amount that is payable to such Seller Party in respect of such Unresolved General Escrow Fund Indemnification Claim, to the extent and in the manner set forth in Section 7.4 hereof and the Escrow Agreement. (dv) Parent and Company agree that a portion Promptly after the Second General Escrow Fund Distribution Date, each Seller Party shall by virtue of the Merger be entitled to receive an amount equal to his or her Pro Rata Equity Percentage of the Second General Escrow Distribution Amount, if any, to the extent and in the manner set forth in Article VII hereof and in the Escrow Agreement. Additionally, upon resolution of any Unresolved General Escrow Fund Indemnification Claim, if any, each Seller Party shall by virtue of the Merger be entitled to receive an amount equal to his or her Pro Rata Equity Percentage of any amount that is payable to such Seller Party in respect of such Unresolved General Escrow Fund Indemnification Claim, to the extent and in the manner set forth in Section 7.4 hereof and the Escrow Agreement. (vi) Upon the Escrow Termination Date each Seller Party shall by virtue of the Merger be entitled to receive an amount equal to his or her Pro Rata Equity Percentage of the Termination Date General Escrow Fund Distribution Amount, if any, to the extent and in the manner set forth in Section 7.4 hereof and in the Escrow Agreement. Additionally, upon resolution of any Unresolved General Escrow Termination Date Indemnification Claim, if any, each Seller Party shall by virtue of the Merger be entitled to receive an amount equal to his or her Pro Rata Equity Percentage of the amount that is payable to such Seller Party, if any, in respect of such Escrow Termination Date, to the extent and in the manner set forth in Section 7.4 hereof and the Escrow Agreement. (vii) All cash payments shall be made by wire transfer of immediately available funds; provided, however, that no payment in an amount less than Two Hundred Fifty Thousand dollars ($250,000) shall be required to be made by wire transfer and may be paid, instead, by the issuance of checks written and drawable against immediately available funds. All payments of Aggregate Merger Consideration to the Seller Parties pursuant to this Agreement shall be paid made in such amounts and pursuant to such percentages (which percentages shall be equal to their Pro Rata Equity Percentages) as are set forth in the spreadsheet to be provided by Parent after the Company no later than three (3) Business Days prior to the Closing Date will in the form set forth in Schedule 3.4, rounded to the nearest cent (provided, however, that all payments to Option Holders shall be treated as interest under Section 1.483-4 paid in accordance with the provisions of the U.S. Treasury Regulations. With respect to each such Aggregate Merger Consideration that is issued in Parent Common Stock, Parent shall issue separate certificates for the portion of such Aggregate Merger Consideration that constitutes interest under the applicable U.S. Treasury RegulationsOption Holder’s Option Holder Payout Agreement).