Common use of Right to Elect Directors Clause in Contracts

Right to Elect Directors. Whenever dividends that have become due and payable in cash under Section 3 on the Series A Preferred Stock are in arrears, or the Redemption Price (whether mandatory or optional) has not been paid in full when due, or an Event of Default (as hereinafter defined), has occurred (A) the number of members of the Board of Directors of the corporation shall be increased by two, effective as of the time of election of such directors as hereinafter provided, and (B) the holders of the Series A Preferred Stock (voting separately as a class) shall have the exclusive right (the "DEFAULT RIGHT") to vote for and elect such two additional directors of the corporation at any meeting of stockholders of the corporation at which directors are to be elected held during the period such dividends remain in arrears or such redemption price has not been paid in full. The holders of the Series A Preferred Stock shall have this Default Right until (x) payment in full of all accrued and unpaid dividends on the Series A Preferred Stock has been made, (y) payment in full of any Redemption Price which has become due has been made or (z) the date on which such Event of Default has ceased to be continuing. An "EVENT OF Default" shall be deemed to occur if: (i) a default occurs under any bond, debenture, note or other evidence of indebtedness, whether or not contingent, for borrowed money ("INDEBTEDNESS") by the corporation or any Restricted Subsidiary (as defined in the Indenture dated as of June 28, 1996, as amended, relating to the corporation's 12% Senior Subordinated Notes due 2006, the "INDENTURE"), which default has resulted in such at least $5.0 million aggregate principal amount of Indebtedness becoming or being declared payable prior to the date on which it would otherwise have been due and payable, without such Indebtedness having been discharged, such acceleration having been rescinded or annulled or there having been deposited in trust a sum of money sufficient to discharge in full such Indebtedness; or (ii) the corporation or any of its Subsidiaries (as defined in the Indenture) fails to pay any principal or interest when due with respect to any Indebtedness for money borrowed (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and such failure continues after the applicable grace period, if any, specified in the agreement or instrument evidencing or governing such Indebtedness, has expired, and the amount of such Indebtedness, together with any interest or premium thereon, exceeds $5.0 million).

Right to Elect Directors. Whenever At any time that full dividends that have become due and payable in cash under Section 3 on the Series A Preferred Stock are in arrears, Shares shall not have been paid (i) for four (4) or the Redemption Price more Dividend Periods (whether mandatory or optionalnot consecutive) has not been paid or (ii) for one (1) Dividend Period following the payment in full when due, or an Event of Default dividends on the Series A Preferred Shares for twelve (as hereinafter defined12) consecutive Dividend Periods (a “Preferred Dividend Cure”) after the occurrence of the circumstances described in clause (i) above (each a “Preferred Dividend Default”), has occurred (A) the number of members of directors then constituting the Board of Directors of the corporation shall Corporation will be increased by two, effective as of the time of election of such directors as hereinafter provided, and (B) the holders of the Series A Preferred Stock (Shares, voting separately as a class) shall have single class together with the exclusive right (holders of each other series of Preferred Stock then entitled by the "DEFAULT RIGHT") terms of such Preferred Stock to vote for and additional directors (the “Parity Voting Preferred Stock”), will be entitled to elect such two additional directors (each a “Preferred Director”) to serve on the Corporation’s Board of Directors at a special meeting called by the holders of at least 10% of the corporation at then outstanding Series A Preferred Shares (or the holders of any other Parity Voting Preferred Stock); provided, however, if such request is received within 90 days of the day fixed for the next annual meeting of stockholders stockholders, then the holders of the corporation Preferred Stock shall elect the Preferred Directors at which directors are such scheduled annual meeting. Upon a Preferred Dividend Cure following the most recent Preferred Dividend Default, the holders of Series A Preferred Shares shall be divested of the voting rights set forth above and the term of office of the Preferred Stock Directors elected as provided above shall terminate (subject to revesting in the event of each and every Preferred Dividend Default). Any Preferred Director may be elected held during removed by, and shall not be removed except by, the period such dividends remain in arrears vote of the holders of record of the outstanding Series A Preferred Shares entitled to vote, voting together as a single class with the holders of all other series of Parity Voting Preferred Stock, at a meeting of the Corporation’s stockholders, or such redemption price has not been paid in full. The of the holders of the Series A Preferred Shares and all other series of Preferred Stock shall have this Default Right until (x) payment in full of all accrued and unpaid so entitled to vote thereon, called for that purpose. As long as dividends on the Series A Preferred Stock has Shares shall not have been madepaid for the preceding quarterly Dividend Period, (yi) payment any vacancy in full the office of any Redemption Price which has become due has been made or Preferred Director may be filled (zexcept as provided in the following clause (ii)) by an instrument in writing signed by the date remaining Preferred Director and filed with the Corporation, and (ii) in the case of the removal of any Preferred Director, the vacancy may be filled by the vote of the holders of the outstanding Series A Preferred Shares entitled to vote, voting together as a single class with the holders of all other series of Preferred Stock entitled to vote on the matter, at the same meeting at which such Event of Default has ceased removal shall be voted. Each director appointed as aforesaid by the remaining Preferred Director shall be deemed, for all purposes hereof, to be continuinga Preferred Director. An "EVENT OF Default" shall Any Preferred Director will be deemed to occur if: (ibe an Independent Director for purposes of the actions set forth in Section 8(b) requiring the approval of a default occurs under any bond, debenture, note or other evidence majority of indebtedness, whether or not contingent, for borrowed money ("INDEBTEDNESS") by the corporation or any Restricted Subsidiary (as defined in the Indenture dated as of June 28, 1996, as amended, relating to the corporation's 12% Senior Subordinated Notes due 2006, the "INDENTURE"), which default has resulted in such at least $5.0 million aggregate principal amount of Indebtedness becoming or being declared payable prior to the date on which it would otherwise have been due and payable, without such Indebtedness having been discharged, such acceleration having been rescinded or annulled or there having been deposited in trust a sum of money sufficient to discharge in full such Indebtedness; or (ii) the corporation or any of its Subsidiaries (as defined in the Indenture) fails to pay any principal or interest when due with respect to any Indebtedness for money borrowed (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and such failure continues after the applicable grace period, if any, specified in the agreement or instrument evidencing or governing such Indebtedness, has expired, and the amount of such Indebtedness, together with any interest or premium thereon, exceeds $5.0 million)Independent Directors.