Common use of Replacement Rights Clause in Contracts

Replacement Rights. If the New Director is unable or unwilling to serve as a director, is not appointed pursuant to Section 1(a)(i) hereof, resigns as a director, or otherwise ceases to be a director, in each case due to death or disability prior to the Termination Date (as defined below), and at such time the Investor Parties’ beneficial ownership, in the aggregate, equals or exceeds three percent (3.0%) of the then-outstanding Common Stock (subject to adjustment for stock splits, reclassifications, combinations and similar adjustments, the “Minimum Ownership Threshold”), then the Investor Parties shall have the right to select a candidate to replace the New Director (such person, a “Replacement New Director”); provided, however, that prior to and as a condition precedent to the appointment of the Replacement New Director, the Replacement New Director shall (i) satisfy the NASDAQ Independence Standards of the NASDAQ Stock Market LLC (or applicable requirement of such other national securities exchange designated as the primary market on which the Common Stock is listed for trading), (ii) provide such information and participate in such customary procedures required for the New Director under Section 1(a)(ii) hereof, (iii) have a substantially similar skill set as the New Director, (iv) satisfy the eligibility, qualification and other requirements set forth in the Corporate Governance Guidelines and (v) have been deemed otherwise reasonably acceptable by the Nominating Committee and approved of by the Board (with each such approval and acceptance not to be unreasonably withheld). Effective upon the Replacement New Director’s appointment to the Board, such Replacement New Director will be considered the New Director for all purposes of this Agreement.