Published on 01 Oct 2010 • USA (National/Federal) |
"The parties agree and acknowledge that in any appraisal proceeding with respect to the Dissenting Shares and to the fullest extent permitted by applicable Law, the fair value of the Dissenting Shares shall be determined in accordance with Section 262(h) of the DGCL without regard to the Top-Up Option, the Top-Up Shares or any consideration paid or delivered by [buyer] to [ICx] in payment for the Top-Up Shares."
Assume a tender offer at a price of $1 per share with an 80% tender (8 million shares). The top-up option is exercised to provide the buyer 10% of the target's shares (10 million shares). The buyer now owns 18 million of the 20 million shares. Assume that the merger price (and option price) was $1. Without the cash from the top-up, assume the "going concern" value would have been $9 million (10% less than the merger price), or $.90 per share. But if the top-up is exercised, then the going concern value is probably $9 million, plus the $10 million in cash from the exercise of the option, or $19 million. Therefore, the total price at going concern value is $.95 per share ($19 million for 20 million shares).
"The parties agree and acknowledge that in any appraisal proceeding with respect to the Dissenting Shares, and to the fullest extent permitted by applicable law, the Surviving Corporation shall not assert that the Top-Up Option, the issuance of the Top-Up Shares or the payment by [Buyer] to [Target] of any consideration for the Top-Up Shares should be considered by the Court in connection with its determination in accordance with Section 262(h) of the DGCL of the fair value of the Dissenting Shares."