Holder Underwritten Offering Clause Samples
The "Holder Underwritten Offering" clause defines the rights and procedures for a security holder to initiate and conduct an underwritten public offering of their securities. Typically, this clause outlines the steps a holder must follow to request such an offering, the obligations of the company to cooperate, and any limitations or conditions, such as minimum offering size or frequency restrictions. Its core practical function is to provide holders with a clear mechanism to access public capital markets, ensuring they can efficiently sell their securities while balancing the interests of the company and other stakeholders.
Holder Underwritten Offering. (i) One or more Electing Holders holding at least 25% of a class of then outstanding Registrable Securities may request that the Company effect an underwritten takedown under the Shelf Registration Statement of Registrable Securities held by such Electing Holder or Electing Holders in an amount equal to at least 25% of such class of then outstanding Registrable Securities (or, if less than such amount, all of their remaining Registrable Securities) (each, a “Holder Underwritten Offering”). Within five (5) business days of receipt of such request, the Company shall notify all other Holders and Other Registrable Securityholders of such request and shall (except as provided in clause (iii) below) include in such Holder Underwritten Offering all Registrable Securities and Other Registrable Securities requested to be included therein by Holders or Other Registrable Securityholders who respond within five (5) Business Days of the Company’s notification described above (such Holders who are not Electing Holders shall participate in the Holder Underwritten Offering only if they also become Electing Holders, and such Other Registrable Securityholders shall participate in the Holder Underwritten Offering only if they also become “Electing Holders” as such term is defined in the registration rights agreement with the Company in respect the Other Registrable Securities).
(ii) For any Holder Underwritten Offering, the managing underwriter or underwriters shall be selected by Electing Holders participating in such offering holding a majority of the Registrable Securities to be disposed of pursuant to such offering and shall be reasonably acceptable to the Company.
(iii) If the managing underwriter or underwriters for the Holder Underwritten Offering advise the Company that in their reasonable opinion the number of securities requested to be included in such underwritten offering takedown exceeds the number which can be sold in an orderly manner in such offering within a price range acceptable to Electing Holders representing a majority of Registrable Securities included in the Holder Underwritten Offering, the Company shall include in such Holder Underwritten Offering the number which can be so sold in the following order of priority: (A) first, the securities requested to be included by the Electing Holders and the Other Registrable Securityholders, if applicable (pro rata among the holders of such securities on the basis of the number of securities requested to be inc...