EXHIBIT 10.3 AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

 

 

TABLE OF CONTENTS

 

		Page
ARTICLE I THE MERGERS		2
1.1	Organization of the Company, CAC Merger Sub and STI Merger Sub	2
1.2	The Mergers	3
1.3	Closing	4
1.4	Effective Time	4
1.5	Effect of the Mergers	4
1.6	Certificate of Incorporation and Bylaws of the Surviving Corporations	4
1.7	Certificate of Incorporation and Bylaws of the Company	5
1.8	Conversion of Securities	5
1.9	Payment Schedule	6
1.10	Escrow Shares	7
1.11	Cancellation of Outstanding Company Common Stock	8
1.12	Conversion of Common Stock of CAC Merger Sub and STI Merger Sub into Common Stock of the Surviving Corporations	8
1.13	Exchange of Shares	9
1.14	Stock Transfer Books	11
1.15	Restricted Shares	11
1.16	Dissenting Shares	11
1.17	Tax Consequences	12
1.18	Lost, Stolen or Destroyed Certificate	13
1.19	No Further Ownership Rights in Capital Stock of Consonus and STI	13
1.20	Taking of Necessary Action; Further Action	13

 

 

ARTICLE II REPRESENTATIONS AND WARRANTIES OF CONSONUS		13
2.1	Organization and Good Standing	13
2.2	Authorization of Agreement	14
2.3	Conflicts; Consents of Third Parties	15
2.4	Capitalization.	15
2.5	Consonus Subsidiaries and Affiliated Entities	16
2.6	Corporate Records	17
2.7	Financial Statements	17
2.8	No Undisclosed Liabilities	18
2.9	Absence of Certain Developments	18
2.10	Taxes	20
2.11	Real Property	23
2.12	Tangible Personal Property	24
2.13	Intellectual Property	25
2.14	Material Contracts	28
2.15	Employee Benefit Plans	30
2.16	Labor and Employment Matters	31
2.17	Litigation	32
2.18	Compliance with Laws; Permits	32
2.19	Environmental Matters	33
2.20	Insurance	33
2.21	Accounts and Notes Receivable and Payable	34
2.22	Consonus Related Party Transactions	34
2.23	Customers and Suppliers	34
2.24	Banks; Power of Attorney	35
2.25	Financial Advisors	35

 

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ARTICLE III REPRESENTATIONS AND WARRANTIES OF STI		35
3.1	Organization and Good Standing	35
3.2	Authorization of Agreement	35
3.3	Conflicts; Consents of Third Parties	36
3.4	Capitalization	36
3.5	STI Subsidiaries and Affiliated Entities	37
3.6	Corporate Records	38
3.7	Financial Statements	38
3.8	No Undisclosed Liabilities	39
3.9	Absence of Certain Developments	39
3.10	Taxes	41
3.11	Real Property	43
3.12	Tangible Personal Property	45
3.13	Intellectual Property	45
3.14	Material Contracts	48
3.15	Employee Benefit Plans	50
3.16	Labor and Employment Matters	52
3.17	Litigation	53
3.18	Compliance with Laws; Permits	53
3.19	Environmental Matters	53
3.20	Insurance	54
3.21	Accounts and Notes Receivable and Payable	54
3.22	STI Related Party Transactions	54
3.23	Customers and Suppliers	55
3.24	Banks; Power of Attorney	55

 

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3.25	Financial Advisors	55
ARTICLE IV ADDITIONAL AGREEMENTS		55
4.1	Exemption from Registration; Information Statement	55
4.2	Meeting of Stockholders	56
4.3	Confidentiality	56
4.4	Public Disclosure	57
4.5	Access to Information	57
4.6	Consents; Cooperation	58
4.7	Legal Requirements	58
4.8	Expenses	58
4.9	Commercially Reasonable Efforts and Further Assurances	58
4.10	Treatment of Convertible Securities	59
4.11	Board of Directors	60
4.12	Executive Officers	60
4.13	Director and Officer Indemnification	60
4.14	Benefit Plans	61
4.15	The Company Arrangements	61
4.16	Repayment of Certain Indebtedness	61
4.17	Break-up Fee	61
4.18	Employment Agreements	62
4.19	Stockholders Agreement	62
4.20	Operating Agreement	62
4.21	IPO	62
4.22	Real Property Sale/Leaseback	62
4.23	Registration Rights	63

 

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4.24	Rescission Agreement	63
ARTICLE V CONDUCT PRIOR TO THE EFFECTIVE TIME		63
5.1	Conduct of Business of STI and Consonus	63
5.2	No Solicitation	66
ARTICLE VI CONDITIONS TO THE MERGERS		68
6.1	Conditions to Obligations of Each Party to Effect the Mergers	68
6.2	Additional Conditions to Obligations of Consonus	68
6.3	Additional Conditions to the Obligations of STI	70
ARTICLE VII INDEMNIFICATION		72
7.1	Survival of Representations and Warranties	72
7.2	Indemnification Provisions	72
7.3	Limitations	73
7.4	Exclusive Remedy	74
7.5	Escrow; Escrow Fund	74
7.6	Claims upon Escrow Fund	75
7.7	Objections to Claims	75
7.8	Resolution of Conflicts; Arbitration	76
7.9	Holders’ Agents	77
7.10	Actions of a Holders’ Agent	79
7.11	Third Party Claims	80
7.12	Voting Rights and Cash Distributions With Respect to Escrow Shares	80
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER		81
8.1	Termination	81
8.2	Effect of Termination	81
8.3	Extension; Waiver	81

 

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ARTICLE IX GENERAL PROVISIONS		82
9.1	General	82
9.2	Notices	85
9.3	Interpretation	86
9.4	Counterparts	86
9.5	Schedules and Exhibits	86
9.6	Entire Agreement; Nonassignability; Parties in Interest	86
9.7	Severability	87
9.8	Specific Performance	87
9.9	Governing Law	87
9.10	Rules of Construction	87
9.11	Amendments	87
9.12	Waiver of Jury Trial	87

 

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SCHEDULES

 

Consonus Payment Schedule
STI Payment Schedule
Schedule 1.15(a)	-	Consonus Restricted Shares
Schedule 1.15(b)	-	STI Restricted Shares
Schedule 2.3(a)	-	Conflicts; Consents of Third Parties (Consonus)
Schedule 2.3(b)	-	Conflicts; Consents of Third Parties (Consonus)
Schedule 2.4(a)	-	Consonus Capitalization
Schedule 2.4(b)	-	Consonus Options and Warrants
Schedule 2.5	-	Consonus Subsidiaries and Affiliated Entities
Schedule 2.8	-	No Undisclosed Liabilities (Consonus)
Schedule 2.9	-	Absence of Certain Developments (Consonus)
Schedule 2.10(a)	-	Taxes (Consonus)
Schedule 2.10(d)	-	Taxes (Consonus)
Schedule 2.11	-	Real Property (Consonus)
Schedule 2.11(f)	-	Real Property (Consonus)
Schedule 2.12(a)	-	Tangible Personal Property (Consonus)
Schedule 2.12(b)	-	Consonus Personal Property Leases
Schedule 2.13(a)	-	Intellectual Property (Consonus)
Schedule 2.13(b)	-	Rights in Intellectual Property (Consonus)
Schedule 2.13(d)	-	Intellectual Property Licenses (Consonus)
Schedule 2.13(e)	-	Intellectual Property Contracts (Consonus)
Schedule 2.13(h)	-	Intellectual Property Contracts (Consonus)
Schedule 2.13(k)	-	Intellectual Property Contracts (Consonus)
Schedule 2.13(l)	-	Software (Consonus)
Schedule 2.14(a)	-	Consonus Material Contracts
Schedule 2.14(b)	-	Consonus Material Contracts
Schedule 2.15	-	Employee Benefit Plans (Consonus)
Schedule 2.15(h)	-	Employee Benefit Plans (Consonus)
Schedule 2.16(b)	-	Labor and Employment Matters (Consonus)
Schedule 2.16(c)	-	Labor and Employment Matters (Consonus)
Schedule 2.16(d)	-	Labor and Employment Matters (Consonus)
Schedule 2.16(e)	-	Labor and Employment Matters (Consonus)
Schedule 2.17	-	Litigation (Consonus)
Schedule 2.18	-	Consonus Permits (Consonus)
Schedule 2.19	-	Environmental Matters (Consonus)
Schedule 2.20	-	Insurance (Consonus)
Schedule 2.21	-	Accounts and Notes Receivable
Schedule 2.22	-	Consonus Related Party Transactions
Schedule 2.23	-	Customers and Suppliers (Consonus)
Schedule 2.24	-	Banks; Power of Attorney (Consonus)
Schedule 2.25	-	Financial Advisors (Consonus)
Schedule 3.3(a)	-	Conflicts; Consents of Third Parties (STI)
Schedule 3.3(b)	-	Conflicts; Consents of Third Parties (STI)
Schedule 3.4(a)	-	STI Capitalization
Schedule 3.4(b)	-	STI Options and Warrants

 

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Schedule 3.5	-	STI Subsidiaries and Affiliated Entities
Schedule 3.8	-	No Undisclosed Liabilities (STI)
Schedule 3.9	-	Absence of Certain Developments (STI)
Schedule 3.10(d)	-	Taxes (STI)
Schedule 3.11	-	Real Property (STI)
Schedule 3.11(f)	-	Real Property (STI)
Schedule 3.12(a)	-	Tangible Personal Property (STI)
Schedule 3.12(b)	-	STI Personal Property Leases
Schedule 3.13(a)	-	Intellectual Property (STI)
Schedule 3.13(b)	-	Rights in Intellectual Property (STI)
Schedule 3.13(d)	-	Intellectual Property Licenses (STI)
Schedule 3.13(e)	-	Intellectual Property Contracts (STI)
Schedule 3.13(l)	-	Software (STI)
Schedule 3.14(a)	-	STI Material Contracts
Schedule 3.14(b)	-	STI Material Contracts
Schedule 3.15	-	Employee Benefit Plans (STI)
Schedule 3.15(h)	-	Employee Benefit Plans (STI)
Schedule 3.16(b)	-	Labor and Employment Matters (STI)
Schedule 3.16(c)	-	Labor and Employment Matters (STI)
Schedule 3.16(d)	-	Labor and Employment Matters (STI)
Schedule 3.16(e)	-	Labor and Employment Matters (STI)
Schedule 3.17	-	Litigation (STI)
Schedule 3.18	-	STI Permits (STI)
Schedule 3.19	-	Environmental Matters (STI)
Schedule 3.20	-	Insurance (STI)
Schedule 3.21	-	Accounts and Notes Receivable
Schedule 3.22	-	STI Related Party Transactions
Schedule 3.23	-	Customers and Suppliers (STI)
Schedule 3.24	-	Banks; Power of Attorney (STI)
Schedule 3.25	-	Financial Advisors (STI)
Schedule 4.11	-	Board of Directors
Schedule 4.12	-	Executive Officers
Schedule 4.15	-	Equity Incentive Grants

 

EXHIBITS

 

Exhibit A	-	Voting Agreements
Exhibit B	-	Certificate of Incorporation of the Company
Exhibit C	-	Bylaws of the Company
Exhibit D	-	Calculation of Exchange Ratio
Exhibit E-1	-	Form of Consonus Escrow Agreement
Exhibit E-2	-	Form of STI Escrow Agreement
Exhibit F	-	Michael Shook Employment Agreement
Exhibit G	-	William Shook Employment Agreement
Exhibit H	-	Form of Stockholders Agreement
Exhibit I	-	Form of Operating Agreement
Exhibit J	-	FIRPTA Certificate

 

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INDEX OF DEFINED TERMS

 

DEFINITIONS

 

Defined Terms		Defined in Section
Acquisition Proposal		5.2(a)
Affiliate		9.1(a)
Affiliated Group		9.1(b)
Agent Expenses		7.9(d)
Agreement		Preamble
Basket Amount		7.3(a)
CAC Merger Sub		Preamble
Certificates		1.13(b)
Certificates of Merger		1.2(b)
Claim		7.3(b)
Closing		1.3
Closing Date		1.3
COBRA		2.15(g)
Code		Recitals “G”
Company		Preamble
Company Board		1.1(c)
Company Common Stock		1.8(a)(i)
Company Equity Plan		4.15
Company Indemnified Party		7.2(a)(i)
Consonus		Preamble
Consonus Balance Sheet		2.7(a)
Consonus Balance Sheet Date		2.7(a)
Consonus Board		Recitals “A”
Consonus Certificate of Merger		1.2(a)
Consonus Common Stock		2.4(a)
Consonus Dissenting Share Payments		1.16(b)
Consonus Dissenting Shares		1.16
Consonus Documents		2.2(a)
Consonus Employees		2.15(a)
Consonus Escrow Agreement		1.10(a)
Consonus Escrow Fund		1.10(d)
Consonus Escrow Shares		1.10(b)
Consonus Exchange Ratio		1.8(a)(i)
Consonus Financial Statements		2.7(a)
Consonus Holders		1.9(a)
Consonus Holders’ Agent		7.9(a)(i)
Consonus Indemnified Party		7.2(c)
Consonus’ Information		4.3(a)
Consonus Related Losses		7.2(a)
Consonus Material Adverse Effect		2.1(a)
Consonus Material Contracts		2.14(a)

 

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Defined Terms		Defined in Section
Consonus Merger		Recitals “B”
Consonus Officer Certificate		6.3(c)
Consonus Owned Real Properties		2.11(a)
Consonus Payment Schedule		1.9(a)
Consonus Permits		2.18(b)
Consonus Personal Property Leases		2.12(b)
Consonus Plans		2.15(a)
Consonus Preferred Stock		2.4(a)
Consonus Principal Stockholder		Recitals “F”
Consonus Real Properties		2.11(a)
Consonus Real Property Leases		2.11(a)
Consonus Related Losses		7.2(a)(i)
Consonus Related Persons		2.22
Consonus Secretary Certificate		6.3(d)
Consonus Subsidiary		2.5(a)
Consonus Surviving Corporation		1.2(a)
Consonus Surviving Corporation Common Stock		1.12(a)
Consonus Unresolved Claim		7.5(b)
Consonus Warrants		2.4(b)
Copyrights		9.1(d)
DGCL		Recitals “B”
Dissenting Shares		1.16
Effective Time		1.4
Employment Agreements		4.18
End Date		8.1(b)
Environmental Law		9.1(e)
Environmental Permit		9.1(f)
Equity Value		Exhibit D
Escrow Agent		7.5(a)
Escrow Agreements		1.10(a)
Escrow Expiration Date		7.5(b)
Exchange Fund		1.13(a)
Expenses		4.8
GAAP		2.7(a)
GE Indebtedness		4.21
Governmental Body		9.1(g)
Holders’ Agent		7.9(a)(ii)
Indemnifiable Losses		7.2(a)
Indemnified Parties		7.3(a)
Indemnified Party		7.3(a)
Indemnifying Party		7.6(a)
Information Statement		4.1
Intellectual Property		9.1(h)
Intellectual Property Licenses		9.1(i)

 

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Defined Terms		Defined in Section
IPO		4.21
IRS		9.1(j)
KLI		4.11
Knowledge		9.1(k)
Law		9.1(l)
Legal Proceeding		9.1(m)
Lien		9.1(n)
Loan Forgiveness		4.16
Loan Repayment		4.16
Losses		7.6(a)
Marks		9.1(o)
Merger Subs		Preamble
Mergers		Recitals “B”
Multiemployer Plan		2.15(a)
NCBCA		Recitals “B”
North Carolina Permit		4.1
Notice of Claim		7.6(a)
Officer’s Certificate		7.6(b)
Operating Agreement		4.20
Order		9.1(q)
Patents		9.1(r)
Payment Schedules		1.9(b)
Permits		9.1(s)
Permitted Exceptions		9.1(t)
Person		9.1(u)
Post-IPO Voting Agreement		4.11
Pre-surrender Dividends		1.13(d)
Rescission		1.10(e)
Rescission Agreement		4.24
Restricted Shares		1.15
Sale/Leaseback Transactions		4.22
Software		9.1(v)
STI		Preamble
STI Articles of Merger		1.2(b)
STI Balance Sheet		3.7(a)
STI Balance Sheet Date		3.7(a)
STI Board		Recitals “A”
STI Certificate		1.9(b)
STI Closing Shares		1.10(e)
STI Closing Shares Escrow Agreement		1.10(e)
STI Common Stock		3.4(a)
STI Converted Option		4.10(a)
STI Dissenting Share Payments		1.16(c)
STI Dissenting Shares		1.16

 

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Defined Terms		Defined in Section
STI Documents		3.2
STI Employees		3.15(a)
STI Escrow Agreement		1.10(a)
STI Escrow Fund		1.10(d)
STI Escrow Shares		1.10(c)
STI Exchange Ratio		1.8(b)(i)
STI Financial Statements		3.7(a)
STI Holders		1.9(b)
STI Holders’ Agent		7.9(a)(ii)
STI Indemnified Party		7.2(b)
STI’s Information		4.3(b)
STI Related Losses		7.2(a)(ii)
STI Material Adverse Effect		3.1
STI Material Contracts		2.14(a)
STI Merger		Recitals “B”
STI Merger Sub		Preamble
STI Officer Certificate		6.2(c)
STI Option		1.8(b)(iii)
STI Owned Real Properties		3.11(a)
STI Payment Schedule		1.9(b)
STI Permits		3.18(b)
STI Personal Property Leases		3.12(b)
STI Plans		3.15(a)
STI Principal Stockholders		Recitals “E”
STI Real Property Leases		3.11(a)
STI Related Losses		7.2(a)(ii)
STI Related Persons		3.22
STI Secretary Certificate		6.2(d)
STI Subsidiary		3.5(a)
STI Surviving Corporation		1.2(b)
STI Surviving Corporation Common Stock		1.12(b)
STI Unresolved Claim		7.5(b)
STI Warrants		3.4(b)
Stockholders Agreement		4.19
Stockholders’ Meeting		4.2
Superior Proposal		5.2(b)
Surviving Corporations		1.2(b)
Tax Return		9.1(w)(i)
Taxes		9.1(x)
Taxing Authority		9.1(y)
Third Party Claim		7.11(a)
Title IV Plan		2.15(a)
Total Debt		Exhibit D
Total Equity Value of the Company		Exhibit D

 

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Defined Terms		Defined in Section
Trade Secrets		9.1(z)
Voting Agreements		Recitals “E”

 

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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

 

This AGREEMENT AND PLAN OF MERGER AND REORGANIZATION, made and entered into as of October 18, 2006 (as amended, supplemented or otherwise modified from time to time, this “ Agreement ”), by and among Consonus Acquisition Corp., a Delaware corporation (“ Consonus ”), Strategic Technologies, Inc., a North Carolina corporation (“ STI ”), Consonus Technologies, Inc., a Delaware corporation (the “ Company ”), CAC Merger Sub, Inc., a Delaware corporation and a wholly and directly owned subsidiary of the Company (“ CAC Merger Sub ”), STI Merger Sub, Inc., a North Carolina corporation and a wholly and directly owned subsidiary of the Company (“ STI Merger Sub ” and, together with CAC Merger Sub, the “ Merger Subs ”), and Knox Lawrence International, LLC, as the Consonus Holders’ Agent, and Irvin J. Miglietta, as the STI Holders’ Agent, for the purposes of Article VII only.

 

RECITALS

 

A.             Each of the Board of Directors of Consonus (the “ Consonus Board” ) and the Board of Directors of STI (the “ STI Board ”) have determined that it is consistent with and in furtherance of their respective long-term business strategies and fair to and in the best interests of their respective companies and stockholders to combine their respective businesses in a transaction so that they will be conducted by such companies or their successors as direct subsidiaries of the Company as set forth in this Agreement.

 

B.             The parties hereto intend that, upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the General Corporation Law of the State of Delaware (the “ DGCL ”) and the North Carolina Business Corporation Act (the “ NCBCA ”): (i) CAC Merger Sub will be merged with and into Consonus, the separate corporate existence of CAC Merger Sub will thereupon cease and Consonus will continue as the surviving corporation and a wholly owned subsidiary of the Company (the “ Consonus Merger ”), and (ii) STI Merger Sub will be merged with and into STI, the separate corporate existence of STI Merger Sub will thereupon cease and STI will continue as the surviving corporation and a wholly owned subsidiary of the Company (the “ STI Merger ”, and together with the Consonus Merger, the “ Mergers ”).

 

C.             The Consonus Board has (i) determined that the Consonus Merger is consistent with and in furtherance of the long-term business interests of Consonus and fair to, and in the best interests of Consonus and its stockholders, (ii) declared this Agreement to be advisable, (iii) approved this Agreement, the Consonus Merger and the other transactions contemplated by this Agreement, and (iv) determined to recommend that the stockholders of Consonus adopt this Agreement.

 

D.             The STI Board has (i) determined that the STI Merger is consistent with and in furtherance of the long-term business interests of STI and fair to, and in the best interests of, STI and its stockholders, (ii) declared this Agreement to be advisable, (iii) approved this Agreement, the STI Merger and the other transactions contemplated by this Agreement, and (iv) determined to recommend that the stockholders of STI adopt this Agreement.

 

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E.             As an inducement to Consonus and the Company to enter into this Agreement, Michael Shook, William Shook and Irvin Miglietta  (the “ STI Principal Stockholders ”) have each entered into a voting agreement, dated as of the date hereof and attached as Exhibit A (the “ Voting Agreements ”), pursuant to which the STI Principal Stockholders have agreed, solely in their capacity as STI Stockholders, to vote their shares of STI Common Stock in favor of (i) this Agreement (including the escrow and all other provisions of Article VII hereof and the deposit of that number of shares of the Company Common Stock equal to the Escrow Amount into the Escrow Fund and the appointment of Irvin J. Miglietta as STI Holder Agent), (ii) the Mergers and (iii) the other transactions contemplated by this Agreement.

 

F.              As an inducement to STI to enter into this Agreement, Knox Lawrence International, LLC  (the “ Consonus Principal Stockholder ”) has entered into a Voting Agreement, dated as of the date hereof, pursuant to which the Consonus Principal Stockholder has agreed, solely in its capacity as a Consonus Stockholder, to vote its shares of Consonus Common Stock in favor of (i) this Agreement (including the escrow and all other provisions of Article VII hereof and the deposit of that number of shares of the Company Common Stock equal to the Escrow Amount into the Escrow Fund and the appointment of KLI as Consonus Holder Agent), (ii) the Mergers and (iii) the other transactions contemplated by this Agreement.

 

G.             By executing this Agreement, the parties intend: (i) for United States Federal income tax purposes, that the Mergers shall collectively qualify as a transaction described in Section 351 of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “ Code ”) and that each of the Mergers shall qualify as a reorganization within the meaning of Section 368(a) of the Code, and that, other than with respect to cash received for fractional shares pursuant to Section 1.13(c) and for Dissenting Shares pursuant to Section 1.16, the stockholders of Consonus and STI will recognize no gain or loss for federal income tax purposes as a result of the consummation of the Mergers; and (ii) for the Mergers to be accounted for as a purchase under GAAP.

 

In consideration of the foregoing and the representations, warranties, covenants and agreements set forth herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

 

ARTICLE I
THE MERGERS

 

1.1           Organization of the Company, CAC Merger Sub and STI Merger Sub .

 

(a)            Organization of the Company . Consonus has organized the Company under the laws of the State of Delaware for the purpose of effecting the transactions contemplated hereby. As of the date hereof, the authorized capital stock of the Company consists of Twenty Million (20,000,000) shares of common stock and Ten Million (10,000,000) shares of preferred stock, of which five hundred (500) shares of common stock are issued and outstanding, which shares have been issued to Consonus.

 

(b)            Organization of the Merger Subs . Consonus has caused the Company to organize CAC Merger Sub and STI Merger Sub under the laws of the State of Delaware and the

 

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State of North Carolina, respectively, for the purposes of effecting the transactions contemplated hereby. The authorized capital stock of each of CAC Merger Sub and STI Merger Sub consists of one thousand (1,000) shares of common stock, one (1) share of each of which has been issued to the Company, as the sole stockholder of each of CAC Merger Sub and STI Merger Sub, for a purchase price of One Dollar ($1.00) per share.

 

(c)            Directors . Prior to the Effective Time, the Board of Directors of each of the Company (the “ Company Board ”), CAC Merger Sub and STI Merger Sub shall consist solely of the chairman of the Consonus Board of Directors. Beginning at the Effective Time, the Board of Directors of the Company shall be as set forth in Section 4.11, the Board of Directors of the STI Surviving Corporation shall be the current board of Directors of STI, and the Board of Directors of the Consonus Surviving Corporation shall be the current Board of Directors of Consonus.

 

(d)            Officers . Prior to the Effective Time, the sole officer of the Company, CAC Merger Sub and STI Merger Sub shall be the chairman of the Consonus Board of Directors as President of each such Company. The Company, Consonus and STI shall take all requisite action to cause the executive officers of the Company and the Surviving Corporations as of the Effective Time to be as provided in Section 4.12 hereof.

 

(e)            Approval of Agreement; Compliance . Consonus, in its capacity as the sole holder of all outstanding shares of the Company’s capital stock, shall adopt this Agreement, and shall cause the Company to take all requisite action to approve and adopt this Agreement and approve the transactions contemplated hereby. Consonus shall cause each of the Company, CAC Merger Sub and STI Merger Sub to perform their respective obligations under this Agreement in accordance with the terms and conditions hereof.

 

1.2           The Mergers .

 

(a)            The Consonus Merger . Upon the terms and subject to the conditions set forth in this Agreement and in accordance with the DGCL, and simultaneously with the STI Merger, Consonus, the Company and CAC Merger Sub shall cause a certificate of merger to be filed with the Secretary of State of the State of Delaware in accordance with the relevant provisions of the DGCL (the “ Consonus Certificate of Merger ”) providing for the Consonus Merger, with Consonus being the surviving corporation thereof (the “ Consonus Surviving Corporation ”) upon the effectiveness of the Consonus Merger, pursuant to this Agreement and the Consonus Certificate of Merger and in accordance with applicable provisions of the DGCL.

 

(b)            The STI Merger . Upon the terms and subject to the conditions set forth in this Agreement and in accordance with the NCBCA, and simultaneously with the Consonus Merger, STI, the Company and STI Merger Sub shall cause articles of merger to be filed with the Secretary of State of the State of North Carolina in accordance with the relevant provisions of the NCBCA (the “ STI Articles of Merger ”, and together with the Consonus Certificate of Merger, the “ Certificates of Merger ”) providing for the STI Merger, with STI being the surviving corporation thereof (the “ STI Surviving Corporation ”, and together with the Consonus Surviving Corporation, the “ Surviving Corporations ”) upon the effectiveness of the STI

 

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Merger, pursuant to this Agreement and the STI Certificate of Merger and in accordance with applicable provisions of the NCBCA.

 

1.3           Closing . Subject to the satisfaction or waiver of the conditions set forth in Article VI hereof, the consummation of the Mergers shall take place on January 2, 2007 at a closing (the “ Closing ”) to be held at the offices of Wyrick Robbins Yates & Ponton LLP, 4101 Lake Boone Trail, Suite 300, Raleigh, North Carolina 27607, unless another date, time or place is agreed to by Consonus and STI (the actual time and date of the Closing being referred to herein as the “ Closing Date ”).

 

1.4           Effective Time . As soon as practicable following the Closing, the parties hereto shall cause the Mergers to be consummated by filing the Certificates of Merger with the Secretary of State of the State of Delaware and the Secretary of State of the State of North Carolina, as the case may be, in such form as is required by, and executed and acknowledged in accordance with, the relevant provisions of the DGCL and the NCBCA, as applicable, and make all other filings or recordings required under the DGCL and the NCBCA. The Mergers shall become effective at the date and time at which the Certificates of Merger are duly filed with the Secretary of State of the State of Delaware and the Secretary of State of the State of North Carolina, in accordance with the relevant provisions of the DGCL and the NCBCA, as applicable, or such subsequent date and time as the parties hereto shall mutually agree and as shall be specified in the Certificates of Merger (the “ Effective Time ”); provided, however, that notwithstanding the foregoing, the parties hereto agree that the Certificates of Merger shall provide that the Mergers shall become effective at the same time.

 

1.5           Effect of the Mergers . At the Effective Time, the effect of each of the Consonus Merger and the STI Merger shall be as provided in the applicable provisions of the DGCL and the NCBCA, as applicable. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, except as otherwise provided herein: (a) all of the property, rights, privileges, powers and franchises of Consonus and CAC Merger Sub shall vest in the Consonus Surviving Corporation, and all debts, liabilities and duties of Consonus and CAC Merger Sub shall become the debts, liabilities and duties of the Consonus Surviving Corporation; and (b) all the property, rights, privileges, powers and franchises of STI and STI Merger Sub shall vest in the STI Surviving Corporation, and all debts, liabilities and duties of STI and STI Merger Sub shall become the debts, liabilities and duties of the STI Surviving Corporation. As of the Effective Time, each of the Surviving Corporations shall be a direct wholly-owned subsidiary of the Company.

 

1.6           Certificate of Incorporation and Bylaws of the Surviving Corporations . Unless otherwise agreed by Consonus and STI prior to the Effective Time, at the Effective Time:

 

(a)            Consonus Surviving Corporation . By virtue of the Consonus Merger, the Certificate of Incorporation and the Bylaws of Consonus, as in effect on the Effective Date, shall continue in full force and effect as the Certificate of Incorporation and Bylaws of the Consonus Surviving Corporation.

 

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(b)            STI Surviving Corporation . By virtue of the STI Merger, the Articles of Incorporation and the Bylaws of STI, as in effect on the Effective Date, shall continue in full force and effect as the Articles of Incorporation and Bylaws of the STI Surviving Corporation.

 

1.7           Certificate of Incorporation and Bylaws of the Company . At the Effective Time, the Certificate of Incorporation and Bylaws of the Company shall be identical to the forms attached hereto as Exhibit B and Exhibit C, respectively.

 

1.8           Conversion of Securities . Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, by virtue of the Mergers, and without any action on the part of Consonus, STI, CAC Merger Sub, STI Merger Sub, the Company or the holders of any of the securities of the foregoing entities, the following shall occur:

 

(a)            Consonus Securities .

 

(i)             Consonus Common Stock . Except as provided in Section 1.8(a)(ii) and Section 1.13(c) , each share of Consonus Common Stock issued and outstanding immediately prior to the Effective Time shall, at the Effective Time, be cancelled and extinguished and automatically converted into the right to receive that number of fully paid and nonassessable shares of common stock, par value $0.000001 per share, of the Company (the “ Company Common Stock ”) obtained by multiplying one share of the Company Common Stock by 551.4082117 (the “ Consonus Exchange Ratio ”).

 

(ii)            Certain Owned Consonus Shares . Each share of Consonus Common Stock which is, immediately prior to the Effective Time, held in the treasury of Consonus, or outstanding and held by STI, the Company, or any direct or indirect wholly owned subsidiary of Consonus, STI or the Company, shall be canceled and extinguished without any conversion thereof.

 

(iii)           Adjustments to the Consonus Exchange Ratio . The Consonus Exchange Ratio shall be adjusted to reflect fully the appropriate effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Consonus Common Stock), reorganization, recapitalization, reclassification or other like change with respect to Consonus Common Stock having a record date on or after the date hereof and prior to the Effective Time. The Consonus Exchange Ratio shall also be adjusted as set forth in Section 1.8(c) .

 

(b)            STI Securities.

 

(i)             STI Common Stock . Except as provided in Section 1.8(b)(ii) and Section 1.13(c) , each share of STI Common Stock issued and outstanding immediately prior to the Effective Time shall, at the Effective Time, be cancelled and extinguished and automatically converted into the right to receive that number of fully paid and nonassessable shares of the Company Common Stock obtained by multiplying one share of the Company Common Stock by 0.07716852370881630 (the “ STI Exchange Ratio ”).

 

(ii)            Certain Owned STI Shares . Each share of STI Common Stock which is, immediately prior to the Effective Time, held in the treasury of STI, or outstanding and

 

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held by Consonus, the Company, or any direct or indirect wholly owned subsidiary of STI, Consonus or the Company, shall be canceled and extinguished without any conversion thereof.

 

(iii)           STI Options . Each option to purchase a share of STI Common Stock (an “ STI Option ”) outstanding immediately prior to the Effective Time shall be treated in accordance with the terms of Section 4.10 hereof.

 

(iv)           Adjustments to the STI Exchange Ratio . The STI Exchange Ratio shall be adjusted to reflect fully the appropriate effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into STI Common Stock), reorganization, recapitalization, reclassification or other like change with respect to STI Common Stock having a record date on or after the date hereof and prior to the Effective Time. The STI Exchange Ratio shall also be adjusted as set forth in Section 1.8(c) .

 

(c)            Adjustments to Exchange Ratios Based on Pre-Merger Indebtedness. The Consonus Exchange Ratio and STI Exchange Ratio designate a post-Mergers capitalization of the Company of 65% of the issued and outstanding stock of the Company to be held by the pre-Consonus Merger Consonus Holders and 35% of the issued and outstanding stock of the Company to be held by the pre-STI Merger STI Holders, prior to any adjustment pursuant to this Section 1.8(c). The calculation of the Consonus Exchange Ratio and STI Exchange Ratio is set forth on Exhibit D attached hereto. In the event that the Total Equity Value of the Company on the Closing Date is greater than or less than $47,500,000 by 10% or more as a result of changes to the Total Debt of Consonus and/or STI as set forth on Exhibit D, then the Consonus Exchange Ratio and STI Exchange Ratio shall be adjusted to reflect the ratio of their respective Equity Values to the Total Equity Value of the Company. Notwithstanding any of the foregoing, in the event that an adjustment to the Consonus Exchange Ratio or the STI Exchange Ratio results in the STI Holders receiving less than 35% of the Company Common Stock, STI will be not required to consummate the Closing of the Mergers or any of the transactions contemplated herein.

 

1.9           Payment Schedule .

 

(a)            Prior to the Closing, Consonus shall prepare and deliver to STI a true and correct payment schedule, which schedule shall list, as of immediately prior to the Closing: (i) all holders of Consonus Common Stock (the “ Consonus Holders ”); (ii) the address of each Consonus Holder; (iii) the number of whole shares of the Company Common Stock to be issued to each Consonus Holder; and (iv) the number of whole Consonus Escrow Shares that is to be deposited with the Escrow Agent pursuant to the Consonus Escrow Agreement on behalf of each Consonus Holder (the “ Consonus Payment Schedule ”).

 

(b)            Prior to the Closing, STI shall prepare and deliver to Consonus a true and correct payment schedule, which schedule shall list, as of immediately prior to the Closing: (i) all holders of STI Common Stock (collectively, the “ STI Holders ”); (ii) the address of each STI Common Stockholder; (iii) the number of whole shares of the Company Common Stock to be issued to each STI Common Stockholder (calculated in accordance with the Articles of Incorporation of STI, as in effect on the date of Closing (the “ STI Certificate ”); and (iv) the number of whole STI Escrow Shares that is to be deposited with the Escrow Agent pursuant to

 

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the STI Escrow Agreement on behalf of each STI Holder (the “ STI Payment Schedule ” and, together with the Consonus Payment Schedule, the “ Payment Schedules ”).

 

1.10         Escrow Shares.

 

(a)            Prior to the Closing, (i) the Company, Consonus, the Consonus Holders’ Agent and the Escrow Agent (as defined in Section 7.5(a)) shall enter into an Escrow Agreement, in the form attached hereto as Exhibit E-1 (the “ Consonus Escrow Agreement ”), and (ii) the Company, STI, the STI Holders’ Agent, and the Escrow Agent (as defined in Section 7.5(a)) shall enter into an Escrow Agreement, in the form attached hereto as Exhibit E-2 (the “ STI Escrow Agreement ”, and together with the Consonus Escrow Agreement, the “ Escrow Agreements ”).

 

(b)            Notwithstanding anything to the contrary set forth in this Agreement, at the Effective Time, the Company shall withhold from delivery to the Consonus Holders twenty percent (20%) of the shares of the Company Common Stock (the “ Consonus Escrow Shares ”) otherwise issuable to the Consonus Holders pursuant to Section 1.8(a)(i) and hereof based on each such holder’s pro rata share of the Company Common Stock, as set forth on the Consonus Payment Schedule.

 

(c)            Notwithstanding anything to the contrary set forth in this Agreement, at the Effective Time, the Company shall withhold from delivery to the STI Holders twenty percent (20%) of the shares of the Company Common Stock (the “ STI Escrow Shares ”) otherwise issuable to the STI Holders pursuant to Section 1.8(b)(i) hereof based on each such holder’s pro rata share of the Company Common Stock, as set forth on the STI Payment Schedule.

 

(d)            As soon as practicable after the Effective Time, and in accordance with the provisions of the Escrow Agreements, the Company shall cause to be deposited with the Escrow Agent, certificates representing the Consonus Escrow Shares and the STI Escrow Shares, which shall be registered in the name of the Escrow Agent as nominee for the Consonus Holders and STI Holders. The certificates deposited with the Escrow Agent representing the Consonus Escrow Shares (the “ Consonus Escrow Fund ”) shall be held by the Escrow Agent pursuant to the terms of the Consonus Escrow Agreement as security for the indemnification obligations of the Consonus Holders pursuant to Article VII . The certificates representing the STI Escrow Shares (the “ STI Escrow Fund ”) shall be held by the Escrow Agent pursuant to the terms of the STI Escrow Agreement as security for the indemnification obligations of the STI Holders pursuant to Article VII .

 

(e)            STI Escrow.

 

(i)             At or prior to Closing, STI, the STI Holders’ Agent and an escrow agent selected by STI will enter into an escrow agreement (the “ STI Closing Shares Escrow Agreement ”) with respect to the Company Common Stock issued at Closing to the STI Holders other than the STI Escrow Shares (the “ STI Closing Shares ”). The STI Closing Shares will be held in escrow until the earlier of (A) the closing of the IPO, at which time such shares will be delivered to the STI Holders in accordance with the STI Payment Schedule, or (B) such date as the rescission under the Rescission Agreement occurs (the “ Rescission ”), in which case such

 

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shares will be delivered to the Company for cancellation in exchange for which the STI Holders will receive the STI Common Stock held by each such STI Holder immediately prior to the closing of the Mergers, all as further set forth in the Rescission Agreement. In the event neither of the foregoing occurs by December 31, 2007, the STI Closing Shares will be delivered to the STI Holders in accordance with the STI Payment Schedule.

 

(ii)            As soon as practicable after the Effective Time, and in accordance with the provisions of the STI Closing Shares Escrow Agreement, the Company shall cause to be deposited with the escrow agent thereunder, a certificate or certificates representing the STI Closing Shares, which shall be registered in the name of such escrow agent as nominee for the STI Holders.

 

(iii)           Notwithstanding any of the foregoing, if in STI’s reasonable discretion, the STI Closing Shares Escrow Agreement and the provisions related thereto will not be necessary or beneficial to the Rescission process, if necessary, STI may elect to waive the provisions of this subsection 1.10(e) and issue the STI Closing Shares directly to the STI Holders rather than into escrow.

 

1.11         Cancellation of Outstanding Company Common Stock . At the Effective Time, the shares of the Company Common Stock held by Consonus immediately prior to the Effective Time, and all rights in respect thereof, shall be canceled and retired by the Company, and no shares of capital stock or other securities of the Company or either of the Surviving Corporations or any other corporation shall be issuable, and no payment or other consideration shall be made, with respect thereto.

 

1.12         Conversion of Common Stock of CAC Merger Sub and STI Merger Sub into Common Stock of the Surviving Corporations.

 

(a)            At the Effective Time, each share of common stock, par value $.001 per share, of CAC Merger Sub issued and outstanding immediately prior to the Effective Time, and all rights in respect thereof, shall, without any action on the part of the Company, be cancelled and automatically converted into one validly issued, fully paid and nonassessable share of common stock, par value $.001 per share, of Consonus Surviving Corporation (the “ Consonus Surviving Corporation Common Stock ”). Immediately after the Effective Time and upon surrender by the Company of the certificate representing the shares of common stock of CAC Merger Sub, Consonus Surviving Corporation shall deliver to the Company an appropriate certificate or certificates representing the Consonus Surviving Corporation Common Stock created by conversion of the common stock of CAC Merger Sub owned by the Company.

 

(b)            At the Effective Time, each share of common stock, par value $.001 per share, of STI Merger Sub issued and outstanding immediately prior to the Effective Time, and all rights in respect thereof, shall, without any action on the part of the Company, be cancelled and automatically converted into one validly issued, fully paid and nonassessable share of common stock, par value $.001 per share, of STI Surviving Corporation (the “ STI Surviving Corporation Common Stock ”). Immediately after the Effective Time and upon surrender by the Company of the certificate representing the shares of common stock of STI Merger Sub, STI Surviving Corporation shall deliver to the Company an appropriate certificate or certificates

 

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representing the STI Surviving Corporation Common Stock created by conversion of the common stock of STI Merger Sub owned by the Company.

 

1.13         Exchange of Shares .

 

(a)            Company to Provide Common Stock . Promptly after the Effective Time, the Company shall allocate, for the benefit of the holders of shares of Consonus Common Stock and the holders of STI Common Stock, for exchange in accordance with the terms of this Article I, certificates representing the shares of the Company Common Stock issuable pursuant to this Agreement. In addition, the Company shall make available, as necessary from time to time after the Effective Time as needed, cash in an amount sufficient for payment in lieu of fractional shares pursuant to Section 1.13(c) hereof and any Pre-surrender Dividends (as defined in Section 1.13(d) which the Consonus Holders and the STI Holders may be entitled to pursuant to Section 1.13(b) hereof (the “ Exchange Fund ”).

 

(b)            Exchange Procedures . Promptly after the Effective Time, the Company shall mail to each holder of record (as of the Effective Time) of, or entitled to, a certificate or certificates (the “ Certificates ”) which immediately prior to the Effective Time represented outstanding shares of Consonus Common Stock and outstanding shares of STI Common Stock, in each case, whose shares were converted into the right to receive shares of the Company Common Stock pursuant to Section 1.8(a)(i) and Section 1.8(b)(i) hereof, cash in lieu of any fractional shares pursuant to Section 1.13(c) hereof and any Pre-surrender Dividends as defined in and pursuant to Section 1.13(d) hereof: (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Company  and shall be in such form and have such other provisions as Consonus and STI may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for certificates representing whole shares of the Company Common Stock, cash in lieu of any fractional shares pursuant to Section 1.13(c) hereof and any Pre-surrender Dividends as defined in and pursuant to Section 1.13(d) hereof. Upon surrender of Certificates for cancellation to the Company or delivery of appropriate documentation discussed in Section 1.18, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto and such other documents as may reasonably be required by the Company, the holder of such Certificates shall be entitled to receive in exchange therefor the number of whole shares of the Company Common Stock (after taking into account all Certificates surrendered by such holder) to which such holder is entitled pursuant to Section 1.8(a)(i) or Section 1.8(a)(iv) hereof, payment in lieu of fractional shares which such holder has the right to receive pursuant to Section 1.13(c) hereof and any Pre-surrender Dividends as defined in and payable pursuant to Section 1.13(d) and the Certificates so surrendered shall forthwith be canceled. Until so surrendered, outstanding Certificates will be deemed from and after the Effective Time, for all corporate purposes, to evidence the ownership of the number of full shares of the Company Common Stock into which such shares of Consonus Common Stock or shares of STI Common Stock shall have been so converted and the right to receive an amount in cash in lieu of the issuance of any fractional shares in accordance with Section 1.13(c) hereof and any Pre-surrender Dividends as defined in and payable pursuant to Section 1.13(d) hereof.

 

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(c)            Fractional Shares . No fraction of a share of the Company Common Stock will be issued by virtue of the Mergers, but in lieu thereof each holder of STI Common Stock who (i) would otherwise be entitled to receive a fraction of a share of Company Common Stock of five-tenths(0.5) or more, will receive a whole share of Company Common Stock, and (ii) would otherwise be entitled to receive a fraction of a share of Company Common Stock of less than five-tenths (0.5), will receive no consideration therefor, and each holder of Consonus Common Stock who would otherwise be entitled to receive a fraction of a share of the Company Common Stock shall, upon surrender of such holder’s Certificate(s), receive from the Company, at such time as such holder receives a Certificate or Certificates representing shares of the Company Common Stock as contemplated by Section 1.8(a)(i) or 1.8(a)(iv)  hereof (or appropriate documentation discussed in Section 1.18), an amount of cash (rounded up to the nearest whole cent), without interest, equal to the product obtained by multiplying (i) such fraction, and (ii) the fair market value of one share of the Company Common Stock as of the Effective Time as determined in good faith by the Company Board based on the Total Equity Value.

 

(d)            Distributions With Respect to Unexchanged Shares . No dividends or other distributions declared or made after the date hereof with respect to the Company Common Stock, Consonus Common Stock or STI Common Stock with a record date after the Effective Time and no payment in lieu of fractional shares pursuant to Section 1.13(c) hereof will be paid to the holders of any unsurrendered Certificates with respect to the shares of the Company Common Stock represented thereby until the holders of record of such Certificates shall surrender such Certificates. Subject to applicable laws and legal requirements, following surrender of any such Certificates, the Company shall deliver to the record holders thereof, without interest (i) promptly after such surrender, the number of whole shares of the Company Common Stock issued in exchange therefor along with payment in lieu of fractional shares pursuant to Section 1.13(c) hereof and the amount of any such dividends or other distributions with a record date after the Effective Time (“ Pre-surrender Dividends ”) and theretofore paid with respect to such whole shares of the Company Common Stock and (ii) at the appropriate payment date, the amount of Pre-surrender Dividends with a record date after the Effective Time and a payment date subsequent to such surrender payable with respect to such whole shares of the Company Common Stock.

 

(e)            Transfers of Ownership . If shares of the Company Common Stock are to be issued in a name other than that in which the Certificates surrendered in exchange therefor are registered, it will be a condition of the issuance thereof that the Certificates so surrendered will be properly endorsed or accompanied by appropriate stock powers, and otherwise in proper form for transfer and that the Persons requesting such exchange will have paid to the Company or any agent designated by it any transfer or other Taxes required by reason of the issuance of shares of the Company Common Stock in any name other than that of the registered holder of the Certificates surrendered, or established to the satisfaction of the Company or any agent designated by it that such any such Taxes have been paid or are not payable.

 

(f)             Required Withholding . Each of the Company and the Surviving Corporations shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable pursuant to this Agreement to any holder or former holder of Consonus Common Stock or STI Common Stock such amounts as may be required to be deducted or

 

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withheld therefrom under the Code or under any provision of state, local or foreign Tax laws or under any other applicable Laws. To the extent such amounts are so deducted or withheld, the amount of such consideration shall be treated for all purposes under this Agreement as having been paid to the Person to whom such consideration would otherwise have been paid.

 

(g)            Termination of Exchange Fund; No Liability . Any such portion of the Exchange Fund remaining unclaimed by holders of shares of Consonus Common Stock or STI Common Stock immediately prior to such time as such amounts would otherwise escheat to or become property of any Governmental Body shall, to the extent permitted by applicable Laws, become the property of the Company, free and clear of any claims or interest of any Person previously entitled thereto. Notwithstanding anything to the contrary in this Section 1.13(g), none of the Company, the Surviving Corporations or any other party hereto shall be liable to a holder or former holder of shares of Consonus Common Stock, STI Common Stock or the Company Common Stock, as the case may be, for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar Legal Requirement.

 

1.14         Stock Transfer Books . At the Effective Time, the stock transfer books of Consonus with respect to Consonus capital stock and the stock transfer books of STI with respect to STI capital stock shall each be closed, and there shall be no further registration thereafter of transfers of shares of capital stock of Consonus or STI outstanding immediately prior to the Effective Time on the records of any such stock transfer books.

 

1.15         Restricted Shares . If any shares of STI Common Stock or Consonus Common Stock outstanding immediately prior to the Effective Time are unvested or are subject to a repurchase option, risk of forfeiture or other condition under any applicable restricted stock purchase agreement or other agreement with STI or Consonus, as the case may be (the “ Restricted Shares ”), then the shares of the Company Common Stock issued in exchange for such Restricted Shares shall also be unvested and subject to the same repurchase option, risk of forfeiture or other condition, and the certificates representing such shares may accordingly be marked with appropriate legends. Schedule 1.15(a) sets forth a list of the holders of Restricted Shares of Consonus and the number of Restricted Shares held by each such holder, and Schedule 1.15(b) sets forth a list of the holders of Restricted Shares of STI and the number of Restricted Shares held by each such holder. STI and Consonus shall take all action that may be necessary to ensure that, from and after the Effective Time, the Company will be entitled to exercise any such repurchase option or other right set forth in any such restricted stock purchase agreement or other agreement. The number of shares subject to repurchase and the repurchase price pursuant to any repurchase option shall be appropriately adjusted to reflect the Mergers.

 

1.16         Dissenting Shares . Notwithstanding any other provisions of this Agreement to the contrary, any holder of Consonus capital stock outstanding as of immediately prior to the Effective Time, and with respect to which the holder thereof has properly demanded appraisal rights in accordance with Section 262 of the DGCL and has not effectively withdrawn or lost such holder’s appraisal rights under Section 262 of the DGCL with respect to such Consonus Holder’s Consonus Common Stock (the “ Consonus Dissenting Shares ”), and any holder of STI capital stock outstanding immediately prior to the Effective Time and with respect to which the holder thereof has properly demanded appraisal or dissenters’ rights in accordance with Section 55-13-21 of the NCBCA and has not effectively withdrawn or lost such STI Holder’s appraisal

 

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or dissenters’ rights under Article 13 of Chapter 55 of the NCBCA with respect to such STI Holder’s STI Common Stock (the “STI Dissenting Shares,” and together with the Consonus Dissenting Shares, the “ Dissenting Shares ”) shall not be converted into or represent a right to receive the consideration for such shares set forth in Section 1.8 hereof, but the holder thereof shall only be entitled to such rights as are provided by the DGCL with respect to the Consonus Dissenting Shares and of the NCBCA with respect to the STI Dissenting Shares.

 

(a)            If any holder of Dissenting Shares shall effectively withdraw or lose (through failure to perfect or otherwise) such holder’s appraisal rights under Section 262 of the DGCL with respect to the Consonus Dissenting Shares and Sections 55-13-21 and 55-13-23 of the NCBCA with respect to STI Dissenting Shares, then, as of the later of the Effective Time and the occurrence of