Preemptive Rights Clause Samples
Preemptive rights are provisions that grant existing shareholders the first opportunity to purchase additional shares in a company before those shares are offered to external investors. In practice, when a company issues new stock, shareholders with preemptive rights can buy a proportional amount to maintain their ownership percentage. This clause is designed to protect shareholders from dilution of their ownership and voting power, ensuring they can retain their influence in the company as it raises new capital.
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Preemptive Rights. (a) The Company hereby grants to WBA (the “Pre-Emptive Stockholder”) the right, subject to Applicable Law, to purchase (and/or to designate one or more Permitted Transferees of WBA to purchase (subject to Section 2.1(b) and so long as any such Permitted Transferee, to the extent it has not already done so, executes a customary joinder to this Agreement, in form and substance reasonably acceptable to the Company, in which such Permitted Transferee, agrees to be an Investor for all purposes of this Agreement)) the Pre-Emptive Stockholder’s Pro Rata Portion of any Equity Securities (collectively, the “New Securities”) that the Company may from time to time propose to issue (other than in Permitted Transactions); provided, that, for the avoidance of doubt, (i) such Pro Rata Portion of any New Securities shall not increase the total number of New Securities issued or proposed to be issued, other than (x) in the case of New Securities issued as consideration for the consummation by the Company of a merger, consolidation or acquisition of any business, or any other business combination or (y) in any other issuance in the form of an Underwritten Offering or other registered public offering (including a block trade), in which case, if the Pre-Emptive Stockholder elects to purchase its Pro Rata Portion of the New Securities, the total number of New Securities issued in connection with such transaction shall be increased by such Pro Rata Portion (the “Proposed Issuance Increase”), and (ii) no Proposed Issuance (including (x) any issuance of New Securities to the Pre-Emptive Stockholder (and/or its designees) and (y) any Proposed Issuance Increase pursuant to the immediately preceding clause (i)) completed in compliance with this Section 2.3 shall be applied in a circular manner to this Section 2.3 so as to result in duplicative or iterative pre-emptive rights.
(b) The Company shall give written notice (an “Issuance Notice”) of any proposed issuance described in subsection (a) above (“Proposed Issuance”) to WBA no later than five (5) Business Days prior to such issuance (or if such notice period is not reasonably possible under the circumstances, such prior written notice as is reasonably possible). The Issuance Notice shall set forth the material terms and conditions of the proposed issuance, including:
(i) the number and description of the New Securities proposed to be issued and the percentage of the Company’s outstanding Equity Securities such issuance would repre...
Preemptive Rights. (a) The Company hereby grants to each Shareholder the right to purchase an amount up to such Shareholder’s pro rata share on an as converted basis of all New Company Securities that the Company or any Subsidiary of the Company may from time to time propose to issue, offer or sell. The “pro rata share” for purposes of this Section 6.01(a) with respect to any given Shareholder shall be expressed as a fraction, (i) the numerator of which is the number of Common Shares Beneficially Owned by such Shareholder on the date of the Company’s written notice pursuant to Section 6.01(c) hereof, and (ii) the denominator of which is the number of Common Shares outstanding on the date of the Company’s written notice pursuant to Section 6.01(c) hereof, assuming for this purpose conversion of all outstanding Derivative Securities (including, for the avoidance of doubt, the Senior Preferred Shares).
(b) For purposes of this Section 6.01, “New Company Securities” means (A) any shares of capital stock (of any class) of the Company or any of its Subsidiaries, including Common Shares, shares of Preferred Stock or other Equity Securities, whether now authorized or not, issued after the Effective Date, or (B) any options, warrants, convertible notes, securities of any type or similar rights issued by the Company or any of its Subsidiaries after the Effective Date that are or may become convertible into or exercisable or exchangeable for, or that carry rights to subscribe for, any shares of capital stock (of any class), including Common Shares, shares of Preferred Stock or other Equity Securities (each of the foregoing reference in such clause (B), a “Convertible Security”); provided, however, that the term “New Company Securities” does not include any securities (1) issued as consideration to effect the acquisition of another entity by the Company or any of its Subsidiaries pursuant to a merger, consolidation, amalgamation, exchange of shares, the purchase of all or substantially all of the assets, or otherwise; (2) issued to any directors or employees of the Company or any of its Subsidiaries pursuant to any incentive stock plan or other form of incentive compensation approved and adopted by the Company, and any Common Shares or other equity issued upon the exercise thereof; (3) issued upon the exercise of or conversion of the Senior Preferred Shares; (4) issued to the Shareholders upon any stock split, stock dividend, combination or other similar event with respect to the Common...
Preemptive Rights. (a) If the Company proposes to issue, sell or exchange, or agree to issue, sell or exchange (i) any equity security of the Company, (ii) any debt security of the Company which by its terms is convertible into or exchangeable for any equity security of the Company or (iii) any option, warrant or other right to subscribe for, purchase or otherwise acquire any equity security or any debt security referred to in clause (i) or (ii) above (collectively, "Securities") to any person or entity, the Company shall deliver to the Purchaser an offer (the "Preemptive Offer") to issue such number of Securities to it to enable it to retain its fully-diluted ownership position in the Company that it held immediately prior to the proposed issuance, sale, or exchange (the "Offered Securities") upon the same terms set forth as such offer. The Preemptive Offer shall state that the Company proposes to issue such Securities and specify their number and terms (including purchase price). The Preemptive Offer shall remain open for a period of 20 days (the "Preemptive Period") from the date of its delivery unless earlier withdrawn by the Company as a result of termination by the Company of the proposed issuance, sale or exchange giving rise to the Preemptive Offer. For purposes of this Section 4, the Purchaser's "fully diluted ownership position" shall mean the proportion that the number of shares of Common Stock issued and held, or issuable upon exercise or conversion of any debt or equity securities of the Company convertible into or exchangeable for shares of Common Stock of the Company then held by such Purchaser bears to the total number of shares of Common Stock then outstanding (assuming full conversion and exercise of all convertible or exercisable securities then outstanding).
(b) Purchaser may accept the Preemptive Offer by delivering to the Company a written notice (the "Purchase Notice") within the Preemptive Period and the appropriate amount of funds to purchase such Offered Securities. The Purchase Notice shall state the number (the "Preemptive Number") of Offered Securities Purchaser desires to purchase. If Purchaser fails to deliver the Purchase Notice within the Preemptive Period, Purchaser shall forfeit the right to participate in the purchase of the Offered Securities.
(c) Notwithstanding anything to the contrary in this Section 4, the Company shall not be required to extend a Preemptive Offer to the Purchaser with respect to (i) the issuance or sale of options to...
Preemptive Rights. (a) In the event that the Majority Stockholder or its Affiliate shall purchase any Shares or securities convertible into or exchangeable for Shares of the Company, following the date hereof, the Management Stockholder shall have the right to purchase a Pro Rata Amount of such Shares or other securities or equity, as the case may be, as are being purchased, such subscription being conditioned upon the actual purchase of such Shares or other securities or equity, as the case may be; provided, however, that such preemptive right shall not be exercisable if such Shares or other securities or equity, as the case may be, that are to be issued by the Company or any subsidiary are issued (A) by reason of a dividend, split, split-up or other distribution on Shares or equity of such subsidiary or (B) pursuant to the Merger Agreement. No Management Stockholder’s rights to purchase Shares or other securities or equity pursuant to this Section shall be increased as a result of any other Management Stockholder’s failure to exercise its rights hereunder.
(b) Written notice specifying the contemplated date the new Shares or other securities or equity are to be purchased, the amount of new Shares or securities or equity to be purchased and the material terms thereof shall be delivered by the Company to the Management Stockholder no later than ten Business Days prior to such contemplated purchase date of the Shares or securities or equity, and such Management Stockholder shall have until five Business Days prior to the contemplated purchase date specified in such notice to inform the Company of its intentions as to the exercise of the preemptive right provided under this Section, including the maximum number of Shares or securities or equity (up to its Pro Rata Amount) for which it wishes to exercise its preemptive rights. If no written reply is received by the Company prior to the fifth Business Day before the contemplated purchase date specified in such notice, the Company may treat the preemptive right of such Management Stockholder to have been waived for that, but only for that, transaction.
(c) Notwithstanding Section 7 below, the rights provided in this Section 6 shall expire on the date of an Initial Public Offering.
Preemptive Rights. (a) In the event that the Purchaser Beneficially Owns at least 20% of the aggregate number of shares of NewCo Common Stock then outstanding, if NewCo engages in any transaction involving the direct or indirect sale or issuance of Covered Securities by NewCo and such sale or issuance would cause the Purchaser to Beneficially Own less than 20% of the aggregate number of outstanding shares of NewCo Common Stock immediately following such sale or issuance, the Purchaser will be afforded the opportunity to acquire from NewCo, for the same price and on the same terms as such Covered Securities are offered, up to an amount (the “Amount”) necessary to enable the Purchaser to own 20% of the aggregate number of outstanding shares of NewCo Common Stock immediately following such sale or issuance; provided, that, if the transaction at issue is an acquisition, merger or other business combination involving a Third Party by NewCo in which NewCo issues or sells Covered Securities as consideration for the transaction, such Covered Securities shall be deemed to be offered at the per share purchase price implied from the transaction terms as of the time of entry into the agreement for such transaction; provided, further, that, if such per share purchase price is not reasonably ascertainable, the per share purchase price shall be deemed to be the trading price of the NewCo Common Stock at the close of the business on the day immediately prior to the public disclosure or announcement of such transaction.
(b) If NewCo proposes to engage in a transaction involving the direct or indirect sale or issuance of Covered Securities described in Section 8.12(a) above, NewCo will first submit written notice (the “Notice of Preemptive Rights”) to the Purchaser disclosing the terms of the proposed sale or issuance transaction (which notice will set forth all material terms, including price, number of securities or aggregate principal amount, as applicable, and the type of securities to be sold or issued). The Notice of Preemptive Rights will include an offer to the Purchaser to purchase up to the Purchaser’s Amount of such Covered Securities on terms and conditions, including price, not less favorable to the Purchaser than those on which NewCo proposes to sell such Covered Securities to the third party or parties. Such offer as set forth in the Notice of Preemptive Rights will remain open for a period of at least 15 Business Days after the Notice of Preemptive Rights is delivered, prior t...
Preemptive Rights. (a) Following the Closing, for so long as the Investor has a Qualifying Ownership Interest, if the Company proposes to issue (a “New Issuance”) any equity (including shares of Common Stock or shares of Company Preferred Stock), or any securities, options or debt that are convertible or exchangeable into equity or that include an equity component (any such security, a “New Security”), the Company shall provide written notice of such proposed New Issuance to the Investor no later than fifteen (15) business days prior to the anticipated issuance date (the “Preemptive Rights Notice”). The Investor shall have the right to purchase for cash, at the price and on the same terms and conditions and at the same time as the New Issuance, such number of New Securities as are required to enable it to maintain its proportionate Common Stock-equivalent interest in the Company immediately prior to any such issuance of New Securities (the “Preemptive Amount”). The Preemptive Rights Notice shall set forth all material terms and conditions of the New Issuance, including the number New Securities proposed to be issued, the issue price and the maximum number of New Securities that the Investor may purchase in the New Issuance pursuant to the immediately preceding sentence.
(b) The Investor may elect to participate in the New Issuance to the extent described in Section 4.4(a) by delivering an irrevocable written notice to the Company by the date specified by the Company in the Preemptive Rights Notice (which shall be no later than three (3) business days before the anticipated date of the New Issuance), setting forth the number of shares the Investor wishes to purchase in the New Issuance up to its Preemptive Amount; provided that in order to exercise rights under this Section 4.4 (“Preemptive Rights”), the Investor must execute all customary transaction documentation in connection with such New Issuance on the same terms as any other participant in the New Issuance; provided, further, that in the event that the Company is issuing more than one type or class of New Securities in connection with such New Issuance, the Investor participating in such issuance shall be required to acquire the same percentage of all such types and classes of securities.
(c) The closing of the acceptances of the Preemptive Rights shall take place at the same time as the closing(s) under definitive agreements with other participants in the New Issuance, which in any event shall occur within ninety (90)...
Preemptive Rights. The Company shall have fully satisfied (including with respect to rights of timely notification) or obtained enforceable waivers in respect of any preemptive or similar rights directly or indirectly affecting any of its securities.
Preemptive Rights. No Person shall have any preemptive, preferential or other similar right with respect to (i) additional Capital Contributions or loans to the Partnership; or (ii) the issuance or sale of any Partnership Units or other Partnership Interests.
Preemptive Rights. (a) Except as set forth in Section 3.5(c), the Maker shall not issue or sell any shares of Common Stock or other securities, or any rights or options to purchase Common Stock or other securities, or any debt or shares convertible into or exchangeable for Common Stock or other securities, whether now or hereafter authorized and whether unissued or in the treasury (collectively, “Preemptive Shares”), unless the Holder shall first have been given the right to acquire, at a price no less favorable than that at which such Preemptive Shares are to be offered to others, a portion of the Preemptive Shares, as provided in Section 3.5(b).
(b) The Maker shall give the Holder prior written notice of any proposed issuance or sale described in Section 3.5(a), including the price at which such securities are to be offered and the time period for the offering, and the Holder shall have thirty (30) days from the giving of such notice within which to elect to acquire that number of the Preemptive Shares equal to the product of the total number of Preemptive Shares being offered and a fraction, determined as of the time immediately prior to the issuance of the Preemptive Shares, the numerator of which is equal to the sum of (i) the number of shares of Common Stock then outstanding as a result of the conversion of this Note, and (ii) the number of shares of Common Stock into which this Note could be converted, and the denominator of which is equal to the sum of (x) the number of shares of Common Stock then outstanding, (y) the number of shares of Common Stock into which this Note could be converted, and (z) the number of shares of Common Stock issuable upon conversion or exercise of all outstanding options, warrants and other rights for the purchase of capital stock of the Company, and all outstanding shares of all series of preferred stock (such number of Preemptive Shares being referred to herein as the “Common Stock Preemptive Shares”). The Holder may acquire that portion of the Common Stock Preemptive Shares being offered equal to its percentage ownership of the outstanding Common Stock immediately preceding the issuance of the Preemptive Shares. If any transaction specified by the Maker in any such notice shall not be consummated within one hundred twenty (120) days from the date of such notice, the Corporation shall again comply with the provisions of this Section 3.5 with respect to such transaction, and the Holder shall again have preemptive rights hereunder with resp...
Preemptive Rights. No Stockholder has, or hereby waives, any preemptive or other right to acquire shares of Company Stock that such Stockholder has or may have had.