Common use of Replacement Director Clause in Contracts

Replacement Director. The Company agrees that if, during the Standstill Period (and so long as no Investor has breached its obligations under Section 1, Section 3, Section 4 or Section 9 hereof), the First Additional Class 1 Director (or his or her replacement appointed pursuant to this Section 2(i)) is unable to serve as a director, resigns, or is removed as a director prior to the end of the term of office set forth above (other than on account of (i) the failure of the First Additional Class 1 Director to be elected or re-elected by the stockholders at an annual meeting of the Company’s stockholders or a special meeting of stockholders held in lieu thereof or (ii) the First Additional Class 1 Director not being nominated to serve as a director in accordance with the terms of this Agreement at an annual meeting of the Company’s stockholders or a special meeting of stockholders held in lieu thereof), and at such time the Investor Group beneficially owns in the aggregate at least the lesser of (A) ten percent (10%) of the Company’s then outstanding voting securities on an as-converted to Common Stock basis or (B) the Company’s then outstanding voting securities on an as-converted to Common Stock basis beneficially owned by the Investors as of the Effective Date and as set forth on Exhibit A hereto (the “Investor Group Minimum Ownership Threshold”), then the Investor Group shall have the ability to recommend a substitute person, provided that any such substitute person so recommended shall qualify as “independent” pursuant to Nasdaq’s listing standards, be independent from the Investors, have the relevant financial and business experience to fill the resulting vacancy, made himself or herself available for one or more interviews with the Nominating Committee and other members of the Board, agreed to a customary background check by the Company and completed the Company’s standard directors’ and officers’ questionnaire (the “Qualification Information”). In the event that the Nominating Committee does not accept a substitute person so recommended, then the Investor Group shall have the right to recommend an additional substitute person for consideration by the Nominating Committee. Either the original candidate or the substitute person recommended shall be accepted by the Nominating Committee, provided, that after reasonable review by the Nominating Committee of the Qualification Information, both such candidates were, in the reasonable judgement of the Nominating Committee, qualified to serve on the Board; provided, further, that the Investor Group may continue to recommend additional substitute persons until two candidates are so accepted by the Nominating Committee at which time the Nominating Committee shall accept one of the two such candidates. Upon acceptance of a replacement director nominee by the Nominating Committee, the Board and all applicable committees of the Board, shall, subject to the good faith exercise of the Board’s, and all applicable committees of the Board’s, fiduciary duties under applicable law, take all necessary actions to appoint such replacement director to the Board no later than ten (10) business days after the Nominating Committee’s recommendation. Following the appointment of any replacement director in accordance with this Section 2(i), any reference to the First Additional Class 1 Director in this Agreement shall be deemed to refer to such replacement director.

Replacement Director. The Company agrees that if, during the Standstill Period (and so long as no Investor has breached its obligations under Section 12, Section 3, Section 4 3 or Section 9 8 hereof), the First Additional Continuing Class 1 Director (or his or her replacement appointed pursuant to this Section 2(i1(f)) is unable to serve as a director, resigns, or is removed as a director prior to the end of the term of office set forth above (other than on account of (i) the failure of the First Additional Continuing Class 1 Director to be elected or re-elected by the stockholders at an annual meeting of the Company’s stockholders or a special meeting of stockholders held in lieu thereof or (ii) the First Additional Continuing Class 1 Director not being nominated to serve as a director in accordance with the terms of this Agreement at an annual meeting of the Company’s stockholders or a special meeting of stockholders held in lieu thereof), and at such time the Investor Group beneficially owns in the aggregate at least the lesser of (A) ten percent (10%) of the Company’s then outstanding voting securities on an as-converted to Common Stock basis or (B) the Company’s then outstanding voting securities on an as-converted to Common Stock basis beneficially owned by the Investors as of the Effective Date and as set forth on Exhibit A hereto (the “Investor Group Minimum Ownership Threshold”), then the Investor Group shall have the ability to recommend a substitute person, provided that any such substitute person so recommended shall qualify as “independent” pursuant to Nasdaq’s listing standards, be independent from the Investors, have the relevant financial and business experience to fill the resulting vacancy, made himself or herself available for one or more interviews with the Nominating Committee and other members of the Board, agreed to a customary background check by the Company and completed the Company’s standard directors’ and officers’ questionnaire (the “Qualification Information”). In the event that the Nominating Committee does not accept a substitute person so recommended, then the Investor Group shall have the right to recommend an additional substitute person for consideration by the Nominating Committee. Either the original candidate or the substitute person recommended shall be accepted by the Nominating Committee, provided, that after reasonable review by the Nominating Committee of the Qualification Information, both such candidates were, in the reasonable judgement of the Nominating Committee, qualified to serve on the Board; provided, further, that the Investor Group may continue to recommend additional substitute persons until two candidates are so accepted by the Nominating Committee at which time the Nominating Committee shall accept one of the two such candidates. Upon acceptance of a replacement director nominee by the Nominating Committee, the Board and all applicable committees of the Board, shall, subject to the good faith exercise of the Board’s, and all applicable committees of the Board’s, fiduciary duties under applicable law, take all necessary actions to appoint such replacement director to the Board no later than ten (10) business days after the Nominating Committee’s recommendation. Following the appointment of any replacement director in accordance with this Section 2(i1(f), any reference to the First Additional Continuing Class 1 Director in this Agreement shall be deemed to refer to such replacement director.