Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering. (b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares. (c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders. (d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02. (e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance. (f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale. (g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 6 contracts
Sources: Stockholder Subscription Agreement, Stockholder Subscription Agreement, Stockholder Subscription Agreement
Preemptive Rights. (a) The Except for the issuance of Excluded Securities or pursuant to the conversion or exercise of any Capital Stock outstanding on the Closing Date, if, following the Closing Date, the Company authorizes the issuance or sale of any Capital Stock to any Person or Persons (the “Offeree”), the Company shall give each first offer to sell to the Qualified Stockholders a portion of such Capital Stock equal to the quotient determined by dividing (1) the number of shares of Common Stock beneficially owned by such Qualified Stockholder written notice at such time (determined on an as-converted basis), by (2) the total number of shares of Common Stock then issued and outstanding immediately prior to such issuance (determined on an as-converted basis) (the “Issuance NoticePreemptive Percentage”) ); provided, that a Qualified Stockholder shall not be entitled to acquire any such Capital Stock pursuant to this Section 4.2 to the extent the issuance of any such Capital Stock to such Qualified Stockholder would require approval of the stockholders of the Company as a result of such Qualified Stockholder’s status, if applicable, as an Affiliate of the Company or pursuant to the rules and listing standards of Nasdaq, in which case the Company may consummate the proposed issuance of the Capital Stock to other Persons prior to obtaining approval of the stockholders of the Company (subject to compliance by the Company of any Shares at least ten (10with Section 4.2(f) Business Days prior to the proposed issuance datebelow). The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder Qualified Stockholders shall be entitled to purchase such Stockholder’s Pro Rata Share Capital Stock at the same price as such Capital Stock is to be offered to the Offeree; provided that, if the Offeree is required to also purchase other Capital Stock, the Qualified Stockholders shall also be required to purchase the same Capital Stock (at the same price) that the Offeree is required to purchase. The Qualified Stockholders electing to purchase their pro rata share of the Shares proposed Capital Stock authorized for issuance or sale to be issued to a third-party, at the price and on Offeree (“Participating Stockholders”) will take all necessary actions in connection with the other terms and conditions specified in consummation of the Issuance Notice. For purposes of purchase transactions contemplated by this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued 4.2 as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved requested by the Board, (iii) issued including the execution of all agreements, documents and instruments in connection therewith in the form presented by the Company, so long as such agreements, documents and instruments are on customary forms for a transaction of this type and do not require such Participating Stockholders to make or issuable agree to lenders any representation, warranty, covenant or lessors indemnity that is more burdensome than that required of the Offeree in the agreements, documents or instruments in connection with such transaction. If any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Qualified Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall elects not have exercised his or her rights to purchase any such Capital Stock, or not to purchase all of such Qualified Stockholder’s Pro Rata Share pro rata portion thereof, each other Qualified Stockholder who has elected to purchase all of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Qualified Stockholder’s Pro Rata Share (full pro rata share of the “Excess Shares”), any participating Stockholder electing Capital Stock authorized for issuance or sale to exercise his or her rights with respect to his or her full Pro Rata Share the Offeree (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares shares of such Capital Stock as set forth below. If a Fully Participating Stockholder desires to purchase such Capital Stock in excess of the portion allocated to such Fully Participating Stockholder pursuant to the first sentence of this Section 4.2(a), then such Fully Participating Stockholder shall be entitled to purchase a number of shares of Capital Stock equal to the product aggregate number of (i) shares of Capital Stock that the Excess Shares and (ii) a fractionother Qualified Stockholders elected not to purchase pursuant to the first sentence of this Section 4.2(a); provided that, if there is an oversubscription in respect of such remaining Capital Stock due to more than one Fully Participating Stockholder requesting additional Capital Stock, the numerator of which is the Aggregate Ownership of that class of Shares by oversubscribed amount shall be fully allocated among the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Stockholders pro rata based on such Fully Participating Stockholders’ relative Preemptive Percentage.
(b) In order to exercise its purchase rights hereunder, a Qualified Stockholder must, within 15 days after receipt of written notice from the Company describing the Capital Stock being offered, the purchase price thereof, the payment terms and such Qualified Stockholder’s percentage allotment, deliver a written notice to the Company describing its election hereunder (which election shall be absolute and unconditional other than being conditioned upon the consummation of the issuance to the Offeree).
(c) During the 90 days following the expiration of the 15-day offering period described above, the Company shall be entitled to sell the shares of Capital Stock, which the Qualified Stockholders have not elected to purchase, to the Offeree at no less than the purchase price, and upon other terms no more favorable than those, stated in the notice provided under Section 4.2(b) (in addition to the portion of the Capital Stock the Company is not required to offer to the Qualified Stockholders pursuant to the first sentence of Section 4.2(a)). Any Capital Stock proposed to be offered or sold by the Company to the Offeree after such 90-day period, or at a price not complying with the immediate preceding sentence, must be reoffered to the Qualified Stockholders pursuant to the terms of this Section 4.2 prior to any sale to the Offeree.
(d) The In the event that a Qualified Stockholder is not entitled to acquire any Capital Stock pursuant to Section 4.2(a) because such issuance would require the Company shall have ninety (90) days from the date to obtain stockholder approval in respect of the Issuance Notice issuance of such Capital Stock to consummate such Qualified Stockholder as a result of any such Qualified Stockholder’s status, if applicable, as an Affiliate of the Company or pursuant to the rules and listing standards of Nasdaq, the Company shall, upon the Qualified Stockholder’s reasonable request delivered to the Company in writing within seven (7) business days following its receipt of the written notice of such issuance to the Qualified Stockholder pursuant to Section 4.2(b), at the Qualified Stockholder’s election, (i) waive the restrictions set forth in Section 3.2 solely to the extent necessary to permit such Qualified Stockholder to acquire such number of shares of Capital Stock equivalent to its Preemptive Percentage of such issuance such Qualified Stockholder would have been entitled to purchase had it been entitled to acquire such Capital Stock pursuant to Section 4.2(a); (ii) consider and discuss in good faith modifications proposed by the Qualified Stockholder to the terms and conditions of such portion of the Capital Stock which would otherwise be issued to the Qualified Stockholder such that the Company would not be required to obtain stockholder approval in respect of the issuance of such new Capital Stock as so modified; and/or (iii) solely to the extent that stockholder approval is required in connection with the issuance of Capital Stock to Persons other than the Qualified Stockholders, use reasonable best efforts to seek stockholder approval in respect of the issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable Capital Stock to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02Qualified Stockholders.
(e) The Company In the case of the offering of Capital Stock for consideration in whole or in part other than cash, including securities acquired in exchange therefor (other than securities by their terms so exchangeable), the consideration other than cash shall be deemed to be the fair value thereof as reasonably determined by the Board; provided, however, that such fair value as determined by the Board shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on exceed the part aggregate market price of the Company to any Stockholder if securities being offered as of the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect date the Board authorizes the offering of such proposed issuancesecurities.
(f) The Notwithstanding the foregoing, the Company may offer and shall be permitted to sell Shares subject Capital Stock pursuant to the preemptive rights under this Section 4.02 an at-the-market offering program without first offering such Shares Capital Stock to the Stockholders pursuant to this Section 4.2; provided that promptly following such sale, each Stockholder shall be offered the right to purchase Capital Stock in such amount necessary to achieve the same economic effect to such Stockholder as contemplated by, and subject to, this Section 4.2, if such offer would have been made prior to such sale; provided that in such case there shall be deemed to be no dilution to the Preemptive Percentage (or complying with equivalent concepts used to measure or describe the procedures Stockholder’s percentage ownership of the Common Stock on an as-converted basis) for any purpose under this Agreement (including, for the avoidance of doubt, Section 2.1, Section 3.3 and Section 4.2) of any Stockholder who did not purchase the shares of Capital Stock at the time of the initial sale in such at-the-market offering as a result of the application of Section 4.2(f) until such Stockholder has exercised or declined to exercise or waived its rights under the first proviso of this Section 4.024.2(f) with respect to such proposed issuance of Capital Stock and, so long as each Stockholder receives prompt written notice for the avoidance of doubt, in the case of any such sales and thereafter is given decline to exercise or waiver of rights under the opportunity to purchase his or her respective Pro Rata Share first proviso of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, howeverthis Section 4.2(f), the price of such Shares Preemptive Percentage shall be identical to the price paid such offer and salediluted accordingly.
(g) The provisions Notwithstanding anything in this Agreement to the contrary that limits the ability of this a Person to assign or transfer its rights hereunder, a Participating Stockholder may designate any of its Permitted Transferees to purchase all or part of the shares of Capital Stock offered pursuant to Section 4.02 4.2(a); provided that such Participating Stockholder shall terminate after remain obligated to consummate the Initial Public Offeringpurchase if such designees fail to do so.
Appears in 6 contracts
Sources: Stockholders Agreement (Comscore, Inc.), Stock Exchange Agreement (Comscore, Inc.), Stock Exchange Agreement (Comscore, Inc.)
Preemptive Rights. (a) The Other than with respect to the Equity Securities of the Company described in Section 3.07(f), the Company shall give each Stockholder of the Initial Members (and their Permitted Transferees) written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares Equity Securities of the Company at least ten twenty (1020) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares Equity Securities of the Company are to be issued and the other material terms and conditions of the issuanceissuance (including the terms of the Equity Securities of the Company proposed to be issued). Subject to Section 4.02(e) below, if any such Shares are purchased3.07(f), each Stockholder of the Initial Members shall be entitled to purchase such Stockholder’s Pro Rata Share (or to cause its Affiliates to purchase) up to its respective Membership Percentage of the Shares Equity Securities of the Company proposed to be issued to a third-partyissued, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his If any Initial Member (or her rights under this Section 4.02 by delivering its Permitted Transferees) desires to purchase or to have any of its Affiliates purchase any or all of its Membership Percentage of the Equity Securities of the Company specified in the Issuance Notice, it shall deliver a written notice to the Company (each a “Preemptive Rights Exercise Notice”) of his or her its election to purchase such Shares to Equity Securities of the Company, Company within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice The Preemptive Rights Exercise Notice shall specify the number (or amount) of Shares Equity Securities of the Company to be purchased by such Stockholder submitting such notice) party or its Affiliates and shall constitute exercise by such Stockholder shall constitute party of its rights under this Section 3.07 and a binding agreement of such Stockholder party or such party’s applicable Affiliates to purchase, at the price and on the terms and conditions specified in the Issuance NoticeNotice and in accordance with the terms of this Section 3.07, the number of shares (or amount) of Shares Equity Securities of the Company specified in the Preemptive Rights Exercise Notice with such Stockholder’s noticepurchase to be consummated as promptly as reasonably practicable. If, at the termination of such ten (10) Business Day- Day period, any Stockholder Initial Member (or its Permitted Transferees) shall not have exercised his or her rights delivered a Preemptive Rights Exercise Notice to purchase any of such Stockholder’s Pro Rata Share of such Sharesthe Company, such Stockholder party shall be deemed to have waived all of its rights under this Section 4.02 3.07 with respect to, and only with respect to, to the purchase of such SharesEquity Securities of the Company. Promptly following the termination of such ten (10) Business Day period, the Company shall deliver to each of the Initial Members (or its Permitted Transferees) a copy of any Preemptive Rights Exercise Notice it has received or notify each of the Initial Members that no Preemptive Rights Exercise Notices have been received (each a “Second Notice”).
(c) If any Stockholder elects an Initial Member (or its Permitted Transferees) fails to exercise his or her its preemptive rights under this Section 4.02 3.07 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (its Membership Percentage of the “Excess Shares”), any participating Stockholder electing to exercise his or her issuance and another Member has exercised its rights under this Section 3.07 with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) its entire Membership Percentage, such other Member shall be entitled to purchase, or have its Affiliates purchase, from the Company any or all of the remaining portion of the issuance. If any such Initial Member (or its Permitted Transferees) desires to purchase an additional number or to have any of Shares equal its Affiliates purchase such remaining portion, it shall deliver a written notice to the product Company of its election to purchase such remaining portion within five (i5) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum Business Days following receipt of the Aggregate Ownership of that class of Shares by all Fully Participating StockholdersSecond Notice from the Company.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares Equity Securities of the Company that each Stockholder the Initial Members (or their Permitted Transferees) have not elected not to purchase at a price equal to or greater than the price specified in the Issuance Notice and otherwise upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice; provided, provided that, that if any Governmental Approvals are required in connection with such issuance is subject to regulatory approvalissuance, such ninety (90) -day period shall be extended until the expiration of five (5) Business Days after following the date on which all such approvals Governmental Approvals are obtained and any applicable waiting periods under applicable Law have expired or been receivedterminated, but in no event later will such period be extended for more than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Sharesan additional 180 days. If the Company proposes to issue any class such Equity Securities of Shares the Company after such one hundred and twenty 90-day (120or longer, as permitted by the preceding sentence) day period or on other terms materially less favorable to the issuerperiod, it shall again comply with the procedures set forth in this Section 4.023.07.
(e) At the consummation of the issuance of such Equity Securities of the Company the Company shall issue certificates or other appropriate instruments representing the Equity Securities of the Company to be purchased by each party exercising preemptive rights pursuant to this Section 3.07 registered in the name of such party, against payment by such party of the purchase price for such Equity Securities of the Company in accordance with the terms and conditions as specified in the Issuance Notice.
(f) Notwithstanding the foregoing, no Initial Member (or its Permitted Transferees) shall be entitled to purchase Equity Securities of the Company as contemplated by this Section 3.07 in connection with issuances of Equity Securities of the Company (i) to employees of the Company or any of its Subsidiaries pursuant to employee benefit plans or arrangements approved by the Board in accordance with the terms of this Agreement (including Section 5.05(a)) (and upon the conversion, exercise or exchange of Equity Securities of the Company granted pursuant to any such plans or arrangements or outstanding as of the date hereof), (ii) in connection with a Qualified IPO in accordance with the terms of this Agreement, (iii) pursuant to conversion, exercise or exchange of any convertible, exchangeable or exercisable Equity Securities of the Company issued in compliance with the terms of this Agreement, (iv) pursuant to any exercise of the Top-up Option under Section 10.06 below, (v) pursuant to equity adjustments as required under Section 2.03, Section 6.03 and Section 8.06 of the Contribution Agreement, (vi) pursuant to Section 8.02(a)(ix), or (vii) pursuant to an issuance of Equity Securities of the Company pursuant to Section 3.03(c). The Company shall not be under any obligation obligated to consummate any proposed issuance of Shares and there will be no liability on the part Equity Securities of the Company Company, nor be liable to any Stockholder Initial Member (or its Permitted Transferees) if the Company has not consummated any proposed issuance of Shares Equity Securities of the Company, pursuant to this Section 4.02 3.07 for whatever reason, regardless of whether it shall have delivered an Issuance Notice or received any Preemptive Rights Exercise Notices in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this This Section 4.02 3.07 shall terminate after the Initial Public Offeringupon consummation of a Qualified IPO.
Appears in 5 contracts
Sources: Limited Liability Company Agreement (PF2 SpinCo, Inc.), Limited Liability Company Agreement (Change Healthcare Inc.), Limited Liability Company Agreement (Change Healthcare Inc.)
Preemptive Rights. (aA) The Company During the Investor Approval Period, other than upon (w) any issuances from the Partnership’s equity incentive plans in effect from time to time, (x) the conversion of the Class B Units, (y) adjustments pursuant to Section 5.12(b)(ix) or (z) the issuance of (1) General Partner Units pursuant to Section 5.2(b), (2) Units pursuant to the Unit Purchase Agreement, (3) the CEI Class B Units and (4) the CTPL Class B Units, the Partnership shall give each Stockholder written notice not issue or transfer any Equity Securities other than in compliance with this Section 5.12(b)(vii), Section 5.8 and Section 5.12(b)(ix). If at any time the Partnership wishes to issue or transfer to any Person any Equity Securities, the Partnership shall (an “Issuance Notice”1) of any proposed issuance by the Company of any Shares at least promptly, but not later than ten (10) Business Days days prior to the planned date of any such issuance or transfer, deliver a notice of such proposed issuance dateor transfer to the Purchaser (the “Equity Securities Notice”) and (2) promptly deliver a notice to the Purchaser of approval of such issuance or transfer by the Board of Directors. The Issuance Equity Securities Notice shall specify include (x) a description of the number Equity Securities, (y) the identity of the proposed recipient(s) of the Equity Securities if such proposed recipient(s) have been identified and class (z) a description of such Shares the consideration and the price at which such Shares are to be issued and the other material terms and conditions of upon which the issuance. Subject to Section 4.02(e) belowproposed issuance or transfer is being made (provided, if any that in no event shall such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in include matters that would violate the Issuance Notice. For purposes of Purchaser’s rights pursuant to this Section 4.025.12(b)(vii)), “Excluded Securities” shall include together with a copy of any Shares: written agreements relating thereto.
(iB) issued as a dividend or a distributionDuring the Investor Approval Period, the Purchaser and the General Partner (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with the exercise of any financing or leasing transactions, (iv) issued rights of the General Partner pursuant to the acquisition Section 5.8 (each an “Electing Party”) shall have an option for a period of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, three (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (103) Business Days from the date that the Board of receipt Directors approves the issuance of the Issuance Equity Securities, which shall be no sooner than 13 days from the Equity Securities Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares , to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder elect to purchase, at the same price and on the same material terms and conditions specified as described in the Issuance Equity Securities Notice, some or all of the offered Equity Securities in an amount up to the Electing Party’s Preemptive Share, by delivering to the Partnership irrevocable written notice within such period setting forth the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at Equity Securities which the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights Electing Party wishes to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed and an undertaking to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, pay in full at closing the purchase of price for such SharesEquity Securities.
(cC) If any Stockholder elects to the General Partner does not exercise his or her preemptive rights under its right set forth in Section 5.8 and this Section 4.02 5.12(b)(vii) to purchase its Preemptive Share of the Equity Securities stated in the Equity Securities Notice, then the Purchaser shall have an option for a period of three (3) Business Days after the Purchaser’s receipt of notice that the General Partner has not exercised all or elects any portion of such right to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled elect to purchase an additional amount of such Equity Securities up to the aggregate amount of offered Equity Securities not committed to be purchased by the General Partner. The Purchaser desiring to exercise its option set forth in this Section 5.12(b)(vii)(C) shall deliver irrevocable written notice to the Partnership within such three (3) Business Day period setting forth the number of Shares equal Equity Securities which the Purchaser wishes to purchase and an undertaking to pay in full at closing the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholderspurchase price for such Equity Securities.
(dD) The Company closing of the Equity Securities offered pursuant to the Equity Securities Notice shall have occur concurrently with the closing of the offering contemplated in the Equity Securities Notice. The Purchaser shall pay the same amount per Equity Security that the Partnership would receive from the underwriters (to the extent the Equity Securities are contemplated being sold pursuant to an underwritten sale) in connection with any exercise of its preemptive rights pursuant to Section 5.8 and this Section 5.12(b)(vii).
(E) Any Equity Securities for which the Purchaser or the General Partner, as applicable, has not elected to purchase following the expiration of the applicable period(s) set forth in Section 5.12(b)(vii)(C) and Section 5.12(b)(vii)(D) may be sold or transferred to the proposed recipient(s) on substantially the same terms and conditions set forth in the Equity Securities Notice at any time during the period ending ninety (90) days from the date after termination of the Issuance Notice to consummate the proposed issuance of any or all later of such Shares applicable period. Any Equity Securities that each Stockholder have elected not the Partnership desires to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, issue or transfer following such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, set forth in the price of such Shares shall Equity Securities Notice must be identical offered to the price paid such offer Purchaser and sale.
(g) The provisions the General Partner and its Affiliates with a new Equity Securities Notice pursuant to the terms of this Section 4.02 shall terminate after the Initial Public Offering5.12(b)(vii).
Appears in 3 contracts
Sources: Limited Partnership Agreement (Cheniere Energy Partners, L.P.), Limited Partnership Agreement (Cheniere Energy Partners, L.P.), Limited Partnership Agreement
Preemptive Rights. (a) The To the extent permitted under Nasdaq rules, the Company hereby grants to ▇▇▇▇▇▇▇ the right until the Second Trigger Date to purchase up to its Pro Rata Portion of any Company Securities that the Company may from time to time propose to issue or sell to any Person; provided that, without limiting the Pre-Agreed Procedures, in the case Company Securities are proposed to be issued (in whole or in part) as consideration in any merger, consolidation, reorganization, conversion, joint venture or any other business combination, or any acquisition (including by merger, consolidation, acquisition of stock or assets or otherwise) of any businesses, assets, operations or securities comprising a business (any such transaction, an “M&A Transaction”), ▇▇▇▇▇▇▇ shall only be entitled to purchase a number of such Company Securities up to its Percentage Maintenance Share.
(b) Without limiting ▇▇▇▇▇▇▇’▇ rights pursuant to Section 3.6, the Company shall give each Stockholder written notice to ▇▇▇▇▇▇▇ (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten or sale described in Section 4.3(a) within five (105) Business Days following any meeting of the Company Board or any committee of the Company Board (or subcommittee thereof) at which any such issuance or sale is approved or, if the approval of the Company Board or any committee of the Company Board (or subcommittee thereof) is not required in connection with such issuance or sale, no less than thirty (30) days prior to the date of the proposed issuance dateor sale. The Issuance Notice shall, if applicable, be accompanied by a written offer from any prospective purchaser seeking to purchase Company Securities and shall specify set forth the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(eproposed issuance or sale, including:
(i) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share the number and class of the Shares proposed Company Securities to be issued to a third-party, at or sold and the price and on percentage of the other terms and conditions specified in outstanding shares of capital stock of the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend Company such issuance or a distribution, sale would represent;
(ii) granted the proposed issuance or issued to employeessale date, officers, directors, consultants or advisors of which shall be at least thirty (30) days from the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days date of receipt by ▇▇▇▇▇▇▇ of the Issuance Notice. A delivery ; and
(iii) (x) in the case of such notice an issuance for cash (which notice shall specify other than a public offering of Company Securities) or offer from a prospective third party for cash, the number proposed purchase price in cash per Company Security and (or amounty) in all other cases (including a public offering of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement Company Securities), the Company’s calculation of such Stockholder to purchase, at the purchase price and based on the terms and conditions specified Pre-Agreed Procedures (such proposed purchase price in clause (x) or (y), the “Proposed Purchase Price”).
(c) For a period of thirty (30) days (such period, as it may be extended pursuant to the proviso of this sentence, the “Election Period”) following the receipt by ▇▇▇▇▇▇▇ of an Issuance Notice, ▇▇▇▇▇▇▇ shall have the right to elect irrevocably to purchase up to its Pro Rata Portion of the Company Securities (or, to the extent applicable as set forth in the proviso of Section 4.3(a), a number of shares Company Securities up to its Percentage Maintenance Share) at the Proposed Purchase Price by delivering a written notice to the Company; provided that, following receipt of an Issuance Notice, ▇▇▇▇▇▇▇ may agree upon a different Proposed Purchase Price with an RPT Committee in accordance with the Related Party Transactions Policy in which case (or amounti) ▇▇▇▇▇▇▇ shall purchase up to its Pro Rata Portion of Shares specified the Company Securities (or, to the extent applicable as set forth in the proviso of Section 4.3(a), a number of Company Securities up to its Percentage Maintenance Share) at such Stockholder’s noticeother Proposed Purchase Price and (ii) the Election Period shall be tolled for so long as ▇▇▇▇▇▇▇ and an RPT Committee are working in good faith to agree on a Proposed Purchase Price until such time as ▇▇▇▇▇▇▇ and such RPT Committee agree on the Proposed Purchase Price. If, at the termination of such ten (10) Business Day- periodthe Election Period, any Stockholder ▇▇▇▇▇▇▇ shall not have exercised his or her rights delivered such notice to purchase any of such Stockholder’s Pro Rata Share of such Sharesthe Company, such Stockholder ▇▇▇▇▇▇▇ shall be deemed to have waived all of its rights under this Section 4.02 4.3 with respect to, and only with respect to, to the purchase of the Company Securities referred to in the Issuance Notice. The closing of any purchase by ▇▇▇▇▇▇▇ shall be consummated concurrently with the consummation of the issuance or sale described in the Issuance Notice; provided that the closing of any purchase by ▇▇▇▇▇▇▇ may be extended beyond the closing of the transaction in the Issuance Notice to the extent necessary to (x) obtain any required approval of a Governmental Authority or (y) to the extent stockholder approval is required under the Nasdaq rules, in which case the Company and ▇▇▇▇▇▇▇ shall use their respective reasonable best efforts to obtain any such Shares.
(c) If any Stockholder elects approval(s); provided that the ▇▇▇▇▇▇▇ Ownership Percentage and the ▇▇▇▇▇▇▇ Fully-Diluted Ownership Percentage shall at all times during this period be calculated as if ▇▇▇▇▇▇▇ shall have exercised its rights pursuant to exercise his or her preemptive rights under this Section 4.02 4.3 in full and as if all remaining shares described in the Issuance Notice shall have been issued or elects sold, until such time that (i) such sale to ▇▇▇▇▇▇▇ is consummated, (ii) in the case of a required approval of a Governmental Authority, there is a final, non-appealable court order prohibiting ▇▇▇▇▇▇▇ from acquiring such Company Securities, (iii) in the case stockholder approval is required under the Nasdaq rules, such stockholder vote shall have occurred and such sale to ▇▇▇▇▇▇▇ not be approved or (iv) ▇▇▇▇▇▇▇ determines not to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholdersrights.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until Upon the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuanceElection Period, the Company shall record be free to sell such Company Securities referenced in the Shares Issuance Notice that ▇▇▇▇▇▇▇ has not elected irrevocably to purchase on terms and conditions no more favorable to the purchasers thereof than those offered to ▇▇▇▇▇▇▇ in book entry format representing the Shares to Issuance Notice delivered in accordance with Section 4.3(b); provided that if such sale is not consummated within thirty (30) days of the expiration of the Election Period, then any further issuance or sale of such Company Securities shall again be purchased by each Stockholder exercising preemptive rights pursuant subject to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.024.3.
(e) The Company shall not be under any obligation to consummate any proposed issuance For the avoidance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, howeverdoubt, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 4.3 shall terminate after on the Initial Public OfferingSecond Trigger Date. Notwithstanding anything to the contrary in this Agreement, this Section 4.3 shall not apply with respect to the issuance or sale of Other Company Securities (as defined in the Pre-Agreed Procedures) which shall be subject to the terms and conditions of the Pre-Agreed Procedures.
Appears in 2 contracts
Sources: Transaction Agreement and Plan of Merger (Emersub CX, Inc.), Transaction Agreement and Plan of Merger (Aspen Technology Inc /De/)
Preemptive Rights. 2.1 Until an IPO, and except to the extent the right to receive such offer has been waived in writing (abefore or after the effective date hereof) The Company shall give each Stockholder written notice (an “Issuance Notice”) of by a Shareholder who would otherwise be entitled thereto, any proposed issuance New Securities to be allotted by the Company shall first be offered by the Board of Directors by written notice of offer to the registered Shareholders holding at least 3% of the issued and outstanding share capital of the Company on an issued and outstanding basis. "New Securities" shall mean any share capital of the Company, whether or not now authorized, and rights, options or warrants to purchase share capital, and securities of any Shares at least ten (10) Business Days prior to the proposed issuance datetype whatsoever that are, or may become, convertible into share capital. The Issuance Notice New Securities shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Sharesnot include: (i) issued as a dividend or a distribution, (ii) granted or securities issued to employees, officers, directors, or consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity any stock option plan or stock plan or stock purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are stock bonus arrangement approved by the BoardBoard of Directors or as otherwise approved by the Board of Directors; (ii) securities issued for consideration which does not consist of cash or which does not consist entirely of cash, including without limitation real estate (including ownership, leasing or any other rights thereto), patents or technology or other know-how (including ownership, licensing or any other rights thereto), research and/or development services or activities, distribution or manufacture of the Company's products or services, any other services or activities, or joint ventures; (iii) shares of the Company issuable upon exercise of options or warrants issued or issuable to lenders or lessors in connection full compliance with any financing or leasing transactions, the provisions of this Section 2; (iv) securities offered to the public; (v) securities issued pursuant to the acquisition (including if applicable acquisition of another Person shares) by the Company of another corporation or any of its Subsidiaries by consolidation, merger, business entity (or their business unit or division) or purchase or other transaction in which acquisition by the Company of all or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of substantially all the assets of another corporation or equity ownership business entity (or their business unit or division) or merger of such other Person, (v) issued to Persons who any corporation or business entity with or into the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and Company; (vi) securities issued in connection pursuant to stock split, recapitalization, reclassification or payment of any dividend, bonus shares, or distribution with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares respect to the Company's issued and outstanding share capital, within ten (10) Business Days of receipt or any similar event of the Issuance Notice. A delivery of such notice Company; or (which notice shall specify the number (or amountvii) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights commission paid pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.022.5 below.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 2 contracts
Sources: Shareholders Agreement (ActiVein, Inc.), Agreement to Exchange Stock (ActiVein, Inc.)
Preemptive Rights. (a) Subject to the Class A Member(s) or Class B Member(s) obligation or right to contribute additional capital as set forth in Section 4.1, prior to the Company issuing any Interests or options or rights to acquire Interests (other than (i) any equity issuance associated with an acquisition previously approved by EMG, (ii) Interests issued in connection with any split, distribution or recapitalization of the Company, (iii) Interests issued in any initial public offering registration statement filed under the Securities Act, or (iv) in connection with any capital raising or financing efforts by the Company the purpose of which is to fund any activities of the Company which were the subject of a Capital Call made pursuant to Section 4.1(d) that was not fully funded by the Members; provided, however, that any Interests to be issued in such capital raising or financing efforts, and the pricing of such Interests, are equivalent to the terms of such Capital Call), whether through exchange, conversion or otherwise (the “New Interests”), to a proposed third party purchaser (the “Proposed Purchaser”), each Member who is not in default of this Agreement and which certifies to the Company’s reasonable satisfaction that it is an “accredited investor” within the meaning of Rule 501 under the Securities Act (an “Eligible Member”) shall have the right to purchase a portion of the New Interests in accordance with this Section 5.6.
(b) The Company shall give each Stockholder Eligible Member prior written notice (an the “Issuance First Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior to New Interests, which shall set forth in reasonable detail the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions thereof (as determined by the Board in good faith) and shall offer to each Eligible Member the opportunity to purchase its Percentage Interest (as of the issuance. Subject to Section 4.02(edate of such notice) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares New Interests, on the same terms and conditions and at the same time as the New Interests are proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable Company. If any Eligible Member desires to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of exercise its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her preemptive rights under this Section 4.02 by delivering 5.6, it must deliver an irrevocable written notice of his or her election to purchase such Shares to within 30 days after the Company, within ten (10) Business Days of Eligible Member’s receipt of the Issuance Notice. A delivery First Notice (the “Election Period”) setting forth the dollar amount of such notice the New Interests the Eligible Member (which notice shall specify the number (or amount“Electing Member”) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder is electing to purchase, at up to its Percentage Interest plus any additional amount of New Interests it desires to purchase in excess of its Percentage Interest (the price and “Over-Allotment Amount”) if other Eligible Members do not exercise their preemptive rights hereunder. The right of each Electing Member to purchase New Interests in excess of its Percentage Interest shall be based on the terms and conditions specified in relative Percentage Interests of the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights Electing Members desiring to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such SharesOver-Allotment Amounts.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum Eligible Members do not subscribe for all of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuanceNew Interests, the Company shall record have the Shares right, but not the obligation, to issue and sell the unsubscribed portion of the New Interests to the Proposed Purchaser at any time during the 90 days following the end of the Election Period, at the same price and pursuant to the terms and conditions set forth in book entry format representing the Shares to be purchased by each Stockholder exercising First Notice. The Board may, in its reasonable discretion, impose such other reasonable and customary terms and procedures such as setting a closing date and requiring customary closing deliveries in connection with any preemptive rights offering. In the event any Electing Member refuses to purchase the New Interests for which it subscribed pursuant to this Section 4.02 registered 5.6, then in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If addition to any other rights the Company proposes to issue may have at law or in equity, such Electing Member and any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company transferee thereof shall not be under considered an Eligible Member for any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive future rights granted under this Section 4.02 without first offering such Shares to each Stockholder 5.6 unless the Board expressly designates otherwise (which the Board may, in its sole discretion, do on an offer-by-offer basis or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales not at all) and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and saledeemed a Defaulting Member under Section 4.2.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 2 contracts
Sources: Limited Liability Company Agreement (MPLX Lp), Limited Liability Company Agreement (Markwest Energy Partners L P)
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days If, prior to the proposed issuance date. The Issuance Notice shall specify consummation of, a Qualified IPO, the number Company or any Subsidiary wishes to issue and class sell any shares of such Shares and Common Stock or any security convertible into or exchangeable for Common Stock (a “New Security”) to any Person or Persons (collectively, the price at which such Shares are to be issued and the “Subject Purchasers”) other material terms and conditions of the issuance. Subject to Section 4.02(ethan (A) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued in a Public Offering pursuant to a third-partyDemand IPO, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as connection with a dividend Qualified IPO or in connection with or following a distributionPublic Offering Event, (iiB) granted or issued an issuance to employeesdirectors, officers, directors, employees and consultants or advisors of the Company and its Subsidiaries of restricted Common Stock and/or stock options exercisable for shares of Common Stock pursuant to any equity incentive plan of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are Subsidiary approved by CCMP, as well as the Boardissuance of Common Stock upon the exercise of such options (it being understood that the proviso in this clause (B) shall not apply to, (iii) issued or issuable to lenders or lessors include, options assumed in connection with any financing transaction described in the following clause (C)); or leasing transactions(C) the issuance of any equity security in connection with (1) any arms-length merger, consolidation, share exchange or similar transaction of the Company or any Subsidiary with any other Person or (iv2) issued pursuant to the arms-length strategic acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase Subsidiary of the capital stock (or other transaction in which the Company equity interests) or such Subsidiary acquires, in a single transaction or series assets of related transactions, a material amount of the assets or equity ownership of such any other Person, (v) issued to Persons who then the Board in good faith reasonably believes will provide strategic benefits Company shall also offer such New Securities to the Company Principal Investor Group and its Permitted Transferees by sending written notice (the “New Issuance Notice”) to such Principal Investor Group and Permitted Transferees (“Preemptive Right Beneficiary”) at least fifteen (15) days prior to the issuance and sale of the New Securities. The New Issuance Notice shall state (a) the number of shares, notes or any other securities, as applicable, of its Subsidiaries New Securities proposed to be issued and (vi) issued in connection with an Initial Public Offering.
sold and the terms of such New Securities, (b) Each Stockholder may exercise his the proposed purchase price per share, note or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Companyother security, within ten (10) Business Days of receipt as applicable, of the Issuance Notice. A delivery of such notice New Securities that the Company is willing to accept (which notice shall specify the number (or amount“Proposed Price”) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
New Securities, (c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights the proposed date on which the New Securities will be sold (the “New Issuance Closing Date”), and (d) each Holder’s Proportionate Percentage. For purposes hereof, each Preemptive Right Beneficiary’s “Proportionate Percentage” means, with respect to less than any Preemptive Right Beneficiary, the percentage of the New Securities allocated to such Stockholder’s Pro Rata Share Preemptive Right Beneficiary to be determined by dividing (a) the “Excess Shares”total number of shares of Fully-Diluted Common Stock owned by such Preemptive Right Beneficiary (excluding shares issuable upon exercise of employee stock options), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share by (a “Fully Participating Stockholder”b) shall be entitled to purchase an additional the total number of Shares equal to the product shares of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares Fully-Diluted Common Stock owned by all Fully Participating StockholdersPreemptive Right Beneficiaries (excluding shares issuable upon exercise of employee stock options).
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 2 contracts
Sources: Stockholders' Agreement (Chaparral Energy, Inc.), Stock Purchase Agreement (Chaparral Energy, Inc.)
Preemptive Rights. (a) The Prior to the consummation of an Initial Public Offering, the Company shall give each Stockholder of the Shareholders that is (i) an “accredited investor” (as such term is defined in Rule 501(a) of the Securities Act) or (ii) located outside the United States and is not a “U.S. Person” as such term is defined in Regulation S under the Securities Act (“Regulation S”) and that such Shareholder is obtaining the Company Securities in an “offshore transaction” (as such term is defined in Regulation S under the Securities Act) outside of the United States, each as of the time of any proposed issuance by the Company of shares of a specified class of Company Securities, written notice pursuant to Section 8.9 (an “Issuance Notice”) of any such proposed issuance by the Company of any Shares at least ten (10) Business Days days prior to the proposed issuance date. The Issuance Notice shall specify the number and of shares of the specified class of such Shares Company Securities and the price at which such Shares Company Securities are proposed to be issued and the other material terms and conditions of the issuance, including, without limitation, the proposed closing date. Subject to Section 4.02(e) below, if any such Shares are purchased3.4(f), each Stockholder Shareholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-partypurchase, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes , its pro rata amount of this Section 4.02, “Excluded Securities” shall include any Shares: such newly issued Company Securities equal to (ix) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors the number of shares of the specified class of Company or any of its Subsidiaries pursuant Securities proposed to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) be issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any multiplied by (y) a fraction, the numerator of its Subsidiaries which is the aggregate number of Shares owned by consolidation, merger, purchase or other transaction in such Shareholder and the denominator of which is the Company or such Subsidiary acquiresaggregate number of Shares owned by all Shareholders, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with each case on an Initial Public Offeringas-converted basis.
(b) Each Stockholder Shareholder may exercise his or her its rights under this Section 4.02 3.4 by delivering written notice to the Company of his or her its election to purchase such Shares to the Company, Company Securities within ten (10) Business Days of days after receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares shares of the specified class of Company Securities requested to be purchased by such Stockholder the Shareholder submitting such notice) by such Stockholder Shareholder shall constitute a binding agreement of such Stockholder Shareholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares the specified class of Company Securities specified in such StockholderShareholder’s notice. If, at the termination of such ten (10) Business Day- -day period, any Stockholder shall Shareholder has not have exercised his or her rights its right to purchase any of such Stockholder’s Pro Rata Share its pro rata share of such SharesCompany Securities, such Stockholder Shareholder shall be deemed to have waived all of its rights under this Section 4.02 3.4 with respect to, and only with respect to, the purchase of such SharesCompany Securities specified in the Issuance Notice.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) 120 days from after the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares Company Securities that each Stockholder the Shareholders have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice; provided, provided that, that if such issuance is subject to regulatory approval, such ninety (90) 120-day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) 180 days from after the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format issue certificates representing the Shares Company Securities to be purchased by each Stockholder Shareholder exercising preemptive rights pursuant to this Section 4.02 3.4 registered in the name of such StockholderShareholder, against payment by such Stockholder Shareholder of the purchase price for such SharesCompany Securities. If the Company proposes to issue any class of Shares Company Securities after such one hundred and twenty (120) -day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.023.4.
(ed) The closing of any issuance of Company Securities to the Shareholders pursuant to this Section 3.4, shall take place at the time and in the manner provided in the Issuance Notice. The Company shall not be under any no obligation to consummate any proposed issuance of Shares and Company Securities, nor shall there will be no any liability on the part of the Company such entity to any Stockholder Shareholder, if the Company has not consummated any proposed issuance of Shares Company Securities pursuant to this Section 4.02 3.4 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(fe) The Notwithstanding the requirements of this Section 3.4, the Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 shares of a specified class of Company Securities without first offering such Shares Company Securities to each Stockholder of the other Shareholders or complying with the procedures of this Section 4.023.4, so long as (i) each Stockholder of the other Shareholders receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share consummation of such sales, (ii) either the Company or the initial purchaser of such Company Securities commits (at the time of such initial sale) to make available for sale to such Shareholders a number of shares of the specified class of Company Securities equal to (x) the number of shares of the specified class of Company Securities issued by the Company (including all shares of the specified class of Company Securities issued or sold to Shareholders with respect to this provision) multiplied by (y) a fraction, the numerator of which is the aggregate number of Shares owned by such Shareholder and the denominator of which is the aggregate number of Shares owned by all Shareholders, each determined on an as-converted basis, within forty-five (45) 45 days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such prior sale, however, and (iii) the price per share of such Shares specified class of Company Securities shall be identical to the price per share paid in such offer and prior sale.
(gf) The provisions of preemptive rights under this Section 4.02 3.4 shall terminate after not apply to (i) issuances or sales of Company Securities to employees, officers, directors, consultants, customers or suppliers (including in connection with bona fide licensing, commercial or other strategic arrangements) of the Company or any Subsidiary pursuant to employee benefit, incentive or similar plans or agreements or arrangements of the Company, (ii) issuances or sales of Company Securities upon exercise, conversion or exchange of Company Securities outstanding as of the date hereof, (iii) Common Shares issued pursuant to conversion of preferred shares pursuant to Section 4.7 of the Charter, securities issued in connection with a stock split or stock dividend of the Company, (iv) the issuance of Company Securities to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to a debt financing, equipment leasing or real property leasing transaction, (v) the issuance of Company Securities contemplated by the Subscription Agreement (including any Series D Shares issued pursuant to Sections 1.2 through 1.3 of the Subscription Agreement), (vi) issuances or sales in an Initial Public Offering, or as consideration for a merger of the Company with or into another Person or an acquisition by the Company of another Person or substantially all the assets of another Person, (vii) issuances as consideration for sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic partnerships approved or (viii) any Series C-2 Shares issued pursuant to the Note Conversion Agreement, in each case of (i) — (vii) as approved in accordance with the Charter.
Appears in 2 contracts
Sources: Shareholders Agreement (OptiNose, Inc.), Shareholders Agreement (OptiNose, Inc.)
Preemptive Rights. (a) Subject to Section 6(b) below, if the Partnership or any of its Subsidiaries proposes to issue any Equity Security, the Partnership will (or will cause such Subsidiary to) offer to sell to each Partner holding Common Units a number of such securities (“Offered Units”) as is equal to such Partner’s pro rata share, based on the ratio of (i) the number of Common Units owned by such Partner divided by (ii) the total number of Common Units outstanding at such time; provided that for the purpose of calculating Offered Units with respect to any Management Partner, the “Partner Interests owned by such Partner” shall mean such Partner’s Vested Incentive Units held by such Partner at the time of such calculation. The Company Partnership shall give each Stockholder Partner at least thirty (30) days prior written notice of any proposed issuance, which notice shall disclose in reasonable detail the proposed terms and conditions of such issuance (an the “Issuance Notice”) of ); provided the issue price for any proposed issuance by the Company of any Shares at least ten (10) Business Days Class A Common Units issued as provided in this Section 6 prior to the proposed issuance date. The Issuance Notice shall specify first anniversary of the number and class date of such Shares and this Agreement will the same as the price per Unit at which such Shares Class A Common Units are being issued pursuant to be issued and the other material terms and conditions Investor Securities Purchase Agreement on the date of the issuancethis Agreement (i.e., $1.00 per Class A Common Unit). Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall Each Partner will be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, securities at the same price and on the other same terms (including, if more than one type of security is issued, the same proportionate mix of such securities) as the securities are issued by delivery of irrevocable written notice (the “Election Notice”) to the Partnership of such election within thirty (30) days after receipt of the Issuance Notice (the “Preemptive Period”). If any Partner has elected to purchase any Offered Units, the sale of such units shall be consummated as soon as practical (but in any event within twenty (20) days, unless the Company abandons or withdraws its offering of the Offered Units) after the delivery of the Election Notice to the Partnership. To the extent the Partners do not elect to, or are not entitled to, purchase all of the Offered Units, then the Partnership or such Subsidiary may issue the remaining Offered Units at a price and conditions on terms no more favorable to the transferee(s) thereof specified in the Issuance NoticeNotice during the 120-day period following the Preemptive Period. For purposes Notwithstanding anything in this Section 6 to the contrary, the Partnership shall not be deemed to have breached this Section 6 if, within 30 days following the issuance of any Equity Securities in contravention of this Section 4.026, “Excluded Securities” shall include the Partnership or the Subsidiary in question (as applicable) offers to sell the same type of such Equity Securities or the holder of such Equity Securities offers to sell all or the applicable portion of such additional Equity Securities in each case to each Partner so that, taking into account such previously issued securities and any Shares: (i) issued as a dividend or a distributionsuch additional securities, (ii) granted or issued each Partner will have had the right to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, subscribe for securities in a single transaction manner consistent with the allocation provided in the initial sentence of this Section 6(a); provided that no merger or series consolidation or sale of related transactions, a material amount all or substantially all of the assets of, transfer of Equity Securities or equity ownership issuance or sale of additional Equity Securities of the Partnership or any Subsidiary may be approved or effected or any distribution under the Partnership Agreement may be approved or occur prior to the consummation of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offeringsubsequent offer.
(b) Each Stockholder may exercise his or her The rights under contained in this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder 6 shall not have exercised his or her rights apply to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and issuance of Common Units (including any Convertible Security) as a dividend or upon any subdivision or Unit split of outstanding Common Units; (ii) a fractionthe issuance of Equity Securities upon conversion of any Convertible Securities issued in compliance herewith; (iii) the issuance of Equity Securities to officers, directors, managers employees or consultants of the Partnership, its Subsidiaries or Grande Manager or, for so long as the ABB Advisory Agreement is in effect, of ABB or its Affiliates, approved by, or pursuant to arrangements approved by, the numerator General Partners or the Grande Manager Board, (iv) the issuance of which is Common Units pursuant to any underwritten public offering, (v) the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any Common Unit (including any Convertible Security) as consideration for the acquisition of any Person or all business or unit or division thereof or any other asset or other property to be used in the operations of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable Partnership or any of its Subsidiaries, (vi) any issuance of Class A Common Units pursuant to the Company than those specified in the Issuance NoticeRecapitalization Agreement, provided that, if such or (vii) any issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date Equity Securities of a Subsidiary of the Issuance Notice. At Partnership to the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares Partnership or to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder any other Subsidiary of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02Partnership.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 2 contracts
Sources: Recapitalization Agreement (Grande Communications Holdings, Inc.), Partnership Agreement (Grande Communications Holdings, Inc.)
Preemptive Rights. (a) The If the Company offers or sells any Capital Stock, any other SAFE, or any option, warrant, convertible note or other security convertible into or exercisable or exchangeable for any Capital Stock, the Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior simultaneously offer to the proposed issuance date. The Issuance Notice shall specify ▇▇▇▇ ▇▇▇▇▇ Network the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled right to purchase such Stockholderthe Investor’s Pro Rata Share of the Shares proposed such securities; provided, however, that such right shall not apply to be (a) Common Stock or options to acquire Common Stock issued by reason of a dividend on Common Stock or Common Stock issued in connection with a stock split of outstanding Common Stock, (b) Common Stock or options to acquire Common Stock issued to a third-partyemployees or directors of, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of to, the Company or any of its Subsidiaries subsidiaries pursuant to incentive agreementsa plan, equity purchase agreement, or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are arrangement approved by the BoardBoard of Directors of the Company, (iiic) Capital Stock actually issued upon the exercise of options or issuable the conversion or exchange of convertible securities if such options or convertible securities were exempt from the purchase rights set forth in this Section 5 upon their original issuance or such purchase rights were waived in writing by the ▇▇▇▇ ▇▇▇▇▇ Network, (d) Common Stock or options to lenders acquire Common Stock issued to suppliers or lessors third party service providers in connection with any financing the provision of goods or leasing transactionsservices pursuant to transactions approved by the Board of Directors of the Company, and (ive) Capital Stock or options to acquire Capital Stock issued pursuant to the acquisition of another Person corporation by the Company by merger or any purchase of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount substantially all of the assets or equity ownership of assets, provided that such other Person, (v) issued to Persons who issuances are approved by the Board in good faith reasonably believes will of Directors of the Company. The Company shall provide strategic benefits to the Company or Investor (i) no less than thirty (30) days advance written notice of any proposed offering of its Subsidiaries securities setting forth a true and accurate summary of the terms of the securities being offered, and (viii) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within no less than ten (10) Business Days business days prior to the closing of receipt such offering a true and accurate copy of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to definitive legal documents that will be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and executed upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive offering. The rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not 5 may be under any obligation assigned to consummate any proposed one or more individual members of the ▇▇▇▇ ▇▇▇▇▇ Network. Upon the issuance of Shares Standard Preferred Stock or Safe Preferred Stock, as applicable, the Company and there will be no liability on the part ▇▇▇▇ ▇▇▇▇▇ Network shall enter into an agreement granting the ▇▇▇▇ ▇▇▇▇▇ Network the rights set forth in this Section 5, unless the transaction documents related to the Equity Financing grant the Investor a right to purchase its pro rata share of securities sold or issued by the Company occurring after the Equity Financing and the right to transfer such preemptive rights to the ▇▇▇▇ ▇▇▇▇▇ Network or any one or more individual members of the Company to any Stockholder if ▇▇▇▇ ▇▇▇▇▇ Network, in which case the Company has not consummated any proposed issuance of Shares pursuant to rights set forth in this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 5 shall terminate after the Initial Public Offeringwith this Agreement.
Appears in 2 contracts
Sources: Incubation Fund Award Agreement, Simple Agreement for Future Equity (Safe)
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior Subject to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions contained in this Section 7, the Parent hereby grants to Shareholders a right of first offer with respect to future sales of shares ("New Issues") by the issuanceParent. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder Shareholders shall be entitled to purchase such Stockholder’s Pro Rata Share number of shares in each New Issue that is determined by multiplying the total number of shares in each New Issue by a fraction, the numeration of which is the number of Exchange Shares proposed to be issued to a third-party, at and the price and on denominator of which is the other terms and conditions specified in the Issuance Notice. For purposes total number of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued shares then held by all holders of shares as a dividend or group on a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offeringfully diluted basis.
(b) Each Stockholder may exercise his time the Parent proposes to offer shares or her rights under this Section 4.02 securities convertible into shares for sale, the Parent shall first make an offering of such securities to the Shareholders by delivering to Shareholders a notice ("Offering Notice") stating (i) its bona fide intention to offer such securities, (ii) the number of his or her election securities proposed to be offered, and (iii) the price and terms upon which it proposes to offer such securities.
(c) Within fourteen (14) calendar days following the delivery of the Offering Notice, Shareholders may elect to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchaseobtain, at the price and on upon the terms and conditions specified in the Issuance Offering Notice, the that number of shares (or amount) of Shares specified the New Issue determined as provided in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”7(a), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share by written notice of acceptance (a “Fully Participating Stockholder”"Acceptance Notice") shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating StockholdersParent.
(d) The Company shall have ninety (90) days from the date right of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth first offer in this Section 4.02.
(e) The Company 7 shall not be under any obligation applicable (a) to consummate any proposed the issuance or sale of securities, or options therefor, pursuant to a bonus or option plan, or otherwise pursuant to the employment terms of an officer or employee, approved by the Parent's Board of Directors, or (b) to the issuance of Shares and there will be no liability on securities in connection with a bona fide business acquisition of or by the part Parent, whether by merger, consolidation, sale of the Company to any Stockholder if the Company has not consummated any proposed issuance assets, exchange of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuancestock or otherwise.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 2 contracts
Sources: Share Purchase and Exchange Agreement (Manchester Inc), Share Purchase and Exchange Agreement (Manchester Inc)
Preemptive Rights. (a) The Company shall give provide each Stockholder Shareholder with a written notice (an “Issuance a "Preemptive Rights Notice”") of any proposed issuance by the Company of any Shares Equity Securities (other than the issuance of Equity Securities in connection with a THL Exchange) at least ten (10) Business Days 10 days prior to the proposed issuance date. The Issuance Notice Such notice shall specify the number and class of such Shares and the price at which such Shares the Equity Securities are to be issued and the other material terms and conditions of the issuance. Subject .
(i) In the event the Company shall issue any New Common Securities or New Preferred Securities (collectively, the "New Securities") to Section 4.02(eany third party (including any Shareholder) belowprior to a Qualifying Public Offering, if any such Shares are purchased, the THL Entities and each Stockholder Management Shareholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms at which such New Securities are proposed to be issued and conditions specified in the Issuance such Preemptive Rights Notice, the number of shares (THL Entities' or amount) of Shares specified in such Stockholder’s notice. If, at the termination Management Shareholder's Preemptive Rights Portion of such ten (10) Business Day- periodclass of the New Securities proposed to be issued. "Preemptive Rights Portion" means, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (New Common Securities, the “Excess Shares”)pro rata portion of New Common Securities proposed to be issued by the Company, any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) which amount shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate based upon such Shareholder's Initial Ownership of that class shares of Shares by the Fully Participating Stockholder, Common Stock as the case may be, and the denominator a percentage of which is equal to the sum of the Aggregate Initial Ownership of that class shares of Shares by Common Stock of (A) the THL Entities, (B) all Fully Participating Stockholders.
Institutional Shareholders and (dC) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.Management Shareholders
Appears in 1 contract
Sources: Investors' Agreement (Fisher Scientific International Inc)
Preemptive Rights. (a) The Company shall give each Management Stockholder written notice (an “"Issuance Notice”") of any proposed issuance by the Company Company, Intermediate Holdings or Jostens, as the case may be, of any Shares Company Securities to any DLJMB Funds or their successors, as the case may be, prior to the Initial Public Offering at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares Company Securities and the price at which such Shares Company Securities are to be issued to any DLJMB Fund or DLJMB Funds and the other material terms and conditions of the issuance. Subject to Section 4.02(e4.05(e) below, if any DLJMB Funds or DLJMB Funds will purchase any such Shares are purchasedCompany Securities, each Management Stockholder shall be entitled to purchase such Management Stockholder’s 's Pro Rata Share of the Shares Company Securities proposed to be issued to a third-partythe DLJMB Funds, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Management Stockholder may exercise his or her rights under this Section 4.02 4.05 by delivering notice of his or her election to purchase such Shares Company Securities to the Company, Company the DLJMB Funds and to each other within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares Company Securities to be purchased by such Management Stockholder submitting such notice) by such Management Stockholder shall constitute a binding agreement of such Management Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares Company Securities specified in such Management Stockholder’s 's notice. If, at the termination of such ten (10) Business Day- Day-period, any Management Stockholder shall not have exercised his or her rights to purchase any of such Management Stockholder’s 's Pro Rata Share of such SharesCompany Securities, such Management Stockholder shall be deemed to have waived all of its rights under this Section 4.02 4.05 with respect to, and only with respect to, the purchase of such SharesCompany Securities.
(c) If any Management Stockholder elects to exercise his or her preemptive rights under this Section 4.02 4.05 or elects to exercise such rights with respect to less than such Management Stockholder’s 's Pro Rata Share (the “"Excess Shares”"), the DLJMB Funds and any participating Management Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “"Fully Participating Stockholder”") shall be entitled to purchase an additional number of Shares Company Securities equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by Company Securities of the DLJMB Funds or the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by Company Securities of the DLJMB Funds and all Fully Participating Stockholders.
(d) The Company Company, Intermediate Holdings or Jostens, as the case may be, shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares Company Securities that the DLJMB Funds and each Management Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company Company, Intermediate Holdings or Jostens, as the case may be, than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) -day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) 120 days from the date of the Issuance Notice. At the consummation of such issuance, the Company Company, Intermediate Holdings or Jostens, as the case may be, shall record the Shares in book entry format issue certificates representing the Shares Company Securities to be purchased by each Management Stockholder exercising preemptive rights pursuant to this Section 4.02 4.05 registered in the name of such Management Stockholder, against payment by such Management Stockholder of the purchase price for such SharesCompany Securities. If the Company Company, Intermediate Holdings or Jostens, as the case may be, proposes to issue any class of Shares Company Securities after such one hundred and twenty (120) 90-day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.024.05.
(e) The Company None of the Company, Intermediate Holdings or Jostens, as the case may be, shall not be under any obligation to consummate any proposed issuance of Shares and Company Securities, nor shall there will be no any liability on the part of the Company Company, Intermediate Holdings or Jostens, as the case may be, to any Management Stockholder if the Company has not consummated any proposed issuance of Shares Company Securities pursuant to this Section 4.02 4.05 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The provisions of this Section 4.05 shall terminate upon the consummation of the Initial Public Offering. The Company may offer and sell Shares Company Securities to the DLJMB Funds subject to the preemptive rights under this Section 4.02 4.05 without first offering such Shares Company Securities to each Management Stockholder or complying with the procedures of this Section 4.024.05, so long as each Management Stockholder receives receive prompt written notice of such sales and thereafter is are given the opportunity to purchase his or her respective Pro Rata Share Shares of such Shares Company Securities within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such salesale to the DLJMB Funds, however, the price of such Shares Company Securities shall be identical to the price paid such offer and saleby the DLJMB Funds.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (a) The If the Company shall give or any of its Subsidiaries proposes to issue and sell any of its equity securities or any securities containing options or rights to acquire any equity securities or any securities convertible into equity securities to any Person, the Company will offer to sell to each Investor Stockholder written notice (an “Issuance Notice”) a portion of the number or amount of such securities proposed to be sold in any proposed issuance such transaction or series of related transactions equal to the product of the percentage each such Investor Stockholder holds of all Company Stock then held by aft of the Stockholders by the Company number of any Shares at least ten (10) Business Days prior to the securities proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and sold by the other material Company in any such transaction or series of related transactions, all for the same price and upon substantially the same terms and conditions (taking into account and in a manner consistent with the relative size of the issuance. Subject investment by each of the Investor Stockholders) as the securities that are being offered to Section 4.02(e) below, such Person in such transaction or series of transactions; provided that if any such Shares are purchased, each Stockholder shall be Stockholders entitled to purchase or receive such Stockholder’s Pro Rata Share stock or securities are required to also purchase other securities of the Shares proposed Company, the Investor Stockholders exercising their rights pursuant to this Section 4 shall also be issued required to a third-party, at purchase the price and same strip of securities (on the other same terms and conditions specified in conditions) that such other stockholders are required to purchase.
(b) Notwithstanding the Issuance Notice. For purposes foregoing, the provisions of this Section 4.02, “Excluded Securities” 4 shall include any Shares: not be applicable to the issuance of equity securities (i) issued as a dividend or a distributionupon the conversion of shares of one class of capital stock into shares of another class, (ii) granted as a stock dividend or issued any stock split or other subdivision or combination of the outstanding equity securities, (iii) in any transaction in respect of a security that is offered to employeesall Investor Stockholders on a pro rata basis, officers(iv) as consideration in connection with a business acquisition or a strategic partnership, directors(v) pursuant to a debt financing from a bank, consultants institutional lender or advisors similar financial institution, (vi) pursuant to a commercial lending transaction with a leasing entity, (vii) in connection with the grant or exercise of stock or options to employees or directors of the Company or any of its Subsidiaries or (viii) in a public offering pursuant to incentive agreementsa registration statement filed with, equity purchase or equity option plansand declared effective by, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued Securities and Exchange Commission pursuant to the acquisition Securities Act; and further, the provisions of another Person by the Company or any this Section 4 shall terminate upon completion of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(bc) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election The Company will cause to purchase such Shares be given to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such Investor Stockholders a written notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on setting forth in reasonable detail the terms and conditions specified in upon which the Issuance Notice, the number of Investor Stockholders may purchase such shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share other securities (the “Excess SharesPreemptive Notice”). After receiving a Preemptive Notice, any participating Investor Stockholder electing wishing to exercise his or her the preemptive rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares granted by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable this Section 4 must give notice to the Company than those specified in the Issuance Noticewriting, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days within 30 days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of that such Preemptive Notice is deemed given pursuant to Section 21, that such Investor Stockholder irrevocably agrees to purchase the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights shares or other securities offered pursuant to this Section 4.02 registered 4 on the date of sale to such Person (the “Preemptive Reply”). If any Investor Stockholder fails to make a Preemptive Reply in accordance with this Section, shares or other securities offered to such Investor Stockholder in accordance with this Section may thereafter, for a period not exceeding 90 days following the name expiration of such Stockholder30-day period, against payment by such be issued, sold or subjected to rights or options to any Spectrum Group Stockholder of or any Person at a price not less than the purchase price for such Shares. If at which they were offered to the Company proposes to issue any class of Shares after such one hundred Investor Stockholders and twenty (120) day period or on other terms materially less and conditions no more favorable to the issuerpurchasers thereof than those offered to the Investor Stockholders. Any such shares or other securities not so issued, it shall sold or subjected to rights or options to any Spectrum Group Stockholder or any Person during such 90 day period will thereafter again comply with be subject to the procedures preemptive rights provided for in this Section 4. Except as set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on 4, the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it Investor Stockholders shall have delivered an Issuance Notice in no other preemptive rights with respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder issuance or complying with sale of equity securities by the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and saleCompany.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (a) The Company shall give each Stockholder written notice Subject to the provisions of paragraph ----------------- (an “Issuance Notice”b) of this Section 5.1, Mtel LATAM shall not issue, sell, or enter into any proposed issuance by agreement(s) or commitment(s) pursuant to which it becomes obligated to issue, any shares of its capital stock, or any warrants, options or other securities convertible or exchangeable into such shares, unless Mtel LATAM shall first offer (the Company "Preemptive Rights Offer") in writing to sell to each of any Shares the ----------------------- Stockholders, at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify same price, and on the number same terms and class conditions, an amount of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares securities proposed to be issued to a third-partyoffered by Mtel LATAM, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant pro rata to the acquisition of another Person by Stockholder's proportionate Voting Interest. Such Preemptive Rights Offer shall remain outstanding for at least 30 Business Days from the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership date of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries notice and (vi) issued in connection with an Initial Public Offeringshall be exercised by each Stockholder by serving written notice on Mtel LATAM within such 30 Business Day period.
(b) Each Stockholder may exercise his The Preemptive Rights Offer shall not apply to: (i) any issuances or her rights under this Section 4.02 grants of equity securities by delivering notice of his or her election to purchase such Shares Mtel LATAM to the Companyofficers, within ten directors or employees of Mtel LATAM or any of its subsidiaries pursuant to the Stock Option Plan or any other employee stock option plan or employee benefit or other incentive plan adopted by the Mtel Board pursuant to Section 2.1(xxi) herein, (10ii) Business Days the exercise of receipt any options issued pursuant to or in connection with the Stock Option Plan or any other employee stock option plan or employee benefit or other incentive plan adopted by Mtel LATAM or any Material Subsidiary in accordance with Section 2.1(xxi) herein, (iii) the issuance of any securities by Mtel LATAM upon the exercise of any exchange, conversion or similar feature contemplated by any security issued pursuant to the Transaction Documents, (iv) the issuance of any securities by Mtel LATAM upon the exchange of any shares of Preferred Stock of Mtel Puerto Rico, (v) the issuance of any equity securities as a payment-in-kind dividend on any class of Company Stock, (vi) the issuance of equity securities, either directly or indirectly, in connection with the acquisition by Mtel LATAM of a controlling interest in any party which is not an Affiliate of either Mtel LATAM or any of the Issuance Notice. A delivery Stockholders (whether by merger, consolidation, sale of assets or securities, or otherwise) which issuance has been approved by the Mtel LATAM Board pursuant to the provisions set forth in Section 2.1 hereof, (vii) the issuance of securities (including any convertible securities or options and the conversion or exercise thereof) to any third party which is at such notice time a creditor of Mtel LATAM, in connection with the refinancing or restructuring of the indebtedness owed to such third party, (which notice shall specify viii) any issuance of securities by Mtel LATAM in connection with an IPO, (ix) the number (or amount) distribution by Mtel LATAM of Shares its securities to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase stockholders on a pro rata basis or (x) any issuance of such Shares.
(c) If --- ---- securities by Mtel LATAM pursuant to any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating StockholdersTransaction Documents.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Sources: Stockholders and Exchange Rights Agreement (Mobile Telecommunication Technologies Corp)
Preemptive Rights. (ai) The Company shall give each Stockholder written notice (an “Issuance Notice”) of If at any proposed issuance by time on or after the Company of any Shares at least ten (10) Business Days date hereof and prior to the proposed issuance date. The Issuance Notice shall specify Initial Public Offering, subject to compliance with Section 1(g), the number and class Company or its Subsidiaries proposes to issue (x) equity securities of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For kind (for purposes of this Section 4.022(e), the term “Excluded Securitiesequity securities” shall include any Shares: (iwarrants, options or other rights to acquire equity securities or debt securities convertible into equity securities) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or (y) debt securities of any kind to which any Tiptree Investor or any of its Subsidiaries their Affiliates subscribe (in each case, other than the issuance of securities (A) upon conversion of the Preferred Stock pursuant to incentive agreementsthe Certificate of Incorporation, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by exercise of the BoardWarrants, (iiiB) issued or issuable to lenders or lessors the public in connection with any financing or leasing transactionsa firm commitment underwriting pursuant to a registration statement filed under the Securities Act, (ivC) issued pursuant to the acquisition of another Person (not affiliated with any Tiptree Investor) by the Company or any Subsidiary, whether by purchase of its Subsidiaries by consolidationstock, merger, consolidation, purchase of all or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount substantially all of the assets or equity ownership of such other PersonPerson or otherwise, provided that such acquisition has been approved by the Board, and such securities are being issued as consideration for the transaction and not in connection with financing the transaction, (vD) pursuant to an employee stock option plan, stock bonus plan, stock purchase plan, employment agreement or other management equity program, in each case, approved by the Board, (E) upon conversion or exercise of any security convertible into or exercisable for any equity securities, provided that such convertible or exercisable security that were issued in accordance with the terms of this Agreement, (F) to Persons who the Board in good faith reasonably believes will provide strategic benefits vendors, lenders and customers of and consultants to the Company or any of its Subsidiaries and (vi) issued Subsidiary or in connection with a strategic partnership (provided that such securities are (1) being issued as consideration for the strategic partnership and not in connection with financing the strategic partnership, (2) being issued to the Company or another wholly owned Subsidiary of the Company by a wholly owned Subsidiary of the Company), in each case, to the extent such issuance has been approved by the Board, (G) immaterial issuances by Subsidiaries of the Company, solely to the extent such issuance is required by applicable law, (H) by reason of a dividend, stock split or other distribution on shares of Common Stock, (I) to any Investor that is an Initial Public Offering.
employee of the Company or its Subsidiaries, pursuant to the terms of any employment or similar agreement between the Company and such Investor to the extent such employment or similar agreement was approved by the Board or (bJ) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice pursuant to the Purchase Agreement), then, subject to the provisions set forth below, as to each Qualified Investor and, in the case of his or her election any issuance to purchase a Qualified Investor, each Other Investor (other than any such Shares Other Investor that cannot demonstrate to the Company, within ten (10) Business Days of receipt ’s reasonable satisfaction that such Other Investor is at the time of the Issuance Notice. A delivery proposed issuance of such securities an “accredited investor” as such term is defined in Regulation D of the Securities Act) (each a “Preemptive Right Investor”), the Company shall:
(A) give written notice setting forth in reasonable detail (which notice shall specify 1) the number (or amount) designation and all of Shares the terms and provisions of the securities proposed to be purchased by such Stockholder submitting such noticeissued (the “Proposed Securities”), including where applicable, the voting powers, preferences and relative participating, optional or other special rights, and the qualification, limitations or restrictions thereof and interest or dividend rate and maturity; (2) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on other terms of the terms proposed sale of such securities; (3) the amount of such securities proposed to be issued; and conditions specified (4) such other information as a Preemptive Right Investor may reasonably request in order to evaluate the Issuance Noticeproposed issuance; and
(B) offer to issue to each such Preemptive Right Investor for the same price (it being agreed that if such price was to be paid not in cash, the Preemptive Right Investors may pay for such Proposed Securities in cash equal to the Fair Market Value thereof) a portion of the Proposed Securities equal to a percentage determined by dividing (x) the number of shares of Common Stock Owned by such Preemptive Right Investor as a result of Purchased Equity Shares (excluding, for the sake of clarity, any Granted Equity Shares, whether or amountnot vested), determined on an As Converted Basis, by (y) the total number of Shares specified shares of Common Stock then outstanding on an As Converted Basis (such portion of Proposed Securities in respect of Preemptive Right Investor, such StockholderPreemptive Right Investor’s notice. If“Full Allotment”); provided that in the case of issuance by a non-wholly owned Subsidiary of the Company, at the termination Full Allotment shall be further multiplied by the direct or indirect ownership percentage of the Company of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such SharesSubsidiary.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fractionEach such Preemptive Right Investor may exercise his, the numerator of which is the Aggregate Ownership of that class of Shares her or its purchase rights hereunder by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable delivering an irrevocable written notice to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety within twenty (90) day period shall be extended until the expiration of five (520) Business Days after receipt of such notice from the Company, which notice shall state the dollar amount of Proposed Securities such Preemptive Right Investor would like to purchase up to a maximum amount equal to such Preemptive Right Investor’s Full Allotment, plus the additional dollar amount of the Proposed Securities such Preemptive Right Investor would like to purchase in excess of its Full Allotment (the “Over-Allotment Amount”), if any, if other Preemptive Right Investors do not elect to purchase their full allotment of the Proposed Securities. The right of each Preemptive Right Investor to purchase Proposed Securities in excess of its Full Allotment shall be apportioned based on the relative Full Allotments of those Preemptive Right Investors desiring Over-Allotment Amounts (as indicated in such irrevocable written notice). To the extent that the Company offers two or more securities to all prospective purchasers in a proposed issuance in units, such approvals as convertible notes coupled with attached warrants (and only in such units), such Preemptive Right Investors must purchase such units as a whole and will not be given the opportunity to purchase only one of the securities making up such unit.
(iii) Upon the expiration of the offering periods described above, the Company will be free to sell such Proposed Securities that such Preemptive Right Investors have been received, but in no event later than not elected to purchase during the one hundred and twenty (120) days from following such expiration on terms and conditions not more favorable, taken as a whole (but with aggregate economic terms not more favorable), to the date purchasers thereof than those offered to such Preemptive Right Investors. Any Proposed Securities offered or sold by the Company after such ninety (90)-day period must be reoffered to such Preemptive Right Investors pursuant to this Section 2(e).
(iv) Except as set forth in Section 2(e)(iii), the election by a Preemptive Right Investor not to exercise such Preemptive Right Investor’s subscription rights under this Section 2(e) in any one instance shall not affect such Preemptive Right Investor’s right (other than in respect of a reduction in such Preemptive Right Investor’s percentage holdings) as to any subsequent proposed issuance subject to this Section 2(e). If the Board determines in good faith that it is in the best interest of the Issuance Notice. At Company to sell the consummation of such issuanceProposed Securities to one or more Tiptree Investors or their respective Affiliates, the Company shall record be permitted to sell such Proposed Securities to such Tiptree Investors and/or their respective Affiliates without first complying with Section 2(e)(i), provided that promptly following such sale, the Shares Company permits each other Preemptive Right Investor having rights under this Section 2(e) to purchase such Preemptive Right Investor’s proportionate amount of such Proposed Securities in book entry format representing the Shares manner contemplated by this Section 2(e); provided, further, that in the event the Company desires to sell such Proposed Securities to a Tiptree Investor or its Affiliates in reliance on this Section 2(e)(iv), then such Proposed Securities may only be sold to such Tiptree Investor or its Affiliates if they are concurrently offered to be purchased sold to the Warburg Investors. Following the issuance of any Proposed Securities to such Tiptree Investors and/or their respective Affiliates and prior to the issuance of the Proposed Securities to any other Preemptive Right Investor in accordance with this Section 2(e)(iv), the Company shall not set a record date for any meeting or dividend, shall not permit any stockholder action by written consent to be taken, shall not convene any meeting of the stockholders and shall not take any other action, in each Stockholder exercising preemptive rights case, the result of which could reasonably be expected to be influenced by a decision of a Preemptive Right Investor to purchase any Proposed Securities.
(v) Each such Preemptive Right Investor shall, if requested by the Company, execute a stockholders agreement (or consent to an amendment to this Agreement) with respect to such Proposed Securities with terms that are (to the extent practicable) substantially equivalent to, mutatis mutandis, the terms of this Agreement. If any Subsidiary of the Company offers any additional equity securities (“New Subsidiary Securities”) to any Person (other than to the Company or any Subsidiary, directly or indirectly, wholly owned by the Company), then this Section 2(e) will apply to any such offering of New Subsidiary Securities, and each Preemptive Right Investor shall have the right to purchase a portion of such New Subsidiary Securities offered thereunder as though they were equity securities pursuant to this Section 4.02 registered in the name of such Stockholder2(e), against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02mutatis mutandis.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights.
(aA) The Company During the Investor Approval Period, other than upon (w) any issuances from the Partnership’s equity incentive plans in effect from time to time, (x) the conversion of the Class B Units, (y) adjustments pursuant to Section 5.12(b)(ix) or (z) the issuance of (1) General Partner Units pursuant to Section 5.2(b), (2) Units pursuant to the Unit Purchase Agreement, (3) the CEI Class B Units and (4) the CTPL Class B Units, the Partnership shall give each Stockholder written notice not issue or transfer any Equity Securities other than in compliance with this Section 5.12(b)(vii), Section 5.8 and Section 5.12(b)(ix). If at any time the Partnership wishes to issue or transfer to any Person any Equity Securities, the Partnership shall (an “Issuance Notice”1) of any proposed issuance by the Company of any Shares at least promptly, but not later than ten (10) Business Days days prior to the planned date of any such issuance or transfer, deliver a notice of such proposed issuance dateor transfer to the Purchaser (the “Equity Securities Notice”) and (2) promptly deliver a notice to the Purchaser of approval of such issuance or transfer by the Board of Directors. The Issuance Equity Securities Notice shall specify include (x) a description of the number Equity Securities, (y) the identity of the proposed recipient(s) of the Equity Securities if such proposed recipient(s) have been identified and class (z) a description of such Shares the consideration and the price at which such Shares are to be issued and the other material terms and conditions of upon which the issuance. Subject to Section 4.02(e) belowproposed issuance or transfer is being made (provided, if any that in no event shall such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in include matters that would violate the Issuance Notice. For purposes of Purchaser’s rights pursuant to this Section 4.025.12(b)(vii)), “Excluded Securities” shall include together with a copy of any Shares: written agreements relating thereto.
(iB) issued as a dividend or a distributionDuring the Investor Approval Period, the Purchaser and the General Partner (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with the exercise of any financing or leasing transactions, (iv) issued rights of the General Partner pursuant to the acquisition Section 5.8 (each an “Electing Party”) shall have an option for a period of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, three (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (103) Business Days from the date that the Board of receipt Directors approves the issuance of the Issuance Equity Securities, which shall be no sooner than 13 days from the Equity Securities Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares , to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder elect to purchase, at the same price and on the same material terms and conditions specified as described in the Issuance Equity Securities Notice, some or all of the offered Equity Securities in an amount up to the Electing Party’s Preemptive Share, by delivering to the Partnership irrevocable written notice within such period setting forth the number of shares Equity Securities which the Electing Party wishes to purchase and an undertaking to pay in full at closing the purchase price for such Equity Securities.
(C) If the General Partner does not exercise its right set forth in Section 5.8 and this Section 5.12(b)(vii) to purchase its Preemptive Share of the Equity Securities stated in the Equity Securities Notice, then the Purchaser shall have an option for a period of three (3) Business Days after the Purchaser’s receipt of notice that the General Partner has not exercised all or amount) of Shares specified in such Stockholder’s notice. If, at the termination any portion of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights right to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled elect to purchase an additional amount of such Equity Securities up to the aggregate amount of offered Equity Securities not committed to be purchased by the General Partner. The Purchaser desiring to exercise its option set forth in this Section 5.12(b)(vii)(C) shall deliver irrevocable written notice to the Partnership within such three (3) Business Day period setting forth the number of Shares equal Equity Securities which the Purchaser wishes to purchase and an undertaking to pay in full at closing the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholderspurchase price for such Equity Securities.
(dD) The Company closing of the Equity Securities offered pursuant to the Equity Securities Notice shall have occur concurrently with the closing of the offering contemplated in the Equity Securities Notice. The Purchaser shall pay the same amount per Equity Security that the Partnership would receive from the underwriters (to the extent the Equity Securities are contemplated being sold pursuant to an underwritten sale) in connection with any exercise of its preemptive rights pursuant to Section 5.8 and this Section 5.12(b)(vii).
(E) Any Equity Securities for which the Purchaser or the General Partner, as applicable, has not elected to purchase following the expiration of the applicable period(s) set forth in Section 5.12(b)(vii)(C) and Section 5.12(b)(vii)(D) may be sold or transferred to the proposed recipient(s) on substantially the same terms and conditions set forth in the Equity Securities Notice at any time during the period ending ninety (90) days from the date after termination of the Issuance Notice to consummate the proposed issuance of any or all later of such Shares applicable period. Any Equity Securities that each Stockholder have elected not the Partnership desires to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, issue or transfer following such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, set forth in the price of such Shares shall Equity Securities Notice must be identical offered to the price paid such offer Purchaser and sale.
(g) The provisions the General Partner and its Affiliates with a new Equity Securities Notice pursuant to the terms of this Section 4.02 shall terminate after the Initial Public Offering5.12(b)(vii).
Appears in 1 contract
Sources: Limited Partnership Agreement
Preemptive Rights. (ai) The Following the date hereof, except (x) with respect to the Company’s exercise of preemptive rights provided to the Company pursuant to the Partnership Agreement, which shall be governed by the Partnership Agreement, and (y) distributions or other payments paid in kind, if the Company proposes to issue, offer or sell any Membership Interests or other equity securities or equity-linked securities of the Company (“New Securities”) to, or, subject to Section 4.2, receive any loans at any time from, any of the Class A Members or any Affiliate of a Class A Member, then the Company, as directed by the Class A Members, shall either (1) obtain the prior written consent of the Class D Member, which consent shall not be unreasonably withheld, conditioned or delayed or (2) offer the Class D Member the opportunity to purchase such New Securities or participate in any such loan to the Company on a proportionate basis to the Class D Member’s Sharing Percentage at a price per New Security equal to the price per New Security at which such Membership Interests are being issued to the Class A Members or their respective Affiliates or, in the case of such a loan, on the same terms as are agreed by the Class A Member(s) or their Affiliates providing such loan to the Company.
(ii) Following the date hereof, if the Company proposes to issue, offer or sell any New Securities to any Class A Member or any Affiliate thereof in conjunction with any merger, consolidation, sale of all or substantially all of the Company’s assets, reorganization or other business combination, then the Company, as directed by the Class A Members, shall either (1) obtain the prior written consent of the Class D Member, which consent shall not be unreasonably withheld, conditioned or delayed, to the issuance, offer or sale of such New Securities, or (2) obtain the prior approval of such issuance, offer or sale by the Board, including approval by the majority of the Independent Committee, or (3) issue such New Securities on terms that are “fair,” with such determination of whether the terms of such New Securities are “fair” to be deemed satisfied if (A) at least 40% of such New Securities are purchased by a bona fide third party or (B) an independent financial advisory firm selected by the Board (which financial advisory firm shall not have represented the Company or the Partnership as an underwriter, placement agent or lender within the preceding 24 months) provides an opinion stating that the terms are fair, from a financial point of view, to the Company.
(iii) If the Class A Members elect, on behalf of the Company, to provide preemptive rights to the Class D Member in connection with the proposal to issue New Securities pursuant to Section 3.1(g)(i)(2) above, then the Company shall give each Stockholder prompt written notice (an the “Issuance New Issue Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior Company’s proposal to issue, offer or sell New Securities to the proposed issuance dateClass D Member. The Issuance New Issue Notice shall specify set forth (A) the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(eNew Securities being offered, (B) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on terms, if any, upon which the other terms Partnership proposes to issue, offer and conditions specified in sell the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: New Securities and (iC) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors the proposed date of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount closing of the assets or equity ownership issuance of such other Person, New Securities. The Class D Member shall have fifteen (v15) issued days after receipt of the New Issue Notice to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and submit a written notice (via “New Issue Exercise Notice”) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten . The Class D Member shall have the right to elect to purchase up to a number of New Securities equal to the Class D Member’s pro rata share (10) Business Days of receipt based on the ratio of the Issuance Notice. Class D Member’s Sharing Percentage to the aggregate Sharing Percentages of the Class A delivery of such notice (which notice shall specify the number (or amountMembers and Class D Member) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified set forth in the Issuance New Issue Notice. The New Issue Exercise Notice shall set forth the portion of the New Securities that the Class D Member elects to purchase. To the extent that the Class D Member does not elect to purchase its pro rata share of any proposed issuance, the number of shares (or amount) of Shares specified Class A Members shall have the opportunity to increase their participation in such Stockholder’s notice. If, at proposed issuance of New Securities in such amounts as agreed by the termination Class A Members holding a majority of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Sharesthen-outstanding Class A Membership Interests.
(civ) If For the avoidance of doubt, nothing in this Agreement is intended to or shall be construed (a) to prohibit the Class A Members from pursuing any Stockholder elects business opportunity in concert with the Partnership, or (b) require that any Class A Member or the Partnership offer to exercise his the Class D Member any preemptive or her preemptive rights under this Section 4.02 or elects to exercise other participatory right in any such business opportunity, and the Class D Member hereby expressly disclaims any and all rights with respect to less than any such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholdersbusiness opportunity.
(dv) The Company shall have ninety (90) days from Following the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided thathereof, if such issuance is subject at any time EIG and Tailwater fail to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuancecollectively hold Holdings LP Voting Control or Holdings GP Voting Control, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive Class D Member’s rights pursuant to this Section 4.02 registered in the name 3.1(g)(i) and Section 3.1(g)(ii) shall automatically terminate and will cease to be of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred force and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02effect thereafter.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Sources: Contribution Agreement (American Midstream Partners, LP)
Preemptive Rights. (a) The Subject to Section 4.06(f), during the Preemptive Rights Period, if the Company or any of its Subsidiaries proposes to issue additional equity securities, including any warrants, options or other rights to acquire equity of the Company or any of its Subsidiaries or debt securities that are convertible into or exchangeable or exercisable for equity securities of the Company or any of its Subsidiaries (with the exception of any issuance (i) in connection with any acquisition of assets or another Person by the Company or any of its Subsidiaries, whether by purchase of stock, merger, consolidation, purchase of all or substantially all of the assets of such Person or otherwise (excluding any issuance for purposes of financing such transaction) approved by the Board, (ii) in the IPO, (iii) to directors, employees or consultants pursuant to an Employee Equity Arrangement, (iv) to vendors, lenders and customers of and consultants to the Company or any of its Subsidiaries or in connection with a strategic partnership (excluding any issuance for purposes of financing such strategic partnership) approved by the Board, (v) by reason of a dividend, stock split or other distribution on account of the Shares, (vi) of any such equity securities to Igloo Co-Invest, LLC, any Additional Co-Invest Entities and any other Persons pursuant to Permitted Syndication Sales if the Company is simultaneously acquiring from the Sponsors the same aggregate amount of such equity securities or (vii) to the Company or any wholly-owned Subsidiary of the Company (in each case, having been approved in accordance with the terms of this Agreement, to the extent applicable)) (“Preemptive Securities”), the Company shall give each Stockholder provide written notice (an “Issuance Notice”) to each Sponsor of any proposed such anticipated issuance by the Company of any Shares at least ten no later than twenty-two (1022) Business Days prior to the proposed anticipated issuance date. The Issuance Notice Such notice shall specify set forth the number and class of such Shares and the price at which such Shares are to be issued and the other material principal terms and conditions of the issuance, including a description of the Preemptive Securities proposed to be issued, the proposed purchase price for such Preemptive Securities and the anticipated issuance date. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder Each Sponsor shall be entitled have the right to purchase (and/or to cause any of its Affiliates to purchase) up to such StockholderSponsor’s Pro Rata Share Portion of the Shares proposed to be issued to a third-party, such Preemptive Securities at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved Company’s notice by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits delivering an irrevocable written notice to the Company or any of its Subsidiaries and (via “Sponsor Exercise Notice”) issued in connection with an Initial Public Offering.
no later than seven (b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (107) Business Days of receipt after the delivery of the Issuance Notice. A delivery , setting forth (x) the number of such Preemptive Securities for which such right is exercised (which such number shall not exceed such Sponsor’s Pro Rata Portion of such Preemptive Securities) and (y) the maximum number of additional Preemptive Securities that such Sponsor (and/or Affiliates thereof) would be willing to purchase in excess of such Sponsor’s Pro Rata Portion in the event that any other Shareholder or other Person (including the other Sponsor) entitled to exercise preemptive rights with respect to such issuance elects not to purchase its full Pro Rata Portion of such Preemptive Securities. If either Sponsor (or any of their Affiliates) elects to exercise the preemptive rights set forth in this Section 4.06, then the Company shall provide written notice to each of the Preemptive Rights Other Shareholders (an “Other Shareholder Issuance Notice”) of such anticipated issuance no later than fourteen (14) Business Days prior to the anticipated issuance date. Such notice shall set forth the principal terms and conditions of the issuance, including a description of the Preemptive Securities proposed to be issued, the proposed purchase price for such Preemptive Securities, the anticipated issuance date, the number of such Preemptive Securities that each Sponsor notified the Company that it and/or its Affiliates intends to purchase pursuant to the exercise of preemptive rights and the percentage of the Pro Rata Portion of such Sponsor represented by the Preemptive Securities it and/or its Affiliates has elected to purchase pursuant to clause (x) above (the “Sponsor Participation Percentage”). Each such Preemptive Rights Other Shareholder shall have the right to purchase and/or to cause their Affiliate to purchase up to the percentage of such Preemptive Rights Other Shareholder’s Pro Rata Portion of such Preemptive Securities as is equal to the greater of the two Sponsor Participation Percentages set forth in the Company’s notice (which notice shall specify as applicable, the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase“Other Shareholder Participation Limit”), at the price and on the terms and conditions specified in the Issuance Notice, Company’s notice to such Shareholder by delivering an irrevocable written notice to the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such Company no later than ten (10) Business Day- periodDays after the delivery of the Other Shareholder Issuance Notice, setting forth the number of such Preemptive Securities for which such right is exercised. In the event any Stockholder shall Preemptive Rights Other Shareholder (and/or its Affiliates) elects not have exercised his or her rights to purchase any of Preemptive Securities equal to its Other Shareholder Participation Limit and/or a Sponsor (and/or its Affiliates) elects to purchase Preemptive Securities in an amount less than such StockholderSponsor’s Pro Rata Share Portion, the Company shall allocate any remaining Preemptive Securities among those Sponsors (pro rata in accordance with their respective Pro Rata Portions) who indicated in their Sponsor Exercise Notice that they (and/or their Affiliates) desired to purchase Preemptive Securities in excess of their respective Pro Rata Portions.
(b) In the event the Shareholders with preemptive rights pursuant to clause (a) above (and/or their Affiliates) do not purchase all such SharesPreemptive Securities in accordance with the procedures set forth in Section 4.06(a), the Company shall have sixty (60) days after the anticipated issuance date to sell to other Persons the remaining Preemptive Securities at the price and on the terms and conditions that are no more favorable to such Stockholder other Persons than those specified in the Company’s notices to the Shareholders pursuant to Section 4.06(a). If the Company fails to sell such Preemptive Securities within sixty (60) days of the anticipated issuance date provided in the notices given to the Shareholders pursuant to Section 4.06(a), the Company shall be deemed not thereafter issue or sell any Preemptive Securities without first offering such Preemptive Securities to have waived all of its rights under the Sponsors and, if applicable, the Preemptive Rights Other Shareholders in the manner provided in this Section 4.02 with respect to, and only with respect to, the purchase of such Shares4.06.
(c) If any Stockholder elects The election by a Shareholder not to exercise his or her and/or to cause its Affiliates to exercise such Shareholder’s preemptive rights under this Section 4.02 or elects to exercise 4.06 in any one instance shall not affect such rights with Shareholder’s right (other than in respect to less than such Stockholder’s of a reduction in its Pro Rata Share (the “Excess Shares”), Portion) as to any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholdersfuture issuances under this Section 4.06.
(d) The All costs and expenses incurred by the Company and the Sponsors and their Affiliates in connection with its obligations under this Section 4.06 and any purchases made pursuant to this Section 4.06, including all attorneys fees and charges, all accounting fees and charges and all finders, brokerage or investment banking fees, charges or commissions, shall be paid by the Company.
(e) If, at any time prior to the consummation of an IPO or Change of Control, Holdings, IDC or any other Subsidiaries of the Company propose to issue any Preemptive Securities, the Company shall have ninety cause the applicable entity to give effect to the provisions in this Section 4.06 with respect to such issuance.
(90f) days from Notwithstanding any provision hereof to the date contrary, the Company or any of its Subsidiaries may elect to issue Preemptive Securities other than in compliance with Section 4.06(a) if and only if each Sponsor that at such time holds at least 150 million Shares determines that there are exigent circumstances and approves the Issuance Notice to consummate the proposed issuance of any or all Preemptive Securities pursuant to this Section 4.06(f) in light of such Shares that each Stockholder have elected not circumstances. In the event the Company or such Subsidiary is entitled to purchase at issue Preemptive Securities pursuant to this Section 4.06(f), the price and upon terms and conditions that are not materially less favorable Company shall give notice to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of Sponsors within five (5) Business Days after all the issuance of such approvals Preemptive Securities (the “Alternate Procedure Notice”), which shall set forth the principal terms and conditions of the issuance, including the purchase price of the Preemptive Securities, the date on which such Preemptive Securities were issued and the identities and addresses of the Persons to whom the Preemptive Securities were sold (the “Alternate Procedure Purchasers”). Each Sponsor shall have been receivedten (10) Business Days (the “Alternate Procedure Sponsors Preemptive Period”) after the date the Company’s notice is given to elect, but in no event later than one hundred by giving notice to the Company and twenty the Alternate Procedure Purchasers, to purchase (120and/or to cause its Affiliates to purchase) days from the date Alternate Procedure Purchasers up to the number of Preemptive Securities that such Sponsor would otherwise have the Issuance Notice. At right to purchase pursuant to Section 4.06(a) above had the consummation Company complied with the provisions of Section 4.06(a) in connection with the issuance of such issuance, Preemptive Securities under the Company shall record terms and conditions set forth in the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights Company’s notice pursuant to this Section 4.02 registered in the name 4.06(f). If either Sponsor (or any of such Stockholder, against payment by such Stockholder of their Affiliates) elects to exercise the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures rights set forth in this Section 4.02.
(e) The 4.06(f), then the Company shall not be under any obligation provide the Alternate Procedure Notice to consummate any proposed issuance each of Shares the Preemptive Rights Other Shareholders within five (5) Business Days of the expiration of the Alternate Procedure Sponsors Preemptive Period. The notice that is delivered to the Preemptive Rights Other Shareholders shall also state the number of Preemptive Securities that each Sponsor (and/or its Affiliates) notified the Company and there will be no liability the Alternate Procedure Purchasers that it and/or its Affiliates intends to purchase pursuant to the exercise of the purchase rights set forth in this Section 4.06(f) and the Sponsor Participation Percentage for such Sponsor. Each Preemptive Rights Other Shareholder shall have the right to purchase (and/or to cause its Affiliates to purchase) up to the Other Shareholder Participation Limit, at the price and on the part of terms and conditions specified in the Alternate Procedure Notice by delivering an irrevocable written notice to the Company to any Stockholder if and the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event Alternate Procedure Purchasers no later than ten (10) Business Days from receipt delivery of the notice referred to herein on substantially Alternate Procedure Notice, setting forth the same terms and conditions as such sale, however, the price number of such Shares shall be identical Preemptive Securities for which such right is exercised. The closing of sales from the Alternate Procedure Purchasers to the price paid Sponsors and such offer and salePreemptive Rights Other Shareholders (and/or their respective Affiliates) pursuant to this Section 4.06(f) shall occur within forty-five (45) Business Days after the issuance of the Preemptive Securities to the Alternate Procedure Purchasers (subject to extension to the extent necessary to obtain required governmental or other approvals). The Company shall cause any definitive agreements relating to issuances of Preemptive Securities to Alternate Procedure Purchasers to include all such provisions as are necessary to give effect to this Section 4.06(f), including the Alternate Procedure Purchasers’ agreement to sell such Preemptive Securities to such Shareholders (and/or their respective Affiliates), to the extent applicable, on a pro rata basis (based on the number of Preemptive Securities purchased by each Alternate Procedure Purchaser in the applicable issuance).
(g) The provisions Notwithstanding anything to the contrary set forth herein, a Shareholder shall not be entitled to participate in any issuance of Preemptive Securities pursuant to this Section 4.02 4.06 unless at the time of such issuance the Company shall terminate be reasonably satisfied that (i) such Shareholder is an “accredited investor” as defined in Regulation D of the Securities Act or the issuance of Preemptive Securities, after giving effect to the Initial Public Offeringparticipation of such Shareholder therein, would satisfy the requirements of any other exemption from registration available at such time under the Securities Act with respect to such issuance of Preemptive Securities and (ii) an exemption from registration or qualification under any state securities laws or foreign securities laws applicable to such issuance of Preemptive Securities due to the participation of such Shareholder therein would be available with respect to such issuance of Preemptive Securities.
Appears in 1 contract
Preemptive Rights. Subject to Section 9(d) and the limitations set forth in Section 9(c) below, each time the Company proposes to issue any equity securities, or other securities of any kind that are or may become convertible into any equity securities (collectively, “New Issue Securities”) to any Person, the Company shall first offer the New Issue Securities to the Investors in accordance with the following provisions:
(a) The Company shall give to each Stockholder written Investor hereunder who is at the time an Accredited Investor a notice stating: (an “Issuance Notice”i) the Company’s intention to issue the New Issue Securities; (ii) the number and description of any proposed issuance by such shares or the Company amount of any Shares at least ten the New Issue Securities to be issued; (10iii) Business Days prior to the purchase price (calculated as of the proposed issuance date) and the other terms upon which the Company is offering the New Issue Securities; and (iv) the names of the Persons to whom the Company seeks to issue such New Issue Securities (the “Preemptive Notice”).
(b) Transmittal of the Preemptive Notice to the Investors by the Company shall give each Investor the right to purchase from the Company his, her or its Pro Rata Portion, or any lesser number specified by the Investor, of the New Issue Securities for the price and upon the terms set forth in the Preemptive Notice. The Issuance For a period of twenty (20) days after the submission of the Preemptive Notice to the Investors, each Investor shall specify have the number and class option, exercisable by written notice to the Company, to accept the Company’s offer as to all or any part of such Shares and Investor’s Pro Rata Portion or any lesser number of the price at which such Shares New Issue Securities. If two (2) or more types of New Issue Securities are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares or New Issue Securities are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-partytogether with other types of securities, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02including, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distributionwithout limitation, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquiresdebt securities, in a single transaction or series of related transactions, the rights to purchase New Issue Securities granted to the Investors under this Section 9 must be exercised to purchase all types of New Issue Securities and such other securities in the same proportion as such New Issue Securities and other securities are to be issued by the Company. If the Investors (as a material amount group) agree to purchase less than the total number of New Issue Securities proposed to be issued and sold, the Company shall have one hundred twenty (120) days thereafter to sell any or all of the assets remaining New Issue Securities (i.e., those not to be sold to any Investor) to the Person or equity ownership of Persons set forth in the Preemptive Notice, upon terms and conditions no less favorable to the Company, and no more favorable to such other PersonPerson or Persons, than those set forth in the Preemptive Notice. In the event the Company has not sold such New Issue Securities within said one hundred twenty (v120) issued day period, the Company will not thereafter issue or sell any New Issue Securities without first offering such New Issue Securities to Persons who the Investors in the manner provided above.
(c) The preemptive rights contained in this Section 9 shall not apply to:
(i) The issuance and sale by the Company, from time to time pursuant to plans, programs or agreements approved by the Board in good faith reasonably believes will provide strategic benefits of Directors, of shares of Common Stock or options, rights, or warrants to acquire shares of Common Stock, or of securities convertible or exchangeable for shares of Common Stock (A) to employees, officers, or members of or consultants or advisors to the Board of Directors as compensation for their services to the Company or any of its Subsidiaries or (B) in connection with a Company Acquisition or other strategic transaction involving the Company and other entities, including, without limitation, joint ventures, manufacturing, marketing or distribution arrangements or technology transfer or development arrangements;
(ii) The issuance of Securities in a Public Offering;
(iii) The issuance of Securities to credit financing sources in connection with any equipment loan or leasing arrangement, real property leasing arrangement, or debt financing of the Company or its Subsidiaries;
(iv) The issuance of securities by any Subsidiary of the Company to the Company;
(v) The issuance of Securities upon the exercise or exchange of other Securities which were issued in compliance with this Section 9(c) or Securities which were issued in an issuance which is exempt from this Section 9(c);
(vi) issued The issuance of Securities in connection with an Initial Public Offering.any stock split, stock dividend, reverse split, consolidation, recapitalization of the Company or any other form of strategic transaction; and
(bvii) Each Stockholder may exercise his The issuance of Securities pursuant to any rights or her rights under this Section 4.02 by delivering notice of his agreements, options, warrants or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt convertible securities outstanding as of the Issuance Notice. A delivery date of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating StockholdersAgreement.
(d) The Notwithstanding anything to the contrary contained in this Section 9, the Company shall have ninety (90) days from may, in order to expedite the date issuance of New Issue Securities hereunder, issue all or a portion of the Issuance Notice New Issue Securities to consummate one or more Persons (each, an “Initial Subscribing Stockholder”) without complying with the proposed issuance provisions of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, this Section 9; provided that, if such issuance is subject prior to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares either (i) each Initial Subscribing Stockholder agrees to be purchased by each Stockholder exercising preemptive rights pursuant offer to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Investor who is an Accredited Investor and who is not an Initial Subscribing Stockholder (each, an “Other Accredited Stockholder”) his, her or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her its respective Pro Rata Share Portion of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein New Issue Securities on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical issued to the price paid Initial Subscribing Stockholders and in a manner which provides such Other Accredited Stockholder with rights substantially similar to the rights outlined in Sections 9(a) and 9(b) or (ii) the Company shall offer to sell an additional amount of New Issue Securities to each Investor (other that Initial Subscribing Stockholders) only in an amount and sale.
manner which provides such Investor with rights substantially similar to the rights outlined in Sections 9(a) and 9(b). The Initial Subscribing Stockholders or the Company, as applicable, shall offer to sell such New Issue Securities to each Other Accredited Stockholder or Investor (gother that Initial Subscribing Stockholders), respectively and as applicable, within ninety (90) The provisions of this Section 4.02 shall terminate days after the closing of the purchase of the New Issue Securities by the Initial Public OfferingSubscribing Stockholders.
Appears in 1 contract
Preemptive Rights. Prior to an Initial Public Offering (a) The Company shall give as defined below), each Stockholder written notice (holder of Class A Units who is an “Issuance Notice”accredited investor” will have customary preemptive rights for offerings of Equity Securities (as defined below) of any proposed issuance by the Company of any Shares at least ten or its subsidiaries, other than Excluded Issuances (10) Business Days prior to the proposed issuance dateas defined below). The Issuance Notice shall specify Company may issue Equity Securities to Cantor or the number RXR Consortium on an advance sale basis without complying with preemptive rights procedures, provided that, subsequent to such issuance, any Member who is entitled to preemptive rights is given the opportunity to purchase its pro rata share of the Equity Securities issued to Cantor or the RXR Consortium in such offering; provided further, that the applicable ownership thresholds for designation and class approval rights herein will not be affected pending consummation of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuancesubsequent preemptive right. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded SecuritiesIssuances” shall include any Sharesmean, and preemptive rights shall not apply to, Equity Securities issued: (i1) issued as a dividend or a distribution, (ii) granted or issued to employees, directors, officers, directors, advisors or consultants or advisors of the Company and its subsidiaries, directly or any of its Subsidiaries pursuant to employee incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts similar benefits programs or other arrangements that are approved by the Boardarrangements, (iii) issued or issuable including grants to lenders or lessors new hires, in connection with any financing promotions or leasing transactionsotherwise; (2) upon the exercise, conversion or exchange of Equity Securities previously issued not in violation of the preemptive rights requirements; (iv3) issued pursuant to the acquisition of another Person in connection with a pro rata dividend, split, combination, recapitalization, subdivision or similar transaction; (4) in consideration for an acquisition, merger, consolidation or other business combination undertaken by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction subsidiaries; (5) in which connection with a public offering of units of the Company or such Subsidiary acquiresits subsidiaries; (6) issuances to banks, in equipment lessors, brokers or other financial institutions (including, for the avoidance of doubt, hedge funds), or to real property lessors, pursuant to a single debt financing, equipment leasing or real property leasing transaction approved by the Board; (7) by the Company or series any of related transactions, a material amount its wholly owned subsidiaries or by any of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits Company’s subsidiaries to the Company or any of its Subsidiaries and their respective wholly-owned subsidiaries; (vi8) in connection with any joint venture or strategic business transaction approved by the Board; or (9) issued issuances in connection with an Initial Public Offering.
Incremental Facility (as defined in the exit facility term sheet). “Equity Securities” shall mean, as applicable, (a) any stock, equity, partnership or membership interests or other share capital; (b) Each Stockholder may exercise his any debt, warrants, options or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Companyany other instrument, within ten (10) Business Days of receipt in each case of the Issuance Notice. A delivery of such notice foregoing, directly or indirectly convertible into or exchangeable for stock, equity, partnership or membership interests; (which notice shall specify the number (c) any rights or amount) of Shares options directly or indirectly to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (subscribe for or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Sharesstock, such Stockholder shall be deemed equity, partnership or membership interests, or to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his subscribe for or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of any securities described in clause (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
b); or (d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any share appreciation rights, phantom share rights or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02similar rights.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (a) The Company shall give So long as the Conversant Parties Beneficially Own at least 14.9% of the outstanding shares of Common Stock on an as-converted basis, each Stockholder written notice (an “Issuance Notice”) Conversant Investor will have the preemptive rights set forth in this Section 5 with respect to any issuance of any proposed issuance by Equity Securities that are issued after the Company of date hereof (any Shares at least ten such issuance, other than those described in clauses (10i) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(ethrough (vi) below, if a “Preemptive Rights Issuance”), except for (i) issuances of any such Shares are purchased, each Stockholder shall be entitled shares of Common Stock or options or rights to purchase such Stockholder’s Pro Rata Share shares or other form of the Shares proposed equity-based or equity-related awards (including restricted stock units) to be issued to a third-partyemployees (or prospective employees who have accepted an offer of employment), at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02directors or consultants, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreementsany present or future employee, equity purchase director or equity option plans, equity bonuses consultant benefit plan or awards, warrants, contracts program of or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person assumed by the Company or any of its Subsidiaries or of any employee agreements or arrangements or programs in effect as of the Closing Date (including the New LTIP (as defined in the A&R Investment Agreement)), or thereafter adopted by the Board of Directors, (ii) issuances of securities pursuant to any merger, joint venture, partnership, consolidation, mergerdissolution, purchase liquidation, tender offer, recapitalization, reorganization, share exchange, business combination or similar transaction or any other direct or indirect acquisition by the Company, whereby the Company’s securities comprise, in whole or in part, the consideration paid by the Company in such transaction, which transaction has been approved by the Board of Directors and, to the extent then applicable, approved by Investor A in accordance with Section 4, (iii) issuances of shares of Common Stock upon conversion or exercise of any of preferred stock, option or Derivative Instrument, in each case, outstanding as of the Closing Date or 2 To be updated to the extent the Closing does not occur in 2021. if issued after the Closing Date, were either exempt from Investor A’s rights under this Section 5(a) or were offered to the Conversant Investors in accordance with this Section 5, (iv) by reason of a dividend, stock split or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series distribution of related transactions, a material amount of the assets or equity ownership of such other PersonCommon Stock, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits issuances of any shares of Series A Preferred Stock pursuant to the Company terms of the A&R Investment Agreement (including issuances of Common Stock upon conversation of such shares of Series A Preferred Stock in accordance with the Certificate of Designations), or any of its Subsidiaries and (vi) issued issuances of any Equity Securities with respect to which Investor A waives in connection with an Initial Public Offeringwriting the rights of all of the Conversant Investors pursuant to this Section 5.
(b) Each Stockholder may exercise his If the Company at any time, or her rights under this Section 4.02 by delivering from time to time, effects a Preemptive Rights Issuance, the Company shall give prompt written notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days Conversant Investors and each of receipt their Affiliates party to this Agreement that holds any Equity Securities of the Issuance Notice. A delivery of such notice Company (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchaseeach, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the an “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating StockholderInvestor Holder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty ten (12010) days from prior to such issuance), which notice shall set forth the date number and type of the Issuance Notice. At securities to be issued, the consummation issuance date, the offerees or transferees, the price per security, and all of the other terms and conditions of such issuance, which shall be deemed updated by delivery of the final documentation for such issuance to the Conversant Investors. Each Investor Holder may, by written notice to the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120a “Preemptive Rights Notice”) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from days after receipt of the notice referred Preemptive Rights Notice, elect to herein purchase a number of securities specified in such Preemptive Rights Notice (which number may be any number up to but not exceeding the number of securities which, if divided by the sum of (i) such number of securities plus (ii) the number of securities issued in such Preemptive Rights Issuance, would represent a percentage that is equal to (A) the aggregate number of shares of Common Stock (on substantially an as-converted basis if applicable) that such Investor Holder owns immediately prior to such Preemptive Rights Issuance, divided by (B) the total number of shares of Common Stock then outstanding on an as-converted basis), on the same terms and conditions as such salePreemptive Rights Issuance (it being understood and agreed that the price per security that the Investor Holders shall pay shall be the same as the price per security set forth in the Preemptive Rights Notice); provided, howeverthat any Investor Holder shall not be entitled to acquire any such shares of Common Stock to the extent the issuance of such Common Stock to such Investor Holder would require approval of the stockholders of the Company pursuant to the rules and listing standards of NYSE, in which case the Company may consummate the proposed issuance prior to obtaining approval of the stockholders of the Company (subject to compliance by the Company with Section 5(d)). If an Investor Holder exercises its preemptive rights hereunder with respect to such Preemptive Rights Issuance, the price Company shall (or shall cause such Subsidiary to) issue to such Investor Holder (or its designated Affiliate(s)) the number of securities specified in such Shares Preemptive Rights Notice promptly thereafter (and provided that, if such Investor Holder shall be identical have so notified the Company at least three Business Days prior to the price paid issuance date set forth in the Company’s notice, at such offer Investor Holder’s election such purchase and salesale shall occur on the same date as, or substantially concurrently with, the Preemptive Rights Issuance).
(gc) The provisions of election by any Investor Holder not to exercise its preemptive rights hereunder in any one instance shall not affect its right as to any future Preemptive Rights Issuances.
(d) Notwithstanding anything to the contrary in this Agreement, in the event that any Investor Holder exercises its preemptive rights pursuant to this Section 4.02 shall terminate after 5 and the Initial Public Offeringpurchase or issuance of such securities would require the Company to obtain approval of its stockholders pursuant to the listing rules of the NYSE or such national securities exchange that the Common Stock is listed upon, if any, the Company and the Investor Holder will use their respective commercially reasonable efforts to negotiate in good faith the terms of any such transaction, including without limitation the terms of any securities of the Company issued pursuant to such transaction to the Investor Holder, such that the issuance to the Investor Holder would not require such stockholder approval while providing the Investor Holder and/or its Affiliates with substantially similar benefits and rights of such securities issued in the Preemptive Rights Issuance.
Appears in 1 contract
Preemptive Rights. (a) The Company shall give each Stockholder written notice Prior to the consummation of an Initial Public Offering, in the event that (an “Issuance Notice”x) of any proposed issuance by the Company intends to sell or issue any Units or any other Membership Interests, or (y) any Subsidiary of the Company intends to sell or issue any Shares at least ten equity interests in such Subsidiary to any Person other than to a wholly-owned Subsidiary of the Company (10any such Units, Membership Interests or equity interests, the “Preemptive Interests”), the Fugro Member shall have the right to purchase, subject to Section 4.11(b) Business Days and 4.11(c), an amount of such Preemptive Interests up to (but not in excess of) its Class A/A-1/A-2 Percentage Interest immediately prior to such sale or issuance, on the proposed issuance date. The Issuance Notice shall specify same terms and conditions as such Preemptive Interests are being offered and sold, such subscription being conditioned upon the number and class actual sale of such Shares and the price at which Preemptive Interests; provided, however, that such Shares preemptive right shall not extend to any issuance of Class A-1 Units or Incentive Interests, or any other Units, Membership Interests or equity interests that are to be issued and by the other material terms and conditions Company or any of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: its Subsidiaries (i) issued as by reason of a dividend dividend, split, split-up or a distributionother distribution on Units or Membership Interests of the Company or equity interests of such Subsidiary, (ii) granted or issued to employees, officers, directorsemployees or directors of, or consultants or advisors of to, the Company or any of its Subsidiaries pursuant to incentive agreementsany purchase plan or arrangement, equity purchase or equity option plansplan, equity bonuses or awards, warrants, contracts or other arrangements that are incentive plan or agreement approved by the Board, (iii) issued or issuable to lenders or lessors any Person as direct purchase consideration in connection with any financing strategic acquisitions approved by the Board or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may At any time the Company or any of its Subsidiaries proposes to issue any Preemptive Interests, the Company shall give written notice to the Fugro Member specifying the contemplated date such Preemptive Interests are to be sold, the amount of such Preemptive Interests, the rights and limitations of such Preemptive Interests, the purchase price and other terms and conditions upon which such Preemptive Interests are to be issued, and any other material terms thereof. The Company shall deliver such notice to the Fugro Member no later than 25 Business Days prior to such contemplated purchase date, and the Fugro Member shall have until 10 Business Days prior to the contemplated purchase date specified in such notice to inform the Company of its intentions as to the exercise his or her rights of the preemptive right provided under this Section 4.02 4.11, including the maximum number of Preemptive Interests for which it wishes to exercise its preemptive rights. If no written reply is received by delivering notice of his or her election to purchase such Shares the Company prior to the Company, within ten (10) tenth Business Days of receipt of Day before the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares contemplated purchase date specified in such Stockholder’s notice, the Company may treat the preemptive right of the Fugro Member under this Section 4.11 to have been waived for that, but only for that, transaction. IfFor the avoidance of doubt, at the termination of such ten (10) Business Day- period, any Stockholder Fugro Member shall not have exercised his or her rights any right to purchase acquire any portion of any Preemptive Interests proposed to be issued and sold by the Company unless all of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, Preemptive Interests are issued and only with respect to, the purchase of such Sharessold concurrently.
(c) If any Stockholder elects to exercise his or her preemptive rights under Notwithstanding the other provisions of this Section 4.02 4.11, if the Board determines that, in the best interests of the Company, the Company should issue or elects sell any Units or other Membership Interests or any Subsidiary of the Company should offer or sell any equity interests in such Subsidiary that would otherwise be Preemptive Interests required to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal offered to the product of (i) Fugro Member pursuant to this Section 4.11 prior to such offer to the Excess Shares and (ii) a fractionFugro Member, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating StockholderCompany or its Subsidiary, as applicable, may effect such issuance or sale without first complying with the case may beprovisions of this Section 4.11; provided, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
however, that, within thirty (d) The Company shall have ninety (9030) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuanceissuance or sale, the Company shall record offer, and/or cause the Shares in book entry format representing the Shares Person to be purchased by each Stockholder exercising preemptive rights pursuant whom such issuance or sale was made to this Section 4.02 registered in the name of such Stockholderoffer, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given Fugro Member the opportunity to purchase his or her respective Pro Rata Share an amount of such Shares within forty-five securities up to (45but not in excess of) days after the close of its Class A/A-1/A-2 Percentage Interest immediately prior to such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and issuance or sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Sources: Limited Liability Company Agreement (Hc2 Holdings, Inc.)
Preemptive Rights. (a) To the extent permitted under NYSE rules, the Company hereby grants to GE the right to purchase its Pro Rata Portion of any Company Securities (other than any Excluded Securities) that the Company may from time to time propose to issue or sell to any Person. For purposes of this Section 4.3, “Excluded Securities” means Company Securities issued in connection with: (i) a grant to any existing or prospective consultants, employees, officers or directors pursuant to any stock option, employee stock purchase or similar equity-based plans or other compensation agreement; (ii) any acquisition by the Company of the stock, assets, properties or business of any Person; (iii) a stock split, stock dividend or any similar recapitalization; or (iv) any issuance of warrants or other similar rights to purchase Company Common Stock to lenders or other institutional investors in any arm’s length transaction providing debt financing to the Company or any of its Subsidiaries. For the avoidance of doubt, to the extent stockholder approval is required under the NYSE rules for the issuance or sale of Company Securities as provided in this Section 4.3, (x) the Company may issue or sell Company Securities to such other Persons prior to obtaining such stockholder approval in accordance with Section 4.3(d), and (y) the Company shall use its reasonable best efforts to obtain such approval, and after receipt of such approval the Company shall issue or sell the Company Securities (if any) that GE has irrevocably elected to purchase to GE, on the terms set forth in the relevant Issuance Notice.
(b) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by or sale described in Section 4.3(a) to GE within five (5) Business Days following any meeting of the Company Board at which any such issuance or sale is approved or, if the approval of any Shares at least the Company Board is not required in connection with such issuance or sale, no less than ten (10) Business Days prior to the date of the proposed issuance dateor sale. The Issuance Notice shall, if applicable, be accompanied by a written offer from any prospective purchaser seeking to purchase Company Securities and shall specify set forth the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the proposed issuance. Subject to Section 4.02(e, including:
(i) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share the number and class of the Shares proposed Company Securities to be issued to a third-party, at and the price and on percentage of the other terms and conditions specified in outstanding shares of capital stock of the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, Company such issuance would represent;
(ii) granted or issued to employeesthe proposed issuance date, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within shall be at least ten (10) Business Days of receipt from the date of the Issuance Notice. A delivery ; and
(iii) the proposed purchase price per Company Security.
(c) GE shall for a period of such notice ten (which notice shall specify 10) Business Days following the number (or amount) receipt of Shares an Issuance Notice have the right to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement elect irrevocably to purchase its Pro Rata Portion of such Stockholder to purchase, the Company Securities at the purchase price and on the terms and conditions specified set forth in the Issuance Notice, Notice by delivering a written notice to the number of shares (or amount) of Shares specified in such Stockholder’s noticeCompany. If, at the termination of such ten (10) Business Day- Day period, any Stockholder GE shall not have exercised his or her rights delivered such notice to purchase any of such Stockholder’s Pro Rata Share of such Sharesthe Company, such Stockholder GE shall be deemed to have waived all of its rights under this Section 4.02 4.3 with respect to, and only with respect to, to the purchase of such Shares.
(c) If Company Securities. The closing of any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) purchase by GE shall be entitled to consummated concurrently with the consummation of the issuance or sale described in the Issuance Notice; provided, however, that the closing of any purchase an additional number by GE may be extended beyond the closing of Shares equal the transaction in the Issuance Notice to the product extent necessary to obtain any required approval or consent of a Governmental Entity or any other third party (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal Company and GE shall use their respective reasonable best efforts to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholdersobtain such approvals).
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until Upon the expiration of five the ten (510) Business Days after all such approvals have been received, but Day period described in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuanceSection 4.3(c), the Company shall record the Shares in book entry format representing the Shares be free to be purchased by each Stockholder exercising preemptive rights pursuant sell such Company Securities that GE has not elected irrevocably to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred on terms and twenty (120) day period or on other terms materially less conditions no more favorable to the issuer, it shall again comply purchasers thereof than those offered to GE in the Issuance Notice delivered in accordance with the procedures set forth in this Section 4.024.3(b).
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 4.3 shall terminate after on the Initial Public OfferingTrigger Date.
Appears in 1 contract
Preemptive Rights. (a) The Company Each Institutional Investor, Rollover Investor and each of its Permitted Transferees that are Investors shall give each Stockholder written notice (an “Issuance Notice”) have the right to purchase their respective Pro Rata Amount of any proposed issuance by the Company of additional Securities (including any Shares at least ten (10security convertible into or exercisable for any Securities) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company may propose to issue from time to time to OEP or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchasetheir Permitted Transferees, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of on which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any such Securities to OEP or their Permitted Transferees (such Securities are hereinafter collectively referred to as “Newly Issued Securities”). Each Investor acknowledges that in the event that the Company offers to sell to potential investors units consisting of more than one type or class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02securities, so long as each Stockholder receives prompt written notice the potential investors purchase only on such a unit by unit basis, the rights provided by this Section 1.6 with respect to such offering shall also be limited to the right to purchase such units, and not to purchase a portion of the underlying securities of a unit.
(b) Notwithstanding the requirements of this Section 1.6, the provisions of this Section 1.6 shall not be applicable to the issuance of Securities (i) upon the conversion of shares of one class of stock, in accordance with the terms of such sales and thereafter class of stock, into shares of another class, (ii) as a dividend on (or payment of accrued yield in respect of) the outstanding Preferred Stock pursuant to paragraph B.3 of Article V of the Company’s certificate of incorporation so long as such dividend is given paid in accordance with the opportunity distribution priority set forth in paragraph B.2. of Article V of the Company’s Certificate of Incorporation, (iii) which have already been made available to all Non-OEP Investors for purchase his or her respective in each Non-OEP Investor’s Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein Amount on substantially the same terms and conditions as such salethe current issuance of Securities, however, (iv) in connection with grants of stock or options to employees or directors of the price of such Shares shall be identical to the price paid such offer and saleCompany or (v) purchased by OEP or its Permitted Transferees in a Public Offering.
(gc) The provisions Company will give the Institutional Investors, Rollover Investors and their Permitted Transferees that are Investors a written notice setting forth the terms and conditions upon which the Institutional Investors, the Rollover Investors or their Permitted Transferees that are Investors may purchase Newly Issued Securities in accordance with Section 1.6(a) and such Institutional Investor’s, such Rollover Investor’s or such Permitted Transferee’s Pro Rata Amount of the Securities that such Institutional Investor, such Rollover Investor or such Permitted Transferee is entitled to purchase (the “Preemptive Notice”). The Institutional Investors, the Rollover Investors and such Permitted Transferees must reply, in writing, within 30 days after the date of delivery of the Preemptive Notice if such Persons agree to purchase all or any portion of the Newly Issued Securities offered pursuant to this Section 1.6 on the date of proposed sale (the “Preemptive Reply”), setting forth the amount, if any, of Newly Issued Securities such Persons wish to purchase. If any Institutional Investor, Rollover Investor or Permitted Transferee fails to make a Preemptive Reply in accordance with this Section 1.6, or elects to purchase less than his, her or its Pro Rata Amount of such Newly Issued Securities, such unclaimed Newly Issued Securities that were offered to such Institutional Investor, Rollover Investor or Permitted Transferee may thereafter, for a period not exceeding 90 days following the expiration of such 30-day period, be issued, sold or subjected to rights or options to OEP or their Permitted Transferees, at a price not less than that at which they were offered to the Institutional Investors, the Rollover Investors and their Permitted Transferees that are Investors.
(d) Notwithstanding the requirements of this Section 4.02 1.6, the Company may make an issuance of Newly Issued Securities at any time without complying with the requirements of Section 1.6(a) and (c) so long as the Company complies with the requirements of this Section 1.6(d). The Company shall terminate place into escrow with a third party at the time of such issuance a portion of the Newly Issued Securities equal to the “Preemptive Escrow Amount.” The “Preemptive Escrow Amount” shall equal that amount of Newly Issued Securities which the Rollover Investors and their Permitted Transferees that are Investors would have been entitled to purchase, in the aggregate, if the Company had delivered a Preemptive Notice in accordance with Section 1.6(c) and each Institutional Investor, Rollover Investor and its Permitted Transferees that are Investors had elected to participate to the full extent permitted in the issuance of Newly Issued Securities in accordance with Section 1.6(a). No later than two (2) business days after the Initial Public Offeringdate of the issuance of the Newly Issued Securities, the Company shall notify the Institutional Investors and the Rollover Investors in writing of such issuance. Such notice (the “Preemptive Escrow Notice”) shall set forth the same information required in the Preemptive Notice, and in addition, such notice shall state the name of the escrow agent. An Institutional Investor, Rollover Investor or a Rollover Investor’s Permitted Transferee that is an Investor may exercise the preemptive right by delivering to the Company, within 30 days after the date of delivery of the Preemptive Escrow Notice, a written notice specifying the number of shares of Newly Issued Securities it, he or she proposes to purchase of the total number of shares of Newly Issued Securities such Institutional Investor, Rollover Investor or Permitted Transferee is entitled to purchase (the “Preemptive Election”). The Preemptive Election shall be accompanied by payment in full for such Newly Issued Securities, in the same form as provided by OEP or their Permitted Transferees. Promptly after the expiration of the 30th day after the delivery of the Preemptive Escrow Notice, (i) the Company shall sell to each Institutional Investor, Rollover Investor or Permitted Transferee that number of shares of Newly Issued Securities that each such Institutional Investor, Rollover Investor or Permitted Transferee proposed to purchase pursuant to its Preemptive Election on the same terms and conditions as set forth in the Preemptive Escrow Notice and (ii) when such Newly Issued Securities have been issued to such Institutional Investors, Rollover Investors or their Permitted Transferees, all remaining Newly Issued Securities held in escrow shall be sold to OEP and their Permitted Transferees, upon the terms and conditions set forth in the Preemptive Escrow Notice.
Appears in 1 contract
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) So long as 17.5% of any proposed issuance by the Preferred Shares issued to Subscribers on the last Closing Date to occur remain outstanding, if the Company offers to sell Covered Securities (as defined below) in a public or private offering of any Shares at least ten Covered Securities solely for cash (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchaseda “Qualified Offering”), each Stockholder Subscriber shall be entitled afforded the opportunity to purchase such Stockholder’s Pro Rata Share of acquire from the Shares proposed to be issued to a third-partyCompany, at for the same price and on the other same terms and conditions specified as such Covered Securities are offered, such Subscriber’s pro rata portion (determined by dividing the number of Preferred Shars purchased by such Subscriber in this Offering by the Issuance Noticetotal number of Preferred Shares issued in this Offering) of 6.25% of the amount of Covered Securities so offered. For purposes of this Section 4.02, “Excluded Covered Securities” shall include means Preferred Stock and any Shares: rights, options, or warrants to purchase or securities convertible into or exercisable or exchangeable for Preferred Stock, other than (i) issued as a dividend securities issuable upon conversion of any of the Preferred Shares or a distribution, upon exercise of the Warrants; (ii) granted securities issued upon the conversion or issued to employeesexercise of any debenture, officerswarrant, directorsoption, consultants or advisors other convertible security which is outstanding as of the Company first Closing Date to occur; (iii) Preferred Stock issuable upon a stock split, stock dividend, or any subdivision of its Subsidiaries pursuant to incentive agreementsshares of Preferred Stock approved by Company stockholders; (iv) shares of Preferred Stock (or options, equity purchase or equity option plansconvertible securities, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iiirights to purchase such shares of Preferred Stock) issued or issuable to lenders employees or directors of, or consultants providing bona fide services to, the Company pursuant to an Approved Stock Plan (as defined below), (v) Preferred Stock, options or convertible securities issued to banks, equipment lessors or other financial institutions pursuant to a debt financing or equipment leasing approved by the board of directors of the Company, (vi) shares of Preferred Stock, options or convertible securities issued to suppliers or third party service providers in connection with any financing the provision of goods or leasing transactionsservices pursuant to transactions approved by the board of directors of the Company, and (ivvii) shares of Preferred Stock, options or convertible securities issued as acquisition consideration pursuant to the acquisition of another Person corporation by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount substantially all of the assets or equity ownership other reorganization, each as approved by the board of such other Persondirectors of the Company and the stockholders of the Company (each an “Excluded Issuance”). “Approved Stock Plan” means any employee benefit plan which has been approved by the board of directors of the Company prior to or subsequent to the date hereof pursuant to which shares of Common Stock and standard rights, (v) warrants, or options to subscribe for, purchase, or otherwise acquire Common Stock may be issued to Persons who the Board in good faith reasonably believes will provide strategic benefits any employee, officer, or director for services provided to the Company or in their capacity as such. Prior to making any Qualified Offering of Covered Securities, the Company shall give the Subscriber written notice at the address shown on each Subscriber’s signature page hereto of its Subsidiaries intention to make such an offering, describing, to the extent then known, the anticipated amount of securities, and other material terms then known to the Company upon which the Company proposes to offer the same (visuch notice, a “Qualified Offering Notice”). The Subscriber shall then have 10 days after receipt of the Qualified Offering Notice (the “Offer Period”) issued to notify the Company in connection with an Initial Public Offering.
writing that it intends to exercise such preemptive right and as to the amount of Covered Securities the Subscriber desires to purchase, up to the maximum amount calculated pursuant to this Section 9(b) (bthe “Designated Securities”). Such notice constitutes a non-binding indication of interest of the Subscriber to purchase the amount of Designated Securities specified by the Subscriber (or a proportionately lesser amount if the amount of Covered Securities to be offered in such Qualified Offering is subsequently reduced) Each Stockholder may exercise his at the price (or her rights range of prices) established in the Qualified Offering and other terms set forth in the Company’s notice to it. Any failure to respond or to confirm the Subscriber’s interest in purchasing any Covered Securities to which it is entitled under this Section 4.02 by delivering notice 9(b) during the Offer Period constitutes a waiver of his its preemptive rights in respect of such offering or her election to purchase such Shares as to the CompanyCovered Securities as to which no interest in purchasing is received, within ten (10) Business Days of receipt as applicable. The sale of the Issuance NoticeCovered Securities in the Qualified Offering, including any Designated Securities, shall be closed not later than 120 days after the end of the Offer Period. A delivery of such notice (which notice shall specify the number (or amount) of Shares The Covered Securities to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder sold to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified other investors in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder Qualified Offering shall be deemed to have waived all of its rights under this Section 4.02 with respect tosold at a price not less than, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less no more favorable to the Company than such other investors than, those specified in the Issuance Qualified Offering Notice. If the Company does not consummate the sale of Covered Securities to other investors within such 120-day period, the right provided that, if such issuance is subject to regulatory approval, such ninety (90) day period hereunder shall be extended until revived and such securities shall not be offered unless first reoffered to the expiration of five (5) Business Days after all such approvals have been receivedSubscribers in accordance herewith. Notwithstanding anything to the contrary set forth herein and unless otherwise agreed by the Subscriber, but in no event by not later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation end of such issuance120-day period, the Company shall record either confirm in writing to the Shares in book entry format representing Subscriber that the Shares Qualified Offering has been abandoned or shall publicly disclose its intention to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered issue the Covered Securities in the name Qualified Offering, in either case in such a manner that the Subscriber will not be in possession of such Stockholderany material, against payment by such Stockholder of the purchase price for such Sharesnon-public information thereafter. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth Subscriber exercises its preemptive right provided in this Section 4.02.
9(b) with respect to a Qualified Offering that is an underwritten public offering or an offering made to qualified institutional buyers (eas such term is defined in the Commission’s Rule 144A under the 1▇▇▇ ▇▇▇) The for resale pursuant to Rule 144A under the 1933 Act (a “Rule 144A offering”), a private placement or other offering, whether not registered under the 1933 Act, the Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject the Subscriber, if any such offering is consummated, the Designated Securities (as adjusted, upward to reflect the preemptive rights under this Section 4.02 without first actual size of such offering when priced but not in excess of each Subscriber’s Subscriber Percentage Interest) at the same price as the Covered Securities are offered to third persons (not including the underwriters or the initial purchasers in a Rule 144A offering that is being reoffered by the initial purchasers) in such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt offering and shall provide written notice of such sales and thereafter is given price upon the opportunity to purchase his or her respective Pro Rata Share determination of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and saleprice.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Sources: Securities Purchase Agreement (Eastside Distilling, Inc.)
Preemptive Rights. (a) The Company shall give Partnership hereby grants to each Stockholder written notice (an “Issuance Notice”) of any proposed the Partners a preemptive right, in accordance with the procedures set forth in this Section 4.9, with respect to the issuance and sale by the Company Partnership of any Shares at least ten Additional Units (10"Preemptive Securities") Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: than those:
(i) issued as a dividend or a distribution, sold in connection with the Phase I Financing;
(ii) granted issued or issued sold to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, a Strategic Investor;
(iii) issued or issuable to lenders sold pursuant to, in connection with, or lessors following the Initial Public Offering;
(iv) issued or sold in connection with any financing merger, consolidation, acquisition or leasing transactions, (iv) issued pursuant to other business combination involving the acquisition of another Person by the Company Partnership or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount subsidiary of the assets or equity ownership of such other Person, Partnership; or
(v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or sold under any of its Subsidiaries and (vi) issued in connection with an Initial Public Offeringemployee benefit or similar plan or arrangement.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares At least thirty (30) days prior to the Company, within ten (10) Business Days of receipt sale of the Issuance Preemptive Securities, the Partnership shall deliver a written notice (a "Sale Notice. A delivery ") to each Subject Partner setting forth:
(i) the number of Preemptive Securities to be sold;
(ii) the price for which and other terms and conditions upon which such Preemptive Securities are to be sold; and
(iii) all written information distributed to offerees of such notice (which notice shall specify Preemptive Securities, together with an irrevocable offer from the number (or amount) of Shares Partnership to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder issue and sell to purchaseeach Subject Partner, at the same price per Preemptive Security and on the same other terms and conditions specified set forth in the Issuance Sale Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares Preemptive Securities equal to the product of (i) the Excess Shares and (ii) total number of Preemptive Securities set forth in the Sale Notice multiplied by a fraction, the numerator of which is the Aggregate Ownership number of that class of Shares Units held by such Subject Partner at the Fully Participating Stockholder, as time the case may beSale Notice is issued, and the denominator of which is equal the number of Units held by all Subject Partners at such time.
(c) The Subject Partners shall have absolute discretion to the sum accept or decline such offers. If a Subject Partner wishes to accept any of the Aggregate Ownership offers made pursuant to Section 4.9(b), it shall give the Partnership irrevocable written notice (which notice must specify acceptance of that class all Preemptive Securities offered to such Subject Partner in the Sale Notice) of Shares by all Fully Participating Stockholdersits election to accept such offer within fifteen (15) days of the 25 date (the "Sale Notice Delivery Date") on which the Partnership delivers the applicable Sale Notice. The closing thereunder (a "Preemptive Rights Closing") shall occur five (5) days thereafter (or, if such day is not a Business Day, on the next Business Day thereafter) at the offices of the Partnership or at such other time and place as the parties shall agree.
(d) The Company If any portion (the "Remaining Portion") of the total number of Preemptive Securities set forth in the Sale Notice is not subscribed to by the Subject Partners within fifteen (15) days of the Sale Notice Delivery Date, the Partnership shall have ninety the right, until the one hundred twenty-first (90121st) day following the Sale Notice Delivery Date, to sell Preemptive Securities to any Person(s) at a price per Preemptive Security not less than 95% of the price specified in the Sale Notice, and on terms and conditions that are otherwise substantially similar to the terms and conditions set forth in the Sale Notice; provided, however, that if, as a condition of such proposed sale, such Person requires the Partnership to sell a number of Preemptive Securities greater than the number of Preemptive Securities included in the Remaining Portion, then such sale shall be subject to the requirements of Section 4.9(e).
(e) If, as a condition of a proposed sale of Preemptive Securities under Section 4.9(d), the Partnership is being required to sell a number of Securities greater than the number of Preemptive Securities included in the Remaining Portion, the Partnership shall provide those Subject Partners that have purchased the Preemptive Securities set forth in the applicable Sale Notice (the "Exercising Partners") with a notice (the "Subsequent Sale Notice") setting forth:
(i) the number of Preemptive Securities that the Partnership plans to sell pursuant to Section 4.9(d); and
(ii) the price for which and other terms and conditions upon which such Preemptive Securities are to be sold. Each of the Exercising Partners shall have the following option (but not the obligation) to purchase Preemptive Securities at the price and on terms and conditions substantially similar to those specified in the Sale Notice: upon the Partnership's delivery of the Subsequent Notice, the Exercising Partner shall have ten (10) days from the date (the "Subsequent Notice Date") upon which the Partnership delivers the Subsequent Sale Notice to deliver to the Partnership an irrevocable written notice (the "Subsequent Sale Election Notice") committing to purchase a specified number of Preemptive Securities that does not exceed the number of Preemptive Securities included in the Remaining Portion. If the total number of Preemptive Securities subscribed to by Exercising Partners through the delivery to the Partnership of Subsequent Sale Election Notices within ten (10) days of the Issuance Subsequent Sale Notice Date is greater than or equal to consummate the proposed issuance number of any or all Preemptive 26 Securities included in the Remaining Portion, then the Partnership shall sell the Preemptive Securities subscribed to in such Subsequent Sale Election Notices and the Partnership shall not complete the sale described in the Subsequent Sale Notice. The closing of such Shares that each Stockholder have elected not sales pursuant to purchase at Subsequent Sale Election Notices (also, a "Preemptive Rights Closing") shall occur on the price and upon terms and conditions that are not materially less favorable to fifteenth (15th) day after the Company than those specified in the Issuance Notice, provided thatSubsequent Sale Notice Date (or, if such issuance date is subject to regulatory approvalnot a Business Day, such ninety (90on the next Business Day thereafter) day period shall be extended until at the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date offices of the Issuance Notice. At Partnership or at such other time and place as the consummation of such issuance, parties shall agree and the Company Partnership shall record not complete the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered sale described in the name of such Stockholder, against payment by such Stockholder of the purchase price for such SharesSubsequent Sale Notice. If the Company proposes total number of Preemptive Securities subscribed to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable by Exercising Partners through the delivery to the issuerPartnership of Subsequent Sale Election Notices within ten (10) days of the Subsequent Sale Notice Date is less than the number of Preemptive Securities included in the Remaining Portion, it then none of Exercising Partners shall again comply with have the procedures set forth in option to purchase Preemptive Securities under this Section 4.02.
(e4.9(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it Partnership shall have delivered an Issuance Notice the right to complete the sale described in respect of such proposed issuancethe Subsequent Sale Notice.
(f) The Company may offer and sell Shares subject In connection with any proposed or contemplated sale of Additional Units, upon the request of the Partnership, each Subject Partner shall indicate to the Partnership its good faith intentions (which indications shall not be binding) with respect to whether or not it will exercise the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and saledescribed herein.
(g) The provisions Notwithstanding anything to the contrary in this Agreement, no Limited Partner shall become a general partner of this Section 4.02 shall terminate after the Initial Public OfferingPartnership or otherwise hold general partner Units in the Partnership as a result of such Limited Partner's purchase of any Preemptive Securities.
Appears in 1 contract
Sources: Limited Partnership Agreement (Loral Space & Communications LTD)
Preemptive Rights. (aA) The Company During the Investor Approval Period, other than upon (w) any issuances from the Partnership's equity incentive plans in effect from time to time, (x) the conversion of the Class B Units, (y) adjustments pursuant to Section 5.12(b)(ix) or (z) the issuance of (1) General Partner Units pursuant to Section 5.2(b), (2) Units pursuant to the Unit Purchase Agreement, (3) the CEI Class B Units and (4) the CTPL Class B Units, the Partnership shall give each Stockholder written notice not issue or transfer any Equity Securities other than in compliance with this Section 5.12(b)(vii), Section 5.8 and Section 5.12(b)(ix). If at any time the Partnership wishes to issue or transfer to any Person any Equity Securities, the Partnership shall (an “Issuance Notice”1) of any proposed issuance by the Company of any Shares at least promptly, but not later than ten (10) Business Days days prior to the planned date of any such issuance or transfer, deliver a notice of such proposed issuance dateor transfer to the Purchaser (the “Equity Securities Notice”) and (2) promptly deliver a notice to the Purchaser of approval of such issuance or transfer by the Board of Directors. The Issuance Equity Securities Notice shall specify include (x) a description of the number Equity Securities, (y) the identity of the proposed recipient(s) of the Equity Securities if such proposed recipient(s) have been identified and class (z) a description of such Shares the consideration and the price at which such Shares are to be issued and the other material terms and conditions of upon which the issuance. Subject to Section 4.02(e) belowproposed issuance or transfer is being made (provided, if any that in no event shall such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in include matters that would violate the Issuance Notice. For purposes of Purchaser's rights pursuant to this Section 4.025.12(b)(vii)), “Excluded Securities” shall include together with a copy of any Shares: written agreements relating thereto.
(iB) issued as a dividend or a distributionDuring the Investor Approval Period, the Purchaser and the General Partner (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with the exercise of any financing or leasing transactions, (iv) issued rights of the General Partner pursuant to the acquisition Section 5.8 (each an “Electing Party”) shall have an option for a period of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, three (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (103) Business Days from the date that the Board of receipt Directors approves the issuance of the Issuance Equity Securities, which shall be no sooner than 13 days from the Equity Securities Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares , to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder elect to purchase, at the same price and on the same material terms and conditions specified as described in the Issuance Equity Securities Notice, some or all of the offered Equity Securities in an amount up to the Electing Party's Preemptive Share, by delivering to the Partnership irrevocable written notice within such period setting forth the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at Equity Securities which the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights Electing Party wishes to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed and an undertaking to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, pay in full at closing the purchase of price for such SharesEquity Securities.
(cC) If any Stockholder elects to the General Partner does not exercise his or her preemptive rights under its right set forth in Section 5.8 and this Section 4.02 5.12(b)(vii) to purchase its Preemptive Share of the Equity Securities stated in the Equity Securities Notice, then the Purchaser shall have an option for a period of three (3) Business Days after the Purchaser's receipt of notice that the General Partner has not exercised all or elects any portion of such right to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled elect to purchase an additional amount of such Equity Securities up to the aggregate amount of offered Equity Securities not committed to be purchased by the General Partner. The Purchaser desiring to exercise its option set forth in this Section 5.12(b)(vii)(C) shall deliver irrevocable written notice to the Partnership within such three (3) Business Day period setting forth the number of Shares equal Equity Securities which the Purchaser wishes to purchase and an undertaking to pay in full at closing the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholderspurchase price for such Equity Securities.
(dD) The Company closing of the Equity Securities offered pursuant to the Equity Securities Notice shall have occur concurrently with the closing of the offering contemplated in the Equity Securities Notice. The Purchaser shall pay the same amount per Equity Security that the Partnership would receive from the underwriters (to the extent the Equity Securities are contemplated being sold pursuant to an underwritten sale) in connection with any exercise of its preemptive rights pursuant to Section 5.8 and this Section 5.12(b)(vii).
(E) Any Equity Securities for which the Purchaser or the General Partner, as applicable, has not elected to purchase following the expiration of the applicable period(s) set forth in Section 5.12(b)(vii)(C) and Section 5.12(b)(vii)(D) may be sold or transferred to the proposed recipient(s) on substantially the same terms and conditions set forth in the Equity Securities Notice at any time during the period ending ninety (90) days from the date after termination of the Issuance Notice to consummate the proposed issuance of any or all later of such Shares applicable period. Any Equity Securities that each Stockholder have elected not the Partnership desires to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, issue or transfer following such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, set forth in the price of such Shares shall Equity Securities Notice must be identical offered to the price paid such offer Purchaser and sale.
(g) The provisions the General Partner and its Affiliates with a new Equity Securities Notice pursuant to the terms of this Section 4.02 shall terminate after the Initial Public Offering5.12(b)(vii).
Appears in 1 contract
Sources: Limited Partnership Agreement (Cheniere Energy Partners, L.P.)
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior not issue, sell or exchange, agree or obligate itself to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issue, sell or exchange, or reserve or set aside for issuance. Subject to Section 4.02(e) below, if any such Shares are purchasedsale or exchange, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distributionany shares of Common Stock, (ii) granted or issued to employees, officers, directors, consultants or advisors any other equity security of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the BoardCompany, (iii) issued any debt security of the Company (other than debt with no equity feature) including without limitation, any debt security which by its terms is convertible into or issuable to lenders exchangeable, directly or lessors in connection with indirectly, for any financing or leasing transactionsequity security of the Company, (iv) issued any security of the Company that is a combination of debt and equity, or (v) any option, warrant or other right to subscribe for, purchase or otherwise acquire any such equity security or any such debt security of the Company (the securities described in (i)-(v) being referred to herein as the “Offered Securities”), unless in each case the Company shall have first offered to sell a portion of such Offered Securities to the Investor and each other purchaser of shares of Series B Preferred Stock (each an “Offeree” and collectively the “Offerees”) as follows: The Company shall deliver to each Offeree a written notice (the “Offer”) specifying the Company’s intention to issue, sell or exchange, or reserve or set aside for issuance, sale or exchange, Offered Securities, setting forth the number of Offered Securities it intends to issue, sell or exchange, or reserve or set aside for issuance, sale or exchange, and each material term and condition pursuant to which it intends to dispose of such Offered Securities. Each of the acquisition Offerees shall have the right to purchase that portion of another Person the Offered Securities as shall be equal to the total number of Offered Securities proposed to be sold by the Company or any of its Subsidiaries multiplied by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is shall equal the Aggregate Ownership number of that class shares of Shares Common Stock (after giving effect to the conversion of all shares of Series B Preferred Stock held by such Offeree) then held by the Fully Participating Stockholder, as the case may be, Offeree and the denominator of which is shall equal to the sum total number of shares of capital stock of the Aggregate Ownership Company on a fully-diluted basis (assuming full conversion and exercise of that class all convertible or exercisable securities of Shares by all Fully Participating Stockholders.
(d) The the Company then issued and outstanding), at a price and on such other terms as shall have ninety been specified by the Company in the Offer (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not Offered Securities which an Offeree is eligible to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant according to this Section 4.02 registered in 4(j(i) being referred to herein collectively as the name “Eligible Securities”). The Offer, will by its terms, remain open and irrevocable for a period of such Stockholder, against payment by such Stockholder of 10 days (the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120“Offer Period”) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and saleOffer.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (a) The Company shall give So long as the Conversant Investors, together with their Affiliates and Permitted Transferees, Beneficially Own at least 14.9% of the outstanding shares of Common Stock on an as-converted basis, each Stockholder written notice (an “Issuance Notice”) Conversant Investor will have the preemptive rights set forth in this Section 5 with respect to any issuance of any proposed issuance by Equity Securities that are issued after the Company of date hereof (any Shares at least ten such issuance, other than those described in clauses (10i) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(ethrough (vi) below, if a “Preemptive Rights Issuance”), except for (i) issuances of any such Shares are purchased, each Stockholder shall be entitled shares of Common Stock or options or rights to purchase such Stockholder’s Pro Rata Share shares or other form of the Shares proposed equity-based or equity-related awards (including restricted stock units) to be issued to a third-partyemployees (or prospective employees who have accepted an offer of employment), at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02directors or consultants, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreementsany present or future employee, equity purchase director or equity option plans, equity bonuses consultant benefit plan or awards, warrants, contracts program of or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person assumed by the Company or any of its Subsidiaries or of any employee agreements or arrangements or programs in effect as of the Closing Date (including the New LTIP (as defined in the Investment Agreement)), or thereafter adopted by the Board of Directors, (ii) issuances of securities pursuant to any merger, joint venture, partnership, consolidation, mergerdissolution, purchase liquidation, tender offer, recapitalization, reorganization, share exchange, business combination or similar transaction or any other direct or indirect acquisition by the Company, whereby the Company’s securities comprise, in whole or in part, the consideration paid by the Company in such transaction, which transaction has been approved by the Board of Directors and, to the extent then applicable, approved by Investor A in accordance with Section 4, (iii) issuances of shares of Common Stock upon conversion or exercise of any of preferred stock, option or Derivative Instrument, in each case, outstanding as of the Closing Date or if issued after the Closing Date, were either exempt from Investor A’s rights under this Section 5(a) or were offered to the Conversant Investors in accordance with this Section 5, (iv) by reason of a dividend, stock split or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series distribution of related transactions, a material amount of the assets or equity ownership of such other PersonCommon Stock, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits issuances of any shares of Series A Preferred Stock pursuant to the Company terms of the Investment Agreement (including issuances of Common Stock upon conversation of such shares of Series A Preferred Stock in accordance with the Certificate of Designations), or any of its Subsidiaries and (vi) issued issuances of any Equity Securities with respect to which Investor A waives in connection with an Initial Public Offeringwriting the rights of all of the Conversant Investors pursuant to this Section 5.
(b) Each Stockholder may exercise his If the Company at any time, or her rights under this Section 4.02 by delivering from time to time, effects a Preemptive Rights Issuance, the Company shall give prompt written notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days Conversant Investors and each of receipt their Affiliates party to this Agreement that holds any Equity Securities of the Issuance Notice. A delivery of such notice Company (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchaseeach, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the an “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating StockholderInvestor Holder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty ten (12010) days from prior to such issuance), which notice shall set forth the date number and type of the Issuance Notice. At securities to be issued, the consummation issuance date, the offerees or transferees, the price per security, and all of the other terms and conditions of such issuance, which shall be deemed updated by delivery of the final documentation for such issuance to the Conversant Investors. Each Investor Holder may, by written notice to the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120a “Preemptive Rights Notice”) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from days after receipt of the notice referred Preemptive Rights Notice, elect to herein purchase a number of securities specified in such Preemptive Rights Notice (which number may be any number up to but not exceeding the number of securities which, if divided by the sum of (i) such number of securities plus (ii) the number of securities issued in such Preemptive Rights Issuance, would represent a percentage that is equal to (A) the aggregate number of shares of Common Stock (on substantially an as-converted basis if applicable) that such Investor Holder owns immediately prior to such Preemptive Rights Issuance, divided by (B) the total number of shares of Common Stock then outstanding on an as-converted basis), on the same terms and conditions as such salePreemptive Rights Issuance (it being understood and agreed that the price per security that the Investor Holders shall pay shall be the same as the price per security set forth in the Preemptive Rights Notice); provided, howeverthat any Investor Holder shall not be entitled to acquire any such shares of Common Stock to the extent the issuance of such Common Stock to such Investor Holder would require approval of the stockholders of the Company pursuant to the rules and listing standards of NYSE, in which case the Company may consummate the proposed issuance prior to obtaining approval of the stockholders of the Company (subject to compliance by the Company with Section 5(d)). If an Investor Holder exercises its preemptive rights hereunder with respect to such Preemptive Rights Issuance, the price Company shall (or shall cause such Subsidiary to) issue to such Investor Holder (or its designated Affiliate(s)) the number of securities specified in such Shares Preemptive Rights Notice promptly thereafter (and provided that, if such Investor Holder shall be identical have so notified the Company at least three Business Days prior to the price paid issuance date set forth in the Company’s notice, at such offer Investor Holder’s election such purchase and salesale shall occur on the same date as, or substantially concurrently with, the Preemptive Rights Issuance).
(gc) The provisions of election by any Investor Holder not to exercise its preemptive rights hereunder in any one instance shall not affect its right as to any future Preemptive Rights Issuances.
(d) Notwithstanding anything to the contrary in this Agreement, in the event that any Investor Holder exercises its preemptive rights pursuant to this Section 4.02 shall terminate after 5 and the Initial Public Offeringpurchase or issuance of such securities would require the Company to obtain approval of its stockholders pursuant to the listing rules of the NYSE or such national securities exchange that the Common Stock is listed upon, if any, the Company and the Investor Holder will use their respective commercially reasonable efforts to negotiate in good faith the terms of any such transaction, including without limitation the terms of any securities of the Company issued pursuant to such transaction to the Investor Holder, such that the issuance to the Investor Holder would not require such stockholder approval while providing the Investor Holder and/or its Affiliates with substantially similar benefits and rights of such securities issued in the Preemptive Rights Issuance.
Appears in 1 contract
Preemptive Rights. (a) The For the purposes of this Section 4, “Excluded Issuance” shall mean (i) the issuance of shares of any Equity Securities (including upon exercise of options) to directors, officers, employees, consultants or other agents of the Company as approved by the Board in connection with their employment or performance of services, (ii) the issuance of any Equity Securities in connection with any “business combination” (as defined in the rules and regulations promulgated by the SEC) or otherwise in connection with bona fide acquisitions of securities or substantially all of the assets of another Person, business unit, division or business, in each case, to the sellers in such transaction as consideration thereof, (iii) the issuance of any securities pursuant to the conversion, redemption or exchange of Preferred Stock issued to the Investor and (iv) the issuance of any shares of a subsidiary of the Company to the Company or a wholly owned subsidiary of the Company.
(b) For so long as the Investor Amount is at least 50%, if the Company proposes to issue Equity Securities of any kind, other than in an Excluded Issuance, then the Company shall:
(i) give written notice to the Investor no less than five (5) Business Days prior to the closing of such issuance or, if the Company reasonably expects such issuance to be completed in less than five (5) Business Days, such shorter period (which shall be as given as promptly as commercially practicable but in any event not less than three (3) Business Days prior to such closing), setting forth in reasonable detail (A) the designation and all of the material terms and provisions of the securities proposed to be issued (the “Proposed Securities”), including, to the extent applicable, the voting powers, preferences and relative participating, optional or other special rights, and the qualifications, limitations or restrictions thereof and interest rate and maturity, (B) the price and other terms of the proposed sale of such securities and (C) the amount of such securities proposed to be issued; provided that, following the delivery of such notice, the Company shall give each Stockholder deliver to the Investor any such information the Investor may reasonably request in order to evaluate the proposed issuance, except that, in connection with a public offering, the Company shall not be required to deliver any information that has not been or will not be provided or otherwise made available to the proposed purchasers of the Proposed Securities; and
(ii) offer to issue and sell to the Investor, on such terms as the Proposed Securities are issued and upon full payment by the Investor, a portion of the Proposed Securities equal to a percentage determined by dividing: (x) the number of shares of Common Stock beneficially owned, on an as-converted basis, by the Investor, by (y) the total number of shares of Common Stock outstanding immediately prior to the issuance of the Proposed Securities, on an as-converted basis.
(c) The Investor will have the option exercisable by written notice to the Company, to accept the Company’s offer and commit to purchase any or all of the Equity Securities offered to be sold, which notice must be given on or prior to the Business Day immediately prior to the date of the closing of the issuance of such Equity Securities (an “Issuance Notice”or, if notice of all such terms has not been given prior to the Business Day immediately prior to the such closing date, at any time prior to such closing date) (the failure of the Investor to respond within such time period shall be deemed a waiver of its rights under this Section 4 with respect to the applicable issuance of Equity Securities). Such notice to the Company shall constitute a binding commitment by the Investor to purchase the amount of Equity Securities so specified at the price and other terms set forth in the Company’s notice to the Investor. The closing of the exercise of such subscription right shall take place simultaneously with the closing of the sale of the Proposed Securities giving rise to such subscription right; provided, however, that the closing of any purchase by the Investor may be extended beyond the closing of the sale of the Proposed Securities giving rise to such preemptive right to the extent necessary to (i) obtain required approvals from any Governmental Entity or (ii) permit the Investor to receive proceeds from calling capital pursuant to commitments made by its (or its Affiliated investment funds’) limited partners. Upon the expiration of the offering period described above, the Company will be free to sell such Proposed Securities that the Investor has not elected to purchase during the 120 days following such expiration on terms and conditions no more favorable to the purchasers thereof than those offered to the Investor in the notice delivered in accordance with this Section 4. Any Proposed Securities offered or sold by the Company after such 120-day period must be reoffered to issue or sell to the Investor pursuant to this Section 4.
(d) The election by the Investor not to exercise its subscription rights under this Section 4 in any one instance shall not affect its right as to any subsequent proposed issuance.
(e) If the proposed issuance by the Company of any Shares at least ten (10) Business Days prior securities which gave rise to the proposed issuance date. The Issuance Notice shall specify exercise by the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any Investor of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in 4 shall be terminated or abandoned by the name Company without the issuance of such Stockholderany securities, against payment by such Stockholder then the purchase rights of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares Investor pursuant to this Section 4.02 for whatever reason4 shall also terminate as to such proposed issuance by the Company (but not any subsequent or future issuance), regardless of whether it shall have delivered an Issuance Notice and any funds in respect of such proposed issuancethereof paid to the Company by the Investor in respect thereof shall be refunded in full.
(f) The Company may offer and sell Shares In the case of an issuance subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder 4 for consideration in whole or complying with the procedures of this Section 4.02in part other than cash, including securities acquired in exchange therefor (other than securities by their terms so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, howeverexchangeable), the price of such Shares consideration other than cash shall be identical deemed to be the price paid such offer and salefair market value thereof as reasonably determined in good faith by the Board.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Sources: Investment Agreement
Preemptive Rights. If the Company or any subsidiary of the Company proposes to issue any shares of capital stock or other equity securities (aother than (i) issuances by a subsidiary of the Company to the Company, (ii) issuances to persons that are not Affiliates of the Company, (iii) issuances to a third party lender in connection with a debt financing from such lender, (iv) issuances pursuant to the Approved Stock Plan, (v) issuances of Common Stock upon the exercise or conversion of options, warrants or convertible securities that were originally issued to non-Affiliates or pursuant to the Approved Stock Plan or (vi) issuances, if any, of Common Stock (or warrants or other rights to acquire the same or upon the exercise of any such warrants or rights), of up to an aggregate of 49% of the Company's Common Stock (on a fully diluted basis) to any holder of the Company's Series A Preferred Stock in consideration for any amendment to the Series A Preferred Stock Certificate of Designation or in consideration for such holder's agreement to participate in the Company's senior credit facility as contemplated and provided for in the Letter Agreements dated the date hereof among the Company, KCSN, TCW and Ares), each Stockholder shall have the right of first refusal to purchase a portion of such securities equal to such Stockholder's percentage interest in the Common Stock on a fully-diluted basis (giving effect to the exercise of all Vested Options and the conversion of all outstanding Notes) immediately prior to such issuance. The Company shall give each Stockholder at least 30 days' prior written notice (an “Issuance Notice”) of any such proposed issuance setting forth in reasonable detail the proposed terms and conditions thereof and shall offer to each Stockholder the opportunity to purchase such securities at the same price, on the same terms, and at the same time as the securities are proposed to be issued by the Company of any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of Company; provided, however, that if such Shares and the price at which such Shares securities are to be issued sold for non-cash consideration, the Board of Directors shall make a good faith determination of the fair value of such non-cash consideration and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder Stockholders shall be entitled to purchase pay such Stockholder’s Pro Rata Share value in cash. A Stockholder may exercise its right of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes first refusal by delivery of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits an irrevocable written notice to the Company or any not more than 20 days after delivery of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt 's notice. The obligation of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder Stockholders exercising preemptive their rights pursuant to this Section 4.02 registered in 8 to purchase and pay for securities shall be conditioned upon the name of such Stockholder, against payment by such Stockholder consummation of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on by the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuanceCompany.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (a) Each of the Stockholders shall, until the fifth anniversary of the Closing Date but only for so long as such Stockholder owns at least 10% of the outstanding Registrable Securities (each a "Qualified Stockholder"), have the right to purchase additional shares of Common Stock, or securities convertible into or exchangeable for shares of Common Stock (including without limitation, warrants, options or convertible stock or debt)(any such securities so issued, "New Securities"), in a pro-rata amount and on the same terms and conditions as are called for by each future issuance (or as nearly as may be practicable in the event the Qualified Stockholders cannot comply with such terms and conditions), in any issuance of securities by the Company other than (i) issuances of securities described in Section 5.8 of the Securities Purchase Agreement (including without limitation pursuant to the Employee Stock Option Plan) or other securities issued to an employee, director or bona fide consultant to the Company as compensation pursuant to a plan or agreement that is approved by holders of a majority of the outstanding shares of Common Stock, (ii) securities issued as consideration for a bona fide business combination or acquisition of securities or other property, or (iii) securities issued upon a conversion of or in exchange for securities issued by the Company in full compliance with the preemptive rights of the Stockholders set forth in this Section 3.1; provided, that such conversion occurred at the sole option of the holder. For the purposes of this Section 3.1, the term "pro-rata amount" shall mean such amount as will allow each Qualified Stockholder to maintain its then existing percentage ownership of the Common Stock on a fully diluted basis.
(b) The Company shall give each Qualified Stockholder written notice (an “"Issuance Notice”") of any proposed issuance by the Company of any Shares New Securities at least ten (10) Business Days 10 days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares New Securities are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each A Qualified Stockholder may exercise his or her its rights under this Section 4.02 3.1 by delivering notice of his or her its election to purchase such Shares New Securities to the Company, Company within ten (10) five Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares shares of New Securities to be purchased by such the Stockholder submitting such notice, up to such Qualified Stockholder's pro rata amount) by such Qualified Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares New Securities specified in such Stockholder’s 's notice. If, at the termination of such ten (10) Business Day- five day-period, any Qualified Stockholder shall not have exercised his or her its rights to purchase any of such Stockholder’s Pro Rata Share 's pro rata amount of such SharesNew Securities, such Qualified Stockholder shall be deemed to have waived all of its rights under this Section 4.02 3.1 with respect to, and only with respect to, to the purchase of such SharesNew Securities.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) 90 days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares New Securities that each Stockholder the Qualified Stockholders have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided provided, that, if such issuance is subject to regulatory approval, such ninety (90) 90 day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) 180 days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format issue certificates representing the Shares New Securities to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 3.1 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such SharesNew Securities. If the Company proposes to issue any class of Shares New Securities after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuertime periods set forth herein, it shall again comply with the procedures set forth in this Section 4.023.1.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Sources: Securities Purchase Agreement (Pinnacle Holdings Inc)
Preemptive Rights. 10.1 Except as provided in paragraphs (a) The Company shall give each Stockholder written notice to (an “Issuance Notice”f) below, namely:
(a) conversion rights applicable to the Series A Preference Shares;
(b) securities issued pursuant to a Qualified IPO;
(c) securities issued in consideration of any proposed issuance the acquisition by the Company of another corporation by merger or purchase of substantially all its assets;
(d) securities issued in connection with any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions stock split, stock consolidation or stock dividend of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share Company or recapitalizations which do not affect the respective percentage equity interest of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: Shareholders;
(ie) issued as a dividend or a distribution, (ii) granted or securities issued to employees, officers, directors, consultants officers or advisors directors of the any Group Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity stock option plans, equity bonuses or awards, warrants, contracts plans or other stock incentive arrangements that are approved by the Board, Board provided that the issue of such securities shall be subject to the restrictions set forth in Clause 9; and
(iiif) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) securities issued pursuant to the acquisition consent in writing of another Person by all Shareholders for the time being, the Company will not, and will procure that none of the Group Companies will, authorise, create or issue any shares or securities of its Subsidiaries by consolidationany class and will not and will procure that none of the Group Companies will, mergerauthorise, issue or grant any options, warrants, conversion rights or other rights to purchase or other transaction acquire any shares or securities of any class without first offering the Shareholders the right of first offer described in this Clause 10.
10.2 The Shareholders shall have a right of first offer to purchase and subscribe for an amount of securities of the Company of any class or kind which the Company or proposes to issue (“Preemptive Securities”) sufficient to maintain their proportionate beneficial ownership interests in the Company (on an as-converted, fully diluted basis).
10.3 If the Company wishes to make any issue of Preemptive Securities, it shall prior to such Subsidiary acquires, in a single transaction or series of related transactions, a material amount issue give all the Shareholders thirty (30) Business Days written notice of the assets or equity ownership proposed issue. The notice shall set forth the terms and conditions of the proposed issue (including the number of Preemptive Securities to be offered and the price for which the Company proposes to offer such Preemptive Securities and any other material terms of such other Personissue), and shall constitute an offer to issue the Preemptive Securities to all the Shareholders on such terms and conditions.
10.4 Any Shareholder may accept such offer by delivering a written notice of acceptance (van “Acceptance Notice”) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company within thirty (30) Business Days after receipt of the notice of the Company of the proposed issue. Any Shareholder in exercising its right of first offer shall be entitled to participate in the purchase of Preemptive Securities on a pro rata basis to the extent necessary to maintain such Shareholder’s proportionate beneficial ownership interest in the Company (such Shareholders’ “Pro Rata Portion”) (and for purposes of determining such Shareholders’ Pro Rata Portion, any Shareholder or other security holder shall be treated as owning that number of Shares into which any outstanding convertible shares may be converted and for which any outstanding options may be exercised). If any Shareholder fails to purchase or does not accept its pro rata portion, the other Shareholders shall, among them, have the right to purchase up to the balance of the Preemptive Securities not so purchased. The Shareholder willing to purchase shall notify the Company of its Subsidiaries and (vi) issued desire to purchase more than its Pro Rata Portion( the “Oversubscription”). If, as a result thereof, such Oversubscription exceeds the total number of Preemptive Securities available in connection respect of such Oversubscription privilege, the oversubscribing Shareholders shall be cut back with an Initial Public Offeringrespect to their Oversubscriptions on a pro rata basis in accordance with their respective Pro Rata Portion.
(b) Each Stockholder may 10.5 If any Shareholder elects to exercise his or her rights under this Section 4.02 by delivering notice its right of his or her election to first offer but does not complete the purchase of such Shares Preemptive Securities within 14 days after delivery of its Acceptance Notice to the Company, within ten (10) Business Days the Company may complete the sale of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and Preemptive Securities on the terms and conditions specified in the Issuance NoticeCompany’s notice within 7 days following the expiration of such 14 day period.
10.6 If the Company does not complete the issue of the Preemptive Securities within such 7 days’ period, the number right of shares (or amount) of Shares specified first offer provided in such Stockholder’s notice. If, at the termination this Clause 11 in respect of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder Preemptive Securities shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, revived and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company Preemptive Securities shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company offered to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject person unless first reoffered to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying Shareholders in accordance with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and saleClause 10.2.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Sources: Shareholder Agreements (The9 LTD)
Preemptive Rights. (a) The If the Company or any of its Subsidiaries proposes to issue additional equity securities, including any warrants, options or other rights to acquire equity of the Company or any of its subsidiaries or debt securities that are convertible into or exchangeable or exercisable for equity securities of the Company or any of its Subsidiaries (with the exception of any issuance (i) in connection with any acquisition of assets or another Person by the Company or any of its Subsidiaries, whether by purchase of stock, merger, consolidation, purchase of all or substantially all of the assets of such Person or otherwise (excluding any issuance for purposes of financing such transaction) approved by the Board and the requisite holders of the Series D Preferred Stock to the extent required under the Series D Certificate of Designation, including in connection with the transactions contemplated by and among the Company, one of its Subsidiaries and Beacon Capital Strategies, Inc. (“Beacon”) pursuant to that certain Asset Purchase Agreement, dated as of February 2, 2011 (the “Beacon APA”), (ii) Exempted Securities (as such term is defined in the Certificate of Designation), (iii) in an underwritten public offering with gross proceeds of $50,000,000 and a market capitalization of $175,000,000 and (iv) approved by holders of the majority of the Series D Preferred Stock (in each case, having been approved in accordance with the terms of this Agreement and the Series D Certificate of Designation, to the extent applicable)) (“Preemptive Securities”), the Company shall give each Stockholder provide written notice (an “Issuance Notice”) to each holder of any proposed Preferred Securities of such anticipated issuance by the Company of any Shares at least ten no later than twenty-two (1022) Business Days prior to the proposed anticipated issuance date. The Issuance Notice Such notice shall specify set forth the number and class of such Shares and the price at which such Shares are to be issued and the other material principal terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share including a description of the Shares Preemptive Securities proposed to be issued issued, the proposed purchase price for such Preemptive Securities and the anticipated issuance date. Each holder of Preferred Securities shall have the right to purchase a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes number of this Section 4.02, “Excluded Securities” shall include any Shares: Preemptive Securities determined by multiplying (i) issued as a dividend or a distributionthe number of Preemptive Securities proposed to be issued, by (ii) granted or issued to employeesa fraction, officers, directors, consultants or advisors the numerator of which is the number of shares of Preferred Stock held by such Stockholder on an as-converted basis at the time the Issuance Notice for such Preemptive Securities is given and the denominator of which is the total number of shares of the Company or any of its Subsidiaries pursuant to incentive agreementsCompany’s Common Stock issued and outstanding on a fully-diluted, equity purchase or equity option plansas converted, equity bonuses or awards, warrants, contracts or other arrangements that are approved by basis on the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt date of the Issuance NoticeNotice (the “Pro Rata Portion”). A delivery Each holder of such notice (which notice shall specify the number (or amount) of Shares Preferred Securities that desires to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, purchase Preemptive Securities at the price and on the terms and conditions specified in the Issuance Notice, Company’s notice must deliver an irrevocable written notice to the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share Company (a “Fully Participating StockholderPreemptive Exercise Notice”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt after the delivery of the notice referred Issuance Notice, setting forth (x) the number of such Preemptive Securities for which such right is exercised (which such number shall not exceed such Stockholder’s Pro Rata Portion of such Preemptive Securities) and (y) the maximum number of additional Preemptive Securities that such Stockholder would be willing to herein purchase in excess of such Stockholder’s Pro Rata Portion in the event that any other Stockholder or other Person entitled to exercise preemptive rights with respect to such issuance elects not to purchase its full Pro Rata Portion of such Preemptive Securities.
(b) In the event the Stockholders with preemptive rights pursuant to clause (a) above do not purchase all such Preemptive Securities in accordance with the procedures set forth in such clause (a), the Company shall have one hundred twenty (120) days after the anticipated issuance date to sell to other Persons the remaining Preemptive Securities at the price and on substantially such terms and conditions that are no more favorable to such other Persons than those specified in the Company’s notices to the Stockholders pursuant to Section 4(a). If the Company fails to sell such Preemptive Securities within one hundred twenty (120) days of the anticipated issuance date provided in the notices given to the Stockholders pursuant to Section 4(a), the Company shall not thereafter issue or sell any Preemptive Securities without first offering such Preemptive Securities to the holders of Preferred Securities in the manner provided in this Section 4.
(c) The election by a Stockholder not to exercise its preemptive rights under this Section 4 in any one instance shall not affect such Stockholder’s right (other than in respect of a reduction in its Pro Rata Portion) as to any future issuances under this Section 4.
(d) All costs and expenses incurred by the Company in connection with its obligations under this Section 4, including all attorneys fees and charges, all accounting fees and charges and all finders, brokerage or investment banking fees, charges or commissions, shall be paid by the Company.
(e) Notwithstanding any provision hereof to the contrary, in lieu of complying with the provisions of this Section 4, the Company may elect to give the Issuance Notice to the Stockholders with preemptive rights pursuant to Section 4(a) within ten (10) days after the issuance of Preemptive Securities and thereafter give such Stockholders the right to purchase such number of Preemptive Securities as would provide them with the same ownership as if the Issuance Notice and preemptive rights had been provided prior to the issuance of the Preemptive Securities, all on the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and salewould otherwise apply under this Section 4.
(gf) The provisions of preemptive rights under this Section 4.02 4 shall terminate after on such date as of which less than 25% of the Initial Public Offeringshares of Series D Preferred Stock issued in the Series D Financing remain outstanding.
Appears in 1 contract
Preemptive Rights. (a) 6.4.1. The Company shall give hereby grants to each Stockholder written notice Capital Member the right to purchase its Pro Rata Share (an “Issuance Notice”disregarding any Incentive Plan Interests) of any proposed issuance by New Senior Securities, as hereinafter defined (the “PR Purchase Right”), which the Company of any Shares at least ten (10) Business Days prior may, from time to the proposed issuance datetime, propose to sell and issue. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) Except as set forth below, if “New Senior Securities” shall mean Series B Preferred Interests or any such Shares are purchasedother equity securities with a liquidation preference or dividend, each Stockholder shall be entitled redemption, or voting rights senior or on parity with Series B Preferred Interests as well as rights, options or warrants to purchase such Stockholder’s Pro Rata Share equity securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity securities. Notwithstanding the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02foregoing, “Excluded New Senior Securities” shall include any Sharesdoes not include: (i) issued as securities offered to the public generally pursuant to a dividend registration statement filed pursuant to the Securities Act, or a distribution, pursuant to Regulation A under the Securities Act; (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) securities issued pursuant to the acquisition of another Person person by the Company or any of its Subsidiaries by consolidation, a merger, share exchange, the purchase of substantially all of the assets of such other company, or other transaction in which reorganization whereby the Company or its Members own not less than fifty-one percent (51%) of the voting power of the surviving or successor Person, so long as such Subsidiary acquiresacquisition is approved by the Board; (iii) the issuance of Options or Interests to employees of the Company, the Officers, Service Providers or members of the Board pursuant to the Option Plan, as currently in effect and as may from time to time be amended or any other equity incentive plan approved by the Board (including, if adopted following the date hereof, the affirmative approval of the Lead Series A Investor Manager and the Lead Series B Investor Manager), not to exceed, in a single transaction or series of related transactionsthe aggregate, a material amount twenty percent (20%) of the assets equity Interests of the Company on a fully diluted basis; (iv) securities issued pursuant to any convertible securities, options or equity ownership warrants, provided that the PR Purchase Right under this Section 6.4 applies with respect to the initial issuance or grant of such other Personconvertible securities, options or warrants; (v) securities issued pursuant to Persons the anti-dilution provisions of any outstanding option, warrant, right or convertible security of the Company issued after November 26, 2019; provided that the PR Purchase Right under this Section 6.4 applies with respect to the initial issuance of such option, warrant or convertible security, or provided that such securities issued pursuant to any option, warrant or convertible security otherwise do not constitute “New Senior Securities” for purposes of this Section 6.4 (as if such securities had been originally issued on the date such securities are issued pursuant to the anti-dilution provisions in the applicable option, warrant or convertible security for the same reason the applicable option, warrant or convertible security was originally issued), (vi) securities representing up to five percent (5%) of equity Interests of the Company on a fully diluted basis at the time of issuance that are issued in connection with arm’s length, reasonable commercial arrangements with any party who is not an Affiliate of a Skybound Member, so long as such commercial arrangement is approved by the Board in good faith reasonably believes will provide strategic benefits faith, and (vii) securities issued to any Person upon the waiver by the Board by unanimous consent of the PR Purchase Right and the notice requirements set forth in this Section 6.4.
6.4.2. If the Company or any proposes to undertake an issuance of New Senior Securities, it shall give each Capital Member written notice of its Subsidiaries intention, describing the type of New Senior Securities, and (vi) issued in connection with an Initial Public Offering.
(b) the price and terms upon which the Company proposes to issue the New Senior Securities. Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within Capital Member shall have ten (10) Business Days days from the date of receipt of the Issuance Notice. A delivery any such notice to agree to purchase up to its respective Pro Rata Share (disregarding any Incentive Plan Interests) of such New Senior Securities for the price and upon the terms specified in the notice (which by giving written notice shall specify to the number (or amount) Company of Shares such Capital Member’s intentions and stating therein the quantity of New Senior Securities to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute Capital Member.
6.4.3. In the event a binding agreement of such Stockholder Capital Member fails to purchase, at exercise the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of PR Purchase Right within such ten (10) Business Day- day period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days thereafter to sell or enter into a written agreement (pursuant to which the sale of New Senior Securities covered thereby shall be completed, if at all, within sixty (60) days from the date of such agreement) to sell the Issuance Notice to consummate New Senior Securities not purchased by the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase Capital Members at the a price and upon such terms and conditions that which are not materially less no more favorable to the Company purchaser of such New Senior Securities than those specified in the Issuance Notice, provided that, if such issuance is subject Company’s notice to regulatory approval, the Capital Members. If the Company has not sold the New Senior Securities or entered into a written agreement to sell the New Senior Securities within such ninety (90) day period shall be extended until (or completed the expiration sale of five the New Senior Securities within sixty (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (12060) days from the date of the Issuance Notice. At the consummation of such issuanceagreement, as provided above), the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to may not thereafter issue or sell any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 New Senior Securities without first offering such Shares to each Stockholder or complying with securities in the procedures of manner provided in this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale6.4.
(g) 6.4.4. The provisions of PR Purchase Right granted to a Capital Member under this Section 4.02 6.4 shall terminate after expire upon the Initial Public Offeringdate such Capital Member no longer owns any Interests.
Appears in 1 contract
Sources: Limited Liability Company Operating Agreement (Mr. Mango LLC)
Preemptive Rights. (a) The Subject to Section 2(c) below, the Company hereby grants to each Investor a right of first refusal to purchase its Pro Rata portion of any Capital Stock which the Company may, from time to time, propose to issue. If Capital Stock is issued as part of an issuance of other securities, such right of first refusal shall extend to such securities as a unit.
(b) In the event the Company proposes to issue Capital Stock, it shall give each Stockholder Investor written notice (an “Issuance a "Preemption Notice”") of any proposed issuance by its intention to do so. ----------------- The Preemption Notice shall set forth the anticipated price (which shall be payable solely in cash) and the general terms upon which the Company proposes to issue the Capital Stock. Each Investor shall have thirty (30) days from the date the Preemption Notice is given to agree to purchase all or any portion of any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class its Pro Rata share of such Shares and Capital Stock for the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the anticipated price and on upon the other terms and conditions specified in the Issuance Notice. For purposes Preemption Notice by giving written notice to the Company stating therein the quantity of Capital Stock it wishes to purchase.
(c) The provisions of this Section 4.02, “Excluded Securities” 2 shall include any Sharesnot apply to the following issuances by the Company: (i) issued as a dividend or a distribution, (ii) granted or shares of Common Stock issued to employees, officers, directors, directors or consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreementsthe Company's 1997 Stock Plan, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or the Company's 1997 Director Option Plan and other arrangements that are similar plans approved by the Board, Company's Board of Directors after the date hereof; (ii) 615,125 shares of Common Stock to be issued pursuant to certain management stock option agreements; (iii) shares issued or issuable to lenders or lessors by the Company in connection with any financing merger, acquisition, business combination, joint venture, partnership or leasing transactions, limited liability company; and (iv) shares issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction for a purchase price less than $500,000 and a purchase price equal to or series of related transactions, a material amount greater than the current Conversion Price (as defined in Section 5 of the assets or equity ownership Certificate of Designations); provided, however, that the aggregate purchase price of all such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder transactions shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholdersexceed $1,500,000.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 2 shall terminate after the Initial Public Offeringas to each share of Series A Preferred Stock upon its conversion into Common Stock.
Appears in 1 contract
Preemptive Rights. (a) The Company shall give hereby grants to each Stockholder written notice Shareholder, for a period of two (an “Issuance Notice”2) years from the date hereof, a preemptive right to purchase, on a pro rata basis and at the same price and upon the same terms as any other investors at such time, all or any part of any proposed issuance by the Company of any Shares at least ten New Securities (10as defined below) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquiresmay, in a single transaction or series of related transactionsfrom time to time, a material amount of the assets or equity ownership of such other Person, (v) issued propose to Persons who the Board in good faith reasonably believes will provide strategic benefits sell and issue subject to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Noticeset forth below. A Shareholder's pro rata share, the number for purposes of shares this subsection (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”a), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership number of that class shares of Shares Common Stock then held by the Fully Participating Stockholder, as the case may besuch Shareholder on a fully-diluted basis, and the denominator of which is equal the total number of shares of Shares then held by all of the Shareholders on a fully-diluted basis. (b) "New Securities" shall mean any capital stock of the Company --------------- whether now authorized or not and rights, options or warrants to purchase capital stock, and securities of any type whatsoever which are, or may become, convertible into capital stock; provided, however, that the term "New Securities" shall expressly not include (i) securities offered to the sum public pursuant to a Public Offering; (ii) securities issued for the acquisition of another corporation by the Company by merger, purchase of substantially all the assets of such corporation or other reorganization resulting in the ownership by the Company of not less than 51% of the Aggregate Ownership voting power of such corporation; (iii) Common Stock issued to employees or consultants of the Company pursuant to a stock option plan, employee stock purchase plan, restricted stock plan or other employee stock plan or agreement approved by the Board of Directors of the Company (provided that class the total number of Shares by shares to be issued under all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from such plans does not exceed 10% of the Company's shares outstanding as of the date of the Issuance Notice to consummate the proposed issuance this Agreement); or (iv) securities issued as a result of any stock split, stock dividend or reclassification of Common Stock, distributable on a pro rata basis to all holders of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02Common Stock.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares Company Securities to Oak Hill or its Affiliates (other than “Excluded Securities” in respect of which this Section 4.05 will not apply) at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares Company Securities and the price at which such Shares Company Securities are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e4.05(e) below, if any such Shares Company Securities are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares Company Securities proposed to be issued to a third-partyOak Hill, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.024.05, “Excluded Securities” shall include any SharesCompany Securities: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors (other than Oak Hill or its Affiliates) in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person (other than Oak Hill or its Affiliates) by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons (other than Oak Hill or its Affiliates) who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 4.05 by delivering notice of his or her election to purchase such Shares Company Securities to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares Company Securities to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares Company Securities specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- Day-period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such SharesCompany Securities, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 4.05 with respect to, and only with respect to, the purchase of such SharesCompany Securities.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 4.05 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares Company Securities equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares Company Securities by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares Company Securities by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares Company Securities that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) -day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) 120 days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format issue certificates representing the Shares Company Securities to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 4.05 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such SharesCompany Securities. If the Company proposes to issue any class of Shares Company Securities after such one hundred and twenty (120) 90-day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.024.05.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares Company Securities and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares Company Securities pursuant to this Section 4.02 4.05 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares Company Securities subject to the preemptive rights under this Section 4.02 4.05 without first offering such Shares Company Securities to each Stockholder or complying with the procedures of this Section 4.024.05, so long as each Stockholder receives receive prompt written notice of such sales and thereafter is are given the opportunity to purchase his or her respective Pro Rata Share of such Shares Company Securities within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares Company Securities shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 4.05 shall terminate after the Initial Public Offering.
Appears in 1 contract
Sources: Stockholders' Agreement (Dave & Buster's Entertainment, Inc.)
Preemptive Rights. If at any time prior to the one year anniversary of the Closing Date, the Company proposes to issue any equity Common Stock or Common Stock Equivalents (collectively, "NEW ISSUE SECURITIES"), the Company shall first offer the New Issue Securities to the Investors in accordance with the following provisions:
(a) The Company shall give each Stockholder a written notice to each Investor (an “Issuance Notice”the "FIRST NOTICE") stating (i) its intention to issue the New Issue Securities, (ii) the number and description of any the New Issue Securities proposed issuance by to be issued and (iii) the Company proposed purchase price (calculated as of any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number ) and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in upon which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of is proposing to offer the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public OfferingNew Issue Securities.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice Transmittal of his or her election to purchase such Shares the First Notice to the CompanyInvestors by the Company shall constitute an offer by the Company to sell each Investor up to his, within ten her or its proportionate number (10) Business Days of receipt based upon his, her or its percentage ownership of the Issuance Notice. A delivery total number of such notice (which notice shall specify the number (or amountissued and outstanding shares of Common Stock) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the New Issue Securities for the price and on upon the terms and conditions specified set forth in the Issuance First Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (For a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date receipt of the Issuance Notice. At of the consummation First Notice to the Investors, each Investor shall have the option, exercisable by written notice to the Company, to accept the Company's offer as to all or any part of such issuanceInvestor's proportionate number of the New Issue Securities. If two or more types of New Issue Securities are to be issued or New Issue Securities are to be issued together with other types of securities, including, without limitation, debt Securities, in a single transaction or related transactions, the Company shall record rights to purchase New Issue Securities granted to the Shares Investors under this Section must be exercised to purchase all types of New Issue Securities and such other securities in book entry format representing the Shares same proportion as such New Issue Securities and other securities are to be purchased issued by each Stockholder exercising the Company.
(c) The preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth contained in this Section 4.02.
(e) The Company shall not be under apply to the issuance and sale by the Company, from time to time hereafter, of (i) shares of Common Stock or Common Stock Equivalents to employees, officers, or directors of, or consultants to, the Company, as compensation for their services to the Company or any obligation of its direct or indirect Subsidiaries pursuant to consummate any proposed arrangements approved by the Board of Directors of the Company, (ii) the issuance of Shares the Securities pursuant to the Transaction Documents and there will be no liability on the part issuance and exercise of the warrants issuable to Cardinal Securities, LLC pursuant to its engagement letter with the Company in connection with the offering subject to this Agreement, (iii) shares of Common Stock issued and sold in a firm commitment underwritten public offering (which shall not include an equity line of credit or similar financing arrangement) resulting in net proceeds to the Company of in excess of $15,000,000 or (iv) shares of Common Stock issued as consideration for the acquisition of another company or business in which the shareholders of the Company to any Stockholder if do not have an ownership interest, which acquisition has been approved by the Board of Directors of the Company has or (v) shares of Common Stock issuable upon the exercise of outstanding Common Stock Equivalents (but not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuanceamendments thereto).
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) Subject to the restrictions on preemptive rights contained in Section 1.2 below, prior to the consummation of any proposed issuance or sale by the Company Corporation of any Shares at least ten shares of its capital stock including any treasury shares (10) Business Days prior to e.g., authorized but unissued shares), such shares shall first be offered (on the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material same terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares as so proposed to be issued or sold) to a third-partythe Shareholders in proportion to their respective holdings, at the price and on the other all as more fully set forth below:
(a) Said terms and conditions specified shall be communicated in writing to each Shareholder at their address appearing on the Issuance Notice. For purposes books of this Section 4.02Corporation, “Excluded Securities” shall include any Shares: (i) issued as together with a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors statement of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offeringtheir rights hereunder.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election Shareholder shall have the option to purchase such Shares to the Companyacquire their proportion (i.e., within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership number of that class of Shares shares held by such Shareholder prior to the Fully Participating Stockholder, as the case may be, new issuance and the denominator of which is equal the total number of issued and outstanding shares held by all Shareholders prior to the sum new issuance) of the Aggregate Ownership capital stock so proposed to be issued or sold, on the same terms and conditions. Such option shall be exercised by delivery of that class written notice of Shares exercise to the principal office or statutory agent of this Corporation within ten (10) business days after receipt of the communication referred to in Section 1.1(a) above. An option may be exercised as to all shares subject thereto or in part.
(c) In the event any Shareholder shall fail or decline to exercise his preemptive option as aforesaid, such Shareholder’s proportion of said capital stock may be acquired by the Shareholders who have exercised their options up to a number of shares in proportion to the number of shares subject to their options. Such option shall be exercised by delivery of written notice of exercise to the principal office or statutory agent of this Corporation within ten (10) business days after receipt of a communication from the Corporation as to the availability of such shares. The option may be exercised as to all Fully Participating Stockholdersshares subject thereto or in part.
(d) The Company Any acquisition of capital stock pursuant to the preemptive rights conferred by this provision shall have ninety be closed on or before the date which is the later of (90i) thirty (30) business days from after receipt by the Corporation of the last written notice of exercise given pursuant to Section 1.1(b) or Section 1.1(c) above, or (ii) the date of the Issuance Notice to consummate the proposed issuance giving rise to such rights, as set forth in the notice given pursuant to Section 1.1(a) above. In the event the Corporation has not sold such capital stock within such time periods, the Corporation shall not thereafter issue or sell any shares of any or all capital stock without first again offering such shares of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable capital stock to the Company than those specified Shareholders in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply accordance with the procedures set forth in this Section 4.021.1.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Sources: Shareholders Agreement (Emerging Fuels Technology, Inc.)
Preemptive Rights. (a) The To the extent permitted under Nasdaq rules, the Company hereby grants to Ivory the right until the Second Trigger Date to purchase up to its Pro Rata Portion of any Company Securities that the Company may from time to time propose to issue or sell to any Person; provided, however, that in any case in which Company Securities are to be issued (in whole or in part) as consideration in any merger, consolidation, reorganization, conversion, joint venture, transfer, domestication or any other business combination, or any acquisition (including by merger, consolidation, conversion, transfer, domestication, acquisition of stock or assets or otherwise) of any businesses, assets, operations or securities comprising a business (any such transaction, an “M&A Transaction”), Ivory shall instead be entitled to purchase a number of such Company Securities up to its Percentage Maintenance Share.
(b) Without limiting Ivory’s rights pursuant to Section 3.6, the Company shall give each Stockholder written notice to Ivory (an “Issuance Notice”) of any proposed issuance by or sale described in Section 4.3(a) within five Business Days following any meeting of the Company Board or any committee of the Company Board (or subcommittee thereof) at which any Shares at least ten such issuance or sale is approved or, if the approval of the Company Board or any committee of the Company Board (10or subcommittee thereof) Business Days prior to is not required in connection with such issuance or sale, no less than 30 days before the date of the proposed issuance dateor sale. The Issuance Notice shall, if applicable, be accompanied by a written offer from any prospective purchaser seeking to purchase Company Securities and shall specify set forth the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(eproposed issuance or sale, including:
(i) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share the number and class of the Shares proposed Company Securities to be issued to a third-party, at or sold and the price and on percentage of the other terms and conditions specified in outstanding shares of capital stock of the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend Company such issuance or a distribution, sale would represent;
(ii) granted the proposed issuance or issued to employeessale date, officers, directors, consultants or advisors of which shall be at least 30 days from the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days date of receipt by Ivory of the Issuance Notice. A delivery ; and
(iii) (x) in the case of such notice an issuance for cash (which notice shall specify other than a public offering of Company Securities) or offer from a prospective third party for cash, the number proposed purchase price in cash per Company Security, and (or amounty) in all other cases (including a public offering of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement Company Securities), the Company’s calculation of such Stockholder to purchase, at the purchase price and based on the terms and conditions specified Pre-agreed Procedures (such proposed purchase price in clause (x) or (y), the “Proposed Purchase Price”).
(c) For a period of 30 days (such period, as it may be extended pursuant to the proviso of this sentence, the “Election Period”) following the receipt by Ivory of an Issuance Notice, Ivory shall have the right to elect irrevocably to purchase up to its Pro Rata Portion of the Company Securities (or, to the extent applicable as set forth in the proviso of Section 4.3(a), a number of shares Company Securities up to its Percentage Maintenance Share) at the Proposed Purchase Price by delivering a written notice to the Company; provided, however, that following receipt of an Issuance Notice, Ivory may agree upon a different Proposed Purchase Price with an RPT Committee in accordance with the Related Party Transactions Policy in which case (or amounti) Ivory shall purchase up to its Pro Rata Portion of Shares specified the Company Securities (or, to the extent applicable as set forth in the proviso of Section 4.3(a), a number of Company Securities up to its Percentage Maintenance Share) at such Stockholder’s noticeother Proposed Purchase Price and (ii) the Election Period shall be tolled for so long as Ivory and an RPT Committee are working in good faith to agree on a Proposed Purchase Price until such time as Ivory and such RPT Committee agree on the Proposed Purchase Price. If, at the termination of such ten (10) Business Day- periodthe Election Period, any Stockholder Ivory shall not have exercised his or her rights delivered such notice to purchase any of such Stockholder’s Pro Rata Share of such Sharesthe Company, such Stockholder Ivory shall be deemed to have waived all of its rights under this Section 4.02 4.3 with respect to, and only with respect to, to the purchase of the Company Securities referred to in the Issuance Notice. The closing of any purchase by Ivory shall be consummated concurrently with the consummation of the issuance or sale described in the Issuance Notice; provided, however, that the closing of any purchase by Ivory may be postponed beyond the closing of the transaction in the Issuance Notice (x) to the extent necessary to obtain any required approval of a Governmental Authority or (y) to the extent stockholder approval is required under the Nasdaq rules, in which case the Company and Ivory shall use their respective reasonable best efforts to obtain any such Shares.
(c) If any Stockholder elects approval(s); provided, further, that for all purposes of this Agreement the Ivory Ownership Percentage and the Ivory Fully Diluted Ownership Percentage shall at all times during this period be calculated as if Ivory shall have exercised its rights pursuant to exercise his or her preemptive rights under this Section 4.02 4.3 in full and as if all remaining shares described in the Issuance Notice were issued or elects sold, until such time that (A) such sale to Ivory is consummated, (B) in the case of a required approval of a Governmental Authority, there is a final, non-appealable court order prohibiting Ivory from acquiring such Company Securities, (C) in the case stockholder approval is required under the Nasdaq rules, such stockholder vote shall have occurred and such sale to Ivory not be approved, or (D) Ivory determines not to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholdersrights.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until Upon the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuanceElection Period, the Company shall record be free to sell such Company Securities referenced in the Shares Issuance Notice that Ivory has not elected irrevocably to purchase on terms and conditions no more favorable to the purchasers thereof than those offered to Ivory in book entry format representing the Shares to Issuance Notice delivered in accordance with Section 4.3(b); provided, however, that if such sale is not consummated within 30 days after the expiration of the Election Period, then any further issuance or sale of such Company Securities shall again be purchased by each Stockholder exercising preemptive rights pursuant subject to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.024.3.
(e) The Company provisions of this Section 4.3 shall terminate on the Second Trigger Date. This Section 4.3 shall not apply with respect to the issuance or sale of Other Company Securities (as defined in the Pre-agreed Procedures) which shall be under any obligation subject instead to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuancePre-agreed Procedures.
(f) The In all cases where Ivory has the right to purchase Company may offer Securities up to its Percentage Maintenance Share pursuant to this Agreement (including the Pre-agreed Procedures), following the issuance or sale of the applicable Company Securities that triggers such Percentage Maintenance Share, the Ivory Ownership Percentage and sell Shares subject the Ivory Fully Diluted Ownership Percentage shall at all times be calculated as if Ivory has exercised such right in full and as if any Company Securities not yet issued or sold to the preemptive rights under this Section 4.02 without first offering third party shall have been issued or sold, until the earlier of (i) the termination of the period for Ivory to elect to exercise such Shares right if Ivory shall not have elected to each Stockholder or complying exercise such right and (ii) the consummation of Ivory’s exercise of such right, at which time the Ivory Ownership Percentage and the Ivory Fully Diluted Ownership Percentage shall be calculated in accordance with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and saledefinitions thereof.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (a) The Prior to the consummation of an IPO, the Company or Warner II, as the case may be, shall give each Stockholder of the Management Shareholders that is an “accredited investor” (as such term is defined in Rule 501(a) of the Securities Act) as of the time of any proposed issuance by the Company or Warner II, as the case may be, of shares of a specified class of Group Equity Securities, written notice (an “Issuance Notice”) of any such proposed issuance by the Company of any Shares at least ten (10) Business Days 10 days prior to the proposed issuance date. The Issuance Notice shall specify the number and of shares of the specified class of such Shares Group Equity Securities and the price at which such Shares Group Equity Securities are proposed to be issued and the other material terms and conditions of the issuance, including, without limitation, the proposed closing date. Subject to Section 4.02(e) below, if any such Shares are purchased4.04(g), each Stockholder Management Shareholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-partypurchase, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes , its pro rata amount of this Section 4.02, “Excluded Securities” shall include any Shares: such newly issued Group Equity Securities equal to (ix) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors the number of shares of the Company or any specified class of its Subsidiaries pursuant Group Equity Securities proposed to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) be issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any Warner II, as the case may be, multiplied by (y) a fraction, the numerator of its Subsidiaries by consolidation, merger, purchase or other transaction in which is the Company or such Subsidiary acquires, in a single transaction or series Aggregate Ownership of related transactions, a material amount of the assets or equity ownership Group Equity Securities of such other Person, (v) issued to Persons who Management Shareholder and the Board in good faith reasonably believes will provide strategic benefits to denominator of which is the Company or any Aggregate Ownership of its Subsidiaries Group Equity Securities of all Management Shareholders and (vi) issued in connection with an Initial Public OfferingNon-Management Shareholders.
(b) Each Stockholder Management Shareholder may exercise his or her its rights under this Section 4.02 4.04 by delivering written notice of his or her its election to purchase such Shares Group Equity Securities to the CompanyCompany or Warner II, as the case may be, within ten (10) Business Days of 10 days after receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares shares of the specified class of Group Equity Securities requested to be purchased by such Stockholder the Management Shareholder submitting such notice) by such Stockholder Management Shareholder shall constitute a binding agreement of such Stockholder Management Shareholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares the specified class of Group Equity Securities specified in such StockholderManagement Shareholder’s notice. If, at the termination of such ten (10) Business Day- 10 day-period, any Stockholder shall Management Shareholder has not have exercised his or her rights its right to purchase any of such Stockholder’s Pro Rata Share its pro rata share of such SharesGroup Equity Securities (as calculated pursuant to Section 4.04(a)), such Stockholder Management Shareholder shall be deemed to have waived all of its rights under this Section 4.02 4.04 with respect to, and only with respect to, the purchase of such SharesGroup Equity Securities specified in the Issuance Notice.
(c) If any Stockholder elects of the Management Shareholders or Non-Management Shareholders fail to exercise his or her its preemptive rights under this Section 4.02 4.04 or (with respect to Non-Management Shareholders) under the Sponsor Shareholders Agreement, or elects to exercise such rights with respect to less than such Stockholdershareholder’s Pro Rata Share pro rata share (the difference between such shareholder’s pro rata share (as calculated pursuant to Section 4.04(a) or (with respect to the Non-Management Shareholders) under the Sponsor Shareholders Agreement) and the number of shares for which such shareholder exercised its preemptive rights under this Section 4.04 or (with respect to the Non-Management Shareholders) under the Sponsor Shareholders Agreement, the “Excess Shares”), any participating Stockholder Management Shareholder electing to exercise his or her its rights with respect to his or her its full Pro Rata Share pro rata share (a “Fully Participating StockholderManagement Shareholder”) shall be entitled to purchase from the Company or Warner II, as the case may be, an additional number of Shares shares of the specified class of Group Equity Securities equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class Group Equity Securities of Shares by the such Fully Participating Stockholder, as the case may beManagement Shareholder, and the denominator of which is equal to the sum of the Aggregate Ownership of that class Group Equity Securities of Shares by all Fully Participating StockholdersManagement Shareholders and all Non-Management Shareholders that elected to exercise their preemptive rights with respect to their full pro rata share pursuant to the Sponsor Shareholders Agreement.
(d) The Company or Warner II, as the case may be, shall have ninety (90) 120 days from after the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares Group Equity Securities that each Stockholder the Management Shareholders and Non-Management Shareholders have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company or Warner II, as the case may be, than those specified in the Issuance Notice; provided, provided that, that if such issuance is subject to regulatory approval, such ninety (90) 120-day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) 180 days from after the date of the Issuance Notice. At the consummation of such issuance, the Company or Warner II, as the case may be, shall record the Shares in book entry format issue certificates representing the Shares Group Equity Securities to be purchased by each Stockholder Management Shareholder exercising preemptive rights pursuant to this Section 4.02 4.04 registered in the name of such StockholderManagement Shareholder, against payment by such Stockholder Management Shareholder of the purchase price for such SharesGroup Equity Securities. If the Company or Warner II, as the case may be, proposes to issue any class of Shares Group Equity Securities after such one hundred and twenty (120) -day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.024.04.
(e) The closing of any issuance of Group Equity Securities contemplated by this Section 4.04 shall take place at the time and in the manner provided in the Issuance Notice. The Company or Warner II, as the case may be, shall not be under any no obligation to consummate any proposed issuance of Shares and Group Equity Securities, nor shall there will be no any liability on the part of the Company such entity to any Stockholder Management Shareholder, if the Company or Warner II, as the case may be, has not consummated any proposed issuance of Shares Group Equity Securities pursuant to this Section 4.02 4.04 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company or Warner II, as the case may be, may offer and sell Shares shares of a specified class of Group Equity Securities subject to the preemptive rights under this Section 4.02 4.04 to an existing Non-Management Shareholder without first offering such Shares Group Equity Securities to each Stockholder of the Management Shareholders or complying with the procedures of this Section 4.024.04, so long as (i) each Stockholder of the Management Shareholders receives prompt written notice of the consummation of such sales and thereafter is given the opportunity to purchase his a number of shares of the specified class of Group Equity Securities equal to (x) the number of shares of the specified class of Group Equity Securities issued by the Company or her respective Pro Rata Share Warner II, as the case may be, (including all shares of the specified class of Group Equity Securities issued to Management Shareholders with respect to this provision) multiplied by (y) a fraction, the numerator of which is the Aggregate Ownership of Group Equity Securities of such Shares Management Shareholder and the denominator of which is the Aggregate Ownership of Group Equity Securities of all Management Shareholders and Non-Management Shareholders, within forty-five (45) 45 days after the close of such sale and in any event no later than ten (10) Business Days from 10 days after receipt of the notice referred to herein on substantially the same terms and conditions as such prior sale, however, and (ii) the price per share of such Shares specified class of Group Equity Securities shall be identical to the price per share paid in such offer and prior sale.
(g) The provisions of preemptive rights under this Section 4.02 4.04 shall terminate after not apply to (i) issuances or sales of Group Equity Securities to employees, officers and/or directors of the Initial Public OfferingCompany or Warner II, as the case may be, pursuant to the Incentive Plan or any other employee benefit or similar plans or arrangements of the Company or Warner II, as the case may be, approved in accordance with the Sponsor Shareholders Agreement, (ii) issuances or sales of Group Equity Securities upon exercise, conversion or exchange of Group Equity Securities outstanding as of the date hereof or which, when issued, were subject to or exempt from the preemptive rights, (iii) securities distributed or set aside ratably to all holders of a specified class of Group Equity Securities on a per share equivalent basis, (iv) issuances or sales in, or in connection with, the IPO, a merger of the Company or Warner II, as the case may be, with or into another Person or an acquisition by the Company or Warner II, as the case may be, of another Person or substantially all the assets of another Person, or (v) issuances of shares of a specified class of Group Equity Securities as a bona-fide “equity kicker” to a lender in connection with a third party debt financing.
(h) Upon any issuances or sales of Group Equity Securities as a unit with any other Group Equity Securities, the preemptive rights under this Section 4.04 shall be exercisable solely with respect to the entire unit rather than only the Group Equity Securities included in the unit.
Appears in 1 contract
Sources: Management Shareholders Agreement (Warner Chilcott CORP)
Preemptive Rights. (a) The If the Company intends to issue any New Securities at any time after Effective Date, to the extent permitted by Applicable Laws, the Company shall give offer to (i) the Institutional Shareholders; and (ii) each Stockholder written notice (individual of the Management Team, the right to participate in the subscription of New Securities proportionately according to their pro rata share. The term “pro rata share” shall be calculated according to the respective number of Shares held by each Institutional Shareholder and each individual of the Management Team on an “Issuance Notice”) as-converted basis in relation to the total number of any proposed issuance by issued and outstanding shares on an as-converted basis of the Company of any Shares at least ten (10) Business Days immediately prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded New Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may Institutional Shareholder and individual of the Management Team that subscribes for their respective pro rata share of New Securities shall have a right of over-allotment such that, if any other Institutional Shareholder or individual of the Management Team fails to exercise his or in full its/his/her rights under this Section 4.02 by delivering notice of his or her election right hereunder to purchase such Shares to the Company, within ten (10) Business Days of receipt its/his/her pro rata share of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such SharesNew Securities, such Stockholder shall be deemed to have waived all Institutional Shareholder and individuals of its rights under this Section 4.02 with respect to, and only with respect to, the purchase Management Team may subscribe for the non- subscribed portion of such Sharesthe New Securities on a pro rata basis.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise The Company may issue New Securities without complying with provisions of Sections 5.6(a) and 5.6(b) if such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of New Securities are (i) shares issued to employees, directors, advisors, consultants and officers pursuant to stock incentive plans approved by the Excess Shares and Board; (ii) a fractionshares issued in connection with sponsored research, the numerator collaboration, technology license, development, marketing, or of which is the Aggregate Ownership of that class of Shares similar nature approved by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
Board; (diii) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance shares issued upon conversion of any preferred shares, debenture, warrant, option, or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions other convertible security that are not materially less favorable to issued with the Company approval by the Company’s Board; and (iv) shares issued for consideration other than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights cash pursuant to this Section 4.02 registered in a merger, consolidation, acquisition, or similar business combination approved by the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02Board.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Sources: Shareholders Agreement (APRINOIA Therapeutics Inc.)
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) To the extent permitted under Nasdaq rules, the Issuer hereby grants to Subscriber the right to purchase its Pro Rata Portion of any proposed Equity Securities (other than any Excluded Securities) that the Issuer (or any of its subsidiaries) may from time to time propose to issue or sell to any Person. To the extent stockholder approval is required under the Nasdaq rules for the issuance by or sale of Equity Securities as provided in this Section 5 the Company of any Shares at least ten (10) Business Days Issuer may issue or sell Equity Securities to such other Persons prior to obtaining such stockholder approval; provided that the proposed issuance date. The Issuance Notice Issuer shall specify the number use its reasonable best efforts to obtain such approval; and class provided further that, after receipt of such Shares and stockholder approval, the price at which such Shares are to be issued and Issuer shall issue or sell the other material terms and conditions of the issuance. Subject to Section 4.02(eEquity Securities (if any) below, if any such Shares are purchased, each Stockholder shall be entitled that Subscriber has irrevocably elected to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-partySubscriber, at the price and on the other terms and conditions specified set forth in the relevant Issuance Notice. For purposes of this Section 4.02Subscription Agreement, (A) “Equity Securities” means (i) any common stock issued by the Issuer or any of its subsidiaries, (ii) any preferred stock of the Issuer or any of its subsidiaries, and (iii) any securities convertible into or exchangeable for, or options, warrants or other rights to acquire, common or preferred stock issued by the Issuer or any of its subsidiaries, (B) “Excluded Securities” shall include any Sharesmeans Equity Securities issued in connection with: (i) issued as a dividend grant to any existing or a distributionprospective consultants, employees, officers or directors pursuant to any stock option, employee stock purchase or similar equity-based plans or other compensation agreement; (ii) granted or issued to employees, officers, directors, consultants or advisors of any acquisition by the Company Issuer or any of its Subsidiaries pursuant to incentive agreementssubsidiaries of the stock, equity purchase assets, properties or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, business of any Person; (iii) issued a stock split, stock dividend or issuable any similar recapitalization; or (iv) any issuance of warrants or other similar rights to purchase Issuer Common Stock to lenders or lessors other institutional investors in connection with any arm’s length transaction providing debt financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company Issuer or any of its Subsidiaries by consolidationsubsidiaries, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (viC) issued in connection “Pro Rata Portion” means, with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election respect to purchase such Shares to the CompanySubscriber, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Noticeany issuance date for Equity Securities, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares Equity Securities equal to the product of (i) the Excess Shares total number of Equity Securities to be issued by the Issuer or any of its subsidiaries on such date and (ii) a fraction, the numerator fraction determined by dividing (x) the number of which is the Aggregate Ownership shares of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum Common Stock of the Aggregate Ownership Issuer owned by Subscriber immediately prior to such issuance by (y) the total number of that class shares of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date Common Stock of the Issuance Notice Issuer outstanding on such date immediately prior to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Sources: Subscription Agreement (United Airlines Holdings, Inc.)
Preemptive Rights. Subject to Section 9(d) and the limitations set forth in Section 9(c) below, each time the Company proposes to issue any equity securities, or other securities of any kind that are or may become convertible into any equity securities (collectively, “New Issue Securities”) to any Person, the Company shall first offer the New Issue Securities to the Investors in accordance with the following provisions:
(a) The Company shall give to each Stockholder written Investor hereunder who is at the time an Accredited Investor a notice stating: (an “Issuance Notice”i) the Company’s intention to issue the New Issue Securities; (ii) the number and description of any proposed issuance by such shares or the Company amount of any Shares at least ten the New Issue Securities to be issued; (10iii) Business Days prior to the purchase price (calculated as of the proposed issuance date) and the other terms upon which the Company is offering the New Issue Securities; and (iv) the names of the Persons to whom the Company seeks to issue such New Issue Securities (the “Preemptive Notice”).
(b) Transmittal of the Preemptive Notice to the Investors by the Company shall give each Investor the right to purchase from the Company his, her or its Pro Rata Portion, or any lesser number specified by the Investor, of the New Issue Securities for the price and upon the terms set forth in the Preemptive Notice. The Issuance For a period of twenty (20) days after the submission of the Preemptive Notice to the Investors, each Investor shall specify have the number and class option, exercisable by written notice to the Company, to accept the Company’s offer as to all or any part of such Shares and Investor’s Pro Rata Portion or any lesser number of the price at which such Shares New Issue Securities. If two (2) or more types of New Issue Securities are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares or New Issue Securities are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-partytogether with other types of securities, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02including, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distributionwithout limitation, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquiresdebt securities, in a single transaction or series of related transactions, the rights to purchase New Issue Securities granted to the Investors under this Section 9 must be exercised to purchase all types of New Issue Securities and such other securities in the same proportion as such New Issue Securities and other securities are to be issued by the Company. If the Investors (as a material amount group) agree to purchase less than the total number of New Issue Securities proposed to be issued and sold, the Company shall have one hundred twenty (120) days thereafter to sell any or all of the assets remaining New Issue Securities (i.e., those not to be sold to any Investor) to the Person or equity ownership of Persons set forth in the Preemptive Notice, upon terms and conditions no less favorable to the Company, and no more favorable to such other PersonPerson or Persons, than those set forth in the Preemptive Notice. In the event the Company has not sold such New Issue Securities within said one hundred twenty (v120) issued day period, the Company will not thereafter issue or sell any New Issue Securities without first offering such New Issue Securities to Persons who the Investors in the manner provided above.
(c) The preemptive rights contained in this Section 9 shall not apply to:
(i) The issuance and sale by the Company, from time to time pursuant to plans, programs or agreements approved by the Board in good faith reasonably believes will provide strategic benefits of Directors, of shares of Common Stock or options, rights, or warrants to acquire shares of Common Stock, or of securities convertible or exchangeable for shares of Common Stock (A) to employees, officers, or members of or consultants or advisors to the Board of Directors as compensation for their services to the Company or any of its Subsidiaries or (B) in connection with a Company Acquisition or other strategic transaction involving the Company and other entities, including, without limitation, joint ventures, manufacturing, marketing or distribution arrangements or technology transfer or development arrangements;
(ii) The issuance of Securities in a Public Offering;
(iii) The issuance of Securities to credit financing sources in connection with any equipment loan or leasing arrangement, real property leasing arrangement, or debt financing of the Company or its Subsidiaries;
(iv) The issuance of securities by any Subsidiary of the Company to the Company;
(v) The issuance of Securities upon the exercise or exchange of other Securities which were issued in compliance with this Section 9(c) or Securities which were issued in an issuance which is exempt from this Section 9(c);
(vi) issued The issuance of Securities in connection with an Initial Public Offering.any stock split, stock dividend, reverse split, consolidation, recapitalization of the Company or any other form of strategic transaction; and
(bvii) Each Stockholder may exercise his The issuance of Securities pursuant to any rights or her rights under this Section 4.02 by delivering notice of his agreements, options, warrants or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt convertible securities outstanding as of the Issuance Notice. A delivery date of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating StockholdersAgreement.
(d) The Notwithstanding anything to the contrary contained in this Section 9, the Company shall have ninety (90) days from may, in order to expedite the date issuance of New Issue Securities hereunder, issue all or a portion of the Issuance Notice New Issue Securities to consummate one or more Persons (each, an “Initial Subscribing Stockholder”) without complying with the proposed issuance provisions of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, this Section 9; provided that, if such issuance is subject prior to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares either (i) each Initial Subscribing Stockholder agrees to be purchased by each Stockholder exercising preemptive rights pursuant offer to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Investor who is an Accredited Investor and who is not an Initial Subscribing Stockholder (each, an “Other Accredited Stockholder”) his, her or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her its respective Pro Rata Share Portion of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein New Issue Securities on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical issued to the price paid Initial Subscribing Stockholders and in a manner which provides such Other Accredited Stockholder with rights substantially similar to the rights outlined in Sections 9(a) and 9(b) or (ii) the Company shall offer to sell an additional amount of New Issue Securities to each Investor (other that Initial Subscribing Stockholders) only in an amount and sale.
manner which provides such Investor with rights substantially similar to the rights outlined in Sections 9(a) and 9(b). The Initial Subscribing Stockholders or the Company, as applicable, shall offer to sell such New Issue Securities to each Other Accredited Stockholder or Investor (g) The provisions of this Section 4.02 shall terminate after the other that Initial Public Offering.Subscribing Stockholders),
Appears in 1 contract
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares Company Securities to Oak Hill or its Affiliates (other than “Excluded Securities” in respect of which this Section 4.05 will not apply) at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares Company Securities and the price at which such Shares Company Securities are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e4.05(e) below, if any such Shares Company Securities are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares Company Securities proposed to be issued to a third-partyOak Hill, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.024.05, “Excluded Securities” shall include any SharesCompany Securities: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors (other than Oak Hill or its Affiliates) in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person (other than Oak Hill or its Affiliates) by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons (other than Oak Hill or its Affiliates) who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Sources: Stockholder Agreement
Preemptive Rights. Except for issuances of (aA) The Equity Securities issued in connection with debt financings, debt refinancings, debt restructurings or similar transactions, (B) Equity Securities issued in connection with strategic transactions involving the Company shall give each Stockholder written notice or any of its Subsidiaries and other Persons (including Equity Securities issued in connection with joint ventures and similar arrangements or as consideration in connection with an “Issuance Notice”acquisition transaction) the primary purpose of which is other than for capital raising purposes, (C) Equity Securities issued upon exercise or conversion of any proposed issuance by Warrants, or other Equity Securities which were issued in compliance with the Company of any Shares at least ten terms hereof, (10D) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be Equity Securities issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants consultants, employees or advisors other service providers (including the EIK Manager) of the Company or any of its Subsidiaries pursuant to the Management Agreement or any incentive agreements, equity purchase or equity option compensation plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iiiE) Units issued or issuable to lenders or lessors in connection with any financing Unit split, Unit dividend or leasing transactionsrecapitalization of the Company or (F) up to $125,000 in preferred Equity Securities issued to the Investor to facilitate the admission of accommodation preferred holders at the Investor, if the Company authorizes the issuance or sale of any Equity Securities, the Company shall offer to sell to each Member (ivother than Excluded Members) issued a portion of such securities such that such Member’s Percentage Interest immediately prior to such issuance or sale would be the same as its Percentage Interest immediately after such issuance or sale; provided, that no Member who solely owns Profit Units or is entitled to purchase less than $10,000 of such securities after determination of such Member’s Percentage Interest (an “Excluded Member”) shall have any rights under this Section 3.4.6. Each such Member shall be entitled to purchase such securities at the most favorable price and on the most favorable terms as such securities are to be offered to any other Persons; provided, that if all Persons entitled to purchase or receive such securities are required to also purchase other securities of the Company, the holders exercising their rights pursuant to this Section 3.4.6 shall also be required to purchase the acquisition same strip of another Person by securities (on the same terms and conditions) that such other Persons are required to purchase. The purchase price for all Equity Securities offered to such holders hereunder shall be payable in cash. Notwithstanding anything to the contrary contained herein, the rights of any Member pursuant to this Section 3.4.6 shall be deemed satisfied if the Company provides (or causes to provide) each Member entitled to such rights the right to purchase from the Company or any Person within thirty (30) days after the issuance giving rise to such right (or, in the case of any issuances contemplated by Section 3.4.1(c), thirty (30) days after the final determination of Fair Market Value), the same amount of Equity Securities that such Member had the right to purchase under this Section 3.4.6.
(a) In order to exercise its Subsidiaries by consolidationpurchase rights hereunder, merger, purchase or other transaction in which a Member must within 20 calendar days after receipt of written notice from the Company or describing in reasonable detail the securities being offered, the purchase price thereof, the payment terms and such Subsidiary acquiresholder’s Percentage Interest, in deliver a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits written notice to the Company or describing such holder’s election as to whether and to what extent such holder desires to purchase its Percentage Interest, and whether such holder elects to purchase any securities that are not fully subscribed in excess of its Subsidiaries and (vi) issued in connection with an Initial Public OfferingPercentage Interest. If all of the securities offered to such Members are not fully subscribed, the remaining securities shall be allocated to the holders Doc#: US1:15482657v3 electing to purchase more than their full allotment pursuant to the immediately preceding sentence, pro rata based on their Percentage Interest.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice Upon the expiration of his or her election the offering period described above, the Company shall be entitled to sell such securities which such Members have not elected to purchase during the 180 days following such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute expiration at a binding agreement of such Stockholder to purchase, at the price not less and on the other terms and conditions specified in not more favorable to the Issuance Notice, purchasers thereof than that offered to such holders. Any securities offered or sold by the number Company after such 180-day period must be reoffered to such Members pursuant to the terms of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares3.4.
(c) If Notwithstanding anything to the contrary in this Section 3.4, in the event any Stockholder elects Subsidiary of the Company issues Subsidiary Equity Securities to exercise his or her preemptive any member of the Investor Group, the rights of each Member under this Section 4.02 or elects 3.4.6 shall apply mutatis mutandis to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholdersissuance.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable Notwithstanding anything to the Company than those specified contrary in the Issuance Noticethis Section 3.4, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date shall a Member have a right to purchase Equity Securities of the Issuance Notice. At Company pursuant to this Section 3.4.6 if such Member is not, at the consummation time of such issuance, an “accredited investor” (as defined in Regulation D promulgated under the Company shall record Securities Act) or if the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name issuance of such Stockholderadditional Equity Securities of any class, against payment by such Stockholder of the purchase price or interests convertible into or exercisable for such Shares. If Equity Securities, to such Member would require registration under the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02Securities Act.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Sources: Limited Liability Company Agreement (American Healthcare REIT, Inc.)
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by If the Company proposes to issue and sell to any Investor or any other party (the "Proposed Purchasers") (i) any Securities or (ii) any securities containing options or rights to acquire any shares of Common Stock, or (iii) any Shares at least ten securities convertible into shares of Common Stock (10such shares and other securities are hereinafter collectively referred to as "Newly Issued Securities"), the Company will first offer to each of the Major Stockholders other than the Proposed Purchasers (each a "Preemptive Investor") Business Days prior to the proposed issuance date. The Issuance Notice shall specify a portion of the number and class or amount of such Shares and securities proposed to be sold in any such transaction or series of related transactions equal to such Preemptive Investor's Ownership Percentage of the price at which such Shares are number of shares proposed to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person sold by the Company or in any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of all for the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the same price and on upon the same terms and conditions specified (including any requirement to purchase other securities) as the securities that are being offered in the Issuance Noticesuch transaction or series of transactions (such portion, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s "Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”Share"), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) . The Company Major Stockholders shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive same rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
2.6 in regards to issuances of equity securities of any subsidiary of the Company other than to the Company. Notwithstanding the foregoing, the provisions of this Section 2.6 shall not be applicable to the issuance of securities (ei) upon the conversion of shares of one class of Company capital stock into shares of another class; (ii) as a dividend or distribution on (or payment of accrued yield in respect of) the outstanding Securities or in connection with any ratable stock splits, reclassifications, recapitalizations, consolidations or similar events affecting the Securities, (iii) in any transaction in respect of a Security that offered by the Company to all holders of such Security on a pro rata basis, (iv) to financing sources of the Company in connection with the issuance of debt or restructuring or recapitalization of existing debt, on terms approved by the Board of Directors, after consultation with Centerbridge, and in accordance with this Agreement; provided, however, in no event may more than an aggregate of one percent (1%) of the outstanding shares of Common Stock be issued pursuant to this clause (iv), (v) to officers, directors or employees of the Company or any Subsidiary pursuant to stock option plans or other equity incentive compensation plans or arrangements, on terms approved by the Board of Directors, (vi) in a Public Offering, or (vii) as consideration in connection with a business acquisition by the Company pursuant to a bona fide sale, whether by merger, consolidation, sale of assets or sale or exchange of capital stock or otherwise, to the extent approved by the Board of Directors and otherwise in accordance with this Agreement, including Section 3.6. The Company shall not be under any obligation to consummate any proposed issuance of Shares and Newly Issued Securities, nor shall there will be no any liability on the part of the Company to any Stockholder Investor if the Company has not consummated any proposed issuance of Shares Newly Issued Securities pursuant to this Section 4.02 2.6 for whatever reason, regardless of whether it shall have delivered an Issuance a Preemptive Notice (as defined below) in respect of such proposed issuance.
(f) . The Company may offer and sell Shares subject will give to the preemptive Preemptive Investors a written notice setting forth the price, terms and conditions (including the proposed closing date on which the Newly Issued Securities will be purchased and sold) (the "New Issuance Closing Date") upon which the Preemptive Investors may purchase such shares or other securities in accordance with Section 2.6(a) (the "Preemptive Notice"). After receiving a Preemptive Notice, the Preemptive Investors must reply, in writing, within ten (10) days of the date of delivery of such Preemptive Notice that such Persons (or its designated Affiliate(s), who shall execute a Joinder) agree to purchase the shares or other securities offered pursuant to this Section 2.6 on the date of proposed sale (the "Preemptive Reply"). Each Preemptive Investor shall provide a copy of its Preemptive Reply to the other Preemptive Investor concurrently with its delivery of its Preemptive Reply to the Company. If any Preemptive Investor fails to exercise its rights under this Section 4.02 2.6 or elects to exercise such rights with respect to less than such Preemptive Investor's Pro Rata Share (the "Non-Electing Preemptive Investor"), the other Preemptive Investor that has exercised or elected to exercise its rights to purchase its entire Pro Rata Share (the "Electing Preemptive Investor") shall be entitled to purchase from the Company the number of Newly Issued Securities that the Non-Electing Preemptive Investor would have been entitled to purchase had it elected to purchase its entire Pro Rata Share or such number of Newly Issued Securities equal to the difference between the Non-Electing Preemptive Investor's Pro Rata Share and the number of Newly Issued Securities elected to be purchased by the Non-Electing Preemptive Investor (all such unpurchased securities, the "Excess Shares"), as the case may be. An Electing Preemptive Investor shall deliver written notice to the Company and the Non-Electing Preemptive Investor of the Electing Preemptive Investor's decision to purchase the Excess Shares within 5 days after the earlier of (i) the Non-Electing Preemptive Investor's delivery of its Preemptive Reply to the Company and (ii) the end of the ten (10) day period referred to above. If the Preemptive Investors fail to deliver a Preemptive Reply or if all Newly Issued Securities are not purchased by the Preemptive Investors in accordance with this Section 2.6, shares or other securities offered to the Preemptive Investors may thereafter, for a period not exceeding six (6) months following the date of the Preemptive Notice, be issued, sold or subjected to rights or options to the proposed original investors at a price and on terms no less than that at which they were offered to the Preemptive Investors. The purchase and sale shall take place on the New Issuance Closing Date or such other date as the parties may agree. Notwithstanding the requirements of this Section 2.6, the Company may make an issuance of Newly Issued Securities at any time without first offering such Shares to each Stockholder or complying with the procedures requirements of Section 2.6(a) and (c) (a "Delayed Issuance")so long as within three (3) business days after the date of the issuance of the Newly Issued Securities, the Company delivers a "Preemptive Escrow Notice" to the Preemptive Investors and otherwise complies with this Section 4.022.6(d). Such Preemptive Escrow Notice shall set forth the price, so long as each Stockholder receives prompt written notice terms and conditions upon which the Preemptive Investors may purchase shares of Newly Issued Securities (which shall be the same price, terms and conditions with respect to which the Newly Issued Securities were issued), the amount of Newly Issued Securities that such sales and thereafter Preemptive Investor is given entitled to receive (such amount to equal the amount of Newly Issued Securities that such Preemptive Investor would have been entitled to receive if such Preemptive Investor had the opportunity to participate in the issuance of the Newly Issued Securities on a pro rata basis in accordance with Section 2.6(a)). A Preemptive Investor may exercise the preemptive right by delivery to the Company and the other Preemptive Investor, within twenty (20) days of the date the Company mailed or caused to be mailed the Preemptive Escrow Notice, of a written notice specifying the number of shares of Newly Issued Securities such Preemptive Investor proposes to purchase his or her respective Pro Rata Share of the number of shares of Newly Issued Securities such Preemptive Investor is entitled to purchase (the "Preemptive Election"). If there is a Non-Electing Preemptive Investor, the other Electing Preemptive Investor shall be entitled to purchase the Excess Shares and shall deliver written notice thereof to the Company within forty-five (455) days after the close earlier of (i) the delivery of the Non-Electing Preemptive Investor's Preemptive Election and (ii) the end of such sale and in any event no later than ten twenty (1020) Business Days from receipt day period referred to above. Promptly after the expiration of the notice referred twentieth (20th) day after the Company has given the Preemptive Escrow Notice, (A) the Company shall sell to herein on substantially each Preemptive Investor that number of shares of Newly Issued Securities that each such Preemptive Investor proposed to purchase pursuant to its Preemptive Election and (B) when such shares have been issued to such Preemptive Investors, all remaining Newly Issued Securities which Preemptive Investors were entitled to purchase but for which they did not deliver a Preemptive Election may be sold to the same original proposed investors upon the terms and conditions as such sale, however, set forth in the price of such Shares shall be identical to the price paid such offer and sale.
Preemptive Escrow Notice for a period not exceeding six (g6) The provisions of this Section 4.02 shall terminate months after the Initial Public Offeringoriginal issuance of Newly Issued Securities to such investors.
Appears in 1 contract
Preemptive Rights. (a) The If the Company shall give each Stockholder written notice proposes to issue and sell to any Investor or any other party (an the “Issuance NoticeProposed Purchasers”) (i) any Securities or (ii) any securities containing options or rights to acquire any shares of Common Stock, or (iii) any proposed issuance by securities convertible into shares of Common Stock (such shares and other securities are hereinafter collectively referred to as “Newly Issued Securities”), the Company of any Shares at least ten (10) Business Days prior will first offer to the proposed issuance date. The Issuance Notice shall specify Major Stockholder other than the Proposed Purchasers (each a “Preemptive Investor”) a portion of the number and class or amount of such Shares and securities proposed to be sold in any such transaction or series of related transactions equal to such Preemptive Investor’s Ownership Percentage of the price at which such Shares are number of shares proposed to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person sold by the Company or in any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount all for the same price and upon the same terms and conditions (including any requirement to purchase other securities) as the securities that are being offered in such transaction or series of transactions (such portion, the “Pro Rata Share”). The Major Stockholder shall have the same rights set forth in this Section 2.5 in regards to issuances of equity securities of any subsidiary of the assets or equity ownership of such Company other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits than to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public OfferingCompany.
(b) Each Stockholder may exercise his or her rights under Notwithstanding the foregoing, the provisions of this Section 4.02 by delivering notice of his or her election to purchase such Shares 2.5 shall not be applicable to the Company, within ten (10) Business Days issuance of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of securities (i) upon the Excess Shares and conversion of shares of one class of Company capital stock into shares of another class; (ii) as a fractiondividend or distribution on (or payment of accrued yield in respect of) the outstanding Securities or in connection with any ratable stock splits, reclassifications, recapitalizations, consolidations or similar events affecting the numerator Securities, (iii) in any transaction in respect of which is the Aggregate Ownership of a Security that class of Shares offered by the Fully Participating StockholderCompany to all holders of such Security on a pro rata basis, as (iv) to financing sources of the case may beCompany in connection with the issuance of debt or restructuring or recapitalization of existing debt, on terms approved by the Board of Directors, after consultation with Centerbridge, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Noticeaccordance with this Agreement; provided, provided thathowever, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later may more than an aggregate of one hundred and twenty percent (1201%) days from the date of the Issuance Notice. At the consummation outstanding shares of such issuance, the Company shall record the Shares in book entry format representing the Shares to Common Stock be purchased by each Stockholder exercising preemptive rights issued pursuant to this Section 4.02 registered in the name of such Stockholderclause (iv), against payment by such Stockholder (v) to officers, directors or employees of the purchase price for such Shares. If Company or any Subsidiary pursuant to stock option plans or other equity incentive compensation plans or arrangements, on terms approved by the Board of Directors, (vi) in a Public Offering, or (vii) as consideration in connection with a business acquisition by the Company proposes pursuant to issue any class a bona fide sale, whether by merger, consolidation, sale of Shares after such one hundred and twenty (120) day period assets or on other terms materially less favorable sale or exchange of capital stock or otherwise, to the issuerextent approved by the Board of Directors and otherwise in accordance with this Agreement, it shall again comply with the procedures set forth in this including Section 4.02.
(e) 3.6. The Company shall not be under any obligation to consummate any proposed issuance of Shares and Newly Issued Securities, nor shall there will be no any liability on the part of the Company to any Stockholder Investor if the Company has not consummated any proposed issuance of Shares Newly Issued Securities pursuant to this Section 4.02 2.5 for whatever reason, regardless of whether it shall have delivered an Issuance a Preemptive Notice (as defined below) in respect of such proposed issuance.
(fc) The Company may offer and sell Shares subject will give to the preemptive Preemptive Investors a written notice setting forth the price, terms and conditions (including the proposed closing date on which the Newly Issued Securities will be purchased and sold) (the “New Issuance Closing Date”) upon which the Preemptive Investors may purchase such shares or other securities in accordance with Section 2.5(a) (the “Preemptive Notice”). After receiving a Preemptive Notice, the Preemptive Investors must reply, in writing, within ten (10) days of the date of delivery of such Preemptive Notice that such Persons (or its designated Affiliate(s), who shall execute a Joinder) agree to purchase the shares or other securities offered pursuant to this Section 2.5 on the date of proposed sale (the “Preemptive Reply”). Each Preemptive Investor shall provide a copy of its Preemptive Reply to the other Preemptive Investor concurrently with its delivery of its Preemptive Reply to the Company. If any Preemptive Investor fails to exercise its rights under this Section 4.02 2.5 or elects to exercise such rights with respect to less than such Preemptive Investor’s Pro Rata Share (the “Non-Electing Preemptive Investor”), the other Preemptive Investor that has exercised or elected to exercise its rights to purchase its entire Pro Rata Share (the “Electing Preemptive Investor”) shall be entitled to purchase from the Company the number of Newly Issued Securities that the Non-Electing Preemptive Investor would have been entitled to purchase had it elected to purchase its entire Pro Rata Share or such number of Newly Issued Securities equal to the difference between the Non-Electing Preemptive Investor’s Pro Rata Share and the number of Newly Issued Securities elected to be purchased by the Non-Electing Preemptive Investor (all such unpurchased securities, the “Excess Shares”), as the case may be. An Electing Preemptive Investor shall deliver written notice to the Company and the Non- Electing Preemptive Investor of the Electing Preemptive Investor’s decision to purchase the Excess Shares within 5 days after the earlier of (i) the Non-Electing Preemptive Investor’s delivery of its Preemptive Reply to the Company and (ii) the end of the ten (10) day period referred to above. If the Preemptive Investors fail to deliver a Preemptive Reply or if all Newly Issued Securities are not purchased by the Preemptive Investors in accordance with this Section 2.5, shares or other securities offered to the Preemptive Investors may thereafter, for a period not exceeding six (6) months following the date of the Preemptive Notice, be issued, sold or subjected to rights or options to the proposed original investors at a price and on terms no less than that at which they were offered to the Preemptive Investors. The purchase and sale shall take place on the New Issuance Closing Date or such other date as the parties may agree.
(d) Notwithstanding the requirements of this Section 2.5, the Company may make an issuance of Newly Issued Securities at any time without first offering such Shares to each Stockholder or complying with the procedures requirements of this Section 4.02, 2.5(a) and (c) (a “Delayed Issuance”) so long as each Stockholder receives prompt written notice within three (3) business days after the date of the issuance of the Newly Issued Securities, the Company delivers a “Preemptive Escrow Notice” to the Preemptive Investors and otherwise complies with this Section 2.5(d). Such Preemptive Escrow Notice shall set forth the price, terms and conditions upon which the Preemptive Investors may purchase shares of Newly Issued Securities (which shall be the same price, terms and conditions with respect to which the Newly Issued Securities were issued), the amount of Newly Issued Securities that such sales and thereafter Preemptive Investor is given entitled to receive (such amount to equal the amount of Newly Issued Securities that such Preemptive Investor would have been entitled to receive if such Preemptive Investor had the opportunity to participate in the issuance of the Newly Issued Securities on a pro rata basis in accordance with Section 2.5(a)). A Preemptive Investor may exercise the preemptive right by delivery to the Company and the other Preemptive Investor, within twenty (20) days of the date the Company mailed or caused to be mailed the Preemptive Escrow Notice, of a written notice specifying the number of shares of Newly Issued Securities such Preemptive Investor proposes to purchase his or her respective Pro Rata Share of the number of shares of Newly Issued Securities such Preemptive Investor is entitled to purchase (the “Preemptive Election”). If there is a Non-Electing Preemptive Investor, the other Electing Preemptive Investor shall be entitled to purchase the Excess Shares and shall deliver written notice thereof to the Company within forty-five (455) days after the close earlier of (i) the delivery of the Non- Electing Preemptive Investor’s Preemptive Election and (ii) the end of such sale and in any event no later than ten twenty (1020) Business Days from receipt day period referred to above. Promptly after the expiration of the notice referred twentieth (20th) day after the Company has given the Preemptive Escrow Notice, (A) the Company shall sell to herein on substantially each Preemptive Investor that number of shares of Newly Issued Securities that each such Preemptive Investor proposed to purchase pursuant to its Preemptive Election and (B) when such shares have been issued to such Preemptive Investors, all remaining Newly Issued Securities which Preemptive Investors were entitled to purchase but for which they did not deliver a Preemptive Election may be sold to the same original proposed investors upon the terms and conditions as set forth in the Preemptive Escrow Notice for a period not exceeding six (6) months after the original issuance of Newly Issued Securities to such sale, howeverinvestors. In the event of a Delayed Issuance, the price of such Shares Company shall be identical to not make any dividend or distribution on the price paid such offer and sale.
(g) The provisions of Newly Issued Securities or otherwise effect any transaction involving the Newly Issued Securities until after the Company has complied in full with this Section 4.02 shall terminate after the Initial Public Offering2.5(d).
Appears in 1 contract
Preemptive Rights. (a) The Company Company, Intermediate Holdings or Jostens, as the case may be, shall give each Syndicate Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company Company, Intermediate Holdings or Jostens, as the case may be, of any Shares Company Securities to any DLJMB Funds or their successors at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares Company Securities and the price at which such Shares Company Securities are to be issued to any DLJMB Fund or DLJMB Funds and the other material terms and conditions of the issuance. Subject to Section 4.02(e9.04(e) below, if any DLJMB Fund or DLJMB Funds will purchase any such Shares are purchasedCompany Securities from the Company, Intermediate Holdings or Jostens, as the case may be, each Syndicate Stockholder shall be entitled to purchase such Syndicate Stockholder’s Pro Rata Share of the Shares Company Securities proposed to be issued to a third-partythe DLJMB Funds, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Syndicate Stockholder may exercise his or her its rights under this Section 4.02 9.04 by delivering notice of his or her its election to purchase such Shares Company Securities to the Company, Intermediate Holdings or Jostens, as the case may be, and the DLJMB Funds within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares Company Securities to be purchased by such the Syndicate Stockholder submitting such notice) by such Syndicate Stockholder shall constitute a binding agreement of such Syndicate Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares Company Securities specified in such Syndicate Stockholder’s notice. If, at the termination of such ten (10) Business Day- Day-period, any Syndicate Stockholder shall not have exercised his or her its rights to purchase any of such Syndicate Stockholder’s Pro Rata Share of such SharesCompany Securities, such Syndicate Stockholder shall be deemed to have waived all of its rights under this Section 4.02 9.04 with respect to, and only with respect to, the purchase of such SharesCompany Securities.
(c) If any Syndicate Stockholder elects declines to exercise his or her its preemptive rights under this Section 4.02 9.04 or elects to exercise such rights with respect to less than such Syndicate Stockholder’s Pro Rata Share (the “Excess Shares”), the DLJMB Funds and any participating Syndicate Stockholder electing to exercise his or her its rights with respect to his or her its full Pro Rata Share (a “Fully Participating Syndicate Stockholder”) shall be entitled to purchase from the Company, Intermediate Holdings or Jostens, as the case may be, an additional number of Shares Company Securities equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by Company Securities of the DLJMB Funds or the Fully Participating Syndicate Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by Company Securities of the DLJMB Funds and all Fully Participating Syndicate Stockholders.
(d) The Company Company, Intermediate Holdings or Jostens, as the case may be, shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares Company Securities that the DLJMB Funds and each Syndicate Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company Company, Intermediate Holdings or Jostens, as the case may be, than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) -day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) 120 days from the date of the Issuance Notice. At the consummation of such issuance, the Company Company, Intermediate Holdings or Jostens, as the case may be, shall record the Shares in book entry format issue certificates representing the Shares Company Securities to be purchased by each Syndicate Stockholder exercising preemptive rights pursuant to this Section 4.02 9.04 registered in the name of such Syndicate Stockholder, against payment by such Syndicate Stockholder of the purchase price for such SharesCompany Securities. If the Company Company, Intermediate Holdings or Jostens, as the case may be, proposes to issue any class of Shares Company Securities after such one hundred and twenty (120) 90-day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.029.04.
(e) The Company None of the Company, Intermediate Holdings or Jostens shall not be under any obligation to consummate any proposed issuance of Shares and Company Securities, nor shall there will be no any liability on the part of the Company Company, Intermediate Holdings or Jostens to any Syndicate Stockholder if the Company has not consummated any proposed issuance of Shares Company Securities pursuant to this Section 4.02 9.04 is not consummated for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company Company, Intermediate Holdings or Jostens may offer and sell Shares Company Securities to the DLJMB Funds subject to the preemptive rights under this Section 4.02 9.04 without first offering such Shares Company Securities to each Stockholder the Syndicate Stockholders or complying with the procedures of this Section 4.029.04, so long as each Stockholder receives the Syndicate Stockholders receive prompt written notice of such sales and thereafter is are given the opportunity to purchase his or her their respective Pro Rata Share Shares of such Shares Company Securities within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such salesale to the DLJMB Funds, however, the price of such Shares Company Securities shall be identical to the price paid such offer and saleby the DLJMB Funds.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Sources: Stock Purchase and Stockholders’ Agreement (Jostens Holding Corp)
Preemptive Rights. (a) The From and after the Effective Date, except as provided below, the Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) belownot issue, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend sell or a distribution, (ii) granted transfer or issued to employees, officers, directors, consultants or advisors of the Company or allow any of its Subsidiaries pursuant subsidiaries to incentive agreementsissue, equity purchase sell or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that transfer any Voting Securities (the "Offered Securities") unless the Purchasers are approved by offered in writing the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder right to purchase, at the same price and or on the same terms proposed to be issued and conditions specified in sold, a portion of the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share Offered Securities (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”"Stated Percentage") shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and total number of Offered Securities multiplied by (ii) a fraction, the numerator of which is the Aggregate Ownership lesser of that class (x) 20,000,000 or (y) the number of Shares Voting Securities then owned by the Fully Participating Stockholder, as the case may be, Purchasers and the denominator of which is equal to the sum total number of the Aggregate Ownership then outstanding shares of that class Common Stock, computed on a fully diluted basis (the "Preemptive Rights"). If the Offered Securities are being issued in connection with the issuance of Shares any other securities, or incurrence of any debt, by all Fully Participating Stockholders.
the Company (d) "Other Securities or Debt"), the Purchasers shall be required to purchase their Stated Percentage of such Other Securities or Debt in order to exercise their Preemptive Rights. The Company Purchasers shall have ninety (90) days from the date of right, during the Issuance Notice period specified in Section 6.12(b), to consummate accept the proposed issuance of offer for any or all of such Shares that each Stockholder have elected their portion of the Offered Securities.
(b) Any Purchaser who does not to purchase at the price and upon terms and conditions that are not materially less favorable deliver to the Company than those specified in written notice of acceptance of any offer made pursuant to Section 6.12(a) within 10 business days after such Purchaser's receipt of such offer shall be deemed to have waived its rights to purchase the Issuance Notice, provided thatOffered Securities which are the subject of such offer (including, if such issuance is subject the Offered Securities include convertible securities, options, or other rights to regulatory approvalacquire securities, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02securities.)
(ec) The Company Section 6.12(a) shall not be under any obligation apply to consummate any proposed (i) the grant of options to purchase Voting Securities, or the issuance of Shares and there will be no liability on the part shares of Voting Securities, to employees of the Company or any of its subsidiaries, (ii) shares of Voting Securities issuable upon exercise of any option, warrant, convertible security or other rights to purchase or subscribe for Voting Securities which, in each case, had been issued in compliance with Section 6.12(a) or under Section 6.12(c)(i), (iii) securities issued pursuant to any Stockholder if stock split, combination of stock, stock dividend or other similar stock recapitalization, (iv) shares of Voting Securities issued pursuant to an employee stock option or similar plan, (v) shares of Voting Securities issued in connection with the Company has not consummated acquisition of the stock or assets or of any proposed other Person (vi) shares of Voting Securities issued pursuant to any registered public offering under the 1933 Act, or (vii) any issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless Offered Securities occurring after the Purchasers collectively own less than 11% of whether it shall have delivered an Issuance Notice in respect the outstanding shares of such proposed issuanceCommon Stock.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.3. AMENDMENT TO ARTICLE 7
Appears in 1 contract
Preemptive Rights. (ai) The Following the date hereof, except (x) with respect to the Company’s exercise of preemptive rights provided to the Company pursuant to the Partnership Agreement, which shall be governed by the Partnership Agreement, and (y) distributions or other payments paid in kind, if the Company proposes to issue, offer or sell any Membership Interests or other equity securities or equity-linked securities of the Company (“New Securities”) to, or, subject to Section 4.2, receive any loans at any time from, any of the Class A Members or any Affiliate of a Class A Member, then the Company, as directed by the Class A Members, shall either (1) obtain the prior written consent of the Class D Member, which consent shall not be unreasonably withheld, conditioned or delayed or (2) offer the Class D Member the opportunity to purchase such New Securities or participate in any such loan to the Company on a proportionate basis to the Class D Member’s Sharing Percentage at a price per New Security equal to the price per New Security at which such Membership Interests are being issued to the Class A Members or their respective Affiliates or, in the case of such a loan, on the same terms as are agreed by the Class A Member(s) or their Affiliates providing such loan to the Company.
(ii) Following the date hereof, if the Company proposes to issue, offer or sell any New Securities to any Class A Member or any Affiliate thereof in conjunction with any merger, consolidation, sale of all or substantially all of the Company’s assets, reorganization or other business combination, then the Company, as directed by the Class A Members, shall either (1) obtain the prior written consent of the Class D Member, which consent shall not be unreasonably withheld, conditioned or delayed, to the issuance, offer or sale of such New Securities, or (2) obtain the prior approval of such issuance, offer or sale by the Board, HOU:3807756.27 HOU:3807756.30 including approval by the majority of the Independent Committee, or (3) issue such New Securities on terms that are “fair,” with such determination of whether the terms of such New Securities are “fair” to be deemed satisfied if (A) at least 40% of such New Securities are purchased by a bona fide third party or (B) an independent financial advisory firm selected by the Board (which financial advisory firm shall not have represented the Company or the Partnership as an underwriter, placement agent or lender within the preceding 24 months) provides an opinion stating that the terms are fair, from a financial point of view, to the Company.
(iii) If the Class A Members elect, on behalf of the Company, to provide preemptive rights to the Class D Member in connection with the proposal to issue New Securities pursuant to Section 3.1(g)(i)(2) above, then the Company shall give each Stockholder prompt written notice (an the “Issuance New Issue Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior Company’s proposal to issue, offer or sell New Securities to the proposed issuance dateClass D Member. The Issuance New Issue Notice shall specify set forth (A) the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(eNew Securities being offered, (B) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on terms, if any, upon which the other terms Partnership proposes to issue, offer and conditions specified in sell the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: New Securities and (iC) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors the proposed date of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount closing of the assets or equity ownership issuance of such other Person, New Securities. The Class D Member shall have fifteen (v15) issued days after receipt of the New Issue Notice to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and submit a written notice (via “New Issue Exercise Notice”) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten . The Class D Member shall have the right to elect to purchase up to a number of New Securities equal to the Class D Member’s pro rata share (10) Business Days of receipt based on the ratio of the Issuance Notice. Class D Member’s Sharing Percentage to the aggregate Sharing Percentages of the Class A delivery of such notice (which notice shall specify the number (or amountMembers and Class D Member) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified set forth in the Issuance New Issue Notice. The New Issue Exercise Notice shall set forth the portion of the New Securities that the Class D Member elects to purchase. To the extent that the Class D Member does not elect to purchase its pro rata share of any proposed issuance, the number of shares (or amount) of Shares specified Class A Members shall have the opportunity to increase their participation in such Stockholder’s notice. If, at proposed issuance of New Securities in such amounts as agreed by the termination Class A Members holding a majority of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Sharesthen-outstanding Class A Membership Interests.
(civ) If For the avoidance of doubt, nothing in this Agreement is intended to or shall be construed (a) to prohibit the Class A Members from pursuing any Stockholder elects business opportunity in concert with the Partnership, or (b) require that any Class A Member or the Partnership offer to exercise his the Class D Member any preemptive or her preemptive rights under this Section 4.02 or elects to exercise other participatory right in any such business opportunity, and the Class D Member hereby expressly disclaims any and all rights with respect to less than any such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholdersbusiness opportunity.
(dv) The Company shall have ninety (90) days from Following the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided thathereof, if such issuance is subject at any time EIG and Tailwater fail to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuancecollectively hold Holdings LP Voting Control or Holdings GP Voting Control, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive Class D Member’s rights pursuant to this Section 4.02 registered in the name 3.1(g)(i) and Section 3.1(g)(ii) shall automatically terminate and will cease to be of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred force and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02effect thereafter.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Sources: Contribution Agreement (Southcross Energy Partners, L.P.)
Preemptive Rights. If at any time prior to the one year anniversary of the Closing Date, the Company proposes to issue any equity Common Stock or Common Stock Equivalents (collectively, “New Issue Securities”), the Company shall first offer the New Issue Securities to the Investors in accordance with the following provisions:
(a) The Company shall give each Stockholder a written notice to each Investor (an the “Issuance First Notice”) stating (i) its intention to issue the New Issue Securities, (ii) the number and description of any the New Issue Securities proposed issuance by to be issued and (iii) the Company proposed purchase price (calculated as of any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number ) and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in upon which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of is proposing to offer the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public OfferingNew Issue Securities.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice Transmittal of his or her election to purchase such Shares the First Notice to the CompanyInvestors by the Company shall constitute an offer by the Company to sell each Investor up to his, within ten her or its proportionate number (10) Business Days of receipt based upon his, her or its percentage ownership of the Issuance Notice. A delivery total number of such notice (which notice shall specify the number (or amountissued and outstanding shares of Common Stock) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the New Issue Securities for the price and on upon the terms and conditions specified set forth in the Issuance First Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (For a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after receipt of the of the First Notice to the Investors, each Investor shall have the option, exercisable by written notice to the Company, to accept ("Notice of Acceptance") the Company’s offer as to all or any part of such approvals Investor’s proportionate number of the New Issue Securities. If two or more types of New Issue Securities are to be issued or New Issue Securities are to be issued together with other types of securities, including, without limitation, debt Securities, in a single transaction or related transactions, the rights to purchase New Issue Securities granted to the Investors under this Section must be exercised to purchase all types of New Issue Securities and such other securities in the same proportion as such New Issue Securities and other securities are to be issued by the Company.
(c) The Company shall have been received, but in no event later than one hundred and twenty thirty (12030) days from Business Days after the date of the Issuance Notice. At the consummation of such issuanceFirst Notice to offer, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholderissue, against payment by such Stockholder sell or exchange all or any part of the purchase price for such Shares. If New Issue Securities as to which a Notice of Acceptance has not been given by the Company proposes Investors, but only upon terms and conditions that are not more favorable to issue any class of Shares after such one hundred and twenty (120) day period the acquiring person or on other terms materially persons or less favorable to the issuer, it shall again comply with the procedures Company than those set forth in this Section 4.02the First Notice.
(ed) The Company preemptive rights contained in this Section shall not be under apply to the issuance and sale by the Company, from time to time hereafter, of (i) shares of Common Stock or Common Stock Equivalents to employees, officers, or directors of, or consultants to, the Company, as compensation for their services to the Company or any obligation of its direct or indirect Subsidiaries pursuant to consummate any proposed arrangements approved by the Board of Directors of the Company, (ii) the issuance of Shares the Securities pursuant to the Transaction Documents and there will be no liability on the part issuance and exercise of the warrants issuable to MidSouth Capital, Inc. pursuant to its engagement letter with the Company in connection with the offering subject to this Agreement, (iii) shares of Common Stock issued and sold in a firm commitment underwritten public offering (which shall not include an equity line of credit or similar financing arrangement) resulting in net proceeds to the Company of in excess of $15,000,000 or (iv) shares of Common Stock issued as consideration for the acquisition of another company or business in which the shareholders of the Company to any Stockholder if do not have a majority ownership interest, which acquisition has been approved by the Board of Directors of the Company has or (v) shares of Common Stock issuable upon the exercise of outstanding Common Stock Equivalents (but not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuanceamendments thereto).
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class shares of its Common Stock or other securities (other than debt securities with no equity feature) to any person other than pursuant to an Exempted Issuance (as defined below), the Holders other than the Founders (collectively, the "Preemptive Rights Holders") shall have the right to purchase, upon the same terms, a number of those shares of Common Stock or other securities (but not less than such number) in the proportion that the number of Shares after of Common Stock beneficially owned by such one hundred and twenty (120) day period or on other terms materially less favorable Preemptive Rights Holder bears to the issuer, it shall again comply with total number of the procedures set forth in this Section 4.02.
(e) Company's shares of Common Stock outstanding immediately prior to such issuance. The Company shall give notice (the "Share Purchase Notice") to the Preemptive Rights Holders setting forth the identity of the person to whom it proposes to issue shares of its Common Stock or other securities and the time, which shall not be under any obligation to consummate any proposed issuance fewer than twenty (20) days, within which and the terms and conditions upon which the Preemptive Rights Holders may purchase the shares of Shares and there will its Common Stock or other securities, which shall be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such saleupon which the person to whom the proposed issuance is to be made may purchase the shares of its Common Stock or other securities. Within ten (10) days after the giving of the Share Purchase Notice, howevereach Preemptive Rights Holder shall give irrevocable notice of his, her or its decision to exercise the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions option under this Section 3.2. For purposes of this Section 4.02 shall terminate after 3.2, an "Exempted Issuance" means the Initial Public Offeringissuance of any shares of the Company's Common Stock (i) pursuant to the Stock Purchase Agreement, (ii) pursuant to any duly approved option plan or similar compensation plan for employees, consultants or directors of the Company, (iii) as a stock dividend or upon any subdivision of shares of Common Stock, provided that the securities issued pursuant to such stock dividend or subdivision are limited to additional shares of Common Stock, (iv) for the acquisition by the Company of another entity or business by merger or such other transaction as would result in the ownership by the Company of not less than a majority of the voting power of the other entity or for the purchase of all assets of an entity or business, (v) pursuant to a Qualifying IPO, (vi) to any person, including Otis or any of its affiliates, in consideration of any payment under or with respect to any licensing, supply, customer, manufacturing or similar commercial agreement with the Company, or (vii) that is deemed to be exempted in a written instrument signed by the holders of a majority of the Shares held by each of (A) the NBIC Holders and (B) all Holders.
Appears in 1 contract
Sources: Stockholders' Agreement (Next Generation Network Inc)
Preemptive Rights. (ai) The Company shall give each Stockholder written notice (an “Issuance Notice”) of If at any proposed issuance by time on or after the Company of any Shares at least ten (10) Business Days date hereof and prior to the proposed issuance date. The Issuance Notice shall specify Initial Public Offering, subject to compliance with Section 1(g), the number and class Company or its Subsidiaries proposes to issue (x) equity securities of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For kind (for purposes of this Section 4.022(e), the term “Excluded Securitiesequity securities” shall include any Shares: (iwarrants, options or other rights to acquire equity securities or debt securities convertible into equity securities) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or (y) debt securities of any kind to which any Tiptree Investor or any of its Subsidiaries their Affiliates subscribe (in each case, other than the issuance of securities (A) upon conversion of the Preferred Stock pursuant to incentive agreementsthe Certificate of Incorporation, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by exercise of the BoardWarrants (B) to the public in a firm commitment underwriting pursuant to a registration statement filed under the Securities Act, (iiiC) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person (not affiliated with any Tiptree Investor) by the Company or any Subsidiary, whether by purchase of its Subsidiaries by consolidationstock, merger, consolidation, purchase of all or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount substantially all of the assets or equity ownership of such other PersonPerson or otherwise, provided such acquisition has been approved by the Board, and such securities are being issued as consideration for the transaction and not in connection with financing the transaction, (vD) pursuant to an employee stock option plan, stock bonus plan, stock purchase plan, employment agreement or other management equity program, in each case, approved by the Board, (E) upon conversion or exercise of any security convertible into or exercisable for any equity securities, provided that such convertible or exercisable security that were issued in accordance with the terms of this Agreement, (F) to Persons who the Board in good faith reasonably believes will provide strategic benefits vendors, lenders and customers of and consultants to the Company or any of its Subsidiaries and (vi) issued Subsidiary or in connection with a strategic partnership (provided such securities are (1) being issued as consideration for the strategic partnership and not in connection with financing the strategic partnership, (2) being issued to the Company or another wholly owned Subsidiary of the Company by a wholly owned Subsidiary of the Company), in each case, to the extent such issuance has been approved by the Board, (G) immaterial issuances by Subsidiaries of the Company, solely to the extent such issuance is required by applicable law, (H) by reason of a dividend, stock split or other distribution on shares of Common Stock, (I) to any Investor that is an Initial Public Offering.
employee of the Company or its Subsidiaries, pursuant to the terms of any employment or similar agreement between the Company and such Investor to the extent such employment or similar agreement was approved by the Board or (bJ) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice pursuant to the Purchase Agreement), then, subject to the provisions set forth below, as to each Qualified Investor and, in the case of his or her election any issuance to purchase a Qualified Investor, each Other Investor (other than any such Shares Other Investor that cannot demonstrate to the Company, within ten (10) Business Days of receipt ’s reasonable satisfaction that such Other Investor is at the time of the Issuance Notice. A delivery proposed issuance of such securities an “accredited investor” as such term is defined in Regulation D of the Securities Act) (each a “Preemptive Right Investor”), the Company shall:
(A) give written notice setting forth in reasonable detail (which notice shall specify 1) the number (or amount) designation and all of Shares the terms and provisions of the securities proposed to be purchased by such Stockholder submitting such noticeissued (the “Proposed Securities”), including where applicable, the voting powers, preferences and relative participating, optional or other special rights, and the qualification, limitations or restrictions thereof and interest or dividend rate and maturity; (2) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on other terms of the terms proposed sale of such securities; (3) the amount of such securities proposed to be issued; and conditions specified (4) such other information as a Preemptive Right Investor may reasonably request in order to evaluate the Issuance Noticeproposed issuance; and
(B) offer to issue to each such Preemptive Right Investor for the same price (it being agreed that if such price was to be paid not in cash, the Preemptive Right Investors may pay for such Proposed Securities in cash equal to the Fair Market Value thereof) a portion of the Proposed Securities equal to a percentage determined by dividing (x) the number of shares of Common Stock Owned by such Preemptive Right Investor as a result of Purchased Equity Shares (excluding, for the sake of clarity, any Granted Equity Shares, whether or amountnot vested), determined on an As Converted Basis, by (y) the total number of Shares specified shares of Common Stock then outstanding on an As Converted Basis (such portion of Proposed Securities in respect of Preemptive Right Investor, such StockholderPreemptive Right Investor’s notice. If“Full Allotment”); provided, at that in the termination case of issuance by a non-wholly owned Subsidiary of the Company, the Full Allotment shall be further multiplied by the direct or indirect ownership percentage by the Company of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such SharesSubsidiary.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fractionEach such Preemptive Right Investor may exercise his, the numerator of which is the Aggregate Ownership of that class of Shares her or its purchase rights hereunder by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable delivering an irrevocable written notice to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety within twenty (90) day period shall be extended until the expiration of five (520) Business Days after receipt of such notice from the Company, which notice shall state the dollar amount of Proposed Securities such Preemptive Right Investor would like to purchase up to a maximum amount equal to such Preemptive Right Investor’s Full Allotment plus the additional dollar amount of the Proposed Securities such Subscription Right Investor would like to purchase in excess of its Full Allotment (the “Over-Allotment Amount”), if any, if other Subscription Right Investors do not elect to purchase their full allotment of the Proposed Securities. The right of each Subscription Right Investor to purchase Proposed Securities in excess of its Full Allotment shall be apportioned based on the relative Full Allotments of those Subscription Right Investors desiring Over-Allotment Amounts (as indicated in such irrevocable written notice). To the extent that the Company offers two or more securities to all prospective purchasers in a proposed issuance in units, such approvals as convertible notes coupled with attached warrants (and only in such units), such Preemptive Right Investors must purchase such units as a whole and will not be given the opportunity to purchase only one of the securities making up such unit.
(iii) Upon the expiration of the offering periods described above, the Company will be free to sell such Proposed Securities that such Preemptive Right Investors have been received, but in no event later than not elected to purchase during the one hundred and twenty (120) days from following such expiration on terms and conditions not more favorable, taken as a whole (but with aggregate economic terms not more favorable), to the date purchasers thereof than those offered to such Preemptive Right Investors. Any Proposed Securities offered or sold by the Company after such ninety (90)-day period must be reoffered to such Preemptive Right Investors pursuant to this Section 2(d).
(iv) Except as set forth in Section 2(e)(iii), the election by a Preemptive Right Investor not to exercise such Preemptive Right Investor’s subscription rights under this Section 2(d) in any one instance shall not affect such Preemptive Right Investor’s right (other than in respect of a reduction in such Preemptive Right Investor’s percentage holdings) as to any subsequent proposed issuance subject to this Section 2(d). If the Board determines in good faith that it is in the best interest of the Issuance Notice. At Company to sell the consummation of such issuanceProposed Securities to one or more Tiptree Investors or their respective Affiliates, the Company shall record be permitted to sell such Proposed Securities to such Tiptree Investors and/or their respective Affiliates without first complying with Section 2(e)(i), provided that promptly following such sale, the Shares Company permits each other Preemptive Right Investor having rights under this Section 2(d) to purchase such Preemptive Right Investor’s proportionate amount of such Proposed Securities in book entry format representing the Shares manner contemplated by this Section 2(d); provided, further, that in the event the Company desires to sell such Proposed Securities to a Tiptree Investor or its Affiliates in reliance on this Section 2(e)(iv), then such Proposed Securities may only be sold to such Tiptree Investor or its Affiliates if they are concurrently offered to be purchased sold to the Warburg Investors. Following the issuance of any Proposed Securities to such Tiptree Investors and/or their respective Affiliates and prior to the issuance of the Proposed Securities to any other Preemptive Right Investor in accordance with this Section 2(e)(iv), the Company shall not set a record date for any meeting or dividend, shall not permit any stockholder action by written consent to be taken, shall not convene any meeting of the stockholders and shall not take any other action, in each Stockholder exercising preemptive rights case, the result of which could reasonably be expected to be influenced by a decision of a Preemptive Right Investor to purchase any Proposed Securities.
(v) Each such Preemptive Right Investor shall, if requested by the Company, execute a stockholders agreement (or consent to an amendment to this Agreement) with respect to such Proposed Securities with terms that are (to the extent practicable) substantially equivalent to, mutatis mutandis, the terms of this Agreement. If any Subsidiary of the Company offers any additional equity securities (“New Subsidiary Securities”) to any Person (other than to the Company or any Subsidiary, directly or indirectly, wholly-owned by the Company), then this Section 2(d) will apply to any such offering of New Subsidiary Securities, and each Preemptive Right Investor shall have the right to purchase a portion of such New Subsidiary Securities offered thereunder as though they were equity securities pursuant to this Section 4.02 registered in the name of such Stockholder2(d), against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02mutatis mutandis.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Sources: Shareholder Agreement (Tiptree Inc.)
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days If, prior to the proposed issuance date. The Issuance Notice shall specify consummation of, a Qualified IPO, the number Company or any Subsidiary wishes to issue and class sell any shares of such Shares and Common Stock or any security convertible into or exchangeable for Common Stock (a “New Security”) to any Person or Persons (collectively, the price at which such Shares are to be issued and the “Subject Purchasers”) other material terms and conditions of the issuance. Subject to Section 4.02(ethan (A) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued in a Public Offering pursuant to a third-partyDemand IPO, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as connection with a dividend Qualified IPO or in connection with or following a distributionPublic Offering Event, (iiB) granted or issued an issuance to employeesdirectors, officers, directors, employees and consultants or advisors of the Company and its Subsidiaries of restricted Common Stock and/or stock options exercisable for shares of Common Stock pursuant to any equity incentive plan of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are Subsidiary approved by CCMP, as well as the Boardissuance of Common Stock upon the exercise of such options (it being understood that the proviso in this clause (B) shall not apply to, (iii) issued or issuable to lenders or lessors include, options assumed in connection with any financing transaction described in the following clause (C)); (C) the issuance of any equity security in connection with (1) any arms-length merger, consolidation, share exchange or leasing transactions, similar transaction of the Company or any Subsidiary with any other Person or (iv2) issued pursuant to the arms-length strategic acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase Subsidiary of the capital stock (or other transaction in equity interests) or assets of any other Person; or (D) an issuance of shares of Common Stock or any security convertible into or exchangeable for Common Stock pursuant to the conversion or exchange of a New Security the issuance of which was subject to this Section 4.10, then the Company or shall also offer such Subsidiary acquires, in a single transaction or series of related transactions, a material amount New Securities to the Principal Investor Group and its Permitted Transferees by sending written notice (the “New Issuance Notice”) to such Principal Investor Group and Permitted Transferees (“Preemptive Right Beneficiary”) at least fifteen (15) days prior to the issuance and sale of the assets New Securities. The New Issuance Notice shall state (a) the number of shares, notes or equity ownership other securities, as applicable, of New Securities proposed to be issued and sold and the terms of such other PersonNew Securities, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his the proposed purchase price per share, note or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Companyother security, within ten (10) Business Days of receipt as applicable, of the Issuance Notice. A delivery of such notice New Securities that the Company is willing to accept (which notice shall specify the number (or amount“Proposed Price”) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
New Securities, (c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share the proposed date on which the New Securities will be sold (the “Excess SharesNew Issuance Closing Date”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.DC\1281653.10
Appears in 1 contract