Wednesday, July 2, 2008

Dallas-based Tyler Technologies reaches settlement with Bank of America in stock purchase warrants lawsuit

By Pegasus News wire

DALLAS — Tyler Technologies, Inc. announced today that it has reached an agreement with Bank of America, N.A. to settle the outstanding litigation related to two Stock Purchase Warrants owned by BANA. According to Tyler’s prior SEC filings, the Warrants entitled BANA to acquire 1,603,766 shares of Tyler common stock at an exercise price of $2.50 per share. The Warrants expired on September 10, 2007.

Photo not provided by Bank of America, Tyler Technologies

Unfortunately for Tyler, BoA demanded to pay the $2 million in pennies

Prior to their expiration, BANA attempted to exercise the Warrants; however, the parties disputed whether or not BANA’s exercise was effective. Tyler filed suit for declaratory judgment seeking a court’s determination on the matter, and BANA asserted numerous counterclaims against Tyler, including breach of contract and misrepresentation.

Following a court-ordered mediation, the parties agreed that BANA will pay Tyler $2,004,707 and Tyler will issue to BANA 801,883 restricted shares of Tyler common stock. As a result of the settlement, Tyler expects to incur a non-cash charge of approximately $9 million, which is not tax deductible, in the quarter ending June 30, 2008.

“We are pleased to resolve the uncertainty related to these warrants and to move forward without devoting additional resources to the litigation,” said John S. Marr, Jr., President and Chief Executive Officer of Tyler. “Only one-half of the original 1.6 million shares pertaining to the warrants will be issued, allowing Tyler to retain approximately $9 million in shareholder value. Unfortunately, while this settlement is not related to our core operating results, accounting rules dictate that the issuance of shares in this circumstance be recorded as a non-cash expense.”

Based in Dallas, Tyler Technologies is a leading provider of end-to-end information management solutions and services for local governments.

Source: Tyler Technologies

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