|
Item 1.01
|
Entry into a Material Definitive Agreement.
|
Interest Purchase Agreement.
On November 7, 2019, 2019, ParTech, Inc., a New York corporation (the “Company”) and a wholly owned subsidiary of PAR Technology Corporation, a Delaware corporation (“PAR Technology”), and PAR
Technology, entered into an Interest Purchase Agreement (the “Purchase Agreement”) with The Drew D. Peloubet Family Trust DTD 6/29/09, Steven A. Roberts, Gary Saling, and PJCDSG, Inc., a Florida corporation (“Parent Seller” and, collectively with
The Drew D. Peloubet Family Trust DTD 6/29/09, Steven A. Roberts, and Gary Saling, the “Sellers”), and Drew D. Peloubet with respect to certain representations, warranties and covenants.
Pursuant to the terms of, and subject to the conditions specified in, the Purchase Agreement, the Company will acquire 100% of the limited liability company interests of AccSys LLC, a Delaware
limited liability company (f/k/a AccSys, Inc., and otherwise known as Restaurant Magic (“Restaurant Magic”)) in consideration of $42 million (the “Transaction”), of which approximately $13 million will be paid in cash, $27 million will be paid in
restricted shares of PAR Technology common stock (the “Share Consideration”) and $2.0 million will be paid by delivery of a subordinated promissory note. Following the closing of the Transaction, the Sellers will have the opportunity to earn
additional purchase price consideration subject to the achievement of certain post-closing milestones (“Earn-Out”). The Earn-Out, if any, will be payable 50% in cash or subordinated promissory notes, at the Company's election, and 50% in
restricted shares of PAR Technology common stock (the “Earn-Out Shares”). The actual number of restricted shares of PAR Technology common stock constituting Share Consideration will be determined by the quotient obtained by dividing, $27 million,
by the volume-weighted average price per share of the Company’s common stock as reported on the New York Stock Exchange (NYSE) for the 20 consecutive trading days ending on the trading day that is immediately prior to the date of closing of the
Transaction (the “Closing Price Per Share”); and the actual number of restricted shares of PAR Technology common stock constituting Earn-Out Shares will be determined by the quotient obtained by dividing the volume weighted average price per share
of PAR Technology common stock on the NYSE for the consecutive 20 trading days ending on the trading day immediately preceding the applicable earn-out payment date. At issuance, the shares of PAR Technology common stock comprising the Share
Consideration and the Earn-Out Shares will not be registered under the Securities Act of 1933 (“Securities Act”) or other applicable securities laws; however, pursuant to the Purchase Agreement, PAR Technology has agreed to register the shares for
resale under the Securities Act and other applicable securities laws.
In connection with the Transaction, PAR Technology will issue, in substitution for phantom LLC Units of Restaurant Magic outstanding and held by certain of Restaurant Magic’s employees as of the
closing of the Transaction, up to $2.0 million of restricted time-vested shares of PAR Technology common stock (the “substitute time-vested restricted stock”); the actual number of shares of substitute time-vested restricted stock will be
determined by dividing $2.0 million by the Closing Price Per Share.The substitute time-vested restricted stock will vest in equal annual installments so long as the holder continues to provide service to PAR Technology or its affiliates over the
three year period following the closing of the Transaction.
In no event will the total number of shares of PAR Technology common stock issued in consideration of the membership interests and the achievement of post-closing milestones and as substitute
time-vested restricted stock exceed in the aggregate 19.9% of PAR Technology outstanding common stock; and, in the event such share limit would be exceeded, PAR Technology will pay cash in lieu of shares of PAR Technology common stock otherwise
issuable.
The Transaction, which has been unanimously approved by the Board of Directors of PAR Technology, is expected to close during the fourth quarter of 2019, subject to the satisfaction or waiver of
certain customary closing conditions, including, among other things: (i) the material accuracy of representations and warranties of each party to the Purchase Agreement; (ii) the performance by each party of its obligations and agreements in all
material respects; (iii) the absence of a material adverse effect with respect to the Sellers or to Restaurant Magic’s business or the business of PAR Technology between the date of the Purchase Agreement and the closing of the Transaction; (iv)
the absence of any applicable law or injunction enjoining or otherwise prohibiting the consummation of the Transaction; and (v) the Company’s receipt of satisfactory audited financial statements of Restaurant Magic for the fiscal year ended
December 31, 2018. The Purchase Agreement contains customary representations, warranties and covenants by each party that are subject, in some cases, to specified exceptions and qualifications contained in the Purchase Agreement.
The description of the Purchase Agreement herein does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Purchase Agreement, a copy of which is
attached to this current report on Form 8-K as Exhibit 2.1 and is incorporated into this report by reference in its entirety. The Purchase Agreement has been attached to provide investors with information regarding its terms. It is not intended to
provide any other factual or disclosure information about PAR Technology or the other parties to the Purchase Agreement. In particular, the assertions embodied in the representations and warranties contained in the Purchase Agreement are qualified
by information in confidential disclosure schedules provided by the parties in connection with the signing of the Purchase Agreement. The confidential disclosure schedules contain information that modifies, qualifies and creates exceptions to the
representations and warranties in the Purchase Agreement and were used for the purpose of allocating risk between the parties rather than establishing matters as facts. The Purchase Agreement contains representations, warranties and covenants by
the parties to the Purchase Agreement, and those representations, warranties and covenants may apply standards of materiality in a way that is different from what may be viewed as material to the reader or other investors.
Accordingly, investors should not rely on the representations, warranties and covenants in the Purchase Agreement, or any description thereof, as characterizations of the actual state of facts or
conditions. Investors should review the Purchase Agreement, or any descriptions thereof, not in isolation, but only in conjunction with the other information about PAR Technology that it includes in reports, statements and other filings it makes
with the Securities and Exchange Commission.