Purchaser Approval Rights Clause Samples
The Purchaser Approval Rights clause grants the purchaser the authority to review and approve certain actions or decisions made by the seller or the company being acquired. Typically, this clause outlines specific matters—such as major expenditures, changes to business operations, or amendments to key agreements—that cannot proceed without the purchaser’s explicit consent. By requiring purchaser approval for significant decisions, this clause ensures the purchaser maintains control over critical aspects of the transaction and mitigates the risk of unwanted changes or liabilities arising before the deal is finalized.
Purchaser Approval Rights. The Company may not, and may not permit its Subsidiaries to, take any of the following actions without each Purchaser’s prior written consent; provided, however, that if such written consent is withheld by any Purchaser, the Company may, notwithstanding the withholding of such written consent, take any such actions that are first approved by the affirmative vote or consent of holders of not less than two-thirds of the Voting Securities that are not held by each Purchaser or any of its respective Affiliates:
(a) enter into any transaction with any director or officer of the Company, or any holder of 10% or more of the Voting Securities outstanding at such time, except for (i) compensation or incentive arrangements with officers or directors that have been approved by the Board or Compensation Committee thereof and (ii) transactions that are not material to the Company;
(b) issue any security that ranks senior to or on parity with the Series A Preferred (or the Series B Preferred, if any shares of Series B Preferred are outstanding and owned by any Purchaser) as to dividend rights and rights on liquidation, winding up and dissolution of the Company (including without limitation additional shares of Series A Preferred or Series B Preferred), or issue any options, rights, warrants or securities convertible into or exercisable or exchangeable for such shares; provided, however, that the written consent of any Purchaser will not be necessary for the Company to authorize or issue any Indebtedness incurred to refinance, extend, renew, refund, repay, prepay, redeem, defease, exchange or replace (collectively, “Refinancings”) any Indebtedness of the Company existing at the applicable time, as long as such Refinancings are (i) on prevailing market terms with respect to the economics thereof in all material respects and (ii) are on substantially the same terms (including without limitation with respect to obligors, tenor, security and ranking) as the Indebtedness to which such Refinancings relate with respect to other terms;
(c) issue or authorize the issuance of any capital stock of the Company (or rights to acquire any capital stock of the Company) for a price per share that is less than (A) if such issuance is for Common Stock or options, rights, warrants or securities of the Company which are convertible into or exercisable or exchangeable for Common Stock of the Company (“Common Stock Derivatives”), the Current Market Price for the Common Stock at the time of suc...