Demand Note Debt Clause Samples

Demand Note Debt. In exchange for the outstanding Demand Note Debt, the holders of Demand Note Debt shall receive in the aggregate: (1) cash in an amount equal to the difference between (i) $6,000,000 and (ii) the sum of (A) the cash payable under Section 3.1 of this Agreement and (B) the cash payable to the holders of New Demand Note Debt pursuant to Section 3.2(a) of this Agreement, and (2) a number of fully paid and nonassessable shares of Buyer Common Stock (and cash in lieu of fractional amounts) equal to the lesser of (i) 800,000 and (ii) the quotient obtained by dividing (A) the difference between (x) the aggregate Demand Note Debt outstanding at the Effective Time minus (y) the amount of cash payable to the holders of Demand Note Debt pursuant to Section 3.2(b)(1) by (B) the Buyer Share Market Value. Each holder of Demand Note Debt shall receive its pro rata portion of the consideration set forth in the immediately preceding sentence. For purposes of this paragraph, "pro rata portion" shall be a fraction having as its numerator the amount of Demand Note Debt held by such holder as of the Effective Time and having as its denominator the aggregate amount of Demand Note Debt outstanding at the Effective Time. All of such shares of Buyer Common Stock shall be duly authorized and validly issued and free of preemptive rights, with no personal liability attaching to the ownership thereof subject to the indemnification obligations of the holders of any such shares as provided herein. All Demand Note Debt shall cease to be outstanding and shall be canceled and retired and shall cease to exist, and each holder of instruments or notes that immediately prior to the Closing Date represented any Demand Note Debt (a "DEMAND NOTE" and collectively, the "DEMAND NOTES") shall thereafter cease to have any rights with respect to such Demand Note Debt, except the right to receive the applicable pro rata portion of the Merger Consideration to be issued in consideration therefor (including any cash paid in lieu of fractional shares) and any other distributions to which holders of Demand Note Debt become entitled, all in accordance with this Article III upon the surrender of such Demand Notes.