Deadlock Provisions Sample Clauses
Deadlock provisions are contractual mechanisms designed to resolve situations where decision-makers, such as company directors or joint venture partners, cannot reach an agreement on key issues. Typically, these provisions outline specific procedures—such as escalation to higher management, mediation, or even forced buy-sell arrangements—to break the impasse. By providing a clear process for resolving deadlocks, these clauses help prevent prolonged disputes that could paralyze business operations or jeopardize the partnership.
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Deadlock Provisions. (a) To the extent the Voting Members are unable to reach an agreement in a timely manner with respect to the items set forth in Schedule 12.3, provided however that (i) such inability to reach an agreement continues for a period of more than six (6 months and (i) the first anniversary of such inability falls after the second (2nd) anniversary of the date of this Agreement, a deadlock shall deemed to have occurred (a “Deadlock”). If a Deadlock arises, senior executives of each Voting Member shall meet and use their reasonable best efforts to resolve the Deadlock within sixty (60) days of the initial written submission of the issue by one Voting Member to the other. If the senior executives agree upon a resolution or disposition of the matter, they shall jointly execute a statement setting forth the term of the resolution or disposition and the Voting Members shall exercise their voting rights and other powers available to them in relation to the Company to procure that the resolution or disposition is fully and promptly carried into effect. If a Deadlock arises which has not been so resolved within the sixty (60) day time frame, each Voting Member will advise the other Voting Member, within thirty (30) days after the Deadlock is reached, whether it wishes (i) to dissolve the Company, (ii) to sell its Membership Interest to the other Member,(iii) to sell its Membership Interest to a Third Party Entity, or (iv) to purchase the Membership Interest of the other Member;
(b) If both Voting Members desire to dissolve the Company and sell the assets of the Company on other than an ongoing concern basis, then the provisions of Article XIII will apply;
(c) If both Voting Members desire to sell their Membership Interests (and the Company as an ongoing concern), then both Voting Members will cooperate in an effort to sell their Membership Interests to a Third Party Entity;
(d) If both of the Voting Members desire to purchase the Membership Interest of the other Voting Member, then each of the Voting Members will, within sixty (60) days after the date the last notice from the Voting Members is given, submit a sealed bid to the independent accountants of the Company (or other mutually acceptable independent Third Party) specifying the price at which said Voting Member is willing to purchase the Membership Interest of the other Voting Member for cash at closing. The Voting Member submitting the highest timely bid, as certified by the independent Third Party within two (2)...
Deadlock Provisions. In the event the Board of Directors fails to resolve, in accordance with Section 4.5 or 4.6 of this Agreement, any matter properly before the Board of Directors that materially and adversely affects the continued operation of the Company and provided that such failure is not caused by a material breach under this Agreement or any other Company agreement by IN Stockholder or TW Stockholder or the Affiliates of IN Stockholder or TW Stockholder, the Board of Directors shall schedule another meeting as soon as reasonably possible to discuss and resolve such matter. If the IN Directors and TW Directors fail to resolve such matter, or if a quorum is not present at such meeting, or if a quorum is not present for any two consecutive Board of Directors meetings, either such Stockholder may declare a deadlock ("Deadlock") and send written notice thereof to the other Stockholder.
Deadlock Provisions. 12.1 In the event of a deadlock of the Board or of the Shareholders, a Shareholder (the "Offeror") may serve a notice in writing on the Company with a copy to the other Shareholder (the "Offeree") declaring that deadlock has occurred (a "Offer Notice") and the provisions of this Clause 12 shall thereupon apply.
12.1 The Offeror shall include in the Offer Notice:
(a) an offer:
(i) to sell all of its Shares (the "Sell Shares") to the Offeree (a "Sell Offer"); and
(ii) to buy all the Shares (the "Buy Shares") held by the Offeree (a "Buy Offer");
(b) the fixed price per Share (the "Offer Price") payable or receivable by the Offeree in the case of a Sell Offer or a Buy Offer respectively (together the "Offers") and, in each case, the Offer Price shall be the same, and once an Offer Notice has been sent it shall immediately preclude the sending by the other Shareholder of an Offer Notice.
12.3 The Offers shall remain open for written acceptance by the Offeree for ten (10) Business Days from the date of its receipt of an Offer Notice (the "Offer Period") and the Offeree shall either accept the Sell Offer or the Buy Offer, failing which the Offeree shall be deemed to have accepted the Buy Offer.
Deadlock Provisions. Although the shareholders may agree on everything when the business is formed, they may have irreconcilable disagreements in the future. Although deadlock is commonly considered with a 50/50 corporation, deadlock can also occur in other ownership situations where both or all shareholders have to agree on an item to take action. For example, under the TBOC, approval of a merger of a corporation requires the affirmative vote of the holders of two-thirds of the voting shares. If the majority shareholder owns 60% and the minority shareholder owns 40%, the minority shareholder is able to block the approval of a merger and cause deadlock. Deadlock in a closely held corporation can result in relationships that are very strained, especially if one party desires to exit the business but cannot without losing significant value. Deadlocks can be resolved through various provisions, including the following which are referred to by various names, including “Russian Roulette”, and “Texas Shoot Out”: • Each shareholder submits a sealed bid specifying the value per share and the shareholder with the higher bid buys out the others; or • A shareholder provides notice to the other shareholder with a value per share. The other shareholders must either sell his shares at that price or allow the other shareholder to buy him out at the stated price; or • Each shareholder submits a sealed bid with the lowest price per share at which the shareholder would sell. The shareholder with the highest price buys out the others at the lower price submitted; or • The parties have a third party appraiser determine the value per share, and then the shareholder triggering the buy-sell will either buy the others’ shares at a set premium to the determined value or sell shares at an equivalent discount. The parties should consider setting a time limit on the process to provide some certainty. Other methods to resolve deadlock include an agreement to arbitrate disputes or granting a “springing vote” to a third party which can be used in the event of a deadlock. • Are the parties in different financial situations which would make it difficult for one party to purchase shares? • What is the relative percentage ownership? It may be more difficult for a shareholder to purchase a large block. An example of a deadlock provision is in Exhibit B attached hereto.
Deadlock Provisions. 4.4.1 In the event the Company Board cannot agree with respect to a Key Issue or a Fundamental Issue the matter shall be resolved as follows:
a. The Company Board shall set the Key Issue or the Fundamental Issue aside for a period of forty-five (45) days. During that period, the Representatives of the Company Board shall consider in good faith ways of alleviating or avoiding the Deadlock.
b. At the end of the said period, the Company Board shall again meet to discuss the suggestions for alleviating and/or avoiding the Deadlock. If no such resolution is achieved, the Key Issue or the Fundamental Issue shall be referred to the chief executive officers of the Shareholders for resolution by such chief executive officers. If the matter has not been resolved by such chief executive officers in writing at the close of business on the forty-fifth (45th) day of such referral (unless the chief executive officers agree to extend such period), a Deadlock shall be deemed to have occurred in relation to the Key Issue or Fundamental Issue which Deadlock shall be notified in writing to each Shareholder within five (5) Business Days from declaration of the Deadlock.
Deadlock Provisions. If the Directors nominated by RADIANCE and the Directors nominated by GLOBE are unable to pass an identical resolution at two successive board of directors' meetings the Parties agree to negotiate for the sale of all of one Party's shares of RADIATEC to the other Party. If negotiations fail, either Party may demand the liquidation of RADIATEC, in which case each of the Parties shall vote its shares of RADIATEC at its general meeting of shareholders to approve liquidation of RADIATEC, so that RADIATEC will be liquidated in accordance with Section 11 below.
Deadlock Provisions. (a) In the event of a deadlock of the Board of Directors, at two consecutive meetings, with respect to the Strategic Plan or another matter that, as a result of such deadlock, threatens to have a materially adverse effect on the financial condition or operations of the Company, including matters relating to the Strategic Plan or Section 3.3 (b), each Member, acting through its Chief Executive Officer or other designated representative, shall consult in good faith during the period of 120 days following the second such Board of Directors meeting (the "Consultation Period") in an effort to resolve the deadlock. The Consultation Period may be extended by mutual consent of the Members, and the Members may submit the dispute to binding arbitration if they so elect. If no agreement has been reached between the Members with respect to the dispute within 30 days after the end of the Consultation Period, the Members shall endeavor to negotiate the purchase by one Member or all of the Units of the other Member. In the event that the Members are unable to negotiate an acceptable arrangement with respect to such a purchase of Units, either party may make the offer described in paragraph 8.3(b)
(b) Either Member shall have the right to offer in writing to either buy all of the Units of the other Member or sell all of its Units to the other Member at the price per Unit and on the terms stated by the offering Member in his written offer (the "Offered Price and Terms"). The other Member shall, within ninety (90) days of the receipt of the written offer from the offering Member, either agree to buy the offered Units at the Offered Price and Terms or agree to sell all of its own Units to the offering Member at the Offered Price and Terms. The other
Deadlock Provisions