Merger Agreement provides, among other things, that as soon as practicable after the acquisition of Shares pursuant to the Offer and subject to the satisfaction or waiver of certain conditions, Merger Sub will be merged with and into JetPay (the “Merger”) without a vote of the stockholders of JetPay in accordance with Section 251(h) of the Delaware General Corporation Law (the “DGCL”), with JetPay continuing as the surviving corporation in the Merger. In the Merger, each Share issued and outstanding immediately prior to the effective time of the Merger (other than Shares (i) owned by JetPay as treasury stock or owned by NCR or Merger Sub, if any, which Shares will be cancelled and retired and will cease to exist or (ii) held by a holder who properly demands appraisal for such Common Shares in accordance with Section 262 of the DGCL) will, by virtue of the Merger and without any action on the part of the holder thereof, be cancelled and converted into the right to receive an amount in cash, payable to the holder thereon, equal to the Offer Price, upon the terms and subject to the conditions set forth in the Merger Agreement. As a result of the Merger, JetPay will cease to be a publicly traded company and will become a wholly-owned subsidiary of NCR. For a description of the Merger Agreement, see Section 11 of the Offer to Purchase.
The Offer is not subject to a financing condition. The Offer is conditioned upon, among other things, (a) at the Offer Expiration Time (as extended), there shall have been validly tendered and “received” (as defined in Section 251(h)(6) of the DGCL), and not validly withdrawn, prior to the expiration of the Offer that number of Common Shares and Preferred Shares which, together with the Common Shares and Preferred Shares otherwise owned by Merger Sub or its affiliates, equals a majority of the voting power of the issued and outstanding Common Shares and Preferred Shares (the “Minimum Tender Condition”), (b) any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired or been terminated, (c) there not having occurred or discovered a data compromise after the date of the Merger Agreement involving more than 7,000,000 cards and causing at least $7,000,000 of direct damages, and (d) such other conditions as described in the Offer to Purchase (collectively, as set forth on Exhibit A to the Merger Agreement, the “Offer Conditions”). A full description of the Offer Conditions is set forth in Section 14 of the Offer to Purchase.
On October 19, 2018, the board of directors of JetPay (i) approved and declared that the Merger Agreement, the Merger and the other transactions contemplated thereby are advisable, fair and in the best interests of the stockholders of JetPay and JetPay, (ii) approved the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, on the terms and subject to the conditions set forth in the Merger Agreement; and (iii) determined to recommend that the stockholders of JetPay accept the Offer and tender their shares to Merger Sub pursuant to the Offer.
The Merger Agreement contains provisions that govern the circumstances in which Merger Sub is required or permitted to extend the Offer. Specifically, Merger Sub may extend the Offer Expiration Time at any time with JetPay’s written consent. Merger Sub may (in its sole discretion), without JetPay’s consent, (i) extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or the staff thereof or Nasdaq or NYSE applicable to the Offer (including in order to comply with Exchange Act Rule14e-1(b) in respect of any change in the Offer Prices) or (ii) if, as of any Offer Expiration Time, any Offer Condition is not satisfied and has not been waived, extend the Offer on one or more occasions in consecutive increments of up to ten (10) business days each (or such longer period as the parties hereto may agree), until such time as all Offer Conditions are satisfied or waived; provided, however, that, without JetPay’s written consent, Merger Sub shall not extend the Offer beyond the earlier of February 28, 2019 and the termination of the Merger Agreement. Any extension, delay, termination or amendment of the Offer will be followed promptly by a public announcement thereof in accordance with Rule14e-1(d) of the Exchange Act. If, as of any Offer Expiration Time, any Offer Condition is not satisfied and has not been waived by Merger Sub in accordance with the Merger Agreement, Merger Sub shall, at the written request of JetPay, extend the Offer Expiration Time on one or more occasions in consecutive increments of up to ten (10) business days each (or such longer period as the parties hereto may agree), until such time as all Offer Conditions are satisfied or waived; provided, however, that Merger Sub shall not be required to extend the Offer beyond the earlier of February 28, 2019 and the termination of the Merger Agreement; provided, further, that, if the Minimum Tender Condition is the sole then unsatisfied Offer Condition as of any Offer Expiration Time, so long as the Minimum Tender Condition remains as the sole unsatisfied Offer Condition, Merger Sub shall only be required to extend the Offer Expiration Time for additional periods not to exceed an aggregate of sixty (60) business days.
Merger Sub may, at any time and from time to time, waive any of the Offer Conditions (except the Minimum Tender Condition), except that, without the prior written consent of JetPay, Merger Sub will not: (i) reduce the number of Shares subject to the Offer, (ii) reduce the Offer Prices, (iii) modify or waive the Minimum Tender Condition or the Termination Condition, (iv) add to the conditions to the Offer set forth in Exhibit A of the