Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering. (b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares. (c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders. (d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02. (e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance. (f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale. (g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 6 contracts
Samples: Stockholder Subscription Agreement, Stockholder Subscription Agreement, Stockholder Subscription Agreement
Preemptive Rights. (a) The Other than with respect to the Equity Securities of the Company described in Section 3.07(f), the Company shall give each Stockholder of the Initial Members (and their Permitted Transferees) written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares Equity Securities of the Company at least ten twenty (1020) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares Equity Securities of the Company are to be issued and the other material terms and conditions of the issuanceissuance (including the terms of the Equity Securities of the Company proposed to be issued). Subject to Section 4.02(e) below, if any such Shares are purchased3.07(f), each Stockholder of the Initial Members shall be entitled to purchase such Stockholder’s Pro Rata Share (or to cause its Affiliates to purchase) up to its respective Membership Percentage of the Shares Equity Securities of the Company proposed to be issued to a third-partyissued, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his If any Initial Member (or her rights under this Section 4.02 by delivering its Permitted Transferees) desires to purchase or to have any of its Affiliates purchase any or all of its Membership Percentage of the Equity Securities of the Company specified in the Issuance Notice, it shall deliver a written notice to the Company (each a “Preemptive Rights Exercise Notice”) of his or her its election to purchase such Shares to Equity Securities of the Company, Company within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice The Preemptive Rights Exercise Notice shall specify the number (or amount) of Shares Equity Securities of the Company to be purchased by such Stockholder submitting such notice) party or its Affiliates and shall constitute exercise by such Stockholder shall constitute party of its rights under this Section 3.07 and a binding agreement of such Stockholder party or such party’s applicable Affiliates to purchase, at the price and on the terms and conditions specified in the Issuance NoticeNotice and in accordance with the terms of this Section 3.07, the number of shares (or amount) of Shares Equity Securities of the Company specified in the Preemptive Rights Exercise Notice with such Stockholder’s noticepurchase to be consummated as promptly as reasonably practicable. If, at the termination of such ten (10) Business Day- Day period, any Stockholder Initial Member (or its Permitted Transferees) shall not have exercised his or her rights delivered a Preemptive Rights Exercise Notice to purchase any of such Stockholder’s Pro Rata Share of such Sharesthe Company, such Stockholder party shall be deemed to have waived all of its rights under this Section 4.02 3.07 with respect to, and only with respect to, to the purchase of such SharesEquity Securities of the Company. Promptly following the termination of such ten (10) Business Day period, the Company shall deliver to each of the Initial Members (or its Permitted Transferees) a copy of any Preemptive Rights Exercise Notice it has received or notify each of the Initial Members that no Preemptive Rights Exercise Notices have been received (each a “Second Notice”).
(c) If any Stockholder elects an Initial Member (or its Permitted Transferees) fails to exercise his or her its preemptive rights under this Section 4.02 3.07 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (its Membership Percentage of the “Excess Shares”), any participating Stockholder electing to exercise his or her issuance and another Member has exercised its rights under this Section 3.07 with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) its entire Membership Percentage, such other Member shall be entitled to purchase, or have its Affiliates purchase, from the Company any or all of the remaining portion of the issuance. If any such Initial Member (or its Permitted Transferees) desires to purchase an additional number or to have any of Shares equal its Affiliates purchase such remaining portion, it shall deliver a written notice to the product Company of its election to purchase such remaining portion within five (i5) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum Business Days following receipt of the Aggregate Ownership of that class of Shares by all Fully Participating StockholdersSecond Notice from the Company.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares Equity Securities of the Company that each Stockholder the Initial Members (or their Permitted Transferees) have not elected not to purchase at a price equal to or greater than the price specified in the Issuance Notice and otherwise upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice; provided, provided that, that if any Governmental Approvals are required in connection with such issuance is subject to regulatory approvalissuance, such ninety (90) -day period shall be extended until the expiration of five (5) Business Days after following the date on which all such approvals Governmental Approvals are obtained and any applicable waiting periods under applicable Law have expired or been receivedterminated, but in no event later will such period be extended for more than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Sharesan additional 180 days. If the Company proposes to issue any class such Equity Securities of Shares the Company after such one hundred and twenty 90-day (120or longer, as permitted by the preceding sentence) day period or on other terms materially less favorable to the issuerperiod, it shall again comply with the procedures set forth in this Section 4.023.07.
(e) At the consummation of the issuance of such Equity Securities of the Company the Company shall issue certificates or other appropriate instruments representing the Equity Securities of the Company to be purchased by each party exercising preemptive rights pursuant to this Section 3.07 registered in the name of such party, against payment by such party of the purchase price for such Equity Securities of the Company in accordance with the terms and conditions as specified in the Issuance Notice.
(f) Notwithstanding the foregoing, no Initial Member (or its Permitted Transferees) shall be entitled to purchase Equity Securities of the Company as contemplated by this Section 3.07 in connection with issuances of Equity Securities of the Company (i) to employees of the Company or any of its Subsidiaries pursuant to employee benefit plans or arrangements approved by the Board in accordance with the terms of this Agreement (including Section 5.05(a)) (and upon the conversion, exercise or exchange of Equity Securities of the Company granted pursuant to any such plans or arrangements or outstanding as of the date hereof), (ii) in connection with a Qualified IPO in accordance with the terms of this Agreement, (iii) pursuant to conversion, exercise or exchange of any convertible, exchangeable or exercisable Equity Securities of the Company issued in compliance with the terms of this Agreement, (iv) pursuant to any exercise of the Top-up Option under Section 10.06 below, (v) pursuant to equity adjustments as required under Section 2.03, Section 6.03 and Section 8.06 of the Contribution Agreement, (vi) pursuant to Section 8.02(a)(ix), or (vii) pursuant to an issuance of Equity Securities of the Company pursuant to Section 3.03(c). The Company shall not be under any obligation obligated to consummate any proposed issuance of Shares and there will be no liability on the part Equity Securities of the Company Company, nor be liable to any Stockholder Initial Member (or its Permitted Transferees) if the Company has not consummated any proposed issuance of Shares Equity Securities of the Company, pursuant to this Section 4.02 3.07 for whatever reason, regardless of whether it shall have delivered an Issuance Notice or received any Preemptive Rights Exercise Notices in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this This Section 4.02 3.07 shall terminate after the Initial Public Offeringupon consummation of a Qualified IPO.
Appears in 5 contracts
Samples: Limited Liability Company Agreement (PF2 SpinCo, Inc.), Limited Liability Company Agreement (Change Healthcare Inc.), Limited Liability Company Agreement (Change Healthcare Inc.)
Preemptive Rights. (aA) The Company During the Investor Approval Period, other than upon (w) any issuances from the Partnership’s equity incentive plans in effect from time to time, (x) the conversion of the Class B Units, (y) adjustments pursuant to Section 5.12(b)(ix) or (z) the issuance of (1) General Partner Units pursuant to Section 5.2(b), (2) Units pursuant to the Unit Purchase Agreement, (3) the CEI Class B Units and (4) the CTPL Class B Units, the Partnership shall give each Stockholder written notice not issue or transfer any Equity Securities other than in compliance with this Section 5.12(b)(vii), Section 5.8 and Section 5.12(b)(ix). If at any time the Partnership wishes to issue or transfer to any Person any Equity Securities, the Partnership shall (an “Issuance Notice”1) of any proposed issuance by the Company of any Shares at least promptly, but not later than ten (10) Business Days days prior to the planned date of any such issuance or transfer, deliver a notice of such proposed issuance dateor transfer to the Purchaser (the “Equity Securities Notice”) and (2) promptly deliver a notice to the Purchaser of approval of such issuance or transfer by the Board of Directors. The Issuance Equity Securities Notice shall specify include (x) a description of the number Equity Securities, (y) the identity of the proposed recipient(s) of the Equity Securities if such proposed recipient(s) have been identified and class (z) a description of such Shares the consideration and the price at which such Shares are to be issued and the other material terms and conditions of upon which the issuance. Subject to Section 4.02(e) belowproposed issuance or transfer is being made (provided, if any that in no event shall such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in include matters that would violate the Issuance Notice. For purposes of Purchaser’s rights pursuant to this Section 4.025.12(b)(vii)), “Excluded Securities” shall include together with a copy of any Shares: written agreements relating thereto.
(iB) issued as a dividend or a distributionDuring the Investor Approval Period, the Purchaser and the General Partner (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with the exercise of any financing or leasing transactions, (iv) issued rights of the General Partner pursuant to the acquisition Section 5.8 (each an “Electing Party”) shall have an option for a period of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, three (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (103) Business Days from the date that the Board of receipt Directors approves the issuance of the Issuance Equity Securities, which shall be no sooner than 13 days from the Equity Securities Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares , to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder elect to purchase, at the same price and on the same material terms and conditions specified as described in the Issuance Equity Securities Notice, some or all of the offered Equity Securities in an amount up to the Electing Party’s Preemptive Share, by delivering to the Partnership irrevocable written notice within such period setting forth the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at Equity Securities which the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights Electing Party wishes to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed and an undertaking to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, pay in full at closing the purchase of price for such SharesEquity Securities.
(cC) If any Stockholder elects to the General Partner does not exercise his or her preemptive rights under its right set forth in Section 5.8 and this Section 4.02 5.12(b)(vii) to purchase its Preemptive Share of the Equity Securities stated in the Equity Securities Notice, then the Purchaser shall have an option for a period of three (3) Business Days after the Purchaser’s receipt of notice that the General Partner has not exercised all or elects any portion of such right to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled elect to purchase an additional amount of such Equity Securities up to the aggregate amount of offered Equity Securities not committed to be purchased by the General Partner. The Purchaser desiring to exercise its option set forth in this Section 5.12(b)(vii)(C) shall deliver irrevocable written notice to the Partnership within such three (3) Business Day period setting forth the number of Shares equal Equity Securities which the Purchaser wishes to purchase and an undertaking to pay in full at closing the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholderspurchase price for such Equity Securities.
(dD) The Company closing of the Equity Securities offered pursuant to the Equity Securities Notice shall have occur concurrently with the closing of the offering contemplated in the Equity Securities Notice. The Purchaser shall pay the same amount per Equity Security that the Partnership would receive from the underwriters (to the extent the Equity Securities are contemplated being sold pursuant to an underwritten sale) in connection with any exercise of its preemptive rights pursuant to Section 5.8 and this Section 5.12(b)(vii).
(E) Any Equity Securities for which the Purchaser or the General Partner, as applicable, has not elected to purchase following the expiration of the applicable period(s) set forth in Section 5.12(b)(vii)(C) and Section 5.12(b)(vii)(D) may be sold or transferred to the proposed recipient(s) on substantially the same terms and conditions set forth in the Equity Securities Notice at any time during the period ending ninety (90) days from the date after termination of the Issuance Notice to consummate the proposed issuance of any or all later of such Shares applicable period. Any Equity Securities that each Stockholder have elected not the Partnership desires to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, issue or transfer following such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, set forth in the price of such Shares shall Equity Securities Notice must be identical offered to the price paid such offer Purchaser and sale.
(g) The provisions the General Partner and its Affiliates with a new Equity Securities Notice pursuant to the terms of this Section 4.02 shall terminate after the Initial Public Offering5.12(b)(vii).
Appears in 3 contracts
Samples: Limited Partnership Agreement (Cheniere Energy Partners, L.P.), Limited Partnership Agreement (Cheniere Energy Partners, L.P.), Limited Partnership Agreement
Preemptive Rights. (a) The Subject to Section 3.02(e), the Company shall, or shall cause its Subsidiaries, as the case may be, to give each Stockholder written Qualified Investor notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares Company Securities other than pursuant to Section 3.02(e) (together, “Subject Securities”) at least ten fifteen (1015) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares Subject Securities are to be issued, the Person to which the Subject Securities shall be issued (the “Subscriber”) and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased3.02(e), each Stockholder Qualified Investor shall be entitled to subscribe for and purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, Subject Securities in accordance with this Section 3.02 at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of Notice provided that the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership Ownership Percentage of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries Qualified Investor shall not exceed such Investor’s Ownership Cap immediately after such subscription and (vi) issued in connection with an Initial Public Offeringpurchase.
(b) Each Stockholder may exercise his or her rights under Pursuant to this Section 4.02 3.02, each Qualified Investor may elect to subscribe for and purchase up to a portion of the Subject Securities equal to its Ownership Percentage as of the date of the Issue Notice, by delivering written notice to the Company (each, an “Exercise Notice”) of his or her its election to subscribe for and purchase such Shares to the Company, Subject Securities within ten (10) Business Days of following receipt of the Issuance Notice. A delivery of such notice (which notice shall specify , specifying the number (or amount) of Shares Subject Securities to be purchased by such Stockholder submitting such notice) Qualified Investor and shall constitute exercise by such Stockholder shall constitute Qualified Investor of its rights under this Section and a binding agreement of such Stockholder Qualified Investor to subscribe for and purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares Subject Securities specified in such Stockholder’s noticethe Exercise Notice. If, at the termination of such ten (10) Business Day- 10)-Business-Day period, any Stockholder a Qualified Investor shall not have exercised his or her rights delivered an Exercise Notice to purchase any of such Stockholder’s Pro Rata Share of such Sharesthe Company, such Stockholder Investor shall be deemed to have waived all of its rights under this Section 4.02 3.02 with respect to, and only with respect to, to the purchase of such SharesSubject Securities.
(c) If any Stockholder elects to exercise his The Company or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholderapplicable Subsidiary, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares Subject Securities that each Stockholder the Qualified Investors have not elected not to purchase to the Subscriber at the price and upon terms and conditions that are not materially less favorable to the Company or such Subsidiary, as the case may be, than those specified in the Issuance Notice, ; provided that, if such issuance is subject to regulatory approval, such ninety (90) -day period shall be extended until the expiration of five ten (510) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company or the applicable Subsidiary, as the case may be, proposes to issue any class of Shares such Subject Securities after such one hundred and twenty (120) 90-day period or on other terms materially less favorable to the issuerperiod, it shall again comply with the procedures set forth in this Section 4.023.02.
(d) At the consummation of the issuance of such Subject Securities, the Company shall issue, upon the written request of a Qualified Investor, certificates representing the Subject Securities to be subscribed for and purchased by such Qualified Investor registered in the name of such Qualified Investor, against payment by such Qualified Investor of the purchase price for such Subject Securities in accordance with the terms and conditions as specified in the Issuance Notice.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on Notwithstanding the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reasonforegoing, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
sub-sections (fa) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures through (d) of this Section 4.023.02 shall not apply to any issuance of Company Securities (whether prior to, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his on or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions date of this Section 4.02 shall terminate after the Initial Public OfferingAgreement) pursuant to any Employee Equity Incentive Plan.
Appears in 3 contracts
Samples: Investor Rights Agreement (JD.com, Inc.), Investor Rights Agreement (Tencent Holdings LTD), Investor Rights Agreement (Vipshop Holdings LTD)
Preemptive Rights. (a) The Company shall give each Stockholder Comcast and HoldCo written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares Company Securities at least ten (10) 20 Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares Company Securities are to be issued and the other material terms and conditions of the issuanceissuance (including the terms of the Company Securities proposed to be issued). Subject to Section 4.02(eSections 3.07(f) below, if any such Shares are purchasedand 4.10(a)(viii), each Stockholder of Comcast and HoldCo shall be entitled to purchase such Stockholder(or to cause its Subsidiaries to purchase or, in the case of HoldCo, to assign to GE or its Subsidiaries the right to purchase) up to its respective Percentage Interest (or, in the case of HoldCo, GE’s Pro Rata Share Percentage Interest) of the Shares Company Securities proposed to be issued to a third-partyissued, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes ; provided that if any HoldCo Shares have previously been sold to the Company in accordance with the terms of this Section 4.02Agreement, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or neither HoldCo nor any of its Subsidiaries pursuant to incentive agreements, equity shall purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the such Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public OfferingSecurities.
(b) Each Stockholder may exercise his Subject to Section 3.07(a), if Comcast or her rights under this Section 4.02 by delivering HoldCo desires to purchase or to have any of its Affiliates purchase any or all of its Percentage Interest (or, in the case of HoldCo, GE’s Percentage Interest) of the Company Securities specified in the Issuance Notice, it shall deliver a written notice to the Company (each a “Preemptive Rights Exercise Notice”) of his or her its election to purchase such Shares to the Company, Company Securities within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice The Preemptive Rights Exercise Notice shall specify the number (or amount) of Shares Company Securities to be purchased by such Stockholder submitting such notice) party or its Affiliates and shall constitute exercise by such Stockholder shall constitute party of its rights under this Section 3.07 and a binding agreement of such Stockholder party or such party’s applicable Affiliates to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares Company Securities specified in the Preemptive Rights Exercise Notice with such Stockholder’s noticepurchase to be consummated as promptly as reasonably practicable. If, at the termination of such ten (10) Business Day- Business-Day period, any Stockholder Comcast or HoldCo shall not have exercised his or her rights delivered a Preemptive Rights Exercise Notice to purchase any of such Stockholder’s Pro Rata Share of such Sharesthe Company, such Stockholder party shall be deemed to have waived all of its rights under this Section 4.02 3.07 with respect to, and only with respect to, to the purchase of such SharesCompany Securities. Promptly following the termination of such ten Business Day period, the Company shall deliver to each of Comcast and HoldCo a copy of any Preemptive Rights Exercise Notice it has received from the other party.
(c) If any Stockholder elects Comcast or HoldCo fails to exercise his or her its preemptive rights under this Section 4.02 3.07 or elects to exercise such rights with respect to less than such Stockholderits Percentage Interest (or, in the case of HoldCo, GE’s Pro Rata Share (Percentage Interest) of the “Excess Shares”), any participating Stockholder electing to exercise his or her issuance and the other party has exercised its rights under this Section 3.07 with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) its entire Percentage Interest, the other party shall be entitled to purchase an additional number of Shares equal to from the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum Company any or all of the Aggregate Ownership remaining portion of that class of Shares by all Fully Participating Stockholdersthe issuance.
(d) The Subject to Section 4.10(a)(viii), the Company shall have ninety (90) 90 days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares Company Securities that each Stockholder Comcast or HoldCo have not elected not to purchase at a price equal to or greater than the price specified in the Issuance Notice and otherwise upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, ; provided that, if such issuance is subject to regulatory approval, such ninety (90) -day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) 180 days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares such Company Securities after such one hundred and twenty 90-day (120or longer, as permitted by the preceding sentence) day period or on other terms materially less favorable to the issuerperiod, it shall again comply with the procedures set forth in this Section 4.023.07.
(e) At the consummation of the issuance of such Company Securities, subject to Section 2.10, the Company shall, if necessary or desirable, issue certificates or other appropriate instruments representing the Company Securities to be purchased by each party exercising preemptive rights pursuant to this Section 3.07 registered in the name of such party, against payment by such party of the purchase price for such Company Securities in accordance with the terms and conditions as specified in the Issuance Notice.
(f) Notwithstanding the foregoing, neither Comcast nor HoldCo shall be entitled to purchase Company Securities as contemplated by this Section 3.07 in connection with issuances of Company Securities (i) to employees of the Company or any of its Subsidiaries pursuant to employee benefit plans or arrangements approved by the Board (including upon the exercise of employee stock options granted pursuant to any such plans or arrangements), (ii) in connection with any bona fide, arm’s length restructuring or refinancing of outstanding debt of the Company or any of its Subsidiaries, (iii) as consideration in a bona fide, arm’s-length direct or indirect merger, acquisition or similar transaction, (iv) pursuant to an IPO or (v) that are Equity Securities as described in the second proviso of Section 3.03(b). The Company shall not be under any obligation obligated to consummate any proposed issuance of Shares and there will Company Securities, nor be no liability on the part of the Company liable to any Stockholder Member if the Company has not consummated any proposed issuance of Shares Company Securities, pursuant to this Section 4.02 3.07 for whatever reason, regardless of whether it shall have delivered an Issuance Notice or received any Preemptive Rights Exercise Notices in respect of such proposed issuance.
(fg) The Company may offer and sell Shares subject If GE or any of its Affiliates (other than HoldCo or any of its Subsidiaries) acquires Units pursuant to the exercise of HoldCo’s preemptive rights under this Section 4.02 without first offering 3.07, notwithstanding any provision set forth in this Agreement that GE only sell or cause to be sold HoldCo Shares (as opposed to Units) in connection with a particular transaction, GE will be permitted and, if such Shares provision requires GE to each Stockholder sell or complying cause to be sold securities representing the remainder of its Percentage Interest, required to sell such Units in connection with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and saletransaction.
(gh) The provisions of this This Section 4.02 3.07 shall terminate after the Initial Public Offeringupon an IPO.
Appears in 2 contracts
Samples: Limited Liability Company Agreement, Limited Liability Company Agreement (Comcast Corp)
Preemptive Rights. (a) The Company shall give each Stockholder Comcast and HoldCo written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares Company Securities at least ten (10) 20 Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares Company Securities are to be issued and the other material terms and conditions of the issuanceissuance (including the terms of the Company Securities proposed to be issued). Subject to Section 4.02(eSections 3.07(f) below, if any such Shares are purchasedand 4.10(a)(viii), each Stockholder of Comcast and HoldCo shall be entitled to purchase such Stockholder(or to cause its Subsidiaries to purchase or, in the case of HoldCo, to assign to GE or its Subsidiaries the right to purchase) up to its respective Percentage Interest (or, in the case of HoldCo, GE’s Pro Rata Share Percentage Interest) of the Shares Company Securities proposed to be issued to a third-partyissued, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes ; provided that if any HoldCo Shares have previously been sold to the Company in accordance with the terms of this Section 4.02Agreement, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or neither HoldCo nor any of its Subsidiaries pursuant to incentive agreements, equity shall purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the such Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public OfferingSecurities.
(b) Each Stockholder may exercise his Subject to Section 3.07(a), if Comcast or her rights under this Section 4.02 by delivering HoldCo desires to purchase or to have any of its Affiliates purchase any or all of its Percentage Interest (or, in the case of HoldCo, GE’s Percentage Interest) of the Company Securities specified in the Issuance Notice, it shall deliver a written notice to the Company (each a “Preemptive Rights Exercise Notice”) of his or her its election to purchase such Shares to the Company, Company Securities within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice The Preemptive Rights Exercise Notice shall specify the number (or amount) of Shares Company Securities to be purchased by such Stockholder submitting such notice) party or its Affiliates and shall constitute exercise by such Stockholder shall constitute party of its rights under this Section 3.07 and a binding agreement of such Stockholder party or such party’s applicable Affiliates to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares Company Securities specified in the Preemptive Rights Exercise Notice with such Stockholder’s noticepurchase to be consummated as promptly as reasonably practicable. If, at the termination of such ten (10) Business Day- Business-Day period, any Stockholder Comcast or HoldCo shall not have exercised his or her rights delivered a Preemptive Rights Exercise Notice to purchase any of such Stockholder’s Pro Rata Share of such Sharesthe Company, such Stockholder party shall be deemed to have waived all of its rights under this Section 4.02 3.07 with respect to, and only with respect to, to the purchase of such SharesCompany Securities. Promptly following the termination of such ten Business Day period, the Company shall deliver to each of Comcast and HoldCo a copy of any Preemptive Rights Exercise Notice it has received from the other party.
(c) If any Stockholder elects Comcast or HoldCo fails to exercise his or her its preemptive rights under this Section 4.02 3.07 or elects to exercise such rights with respect to less than such Stockholderits Percentage Interest (or, in the case of HoldCo, GE’s Pro Rata Share (Percentage Interest) of the “Excess Shares”), any participating Stockholder electing to exercise his or her issuance and the other party has exercised its rights under this Section 3.07 with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) its entire Percentage Interest, the other party shall be entitled to purchase an additional number of Shares equal to from the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum Company any or all of the Aggregate Ownership remaining portion of that class of Shares by all Fully Participating Stockholdersthe issuance.
(d) The Subject to Section 4.10(a)(viii), the Company shall have ninety (90) 90 days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares Company Securities that each Stockholder Comcast or HoldCo have not elected not to purchase at a price equal to or greater than the price specified in the Issuance Notice and otherwise upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, ; provided that, if such issuance is subject to regulatory approval, such ninety (90) -day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) 180 days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares such Company Securities after such one hundred and twenty 90-day (120or longer, as permitted by the preceding sentence) day period or on other terms materially less favorable to the issuerperiod, it shall again comply with the procedures set forth in this Section 4.023.07.
(e) At the consummation of the issuance of such Company Securities, subject to Section 2.10, the Company shall, if necessary or desirable, issue certificates or other appropriate instruments representing the Company Securities to be purchased by each party exercising preemptive rights pursuant to this Section 3.07 registered in the name of such party, against payment by such party of the purchase price for such Company Securities in accordance with the terms and conditions as specified in the Issuance Notice.
(f) Notwithstanding the foregoing, neither Comcast nor HoldCo shall be entitled to purchase Company Securities as contemplated by this Section 3.07 in connection with issuances of Company Securities (i) to employees of the Company or any of its Subsidiaries pursuant to employee benefit plans or arrangements approved by the Board (including upon the exercise of employee stock options granted pursuant to any such plans or arrangements), (ii) in connection with any bona fide, arm’s length restructuring or refinancing of outstanding debt of the Company or any of its Subsidiaries, (iii) as consideration in a bona fide, arm’s-length direct or indirect merger, acquisition or similar transaction, (iv) pursuant to an IPO or (v) that are Equity Securities as described in the second proviso of Section 3.03(b). The Company shall not be under any obligation obligated to consummate any proposed issuance of Shares and there will Company Securities, nor be no liability on the part of the Company liable to any Stockholder Member if the Company has not consummated any proposed issuance of Shares Company Securities, pursuant to this Section 4.02 3.07 for whatever reason, regardless of whether it shall have delivered an Issuance Notice or received any Preemptive Rights Exercise Notices in respect of such proposed issuance.
(fg) The Company may offer and sell Shares subject If GE or any of its Affiliates (other than HoldCo or any of its Subsidiaries) acquires Membership Interests pursuant to the exercise of HoldCo’s preemptive rights under this Section 4.02 without first offering 3.07, notwithstanding any provision set forth in this Agreement that GE only sell or cause to be sold HoldCo Shares (as opposed to Membership Interests) in connection with a particular transaction, GE will be permitted and, if such Shares provision requires GE to each Stockholder sell or complying cause to be sold securities representing the remainder of its Percentage Interest, required to sell such Membership Interests in connection with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and saletransaction.
(gh) The provisions of this This Section 4.02 3.07 shall terminate after the Initial Public Offeringupon an IPO.
Appears in 2 contracts
Samples: Limited Liability Company Agreement (General Electric Co), Limited Liability Company Agreement (Comcast Corp)
Preemptive Rights. 2.1 Until an IPO, and except to the extent the right to receive such offer has been waived in writing (abefore or after the effective date hereof) The Company shall give each Stockholder written notice (an “Issuance Notice”) of by a Shareholder who would otherwise be entitled thereto, any proposed issuance New Securities to be allotted by the Company shall first be offered by the Board of Directors by written notice of offer to the registered Shareholders holding at least 3% of the issued and outstanding share capital of the Company on an issued and outstanding basis. "New Securities" shall mean any share capital of the Company, whether or not now authorized, and rights, options or warrants to purchase share capital, and securities of any Shares at least ten (10) Business Days prior to the proposed issuance datetype whatsoever that are, or may become, convertible into share capital. The Issuance Notice New Securities shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Sharesnot include: (i) issued as a dividend or a distribution, (ii) granted or securities issued to employees, officers, directors, or consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity any stock option plan or stock plan or stock purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are stock bonus arrangement approved by the BoardBoard of Directors or as otherwise approved by the Board of Directors; (ii) securities issued for consideration which does not consist of cash or which does not consist entirely of cash, including without limitation real estate (including ownership, leasing or any other rights thereto), patents or technology or other know-how (including ownership, licensing or any other rights thereto), research and/or development services or activities, distribution or manufacture of the Company's products or services, any other services or activities, or joint ventures; (iii) shares of the Company issuable upon exercise of options or warrants issued or issuable to lenders or lessors in connection full compliance with any financing or leasing transactions, the provisions of this Section 2; (iv) securities offered to the public; (v) securities issued pursuant to the acquisition (including if applicable acquisition of another Person shares) by the Company of another corporation or any of its Subsidiaries by consolidation, merger, business entity (or their business unit or division) or purchase or other transaction in which acquisition by the Company of all or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of substantially all the assets of another corporation or equity ownership business entity (or their business unit or division) or merger of such other Person, (v) issued to Persons who any corporation or business entity with or into the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and Company; (vi) securities issued in connection pursuant to stock split, recapitalization, reclassification or payment of any dividend, bonus shares, or distribution with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares respect to the Company's issued and outstanding share capital, within ten (10) Business Days of receipt or any similar event of the Issuance Notice. A delivery of such notice Company; or (which notice shall specify the number (or amountvii) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights commission paid pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.022.5 below.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 2 contracts
Samples: Shareholders Agreement (ActiVein, Inc.), Agreement to Exchange Stock (ActiVein, Inc.)
Preemptive Rights. (a) The To the extent permitted under Nasdaq rules, the Company hereby grants to Xxxxxxx the right until the Second Trigger Date to purchase up to its Pro Rata Portion of any Company Securities that the Company may from time to time propose to issue or sell to any Person; provided that, without limiting the Pre-Agreed Procedures, in the case Company Securities are proposed to be issued (in whole or in part) as consideration in any merger, consolidation, reorganization, conversion, joint venture or any other business combination, or any acquisition (including by merger, consolidation, acquisition of stock or assets or otherwise) of any businesses, assets, operations or securities comprising a business (any such transaction, an “M&A Transaction”), Xxxxxxx shall only be entitled to purchase a number of such Company Securities up to its Percentage Maintenance Share.
(b) Without limiting Xxxxxxx’x rights pursuant to Section 3.6, the Company shall give each Stockholder written notice to Xxxxxxx (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten or sale described in Section 4.3(a) within five (105) Business Days following any meeting of the Company Board or any committee of the Company Board (or subcommittee thereof) at which any such issuance or sale is approved or, if the approval of the Company Board or any committee of the Company Board (or subcommittee thereof) is not required in connection with such issuance or sale, no less than thirty (30) days prior to the date of the proposed issuance dateor sale. The Issuance Notice shall, if applicable, be accompanied by a written offer from any prospective purchaser seeking to purchase Company Securities and shall specify set forth the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(eproposed issuance or sale, including:
(i) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share the number and class of the Shares proposed Company Securities to be issued to a third-party, at or sold and the price and on percentage of the other terms and conditions specified in outstanding shares of capital stock of the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend Company such issuance or a distribution, sale would represent;
(ii) granted the proposed issuance or issued to employeessale date, officers, directors, consultants or advisors of which shall be at least thirty (30) days from the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days date of receipt by Xxxxxxx of the Issuance Notice. A delivery ; and
(iii) (x) in the case of such notice an issuance for cash (which notice shall specify other than a public offering of Company Securities) or offer from a prospective third party for cash, the number proposed purchase price in cash per Company Security and (or amounty) in all other cases (including a public offering of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement Company Securities), the Company’s calculation of such Stockholder to purchase, at the purchase price and based on the terms and conditions specified Pre-Agreed Procedures (such proposed purchase price in clause (x) or (y), the “Proposed Purchase Price”).
(c) For a period of thirty (30) days (such period, as it may be extended pursuant to the proviso of this sentence, the “Election Period”) following the receipt by Xxxxxxx of an Issuance Notice, Xxxxxxx shall have the right to elect irrevocably to purchase up to its Pro Rata Portion of the Company Securities (or, to the extent applicable as set forth in the proviso of Section 4.3(a), a number of shares Company Securities up to its Percentage Maintenance Share) at the Proposed Purchase Price by delivering a written notice to the Company; provided that, following receipt of an Issuance Notice, Xxxxxxx may agree upon a different Proposed Purchase Price with an RPT Committee in accordance with the Related Party Transactions Policy in which case (or amounti) Xxxxxxx shall purchase up to its Pro Rata Portion of Shares specified the Company Securities (or, to the extent applicable as set forth in the proviso of Section 4.3(a), a number of Company Securities up to its Percentage Maintenance Share) at such Stockholder’s noticeother Proposed Purchase Price and (ii) the Election Period shall be tolled for so long as Xxxxxxx and an RPT Committee are working in good faith to agree on a Proposed Purchase Price until such time as Xxxxxxx and such RPT Committee agree on the Proposed Purchase Price. If, at the termination of such ten (10) Business Day- periodthe Election Period, any Stockholder Xxxxxxx shall not have exercised his or her rights delivered such notice to purchase any of such Stockholder’s Pro Rata Share of such Sharesthe Company, such Stockholder Xxxxxxx shall be deemed to have waived all of its rights under this Section 4.02 4.3 with respect to, and only with respect to, to the purchase of the Company Securities referred to in the Issuance Notice. The closing of any purchase by Xxxxxxx shall be consummated concurrently with the consummation of the issuance or sale described in the Issuance Notice; provided that the closing of any purchase by Xxxxxxx may be extended beyond the closing of the transaction in the Issuance Notice to the extent necessary to (x) obtain any required approval of a Governmental Authority or (y) to the extent stockholder approval is required under the Nasdaq rules, in which case the Company and Xxxxxxx shall use their respective reasonable best efforts to obtain any such Shares.
(c) If any Stockholder elects approval(s); provided that the Xxxxxxx Ownership Percentage and the Xxxxxxx Fully-Diluted Ownership Percentage shall at all times during this period be calculated as if Xxxxxxx shall have exercised its rights pursuant to exercise his or her preemptive rights under this Section 4.02 4.3 in full and as if all remaining shares described in the Issuance Notice shall have been issued or elects sold, until such time that (i) such sale to Xxxxxxx is consummated, (ii) in the case of a required approval of a Governmental Authority, there is a final, non-appealable court order prohibiting Xxxxxxx from acquiring such Company Securities, (iii) in the case stockholder approval is required under the Nasdaq rules, such stockholder vote shall have occurred and such sale to Xxxxxxx not be approved or (iv) Xxxxxxx determines not to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholdersrights.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until Upon the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuanceElection Period, the Company shall record be free to sell such Company Securities referenced in the Shares Issuance Notice that Xxxxxxx has not elected irrevocably to purchase on terms and conditions no more favorable to the purchasers thereof than those offered to Xxxxxxx in book entry format representing the Shares to Issuance Notice delivered in accordance with Section 4.3(b); provided that if such sale is not consummated within thirty (30) days of the expiration of the Election Period, then any further issuance or sale of such Company Securities shall again be purchased by each Stockholder exercising preemptive rights pursuant subject to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.024.3.
(e) The Company shall not be under any obligation to consummate any proposed issuance For the avoidance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, howeverdoubt, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 4.3 shall terminate after on the Initial Public OfferingSecond Trigger Date. Notwithstanding anything to the contrary in this Agreement, this Section 4.3 shall not apply with respect to the issuance or sale of Other Company Securities (as defined in the Pre-Agreed Procedures) which shall be subject to the terms and conditions of the Pre-Agreed Procedures.
Appears in 2 contracts
Samples: Transaction Agreement and Plan of Merger (Emersub CX, Inc.), Transaction Agreement and Plan of Merger (Aspen Technology Inc /De/)
Preemptive Rights. (a) The Prior to the consummation of an Initial Public Offering, the Company shall give each Stockholder of the Shareholders that is (i) an “accredited investor” (as such term is defined in Rule 501(a) of the Securities Act) or (ii) located outside the United States and is not a “U.S. Person” as such term is defined in Regulation S under the Securities Act (“Regulation S”) and that such Shareholder is obtaining the Company Securities in an “offshore transaction” (as such term is defined in Regulation S under the Securities Act) outside of the United States, each as of the time of any proposed issuance by the Company of shares of a specified class of Company Securities, written notice pursuant to Section 8.9 (an “Issuance Notice”) of any such proposed issuance by the Company of any Shares at least ten (10) Business Days days prior to the proposed issuance date. The Issuance Notice shall specify the number and of shares of the specified class of such Shares Company Securities and the price at which such Shares Company Securities are proposed to be issued and the other material terms and conditions of the issuance, including, without limitation, the proposed closing date. Subject to Section 4.02(e) below, if any such Shares are purchased3.4(f), each Stockholder Shareholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-partypurchase, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes , its pro rata amount of this Section 4.02, “Excluded Securities” shall include any Shares: such newly issued Company Securities equal to (ix) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors the number of shares of the specified class of Company or any of its Subsidiaries pursuant Securities proposed to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) be issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any multiplied by (y) a fraction, the numerator of its Subsidiaries which is the aggregate number of Shares owned by consolidation, merger, purchase or other transaction in such Shareholder and the denominator of which is the Company or such Subsidiary acquiresaggregate number of Shares owned by all Shareholders, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with each case on an Initial Public Offeringas-converted basis.
(b) Each Stockholder Shareholder may exercise his or her its rights under this Section 4.02 3.4 by delivering written notice to the Company of his or her its election to purchase such Shares to the Company, Company Securities within ten (10) Business Days of days after receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares shares of the specified class of Company Securities requested to be purchased by such Stockholder the Shareholder submitting such notice) by such Stockholder Shareholder shall constitute a binding agreement of such Stockholder Shareholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares the specified class of Company Securities specified in such StockholderShareholder’s notice. If, at the termination of such ten (10) Business Day- -day period, any Stockholder shall Shareholder has not have exercised his or her rights its right to purchase any of such Stockholder’s Pro Rata Share its pro rata share of such SharesCompany Securities, such Stockholder Shareholder shall be deemed to have waived all of its rights under this Section 4.02 3.4 with respect to, and only with respect to, the purchase of such SharesCompany Securities specified in the Issuance Notice.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) 120 days from after the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares Company Securities that each Stockholder the Shareholders have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice; provided, provided that, that if such issuance is subject to regulatory approval, such ninety (90) 120-day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) 180 days from after the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format issue certificates representing the Shares Company Securities to be purchased by each Stockholder Shareholder exercising preemptive rights pursuant to this Section 4.02 3.4 registered in the name of such StockholderShareholder, against payment by such Stockholder Shareholder of the purchase price for such SharesCompany Securities. If the Company proposes to issue any class of Shares Company Securities after such one hundred and twenty (120) -day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.023.4.
(ed) The closing of any issuance of Company Securities to the Shareholders pursuant to this Section 3.4, shall take place at the time and in the manner provided in the Issuance Notice. The Company shall not be under any no obligation to consummate any proposed issuance of Shares and Company Securities, nor shall there will be no any liability on the part of the Company such entity to any Stockholder Shareholder, if the Company has not consummated any proposed issuance of Shares Company Securities pursuant to this Section 4.02 3.4 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(fe) The Notwithstanding the requirements of this Section 3.4, the Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 shares of a specified class of Company Securities without first offering such Shares Company Securities to each Stockholder of the other Shareholders or complying with the procedures of this Section 4.023.4, so long as (i) each Stockholder of the other Shareholders receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share consummation of such sales, (ii) either the Company or the initial purchaser of such Company Securities commits (at the time of such initial sale) to make available for sale to such Shareholders a number of shares of the specified class of Company Securities equal to (x) the number of shares of the specified class of Company Securities issued by the Company (including all shares of the specified class of Company Securities issued or sold to Shareholders with respect to this provision) multiplied by (y) a fraction, the numerator of which is the aggregate number of Shares owned by such Shareholder and the denominator of which is the aggregate number of Shares owned by all Shareholders, each determined on an as-converted basis, within forty-five (45) 45 days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such prior sale, however, and (iii) the price per share of such Shares specified class of Company Securities shall be identical to the price per share paid in such offer and prior sale.
(gf) The provisions of preemptive rights under this Section 4.02 3.4 shall terminate after not apply to (i) issuances or sales of Company Securities to employees, officers, directors, consultants, customers or suppliers (including in connection with bona fide licensing, commercial or other strategic arrangements) of the Company or any Subsidiary pursuant to employee benefit, incentive or similar plans or agreements or arrangements of the Company, (ii) issuances or sales of Company Securities upon exercise, conversion or exchange of Company Securities outstanding as of the date hereof, (iii) Common Shares issued pursuant to conversion of preferred shares pursuant to Section 4.7 of the Charter, securities issued in connection with a stock split or stock dividend of the Company, (iv) the issuance of Company Securities to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to a debt financing, equipment leasing or real property leasing transaction, (v) the issuance of Company Securities contemplated by the Subscription Agreement (including any Series D Shares issued pursuant to Sections 1.2 through 1.3 of the Subscription Agreement), (vi) issuances or sales in an Initial Public Offering, or as consideration for a merger of the Company with or into another Person or an acquisition by the Company of another Person or substantially all the assets of another Person, (vii) issuances as consideration for sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic partnerships approved or (viii) any Series C-2 Shares issued pursuant to the Note Conversion Agreement, in each case of (i) — (vii) as approved in accordance with the Charter.
Appears in 2 contracts
Samples: Shareholders Agreement (OptiNose, Inc.), Shareholders Agreement (OptiNose, Inc.)
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days If, prior to the proposed issuance date. The Issuance Notice shall specify consummation of, a Qualified IPO, the number Company or any Subsidiary wishes to issue and class sell any shares of such Shares and Common Stock or any security convertible into or exchangeable for Common Stock (a “New Security”) to any Person or Persons (collectively, the price at which such Shares are to be issued and the “Subject Purchasers”) other material terms and conditions of the issuance. Subject to Section 4.02(ethan (A) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued in a Public Offering pursuant to a third-partyDemand IPO, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as connection with a dividend Qualified IPO or in connection with or following a distributionPublic Offering Event, (iiB) granted or issued an issuance to employeesdirectors, officers, directors, employees and consultants or advisors of the Company and its Subsidiaries of restricted Common Stock and/or stock options exercisable for shares of Common Stock pursuant to any equity incentive plan of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are Subsidiary approved by CCMP, as well as the Boardissuance of Common Stock upon the exercise of such options (it being understood that the proviso in this clause (B) shall not apply to, (iii) issued or issuable to lenders or lessors include, options assumed in connection with any financing transaction described in the following clause (C)); or leasing transactions(C) the issuance of any equity security in connection with (1) any arms-length merger, consolidation, share exchange or similar transaction of the Company or any Subsidiary with any other Person or (iv2) issued pursuant to the arms-length strategic acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase Subsidiary of the capital stock (or other transaction in which the Company equity interests) or such Subsidiary acquires, in a single transaction or series assets of related transactions, a material amount of the assets or equity ownership of such any other Person, (v) issued to Persons who then the Board in good faith reasonably believes will provide strategic benefits Company shall also offer such New Securities to the Company Principal Investor Group and its Permitted Transferees by sending written notice (the “New Issuance Notice”) to such Principal Investor Group and Permitted Transferees (“Preemptive Right Beneficiary”) at least fifteen (15) days prior to the issuance and sale of the New Securities. The New Issuance Notice shall state (a) the number of shares, notes or any other securities, as applicable, of its Subsidiaries New Securities proposed to be issued and (vi) issued in connection with an Initial Public Offering.
sold and the terms of such New Securities, (b) Each Stockholder may exercise his the proposed purchase price per share, note or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Companyother security, within ten (10) Business Days of receipt as applicable, of the Issuance Notice. A delivery of such notice New Securities that the Company is willing to accept (which notice shall specify the number (or amount“Proposed Price”) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
New Securities, (c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights the proposed date on which the New Securities will be sold (the “New Issuance Closing Date”), and (d) each Holder’s Proportionate Percentage. For purposes hereof, each Preemptive Right Beneficiary’s “Proportionate Percentage” means, with respect to less than any Preemptive Right Beneficiary, the percentage of the New Securities allocated to such Stockholder’s Pro Rata Share Preemptive Right Beneficiary to be determined by dividing (a) the “Excess Shares”total number of shares of Fully-Diluted Common Stock owned by such Preemptive Right Beneficiary (excluding shares issuable upon exercise of employee stock options), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share by (a “Fully Participating Stockholder”b) shall be entitled to purchase an additional the total number of Shares equal to the product shares of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares Fully-Diluted Common Stock owned by all Fully Participating StockholdersPreemptive Right Beneficiaries (excluding shares issuable upon exercise of employee stock options).
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 2 contracts
Samples: Stockholders' Agreement (Chaparral Energy, Inc.), Stock Purchase Agreement (Chaparral Energy, Inc.)
Preemptive Rights. (a) The If the Company offers or sells any Capital Stock, any other SAFE, or any option, warrant, convertible note or other security convertible into or exercisable or exchangeable for any Capital Stock, the Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior simultaneously offer to the proposed issuance date. The Issuance Notice shall specify Xxxx Xxxxx Network the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled right to purchase such Stockholderthe Investor’s Pro Rata Share of the Shares proposed such securities; provided, however, that such right shall not apply to be (a) Common Stock or options to acquire Common Stock issued by reason of a dividend on Common Stock or Common Stock issued in connection with a stock split of outstanding Common Stock, (b) Common Stock or options to acquire Common Stock issued to a third-partyemployees or directors of, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of to, the Company or any of its Subsidiaries subsidiaries pursuant to incentive agreementsa plan, equity purchase agreement, or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are arrangement approved by the BoardBoard of Directors of the Company, (iiic) Capital Stock actually issued upon the exercise of options or issuable the conversion or exchange of convertible securities if such options or convertible securities were exempt from the purchase rights set forth in this Section 5 upon their original issuance or such purchase rights were waived in writing by the Xxxx Xxxxx Network, (d) Common Stock or options to lenders acquire Common Stock issued to suppliers or lessors third party service providers in connection with any financing the provision of goods or leasing transactionsservices pursuant to transactions approved by the Board of Directors of the Company, and (ive) Capital Stock or options to acquire Capital Stock issued pursuant to the acquisition of another Person corporation by the Company by merger or any purchase of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount substantially all of the assets or equity ownership of assets, provided that such other Person, (v) issued to Persons who issuances are approved by the Board in good faith reasonably believes will of Directors of the Company. The Company shall provide strategic benefits to the Company or Investor (i) no less than thirty (30) days advance written notice of any proposed offering of its Subsidiaries securities setting forth a true and accurate summary of the terms of the securities being offered, and (viii) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within no less than ten (10) Business Days business days prior to the closing of receipt such offering a true and accurate copy of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to definitive legal documents that will be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and executed upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive offering. The rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not 5 may be under any obligation assigned to consummate any proposed one or more individual members of the Xxxx Xxxxx Network. Upon the issuance of Shares Standard Preferred Stock or Safe Preferred Stock, as applicable, the Company and there will be no liability on the part Xxxx Xxxxx Network shall enter into an agreement granting the Xxxx Xxxxx Network the rights set forth in this Section 5, unless the transaction documents related to the Equity Financing grant the Investor a right to purchase its pro rata share of securities sold or issued by the Company occurring after the Equity Financing and the right to transfer such preemptive rights to the Xxxx Xxxxx Network or any one or more individual members of the Company to any Stockholder if Xxxx Xxxxx Network, in which case the Company has not consummated any proposed issuance of Shares pursuant to rights set forth in this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 5 shall terminate after the Initial Public Offeringwith this Agreement.
Appears in 2 contracts
Samples: Incubation Fund Award Agreement, Simple Agreement for Future Equity (Safe)
Preemptive Rights. (a) The Company shall give provide each Stockholder Shareholder with a written notice (an “Issuance a "Preemptive Rights Notice”") of any proposed issuance by the Company of any Shares Equity Securities at least ten (10) Business Days 10 days prior to the proposed issuance date. The Issuance Notice Such notice shall specify the number and class of such Shares and the price at which such Shares the Equity Securities are to be issued and the other material terms and conditions of the issuance. Subject .
(i) In the event the Company shall issue any New Common Securities or New Preferred Securities (collectively, the "New Securities") to Section 4.02(eany third party (including any Shareholder) belowprior to a Qualifying Public Offering, if any such Shares are purchased, the THL Entities and each Stockholder Management Shareholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms at which such New Securities are proposed to be issued and conditions specified in the Issuance such Preemptive Rights Notice, the number of shares (THL Entities' or amount) of Shares specified in such Stockholder’s notice. If, at the termination Management Shareholder's Preemptive Rights Portion of such ten (10) Business Day- periodclass of the New Securities proposed to be issued. "Preemptive Rights Portion" means, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (New Common Securities, the “Excess Shares”)pro rata portion of New Common Securities proposed to be issued by the Company, any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) which amount shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate based upon such Shareholder's Initial Ownership of that class shares of Shares by the Fully Participating Stockholder, Common Stock as the case may be, and the denominator a percentage of which is equal to the sum of the Aggregate Initial Ownership of that class shares of Shares Common Stock of (A) the THL Entities, (B) all Institutional Shareholders and (C) all Management Shareholders and, with respect to New Preferred Securities, the pro rata portion of New Preferred Securities proposed to be issued by all Fully Participating Stockholders.
(d) The Company the Company, which amount shall have ninety (90) days from the date be based upon such Shareholder's Initial Ownership of shares of Preferred Stock as a percentage of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date sum of the Issuance Notice. At Initial Ownership of shares of Preferred Stock of (A) the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred THL Entities and twenty (120B) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02all Institutional Shareholders.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 2 contracts
Samples: Investors' Agreement (Fisher Scientific International Inc), Investors' Agreement (Donaldson Lufkin & Jenrette Inc /Ny/)
Preemptive Rights. (a) The Except for the issuance of Excluded Securities or pursuant to the conversion or exercise of any Capital Stock outstanding on the Closing Date, if, following the Closing Date, the Company authorizes the issuance or sale of any Capital Stock to any Person or Persons (the “Offeree”), the Company shall give each first offer to sell to the Qualified Stockholders a portion of such Capital Stock equal to the quotient determined by dividing (1) the number of shares of Common Stock beneficially owned by such Qualified Stockholder written notice at such time (determined on an as-converted basis), by (2) the total number of shares of Common Stock then issued and outstanding immediately prior to such issuance (determined on an as-converted basis) (the “Issuance NoticePreemptive Percentage”) ); provided, that a Qualified Stockholder shall not be entitled to acquire any such Capital Stock pursuant to this Section 4.2 to the extent the issuance of any such Capital Stock to such Qualified Stockholder would require approval of the stockholders of the Company as a result of such Qualified Stockholder’s status, if applicable, as an Affiliate of the Company or pursuant to the rules and listing standards of Nasdaq, in which case the Company may consummate the proposed issuance of the Capital Stock to other Persons prior to obtaining approval of the stockholders of the Company (subject to compliance by the Company of any Shares at least ten (10with Section 4.2(f) Business Days prior to the proposed issuance datebelow). The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder Qualified Stockholders shall be entitled to purchase such Stockholder’s Pro Rata Share Capital Stock at the same price as such Capital Stock is to be offered to the Offeree; provided that, if the Offeree is required to also purchase other Capital Stock, the Qualified Stockholders shall also be required to purchase the same Capital Stock (at the same price) that the Offeree is required to purchase. The Qualified Stockholders electing to purchase their pro rata share of the Shares proposed Capital Stock authorized for issuance or sale to be issued to a third-party, at the price and on Offeree (“Participating Stockholders”) will take all necessary actions in connection with the other terms and conditions specified in consummation of the Issuance Notice. For purposes of purchase transactions contemplated by this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued 4.2 as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved requested by the Board, (iii) issued including the execution of all agreements, documents and instruments in connection therewith in the form presented by the Company, so long as such agreements, documents and instruments are on customary forms for a transaction of this type and do not require such Participating Stockholders to make or issuable agree to lenders any representation, warranty, covenant or lessors indemnity that is more burdensome than that required of the Offeree in the agreements, documents or instruments in connection with such transaction. If any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Qualified Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall elects not have exercised his or her rights to purchase any such Capital Stock, or not to purchase all of such Qualified Stockholder’s Pro Rata Share pro rata portion thereof, each other Qualified Stockholder who has elected to purchase all of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Qualified Stockholder’s Pro Rata Share (full pro rata share of the “Excess Shares”), any participating Stockholder electing Capital Stock authorized for issuance or sale to exercise his or her rights with respect to his or her full Pro Rata Share the Offeree (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares shares of such Capital Stock as set forth below. If a Fully Participating Stockholder desires to purchase such Capital Stock in excess of the portion allocated to such Fully Participating Stockholder pursuant to the first sentence of this Section 4.2(a), then such Fully Participating Stockholder shall be entitled to purchase a number of shares of Capital Stock equal to the product aggregate number of (i) shares of Capital Stock that the Excess Shares and (ii) a fractionother Qualified Stockholders elected not to purchase pursuant to the first sentence of this Section 4.2(a); provided that, if there is an oversubscription in respect of such remaining Capital Stock due to more than one Fully Participating Stockholder requesting additional Capital Stock, the numerator of which is the Aggregate Ownership of that class of Shares by oversubscribed amount shall be fully allocated among the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Stockholders pro rata based on such Fully Participating Stockholders’ relative Preemptive Percentage.
(b) In order to exercise its purchase rights hereunder, a Qualified Stockholder must, within 15 days after receipt of written notice from the Company describing the Capital Stock being offered, the purchase price thereof, the payment terms and such Qualified Stockholder’s percentage allotment, deliver a written notice to the Company describing its election hereunder (which election shall be absolute and unconditional other than being conditioned upon the consummation of the issuance to the Offeree).
(c) During the 90 days following the expiration of the 15-day offering period described above, the Company shall be entitled to sell the shares of Capital Stock, which the Qualified Stockholders have not elected to purchase, to the Offeree at no less than the purchase price, and upon other terms no more favorable than those, stated in the notice provided under Section 4.2(b) (in addition to the portion of the Capital Stock the Company is not required to offer to the Qualified Stockholders pursuant to the first sentence of Section 4.2(a)). Any Capital Stock proposed to be offered or sold by the Company to the Offeree after such 90-day period, or at a price not complying with the immediate preceding sentence, must be reoffered to the Qualified Stockholders pursuant to the terms of this Section 4.2 prior to any sale to the Offeree.
(d) The In the event that a Qualified Stockholder is not entitled to acquire any Capital Stock pursuant to Section 4.2(a) because such issuance would require the Company shall have ninety (90) days from the date to obtain stockholder approval in respect of the Issuance Notice issuance of such Capital Stock to consummate such Qualified Stockholder as a result of any such Qualified Stockholder’s status, if applicable, as an Affiliate of the Company or pursuant to the rules and listing standards of Nasdaq, the Company shall, upon the Qualified Stockholder’s reasonable request delivered to the Company in writing within seven (7) business days following its receipt of the written notice of such issuance to the Qualified Stockholder pursuant to Section 4.2(b), at the Qualified Stockholder’s election, (i) waive the restrictions set forth in Section 3.2 solely to the extent necessary to permit such Qualified Stockholder to acquire such number of shares of Capital Stock equivalent to its Preemptive Percentage of such issuance such Qualified Stockholder would have been entitled to purchase had it been entitled to acquire such Capital Stock pursuant to Section 4.2(a); (ii) consider and discuss in good faith modifications proposed by the Qualified Stockholder to the terms and conditions of such portion of the Capital Stock which would otherwise be issued to the Qualified Stockholder such that the Company would not be required to obtain stockholder approval in respect of the issuance of such new Capital Stock as so modified; and/or (iii) solely to the extent that stockholder approval is required in connection with the issuance of Capital Stock to Persons other than the Qualified Stockholders, use reasonable best efforts to seek stockholder approval in respect of the issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable Capital Stock to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02Qualified Stockholders.
(e) The Company In the case of the offering of Capital Stock for consideration in whole or in part other than cash, including securities acquired in exchange therefor (other than securities by their terms so exchangeable), the consideration other than cash shall be deemed to be the fair value thereof as reasonably determined by the Board; provided, however, that such fair value as determined by the Board shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on exceed the part aggregate market price of the Company to any Stockholder if securities being offered as of the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect date the Board authorizes the offering of such proposed issuancesecurities.
(f) The Notwithstanding the foregoing, the Company may offer and shall be permitted to sell Shares subject Capital Stock pursuant to the preemptive rights under this Section 4.02 an at-the-market offering program without first offering such Shares Capital Stock to the Stockholders pursuant to this Section 4.2; provided that promptly following such sale, each Stockholder shall be offered the right to purchase Capital Stock in such amount necessary to achieve the same economic effect to such Stockholder as contemplated by, and subject to, this Section 4.2, if such offer would have been made prior to such sale; provided that in such case there shall be deemed to be no dilution to the Preemptive Percentage (or complying with equivalent concepts used to measure or describe the procedures Stockholder’s percentage ownership of the Common Stock on an as-converted basis) for any purpose under this Agreement (including, for the avoidance of doubt, Section 2.1, Section 3.3 and Section 4.2) of any Stockholder who did not purchase the shares of Capital Stock at the time of the initial sale in such at-the-market offering as a result of the application of Section 4.2(f) until such Stockholder has exercised or declined to exercise or waived its rights under the first proviso of this Section 4.024.2(f) with respect to such proposed issuance of Capital Stock and, so long as each Stockholder receives prompt written notice for the avoidance of doubt, in the case of any such sales and thereafter is given decline to exercise or waiver of rights under the opportunity to purchase his or her respective Pro Rata Share first proviso of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, howeverthis Section 4.2(f), the price of such Shares Preemptive Percentage shall be identical to the price paid such offer and salediluted accordingly.
(g) The provisions Notwithstanding anything in this Agreement to the contrary that limits the ability of this a Person to assign or transfer its rights hereunder, a Participating Stockholder may designate any of its Permitted Transferees to purchase all or part of the shares of Capital Stock offered pursuant to Section 4.02 4.2(a); provided that such Participating Stockholder shall terminate after remain obligated to consummate the Initial Public Offeringpurchase if such designees fail to do so.
Appears in 2 contracts
Samples: Stockholders Agreement (Comscore, Inc.), Stockholders Agreement (Comscore, Inc.)
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) In the case of any the proposed issuance of, or the proposed granting by the Company of any Shares at least ten warrants, options or other rights to purchase Common Stock, preferred stock or other equity securities of the Company (10) Business Days prior to or securities convertible into or exchangeable for such Common Stock, other equity securities or preferred stock), in each case after the date hereof (collectively, the "Preemptive Rights Securities"), the Management Stockholder shall have the right, on the same terms as those of the proposed issuance date. The Issuance Notice shall specify or grant and during a reasonable time of no less than 15 days after the number and class Company has given notice to the Management Stockholder of such Shares proposed issuance or granting (containing the terms and conditions of such issuance or grant and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares Preemptive Rights Securities proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”granted), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number amount of Shares such Preemptive Rights Securities equal to the product proportion of (i) the Excess Shares and (ii) a fractionaggregate amount of such outstanding Common Stock, the numerator of which is the Aggregate Ownership of that class of Shares preferred stock or other equity securities then owned by the Fully Participating Management Stockholder, as the case may bein each case, on a fully diluted basis based on a record date not more than 30 days prior to such issuance or granting. The price or prices and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all terms of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares Preemptive Rights Securities shall be identical to the price paid or prices and terms at which such offer and salePreemptive Rights Securities are proposed to be offered for sale or granted to others.
(gb) The provisions of this Section 4.02 16 above shall terminate after not apply to any proposed issuance or grant made pursuant to: (i) any employee stock option plan or other employment or compensation arrangement, (ii) the Initial Public Offering.terms of any options, warrants or other securities provided that such optionees and/or stockholders were given preemptive rights at the time such options, warrants or other securities were issued or granted, (iii) the exchange by the Company of one equity security for another to the extent such securities are made available to all holders of such class of securities and (iv) any bona fide merger or consolidation of any person, business,
Appears in 2 contracts
Samples: Management Stockholder's Agreement (Medcath Corp), Management Stockholder's Agreement (Medcath Corp)
Preemptive Rights. (a) The Company shall give each Stockholder written Other than through an Excluded Issuance, prior to the Partnership offering, issuing or selling any Common Units or other securities that have rights and preferences that rank pari passu with the Common Units (“Pari Passu Securities”), including debt (or other instruments) convertible into Pari Passu Securities, or options or other rights to acquire Pari Passu Securities, including pursuant to a commitment or subscription to acquire Pari Passu Securities over time pursuant to capital calls or otherwise, or any equity interest or options or other rights to acquire an equity interest in any Subsidiary of the Partnership, including debt or other instruments convertible into equity interests in a Subsidiary of the Partnership (collectively, the “New Interests”), to any Brookfield Affiliated Holder (a “Proposed Purchaser”), the Partnership shall, subject to compliance with applicable securities laws, deliver a notice (an the “Issuance Preemptive Notice”) of any proposed issuance by its proposal to offer, issue or sell the Company of any Shares at least ten (10) Business Days prior New Interests to the proposed issuance date. The Issuance each Class A Common Unitholder, which Preemptive Notice shall specify offer each Class A Common Unitholder the number right to purchase additional Class A Common Units and class of such Shares and shall set forth in reasonable detail (A) the price at which such Shares are to be issued and the other material terms and conditions of such issuance, (B) the issuance. Subject price per Class A Common Unit and (C) the maximum number of Class A Common Units (which will be issued to Section 4.02(ethe Class A Common Unitholders in lieu of New Interests) belowthat are available for purchase by such Class A Common Unitholder (Pro Rata based on such Class A Common Unitholder’s Percentage Interest, if any calculated as of the date of the Preemptive Notice, in relation to the total number of New Interests available for purchase) (such Shares are purchasedClass A Common Unitholder’s “Eligible Share”); provided, each Stockholder that, the New Interests available for purchase by the Proposed Purchaser shall be entitled reduced, on a one-for-one basis, to the extent the Class A Common Unitholders elect to purchase additional Class A Common Units pursuant to this Section 17.4. Each Class A Common Unitholder shall have 5 Business Days after receipt of the Preemptive Notice (the “Election Period”) to exercise its right to purchase such StockholderClass A Common Units by delivering an irrevocable written notice to the Partnership, which shall state the number of Class A Common Units such Class A Common Unitholder elects to purchase up to the maximum amount of such Class A Common Unitholder’s Pro Rata Share share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified total number of Class A Common Units available for purchase in the Issuance Notice. For purposes of this Section 4.02, Preemptive Notice (the “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public OfferingOffered Interests”).
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt If not all of the Issuance Notice. Class A delivery Common Units are subscribed for by the Class A Common Unitholders, the Partnership shall have the right, but shall not be required, to offer, issue and sell the unsubscribed portion of such notice (which notice shall specify the number (or amount) Offered Interests to any other Class A Common Unitholder at any time during the 60 days following the termination of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute the Election Period at a binding agreement of such Stockholder to purchase, at the price and on terms no more favorable, in the terms and conditions aggregate, to such Class A Common Unitholder than specified in the Issuance Preemptive Notice. Notwithstanding the foregoing sentence, the number General Partner may, in its reasonable discretion, impose such other reasonable and customary terms and procedures, including setting a closing date and requiring customary closing deliveries, in connection with any offering, issuance or sale of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights Offered Interests pursuant to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares17.4.
(c) If any Stockholder elects Notwithstanding anything to exercise his or her preemptive rights the contrary in this Agreement, the Partnership may, in order to expedite the issuance of New Interests under this Section 4.02 Agreement, issue all or elects a portion of such New Interests to exercise any Proposed Purchaser approved by the General Partner without complying with Sections 17.4(a) and (b); provided, however, that within 45 days of the issuance of such rights New Interests (or such longer period as may be required to comply with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”any applicable securities laws), any participating Stockholder electing the Partnership shall offer to exercise his or her rights with respect sell an amount of Class A Common Units to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares each Class A Common Unitholder equal to such Class A Common Unitholder’s respective Eligible Share of such Class A Common Units in a manner that otherwise provides each such Class A Common Unitholder with rights substantially similar to the product of (irights set forth in Sections 17.4(a) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall b). Each Class A Common Unitholder will have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) 5 Business Days after all delivery of such approvals have been receiveda written offer to such Class A Common Unitholder to deliver an irrevocable written notice to the Partnership, but in no event later than one hundred and twenty (120) days from which notice shall state the date amount of Class A Common Units that such Class A Common Unitholder would like to purchase up to the maximum dollar amount equal to such Class A Common Unitholder’s Eligible Share of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02total offering amount.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Altera Infrastructure L.P.), Limited Partnership Agreement (Teekay Offshore Partners L.P.)
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior Subject to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions contained in this Section 7, the Parent hereby grants to Shareholders a right of first offer with respect to future sales of shares ("New Issues") by the issuanceParent. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder Shareholders shall be entitled to purchase such Stockholder’s Pro Rata Share number of shares in each New Issue that is determined by multiplying the total number of shares in each New Issue by a fraction, the numeration of which is the number of Exchange Shares proposed to be issued to a third-party, at and the price and on denominator of which is the other terms and conditions specified in the Issuance Notice. For purposes total number of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued shares then held by all holders of shares as a dividend or group on a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offeringfully diluted basis.
(b) Each Stockholder may exercise his time the Parent proposes to offer shares or her rights under this Section 4.02 securities convertible into shares for sale, the Parent shall first make an offering of such securities to the Shareholders by delivering to Shareholders a notice ("Offering Notice") stating (i) its bona fide intention to offer such securities, (ii) the number of his or her election securities proposed to be offered, and (iii) the price and terms upon which it proposes to offer such securities.
(c) Within fourteen (14) calendar days following the delivery of the Offering Notice, Shareholders may elect to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchaseobtain, at the price and on upon the terms and conditions specified in the Issuance Offering Notice, the that number of shares (or amount) of Shares specified the New Issue determined as provided in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”7(a), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share by written notice of acceptance (a “Fully Participating Stockholder”"Acceptance Notice") shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating StockholdersParent.
(d) The Company shall have ninety (90) days from the date right of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth first offer in this Section 4.02.
(e) The Company 7 shall not be under any obligation applicable (a) to consummate any proposed the issuance or sale of securities, or options therefor, pursuant to a bonus or option plan, or otherwise pursuant to the employment terms of an officer or employee, approved by the Parent's Board of Directors, or (b) to the issuance of Shares and there will be no liability on securities in connection with a bona fide business acquisition of or by the part Parent, whether by merger, consolidation, sale of the Company to any Stockholder if the Company has not consummated any proposed issuance assets, exchange of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuancestock or otherwise.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 2 contracts
Samples: Share Purchase and Exchange Agreement (Manchester Inc), Share Purchase and Exchange Agreement (Manchester Inc)
Preemptive Rights. 12.1 The Corporation hereby agrees that each Shareholder shall have a preemptive right on the terms and conditions set forth below in this Section 12 to purchase a pro rata portion of any New Securities that the Corporation proposes to issue or sell to any person or entity; provided, however, that such preemptive rights will not apply to any issuance of New Securities by the Corporation:
12.1.1 to employees of the Corporation or its Subsidiaries pursuant to any employee benefit plans established by the Corporation or its Subsidiaries;
12.1.2 made in connection with the acquisition of the capital stock or assets of another unrelated corporation or other unrelated entity or the merger of the Corporation therewith; or
12.1.3 the issuance of New Securities in connection with a Public Offering.
12.2 If the Corporation proposes to make any sale, assignment or transfer of any of the New Securities to which the preemptive right described herein apply, the Corporation shall deliver a Preemption Notice to each of the Shareholders no less than 30 days prior to such proposed sale, assignment or transfer which shall include (ai) The Company shall give each Stockholder written notice a statement of the Corporation's intention to sell, assign or transfer the New Securities, (an “Issuance Notice”ii) the name and address of the proposed purchaser(s), assignee(s) or transferee(s), (iii) the nature and quantity of the New Securities to be sold, assigned or transferred, (iv) the sale price per share (or equivalent) of any proposed issuance by the Company of any Shares at least ten New Securities and (10v) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuanceproposed sale, assignment or transfer. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder The Preemption Notice shall be entitled to purchase such Stockholder’s Pro Rata Share constitute an irrevocable offer on the part of the Shares proposed Corporation to be issued sell to each Shareholder a third-party, at pro rata portion of the price and New Securities on the other same per share terms and conditions stated in the Preemption Notice. A Shareholder's pro rata portion of the New Securities shall be the percentage determined by dividing (i) the sum of the total shares of Stock which such Shareholder beneficially owns as of the date of the Preemption Notice by (ii) the sum of the total shares of Stock outstanding on the date of the Preemption Notice.
12.3 A Shareholder may elect to accept the offer to purchase New Securities set forth in a Preemption Notice only by delivery of a Preemption Acceptance to the Corporation within 30 days after delivery of the Preemption Notice. If a Shareholder elects to purchase his or its pro rata portion of the New Securities, the closing of the purchase and sale shall occur no later than 90 days after delivery to the Corporation of the Preemption Acceptance. At the closing, such Shareholder shall deliver to the Corporation an amount in cash as payment for its New Securities for delivery by the Corporation of certificates evidencing such securities.
12.4 If no Shareholder delivers a Preemption Acceptance for any portion of the shares of the New Securities within 30 days of the Preemption Notice (or if all Shareholders sooner reject the Company's offer), the Corporation shall be free for a period of 120 days thereafter to sell, assign or transfer any shares of the New Securities for which no Preemption Acceptance has been delivered to any Person or entity on terms and conditions which are no less favorable to the Corporation as those specified in the Issuance Preemption Notice. For purposes Any such Person or entity who purchases, or accepts the assignment or transfer of such shares of New Securities as provided herein, shall execute a counterpart copy of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts Agreement or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant instrument acceptable to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on Corporation acknowledging the terms and conditions specified in of this Agreement and such Person's obligation to be bound hereby. If the Issuance NoticeCorporation does not sell, the number of shares (assign or amount) of Shares specified in transfer such Stockholder’s notice. If, at the termination of New Securities within such ten (10) Business Day- 120 day period, then such New Securities shall again become subject to the provisions of this Section 12.
12.5 The acceptance or failure to accept any Stockholder Preemption Notice by a Shareholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of affect its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects 12 to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise acquire his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance its pro rata portion of any New Securities that the Corporation proposes to sell, assign or all of such Shares that each Stockholder have elected not transfer to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified any person or entity in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02future.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Samples: Shareholder Agreement (Torotel Inc)
Preemptive Rights. (a) The Company shall give each Stockholder written notice Prior to the consummation of an Initial Public Offering, in the event that (an “Issuance Notice”x) of any proposed issuance by the Company intends to sell or issue any Units or any other Membership Interests, or (y) any Subsidiary of the Company intends to sell or issue any Shares at least ten equity interests in such Subsidiary to any Person other than to a wholly-owned Subsidiary of the Company (10any such Units, Membership Interests or equity interests, the “Preemptive Interests”), the Fugro Member shall have the right to purchase, subject to Section 4.11(b) Business Days and 4.11(c), an amount of such Preemptive Interests up to (but not in excess of) its Class A/A-1/A-2 Percentage Interest immediately prior to such sale or issuance, on the proposed issuance date. The Issuance Notice shall specify same terms and conditions as such Preemptive Interests are being offered and sold, such subscription being conditioned upon the number and class actual sale of such Shares and the price at which Preemptive Interests; provided, however, that such Shares preemptive right shall not extend to any issuance of Class A-1 Units or Incentive Interests, or any other Units, Membership Interests or equity interests that are to be issued and by the other material terms and conditions Company or any of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: its Subsidiaries (i) issued as by reason of a dividend dividend, split, split-up or a distributionother distribution on Units or Membership Interests of the Company or equity interests of such Subsidiary, (ii) granted or issued to employees, officers, directorsemployees or directors of, or consultants or advisors of to, the Company or any of its Subsidiaries pursuant to incentive agreementsany purchase plan or arrangement, equity purchase or equity option plansplan, equity bonuses or awards, warrants, contracts or other arrangements that are incentive plan or agreement approved by the Board, (iii) issued or issuable to lenders or lessors any Person as direct purchase consideration in connection with any financing strategic acquisitions approved by the Board or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may At any time the Company or any of its Subsidiaries proposes to issue any Preemptive Interests, the Company shall give written notice to the Fugro Member specifying the contemplated date such Preemptive Interests are to be sold, the amount of such Preemptive Interests, the rights and limitations of such Preemptive Interests, the purchase price and other terms and conditions upon which such Preemptive Interests are to be issued, and any other material terms thereof. The Company shall deliver such notice to the Fugro Member no later than 25 Business Days prior to such contemplated purchase date, and the Fugro Member shall have until 10 Business Days prior to the contemplated purchase date specified in such notice to inform the Company of its intentions as to the exercise his or her rights of the preemptive right provided under this Section 4.02 4.11, including the maximum number of Preemptive Interests for which it wishes to exercise its preemptive rights. If no written reply is received by delivering notice of his or her election to purchase such Shares the Company prior to the Company, within ten (10) tenth Business Days of receipt of Day before the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares contemplated purchase date specified in such Stockholder’s notice, the Company may treat the preemptive right of the Fugro Member under this Section 4.11 to have been waived for that, but only for that, transaction. IfFor the avoidance of doubt, at the termination of such ten (10) Business Day- period, any Stockholder Fugro Member shall not have exercised his or her rights any right to purchase acquire any portion of any Preemptive Interests proposed to be issued and sold by the Company unless all of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, Preemptive Interests are issued and only with respect to, the purchase of such Sharessold concurrently.
(c) If any Stockholder elects to exercise his or her preemptive rights under Notwithstanding the other provisions of this Section 4.02 4.11, if the Board determines that, in the best interests of the Company, the Company should issue or elects sell any Units or other Membership Interests or any Subsidiary of the Company should offer or sell any equity interests in such Subsidiary that would otherwise be Preemptive Interests required to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal offered to the product of (i) Fugro Member pursuant to this Section 4.11 prior to such offer to the Excess Shares and (ii) a fractionFugro Member, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating StockholderCompany or its Subsidiary, as applicable, may effect such issuance or sale without first complying with the case may beprovisions of this Section 4.11; provided, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
however, that, within thirty (d) The Company shall have ninety (9030) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuanceissuance or sale, the Company shall record offer, and/or cause the Shares in book entry format representing the Shares Person to be purchased by each Stockholder exercising preemptive rights pursuant whom such issuance or sale was made to this Section 4.02 registered in the name of such Stockholderoffer, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given Fugro Member the opportunity to purchase his or her respective Pro Rata Share an amount of such Shares within forty-five securities up to (45but not in excess of) days after the close of its Class A/A-1/A-2 Percentage Interest immediately prior to such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and issuance or sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Hc2 Holdings, Inc.)
Preemptive Rights. (a) The Prior to the consummation of an IPO, the Company or Warner II, as the case may be, shall give each Stockholder of the Management Shareholders that is an “accredited investor” (as such term is defined in Rule 501(a) of the Securities Act) as of the time of any proposed issuance by the Company or Warner II, as the case may be, of shares of a specified class of Group Equity Securities, written notice (an “Issuance Notice”) of any such proposed issuance by the Company of any Shares at least ten (10) Business Days 10 days prior to the proposed issuance date. The Issuance Notice shall specify the number and of shares of the specified class of such Shares Group Equity Securities and the price at which such Shares Group Equity Securities are proposed to be issued and the other material terms and conditions of the issuance, including, without limitation, the proposed closing date. Subject to Section 4.02(e) below, if any such Shares are purchased4.04(g), each Stockholder Management Shareholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-partypurchase, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes , its pro rata amount of this Section 4.02, “Excluded Securities” shall include any Shares: such newly issued Group Equity Securities equal to (ix) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors the number of shares of the Company or any specified class of its Subsidiaries pursuant Group Equity Securities proposed to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) be issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any Warner II, as the case may be, multiplied by (y) a fraction, the numerator of its Subsidiaries by consolidation, merger, purchase or other transaction in which is the Company or such Subsidiary acquires, in a single transaction or series Aggregate Ownership of related transactions, a material amount of the assets or equity ownership Group Equity Securities of such other Person, (v) issued to Persons who Management Shareholder and the Board in good faith reasonably believes will provide strategic benefits to denominator of which is the Company or any Aggregate Ownership of its Subsidiaries Group Equity Securities of all Management Shareholders and (vi) issued in connection with an Initial Public OfferingNon-Management Shareholders.
(b) Each Stockholder Management Shareholder may exercise his or her its rights under this Section 4.02 4.04 by delivering written notice of his or her its election to purchase such Shares Group Equity Securities to the CompanyCompany or Warner II, as the case may be, within ten (10) Business Days of 10 days after receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares shares of the specified class of Group Equity Securities requested to be purchased by such Stockholder the Management Shareholder submitting such notice) by such Stockholder Management Shareholder shall constitute a binding agreement of such Stockholder Management Shareholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares the specified class of Group Equity Securities specified in such StockholderManagement Shareholder’s notice. If, at the termination of such ten (10) Business Day- 10 day-period, any Stockholder shall Management Shareholder has not have exercised his or her rights its right to purchase any of such Stockholder’s Pro Rata Share its pro rata share of such SharesGroup Equity Securities (as calculated pursuant to Section 4.04(a)), such Stockholder Management Shareholder shall be deemed to have waived all of its rights under this Section 4.02 4.04 with respect to, and only with respect to, the purchase of such SharesGroup Equity Securities specified in the Issuance Notice.
(c) If any Stockholder elects of the Management Shareholders or Non-Management Shareholders fail to exercise his or her its preemptive rights under this Section 4.02 4.04 or (with respect to Non-Management Shareholders) under the Sponsor Shareholders Agreement, or elects to exercise such rights with respect to less than such Stockholdershareholder’s Pro Rata Share pro rata share (the difference between such shareholder’s pro rata share (as calculated pursuant to Section 4.04(a) or (with respect to the Non-Management Shareholders) under the Sponsor Shareholders Agreement) and the number of shares for which such shareholder exercised its preemptive rights under this Section 4.04 or (with respect to the Non-Management Shareholders) under the Sponsor Shareholders Agreement, the “Excess Shares”), any participating Stockholder Management Shareholder electing to exercise his or her its rights with respect to his or her its full Pro Rata Share pro rata share (a “Fully Participating StockholderManagement Shareholder”) shall be entitled to purchase from the Company or Warner II, as the case may be, an additional number of Shares shares of the specified class of Group Equity Securities equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class Group Equity Securities of Shares by the such Fully Participating Stockholder, as the case may beManagement Shareholder, and the denominator of which is equal to the sum of the Aggregate Ownership of that class Group Equity Securities of Shares by all Fully Participating StockholdersManagement Shareholders and all Non-Management Shareholders that elected to exercise their preemptive rights with respect to their full pro rata share pursuant to the Sponsor Shareholders Agreement.
(d) The Company or Warner II, as the case may be, shall have ninety (90) 120 days from after the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares Group Equity Securities that each Stockholder the Management Shareholders and Non-Management Shareholders have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company or Warner II, as the case may be, than those specified in the Issuance Notice; provided, provided that, that if such issuance is subject to regulatory approval, such ninety (90) 120-day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) 180 days from after the date of the Issuance Notice. At the consummation of such issuance, the Company or Warner II, as the case may be, shall record the Shares in book entry format issue certificates representing the Shares Group Equity Securities to be purchased by each Stockholder Management Shareholder exercising preemptive rights pursuant to this Section 4.02 4.04 registered in the name of such StockholderManagement Shareholder, against payment by such Stockholder Management Shareholder of the purchase price for such SharesGroup Equity Securities. If the Company or Warner II, as the case may be, proposes to issue any class of Shares Group Equity Securities after such one hundred and twenty (120) -day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.024.04.
(e) The closing of any issuance of Group Equity Securities contemplated by this Section 4.04 shall take place at the time and in the manner provided in the Issuance Notice. The Company or Warner II, as the case may be, shall not be under any no obligation to consummate any proposed issuance of Shares and Group Equity Securities, nor shall there will be no any liability on the part of the Company such entity to any Stockholder Management Shareholder, if the Company or Warner II, as the case may be, has not consummated any proposed issuance of Shares Group Equity Securities pursuant to this Section 4.02 4.04 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company or Warner II, as the case may be, may offer and sell Shares shares of a specified class of Group Equity Securities subject to the preemptive rights under this Section 4.02 4.04 to an existing Non-Management Shareholder without first offering such Shares Group Equity Securities to each Stockholder of the Management Shareholders or complying with the procedures of this Section 4.024.04, so long as (i) each Stockholder of the Management Shareholders receives prompt written notice of the consummation of such sales and thereafter is given the opportunity to purchase his a number of shares of the specified class of Group Equity Securities equal to (x) the number of shares of the specified class of Group Equity Securities issued by the Company or her respective Pro Rata Share Warner II, as the case may be, (including all shares of the specified class of Group Equity Securities issued to Management Shareholders with respect to this provision) multiplied by (y) a fraction, the numerator of which is the Aggregate Ownership of Group Equity Securities of such Shares Management Shareholder and the denominator of which is the Aggregate Ownership of Group Equity Securities of all Management Shareholders and Non-Management Shareholders, within forty-five (45) 45 days after the close of such sale and in any event no later than ten (10) Business Days from 10 days after receipt of the notice referred to herein on substantially the same terms and conditions as such prior sale, however, and (ii) the price per share of such Shares specified class of Group Equity Securities shall be identical to the price per share paid in such offer and prior sale.
(g) The provisions of preemptive rights under this Section 4.02 4.04 shall terminate after not apply to (i) issuances or sales of Group Equity Securities to employees, officers and/or directors of the Initial Public OfferingCompany or Warner II, as the case may be, pursuant to the Incentive Plan or any other employee benefit or similar plans or arrangements of the Company or Warner II, as the case may be, approved in accordance with the Sponsor Shareholders Agreement, (ii) issuances or sales of Group Equity Securities upon exercise, conversion or exchange of Group Equity Securities outstanding as of the date hereof or which, when issued, were subject to or exempt from the preemptive rights, (iii) securities distributed or set aside ratably to all holders of a specified class of Group Equity Securities on a per share equivalent basis, (iv) issuances or sales in, or in connection with, the IPO, a merger of the Company or Warner II, as the case may be, with or into another Person or an acquisition by the Company or Warner II, as the case may be, of another Person or substantially all the assets of another Person, or (v) issuances of shares of a specified class of Group Equity Securities as a bona-fide “equity kicker” to a lender in connection with a third party debt financing.
(h) Upon any issuances or sales of Group Equity Securities as a unit with any other Group Equity Securities, the preemptive rights under this Section 4.04 shall be exercisable solely with respect to the entire unit rather than only the Group Equity Securities included in the unit.
Appears in 1 contract
Samples: Management Shareholders Agreement (Warner Chilcott CORP)
Preemptive Rights. (a) The If the Company intends to issue any New Securities at any time after Effective Date, to the extent permitted by Applicable Laws, the Company shall give offer to (i) the Institutional Shareholders; and (ii) each Stockholder written notice (individual of the Management Team, the right to participate in the subscription of New Securities proportionately according to their pro rata share. The term “pro rata share” shall be calculated according to the respective number of Shares held by each Institutional Shareholder and each individual of the Management Team on an “Issuance Notice”) as-converted basis in relation to the total number of any proposed issuance by issued and outstanding shares on an as-converted basis of the Company of any Shares at least ten (10) Business Days immediately prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded New Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may Institutional Shareholder and individual of the Management Team that subscribes for their respective pro rata share of New Securities shall have a right of over-allotment such that, if any other Institutional Shareholder or individual of the Management Team fails to exercise his or in full its/his/her rights under this Section 4.02 by delivering notice of his or her election right hereunder to purchase such Shares to the Company, within ten (10) Business Days of receipt its/his/her pro rata share of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such SharesNew Securities, such Stockholder shall be deemed to have waived all Institutional Shareholder and individuals of its rights under this Section 4.02 with respect to, and only with respect to, the purchase Management Team may subscribe for the non- subscribed portion of such Sharesthe New Securities on a pro rata basis.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise The Company may issue New Securities without complying with provisions of Sections 5.6(a) and 5.6(b) if such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of New Securities are (i) shares issued to employees, directors, advisors, consultants and officers pursuant to stock incentive plans approved by the Excess Shares and Board; (ii) a fractionshares issued in connection with sponsored research, the numerator collaboration, technology license, development, marketing, or of which is the Aggregate Ownership of that class of Shares similar nature approved by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
Board; (diii) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance shares issued upon conversion of any preferred shares, debenture, warrant, option, or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions other convertible security that are not materially less favorable to issued with the Company approval by the Company’s Board; and (iv) shares issued for consideration other than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights cash pursuant to this Section 4.02 registered in a merger, consolidation, acquisition, or similar business combination approved by the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02Board.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Samples: Shareholders Agreement (APRINOIA Therapeutics Inc.)
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares Company Securities to Oak Hill or its Affiliates (other than “Excluded Securities” in respect of which this Section 4.05 will not apply) at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares Company Securities and the price at which such Shares Company Securities are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e4.05(e) below, if any such Shares Company Securities are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares Company Securities proposed to be issued to a third-partyOak Hill, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.024.05, “Excluded Securities” shall include any SharesCompany Securities: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors (other than Oak Hill or its Affiliates) in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person (other than Oak Hill or its Affiliates) by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons (other than Oak Hill or its Affiliates) who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 4.05 by delivering notice of his or her election to purchase such Shares Company Securities to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares Company Securities to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares Company Securities specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- Day-period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such SharesCompany Securities, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 4.05 with respect to, and only with respect to, the purchase of such SharesCompany Securities.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 4.05 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares Company Securities equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares Company Securities by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares Company Securities by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares Company Securities that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) -day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) 120 days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format issue certificates representing the Shares Company Securities to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 4.05 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such SharesCompany Securities. If the Company proposes to issue any class of Shares Company Securities after such one hundred and twenty (120) 90-day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.024.05.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares Company Securities and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares Company Securities pursuant to this Section 4.02 4.05 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares Company Securities subject to the preemptive rights under this Section 4.02 4.05 without first offering such Shares Company Securities to each Stockholder or complying with the procedures of this Section 4.024.05, so long as each Stockholder receives receive prompt written notice of such sales and thereafter is are given the opportunity to purchase his or her respective Pro Rata Share of such Shares Company Securities within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares Company Securities shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 4.05 shall terminate after the Initial Public Offering.
Appears in 1 contract
Samples: Stockholders' Agreement (Dave & Buster's Entertainment, Inc.)
Preemptive Rights. (ai) The Company shall give each Stockholder written notice (an “Issuance Notice”) of If at any proposed issuance by time on or after the Company of any Shares at least ten (10) Business Days date hereof and prior to the proposed issuance date. The Issuance Notice shall specify Initial Public Offering, subject to compliance with Section 1(g), the number and class Company or its Subsidiaries proposes to issue (x) equity securities of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For kind (for purposes of this Section 4.022(e), the term “Excluded Securitiesequity securities” shall include any Shares: (iwarrants, options or other rights to acquire equity securities or debt securities convertible into equity securities) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or (y) debt securities of any kind to which any Tiptree Investor or any of its Subsidiaries their Affiliates subscribe (in each case, other than the issuance of securities (A) upon conversion of the Preferred Stock pursuant to incentive agreementsthe Certificate of Incorporation, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by exercise of the BoardWarrants, (iiiB) issued or issuable to lenders or lessors the public in connection with any financing or leasing transactionsa firm commitment underwriting pursuant to a registration statement filed under the Securities Act, (ivC) issued pursuant to the acquisition of another Person (not affiliated with any Tiptree Investor) by the Company or any Subsidiary, whether by purchase of its Subsidiaries by consolidationstock, merger, consolidation, purchase of all or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount substantially all of the assets or equity ownership of such other PersonPerson or otherwise, provided that such acquisition has been approved by the Board, and such securities are being issued as consideration for the transaction and not in connection with financing the transaction, (vD) pursuant to an employee stock option plan, stock bonus plan, stock purchase plan, employment agreement or other management equity program, in each case, approved by the Board, (E) upon conversion or exercise of any security convertible into or exercisable for any equity securities, provided that such convertible or exercisable security that were issued in accordance with the terms of this Agreement, (F) to Persons who the Board in good faith reasonably believes will provide strategic benefits vendors, lenders and customers of and consultants to the Company or any of its Subsidiaries and (vi) issued Subsidiary or in connection with a strategic partnership (provided that such securities are (1) being issued as consideration for the strategic partnership and not in connection with financing the strategic partnership, (2) being issued to the Company or another wholly owned Subsidiary of the Company by a wholly owned Subsidiary of the Company), in each case, to the extent such issuance has been approved by the Board, (G) immaterial issuances by Subsidiaries of the Company, solely to the extent such issuance is required by applicable law, (H) by reason of a dividend, stock split or other distribution on shares of Common Stock, (I) to any Investor that is an Initial Public Offering.
employee of the Company or its Subsidiaries, pursuant to the terms of any employment or similar agreement between the Company and such Investor to the extent such employment or similar agreement was approved by the Board or (bJ) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice pursuant to the Purchase Agreement), then, subject to the provisions set forth below, as to each Qualified Investor and, in the case of his or her election any issuance to purchase a Qualified Investor, each Other Investor (other than any such Shares Other Investor that cannot demonstrate to the Company, within ten (10) Business Days of receipt ’s reasonable satisfaction that such Other Investor is at the time of the Issuance Notice. A delivery proposed issuance of such securities an “accredited investor” as such term is defined in Regulation D of the Securities Act) (each a “Preemptive Right Investor”), the Company shall:
(A) give written notice setting forth in reasonable detail (which notice shall specify 1) the number (or amount) designation and all of Shares the terms and provisions of the securities proposed to be purchased by such Stockholder submitting such noticeissued (the “Proposed Securities”), including where applicable, the voting powers, preferences and relative participating, optional or other special rights, and the qualification, limitations or restrictions thereof and interest or dividend rate and maturity; (2) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on other terms of the terms proposed sale of such securities; (3) the amount of such securities proposed to be issued; and conditions specified (4) such other information as a Preemptive Right Investor may reasonably request in order to evaluate the Issuance Noticeproposed issuance; and
(B) offer to issue to each such Preemptive Right Investor for the same price (it being agreed that if such price was to be paid not in cash, the Preemptive Right Investors may pay for such Proposed Securities in cash equal to the Fair Market Value thereof) a portion of the Proposed Securities equal to a percentage determined by dividing (x) the number of shares of Common Stock Owned by such Preemptive Right Investor as a result of Purchased Equity Shares (excluding, for the sake of clarity, any Granted Equity Shares, whether or amountnot vested), determined on an As Converted Basis, by (y) the total number of Shares specified shares of Common Stock then outstanding on an As Converted Basis (such portion of Proposed Securities in respect of Preemptive Right Investor, such StockholderPreemptive Right Investor’s notice. If“Full Allotment”); provided that in the case of issuance by a non-wholly owned Subsidiary of the Company, at the termination Full Allotment shall be further multiplied by the direct or indirect ownership percentage of the Company of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such SharesSubsidiary.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fractionEach such Preemptive Right Investor may exercise his, the numerator of which is the Aggregate Ownership of that class of Shares her or its purchase rights hereunder by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable delivering an irrevocable written notice to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety within twenty (90) day period shall be extended until the expiration of five (520) Business Days after receipt of such notice from the Company, which notice shall state the dollar amount of Proposed Securities such Preemptive Right Investor would like to purchase up to a maximum amount equal to such Preemptive Right Investor’s Full Allotment, plus the additional dollar amount of the Proposed Securities such Preemptive Right Investor would like to purchase in excess of its Full Allotment (the “Over-Allotment Amount”), if any, if other Preemptive Right Investors do not elect to purchase their full allotment of the Proposed Securities. The right of each Preemptive Right Investor to purchase Proposed Securities in excess of its Full Allotment shall be apportioned based on the relative Full Allotments of those Preemptive Right Investors desiring Over-Allotment Amounts (as indicated in such irrevocable written notice). To the extent that the Company offers two or more securities to all prospective purchasers in a proposed issuance in units, such approvals as convertible notes coupled with attached warrants (and only in such units), such Preemptive Right Investors must purchase such units as a whole and will not be given the opportunity to purchase only one of the securities making up such unit.
(iii) Upon the expiration of the offering periods described above, the Company will be free to sell such Proposed Securities that such Preemptive Right Investors have been received, but in no event later than not elected to purchase during the one hundred and twenty (120) days from following such expiration on terms and conditions not more favorable, taken as a whole (but with aggregate economic terms not more favorable), to the date purchasers thereof than those offered to such Preemptive Right Investors. Any Proposed Securities offered or sold by the Company after such ninety (90)-day period must be reoffered to such Preemptive Right Investors pursuant to this Section 2(e).
(iv) Except as set forth in Section 2(e)(iii), the election by a Preemptive Right Investor not to exercise such Preemptive Right Investor’s subscription rights under this Section 2(e) in any one instance shall not affect such Preemptive Right Investor’s right (other than in respect of a reduction in such Preemptive Right Investor’s percentage holdings) as to any subsequent proposed issuance subject to this Section 2(e). If the Board determines in good faith that it is in the best interest of the Issuance Notice. At Company to sell the consummation of such issuanceProposed Securities to one or more Tiptree Investors or their respective Affiliates, the Company shall record be permitted to sell such Proposed Securities to such Tiptree Investors and/or their respective Affiliates without first complying with Section 2(e)(i), provided that promptly following such sale, the Shares Company permits each other Preemptive Right Investor having rights under this Section 2(e) to purchase such Preemptive Right Investor’s proportionate amount of such Proposed Securities in book entry format representing the Shares manner contemplated by this Section 2(e); provided, further, that in the event the Company desires to sell such Proposed Securities to a Tiptree Investor or its Affiliates in reliance on this Section 2(e)(iv), then such Proposed Securities may only be sold to such Tiptree Investor or its Affiliates if they are concurrently offered to be purchased sold to the Warburg Investors. Following the issuance of any Proposed Securities to such Tiptree Investors and/or their respective Affiliates and prior to the issuance of the Proposed Securities to any other Preemptive Right Investor in accordance with this Section 2(e)(iv), the Company shall not set a record date for any meeting or dividend, shall not permit any stockholder action by written consent to be taken, shall not convene any meeting of the stockholders and shall not take any other action, in each Stockholder exercising preemptive rights case, the result of which could reasonably be expected to be influenced by a decision of a Preemptive Right Investor to purchase any Proposed Securities.
(v) Each such Preemptive Right Investor shall, if requested by the Company, execute a stockholders agreement (or consent to an amendment to this Agreement) with respect to such Proposed Securities with terms that are (to the extent practicable) substantially equivalent to, mutatis mutandis, the terms of this Agreement. If any Subsidiary of the Company offers any additional equity securities (“New Subsidiary Securities”) to any Person (other than to the Company or any Subsidiary, directly or indirectly, wholly owned by the Company), then this Section 2(e) will apply to any such offering of New Subsidiary Securities, and each Preemptive Right Investor shall have the right to purchase a portion of such New Subsidiary Securities offered thereunder as though they were equity securities pursuant to this Section 4.02 registered in the name of such Stockholder2(e), against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02mutatis mutandis.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (a) The Each Class A Member, in accordance with Subsection (b) below, shall have a preemptive right with respect to: (i) the issuance or sale of new Class A Interests or Class B Economic Interests by the Company; (ii) the issuance of any obligations, evidences of indebtedness, or securities of the Company convertible into, exchangeable for, or accompanied by any rights to receive, purchase, or subscribe to any Class A Interests or Class B Economic Interests; or (iii) the issuance of any right of, subscription to, or right to receive, or any warrant or option for the purchase of, any of the foregoing. No preemptive right shall exist with respect to warrants or equity interests issued to a third-party lender in a commercial loan transaction.
(b) If the Company proposes to issue interests or securities in which the Class A Members have preemptive rights, the Manager(s) shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by to the Company of any Shares Class A Members at least ten twenty (1020) Business Days days prior to the proposed issuance date(“Participation Notice”) unless the Class A Members waive or otherwise agree to a shorter period. The Issuance Participation Notice shall specify the type and number of securities the Company proposes to sell along with the price, terms, and class closing date of such Shares and proposed sale. Each Class A Member must notify the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(eManager(s) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, writing within ten (10) Business Days days of the receipt of the Issuance Notice. Participation Notice whether such Class A delivery Member shall accept the offer to purchase a portion of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, securities on the terms and at the price stipulated in the Participation Notice. If no response has been received by the Manager(s) from a Class A Member within such ten-day period, the Class A Member shall be deemed to have refused the offer. The maximum number of interests or securities a Class A Member shall have the right to purchase shall be equal to the total number of interests or securities offered multiplied by the percentage Class A Interest then owned by such Member. The notice given by the Member must state the number of interests or securities the Member desires to purchase; provided, however, that the notice may indicate that the Member desires to purchase a greater number of interests or securities of the proposed offering than shall be allocated to such Member in the event another Class A Member fails to accept the entire amount of such other Class A Member’s allocation. The closing of the proposed sale to the Class A Members or, in the event the Class A Members do not accept to purchase the entire proposed offering, to the third party, shall be on the closing date and on the terms and conditions specified stipulated in the Issuance Participation Notice, . If the number of shares proposed sale is not completed within three (or amount3) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days months from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Participation Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to may not issue any class of Shares after such one hundred and twenty (120) day period interests or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part securities of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to without again complying with this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance13.2.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (a) 6.4.1. The Company shall give hereby grants to each Stockholder written notice Capital Member the right to purchase its Pro Rata Share (an “Issuance Notice”disregarding any Incentive Plan Interests) of any proposed issuance by New Senior Securities, as hereinafter defined (the “PR Purchase Right”), which the Company of any Shares at least ten (10) Business Days prior may, from time to the proposed issuance datetime, propose to sell and issue. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) Except as set forth below, if “New Senior Securities” shall mean Series B Preferred Interests or any such Shares are purchasedother equity securities with a liquidation preference or dividend, each Stockholder shall be entitled redemption, or voting rights senior or on parity with Series B Preferred Interests as well as rights, options or warrants to purchase such Stockholder’s Pro Rata Share equity securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity securities. Notwithstanding the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02foregoing, “Excluded New Senior Securities” shall include any Sharesdoes not include: (i) issued as securities offered to the public generally pursuant to a dividend registration statement filed pursuant to the Securities Act, or a distribution, pursuant to Regulation A under the Securities Act; (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) securities issued pursuant to the acquisition of another Person person by the Company or any of its Subsidiaries by consolidation, a merger, share exchange, the purchase of substantially all of the assets of such other company, or other transaction in which reorganization whereby the Company or its Members own not less than fifty-one percent (51%) of the voting power of the surviving or successor Person, so long as such Subsidiary acquiresacquisition is approved by the Board; (iii) the issuance of Options or Interests to employees of the Company, the Officers, Service Providers or members of the Board pursuant to the Option Plan, as currently in effect and as may from time to time be amended or any other equity incentive plan approved by the Board (including, if adopted following the date hereof, the affirmative approval of the Lead Series A Investor Manager and the Lead Series B Investor Manager), not to exceed, in a single transaction or series of related transactionsthe aggregate, a material amount twenty percent (20%) of the assets equity Interests of the Company on a fully diluted basis; (iv) securities issued pursuant to any convertible securities, options or equity ownership warrants, provided that the PR Purchase Right under this Section 6.4 applies with respect to the initial issuance or grant of such other Personconvertible securities, options or warrants; (v) securities issued pursuant to Persons the anti-dilution provisions of any outstanding option, warrant, right or convertible security of the Company issued after November 26, 2019; provided that the PR Purchase Right under this Section 6.4 applies with respect to the initial issuance of such option, warrant or convertible security, or provided that such securities issued pursuant to any option, warrant or convertible security otherwise do not constitute “New Senior Securities” for purposes of this Section 6.4 (as if such securities had been originally issued on the date such securities are issued pursuant to the anti-dilution provisions in the applicable option, warrant or convertible security for the same reason the applicable option, warrant or convertible security was originally issued), (vi) securities representing up to five percent (5%) of equity Interests of the Company on a fully diluted basis at the time of issuance that are issued in connection with arm’s length, reasonable commercial arrangements with any party who is not an Affiliate of a Skybound Member, so long as such commercial arrangement is approved by the Board in good faith reasonably believes will provide strategic benefits faith, and (vii) securities issued to any Person upon the waiver by the Board by unanimous consent of the PR Purchase Right and the notice requirements set forth in this Section 6.4.
6.4.2. If the Company or any proposes to undertake an issuance of New Senior Securities, it shall give each Capital Member written notice of its Subsidiaries intention, describing the type of New Senior Securities, and (vi) issued in connection with an Initial Public Offering.
(b) the price and terms upon which the Company proposes to issue the New Senior Securities. Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within Capital Member shall have ten (10) Business Days days from the date of receipt of the Issuance Notice. A delivery any such notice to agree to purchase up to its respective Pro Rata Share (disregarding any Incentive Plan Interests) of such New Senior Securities for the price and upon the terms specified in the notice (which by giving written notice shall specify to the number (or amount) Company of Shares such Capital Member’s intentions and stating therein the quantity of New Senior Securities to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute Capital Member.
6.4.3. In the event a binding agreement of such Stockholder Capital Member fails to purchase, at exercise the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of PR Purchase Right within such ten (10) Business Day- day period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days thereafter to sell or enter into a written agreement (pursuant to which the sale of New Senior Securities covered thereby shall be completed, if at all, within sixty (60) days from the date of such agreement) to sell the Issuance Notice to consummate New Senior Securities not purchased by the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase Capital Members at the a price and upon such terms and conditions that which are not materially less no more favorable to the Company purchaser of such New Senior Securities than those specified in the Issuance Notice, provided that, if such issuance is subject Company’s notice to regulatory approval, the Capital Members. If the Company has not sold the New Senior Securities or entered into a written agreement to sell the New Senior Securities within such ninety (90) day period shall be extended until (or completed the expiration sale of five the New Senior Securities within sixty (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (12060) days from the date of the Issuance Notice. At the consummation of such issuanceagreement, as provided above), the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to may not thereafter issue or sell any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 New Senior Securities without first offering such Shares to each Stockholder or complying with securities in the procedures of manner provided in this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale6.4.
(g) 6.4.4. The provisions of PR Purchase Right granted to a Capital Member under this Section 4.02 6.4 shall terminate after expire upon the Initial Public Offeringdate such Capital Member no longer owns any Interests.
Appears in 1 contract
Samples: Limited Liability Company Operating Agreement (Mr. Mango LLC)
Preemptive Rights. (a) The Company shall give Partnership hereby grants to each Stockholder written notice (an “Issuance Notice”) of any proposed the Partners a preemptive right, in accordance with the procedures set forth in this Section 4.9, with respect to the issuance and sale by the Company Partnership of any Shares at least ten Additional Units (10"Preemptive Securities") Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: than those:
(i) issued as a dividend or a distribution, sold in connection with the Phase I Financing;
(ii) granted issued or issued sold to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, a Strategic Investor;
(iii) issued or issuable to lenders sold pursuant to, in connection with, or lessors following the Initial Public Offering;
(iv) issued or sold in connection with any financing merger, consolidation, acquisition or leasing transactions, (iv) issued pursuant to other business combination involving the acquisition of another Person by the Company Partnership or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount subsidiary of the assets or equity ownership of such other Person, Partnership; or
(v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or sold under any of its Subsidiaries and (vi) issued in connection with an Initial Public Offeringemployee benefit or similar plan or arrangement.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares At least thirty (30) days prior to the Company, within ten (10) Business Days of receipt sale of the Issuance Preemptive Securities, the Partnership shall deliver a written notice (a "Sale Notice. A delivery ") to each Subject Partner setting forth:
(i) the number of Preemptive Securities to be sold;
(ii) the price for which and other terms and conditions upon which such Preemptive Securities are to be sold; and
(iii) all written information distributed to offerees of such notice (which notice shall specify Preemptive Securities, together with an irrevocable offer from the number (or amount) of Shares Partnership to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder issue and sell to purchaseeach Subject Partner, at the same price per Preemptive Security and on the same other terms and conditions specified set forth in the Issuance Sale Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares Preemptive Securities equal to the product of (i) the Excess Shares and (ii) total number of Preemptive Securities set forth in the Sale Notice multiplied by a fraction, the numerator of which is the Aggregate Ownership number of that class of Shares Units held by such Subject Partner at the Fully Participating Stockholder, as time the case may beSale Notice is issued, and the denominator of which is equal the number of Units held by all Subject Partners at such time.
(c) The Subject Partners shall have absolute discretion to the sum accept or decline such offers. If a Subject Partner wishes to accept any of the Aggregate Ownership offers made pursuant to Section 4.9(b), it shall give the Partnership irrevocable written notice (which notice must specify acceptance of that class all Preemptive Securities offered to such Subject Partner in the Sale Notice) of Shares by all Fully Participating Stockholdersits election to accept such offer within fifteen (15) days of the 25 date (the "Sale Notice Delivery Date") on which the Partnership delivers the applicable Sale Notice. The closing thereunder (a "Preemptive Rights Closing") shall occur five (5) days thereafter (or, if such day is not a Business Day, on the next Business Day thereafter) at the offices of the Partnership or at such other time and place as the parties shall agree.
(d) The Company If any portion (the "Remaining Portion") of the total number of Preemptive Securities set forth in the Sale Notice is not subscribed to by the Subject Partners within fifteen (15) days of the Sale Notice Delivery Date, the Partnership shall have ninety the right, until the one hundred twenty-first (90121st) day following the Sale Notice Delivery Date, to sell Preemptive Securities to any Person(s) at a price per Preemptive Security not less than 95% of the price specified in the Sale Notice, and on terms and conditions that are otherwise substantially similar to the terms and conditions set forth in the Sale Notice; provided, however, that if, as a condition of such proposed sale, such Person requires the Partnership to sell a number of Preemptive Securities greater than the number of Preemptive Securities included in the Remaining Portion, then such sale shall be subject to the requirements of Section 4.9(e).
(e) If, as a condition of a proposed sale of Preemptive Securities under Section 4.9(d), the Partnership is being required to sell a number of Securities greater than the number of Preemptive Securities included in the Remaining Portion, the Partnership shall provide those Subject Partners that have purchased the Preemptive Securities set forth in the applicable Sale Notice (the "Exercising Partners") with a notice (the "Subsequent Sale Notice") setting forth:
(i) the number of Preemptive Securities that the Partnership plans to sell pursuant to Section 4.9(d); and
(ii) the price for which and other terms and conditions upon which such Preemptive Securities are to be sold. Each of the Exercising Partners shall have the following option (but not the obligation) to purchase Preemptive Securities at the price and on terms and conditions substantially similar to those specified in the Sale Notice: upon the Partnership's delivery of the Subsequent Notice, the Exercising Partner shall have ten (10) days from the date (the "Subsequent Notice Date") upon which the Partnership delivers the Subsequent Sale Notice to deliver to the Partnership an irrevocable written notice (the "Subsequent Sale Election Notice") committing to purchase a specified number of Preemptive Securities that does not exceed the number of Preemptive Securities included in the Remaining Portion. If the total number of Preemptive Securities subscribed to by Exercising Partners through the delivery to the Partnership of Subsequent Sale Election Notices within ten (10) days of the Issuance Subsequent Sale Notice Date is greater than or equal to consummate the proposed issuance number of any or all Preemptive 26 Securities included in the Remaining Portion, then the Partnership shall sell the Preemptive Securities subscribed to in such Subsequent Sale Election Notices and the Partnership shall not complete the sale described in the Subsequent Sale Notice. The closing of such Shares that each Stockholder have elected not sales pursuant to purchase at Subsequent Sale Election Notices (also, a "Preemptive Rights Closing") shall occur on the price and upon terms and conditions that are not materially less favorable to fifteenth (15th) day after the Company than those specified in the Issuance Notice, provided thatSubsequent Sale Notice Date (or, if such issuance date is subject to regulatory approvalnot a Business Day, such ninety (90on the next Business Day thereafter) day period shall be extended until at the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date offices of the Issuance Notice. At Partnership or at such other time and place as the consummation of such issuance, parties shall agree and the Company Partnership shall record not complete the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered sale described in the name of such Stockholder, against payment by such Stockholder of the purchase price for such SharesSubsequent Sale Notice. If the Company proposes total number of Preemptive Securities subscribed to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable by Exercising Partners through the delivery to the issuerPartnership of Subsequent Sale Election Notices within ten (10) days of the Subsequent Sale Notice Date is less than the number of Preemptive Securities included in the Remaining Portion, it then none of Exercising Partners shall again comply with have the procedures set forth in option to purchase Preemptive Securities under this Section 4.02.
(e4.9(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it Partnership shall have delivered an Issuance Notice the right to complete the sale described in respect of such proposed issuancethe Subsequent Sale Notice.
(f) The Company may offer and sell Shares subject In connection with any proposed or contemplated sale of Additional Units, upon the request of the Partnership, each Subject Partner shall indicate to the Partnership its good faith intentions (which indications shall not be binding) with respect to whether or not it will exercise the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and saledescribed herein.
(g) The provisions Notwithstanding anything to the contrary in this Agreement, no Limited Partner shall become a general partner of this Section 4.02 shall terminate after the Initial Public OfferingPartnership or otherwise hold general partner Units in the Partnership as a result of such Limited Partner's purchase of any Preemptive Securities.
Appears in 1 contract
Samples: Limited Partnership Agreement (Loral Space & Communications LTD)
Preemptive Rights. 10.1 Except as provided in paragraphs (a) The Company shall give each Stockholder written notice to (an “Issuance Notice”f) below, namely:
(a) conversion rights applicable to the Series A Preference Shares;
(b) securities issued pursuant to a Qualified IPO;
(c) securities issued in consideration of any proposed issuance the acquisition by the Company of another corporation by merger or purchase of substantially all its assets;
(d) securities issued in connection with any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions stock split, stock consolidation or stock dividend of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share Company or recapitalizations which do not affect the respective percentage equity interest of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: Shareholders;
(ie) issued as a dividend or a distribution, (ii) granted or securities issued to employees, officers, directors, consultants officers or advisors directors of the any Group Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity stock option plans, equity bonuses or awards, warrants, contracts plans or other stock incentive arrangements that are approved by the Board, Board provided that the issue of such securities shall be subject to the restrictions set forth in Clause 9; and
(iiif) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) securities issued pursuant to the acquisition consent in writing of another Person by all Shareholders for the time being, the Company will not, and will procure that none of the Group Companies will, authorise, create or issue any shares or securities of its Subsidiaries by consolidationany class and will not and will procure that none of the Group Companies will, mergerauthorise, issue or grant any options, warrants, conversion rights or other rights to purchase or other transaction acquire any shares or securities of any class without first offering the Shareholders the right of first offer described in this Clause 10.
10.2 The Shareholders shall have a right of first offer to purchase and subscribe for an amount of securities of the Company of any class or kind which the Company or proposes to issue (“Preemptive Securities”) sufficient to maintain their proportionate beneficial ownership interests in the Company (on an as-converted, fully diluted basis).
10.3 If the Company wishes to make any issue of Preemptive Securities, it shall prior to such Subsidiary acquires, in a single transaction or series of related transactions, a material amount issue give all the Shareholders thirty (30) Business Days written notice of the assets or equity ownership proposed issue. The notice shall set forth the terms and conditions of the proposed issue (including the number of Preemptive Securities to be offered and the price for which the Company proposes to offer such Preemptive Securities and any other material terms of such other Personissue), and shall constitute an offer to issue the Preemptive Securities to all the Shareholders on such terms and conditions.
10.4 Any Shareholder may accept such offer by delivering a written notice of acceptance (van “Acceptance Notice”) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company within thirty (30) Business Days after receipt of the notice of the Company of the proposed issue. Any Shareholder in exercising its right of first offer shall be entitled to participate in the purchase of Preemptive Securities on a pro rata basis to the extent necessary to maintain such Shareholder’s proportionate beneficial ownership interest in the Company (such Shareholders’ “Pro Rata Portion”) (and for purposes of determining such Shareholders’ Pro Rata Portion, any Shareholder or other security holder shall be treated as owning that number of Shares into which any outstanding convertible shares may be converted and for which any outstanding options may be exercised). If any Shareholder fails to purchase or does not accept its pro rata portion, the other Shareholders shall, among them, have the right to purchase up to the balance of the Preemptive Securities not so purchased. The Shareholder willing to purchase shall notify the Company of its Subsidiaries and (vi) issued desire to purchase more than its Pro Rata Portion( the “Oversubscription”). If, as a result thereof, such Oversubscription exceeds the total number of Preemptive Securities available in connection respect of such Oversubscription privilege, the oversubscribing Shareholders shall be cut back with an Initial Public Offeringrespect to their Oversubscriptions on a pro rata basis in accordance with their respective Pro Rata Portion.
(b) Each Stockholder may 10.5 If any Shareholder elects to exercise his or her rights under this Section 4.02 by delivering notice its right of his or her election to first offer but does not complete the purchase of such Shares Preemptive Securities within 14 days after delivery of its Acceptance Notice to the Company, within ten (10) Business Days the Company may complete the sale of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and Preemptive Securities on the terms and conditions specified in the Issuance NoticeCompany’s notice within 7 days following the expiration of such 14 day period.
10.6 If the Company does not complete the issue of the Preemptive Securities within such 7 days’ period, the number right of shares (or amount) of Shares specified first offer provided in such Stockholder’s notice. If, at the termination this Clause 11 in respect of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder Preemptive Securities shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, revived and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company Preemptive Securities shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company offered to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject person unless first reoffered to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying Shareholders in accordance with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and saleClause 10.2.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Samples: Shareholder Agreements (The9 LTD)
Preemptive Rights. (a) The Company shall give each Stockholder written notice Subject to the provisions of paragraph ----------------- (an “Issuance Notice”b) of this Section 5.1, Mtel LATAM shall not issue, sell, or enter into any proposed issuance by agreement(s) or commitment(s) pursuant to which it becomes obligated to issue, any shares of its capital stock, or any warrants, options or other securities convertible or exchangeable into such shares, unless Mtel LATAM shall first offer (the Company "Preemptive Rights Offer") in writing to sell to each of any Shares the ----------------------- Stockholders, at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify same price, and on the number same terms and class conditions, an amount of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares securities proposed to be issued to a third-partyoffered by Mtel LATAM, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant pro rata to the acquisition of another Person by Stockholder's proportionate Voting Interest. Such Preemptive Rights Offer shall remain outstanding for at least 30 Business Days from the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership date of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries notice and (vi) issued in connection with an Initial Public Offeringshall be exercised by each Stockholder by serving written notice on Mtel LATAM within such 30 Business Day period.
(b) Each Stockholder may exercise his The Preemptive Rights Offer shall not apply to: (i) any issuances or her rights under this Section 4.02 grants of equity securities by delivering notice of his or her election to purchase such Shares Mtel LATAM to the Companyofficers, within ten directors or employees of Mtel LATAM or any of its subsidiaries pursuant to the Stock Option Plan or any other employee stock option plan or employee benefit or other incentive plan adopted by the Mtel Board pursuant to Section 2.1(xxi) herein, (10ii) Business Days the exercise of receipt any options issued pursuant to or in connection with the Stock Option Plan or any other employee stock option plan or employee benefit or other incentive plan adopted by Mtel LATAM or any Material Subsidiary in accordance with Section 2.1(xxi) herein, (iii) the issuance of any securities by Mtel LATAM upon the exercise of any exchange, conversion or similar feature contemplated by any security issued pursuant to the Transaction Documents, (iv) the issuance of any securities by Mtel LATAM upon the exchange of any shares of Preferred Stock of Mtel Puerto Rico, (v) the issuance of any equity securities as a payment-in-kind dividend on any class of Company Stock, (vi) the issuance of equity securities, either directly or indirectly, in connection with the acquisition by Mtel LATAM of a controlling interest in any party which is not an Affiliate of either Mtel LATAM or any of the Issuance Notice. A delivery Stockholders (whether by merger, consolidation, sale of assets or securities, or otherwise) which issuance has been approved by the Mtel LATAM Board pursuant to the provisions set forth in Section 2.1 hereof, (vii) the issuance of securities (including any convertible securities or options and the conversion or exercise thereof) to any third party which is at such notice time a creditor of Mtel LATAM, in connection with the refinancing or restructuring of the indebtedness owed to such third party, (which notice shall specify viii) any issuance of securities by Mtel LATAM in connection with an IPO, (ix) the number (or amount) distribution by Mtel LATAM of Shares its securities to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase stockholders on a pro rata basis or (x) any issuance of such Shares.
(c) If --- ---- securities by Mtel LATAM pursuant to any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating StockholdersTransaction Documents.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Samples: Stockholders and Exchange Rights Agreement (Mobile Telecommunication Technologies Corp)
Preemptive Rights. (a) The Except for the issuance of Common Stock (or securities convertible into or containing options or rights to acquire shares of Common Stock)
(i) pursuant to a Public Equity Offering, (ii) as consideration for the acquisition of assets or stock of another Person, (iii) pursuant to the exercise of warrants to purchase capital stock of the Company shall give each Stockholder written notice outstanding as of November 30, 1999, (an “Issuance Notice”iv) pursuant to the terms of any proposed issuance by capital stock or stock option issued to an employee, director or consultant of the Company (or its subsidiaries), (v) pursuant to a dividend or distribution made in respect of the Common Stock or Preferred Stock, (vi) pursuant to the terms of any Shares at least ten debt financing or (10vii) Business Days prior pursuant to which the proposed Designated Holders have waived their rights to purchase any securities pursuant to this Section 20, if the Company authorizes the issuance date. The Issuance Notice shall specify the number and sale of any shares of any class of capital stock or any securities convertible into or containing options or rights to acquire any shares of any class of capital stock (such Shares issuance and sale, a "Covered Offering" and the price at which such Shares are securities proposed to be issued and sold thereunder, the other material terms and conditions "Offered Securities"), the Company will first offer to sell to each Covered Holder a quantity of the issuanceOffered Securities calculated by multiplying (x) the total number of Offered Securities by (y) such holder's Ownership Percentage. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall Each Covered Holder will be entitled to purchase such Stockholder’s Pro Rata Share portion of the Shares proposed Offered Securities pursuant to be issued to a third-party, at the price and on the other terms and conditions specified set forth in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: paragraph (ib) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offeringbelow.
(b) Each Stockholder may exercise his or her rights At least 20 days prior to the consummation of any Covered Offering, the Company shall deliver a written notice (the "Sale Notice") to each Covered Holder specifying in reasonable detail (i) the quantities and classes of Offered Securities, (ii) the proposed offering price, (iii) the proposed date, time and location of the closing of the Covered Offering, and (iv) such other information necessary for such holder to calculate the number of Offered Securities that it is entitled to purchase under this Section 4.02 by delivering notice of his or her 20. The Covered Holders may make an irrevocable election to purchase all or part of such Shares securities, upon the same terms and conditions and at the same time and place as described in the Sale Notice, by delivering a written notice of such election to the Company within 10 days after the Sale Notice has been delivered by the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of Any such notice (which election notice shall specify the number (or amount) quantity of Shares Offered Securities that the electing Covered Holder is entitled to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder purchase under this Section 20. If any Covered Holder elects to purchase, at the price and purchase Offered Securities pursuant to this Section 20 on the terms and conditions specified in the Issuance Sale Notice, the number sale of shares (or amount) such securities shall be consummated, together with the sale of Shares specified in such Stockholder’s notice. Ifany Offered Securities not elected to be purchased under this Section 20, at the termination time and place of the closing of the Covered Offering specified in the Sale Notice or at such ten other time (10not later than 10 days after the time specified in the Sale Notice) Business Day- period, any Stockholder shall and place as the Company may decide and communicate to the electing Covered Holders not have exercised his or her rights less than 2 days prior to such closing. If no Covered Holder elects to purchase any of such Stockholder’s Pro Rata Share of such SharesOffered Securities pursuant to this Section 20, such Stockholder the Company shall be deemed free to have waived all sell the Offered Securities within 90 days after the expiration of its rights under the offering period described above on terms and conditions no more favorable to the purchasers thereof, in the aggregate, than set forth in the Sale Notice. Any Offered Securities offered or sold by the Company after such 90 day period must be reoffered to the Covered Holders pursuant to this Section 4.02 with respect to, and only with respect to, the purchase of such Shares20.
(c) If Notwithstanding the foregoing provisions of this Section 20, in the event that, in connection with any Stockholder issuance and sale of securities of the Company, a Covered Holder elects to purchase securities of the Company pursuant to the exercise his or her preemptive of any rights of such Covered Holder under this Section 4.02 or elects 20 of the Company's Amended and Restated Class B Warrant Agreement dated as of November 30, 1999 relating to exercise a Class B Warrant to purchase 93,273 shares of Common Stock of the Company, such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) Covered Holder shall not be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part securities of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures 20 of this Section 4.02, so long as each Stockholder receives prompt written notice of Agreement with respect to such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer issuance and sale.
(g) The ; provided, that the foregoing provisions of this Section 4.02 clause (c) shall terminate after the Initial Public Offering.not apply with respect to any other Covered Holder. [Signature Page Follows]
Appears in 1 contract
Samples: Class B Warrant Agreement (Osullivan Industries Holdings Inc)
Preemptive Rights. (a) For so long as the Anchor Investor, together with its Affiliates, Beneficially Own no less than four and nine-tenths percent (4.9%) of the outstanding Common Stock, the Anchor Investor or one or more of their designated Affiliates shall have the option and right (but not the obligation) to participate (or nominate any of its Affiliates to participate) in any Equity Issuance by purchasing in the aggregate up to the Anchor Investors’ and its Affiliates’ Pro Rata Portion of such Equity Issuance at the same price and the same terms and conditions as offered to other investors in the Equity Issuance. The Company agrees to use its reasonable best efforts to take any and all action, or to cause such action to be taken, as is necessary or appropriate to allow the Anchor Investor or its Affiliates, as applicable, to fully participate in any Equity Issuance in accordance with the provisions of this Agreement.
(b) In the event the Company proposes to undertake an Equity Issuance, the Company shall promptly give each Stockholder the Anchor Investor prior written notice (an “Issuance Notice”) of any proposed issuance by its intention, describing the Company type of any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and equity interests, the price at which such Shares securities are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party(or, in the case of an underwritten or privately placed offering in which the price is not known at the time the notice is given, the method of determining the price and on a reasonable estimate thereof), the other timing of such proposed Equity Issuance and the general terms and conditions upon which the Company proposes to effect the Equity Issuance. The Anchor Investor and its Affiliates shall have fifteen (15) Business Days (or, if the Company expects that the proposed Equity Issuance will be effected in less than fifteen (15) Business Days, such shorter period, that shall be as long as practicable and in no event less than eleven (11) calendar days, as may be required in order for the Anchor Investor and its Affiliates to participate in such proposed Equity Issuance) from the date the Anchor Investor receives notice of the proposed Equity Issuance to elect to purchase (or nominate any of its Affiliates to purchase) up to the Anchor Investor, together with its Affiliates, Pro Rata Portion of such Equity Issuance for the consideration and upon the terms specified in the notice provided by the Company pursuant to this Section 3.1(b) by giving written notice to the Company and stating therein the quantity of equity interests to be purchased. Any such notice shall be irrevocable; provided, however, that if the terms of the Equity Issuance Noticeare materially modified, then the Anchor Investor and its Affiliates will be provided the opportunity to withdraw or similarly participate on such modified terms. For Any purchase of equity interests by the Anchor Investor and its Affiliates pursuant to this Section 3.1(b) shall occur contemporaneously with, and be subject to the same terms and conditions as, the closing of the sale of the equity interests by the Company to the other parties in the Equity Issuance.
(c) The purchase by the Anchor Investor and its Affiliates of equity interests pursuant to this Section 3.1 shall be subject to the limitations on stock ownership set forth in the Company’s Governing Documents.
(d) In the event that neither the Anchor Investor nor any of its Affiliates exercise the right forth in this Section 3.1 within the applicable period as set forth above, the Company shall be permitted to sell the equity interests in respect of which such pre-emptive rights were not exercised. In the event that the Company has not sold the equity interests within ninety (150) days of its notice to Investor as contemplated by Section 3.1, for purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or 3.1 such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the proposed Equity Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may bebeen terminated, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice provide Anchor Investor with a new notice prior to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02undertaking a subsequent Equity Issuance.
(e) The Company shall not be under any obligation have the right, in its sole discretion, at all times prior to consummate consummation of any proposed issuance of Shares and there will be no liability on Equity Issuance giving rise to the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to rights granted by this Section 4.02 for whatever reason3.1, regardless of whether it shall have delivered an Issuance Notice in respect of to abandon, withdraw or otherwise terminate such proposed issuance.
(f) The Company may offer and sell Shares subject Equity Issuance, without any liability to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder Anchor Investor or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and saleits Affiliates.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Samples: Shareholder Rights Agreement (Wheeler Real Estate Investment Trust, Inc.)
Preemptive Rights. Section 5.1 For so long as (i) RDLT is entitled to nominate a Sxxxxxx Nominee pursuant to Section 1.1 of this Agreement, or (ii) RDLT and his Affiliates Beneficially Own at least ten percent (10%) of the Company’s outstanding shares of Common Stock, whichever is later, the Sxxxxxx Parties and MPT shall have the right to purchase their respective pro rata portion (the “Pre-emptive Shares”) of any New Securities (other than, for the avoidance of doubt, any Excluded Securities) that the Company may from time to time issue or sell to any Person in a public offering or offering under Rule 144A. For this purpose, the Sxxxxxx Parties’ and MPT’s respective pro rata portion is equal to the ratio of (a) the number of shares of Common Stock (including all shares of Common Stock issuable or issued upon exercise or conversion of outstanding warrants or options or convertible securities) of which the Sxxxxxx Parties, together with their Affiliates, or MPT and its Affiliates (as the case may be) are holders or would be holders upon conversion or exercise at the time notice of the proposed issuance of such New Securities is given by the Company pursuant to Section 5.2 to (b) the total number of shares of Common Stock (including all shares of Common Stock issued or issuable upon the exercise or conversion of any outstanding warrants or options or convertible securities) outstanding immediately prior to the issuance of such New Securities. Any exercise or purchase of Pre-emptive Shares pursuant to this Section 5.1 must be conducted in compliance with applicable Law, which may include, without limitation, the offer and sale of Pre-emptive Shares via a concurrent private placement or directed allocation.
Section 5.2 The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior or sale described in Section 5.1 to the proposed issuance date. The Sxxxxxx Parties and MPT, which Issuance Notice shall specify set forth the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the proposed issuance. Subject to Section 4.02(e, including:
(a) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share the number of the Shares New Securities proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.issued;
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice the number of his or her election to purchase such Pre-emptive Shares to which the CompanySxxxxxx Parties and MPT would be entitled;
(c) the proposed issuance date, within ten which shall be at least five (105) Business Days of receipt days following the date of the Issuance Notice. A delivery ; and
(d) the proposed purchase price per share or that the purchase price per share will be determined based upon the trading price of such notice shares of Common Stock at the time of issuance or by some other method.
Section 5.3 RDLT, on behalf of the Sxxxxxx Parties, and MPT (which notice on its own behalf) shall specify for a period of fifteen (15) days following the number receipt of an Issuance Notice (or amountthe “Exercise Period”) of Shares have the right to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder elect irrevocably to purchase, at the purchase price and on the terms and conditions specified set forth in the Issuance Notice, all or a portion of the number of shares Pre-emptive Shares by delivering a written notice to the Company. The Sxxxxxx Parties’ or MPT’s (or amountas the case may be) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights election to purchase any Pre-emptive Shares shall be binding and irrevocable. If RDLT, on behalf of such Stockholder’s Pro Rata Share the Sxxxxxx Parties, or MPT (on its own behalf) fails to deliver a valid written notice of such Shareshis election within the Exercise Period in accordance with this Section 5.3, such Stockholder then the Sxxxxxx Parties or MPT (as the case may be) shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such their respective pre-emptive rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”)New Securities described in the Issuance Notice.
Section 5.4 The Company shall be free to complete the proposed issuance or sale of New Securities described in the Issuance Notice, any participating Stockholder electing to exercise his or her rights including with respect to his any Pre-emptive Shares not elected to be purchased pursuant to Section 5.3 above, in accordance with the terms and conditions set forth in the Issuance Notice (except that the amount of New Securities to be issued or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares sold by the Fully Participating Stockholder, Company may be reduced in the Company’s discretion) so long as the case may be, and the denominator of which such issuance or sale is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have closed within ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until after the expiration of five (5) Business Days after all the Exercise Period. In the event the Company has not sold such approvals have been received, but New Securities in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuancetime period, the Company shall record the Shares not thereafter issue or sell any New Securities without first delivering an Issuance Notice, as appropriate, in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply accordance with the procedures set forth in this Article V.
Section 4.02.
(e) 5.5 The Company and the Sxxxxxx Parties and/or MPT (as applicable) shall not be under consummate the issuance and sale of any obligation to consummate any proposed issuance of Pre-emptive Shares at the same time and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially upon the same terms and conditions as such salethe other purchasers of New Securities described in the Issuance Notice, subject to compliance with applicable Law as contemplated by Section 5.1; provided, however, that the price consummation of such Shares any purchase by the Sxxxxxx Parties and/or MPT (as applicable) may be extended beyond the consummation of the sale of the New Securities to other purchasers to the extent necessary to obtain required approvals from any Governmental Authority.
Section 5.6 In the case of a sale of New Securities for a consideration in whole or in part other than cash, including securities acquired in exchange therefor (other than securities by their terms so exchangeable), the consideration other than cash shall be identical deemed to be the price paid such offer and salefair value thereof as determined by the Board.
Section 5.7 The election by RDLT, on behalf of the Sxxxxxx Parties, or by MPT (gon its own behalf) The provisions of not to exercise its respective pre-emptive rights under this Section 4.02 Article V in any one instance shall terminate after the Initial Public Offeringnot affect its respective right as to any subsequent proposed issuance.
Appears in 1 contract
Samples: Merger Agreement (CareMax, Inc.)
Preemptive Rights. (a) The Other than for issuances of Company Securities contemplated in Section 3.07(f), the Company shall give each Stockholder the Members written notice (an “Issuance NoticeNotice ”) of any proposed issuance by the Company of any Shares Company Securities at least ten (10) 20 Business Days prior to the proposed issuance date, except with respect to any such issuance in connection with a Significant Business Need Contribution, in which case the Company shall provide the Members with an Issuance Notice as promptly as reasonably practicable prior to such issuance taking into account the nature and urgency of the need giving rise to such Significant Business Need Contribution and establish other exercise and issuance periods as it may reasonably determine notwithstanding any other timing requirements of this Section 3.07 at the direction of a majority of the Directors of the Board. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares Company Securities are to be issued and the other material terms and conditions of the issuanceissuance (including the terms of the Company Securities proposed to be issued). Subject to Section 4.02(e) below, if any such Shares are purchased3.07(f), each Stockholder of the Members shall be entitled to purchase such Stockholder’s Pro Rata Share (or to cause its Affiliates to purchase) up to its respective Membership Percentage of the Shares Company Securities proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchaseissued, at the price and on the terms and conditions specified in the Issuance Notice. Notwithstanding anything herein to the contrary, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and 3.07 shall only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights apply with respect to less than such Stockholder’s Pro Rata Share Members holding a Membership Percentage of at least five percent (the “Excess Shares”5%), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) and no Class A Units shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified considered in the Issuance Notice, calculations contemplated herein; provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration that for purposes of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights calculating Membership Percentage pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, howeversentence, the price of such Shares Class B Units held by all Members comprising BHI shall be identical to the price paid such offer and saleaggregated.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. 20.1. Except for the issuance of Common Stock (aor securities convertible into or containing options or rights to acquire shares of Common Stock)
(i) The pursuant to a Public Equity Offering, (ii) as consideration for the acquisition of assets or stock of another Person, (iii) pursuant to the exercise of warrants to purchase capital stock of the Company shall give each Stockholder written notice outstanding as of November 30, 1999, (an “Issuance Notice”iv) pursuant to the terms of any proposed issuance by capital stock or stock option issued to an employee, director or consultant of the Company (or its subsidiaries), (v) pursuant to a dividend or distribution made in respect of the Common Stock or Preferred Stock, (vi) pursuant to the terms of any Shares at least ten debt financing or (10vii) Business Days prior pursuant to which the proposed Designated Holders have waived their rights to purchase any securities pursuant to this Section 20, if the Company authorizes the issuance date. The Issuance Notice shall specify the number and sale of any shares of any class of capital stock or any securities convertible into or containing options or rights to acquire any shares of any class of capital stock (such Shares issuance and sale, a "Covered Offering" and the price at which such Shares are securities proposed to be issued and sold thereunder, the other material terms and conditions "Offered Securities"), the Company will first offer to sell to each Covered Holder a quantity of the issuanceOffered Securities calculated by multiplying (x) the total number of Offered Securities by (y) such holder's Ownership Percentage. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall Each Covered Holder will be entitled to purchase such Stockholder’s Pro Rata Share portion of the Shares proposed Offered Securities pursuant to be issued to a third-party, at the price and on the other terms and conditions specified set forth in paragraph (b) below.
20.2. At least 20 days prior to the Issuance consummation of any Covered Offering, the Company shall deliver a written notice (the "Sale Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: ") to each Covered Holder specifying in reasonable detail (i) issued as a dividend or a distributionthe quantities and classes of Offered Securities, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Boardproposed offering price, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactionsthe proposed date, time and location of the closing of the Covered Offering, and (iv) issued pursuant such other information necessary for such holder to calculate the acquisition number of another Person by the Company Offered Securities that it is entitled to purchase under this Section 20. The Covered Holders may make an irrevocable election to purchase all or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership part of such other Personsecurities, (v) issued to Persons who upon the Board same terms and conditions and at the same time and place as described in good faith reasonably believes will provide strategic benefits the Sale Notice, by delivering a written notice of such election to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 within 10 days after the Sale Notice has been delivered by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of Any such notice (which election notice shall specify the number (or amount) quantity of Shares Offered Securities that the electing Covered Holder is entitled to purchase under this Section 20. If any Covered Holder elects to purchase Offered Securities pursuant to this Section 20, the sale of such securities shall be consummated, together with the sale of any Offered Securities not elected to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchaseunder this Section 20, at the price and on the terms and conditions specified in the Issuance Sale Notice at the time and place of the closing of the Covered Offering specified in the Sale Notice or at such other time (not later than 10 days after the time specified in the Sale Notice) and place as the Company may decide and communicate to the electing Covered Holders not less than 2 days prior to such closing. If no Covered Holder elects to purchase Offered Securities pursuant to this Section 20, the number Company shall be free to sell the Offered Securities within 90 days after the expiration of shares (the offering period described above on terms and conditions no more favorable to the purchasers thereof, in the aggregate, than set forth in the Sale Notice. Any Offered Securities offered or amount) sold by the Company after such 90 day period must be reoffered to the Covered Holders pursuant to this Section 20.
20.3. Notwithstanding the foregoing provisions of Shares specified this Section 20, in such Stockholder’s notice. Ifthe event that, at in connection with any issuance and sale of securities of the termination Company, a Covered Holder elects to purchase securities of the Company pursuant to the exercise of any rights of such ten (10) Business Day- periodCovered Holder under Section 20 of the Company's Amended and Restated Class B Warrant Agreement dated as of November 30, any Stockholder 1999 relating to a Class B Warrant to purchase 39,273 shares of Series B Junior Preferred Stock of the Company, such Covered Holder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part securities of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures 20 of this Section 4.02, so long as each Stockholder receives prompt written notice of Agreement with respect to such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer issuance and sale.
(g) The ; provided, that the foregoing provisions of this Section 4.02 20.3 shall terminate after the Initial Public Offeringnot apply with respect to any other Covered Holder.
Appears in 1 contract
Samples: Class B Warrant Agreement (Osullivan Industries Holdings Inc)
Preemptive Rights. (a) The Company shall give hereby grants to each Stockholder written notice Shareholder, for a period of two (an “Issuance Notice”2) years from the date hereof, a preemptive right to purchase, on a pro rata basis and at the same price and upon the same terms as any other investors at such time, all or any part of any proposed issuance by the Company of any Shares at least ten New Securities (10as defined below) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquiresmay, in a single transaction or series of related transactionsfrom time to time, a material amount of the assets or equity ownership of such other Person, (v) issued propose to Persons who the Board in good faith reasonably believes will provide strategic benefits sell and issue subject to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Noticeset forth below. A Shareholder's pro rata share, the number for purposes of shares this subsection (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”a), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership number of that class shares of Shares Common Stock then held by the Fully Participating Stockholder, as the case may besuch Shareholder on a fully-diluted basis, and the denominator of which is equal the total number of shares of Shares then held by all of the Shareholders on a fully-diluted basis. (b) "New Securities" shall mean any capital stock of the Company --------------- whether now authorized or not and rights, options or warrants to purchase capital stock, and securities of any type whatsoever which are, or may become, convertible into capital stock; provided, however, that the term "New Securities" shall expressly not include (i) securities offered to the sum public pursuant to a Public Offering; (ii) securities issued for the acquisition of another corporation by the Company by merger, purchase of substantially all the assets of such corporation or other reorganization resulting in the ownership by the Company of not less than 51% of the Aggregate Ownership voting power of such corporation; (iii) Common Stock issued to employees or consultants of the Company pursuant to a stock option plan, employee stock purchase plan, restricted stock plan or other employee stock plan or agreement approved by the Board of Directors of the Company (provided that class the total number of Shares by shares to be issued under all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from such plans does not exceed 10% of the Company's shares outstanding as of the date of the Issuance Notice to consummate the proposed issuance this Agreement); or (iv) securities issued as a result of any stock split, stock dividend or reclassification of Common Stock, distributable on a pro rata basis to all holders of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02Common Stock.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (a) The Subject to Section 4.06(f), during the Preemptive Rights Period, if the Company or any of its Subsidiaries proposes to issue additional equity securities, including any warrants, options or other rights to acquire equity of the Company or any of its Subsidiaries or debt securities that are convertible into or exchangeable or exercisable for equity securities of the Company or any of its Subsidiaries (with the exception of any issuance (i) in connection with any acquisition of assets or another Person by the Company or any of its Subsidiaries, whether by purchase of stock, merger, consolidation, purchase of all or substantially all of the assets of such Person or otherwise (excluding any issuance for purposes of financing such transaction) approved by the Board, (ii) in the IPO, (iii) to directors, employees or consultants pursuant to an Employee Equity Arrangement, (iv) to vendors, lenders and customers of and consultants to the Company or any of its Subsidiaries or in connection with a strategic partnership (excluding any issuance for purposes of financing such strategic partnership) approved by the Board, (v) by reason of a dividend, stock split or other distribution on account of the Shares, (vi) of any such equity securities to Igloo Co-Invest, LLC, any Additional Co-Invest Entities and any other Persons pursuant to Permitted Syndication Sales if the Company is simultaneously acquiring from the Sponsors the same aggregate amount of such equity securities or (vii) to the Company or any wholly-owned Subsidiary of the Company (in each case, having been approved in accordance with the terms of this Agreement, to the extent applicable)) (“Preemptive Securities”), the Company shall give each Stockholder provide written notice (an “Issuance Notice”) to each Sponsor of any proposed such anticipated issuance by the Company of any Shares at least ten no later than twenty-two (1022) Business Days prior to the proposed anticipated issuance date. The Issuance Notice Such notice shall specify set forth the number and class of such Shares and the price at which such Shares are to be issued and the other material principal terms and conditions of the issuance, including a description of the Preemptive Securities proposed to be issued, the proposed purchase price for such Preemptive Securities and the anticipated issuance date. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder Each Sponsor shall be entitled have the right to purchase (and/or to cause any of its Affiliates to purchase) up to such StockholderSponsor’s Pro Rata Share Portion of the Shares proposed to be issued to a third-party, such Preemptive Securities at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved Company’s notice by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits delivering an irrevocable written notice to the Company or any of its Subsidiaries and (via “Sponsor Exercise Notice”) issued in connection with an Initial Public Offering.
no later than seven (b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (107) Business Days of receipt after the delivery of the Issuance Notice. A delivery , setting forth (x) the number of such Preemptive Securities for which such right is exercised (which such number shall not exceed such Sponsor’s Pro Rata Portion of such Preemptive Securities) and (y) the maximum number of additional Preemptive Securities that such Sponsor (and/or Affiliates thereof) would be willing to purchase in excess of such Sponsor’s Pro Rata Portion in the event that any other Shareholder or other Person (including the other Sponsor) entitled to exercise preemptive rights with respect to such issuance elects not to purchase its full Pro Rata Portion of such Preemptive Securities. If either Sponsor (or any of their Affiliates) elects to exercise the preemptive rights set forth in this Section 4.06, then the Company shall provide written notice to each of the Preemptive Rights Other Shareholders (an “Other Shareholder Issuance Notice”) of such anticipated issuance no later than fourteen (14) Business Days prior to the anticipated issuance date. Such notice shall set forth the principal terms and conditions of the issuance, including a description of the Preemptive Securities proposed to be issued, the proposed purchase price for such Preemptive Securities, the anticipated issuance date, the number of such Preemptive Securities that each Sponsor notified the Company that it and/or its Affiliates intends to purchase pursuant to the exercise of preemptive rights and the percentage of the Pro Rata Portion of such Sponsor represented by the Preemptive Securities it and/or its Affiliates has elected to purchase pursuant to clause (x) above (the “Sponsor Participation Percentage”). Each such Preemptive Rights Other Shareholder shall have the right to purchase and/or to cause their Affiliate to purchase up to the percentage of such Preemptive Rights Other Shareholder’s Pro Rata Portion of such Preemptive Securities as is equal to the greater of the two Sponsor Participation Percentages set forth in the Company’s notice (which notice shall specify as applicable, the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase“Other Shareholder Participation Limit”), at the price and on the terms and conditions specified in the Issuance Notice, Company’s notice to such Shareholder by delivering an irrevocable written notice to the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such Company no later than ten (10) Business Day- periodDays after the delivery of the Other Shareholder Issuance Notice, setting forth the number of such Preemptive Securities for which such right is exercised. In the event any Stockholder shall Preemptive Rights Other Shareholder (and/or its Affiliates) elects not have exercised his or her rights to purchase any of Preemptive Securities equal to its Other Shareholder Participation Limit and/or a Sponsor (and/or its Affiliates) elects to purchase Preemptive Securities in an amount less than such StockholderSponsor’s Pro Rata Share Portion, the Company shall allocate any remaining Preemptive Securities among those Sponsors (pro rata in accordance with their respective Pro Rata Portions) who indicated in their Sponsor Exercise Notice that they (and/or their Affiliates) desired to purchase Preemptive Securities in excess of their respective Pro Rata Portions.
(b) In the event the Shareholders with preemptive rights pursuant to clause (a) above (and/or their Affiliates) do not purchase all such SharesPreemptive Securities in accordance with the procedures set forth in Section 4.06(a), the Company shall have sixty (60) days after the anticipated issuance date to sell to other Persons the remaining Preemptive Securities at the price and on the terms and conditions that are no more favorable to such Stockholder other Persons than those specified in the Company’s notices to the Shareholders pursuant to Section 4.06(a). If the Company fails to sell such Preemptive Securities within sixty (60) days of the anticipated issuance date provided in the notices given to the Shareholders pursuant to Section 4.06(a), the Company shall be deemed not thereafter issue or sell any Preemptive Securities without first offering such Preemptive Securities to have waived all of its rights under the Sponsors and, if applicable, the Preemptive Rights Other Shareholders in the manner provided in this Section 4.02 with respect to, and only with respect to, the purchase of such Shares4.06.
(c) If any Stockholder elects The election by a Shareholder not to exercise his or her and/or to cause its Affiliates to exercise such Shareholder’s preemptive rights under this Section 4.02 or elects to exercise 4.06 in any one instance shall not affect such rights with Shareholder’s right (other than in respect to less than such Stockholder’s of a reduction in its Pro Rata Share (the “Excess Shares”), Portion) as to any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholdersfuture issuances under this Section 4.06.
(d) The All costs and expenses incurred by the Company and the Sponsors and their Affiliates in connection with its obligations under this Section 4.06 and any purchases made pursuant to this Section 4.06, including all attorneys fees and charges, all accounting fees and charges and all finders, brokerage or investment banking fees, charges or commissions, shall be paid by the Company.
(e) If, at any time prior to the consummation of an IPO or Change of Control, Holdings, IDC or any other Subsidiaries of the Company propose to issue any Preemptive Securities, the Company shall have ninety cause the applicable entity to give effect to the provisions in this Section 4.06 with respect to such issuance.
(90f) days from Notwithstanding any provision hereof to the date contrary, the Company or any of its Subsidiaries may elect to issue Preemptive Securities other than in compliance with Section 4.06(a) if and only if each Sponsor that at such time holds at least 150 million Shares determines that there are exigent circumstances and approves the Issuance Notice to consummate the proposed issuance of any or all Preemptive Securities pursuant to this Section 4.06(f) in light of such Shares that each Stockholder have elected not circumstances. In the event the Company or such Subsidiary is entitled to purchase at issue Preemptive Securities pursuant to this Section 4.06(f), the price and upon terms and conditions that are not materially less favorable Company shall give notice to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of Sponsors within five (5) Business Days after all the issuance of such approvals Preemptive Securities (the “Alternate Procedure Notice”), which shall set forth the principal terms and conditions of the issuance, including the purchase price of the Preemptive Securities, the date on which such Preemptive Securities were issued and the identities and addresses of the Persons to whom the Preemptive Securities were sold (the “Alternate Procedure Purchasers”). Each Sponsor shall have been receivedten (10) Business Days (the “Alternate Procedure Sponsors Preemptive Period”) after the date the Company’s notice is given to elect, but in no event later than one hundred by giving notice to the Company and twenty the Alternate Procedure Purchasers, to purchase (120and/or to cause its Affiliates to purchase) days from the date Alternate Procedure Purchasers up to the number of Preemptive Securities that such Sponsor would otherwise have the Issuance Notice. At right to purchase pursuant to Section 4.06(a) above had the consummation Company complied with the provisions of Section 4.06(a) in connection with the issuance of such issuance, Preemptive Securities under the Company shall record terms and conditions set forth in the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights Company’s notice pursuant to this Section 4.02 registered in the name 4.06(f). If either Sponsor (or any of such Stockholder, against payment by such Stockholder of their Affiliates) elects to exercise the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures rights set forth in this Section 4.02.
(e) The 4.06(f), then the Company shall not be under any obligation provide the Alternate Procedure Notice to consummate any proposed issuance each of Shares the Preemptive Rights Other Shareholders within five (5) Business Days of the expiration of the Alternate Procedure Sponsors Preemptive Period. The notice that is delivered to the Preemptive Rights Other Shareholders shall also state the number of Preemptive Securities that each Sponsor (and/or its Affiliates) notified the Company and there will be no liability the Alternate Procedure Purchasers that it and/or its Affiliates intends to purchase pursuant to the exercise of the purchase rights set forth in this Section 4.06(f) and the Sponsor Participation Percentage for such Sponsor. Each Preemptive Rights Other Shareholder shall have the right to purchase (and/or to cause its Affiliates to purchase) up to the Other Shareholder Participation Limit, at the price and on the part of terms and conditions specified in the Alternate Procedure Notice by delivering an irrevocable written notice to the Company to any Stockholder if and the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event Alternate Procedure Purchasers no later than ten (10) Business Days from receipt delivery of the notice referred to herein on substantially Alternate Procedure Notice, setting forth the same terms and conditions as such sale, however, the price number of such Shares shall be identical Preemptive Securities for which such right is exercised. The closing of sales from the Alternate Procedure Purchasers to the price paid Sponsors and such offer and salePreemptive Rights Other Shareholders (and/or their respective Affiliates) pursuant to this Section 4.06(f) shall occur within forty-five (45) Business Days after the issuance of the Preemptive Securities to the Alternate Procedure Purchasers (subject to extension to the extent necessary to obtain required governmental or other approvals). The Company shall cause any definitive agreements relating to issuances of Preemptive Securities to Alternate Procedure Purchasers to include all such provisions as are necessary to give effect to this Section 4.06(f), including the Alternate Procedure Purchasers’ agreement to sell such Preemptive Securities to such Shareholders (and/or their respective Affiliates), to the extent applicable, on a pro rata basis (based on the number of Preemptive Securities purchased by each Alternate Procedure Purchaser in the applicable issuance).
(g) The provisions Notwithstanding anything to the contrary set forth herein, a Shareholder shall not be entitled to participate in any issuance of Preemptive Securities pursuant to this Section 4.02 4.06 unless at the time of such issuance the Company shall terminate be reasonably satisfied that (i) such Shareholder is an “accredited investor” as defined in Regulation D of the Securities Act or the issuance of Preemptive Securities, after giving effect to the Initial Public Offeringparticipation of such Shareholder therein, would satisfy the requirements of any other exemption from registration available at such time under the Securities Act with respect to such issuance of Preemptive Securities and (ii) an exemption from registration or qualification under any state securities laws or foreign securities laws applicable to such issuance of Preemptive Securities due to the participation of such Shareholder therein would be available with respect to such issuance of Preemptive Securities.
Appears in 1 contract
Preemptive Rights. Subject to Section 9(d) and the limitations set forth in Section 9(c) below, each time the Company proposes to issue any equity securities, or other securities of any kind that are or may become convertible into any equity securities (collectively, “New Issue Securities”) to any Person, the Company shall first offer the New Issue Securities to the Investors in accordance with the following provisions:
(a) The Company shall give to each Stockholder written Investor hereunder who is at the time an Accredited Investor a notice stating: (an “Issuance Notice”i) the Company’s intention to issue the New Issue Securities; (ii) the number and description of any proposed issuance by such shares or the Company amount of any Shares at least ten the New Issue Securities to be issued; (10iii) Business Days prior to the purchase price (calculated as of the proposed issuance date) and the other terms upon which the Company is offering the New Issue Securities; and (iv) the names of the Persons to whom the Company seeks to issue such New Issue Securities (the “Preemptive Notice”).
(b) Transmittal of the Preemptive Notice to the Investors by the Company shall give each Investor the right to purchase from the Company his, her or its Pro Rata Portion, or any lesser number specified by the Investor, of the New Issue Securities for the price and upon the terms set forth in the Preemptive Notice. The Issuance For a period of twenty (20) days after the submission of the Preemptive Notice to the Investors, each Investor shall specify have the number and class option, exercisable by written notice to the Company, to accept the Company’s offer as to all or any part of such Shares and Investor’s Pro Rata Portion or any lesser number of the price at which such Shares New Issue Securities. If two (2) or more types of New Issue Securities are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares or New Issue Securities are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-partytogether with other types of securities, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02including, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distributionwithout limitation, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquiresdebt securities, in a single transaction or series of related transactions, the rights to purchase New Issue Securities granted to the Investors under this Section 9 must be exercised to purchase all types of New Issue Securities and such other securities in the same proportion as such New Issue Securities and other securities are to be issued by the Company. If the Investors (as a material amount group) agree to purchase less than the total number of New Issue Securities proposed to be issued and sold, the Company shall have one hundred twenty (120) days thereafter to sell any or all of the assets remaining New Issue Securities (i.e., those not to be sold to any Investor) to the Person or equity ownership of Persons set forth in the Preemptive Notice, upon terms and conditions no less favorable to the Company, and no more favorable to such other PersonPerson or Persons, than those set forth in the Preemptive Notice. In the event the Company has not sold such New Issue Securities within said one hundred twenty (v120) issued day period, the Company will not thereafter issue or sell any New Issue Securities without first offering such New Issue Securities to Persons who the Investors in the manner provided above.
(c) The preemptive rights contained in this Section 9 shall not apply to:
(i) The issuance and sale by the Company, from time to time pursuant to plans, programs or agreements approved by the Board in good faith reasonably believes will provide strategic benefits of Directors, of shares of Common Stock or options, rights, or warrants to acquire shares of Common Stock, or of securities convertible or exchangeable for shares of Common Stock (A) to employees, officers, or members of or consultants or advisors to the Board of Directors as compensation for their services to the Company or any of its Subsidiaries or (B) in connection with a Company Acquisition or other strategic transaction involving the Company and other entities, including, without limitation, joint ventures, manufacturing, marketing or distribution arrangements or technology transfer or development arrangements;
(ii) The issuance of Securities in a Public Offering;
(iii) The issuance of Securities to credit financing sources in connection with any equipment loan or leasing arrangement, real property leasing arrangement, or debt financing of the Company or its Subsidiaries;
(iv) The issuance of securities by any Subsidiary of the Company to the Company;
(v) The issuance of Securities upon the exercise or exchange of other Securities which were issued in compliance with this Section 9(c) or Securities which were issued in an issuance which is exempt from this Section 9(c);
(vi) issued The issuance of Securities in connection with an Initial Public Offering.any stock split, stock dividend, reverse split, consolidation, recapitalization of the Company or any other form of strategic transaction; and
(bvii) Each Stockholder may exercise his The issuance of Securities pursuant to any rights or her rights under this Section 4.02 by delivering notice of his agreements, options, warrants or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt convertible securities outstanding as of the Issuance Notice. A delivery date of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating StockholdersAgreement.
(d) The Notwithstanding anything to the contrary contained in this Section 9, the Company shall have ninety (90) days from may, in order to expedite the date issuance of New Issue Securities hereunder, issue all or a portion of the Issuance Notice New Issue Securities to consummate one or more Persons (each, an “Initial Subscribing Stockholder”) without complying with the proposed issuance provisions of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, this Section 9; provided that, if such issuance is subject prior to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares either (i) each Initial Subscribing Stockholder agrees to be purchased by each Stockholder exercising preemptive rights pursuant offer to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Investor who is an Accredited Investor and who is not an Initial Subscribing Stockholder (each, an “Other Accredited Stockholder”) his, her or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her its respective Pro Rata Share Portion of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein New Issue Securities on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical issued to the price paid Initial Subscribing Stockholders and in a manner which provides such Other Accredited Stockholder with rights substantially similar to the rights outlined in Sections 9(a) and 9(b) or (ii) the Company shall offer to sell an additional amount of New Issue Securities to each Investor (other that Initial Subscribing Stockholders) only in an amount and sale.
manner which provides such Investor with rights substantially similar to the rights outlined in Sections 9(a) and 9(b). The Initial Subscribing Stockholders or the Company, as applicable, shall offer to sell such New Issue Securities to each Other Accredited Stockholder or Investor (gother that Initial Subscribing Stockholders), respectively and as applicable, within ninety (90) The provisions of this Section 4.02 shall terminate days after the closing of the purchase of the New Issue Securities by the Initial Public OfferingSubscribing Stockholders.
Appears in 1 contract
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares Company Securities to Oak Hill or its Affiliates (other than “Excluded Securities” in respect of which this Section 4.05 will not apply) at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares Company Securities and the price at which such Shares Company Securities are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e4.05(e) below, if any such Shares Company Securities are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares Company Securities proposed to be issued to a third-partyOak Hill, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.024.05, “Excluded Securities” shall include any SharesCompany Securities: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors (other than Oak Hill or its Affiliates) in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person (other than Oak Hill or its Affiliates) by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons (other than Oak Hill or its Affiliates) who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Samples: Stockholder Agreement
Preemptive Rights. (a) The Company shall give provide each Stockholder Shareholder with a written notice (an “Issuance a "Preemptive Rights Notice”") of any proposed issuance by the Company of any Shares Equity Securities (other than the issuance of Equity Securities in connection with a THL Exchange) at least ten (10) Business Days 10 days prior to the proposed issuance date. The Issuance Notice Such notice shall specify the number and class of such Shares and the price at which such Shares the Equity Securities are to be issued and the other material terms and conditions of the issuance. Subject .
(i) In the event the Company shall issue any New Common Securities or New Preferred Securities (collectively, the "New Securities") to Section 4.02(eany third party (including any Shareholder) belowprior to a Qualifying Public Offering, if any such Shares are purchased, the THL Entities and each Stockholder Management Shareholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms at which such New Securities are proposed to be issued and conditions specified in the Issuance such Preemptive Rights Notice, the number of shares (THL Entities' or amount) of Shares specified in such Stockholder’s notice. If, at the termination Management Shareholder's Preemptive Rights Portion of such ten (10) Business Day- periodclass of the New Securities proposed to be issued. "Preemptive Rights Portion" means, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (New Common Securities, the “Excess Shares”)pro rata portion of New Common Securities proposed to be issued by the Company, any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) which amount shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate based upon such Shareholder's Initial Ownership of that class shares of Shares by the Fully Participating Stockholder, Common Stock as the case may be, and the denominator a percentage of which is equal to the sum of the Aggregate Initial Ownership of that class shares of Shares by Common Stock of (A) the THL Entities, (B) all Fully Participating Stockholders.
Institutional Shareholders and (dC) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.Management Shareholders
Appears in 1 contract
Samples: Investors' Agreement (Fisher Scientific International Inc)
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior not issue, sell or exchange, agree or obligate itself to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issue, sell or exchange, or reserve or set aside for issuance. Subject to Section 4.02(e) below, if any such Shares are purchasedsale or exchange, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distributionany shares of Common Stock, (ii) granted or issued to employees, officers, directors, consultants or advisors any other equity security of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the BoardCompany, (iii) issued any debt security of the Company (other than debt with no equity feature) including without limitation, any debt security which by its terms is convertible into or issuable to lenders exchangeable, directly or lessors in connection with indirectly, for any financing or leasing transactionsequity security of the Company, (iv) issued any security of the Company that is a combination of debt and equity, or (v) any option, warrant or other right to subscribe for, purchase or otherwise acquire any such equity security or any such debt security of the Company (the securities described in (i)-(v) being referred to herein as the “Offered Securities”), unless in each case the Company shall have first offered to sell a portion of such Offered Securities to the Investor and each other purchaser of shares of Series B Preferred Stock (each an “Offeree” and collectively the “Offerees”) as follows: The Company shall deliver to each Offeree a written notice (the “Offer”) specifying the Company’s intention to issue, sell or exchange, or reserve or set aside for issuance, sale or exchange, Offered Securities, setting forth the number of Offered Securities it intends to issue, sell or exchange, or reserve or set aside for issuance, sale or exchange, and each material term and condition pursuant to which it intends to dispose of such Offered Securities. Each of the acquisition Offerees shall have the right to purchase that portion of another Person the Offered Securities as shall be equal to the total number of Offered Securities proposed to be sold by the Company or any of its Subsidiaries multiplied by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is shall equal the Aggregate Ownership number of that class shares of Shares Common Stock (after giving effect to the conversion of all shares of Series B Preferred Stock held by such Offeree) then held by the Fully Participating Stockholder, as the case may be, Offeree and the denominator of which is shall equal to the sum total number of shares of capital stock of the Aggregate Ownership Company on a fully-diluted basis (assuming full conversion and exercise of that class all convertible or exercisable securities of Shares by all Fully Participating Stockholders.
(d) The the Company then issued and outstanding), at a price and on such other terms as shall have ninety been specified by the Company in the Offer (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not Offered Securities which an Offeree is eligible to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant according to this Section 4.02 registered in 4(j(i) being referred to herein collectively as the name “Eligible Securities”). The Offer, will by its terms, remain open and irrevocable for a period of such Stockholder, against payment by such Stockholder of 10 days (the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120“Offer Period”) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and saleOffer.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (a) The Company shall give So long as the Conversant Investors, together with their Affiliates and Permitted Transferees, Beneficially Own at least 14.9% of the outstanding shares of Common Stock on an as-converted basis, each Stockholder written notice (an “Issuance Notice”) Conversant Investor will have the preemptive rights set forth in this Section 5 with respect to any issuance of any proposed issuance by Equity Securities that are issued after the Company of date hereof (any Shares at least ten such issuance, other than those described in clauses (10i) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(ethrough (vi) below, if a “Preemptive Rights Issuance”), except for (i) issuances of any such Shares are purchased, each Stockholder shall be entitled shares of Common Stock or options or rights to purchase such Stockholder’s Pro Rata Share shares or other form of the Shares proposed equity-based or equity-related awards (including restricted stock units) to be issued to a third-partyemployees (or prospective employees who have accepted an offer of employment), at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02directors or consultants, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreementsany present or future employee, equity purchase director or equity option plans, equity bonuses consultant benefit plan or awards, warrants, contracts program of or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person assumed by the Company or any of its Subsidiaries or of any employee agreements or arrangements or programs in effect as of the Closing Date (including the New LTIP (as defined in the Investment Agreement)), or thereafter adopted by the Board of Directors, (ii) issuances of securities pursuant to any merger, joint venture, partnership, consolidation, mergerdissolution, purchase liquidation, tender offer, recapitalization, reorganization, share exchange, business combination or similar transaction or any other direct or indirect acquisition by the Company, whereby the Company’s securities comprise, in whole or in part, the consideration paid by the Company in such transaction, which transaction has been approved by the Board of Directors and, to the extent then applicable, approved by Investor A in accordance with Section 4, (iii) issuances of shares of Common Stock upon conversion or exercise of any of preferred stock, option or Derivative Instrument, in each case, outstanding as of the Closing Date or if issued after the Closing Date, were either exempt from Investor A’s rights under this Section 5(a) or were offered to the Conversant Investors in accordance with this Section 5, (iv) by reason of a dividend, stock split or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series distribution of related transactions, a material amount of the assets or equity ownership of such other PersonCommon Stock, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits issuances of any shares of Series A Preferred Stock pursuant to the Company terms of the Investment Agreement (including issuances of Common Stock upon conversation of such shares of Series A Preferred Stock in accordance with the Certificate of Designations), or any of its Subsidiaries and (vi) issued issuances of any Equity Securities with respect to which Investor A waives in connection with an Initial Public Offeringwriting the rights of all of the Conversant Investors pursuant to this Section 5.
(b) Each Stockholder may exercise his If the Company at any time, or her rights under this Section 4.02 by delivering from time to time, effects a Preemptive Rights Issuance, the Company shall give prompt written notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days Conversant Investors and each of receipt their Affiliates party to this Agreement that holds any Equity Securities of the Issuance Notice. A delivery of such notice Company (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchaseeach, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the an “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating StockholderInvestor Holder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty ten (12010) days from prior to such issuance), which notice shall set forth the date number and type of the Issuance Notice. At securities to be issued, the consummation issuance date, the offerees or transferees, the price per security, and all of the other terms and conditions of such issuance, which shall be deemed updated by delivery of the final documentation for such issuance to the Conversant Investors. Each Investor Holder may, by written notice to the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120a “Preemptive Rights Notice”) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from days after receipt of the notice referred Preemptive Rights Notice, elect to herein purchase a number of securities specified in such Preemptive Rights Notice (which number may be any number up to but not exceeding the number of securities which, if divided by the sum of (i) such number of securities plus (ii) the number of securities issued in such Preemptive Rights Issuance, would represent a percentage that is equal to (A) the aggregate number of shares of Common Stock (on substantially an as-converted basis if applicable) that such Investor Holder owns immediately prior to such Preemptive Rights Issuance, divided by (B) the total number of shares of Common Stock then outstanding on an as-converted basis), on the same terms and conditions as such salePreemptive Rights Issuance (it being understood and agreed that the price per security that the Investor Holders shall pay shall be the same as the price per security set forth in the Preemptive Rights Notice); provided, howeverthat any Investor Holder shall not be entitled to acquire any such shares of Common Stock to the extent the issuance of such Common Stock to such Investor Holder would require approval of the stockholders of the Company pursuant to the rules and listing standards of NYSE, in which case the Company may consummate the proposed issuance prior to obtaining approval of the stockholders of the Company (subject to compliance by the Company with Section 5(d)). If an Investor Holder exercises its preemptive rights hereunder with respect to such Preemptive Rights Issuance, the price Company shall (or shall cause such Subsidiary to) issue to such Investor Holder (or its designated Affiliate(s)) the number of securities specified in such Shares Preemptive Rights Notice promptly thereafter (and provided that, if such Investor Holder shall be identical have so notified the Company at least three Business Days prior to the price paid issuance date set forth in the Company’s notice, at such offer Investor Holder’s election such purchase and salesale shall occur on the same date as, or substantially concurrently with, the Preemptive Rights Issuance).
(gc) The provisions of election by any Investor Holder not to exercise its preemptive rights hereunder in any one instance shall not affect its right as to any future Preemptive Rights Issuances.
(d) Notwithstanding anything to the contrary in this Agreement, in the event that any Investor Holder exercises its preemptive rights pursuant to this Section 4.02 shall terminate after 5 and the Initial Public Offeringpurchase or issuance of such securities would require the Company to obtain approval of its stockholders pursuant to the listing rules of the NYSE or such national securities exchange that the Common Stock is listed upon, if any, the Company and the Investor Holder will use their respective commercially reasonable efforts to negotiate in good faith the terms of any such transaction, including without limitation the terms of any securities of the Company issued pursuant to such transaction to the Investor Holder, such that the issuance to the Investor Holder would not require such stockholder approval while providing the Investor Holder and/or its Affiliates with substantially similar benefits and rights of such securities issued in the Preemptive Rights Issuance.
Appears in 1 contract
Preemptive Rights. (a) The Prior to the consummation of an IPO, the Company or Warner II, as the case may be, shall give each Stockholder of the Shareholders that is an “accredited investor” (as such term is defined in Rule 501(a) of the Securities Act) as of the time of any proposed issuance by the Company or Warner II, as the case may be, of shares of a specified class of Group Equity Securities, written notice (an “Issuance Notice”) of any such proposed issuance by the Company of any Shares at least ten (10) Business Days 10 days prior to the proposed issuance date. The Issuance Notice shall specify the number and of shares of the specified class of such Shares Group Equity Securities and the price at which such Shares Group Equity Securities are proposed to be issued and the other material terms and conditions of the issuance, including, without limitation, the proposed closing date. Subject to Section 4.02(e) below, if any such Shares are purchased5.04(g), each Stockholder Shareholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-partypurchase, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes , its pro rata amount of this Section 4.02, “Excluded Securities” shall include any Shares: such newly issued Group Equity Securities equal to (ix) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors the number of shares of the Company or any specified class of its Subsidiaries pursuant Group Equity Securities proposed to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) be issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any Warner II, as the case may be, multiplied by (y) a fraction, the numerator of its Subsidiaries by consolidation, merger, purchase or other transaction in which is the Company or such Subsidiary acquires, in a single transaction or series Aggregate Ownership of related transactions, a material amount of the assets or equity ownership Group Equity Securities of such other Person, (v) issued to Persons who Shareholder and the Board in good faith reasonably believes will provide strategic benefits denominator of which is equal to the Company or any sum of its Subsidiaries (A) the Aggregate Ownership of Group Equity Securities of all Shareholders and (viB) issued in connection with an Initial Public Offeringthe aggregate number of Group Equity Securities owned by Management Shareholders that are entitled to preemptive rights pursuant to the Management Shareholders Agreement (“Management Preemptive Securities”).
(b) Each Stockholder Shareholder may exercise his or her its rights under this Section 4.02 5.04 by delivering written notice of his or her its election to purchase such Shares Group Equity Securities to the CompanyCompany or Warner II, as the case may be, within ten (10) Business Days of 10 days after receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares shares of the specified class of Group Equity Securities requested to be purchased by such Stockholder the Shareholder submitting such notice) by such Stockholder Shareholder shall constitute a binding agreement of such Stockholder Shareholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) the specified class of Shares Group Equity Securities specified in such StockholderShareholder’s notice. If, at the termination of such ten (10) Business Day- 10 day-period, any Stockholder shall Shareholder has not have exercised his or her rights its right to purchase any of such Stockholder’s Pro Rata Share its pro rata share of such SharesGroup Equity Securities, such Stockholder Shareholder shall be deemed to have waived all of its rights under this Section 4.02 5.04 with respect to, and only with respect to, the purchase of such SharesGroup Equity Securities specified in the Issuance Notice.
(c) If any Stockholder elects of the Shareholders, or any of the Management Shareholders, fails to exercise his or her its preemptive rights under this Section 4.02 5.04 or, with respect to the Management Shareholders, under the Management Shareholders Agreement, or elects to exercise such rights with respect to less than such StockholderShareholder’s Pro Rata Share pro rata share (the difference between such Shareholder’s or Management Shareholder’s pro rata share and the number of shares for which such Shareholder or Management Shareholder exercised its preemptive rights under this Section 5.04 or, with respect to the Management Shareholders, under the Management Shareholders Agreement (the “Excess Shares”), any participating Stockholder Shareholder electing to exercise his or her its rights with respect to his or her its full Pro Rata Share pro rata share (a “Fully Participating StockholderShareholder”) shall be entitled to purchase from the Company or Warner II, as the case may be, an additional number of Shares shares of the specified class of Group Equity Securities equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class Group Equity Securities of Shares by the such Fully Participating Stockholder, as the case may beShareholder, and the denominator of which is equal to the sum of (x) the Aggregate Ownership of that class Group Equity Securities of Shares by all Fully Participating StockholdersShareholders and (y) the aggregate number of Management Preemptive Securities owned by all Management Shareholders that elected to exercise their preemptive rights with respect to their full pro rata share pursuant to Section 4.04(b) of the Management Shareholders Agreement.
(d) The Company or Warner II, as the case may be, shall have ninety (90) 120 days from after the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares Group Equity Securities that each Stockholder the Shareholders and Management Shareholders have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company or Warner II, as the case may be, than those specified in the Issuance Notice; provided, provided that, that if such issuance is subject to regulatory approval, such ninety (90) 120-day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) 180 days from after the date of the Issuance Notice. At the consummation of such issuance, the Company or Warner II, as the case may be, shall record the Shares in book entry format issue certificates representing the Shares Group Equity Securities to be purchased by each Stockholder Shareholder exercising preemptive rights pursuant to this Section 4.02 5.04 registered in the name of such StockholderShareholder, against payment by such Stockholder Shareholder of the purchase price for such SharesGroup Equity Securities. If the Company or Warner II, as the case may be, proposes to issue any class of Shares Group Equity Securities after such one hundred and twenty (120) -day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.025.04.
(e) The closing of any issuance of Group Equity Securities to the Shareholders pursuant to this Section 5.04, shall take place at the time and in the manner provided in the Issuance Notice. The Company or Warner II, as the case may be, shall not be under any no obligation to consummate any proposed issuance of Shares and Group Equity Securities, nor shall there will be no any liability on the part of the Company such entity to any Stockholder Shareholder, if the Company or Warner II, as the case may be, has not consummated any proposed issuance of Shares Group Equity Securities pursuant to this Section 4.02 5.04 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company or Warner II, as the case may be, may offer and sell Shares shares of a specified class of Group Equity Securities subject to the preemptive rights under this Section 4.02 5.04 to an existing Shareholder without first offering such Shares Group Equity Securities to each Stockholder of the other Shareholders or complying with the procedures of this Section 4.025.04, so long as (i) each Stockholder of the other Shareholders receives prompt written notice of the consummation of such sales and thereafter is given the opportunity to purchase his a number of shares of the specified class of Group Equity Securities equal to (x) the number of shares of the specified class of Group Equity Securities issued by the Company or her respective Pro Rata Share Warner II, as the case may be, (including all shares of the specified class of Group Equity Securities issued to Shareholders with respect to this provision) multiplied by (y) a fraction, the numerator of which is the Aggregate Ownership of Group Equity Securities of such Shares Shareholder and the denominator of which is equal to the sum of (A) the Aggregate Ownership of Group Equity Securities of all Shareholders and (B) the aggregate number of Management Preemptive Securities, within forty-five (45) 45 days after the close of such sale and in any event no later than ten (10) Business Days from 10 days after receipt of the notice referred to herein on substantially the same terms and conditions as such prior sale, however, and (ii) the price per share of such Shares specified class of Group Equity Securities shall be identical to the price per share paid in such offer and prior sale.
(g) The preemptive rights under this Section 5.04 shall not apply to (i) issuances or sales of Group Equity Securities to employees, officers and/or directors of the Company or Warner II, as the case may be, pursuant to employee benefit or similar plans or arrangements of the Company or Warner II, as the case may be, approved in accordance with Section 2.07(m), (ii) issuances or sales of Group Equity Securities upon exercise, conversion or exchange of Group Equity Securities outstanding as of the Closing Date or which, when issued, were subject to or exempt from the preemptive rights, (iii) securities distributed or set aside ratably to all holders of a specified class of Group Equity Securities on a per share equivalent basis, (iv) issuances or sales in, or in connection with, the IPO, a merger of the Company or Warner II, as the case may be, with or into another Person or an acquisition by the Company or Warner II, as the case may be, of another Person or substantially all the assets of another Person, subject to the provisions of Section 2.07(f) and Section 2.07(g), or (v) issuances of shares of a specified class of Group Equity Securities as a bona-fide “equity kicker” to a lender in connection with a third party debt financing. Upon any issuances or sales of Group Equity Securities as a unit with any other Group Equity Securities, the preemptive rights under this Section 4.02 5.04 shall terminate after be applicable to the Initial Public Offeringentire unit rather than only the Group Equity Securities included in the unit.
Appears in 1 contract
Preemptive Rights. (a) Each of the Stockholders shall, until the fifth anniversary of the Closing Date but only for so long as such Stockholder owns at least 10% of the outstanding Registrable Securities (each a "Qualified Stockholder"), have the right to purchase additional shares of Common Stock, or securities convertible into or exchangeable for shares of Common Stock (including without limitation, warrants, options or convertible stock or debt)(any such securities so issued, "New Securities"), in a pro-rata amount and on the same terms and conditions as are called for by each future issuance (or as nearly as may be practicable in the event the Qualified Stockholders cannot comply with such terms and conditions), in any issuance of securities by the Company other than (i) issuances of securities described in Section 5.8 of the Securities Purchase Agreement (including without limitation pursuant to the Employee Stock Option Plan) or other securities issued to an employee, director or bona fide consultant to the Company as compensation pursuant to a plan or agreement that is approved by holders of a majority of the outstanding shares of Common Stock, (ii) securities issued as consideration for a bona fide business combination or acquisition of securities or other property, or (iii) securities issued upon a conversion of or in exchange for securities issued by the Company in full compliance with the preemptive rights of the Stockholders set forth in this Section 3.1; provided, that such conversion occurred at the sole option of the holder. For the purposes of this Section 3.1, the term "pro-rata amount" shall mean such amount as will allow each Qualified Stockholder to maintain its then existing percentage ownership of the Common Stock on a fully diluted basis.
(b) The Company shall give each Qualified Stockholder written notice (an “"Issuance Notice”") of any proposed issuance by the Company of any Shares New Securities at least ten (10) Business Days 10 days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares New Securities are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each A Qualified Stockholder may exercise his or her its rights under this Section 4.02 3.1 by delivering notice of his or her its election to purchase such Shares New Securities to the Company, Company within ten (10) five Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares shares of New Securities to be purchased by such the Stockholder submitting such notice, up to such Qualified Stockholder's pro rata amount) by such Qualified Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares New Securities specified in such Stockholder’s 's notice. If, at the termination of such ten (10) Business Day- five day-period, any Qualified Stockholder shall not have exercised his or her its rights to purchase any of such Stockholder’s Pro Rata Share 's pro rata amount of such SharesNew Securities, such Qualified Stockholder shall be deemed to have waived all of its rights under this Section 4.02 3.1 with respect to, and only with respect to, to the purchase of such SharesNew Securities.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) 90 days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares New Securities that each Stockholder the Qualified Stockholders have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided provided, that, if such issuance is subject to regulatory approval, such ninety (90) 90 day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) 180 days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format issue certificates representing the Shares New Securities to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 3.1 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such SharesNew Securities. If the Company proposes to issue any class of Shares New Securities after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuertime periods set forth herein, it shall again comply with the procedures set forth in this Section 4.023.1.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Samples: Securities Purchase Agreement (Pinnacle Holdings Inc)
Preemptive Rights. (a) The Company shall give each Management Stockholder written notice (an “"Issuance Notice”") of any proposed issuance by the Company Company, Intermediate Holdings or Jostens, as the case may be, of any Shares Company Securities to any DLJMB Funds or their successors, as the case may be, prior to the Initial Public Offering at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares Company Securities and the price at which such Shares Company Securities are to be issued to any DLJMB Fund or DLJMB Funds and the other material terms and conditions of the issuance. Subject to Section 4.02(e4.05(e) below, if any DLJMB Funds or DLJMB Funds will purchase any such Shares are purchasedCompany Securities, each Management Stockholder shall be entitled to purchase such Management Stockholder’s 's Pro Rata Share of the Shares Company Securities proposed to be issued to a third-partythe DLJMB Funds, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Management Stockholder may exercise his or her rights under this Section 4.02 4.05 by delivering notice of his or her election to purchase such Shares Company Securities to the Company, Company the DLJMB Funds and to each other within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares Company Securities to be purchased by such Management Stockholder submitting such notice) by such Management Stockholder shall constitute a binding agreement of such Management Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares Company Securities specified in such Management Stockholder’s 's notice. If, at the termination of such ten (10) Business Day- Day-period, any Management Stockholder shall not have exercised his or her rights to purchase any of such Management Stockholder’s 's Pro Rata Share of such SharesCompany Securities, such Management Stockholder shall be deemed to have waived all of its rights under this Section 4.02 4.05 with respect to, and only with respect to, the purchase of such SharesCompany Securities.
(c) If any Management Stockholder elects to exercise his or her preemptive rights under this Section 4.02 4.05 or elects to exercise such rights with respect to less than such Management Stockholder’s 's Pro Rata Share (the “"Excess Shares”"), the DLJMB Funds and any participating Management Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “"Fully Participating Stockholder”") shall be entitled to purchase an additional number of Shares Company Securities equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by Company Securities of the DLJMB Funds or the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by Company Securities of the DLJMB Funds and all Fully Participating Stockholders.
(d) The Company Company, Intermediate Holdings or Jostens, as the case may be, shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares Company Securities that the DLJMB Funds and each Management Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company Company, Intermediate Holdings or Jostens, as the case may be, than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) -day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) 120 days from the date of the Issuance Notice. At the consummation of such issuance, the Company Company, Intermediate Holdings or Jostens, as the case may be, shall record the Shares in book entry format issue certificates representing the Shares Company Securities to be purchased by each Management Stockholder exercising preemptive rights pursuant to this Section 4.02 4.05 registered in the name of such Management Stockholder, against payment by such Management Stockholder of the purchase price for such SharesCompany Securities. If the Company Company, Intermediate Holdings or Jostens, as the case may be, proposes to issue any class of Shares Company Securities after such one hundred and twenty (120) 90-day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.024.05.
(e) The Company None of the Company, Intermediate Holdings or Jostens, as the case may be, shall not be under any obligation to consummate any proposed issuance of Shares and Company Securities, nor shall there will be no any liability on the part of the Company Company, Intermediate Holdings or Jostens, as the case may be, to any Management Stockholder if the Company has not consummated any proposed issuance of Shares Company Securities pursuant to this Section 4.02 4.05 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The provisions of this Section 4.05 shall terminate upon the consummation of the Initial Public Offering. The Company may offer and sell Shares Company Securities to the DLJMB Funds subject to the preemptive rights under this Section 4.02 4.05 without first offering such Shares Company Securities to each Management Stockholder or complying with the procedures of this Section 4.024.05, so long as each Management Stockholder receives receive prompt written notice of such sales and thereafter is are given the opportunity to purchase his or her respective Pro Rata Share Shares of such Shares Company Securities within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such salesale to the DLJMB Funds, however, the price of such Shares Company Securities shall be identical to the price paid such offer and saleby the DLJMB Funds.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (a) Subject to Section 3.01(g), the Corporation hereby grants to each Stockholder that owns (including all shares owned by such Stockholder’s Related Persons) at least 3% of the Fully Diluted Party Common Stock as of the close of business on the record date determined by the Board of Directors (each such Stockholder, together with each such Related Person of such Stockholder, a “Preemptive Rightsholder”), which record date shall not be more than ten (10) Business Days prior to, and shall not be later than, the Corporation’s delivery of the Issuance Notice, the right to purchase up to its pro rata portion (based on the number of shares of Fully Diluted Party Common Stock owned by such Stockholder as of the close of business on the record date, as a percentage of the total number of shares of Fully Diluted Party Common Stock owned by all of the Preemptive Rightsholders) of any New Securities that the Corporation or any of its Subsidiaries proposes to sell or issue for cash at any time and from time to time after the date hereof (with respect to a Preemptive Rightsholder, such Preemptive Rightsholder’s “Preemptive Share”). The Company rights of Preemptive Rightsholders to purchase New Securities pursuant to this Section 3.01 (the “Securities Purchase Right”) shall apply at the time of issuance of any right, warrant, or option or convertible or exchangeable security that constitutes a New Security, and not to the subsequent conversion, exchange or exercise of such New Security in accordance with its terms.
(b) The Corporation shall give each Stockholder Preemptive Rightsholder written notice (an “Issuance Notice”) of any proposed issuance by or sale of New Securities that is subject to the Company of any Shares Securities Purchase Right, at least ten (10) Business Days prior to the proposed issuance dateor sale. The Such notice (an “Issuance Notice Notice”) shall specify set forth the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) belowproposed transaction, if any such Shares are purchasedincluding the proposed manner of issuance or sale, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share a description of the Shares New Securities, the total number of New Securities proposed to be issued or sold, the proposed issuance or sale date, the proposed purchase price per share, if applicable, and (if known) the name and address of the proposed purchaser of the New Securities.
(c) At any time during the ten (10) Business Days following receipt of an Issuance Notice, each Preemptive Rightsholder shall have the right, but not the obligation, to a third-partyirrevocably elect, by written notice to the Corporation, to purchase up to its Preemptive Share of the New Securities at the purchase price set forth in the Issuance Notice and on upon the other terms and conditions specified in the Issuance Notice; provided, however, that no Preemptive Rightsholder shall be obligated (or permitted without the Corporation’s consent) to purchase any New Securities pursuant to this Section 3.01 unless all required regulatory approvals, if any, applicable to such purchase have been obtained. For purposes Except as provided in the next sentence, the purchase of this Section 4.02New Securities by the electing Preemptive Rightsholders shall be consummated concurrently with the consummation of the issuance or sale described in the Issuance Notice. The closing of the purchase of New Securities by any electing Preemptive Rightsholder may be extended beyond the closing of the transaction described in the Issuance Notice, “Excluded Securities” shall include any Shares: to the extent necessary to (i) issued as a dividend obtain required approvals of any Governmental Entity and other required regulatory approvals which such Preemptive Rightsholder shall be diligently pursuing in good faith (and the Corporation shall use its commercially reasonable efforts to obtain any approvals required to be obtained by it provided that the Corporation shall not be required to incur any out-of-pocket unreimbursed expenses in connection therewith other than those expenses that are not related to any specific Preemptive Rightsholder or a distribution, specific group of Preemptive Rightsholders) and (ii) granted or issued permit the Preemptive Rightsholder to employees, officers, directors, consultants or advisors of the Company or any of complete its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of internal capital call process following receipt of the Issuance Notice. A ; provided, however, in each case such Preemptive Rightsholder shall have no more than 180 days (in the case of obtaining approvals) or 30 days (in the case of completing an internal capital call) after delivery of the applicable Issuance Notice to obtain such notice (which notice shall specify approvals or complete such internal capital call process. If a Preemptive Rightsholder does not obtain the number (required approvals or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at complete its internal capital calls within the price and on the terms and conditions specified time set forth in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Sharespreceding sentence, such Stockholder Preemptive Rightsholder shall be deemed to have waived all of not exercised its rights under this Section 4.02 Securities Purchase Right and the Corporation shall have the right to issue such New Securities in accordance with respect tothe Issuance Notice, and only with respect toreferences to the date the applicable Issuance Notice was given in Section 3.01(d) shall be deemed to refer to the date that the period set forth in the preceding sentence ended. Notwithstanding anything to the contrary contained herein, in the event that the closing of any purchase of New Securities by any Preemptive Rightsholder is extended pursuant to this paragraph, such Sharesextension shall not preclude the consummation of the issuance or sale of the remaining New Securities described in the Issuance Notice from occurring prior to such closing.
(cd) If any Stockholder elects To the extent that one or more Preemptive Rightsholders do not timely exercise their Securities Purchase Rights in accordance with the terms and conditions set forth in this Section 3.01, or elect to exercise his or her any such rights less than in full (the difference between the maximum number of New Securities such Preemptive Rightsholder could have elected to purchase under this Section 3.01 and the number of New Securities for which such Preemptive Rightsholder exercised its preemptive rights under this Section 4.02 or elects to exercise Section 3.01, such rights with respect to less than Preemptive Rightsholder’s “Individual Excess Shares” and the Individual Excess Shares of all such Stockholder’s Pro Rata Share (Preemptive Rightsholders, the “Excess Shares”), any participating Stockholder electing to exercise his then the Corporation (or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”the applicable Subsidiary) shall be entitled offer to sell to the Preemptive Rightsholders that have validly elected to purchase an additional number all of Shares equal to their Preemptive Share of the product of (i) New Securities, the Excess Shares and pro rata (iibased on the number of shares of Common Stock owned by such Preemptive Rightsholder without giving effect to the issuance pursuant to the Issuance Notice) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares divided by the number of shares of Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares Diluted Party Common Stock owned by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase Preemptive Rightsholders exercising in full their Securities Purchase Rights and at the same price and upon on the same terms and conditions that are not materially less favorable to the Company than as those specified in the Issuance Notice, provided and such Preemptive Rightsholders shall have the right to acquire all or any portion of such Excess Shares within two (2) Business Days following the expiration of the period specified in Section 3.01 by delivering written notice thereof to the Corporation. The Corporation shall continue to offer additional portions to Preemptive Rightsholders validly electing to purchase their full pro rata portion of such Excess Shares pursuant to this Section 3.01(d) until the earlier of (i) all New Securities proposed to be issued by the Corporation or its Subsidiaries and with respect to which Preemptive Rightsholders were entitled to exercise their rights under this Section 3.01 have been allocated to the Preemptive Rightsholders or (ii) no Preemptive Rightsholder remains who has any further right to purchase (including as a result of having waived its rights to purchase) Excess Shares pursuant to the foregoing provision.
(e) Following compliance with the terms and conditions set forth in this Section 3.01, the Corporation (or its applicable Subsidiary) shall be free to consummate the proposed issuance or sale of all or any portion of the remaining New Securities that the Preemptive Rightsholders have not elected to purchase, on terms no less favorable to the Corporation or any of its Subsidiaries than those set forth in the Issuance Notice; provided, that (i) such issuance or sale is closed within ninety (90) days after the date the related Issuance Notice was given, except that, if such issuance or sale is subject to regulatory approval, such ninety (90) day 90)-day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty ninety (120190) days from after the date of related Issuance Notice was given, and (ii) the price at which the New Securities are transferred must be equal to or higher than the purchase price described in the Issuance Notice. At In the consummation of event that the Corporation (or its applicable Subsidiary) has not sold such issuance, the Company shall record the Shares in book entry format representing the Shares to New Securities within such ninety (90)-day period (as may be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures extended as set forth in this Section 4.02.
the preceding sentence), the Corporation (eor its applicable Subsidiary) The Company shall not be under thereafter issue or sell any obligation New Securities without first again offering such securities to consummate any proposed issuance of Shares and there will be no liability on the part of Stockholders entitled to preemptive rights in the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to manner provided in this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuanceSection 3.01.
(f) The Company may offer rights and sell Shares subject obligations set forth in this Section 3.01 shall automatically terminate upon, and shall cease to have any force or effect following, the earlier of (i) the date the Common Stock is listed on a National Securities Exchange in the United States (a “Listing”), or (ii) the consummation of the first public offering and sale of Common Stock by the Corporation (other than on Form S-8 or its equivalent), pursuant to an effective registration statement under the Securities Act (such public offering and sale, an “IPO”).
(g) Notwithstanding anything to the preemptive rights under this Section 4.02 contrary contained herein, the Corporation and/or any of its Subsidiaries may issue or sell New Securities to any purchaser (an “Accelerated Buyer”) without first offering such Shares to each Stockholder or complying with the procedures provisions of this Section 4.02Section 3.01 if the Board of Directors determines in good faith that it is in the best interests of the Corporation to consummate such issuance or sale without having first complied with such provisions; provided, so long as each Stockholder receives prompt that in connection with any such issuance or sale, the Corporation shall give the Preemptive Rightsholders written notice of such sales issuance or sale as promptly as practicable, which notice (an “Accelerated Sale Notice”) shall describe in reasonable detail (a) the material terms and thereafter is given conditions of the opportunity issuance or sale of the New Securities to the Accelerated Buyer, including the number or amount and description of the New Securities issued, the issuance or sale date, the purchase price per share, and the name and address of the Accelerated Buyer and (b) the rights of the Preemptive Rightsholders to purchase his New Securities, pursuant to this paragraph, in connection with such issuance or her respective Pro Rata Share sale. In the event of any such Shares within forty-five (45) days after issuance or sale of New Securities to an Accelerated Buyer, each Preemptive Rightsholder shall have the close of such sale and in right, at any event no later than time during the ten (10) Business Days from following receipt of the notice referred Accelerated Sale Notice, to herein on substantially elect to purchase New Securities in an amount equal to the amount of such New Securities it would have been entitled to purchase if the issuance or sale to the Accelerated Buyer had instead been completed without regard to this Section 3.01(g), including pursuant to Section 3.01(d). If one or more Preemptive Rightsholders exercise the election to make a purchase, the Corporation shall give effect to each such exercise by either (i) requiring that the Accelerated Buyer sell down a portion of its New Securities, or (ii) issuing additional New Securities to such Preemptive Rightsholder, or a combination of (i) and (ii), so long as such action effectively provides such Preemptive Rightsholder with the same terms and conditions as such sale, however, the price number of such Shares shall be identical to the price paid such offer and saleNew Securities it would have received had this paragraph not been utilized.
(gh) The A Preemptive Rightsholder may assign its Securities Purchase Right to any Person or Persons (whether or not a Stockholder) that agree to be bound by the provisions of this Section 4.02 shall terminate after Agreement applicable to the Initial Public OfferingPreemptive Rightsholder by executing a Xxxxxxx.
Appears in 1 contract
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) Subject to the restrictions on preemptive rights contained in Section 1.2 below, prior to the consummation of any proposed issuance or sale by the Company Corporation of any Shares at least ten shares of its capital stock including any treasury shares (10) Business Days prior to e.g., authorized but unissued shares), such shares shall first be offered (on the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material same terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares as so proposed to be issued or sold) to a third-partythe Shareholders in proportion to their respective holdings, at the price and on the other all as more fully set forth below:
(a) Said terms and conditions specified shall be communicated in writing to each Shareholder at their address appearing on the Issuance Notice. For purposes books of this Section 4.02Corporation, “Excluded Securities” shall include any Shares: (i) issued as together with a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors statement of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offeringtheir rights hereunder.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election Shareholder shall have the option to purchase such Shares to the Companyacquire their proportion (i.e., within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership number of that class of Shares shares held by such Shareholder prior to the Fully Participating Stockholder, as the case may be, new issuance and the denominator of which is equal the total number of issued and outstanding shares held by all Shareholders prior to the sum new issuance) of the Aggregate Ownership capital stock so proposed to be issued or sold, on the same terms and conditions. Such option shall be exercised by delivery of that class written notice of Shares exercise to the principal office or statutory agent of this Corporation within ten (10) business days after receipt of the communication referred to in Section 1.1(a) above. An option may be exercised as to all shares subject thereto or in part.
(c) In the event any Shareholder shall fail or decline to exercise his preemptive option as aforesaid, such Shareholder’s proportion of said capital stock may be acquired by the Shareholders who have exercised their options up to a number of shares in proportion to the number of shares subject to their options. Such option shall be exercised by delivery of written notice of exercise to the principal office or statutory agent of this Corporation within ten (10) business days after receipt of a communication from the Corporation as to the availability of such shares. The option may be exercised as to all Fully Participating Stockholdersshares subject thereto or in part.
(d) The Company Any acquisition of capital stock pursuant to the preemptive rights conferred by this provision shall have ninety be closed on or before the date which is the later of (90i) thirty (30) business days from after receipt by the Corporation of the last written notice of exercise given pursuant to Section 1.1(b) or Section 1.1(c) above, or (ii) the date of the Issuance Notice to consummate the proposed issuance giving rise to such rights, as set forth in the notice given pursuant to Section 1.1(a) above. In the event the Corporation has not sold such capital stock within such time periods, the Corporation shall not thereafter issue or sell any shares of any or all capital stock without first again offering such shares of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable capital stock to the Company than those specified Shareholders in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply accordance with the procedures set forth in this Section 4.021.1.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Samples: Shareholders Agreement (Emerging Fuels Technology, Inc.)
Preemptive Rights. (a) The Each Member shall have a preemptive right to purchase New Membership Interests in connection with a capital call pursuant to Section 3.4(b) or otherwise which the Company shall give each Stockholder written notice (an “Issuance Notice”) may, from time to time, propose to sell or issue, in the respective amounts as set forth in Section 3.5(c); provided, however, that the preemptive right of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled Member to purchase such Stockholder’s Pro Rata Share of the Shares proposed New Membership Interests pursuant to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” 3.5 shall include not apply to any Shares: (i) issued as a dividend issuances of New Membership Interests pursuant to bank, other institutional or a distributionlease financing, or other credit arrangements of the Company, including in connection with debt financings, refinancings, restructurings or similar transactions, (ii) granted issuances of New Membership Interests as consideration in connection with any acquisition by the Company or issued any of its Subsidiaries (including, but not limited to, consideration in the form of “roll-over” equity or initial grants of New Membership Interests to employeesmanagement or employees of an acquired or merged Person), officers, directors, consultants or advisors (iii) issuances of New Membership Interests to employees of the Company or any of its Subsidiaries pursuant to incentive agreements(A) as compensation, equity purchase or equity option plans(B) in exchange for consideration, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, and (iiiiv) New Membership Interests issued or issuable to lenders or lessors in connection with any financing Unit split, Unit dividend, recapitalization or leasing transactions, (iv) issued pursuant to similar transactions involving the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public OfferingCompany.
(b) Each Stockholder may exercise his In the event the Company proposes to undertake a sale or her rights under issuance of New Membership Interests as provided for in this Section 4.02 by delivering 3.5 (“Company Issuance”), it shall give written notice (the “Preemptive Right Notice”) of his its intention to do so to each Member. The Preemptive Rights Notice shall describe (i) the type of New Membership Interests to be sold or her election issued, (ii) the amount of New Membership Interests to be sold or issued (the “Issuance Amount”), (iii) the price for each such New Membership Interest, and (iv) any other material terms of the Company Issuance.
(c) Each Member shall have the right, but not the obligation, to purchase such Shares up to the Company, within ten (10) Business Days of receipt its Sharing Percentage of the Issuance Notice. A delivery of Amount (each such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute right, a binding agreement of such Stockholder to purchase“Preemptive Right”), at the purchase price and on the other terms and conditions specified set forth in the Issuance Preemptive Rights Notice, . Each Member may exercise its Preemptive Right by providing written notice thereof (an “Exercise Notice”) to the number Company within 10 Business Days after its receipt of shares the Preemptive Rights Notice (or amount) of Shares specified in such Stockholder’s noticethe “Preemptive Rights Period”). If, at Any Member who does not deliver an Exercise Notice within the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder Preemptive Rights Period shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights Preemptive Right with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating StockholdersNew Membership Interests.
(d) The If any Member fails or declines to exercise its Preemptive Rights in accordance with subsection (c) above in full, the Company shall promptly give notice (the “Second Exercise Notice”) to the Members who exercised in full their Preemptive Rights (the “Oversubscription Participants”) in accordance with subsection (b) above. Each Oversubscription Participant shall have ninety (90) days 5 Business Days from the date of the Issuance Second Participation Notice (the “Second Participation Period”) to consummate notify the proposed issuance Company of any or all of such Shares that each Stockholder have elected not its desire to purchase at the price and upon terms and conditions that are not materially less favorable to the Company more than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date its Sharing Percentage of the Issuance NoticeAmount, stating the number of the additional Issuance Amount it proposes to purchase (the “Additional Number”). At If, as a result thereof, such oversubscription exceeds the consummation total amount of the remaining Issuance Amount available for purchase, each Oversubscription Participant will be cut back by the Company with respect to its oversubscription such that each Oversubscription Participant may purchase a portion of such issuanceremaining New Securities equal to the portion of the New Securities it could subscribe for in accordance with subsection (c) above.
(e) In the event that any Member elects to exercise its Preemptive Right, such Member(s) shall pay the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If New Membership Interests on or before the Company proposes to issue any class earlier of Shares (i) 15 days after expiration of the Preemptive Rights Period, and (ii) such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures date as is expressly set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuancePreemptive Rights Notice.
(f) The In the event that the Members do not elect to purchase (in the aggregate) the entire amount of the Issuance Amount pursuant to this Section 3.5, the Company may offer and sell Shares subject or issue such remaining amount of the Issuance Amount pursuant to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with Company Issuance, for a purchase price not less, and upon the procedures terms and conditions no more favorable, than as set forth in the Preemptive Rights Notice. If the Company Issuance is not consummated within 120 days after the expiration of the Preemptive Rights Period, then the provisions of this Section 4.02, so long as each Stockholder receives prompt written notice 3.5 must be satisfied de novo before the Company can undertake a sale or issuance of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and saleNew Membership Interests.
(g) The provisions No Preemptive Right may be assigned or otherwise transferred in whole or in part by any Member except in connection with a Transfer of this Section 4.02 shall terminate after the Initial Public Offeringsuch Member’s Membership Interests permitted under Article 7.
Appears in 1 contract
Preemptive Rights. (a) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class shares of its Common Stock or other securities (other than debt securities with no equity feature) to any person other than pursuant to an Exempted Issuance (as defined below), the Holders other than the Founders (collectively, the "Preemptive Rights Holders") shall have the right to purchase, upon the same terms, a number of those shares of Common Stock or other securities (but not less than such number) in the proportion that the number of Shares after of Common Stock beneficially owned by such one hundred and twenty (120) day period or on other terms materially less favorable Preemptive Rights Holder bears to the issuer, it shall again comply with total number of the procedures set forth in this Section 4.02.
(e) Company's shares of Common Stock outstanding immediately prior to such issuance. The Company shall give notice (the "Share Purchase Notice") to the Preemptive Rights Holders setting forth the identity of the person to whom it proposes to issue shares of its Common Stock or other securities and the time, which shall not be under any obligation to consummate any proposed issuance fewer than twenty (20) days, within which and the terms and conditions upon which the Preemptive Rights Holders may purchase the shares of Shares and there will its Common Stock or other securities, which shall be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such saleupon which the person to whom the proposed issuance is to be made may purchase the shares of its Common Stock or other securities. Within ten (10) days after the giving of the Share Purchase Notice, howevereach Preemptive Rights Holder shall give irrevocable notice of his, her or its decision to exercise the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions option under this Section 3.2. For purposes of this Section 4.02 shall terminate after 3.2, an "Exempted Issuance" means the Initial Public Offeringissuance of any shares of the Company's Common Stock (i) pursuant to the Stock Purchase Agreement, (ii) pursuant to any duly approved option plan or similar compensation plan for employees, consultants or directors of the Company, (iii) as a stock dividend or upon any subdivision of shares of Common Stock, provided that the securities issued pursuant to such stock dividend or subdivision are limited to additional shares of Common Stock, (iv) for the acquisition by the Company of another entity or business by merger or such other transaction as would result in the ownership by the Company of not less than a majority of the voting power of the other entity or for the purchase of all assets of an entity or business, (v) pursuant to a Qualifying IPO, (vi) to any person, including Otis or any of its affiliates, in consideration of any payment under or with respect to any licensing, supply, customer, manufacturing or similar commercial agreement with the Company, or (vii) that is deemed to be exempted in a written instrument signed by the holders of a majority of the Shares held by each of (A) the NBIC Holders and (B) all Holders.
Appears in 1 contract
Samples: Stockholders' Agreement (Next Generation Network Inc)
Preemptive Rights. (a) The At any time following the date hereof until consummation of an IPO, if the Company shall give each Stockholder written notice proposes to issue additional Membership Units or equity securities (an “Issuance Notice”including any warrants, options or other rights to acquire Membership Units or equity securities, or other equity securities or debt securities that are, or may become, convertible into, or exchangeable or exercisable for, Membership Units or equity securities) (with the exception of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors other institutional investors in connection with any the provision of debt financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and on arms-length terms, (ii) as consideration in any bona fide arms-length merger, acquisition or similar transaction, (iii) as consideration in a bona fide arms-length joint venture or any other strategic transaction, (iv) in connection with any Public Offering, (v) in connection with any Membership Unit split, subdivision, conversion, exercise or dividend (in the case of any split, subdivision or dividend that treats each class or series of outstanding Membership Units equally), or upon conversion or exercise of any other equity security, (vi) issued to employees or directors of the Company or any of its Subsidiaries, pursuant to equity based incentive programs, in each case, as approved by the Board) and (vii) in connection with an Initial Public Offering.
Capital Raise (bany such Membership Units, equity securities or convertible debt securities not described in the foregoing clauses (i)-(vii), “New Securities”, and the issuance of any New Securities, a “New Issuance”), the Company shall as soon as practicable provide written notice to each Convertible Preferred Member and Common Unit Member of such anticipated issuance (the “Preemptive Rights Notice”). The Preemptive Rights Notice shall (x) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice set forth the material terms and conditions of his or her election the New Issuance, including the number and description of New Securities to be issued, the proposed purchase such Shares price for the New Securities to be issued, the Company, within ten anticipated issuance date (10which shall be at least fifteen (15) Business Days of receipt from the date of the Issuance Preemptive Rights Notice. A delivery ) and the purpose of such notice New Issuance, and (which notice y) offer such Member the opportunity to elect to participate in such New Issuance. Subject to the terms of this Section 4.10, each Convertible Preferred Member and Common Unit Member shall specify have the number (or amount) of Shares right to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement purchase up to its Pro Rata Portion of such Stockholder to purchase, New Securities at the price and on the terms and conditions specified in the Issuance NoticePreemptive Rights Notice by delivering an irrevocable written notice to the Company no later than three (3) Business Days before the anticipated issuance date, setting forth the number of shares (or amount) such New Securities for which such right is exercised. The Company shall amend Schedule B as necessary to reflect the purchase by any Common Unit Member of Shares specified New Securities in such Stockholder’s notice. If, at accordance with the termination terms of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares4.10(a).
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(db) The Company shall have ninety (90) days from after the anticipated issuance date of provided in the Issuance Preemptive Rights Notice to consummate sell to other Persons (including to other Members) any New Securities with respect to which the proposed issuance of any or all of such Shares that each Stockholder have elected not Convertible Preferred Members and the Common Unit Members declined to purchase exercise the preemptive rights set forth in Section 4.10(a) at the price and upon on the terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Preemptive Rights Notice, provided that, if . If the Company fails to sell such issuance is subject to regulatory approval, such New Securities within ninety (90) day period shall be extended until days after the expiration of five (5) Business Days after all such approvals have been received, but anticipated issuance date provided in no event later than one hundred and twenty (120) days from the date of the Issuance Preemptive Rights Notice. At the consummation of such issuance, the Company shall record not thereafter issue or sell any New Securities without first offering such New Securities to the Shares Convertible Preferred Members and Common Unit Members in book entry format representing the Shares manner provided in Section 4.10(a). The Company shall amend Schedule A and Schedule B as necessary to be purchased reflect the purchase by each Stockholder exercising preemptive rights pursuant to any Person of New Securities in accordance with the terms of this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.024.10(b).
(ec) The Company shall election by any Convertible Preferred Member or Common Unit Member not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the exercise its preemptive rights under this Section 4.02 4.10 in any one instance shall not affect its right (other than in respect of any reduction in its percentage holdings) as to any future issuances under this Section 4.10. Any sale of New Securities by the Company without first offering such Shares to each Stockholder or complying with giving the procedures of Convertible Preferred Members and Common Unit Members the rights described in this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares 4.10 shall be identical to the price paid such offer void and saleof no force and effect.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (a) The If the Company shall give each Stockholder written notice (an “Issuance Notice”) makes any non-public offering of any proposed issuance by Equity Securities or any securities that are convertible or exchangeable into (or exercisable for) Equity Securities, including, for the Company of any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.022.5, warrants, options or other such rights (any such security, a “Excluded Securities” shall include New Security”) (other than (1) pursuant to any Shares: (i) issued as a dividend employee or a distribution, (ii) granted director benefit plan or issued the granting or exercise of employee stock options or other equity incentives pursuant to employees, officers, directors, consultants the Company’s stock incentive plans or advisors of employment or consulting arrangements with the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the BoardSubsidiaries, (iii2) issued or issuable to lenders or lessors issuances in connection with any financing acquisition (by sale, merger in which the Company is the surviving corporation, or leasing transactionsotherwise) by the Company of equity in, (iv) issued pursuant or assets of, a business, including any joint venture or strategic partnership or to financial institutions, commercial lenders, brokers/finders or any similar party in connection with the acquisition incurrence or guarantee of another Person Indebtedness by the Company or any of its Subsidiaries by consolidationSubsidiaries, merger(3) issuances of any securities issued as a result of a stock split, purchase stock dividend, reclassification or other transaction in which reorganization or similar event, (4) issuances of Equity Securities issued upon conversion, exchange or exercise of, or as a dividend on, any convertible securities of the Company issued prior to the date of the Investment Agreement, (5) issuances of Equity Securities upon conversion, exchange or such Subsidiary acquiresexercise of, or as a dividend on, any Equity Securities issued after the date hereof in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Personto which this Section 2.5 applied, (v6) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with any offer or sale of any Equity Securities to the public pursuant to a registration statement effected in accordance with the Securities Act, and (7) issuances of Equity Securities or issuance of Equity Securities upon conversion, exchange or exercise of, or as a dividend on, any Equity Securities issued pursuant to an Initial Public Offeringexception described in clauses (1) through (6) above), each Eligible Xxxxxxx Party shall be afforded the opportunity to acquire from the Company such Eligible Xxxxxxx Party’s Preemptive Rights Portion of such New Securities for the same price as that offered to the other purchasers of such Equity Securities or other securities; provided, that such Eligible Xxxxxxx Party shall not be entitled to acquire any New Securities pursuant to this Section 2.5 if the issuance of such New Securities to such Eligible Xxxxxxx Party would require approval of the stockholders of the Company as a result of any such Eligible Xxxxxxx Party’s status as an Affiliate of the Company, in which case, the Company may consummate the issuance of New Securities to other investors prior to obtaining approval of the stockholders of the Company but subject to the right of such Eligible Xxxxxxx Party to purchase additional New Securities up to its Preemptive Rights Portion of such issuance following approval of the stockholders of the Company; provided, further, that (x) the Company shall use its reasonable best efforts to obtain the approval of the stockholders of the Company to approve the issuance of the New Securities to such Eligible Xxxxxxx Party and (y) if the issuance of such New Securities is to be effected via a private placement, the Company shall use its reasonable best efforts to obtain commitments from the purchasers of such New Securities to vote in favor of the issuance of such New Securities to such Eligible Xxxxxxx Party; provided, that the Company shall not be required to make any payment to such purchasers in exchange for such commitments.
(b) Subject to the foregoing proviso, the amount of New Securities that each Eligible Xxxxxxx Party shall be entitled to purchase in the aggregate shall be determined by multiplying (1) the total number of such offered shares of New Securities by (2) the Specified Xxxxxxx Party Holdings Percentage of such Eligible Xxxxxxx Party (the “Preemptive Rights Portion”).
(c) If the Company proposes to offer New Securities, it shall give the Eligible Xxxxxxx Parties written notice of its intention, describing the price (or range of prices), anticipated amount of securities, timing and other terms upon which the Company proposes to offer the same at least five (5) Business Days prior to such issuance; provided that, to the extent the terms of such offering cannot reasonably be provided five (5) Business Days prior to such issuance, notice of such terms may be given as promptly as practicable but in any event prior to such issuance. The Company may provide such notice to the Eligible Xxxxxxx Parties on a confidential basis prior to public disclosure of such offering. Each Stockholder Eligible Xxxxxxx Party may notify the Company in writing at any time on or prior to the Business Day immediately prior to the date of such issuance (or, if notice of all such terms has not been given prior to the Business Day immediately prior to the date of such issuance, at any time prior to such issuance) whether such Eligible Xxxxxxx Party will exercise his or her such preemptive rights and as to the amount of New Securities such Eligible Xxxxxxx Party desires to purchase, up to the maximum amount calculated pursuant to Section 2.5(b). Such notice to the Company shall constitute a binding commitment by the Eligible Xxxxxxx Party to purchase the amount of New Securities so specified at the price and other terms set forth in the Company’s notice to it. Subject to receipt of the requisite notice of such issuance, the failure of an Eligible Xxxxxxx Party to respond prior to the time a response is required pursuant to this Section 2.5(c) shall be deemed to be a waiver of such Eligible Xxxxxxx Party’s purchase rights under this Section 4.02 by delivering notice of his or her election 2.5 only with respect to the offering described in the applicable notice.
(d) Each Eligible Xxxxxxx Party shall purchase the securities that it has elected to purchase concurrently with the related issuance of such Shares securities by the Company; provided, that if such related issuance is prior to the Companytenth (10th) Business Day following the date on which such Eligible Xxxxxxx Party has notified the Company that it has elected to purchase securities pursuant to this Section 2.5, then such Eligible Xxxxxxx Party shall purchase such securities within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from following the date of the Issuance Notice related issuance; and provided, further, that the deadlines set forth in this sentence shall be extended to consummate the extent necessary to secure any required approvals or consents or for the expiration of any applicable regulatory waiting periods. If the proposed issuance by the Company of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable securities which gave rise to the Company than those specified in exercise by the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration Eligible Xxxxxxx Parties of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising their preemptive rights pursuant to this Section 4.02 registered in 2.5 shall be terminated or abandoned by the name Company without the issuance of such Stockholderany securities, against payment by such Stockholder of then the purchase price for rights of any Eligible Xxxxxxx Party pursuant to this Section 2.5 shall also terminate as to such Shares. If proposed issuance by the Company proposes to issue (but not any class of Shares after such one hundred subsequent or future issuance), and twenty (120) day period or on other terms materially less favorable any funds in respect thereof paid to the issuer, it Company by any Eligible Xxxxxxx Party in respect thereof shall again comply with the procedures set forth be refunded in this Section 4.02full.
(e) The Company In the case of the offering of securities for consideration in whole or in part other than cash, including securities acquired in exchange therefor (other than securities by their terms so exchangeable), the consideration other than cash shall be deemed to be the fair value thereof as reasonably determined by the Board; provided, however, that such fair value as determined by the Board shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on exceed the part aggregate market price of the Company to any Stockholder if securities being offered as of the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect closing date of such proposed issuanceoffering (which market price shall be deemed to be the Trading Price with respect to an offering of Common Stock).
(f) The Company may offer and sell Shares subject election by any Eligible Xxxxxxx Party not to the preemptive exercise its subscription rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and 2.5 in any event no later than ten (10) Business Days from receipt of the notice referred one instance shall not affect its right as to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and saleany subsequent proposed issuance.
(g) The provisions Company and the Eligible Xxxxxxx Parties shall cooperate in good faith to facilitate the exercise of the Eligible Xxxxxxx Parties’ rights pursuant to this Section 4.02 shall terminate after the Initial Public Offering2.5, including using reasonable best efforts to secure any required approvals or consents.
Appears in 1 contract
Samples: Stockholders' Agreement (Roadrunner Transportation Systems, Inc.)
Preemptive Rights. Subject to the limitations set forth in Subsection 9(d) below, each time the Company or any of its Subsidiaries proposes to issue any equity securities, or other securities of any kind that are or may become convertible into any equity securities (collectively, "New Issue Securities") to any Person, the Company shall, or shall cause its Subsidiary to, first offer the New Issue Securities to the Holders in accordance with the following provisions:
(a) The Company shall give a notice to each Stockholder written notice Holder hereunder (an “Issuance the "First Notice”") stating (i) its intention to issue the New Issue Securities; (ii) the number and description of any proposed issuance by such shares or the Company amount of any Shares at least ten the New Issue Securities to be issued; (10iii) Business Days prior to the purchase price (calculated as of the proposed issuance date) and the other terms upon which the Company is offering the New Issue Securities; and (iv) the names of the Persons to whom the Company seeks to issue such New Issue Securities.
(b) Transmittal of the First Notice to the Holders by the Company shall constitute an offer by the Company to sell each Holder his, her or its proportionate number (based upon his, her or its percentage ownership of the total number of shares of Diluted Common Stock or Diluted Preferred Stock), or any lesser number specified by the Holder, of the New Issue Securities for the price and upon the terms set forth in the First Notice. The Issuance For a period of twenty (20) days after the submission of the First Notice to the Holders, each Holder shall specify have the number and class option, exercisable by written notice to the Company, to accept the Company's offer as to all or any part of such Shares and Holder's proportionate number or any lesser number of the price at which such Shares New Issue Securities. If two or more types of New Issue Securities are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares or New Issue Securities are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-partytogether with other types of securities, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02including, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distributionwithout limitation, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquiresdebt securities, in a single transaction or series of related transactions, the rights to purchase New Issue Securities granted to the Holders under this Section 9 must be exercised to purchase all types of New Issue Securities and such other securities in the same proportion as such New Issue Securities and other securities are to be issued by the Company. If the Holders (as a material amount group) agree to purchase less than the total number of New Issue Securities proposed to be issued and sold, any Holder may condition its agreement to purchase the New Issue Securities upon the sale of the assets balance to unaffiliated third parties.
(c) In the event that any Holder does not exercise his, her or equity its option with respect to all of the New Issue Securities in accordance with Subsection 9(b), the Company, upon notice from such Holder of such Holder's decision not to accept the Company's offer as to all of his, her or its pro rata portion of the New Issue Securities (or upon expiration of the twenty-day option period referred to in Subsection 9(b) if such Holder fails to give notice as aforesaid), shall offer to sell the New Issue Securities which have not been subscribed for to those Holders who have elected to exercise their rights hereunder (allocated pro rata based upon such Holders' respective ownership of Diluted Common Stock or Diluted Preferred Stock compared to the aggregate ownership of Diluted Common Stock or Diluted Preferred Stock of all such other PersonHolders electing to purchase if it is over-subscribed). Thereafter, if all of the New Issue Securities proposed to be issued and sold have not been subscribed for within thirty (v30) days, the Company shall have one hundred twenty (120) days thereafter to sell any or all of the remaining New Issue Securities (i.e., those not to be sold to any Holder) to the Person or Persons set forth in the First Notice, upon terms and conditions no less favorable to the Company, and no more favorable to such Person or Persons, than those set forth in the First Notice. In the event the Company has not sold such New Issue Securities within said one hundred twenty (120) day period, the Company will not thereafter issue or sell and New Issue Securities without first offering such New Issue Securities to the Holders in the manner provided above.
(d) The preemptive rights contained in this Section 9 shall not apply to: (i) the issuance by the Company of up to an aggregate of (A) 71,000 shares of Preferred Stock (as adjusted for stock splits, stock dividends, recapitalizations and the like) and (B) 1,462,800 shares of Common Stock (as adjusted for stock splits, stock dividends, recapitalizations and the like), which shares are issued on the Closing Date or may be issued subsequently pursuant to Preferred Stock purchase options issued to Persons certain Executives on the Closing Date for an aggregate of 1,571.102 shares of Preferred Stock and (C) 37,200 shares of Common Stock reserved for future issuance; (ii) the issuance and sale by the Company, from time to time pursuant to plans, programs or agreements approved by the Governing Body of the Company, of shares of Common Stock, or options, rights, or warrants to acquire shares of Common Stock, or of securities convertible or exchangeable for shares of Common Stock, to employees, officers, or members of the Governing Body of the Company (other than members who the Board in good faith reasonably believes will provide strategic benefits are Affiliates of WPP), as compensation for their services to the Company or any of its Subsidiaries and wholly-owned subsidiaries (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”"Incentive Common Stock"), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of provided that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company Incentive Common Stock shall not be under any obligation transferred to consummate any proposed WPP; (iii) the issuance of Shares and there will be no liability on the part shares of Common Stock of the Company to any Stockholder if the Warrant Security Holders in connection with the exercise of the Warrants; (iv) securities offered in a Qualified Public Offering; and/or (v) securities approved for issuance by the Company's Governing Body in connection with the acquisition of another business entity (which is an Independent Third Party) by the Company has not consummated any proposed issuance by merger, purchase of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect all or substantially all of such proposed issuance.
(f) The other business entity's assets, or by other reorganization whereby the Company may offer and sell Shares subject to ends up owning, directly or indirectly, greater than 50% of the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice voting power of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and salebusiness entity.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (a) To the extent permitted under NYSE rules, the Company hereby grants to GE the right to purchase its Pro Rata Portion of any Company Securities (other than any Excluded Securities) that the Company may from time to time propose to issue or sell to any Person. For purposes of this Section 4.3, “Excluded Securities” means Company Securities issued in connection with: (i) a grant to any existing or prospective consultants, employees, officers or directors pursuant to any stock option, employee stock purchase or similar equity-based plans or other compensation agreement; (ii) any acquisition by the Company of the stock, assets, properties or business of any Person; (iii) a stock split, stock dividend or any similar recapitalization; or (iv) any issuance of warrants or other similar rights to purchase Company Common Stock to lenders or other institutional investors in any arm’s length transaction providing debt financing to the Company or any of its Subsidiaries. For the avoidance of doubt, to the extent stockholder approval is required under the NYSE rules for the issuance or sale of Company Securities as provided in this Section 4.3, (x) the Company may issue or sell Company Securities to such other Persons prior to obtaining such stockholder approval in accordance with Section 4.3(d), and (y) the Company shall use its reasonable best efforts to obtain such approval, and after receipt of such approval the Company shall issue or sell the Company Securities (if any) that GE has irrevocably elected to purchase to GE, on the terms set forth in the relevant Issuance Notice.
(b) The Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by or sale described in Section 4.3(a) to GE within five (5) Business Days following any meeting of the Company Board at which any such issuance or sale is approved or, if the approval of any Shares at least the Company Board is not required in connection with such issuance or sale, no less than ten (10) Business Days prior to the date of the proposed issuance dateor sale. The Issuance Notice shall, if applicable, be accompanied by a written offer from any prospective purchaser seeking to purchase Company Securities and shall specify set forth the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the proposed issuance. Subject to Section 4.02(e, including:
(i) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share the number and class of the Shares proposed Company Securities to be issued to a third-party, at and the price and on percentage of the other terms and conditions specified in outstanding shares of capital stock of the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, Company such issuance would represent;
(ii) granted or issued to employeesthe proposed issuance date, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within shall be at least ten (10) Business Days of receipt from the date of the Issuance Notice. A delivery ; and
(iii) the proposed purchase price per Company Security.
(c) GE shall for a period of such notice ten (which notice shall specify 10) Business Days following the number (or amount) receipt of Shares an Issuance Notice have the right to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement elect irrevocably to purchase its Pro Rata Portion of such Stockholder to purchase, the Company Securities at the purchase price and on the terms and conditions specified set forth in the Issuance Notice, Notice by delivering a written notice to the number of shares (or amount) of Shares specified in such Stockholder’s noticeCompany. If, at the termination of such ten (10) Business Day- Day period, any Stockholder GE shall not have exercised his or her rights delivered such notice to purchase any of such Stockholder’s Pro Rata Share of such Sharesthe Company, such Stockholder GE shall be deemed to have waived all of its rights under this Section 4.02 4.3 with respect to, and only with respect to, to the purchase of such Shares.
(c) If Company Securities. The closing of any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) purchase by GE shall be entitled to consummated concurrently with the consummation of the issuance or sale described in the Issuance Notice; provided, however, that the closing of any purchase an additional number by GE may be extended beyond the closing of Shares equal the transaction in the Issuance Notice to the product extent necessary to obtain any required approval or consent of a Governmental Entity or any other third party (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal Company and GE shall use their respective reasonable best efforts to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholdersobtain such approvals).
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until Upon the expiration of five the ten (510) Business Days after all such approvals have been received, but Day period described in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuanceSection 4.3(c), the Company shall record the Shares in book entry format representing the Shares be free to be purchased by each Stockholder exercising preemptive rights pursuant sell such Company Securities that GE has not elected irrevocably to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred on terms and twenty (120) day period or on other terms materially less conditions no more favorable to the issuer, it shall again comply purchasers thereof than those offered to GE in the Issuance Notice delivered in accordance with the procedures set forth in this Section 4.024.3(b).
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 4.3 shall terminate after on the Initial Public OfferingTrigger Date.
Appears in 1 contract
Preemptive Rights. (a) The Company Each Institutional Investor, Rollover Investor and each of its Permitted Transferees that are Investors shall give each Stockholder written notice (an “Issuance Notice”) have the right to purchase their respective Pro Rata Amount of any proposed issuance by the Company of additional Securities (including any Shares at least ten (10security convertible into or exercisable for any Securities) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company may propose to issue from time to time to OEP or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchasetheir Permitted Transferees, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of on which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any such Securities to OEP or their Permitted Transferees (such Securities are hereinafter collectively referred to as “Newly Issued Securities”). Each Investor acknowledges that in the event that the Company offers to sell to potential investors units consisting of more than one type or class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02securities, so long as each Stockholder receives prompt written notice the potential investors purchase only on such a unit by unit basis, the rights provided by this Section 1.6 with respect to such offering shall also be limited to the right to purchase such units, and not to purchase a portion of the underlying securities of a unit.
(b) Notwithstanding the requirements of this Section 1.6, the provisions of this Section 1.6 shall not be applicable to the issuance of Securities (i) upon the conversion of shares of one class of stock, in accordance with the terms of such sales and thereafter class of stock, into shares of another class, (ii) as a dividend on (or payment of accrued yield in respect of) the outstanding Preferred Stock pursuant to paragraph B.3 of Article V of the Company’s certificate of incorporation so long as such dividend is given paid in accordance with the opportunity distribution priority set forth in paragraph B.2. of Article V of the Company’s Certificate of Incorporation, (iii) which have already been made available to all Non-OEP Investors for purchase his or her respective in each Non-OEP Investor’s Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein Amount on substantially the same terms and conditions as such salethe current issuance of Securities, however, (iv) in connection with grants of stock or options to employees or directors of the price of such Shares shall be identical to the price paid such offer and saleCompany or (v) purchased by OEP or its Permitted Transferees in a Public Offering.
(gc) The provisions Company will give the Institutional Investors, Rollover Investors and their Permitted Transferees that are Investors a written notice setting forth the terms and conditions upon which the Institutional Investors, the Rollover Investors or their Permitted Transferees that are Investors may purchase Newly Issued Securities in accordance with Section 1.6(a) and such Institutional Investor’s, such Rollover Investor’s or such Permitted Transferee’s Pro Rata Amount of the Securities that such Institutional Investor, such Rollover Investor or such Permitted Transferee is entitled to purchase (the “Preemptive Notice”). The Institutional Investors, the Rollover Investors and such Permitted Transferees must reply, in writing, within 30 days after the date of delivery of the Preemptive Notice if such Persons agree to purchase all or any portion of the Newly Issued Securities offered pursuant to this Section 1.6 on the date of proposed sale (the “Preemptive Reply”), setting forth the amount, if any, of Newly Issued Securities such Persons wish to purchase. If any Institutional Investor, Rollover Investor or Permitted Transferee fails to make a Preemptive Reply in accordance with this Section 1.6, or elects to purchase less than his, her or its Pro Rata Amount of such Newly Issued Securities, such unclaimed Newly Issued Securities that were offered to such Institutional Investor, Rollover Investor or Permitted Transferee may thereafter, for a period not exceeding 90 days following the expiration of such 30-day period, be issued, sold or subjected to rights or options to OEP or their Permitted Transferees, at a price not less than that at which they were offered to the Institutional Investors, the Rollover Investors and their Permitted Transferees that are Investors.
(d) Notwithstanding the requirements of this Section 4.02 1.6, the Company may make an issuance of Newly Issued Securities at any time without complying with the requirements of Section 1.6(a) and (c) so long as the Company complies with the requirements of this Section 1.6(d). The Company shall terminate place into escrow with a third party at the time of such issuance a portion of the Newly Issued Securities equal to the “Preemptive Escrow Amount.” The “Preemptive Escrow Amount” shall equal that amount of Newly Issued Securities which the Rollover Investors and their Permitted Transferees that are Investors would have been entitled to purchase, in the aggregate, if the Company had delivered a Preemptive Notice in accordance with Section 1.6(c) and each Institutional Investor, Rollover Investor and its Permitted Transferees that are Investors had elected to participate to the full extent permitted in the issuance of Newly Issued Securities in accordance with Section 1.6(a). No later than two (2) business days after the Initial Public Offeringdate of the issuance of the Newly Issued Securities, the Company shall notify the Institutional Investors and the Rollover Investors in writing of such issuance. Such notice (the “Preemptive Escrow Notice”) shall set forth the same information required in the Preemptive Notice, and in addition, such notice shall state the name of the escrow agent. An Institutional Investor, Rollover Investor or a Rollover Investor’s Permitted Transferee that is an Investor may exercise the preemptive right by delivering to the Company, within 30 days after the date of delivery of the Preemptive Escrow Notice, a written notice specifying the number of shares of Newly Issued Securities it, he or she proposes to purchase of the total number of shares of Newly Issued Securities such Institutional Investor, Rollover Investor or Permitted Transferee is entitled to purchase (the “Preemptive Election”). The Preemptive Election shall be accompanied by payment in full for such Newly Issued Securities, in the same form as provided by OEP or their Permitted Transferees. Promptly after the expiration of the 30th day after the delivery of the Preemptive Escrow Notice, (i) the Company shall sell to each Institutional Investor, Rollover Investor or Permitted Transferee that number of shares of Newly Issued Securities that each such Institutional Investor, Rollover Investor or Permitted Transferee proposed to purchase pursuant to its Preemptive Election on the same terms and conditions as set forth in the Preemptive Escrow Notice and (ii) when such Newly Issued Securities have been issued to such Institutional Investors, Rollover Investors or their Permitted Transferees, all remaining Newly Issued Securities held in escrow shall be sold to OEP and their Permitted Transferees, upon the terms and conditions set forth in the Preemptive Escrow Notice.
Appears in 1 contract
Preemptive Rights. If at any time prior to the one year anniversary of the Closing Date, the Company proposes to issue any equity Common Stock or Common Stock Equivalents (collectively, "NEW ISSUE SECURITIES"), the Company shall first offer the New Issue Securities to the Investors in accordance with the following provisions:
(a) The Company shall give each Stockholder a written notice to each Investor (an “Issuance Notice”the "FIRST NOTICE") stating (i) its intention to issue the New Issue Securities, (ii) the number and description of any the New Issue Securities proposed issuance by to be issued and (iii) the Company proposed purchase price (calculated as of any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number ) and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in upon which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of is proposing to offer the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public OfferingNew Issue Securities.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice Transmittal of his or her election to purchase such Shares the First Notice to the CompanyInvestors by the Company shall constitute an offer by the Company to sell each Investor up to his, within ten her or its proportionate number (10) Business Days of receipt based upon his, her or its percentage ownership of the Issuance Notice. A delivery total number of such notice (which notice shall specify the number (or amountissued and outstanding shares of Common Stock) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the New Issue Securities for the price and on upon the terms and conditions specified set forth in the Issuance First Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (For a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date receipt of the Issuance Notice. At of the consummation First Notice to the Investors, each Investor shall have the option, exercisable by written notice to the Company, to accept the Company's offer as to all or any part of such issuanceInvestor's proportionate number of the New Issue Securities. If two or more types of New Issue Securities are to be issued or New Issue Securities are to be issued together with other types of securities, including, without limitation, debt Securities, in a single transaction or related transactions, the Company shall record rights to purchase New Issue Securities granted to the Shares Investors under this Section must be exercised to purchase all types of New Issue Securities and such other securities in book entry format representing the Shares same proportion as such New Issue Securities and other securities are to be purchased issued by each Stockholder exercising the Company.
(c) The preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth contained in this Section 4.02.
(e) The Company shall not be under apply to the issuance and sale by the Company, from time to time hereafter, of (i) shares of Common Stock or Common Stock Equivalents to employees, officers, or directors of, or consultants to, the Company, as compensation for their services to the Company or any obligation of its direct or indirect Subsidiaries pursuant to consummate any proposed arrangements approved by the Board of Directors of the Company, (ii) the issuance of Shares the Securities pursuant to the Transaction Documents and there will be no liability on the part issuance and exercise of the warrants issuable to Cardinal Securities, LLC pursuant to its engagement letter with the Company in connection with the offering subject to this Agreement, (iii) shares of Common Stock issued and sold in a firm commitment underwritten public offering (which shall not include an equity line of credit or similar financing arrangement) resulting in net proceeds to the Company of in excess of $15,000,000 or (iv) shares of Common Stock issued as consideration for the acquisition of another company or business in which the shareholders of the Company to any Stockholder if do not have an ownership interest, which acquisition has been approved by the Board of Directors of the Company has or (v) shares of Common Stock issuable upon the exercise of outstanding Common Stock Equivalents (but not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuanceamendments thereto).
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (a) The If the Company shall give or any of its Subsidiaries proposes to issue and sell any of its equity securities or any securities containing options or rights to acquire any equity securities or any securities convertible into equity securities to any Person, the Company will offer to sell to each Investor Stockholder written notice (an “Issuance Notice”) a portion of the number or amount of such securities proposed to be sold in any proposed issuance such transaction or series of related transactions equal to the product of the percentage each such Investor Stockholder holds of all Company Stock then held by aft of the Stockholders by the Company number of any Shares at least ten (10) Business Days prior to the securities proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and sold by the other material Company in any such transaction or series of related transactions, all for the same price and upon substantially the same terms and conditions (taking into account and in a manner consistent with the relative size of the issuance. Subject investment by each of the Investor Stockholders) as the securities that are being offered to Section 4.02(e) below, such Person in such transaction or series of transactions; provided that if any such Shares are purchased, each Stockholder shall be Stockholders entitled to purchase or receive such Stockholder’s Pro Rata Share stock or securities are required to also purchase other securities of the Shares proposed Company, the Investor Stockholders exercising their rights pursuant to this Section 4 shall also be issued required to a third-party, at purchase the price and same strip of securities (on the other same terms and conditions specified in conditions) that such other stockholders are required to purchase.
(b) Notwithstanding the Issuance Notice. For purposes foregoing, the provisions of this Section 4.02, “Excluded Securities” 4 shall include any Shares: not be applicable to the issuance of equity securities (i) issued as a dividend or a distributionupon the conversion of shares of one class of capital stock into shares of another class, (ii) granted as a stock dividend or issued any stock split or other subdivision or combination of the outstanding equity securities, (iii) in any transaction in respect of a security that is offered to employeesall Investor Stockholders on a pro rata basis, officers(iv) as consideration in connection with a business acquisition or a strategic partnership, directors(v) pursuant to a debt financing from a bank, consultants institutional lender or advisors similar financial institution, (vi) pursuant to a commercial lending transaction with a leasing entity, (vii) in connection with the grant or exercise of stock or options to employees or directors of the Company or any of its Subsidiaries or (viii) in a public offering pursuant to incentive agreementsa registration statement filed with, equity purchase or equity option plansand declared effective by, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued Securities and Exchange Commission pursuant to the acquisition Securities Act; and further, the provisions of another Person by the Company or any this Section 4 shall terminate upon completion of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(bc) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election The Company will cause to purchase such Shares be given to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such Investor Stockholders a written notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on setting forth in reasonable detail the terms and conditions specified in upon which the Issuance Notice, the number of Investor Stockholders may purchase such shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share other securities (the “Excess SharesPreemptive Notice”). After receiving a Preemptive Notice, any participating Investor Stockholder electing wishing to exercise his or her the preemptive rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares granted by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable this Section 4 must give notice to the Company than those specified in the Issuance Noticewriting, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days within 30 days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of that such Preemptive Notice is deemed given pursuant to Section 21, that such Investor Stockholder irrevocably agrees to purchase the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights shares or other securities offered pursuant to this Section 4.02 registered 4 on the date of sale to such Person (the “Preemptive Reply”). If any Investor Stockholder fails to make a Preemptive Reply in accordance with this Section, shares or other securities offered to such Investor Stockholder in accordance with this Section may thereafter, for a period not exceeding 90 days following the name expiration of such Stockholder30-day period, against payment by such be issued, sold or subjected to rights or options to any Spectrum Group Stockholder of or any Person at a price not less than the purchase price for such Shares. If at which they were offered to the Company proposes to issue any class of Shares after such one hundred Investor Stockholders and twenty (120) day period or on other terms materially less and conditions no more favorable to the issuerpurchasers thereof than those offered to the Investor Stockholders. Any such shares or other securities not so issued, it shall sold or subjected to rights or options to any Spectrum Group Stockholder or any Person during such 90 day period will thereafter again comply with be subject to the procedures preemptive rights provided for in this Section 4. Except as set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on 4, the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it Investor Stockholders shall have delivered an Issuance Notice in no other preemptive rights with respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder issuance or complying with sale of equity securities by the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and saleCompany.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. Subject to Section 9(d) and the limitations set forth in Section 9(c) below, each time the Company proposes to issue any equity securities, or other securities of any kind that are or may become convertible into any equity securities (collectively, “New Issue Securities”) to any Person, the Company shall first offer the New Issue Securities to the Investors in accordance with the following provisions:
(a) The Company shall give to each Stockholder written Investor hereunder who is at the time an Accredited Investor a notice stating: (an “Issuance Notice”i) the Company’s intention to issue the New Issue Securities; (ii) the number and description of any proposed issuance by such shares or the Company amount of any Shares at least ten the New Issue Securities to be issued; (10iii) Business Days prior to the purchase price (calculated as of the proposed issuance date) and the other terms upon which the Company is offering the New Issue Securities; and (iv) the names of the Persons to whom the Company seeks to issue such New Issue Securities (the “Preemptive Notice”).
(b) Transmittal of the Preemptive Notice to the Investors by the Company shall give each Investor the right to purchase from the Company his, her or its Pro Rata Portion, or any lesser number specified by the Investor, of the New Issue Securities for the price and upon the terms set forth in the Preemptive Notice. The Issuance For a period of twenty (20) days after the submission of the Preemptive Notice to the Investors, each Investor shall specify have the number and class option, exercisable by written notice to the Company, to accept the Company’s offer as to all or any part of such Shares and Investor’s Pro Rata Portion or any lesser number of the price at which such Shares New Issue Securities. If two (2) or more types of New Issue Securities are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares or New Issue Securities are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-partytogether with other types of securities, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02including, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distributionwithout limitation, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquiresdebt securities, in a single transaction or series of related transactions, the rights to purchase New Issue Securities granted to the Investors under this Section 9 must be exercised to purchase all types of New Issue Securities and such other securities in the same proportion as such New Issue Securities and other securities are to be issued by the Company. If the Investors (as a material amount group) agree to purchase less than the total number of New Issue Securities proposed to be issued and sold, the Company shall have one hundred twenty (120) days thereafter to sell any or all of the assets remaining New Issue Securities (i.e., those not to be sold to any Investor) to the Person or equity ownership of Persons set forth in the Preemptive Notice, upon terms and conditions no less favorable to the Company, and no more favorable to such other PersonPerson or Persons, than those set forth in the Preemptive Notice. In the event the Company has not sold such New Issue Securities within said one hundred twenty (v120) issued day period, the Company will not thereafter issue or sell any New Issue Securities without first offering such New Issue Securities to Persons who the Investors in the manner provided above.
(c) The preemptive rights contained in this Section 9 shall not apply to:
(i) The issuance and sale by the Company, from time to time pursuant to plans, programs or agreements approved by the Board in good faith reasonably believes will provide strategic benefits of Directors, of shares of Common Stock or options, rights, or warrants to acquire shares of Common Stock, or of securities convertible or exchangeable for shares of Common Stock (A) to employees, officers, or members of or consultants or advisors to the Board of Directors as compensation for their services to the Company or any of its Subsidiaries or (B) in connection with a Company Acquisition or other strategic transaction involving the Company and other entities, including, without limitation, joint ventures, manufacturing, marketing or distribution arrangements or technology transfer or development arrangements;
(ii) The issuance of Securities in a Public Offering;
(iii) The issuance of Securities to credit financing sources in connection with any equipment loan or leasing arrangement, real property leasing arrangement, or debt financing of the Company or its Subsidiaries;
(iv) The issuance of securities by any Subsidiary of the Company to the Company;
(v) The issuance of Securities upon the exercise or exchange of other Securities which were issued in compliance with this Section 9(c) or Securities which were issued in an issuance which is exempt from this Section 9(c);
(vi) issued The issuance of Securities in connection with an Initial Public Offering.any stock split, stock dividend, reverse split, consolidation, recapitalization of the Company or any other form of strategic transaction; and
(bvii) Each Stockholder may exercise his The issuance of Securities pursuant to any rights or her rights under this Section 4.02 by delivering notice of his agreements, options, warrants or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt convertible securities outstanding as of the Issuance Notice. A delivery date of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating StockholdersAgreement.
(d) The Notwithstanding anything to the contrary contained in this Section 9, the Company shall have ninety (90) days from may, in order to expedite the date issuance of New Issue Securities hereunder, issue all or a portion of the Issuance Notice New Issue Securities to consummate one or more Persons (each, an “Initial Subscribing Stockholder”) without complying with the proposed issuance provisions of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, this Section 9; provided that, if such issuance is subject prior to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares either (i) each Initial Subscribing Stockholder agrees to be purchased by each Stockholder exercising preemptive rights pursuant offer to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Investor who is an Accredited Investor and who is not an Initial Subscribing Stockholder (each, an “Other Accredited Stockholder”) his, her or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her its respective Pro Rata Share Portion of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein New Issue Securities on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical issued to the price paid Initial Subscribing Stockholders and in a manner which provides such Other Accredited Stockholder with rights substantially similar to the rights outlined in Sections 9(a) and 9(b) or (ii) the Company shall offer to sell an additional amount of New Issue Securities to each Investor (other that Initial Subscribing Stockholders) only in an amount and sale.
manner which provides such Investor with rights substantially similar to the rights outlined in Sections 9(a) and 9(b). The Initial Subscribing Stockholders or the Company, as applicable, shall offer to sell such New Issue Securities to each Other Accredited Stockholder or Investor (g) The provisions of this Section 4.02 shall terminate after the other that Initial Public Offering.Subscribing Stockholders),
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Preemptive Rights. (a) The From and after the Effective Date, except as provided below, the Company shall give each Stockholder written notice (an “Issuance Notice”) of any proposed issuance by the Company of any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) belownot issue, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend sell or a distribution, (ii) granted transfer or issued to employees, officers, directors, consultants or advisors of the Company or allow any of its Subsidiaries pursuant subsidiaries to incentive agreementsissue, equity purchase sell or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that transfer any Voting Securities (the "Offered Securities") unless the Purchasers are approved by offered in writing the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder right to purchase, at the same price and or on the same terms proposed to be issued and conditions specified in sold, a portion of the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share Offered Securities (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”"Stated Percentage") shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and total number of Offered Securities multiplied by (ii) a fraction, the numerator of which is the Aggregate Ownership lesser of that class (x) 20,000,000 or (y) the number of Shares Voting Securities then owned by the Fully Participating Stockholder, as the case may be, Purchasers and the denominator of which is equal to the sum total number of the Aggregate Ownership then outstanding shares of that class Common Stock, computed on a fully diluted basis (the "Preemptive Rights"). If the Offered Securities are being issued in connection with the issuance of Shares any other securities, or incurrence of any debt, by all Fully Participating Stockholders.
the Company (d) "Other Securities or Debt"), the Purchasers shall be required to purchase their Stated Percentage of such Other Securities or Debt in order to exercise their Preemptive Rights. The Company Purchasers shall have ninety (90) days from the date of right, during the Issuance Notice period specified in Section 6.12(b), to consummate accept the proposed issuance of offer for any or all of such Shares that each Stockholder have elected their portion of the Offered Securities.
(b) Any Purchaser who does not to purchase at the price and upon terms and conditions that are not materially less favorable deliver to the Company than those specified in written notice of acceptance of any offer made pursuant to Section 6.12(a) within 10 business days after such Purchaser's receipt of such offer shall be deemed to have waived its rights to purchase the Issuance Notice, provided thatOffered Securities which are the subject of such offer (including, if such issuance is subject the Offered Securities include convertible securities, options, or other rights to regulatory approvalacquire securities, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02securities.)
(ec) The Company Section 6.12(a) shall not be under any obligation apply to consummate any proposed (i) the grant of options to purchase Voting Securities, or the issuance of Shares and there will be no liability on the part shares of Voting Securities, to employees of the Company or any of its subsidiaries, (ii) shares of Voting Securities issuable upon exercise of any option, warrant, convertible security or other rights to purchase or subscribe for Voting Securities which, in each case, had been issued in compliance with Section 6.12(a) or under Section 6.12(c)(i), (iii) securities issued pursuant to any Stockholder if stock split, combination of stock, stock dividend or other similar stock recapitalization, (iv) shares of Voting Securities issued pursuant to an employee stock option or similar plan, (v) shares of Voting Securities issued in connection with the Company has not consummated acquisition of the stock or assets or of any proposed other Person (vi) shares of Voting Securities issued pursuant to any registered public offering under the 1933 Act, or (vii) any issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless Offered Securities occurring after the Purchasers collectively own less than 11% of whether it shall have delivered an Issuance Notice in respect the outstanding shares of such proposed issuanceCommon Stock.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.3. AMENDMENT TO ARTICLE 7
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Preemptive Rights. (a) The Company shall give So long as the Conversant Parties Beneficially Own at least 14.9% of the outstanding shares of Common Stock on an as-converted basis, each Stockholder written notice (an “Issuance Notice”) Conversant Investor will have the preemptive rights set forth in this Section 5 with respect to any issuance of any proposed issuance by Equity Securities that are issued after the Company of date hereof (any Shares at least ten such issuance, other than those described in clauses (10i) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(ethrough (vi) below, if a “Preemptive Rights Issuance”), except for (i) issuances of any such Shares are purchased, each Stockholder shall be entitled shares of Common Stock or options or rights to purchase such Stockholder’s Pro Rata Share shares or other form of the Shares proposed equity-based or equity-related awards (including restricted stock units) to be issued to a third-partyemployees (or prospective employees who have accepted an offer of employment), at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02directors or consultants, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreementsany present or future employee, equity purchase director or equity option plans, equity bonuses consultant benefit plan or awards, warrants, contracts program of or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person assumed by the Company or any of its Subsidiaries or of any employee agreements or arrangements or programs in effect as of the Closing Date (including the New LTIP (as defined in the A&R Investment Agreement)), or thereafter adopted by the Board of Directors, (ii) issuances of securities pursuant to any merger, joint venture, partnership, consolidation, mergerdissolution, purchase liquidation, tender offer, recapitalization, reorganization, share exchange, business combination or similar transaction or any other direct or indirect acquisition by the Company, whereby the Company’s securities comprise, in whole or in part, the consideration paid by the Company in such transaction, which transaction has been approved by the Board of Directors and, to the extent then applicable, approved by Investor A in accordance with Section 4, (iii) issuances of shares of Common Stock upon conversion or exercise of any of preferred stock, option or Derivative Instrument, in each case, outstanding as of the Closing Date or 2 To be updated to the extent the Closing does not occur in 2021. if issued after the Closing Date, were either exempt from Investor A’s rights under this Section 5(a) or were offered to the Conversant Investors in accordance with this Section 5, (iv) by reason of a dividend, stock split or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series distribution of related transactions, a material amount of the assets or equity ownership of such other PersonCommon Stock, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits issuances of any shares of Series A Preferred Stock pursuant to the Company terms of the A&R Investment Agreement (including issuances of Common Stock upon conversation of such shares of Series A Preferred Stock in accordance with the Certificate of Designations), or any of its Subsidiaries and (vi) issued issuances of any Equity Securities with respect to which Investor A waives in connection with an Initial Public Offeringwriting the rights of all of the Conversant Investors pursuant to this Section 5.
(b) Each Stockholder may exercise his If the Company at any time, or her rights under this Section 4.02 by delivering from time to time, effects a Preemptive Rights Issuance, the Company shall give prompt written notice of his or her election to purchase such Shares to the Company, within ten (10) Business Days Conversant Investors and each of receipt their Affiliates party to this Agreement that holds any Equity Securities of the Issuance Notice. A delivery of such notice Company (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchaseeach, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the an “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating StockholderInvestor Holder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty ten (12010) days from prior to such issuance), which notice shall set forth the date number and type of the Issuance Notice. At securities to be issued, the consummation issuance date, the offerees or transferees, the price per security, and all of the other terms and conditions of such issuance, which shall be deemed updated by delivery of the final documentation for such issuance to the Conversant Investors. Each Investor Holder may, by written notice to the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120a “Preemptive Rights Notice”) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from days after receipt of the notice referred Preemptive Rights Notice, elect to herein purchase a number of securities specified in such Preemptive Rights Notice (which number may be any number up to but not exceeding the number of securities which, if divided by the sum of (i) such number of securities plus (ii) the number of securities issued in such Preemptive Rights Issuance, would represent a percentage that is equal to (A) the aggregate number of shares of Common Stock (on substantially an as-converted basis if applicable) that such Investor Holder owns immediately prior to such Preemptive Rights Issuance, divided by (B) the total number of shares of Common Stock then outstanding on an as-converted basis), on the same terms and conditions as such salePreemptive Rights Issuance (it being understood and agreed that the price per security that the Investor Holders shall pay shall be the same as the price per security set forth in the Preemptive Rights Notice); provided, howeverthat any Investor Holder shall not be entitled to acquire any such shares of Common Stock to the extent the issuance of such Common Stock to such Investor Holder would require approval of the stockholders of the Company pursuant to the rules and listing standards of NYSE, in which case the Company may consummate the proposed issuance prior to obtaining approval of the stockholders of the Company (subject to compliance by the Company with Section 5(d)). If an Investor Holder exercises its preemptive rights hereunder with respect to such Preemptive Rights Issuance, the price Company shall (or shall cause such Subsidiary to) issue to such Investor Holder (or its designated Affiliate(s)) the number of securities specified in such Shares Preemptive Rights Notice promptly thereafter (and provided that, if such Investor Holder shall be identical have so notified the Company at least three Business Days prior to the price paid issuance date set forth in the Company’s notice, at such offer Investor Holder’s election such purchase and salesale shall occur on the same date as, or substantially concurrently with, the Preemptive Rights Issuance).
(gc) The provisions of election by any Investor Holder not to exercise its preemptive rights hereunder in any one instance shall not affect its right as to any future Preemptive Rights Issuances.
(d) Notwithstanding anything to the contrary in this Agreement, in the event that any Investor Holder exercises its preemptive rights pursuant to this Section 4.02 shall terminate after 5 and the Initial Public Offeringpurchase or issuance of such securities would require the Company to obtain approval of its stockholders pursuant to the listing rules of the NYSE or such national securities exchange that the Common Stock is listed upon, if any, the Company and the Investor Holder will use their respective commercially reasonable efforts to negotiate in good faith the terms of any such transaction, including without limitation the terms of any securities of the Company issued pursuant to such transaction to the Investor Holder, such that the issuance to the Investor Holder would not require such stockholder approval while providing the Investor Holder and/or its Affiliates with substantially similar benefits and rights of such securities issued in the Preemptive Rights Issuance.
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Preemptive Rights. (a) The If the Company shall give each Stockholder written notice proposes to issue and sell to any Investor or any other party (an the “Issuance NoticeProposed Purchasers”) (i) any Securities or (ii) any securities containing options or rights to acquire any shares of Common Stock, or (iii) any proposed issuance by securities convertible into shares of Common Stock (such shares and other securities are hereinafter collectively referred to as “Newly Issued Securities”), the Company of any Shares at least ten (10) Business Days prior will first offer to the proposed issuance date. The Issuance Notice shall specify Major Stockholder other than the Proposed Purchasers (each a “Preemptive Investor”) a portion of the number and class or amount of such Shares and securities proposed to be sold in any such transaction or series of related transactions equal to such Preemptive Investor’s Ownership Percentage of the price at which such Shares are number of shares proposed to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person sold by the Company or in any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount all for the same price and upon the same terms and conditions (including any requirement to purchase other securities) as the securities that are being offered in such transaction or series of transactions (such portion, the “Pro Rata Share”). The Major Stockholder shall have the same rights set forth in this Section 2.5 in regards to issuances of equity securities of any subsidiary of the assets or equity ownership of such Company other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits than to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public OfferingCompany.
(b) Each Stockholder may exercise his or her rights under Notwithstanding the foregoing, the provisions of this Section 4.02 by delivering notice of his or her election to purchase such Shares 2.5 shall not be applicable to the Company, within ten (10) Business Days issuance of receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of securities (i) upon the Excess Shares and conversion of shares of one class of Company capital stock into shares of another class; (ii) as a fractiondividend or distribution on (or payment of accrued yield in respect of) the outstanding Securities or in connection with any ratable stock splits, reclassifications, recapitalizations, consolidations or similar events affecting the numerator Securities, (iii) in any transaction in respect of which is the Aggregate Ownership of a Security that class of Shares offered by the Fully Participating StockholderCompany to all holders of such Security on a pro rata basis, as (iv) to financing sources of the case may beCompany in connection with the issuance of debt or restructuring or recapitalization of existing debt, on terms approved by the Board of Directors, after consultation with Centerbridge, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Noticeaccordance with this Agreement; provided, provided thathowever, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later may more than an aggregate of one hundred and twenty percent (1201%) days from the date of the Issuance Notice. At the consummation outstanding shares of such issuance, the Company shall record the Shares in book entry format representing the Shares to Common Stock be purchased by each Stockholder exercising preemptive rights issued pursuant to this Section 4.02 registered in the name of such Stockholderclause (iv), against payment by such Stockholder (v) to officers, directors or employees of the purchase price for such Shares. If Company or any Subsidiary pursuant to stock option plans or other equity incentive compensation plans or arrangements, on terms approved by the Board of Directors, (vi) in a Public Offering, or (vii) as consideration in connection with a business acquisition by the Company proposes pursuant to issue any class a bona fide sale, whether by merger, consolidation, sale of Shares after such one hundred and twenty (120) day period assets or on other terms materially less favorable sale or exchange of capital stock or otherwise, to the issuerextent approved by the Board of Directors and otherwise in accordance with this Agreement, it shall again comply with the procedures set forth in this including Section 4.02.
(e) 3.6. The Company shall not be under any obligation to consummate any proposed issuance of Shares and Newly Issued Securities, nor shall there will be no any liability on the part of the Company to any Stockholder Investor if the Company has not consummated any proposed issuance of Shares Newly Issued Securities pursuant to this Section 4.02 2.5 for whatever reason, regardless of whether it shall have delivered an Issuance a Preemptive Notice (as defined below) in respect of such proposed issuance.
(fc) The Company may offer and sell Shares subject will give to the preemptive Preemptive Investors a written notice setting forth the price, terms and conditions (including the proposed closing date on which the Newly Issued Securities will be purchased and sold) (the “New Issuance Closing Date”) upon which the Preemptive Investors may purchase such shares or other securities in accordance with Section 2.5(a) (the “Preemptive Notice”). After receiving a Preemptive Notice, the Preemptive Investors must reply, in writing, within ten (10) days of the date of delivery of such Preemptive Notice that such Persons (or its designated Affiliate(s), who shall execute a Joinder) agree to purchase the shares or other securities offered pursuant to this Section 2.5 on the date of proposed sale (the “Preemptive Reply”). Each Preemptive Investor shall provide a copy of its Preemptive Reply to the other Preemptive Investor concurrently with its delivery of its Preemptive Reply to the Company. If any Preemptive Investor fails to exercise its rights under this Section 4.02 2.5 or elects to exercise such rights with respect to less than such Preemptive Investor’s Pro Rata Share (the “Non-Electing Preemptive Investor”), the other Preemptive Investor that has exercised or elected to exercise its rights to purchase its entire Pro Rata Share (the “Electing Preemptive Investor”) shall be entitled to purchase from the Company the number of Newly Issued Securities that the Non-Electing Preemptive Investor would have been entitled to purchase had it elected to purchase its entire Pro Rata Share or such number of Newly Issued Securities equal to the difference between the Non-Electing Preemptive Investor’s Pro Rata Share and the number of Newly Issued Securities elected to be purchased by the Non-Electing Preemptive Investor (all such unpurchased securities, the “Excess Shares”), as the case may be. An Electing Preemptive Investor shall deliver written notice to the Company and the Non- Electing Preemptive Investor of the Electing Preemptive Investor’s decision to purchase the Excess Shares within 5 days after the earlier of (i) the Non-Electing Preemptive Investor’s delivery of its Preemptive Reply to the Company and (ii) the end of the ten (10) day period referred to above. If the Preemptive Investors fail to deliver a Preemptive Reply or if all Newly Issued Securities are not purchased by the Preemptive Investors in accordance with this Section 2.5, shares or other securities offered to the Preemptive Investors may thereafter, for a period not exceeding six (6) months following the date of the Preemptive Notice, be issued, sold or subjected to rights or options to the proposed original investors at a price and on terms no less than that at which they were offered to the Preemptive Investors. The purchase and sale shall take place on the New Issuance Closing Date or such other date as the parties may agree.
(d) Notwithstanding the requirements of this Section 2.5, the Company may make an issuance of Newly Issued Securities at any time without first offering such Shares to each Stockholder or complying with the procedures requirements of this Section 4.02, 2.5(a) and (c) (a “Delayed Issuance”) so long as each Stockholder receives prompt written notice within three (3) business days after the date of the issuance of the Newly Issued Securities, the Company delivers a “Preemptive Escrow Notice” to the Preemptive Investors and otherwise complies with this Section 2.5(d). Such Preemptive Escrow Notice shall set forth the price, terms and conditions upon which the Preemptive Investors may purchase shares of Newly Issued Securities (which shall be the same price, terms and conditions with respect to which the Newly Issued Securities were issued), the amount of Newly Issued Securities that such sales and thereafter Preemptive Investor is given entitled to receive (such amount to equal the amount of Newly Issued Securities that such Preemptive Investor would have been entitled to receive if such Preemptive Investor had the opportunity to participate in the issuance of the Newly Issued Securities on a pro rata basis in accordance with Section 2.5(a)). A Preemptive Investor may exercise the preemptive right by delivery to the Company and the other Preemptive Investor, within twenty (20) days of the date the Company mailed or caused to be mailed the Preemptive Escrow Notice, of a written notice specifying the number of shares of Newly Issued Securities such Preemptive Investor proposes to purchase his or her respective Pro Rata Share of the number of shares of Newly Issued Securities such Preemptive Investor is entitled to purchase (the “Preemptive Election”). If there is a Non-Electing Preemptive Investor, the other Electing Preemptive Investor shall be entitled to purchase the Excess Shares and shall deliver written notice thereof to the Company within forty-five (455) days after the close earlier of (i) the delivery of the Non- Electing Preemptive Investor’s Preemptive Election and (ii) the end of such sale and in any event no later than ten twenty (1020) Business Days from receipt day period referred to above. Promptly after the expiration of the notice referred twentieth (20th) day after the Company has given the Preemptive Escrow Notice, (A) the Company shall sell to herein on substantially each Preemptive Investor that number of shares of Newly Issued Securities that each such Preemptive Investor proposed to purchase pursuant to its Preemptive Election and (B) when such shares have been issued to such Preemptive Investors, all remaining Newly Issued Securities which Preemptive Investors were entitled to purchase but for which they did not deliver a Preemptive Election may be sold to the same original proposed investors upon the terms and conditions as set forth in the Preemptive Escrow Notice for a period not exceeding six (6) months after the original issuance of Newly Issued Securities to such sale, howeverinvestors. In the event of a Delayed Issuance, the price of such Shares Company shall be identical to not make any dividend or distribution on the price paid such offer and sale.
(g) The provisions of Newly Issued Securities or otherwise effect any transaction involving the Newly Issued Securities until after the Company has complied in full with this Section 4.02 shall terminate after the Initial Public Offering2.5(d).
Appears in 1 contract
Preemptive Rights. If at any time prior to the one year anniversary of the Closing Date, the Company proposes to issue any equity Common Stock or Common Stock Equivalents (collectively, “New Issue Securities”), the Company shall first offer the New Issue Securities to the Investors in accordance with the following provisions:
(a) The Company shall give each Stockholder a written notice to each Investor (an the “Issuance First Notice”) stating (i) its intention to issue the New Issue Securities, (ii) the number and description of any the New Issue Securities proposed issuance by to be issued and (iii) the Company proposed purchase price (calculated as of any Shares at least ten (10) Business Days prior to the proposed issuance date. The Issuance Notice shall specify the number ) and class of such Shares and the price at which such Shares are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in upon which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of is proposing to offer the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public OfferingNew Issue Securities.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice Transmittal of his or her election to purchase such Shares the First Notice to the CompanyInvestors by the Company shall constitute an offer by the Company to sell each Investor up to his, within ten her or its proportionate number (10) Business Days of receipt based upon his, her or its percentage ownership of the Issuance Notice. A delivery total number of such notice (which notice shall specify the number (or amountissued and outstanding shares of Common Stock) of Shares to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the New Issue Securities for the price and on upon the terms and conditions specified set forth in the Issuance First Notice, the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, the purchase of such Shares.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (For a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares that each Stockholder have elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) day period shall be extended until the expiration of five (5) Business Days after receipt of the of the First Notice to the Investors, each Investor shall have the option, exercisable by written notice to the Company, to accept ("Notice of Acceptance") the Company’s offer as to all or any part of such approvals Investor’s proportionate number of the New Issue Securities. If two or more types of New Issue Securities are to be issued or New Issue Securities are to be issued together with other types of securities, including, without limitation, debt Securities, in a single transaction or related transactions, the rights to purchase New Issue Securities granted to the Investors under this Section must be exercised to purchase all types of New Issue Securities and such other securities in the same proportion as such New Issue Securities and other securities are to be issued by the Company.
(c) The Company shall have been received, but in no event later than one hundred and twenty thirty (12030) days from Business Days after the date of the Issuance Notice. At the consummation of such issuanceFirst Notice to offer, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholderissue, against payment by such Stockholder sell or exchange all or any part of the purchase price for such Shares. If New Issue Securities as to which a Notice of Acceptance has not been given by the Company proposes Investors, but only upon terms and conditions that are not more favorable to issue any class of Shares after such one hundred and twenty (120) day period the acquiring person or on other terms materially persons or less favorable to the issuer, it shall again comply with the procedures Company than those set forth in this Section 4.02the First Notice.
(ed) The Company preemptive rights contained in this Section shall not be under apply to the issuance and sale by the Company, from time to time hereafter, of (i) shares of Common Stock or Common Stock Equivalents to employees, officers, or directors of, or consultants to, the Company, as compensation for their services to the Company or any obligation of its direct or indirect Subsidiaries pursuant to consummate any proposed arrangements approved by the Board of Directors of the Company, (ii) the issuance of Shares the Securities pursuant to the Transaction Documents and there will be no liability on the part issuance and exercise of the warrants issuable to MidSouth Capital, Inc. pursuant to its engagement letter with the Company in connection with the offering subject to this Agreement, (iii) shares of Common Stock issued and sold in a firm commitment underwritten public offering (which shall not include an equity line of credit or similar financing arrangement) resulting in net proceeds to the Company of in excess of $15,000,000 or (iv) shares of Common Stock issued as consideration for the acquisition of another company or business in which the shareholders of the Company to any Stockholder if do not have a majority ownership interest, which acquisition has been approved by the Board of Directors of the Company has or (v) shares of Common Stock issuable upon the exercise of outstanding Common Stock Equivalents (but not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuanceamendments thereto).
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 shall terminate after the Initial Public Offering.
Appears in 1 contract
Preemptive Rights. (aA) The Company During the Investor Approval Period, other than upon (w) any issuances from the Partnership's equity incentive plans in effect from time to time, (x) the conversion of the Class B Units, (y) adjustments pursuant to Section 5.12(b)(ix) or (z) the issuance of (1) General Partner Units pursuant to Section 5.2(b), (2) Units pursuant to the Unit Purchase Agreement, (3) the CEI Class B Units and (4) the CTPL Class B Units, the Partnership shall give each Stockholder written notice not issue or transfer any Equity Securities other than in compliance with this Section 5.12(b)(vii), Section 5.8 and Section 5.12(b)(ix). If at any time the Partnership wishes to issue or transfer to any Person any Equity Securities, the Partnership shall (an “Issuance Notice”1) of any proposed issuance by the Company of any Shares at least promptly, but not later than ten (10) Business Days days prior to the planned date of any such issuance or transfer, deliver a notice of such proposed issuance dateor transfer to the Purchaser (the “Equity Securities Notice”) and (2) promptly deliver a notice to the Purchaser of approval of such issuance or transfer by the Board of Directors. The Issuance Equity Securities Notice shall specify include (x) a description of the number Equity Securities, (y) the identity of the proposed recipient(s) of the Equity Securities if such proposed recipient(s) have been identified and class (z) a description of such Shares the consideration and the price at which such Shares are to be issued and the other material terms and conditions of upon which the issuance. Subject to Section 4.02(e) belowproposed issuance or transfer is being made (provided, if any that in no event shall such Shares are purchased, each Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-party, at the price and on the other terms and conditions specified in include matters that would violate the Issuance Notice. For purposes of Purchaser's rights pursuant to this Section 4.025.12(b)(vii)), “Excluded Securities” shall include together with a copy of any Shares: written agreements relating thereto.
(iB) issued as a dividend or a distributionDuring the Investor Approval Period, the Purchaser and the General Partner (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with the exercise of any financing or leasing transactions, (iv) issued rights of the General Partner pursuant to the acquisition Section 5.8 (each an “Electing Party”) shall have an option for a period of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, three (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering notice of his or her election to purchase such Shares to the Company, within ten (103) Business Days from the date that the Board of receipt Directors approves the issuance of the Issuance Equity Securities, which shall be no sooner than 13 days from the Equity Securities Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares , to be purchased by such Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder elect to purchase, at the same price and on the same material terms and conditions specified as described in the Issuance Equity Securities Notice, some or all of the offered Equity Securities in an amount up to the Electing Party's Preemptive Share, by delivering to the Partnership irrevocable written notice within such period setting forth the number of shares (or amount) of Shares specified in such Stockholder’s notice. If, at Equity Securities which the termination of such ten (10) Business Day- period, any Stockholder shall not have exercised his or her rights Electing Party wishes to purchase any of such Stockholder’s Pro Rata Share of such Shares, such Stockholder shall be deemed and an undertaking to have waived all of its rights under this Section 4.02 with respect to, and only with respect to, pay in full at closing the purchase of price for such SharesEquity Securities.
(cC) If any Stockholder elects to the General Partner does not exercise his or her preemptive rights under its right set forth in Section 5.8 and this Section 4.02 5.12(b)(vii) to purchase its Preemptive Share of the Equity Securities stated in the Equity Securities Notice, then the Purchaser shall have an option for a period of three (3) Business Days after the Purchaser's receipt of notice that the General Partner has not exercised all or elects any portion of such right to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled elect to purchase an additional amount of such Equity Securities up to the aggregate amount of offered Equity Securities not committed to be purchased by the General Partner. The Purchaser desiring to exercise its option set forth in this Section 5.12(b)(vii)(C) shall deliver irrevocable written notice to the Partnership within such three (3) Business Day period setting forth the number of Shares equal Equity Securities which the Purchaser wishes to purchase and an undertaking to pay in full at closing the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholderspurchase price for such Equity Securities.
(dD) The Company closing of the Equity Securities offered pursuant to the Equity Securities Notice shall have occur concurrently with the closing of the offering contemplated in the Equity Securities Notice. The Purchaser shall pay the same amount per Equity Security that the Partnership would receive from the underwriters (to the extent the Equity Securities are contemplated being sold pursuant to an underwritten sale) in connection with any exercise of its preemptive rights pursuant to Section 5.8 and this Section 5.12(b)(vii).
(E) Any Equity Securities for which the Purchaser or the General Partner, as applicable, has not elected to purchase following the expiration of the applicable period(s) set forth in Section 5.12(b)(vii)(C) and Section 5.12(b)(vii)(D) may be sold or transferred to the proposed recipient(s) on substantially the same terms and conditions set forth in the Equity Securities Notice at any time during the period ending ninety (90) days from the date after termination of the Issuance Notice to consummate the proposed issuance of any or all later of such Shares applicable period. Any Equity Securities that each Stockholder have elected not the Partnership desires to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, issue or transfer following such ninety (90) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) days from the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company proposes to issue any class of Shares after such one hundred and twenty (120) day period or on other terms materially less favorable to the issuer, it shall again comply with the procedures set forth in this Section 4.02.
(e) The Company shall not be under any obligation to consummate any proposed issuance of Shares and there will be no liability on the part of the Company to any Stockholder if the Company has not consummated any proposed issuance of Shares pursuant to this Section 4.02 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, set forth in the price of such Shares shall Equity Securities Notice must be identical offered to the price paid such offer Purchaser and sale.
(g) The provisions the General Partner and its Affiliates with a new Equity Securities Notice pursuant to the terms of this Section 4.02 shall terminate after the Initial Public Offering5.12(b)(vii).
Appears in 1 contract
Samples: Limited Partnership Agreement (Cheniere Energy Partners, L.P.)
Preemptive Rights. (a) The Board of Managers shall have the authority to issue Company Securities in such amounts and at such purchase prices per Company Security as determined by the Board of Managers, subject to the provisions of this Section 3.04 and Section 5.02(b). Subject to Section 3.04(e), the Company shall give each Stockholder deliver written notice (an “Issuance Notice”) to each Investor of any proposed issuance by the Company of any Shares Company Securities at least ten (10) Business Days 20 days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and the cash price at which such Shares Company Securities are to be issued and the other material terms and conditions of the issuance. Subject to Section 4.02(e) below, if any such Shares are purchased3.04(e), each Stockholder Investor shall be entitled to purchase up to such StockholderInvestor’s Pro Rata Share pro rata percentage (determined by dividing the number of Class L Units held by such Investor by the total number of Class L Units then issued and outstanding and held by all of the Shares Investors) of the Company Securities proposed to be issued to a third-partyissued, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his or her rights under this Section 4.02 by delivering An Investor shall deliver written notice of his or her its election to purchase such Shares Company Securities to the Company, Company and each other Investor within ten (10) Business Days 15 days of receipt of the Issuance Notice. A Such delivery of such notice (which notice shall specify the number (or amount) of Shares Company Securities to be purchased by such Stockholder the Investor submitting such notice) to the Company shall constitute exercise by such Stockholder shall constitute Investor of its rights under this Section 3.04 and a binding agreement of such Stockholder Investor to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares Company Securities specified in such StockholderInvestor’s notice. If, at the termination of such ten (10) Business Day- 15-day period, any Stockholder Investor shall not have exercised his or her its rights to purchase any of such Stockholder’s Pro Rata Share its pro rata percentage of such SharesCompany Securities, such Stockholder Investor shall be deemed to have waived all of its rights under this Section 4.02 3.04 with respect to, and only with respect to, to the purchase of such SharesCompany Securities (but, for the avoidance of doubt, shall not have waived its rights with respect to any future purchase of Company Securities). To the extent that any Investor does not exercise its rights under Section 3.04(a) in full, the Company shall provide the Investors who have elected to exercise their rights in full with the opportunity to purchase the remaining Company Securities which were the subject of the Issuance Notice (the “Remaining Securities”). In such event, such Investors may elect to purchase any or all of the Remaining Securities; provided that each such electing Investor shall receive its proportionate share of the Remaining Securities based on the aggregate number of Company Securities such Investors as a group elect to purchase if such number is more than the number or amount of Remaining Securities.
(c) If any Stockholder elects to exercise his or her preemptive rights under this Section 4.02 or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share (the “Excess Shares”), any participating Stockholder electing to exercise his or her rights with respect to his or her full Pro Rata Share (a “Fully Participating Stockholder”) shall be entitled to purchase an additional number of Shares equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholders.
(d) The Company shall have ninety (90) 90 days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares Company Securities that each Stockholder the Investors have not elected not to purchase at the price and upon terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice, provided that, if such issuance is subject to regulatory approval, such ninety (90) -day period shall be extended until the expiration of five days after all such approvals have been received, but in no event later than 180 days from the date of the Issuance Notice. The closing of any purchase of such Company Securities that Investors have elected to purchase pursuant to such Issuance Notice shall take place at the same time as the issuance to non-Members.
(5d) If the Investors have elected to purchase all of the Company Securities proposed to be issued at any one time pursuant to this Section 3.04, the consummation of such purchase shall take place as soon as practicable (but in no event more than 45 days) following the receipt of all notices from the Investors indicating such election; provided that if such purchase is subject to regulatory approval, such 45 day period shall be extended until the expiration of 5 Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) 90 days from following the date receipt of the Issuance Noticesuch election notices. At the consummation of the issuance of such issuanceCompany Securities, the Company shall record issue the Shares in book entry format representing the Shares Company Securities to be purchased by each Stockholder Investor exercising preemptive rights pursuant to this Section 4.02 3.04 registered in the name of such StockholderInvestor, against payment by such Stockholder Investor of the purchase price for such SharesCompany Securities as specified in the Issuance Notice. If the Company proposes to issue any class of Shares Company Securities after such one hundred and twenty (120) 90-day period or on other terms materially less favorable to the issuer(as it may be extended as provided above), it shall again comply with the procedures set forth in this Section 4.023.04.
(e) Notwithstanding the foregoing, no Investor shall be entitled to purchase Company Securities as contemplated by this Section 3.04 in connection with issuances of (i) Company Securities to employees of the Company or any of its Subsidiaries pursuant to employee benefit plans or arrangements approved by the Board of Managers (including upon the exercise of employee incentive grants made pursuant to any such plans or arrangements) or (ii) Company Securities as consideration for any bona fide, arm’s-length direct or indirect merger, acquisition or similar transaction approved by the Board of Managers in accordance with the provisions of this Agreement. The Company shall not be under any obligation obligated to consummate any proposed issuance of Shares and there will Company Securities, nor be no liability on the part of the Company liable to any Stockholder Investor if the Company has not consummated any proposed issuance of Shares Company Securities pursuant to this Section 4.02 3.04 for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this This Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 3.04 shall terminate after the upon consummation of an Initial Public Offering.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Express Parent LLC)
Preemptive Rights. (a) The Prior to the consummation of an IPO, the Company shall give each Stockholder of the Stockholders that is an “accredited investor” (as such term is defined in Rule 501(a) of the Securities Act) as of the time of any proposed issuance by the Company of any Equity Securities to any of the Avista Funds, any of their respective Affiliates, or any Avista Permitted Transferee (collectively, the “Avista Entities”), written notice (an “Issuance Notice”) of any such proposed issuance by the Company of any Shares at least ten (10) Business Days days prior to the proposed issuance date. The Issuance Notice shall specify the number and class type of such Shares Equity Securities and the price at which such Shares Equity Securities are proposed to be issued to the Avista Entities and the other material terms and conditions of such issuance, including the issuanceproposed closing date. Subject to Section 4.02(e) below, if any such Shares are purchased5.04(g), each such Stockholder shall be entitled to purchase such Stockholder’s Pro Rata Share of the Shares proposed to be issued to a third-partypurchase, at the price and on the other terms and conditions specified in the Issuance Notice. For purposes , its pro rata amount of this Section 4.02, “Excluded Securities” shall include any Shares: such newly issued Equity Securities to the Avista Entities equal to (ix) issued as a dividend or a distribution, (ii) granted or the number of such Equity Securities proposed to be issued to employeesthe Avista Entities by the Company, officersmultiplied by (y) a fraction, directors, consultants or advisors the numerator of which is the Aggregate Ownership of Common Stock of such Stockholder and the denominator of which is equal to the Aggregate Ownership of the Company or any Common Stock of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offeringall Stockholders.
(b) Each Stockholder may exercise his or her its rights under this Section 4.02 5.04 by delivering written notice of his or her its election to purchase such Shares Equity Securities to the Company, Company within ten (10) Business Days of days after receipt of the Issuance Notice. A delivery of such notice (which notice shall specify the number (or amount) of Shares shares of such Equity Securities requested to be purchased by such the Stockholder submitting such notice) by such Stockholder shall constitute a binding agreement of such Stockholder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares such Equity Securities specified in such Stockholder’s notice. If, at the termination of such ten (10) Business Day- 10 day-period, any Stockholder shall has not have exercised his or her rights its right to purchase any of such Stockholder’s Pro Rata Share its pro rata share of such SharesEquity Securities, such Stockholder shall be deemed to have waived all of its rights under this Section 4.02 5.04 with respect to, and only with respect to, the purchase of such SharesEquity Securities specified in the Issuance Notice.
(c) If any Stockholder elects of the Stockholders fails to exercise his or her its preemptive rights under this Section 4.02 5.04, or elects to exercise such rights with respect to less than such Stockholder’s Pro Rata Share pro rata share (the difference between such Stockholder’s pro rata share and the number of shares for which such Stockholder exercised its preemptive rights under this Section 5.04 (the “Excess Shares”)), any participating Stockholder electing to exercise his or her its rights with respect to his or her its full Pro Rata Share pro rata share (a “Fully Participating Stockholder”) shall be entitled to purchase from the Company an additional number of Shares shares of such Equity Securities equal to the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class Common Stock of Shares by the such Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class Common Stock of Shares by all Fully Participating Stockholders, in each case, as of immediately prior to the exercise of any preemptive rights pursuant to Section 5.04(b) with respect to such proposed issuance of such Equity Securities; provided, that, notwithstanding the foregoing, in the event that any Avista Entity fails to exercise its preemptive rights under this Section 5.04 or elects to exercise such rights with respect to less than such Avista Entity’s pro rata share, the right to purchase the Excess Shares attributable to such Avista Entity shall be allocated to any Person designated by the Avista Funds in their sole discretion.
(d) The Company shall have ninety one-hundred and twenty (90120) days from after the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares Equity Securities that each Stockholder the Stockholders have elected not to purchase at the same (or higher) price and upon such other terms and conditions that are not materially less favorable to the Company than those specified in the Issuance Notice; provided, provided that, that if such issuance is subject to regulatory approval, such ninety (90) 120-day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one one-hundred and twenty eighty (120180) days from after the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format issue certificates representing the Shares such Equity Securities to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 5.04 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such SharesEquity Securities. If the Company proposes to issue any class of Shares such Equity Securities after such one hundred and twenty (120) -day period or during such 120-day period at a lower price or on such other terms materially less favorable to the issuerCompany, it shall again comply with the procedures set forth in this Section 4.025.04.
(e) The closing of any issuance of Equity Securities to the Stockholders pursuant to this Section 5.04, shall take place at the time and in the manner provided in the Issuance Notice. The Company shall not be under any no obligation to consummate any proposed issuance of Shares and Equity Securities, nor shall there will be no any liability on the part of the Company to any Stockholder Stockholder, if the Company has not consummated any proposed issuance of Shares such Equity Securities pursuant to this Section 4.02 5.04 for whatever reason, except willful misconduct or breach of this Agreement, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares shares of Equity Securities subject to the preemptive rights under this Section 4.02 5.04 to the Avista Entities without first offering such Shares Equity Securities to each Stockholder of the other Stockholders or complying with the procedures of this Section 4.025.04, so long as (i) each Stockholder of the other Stockholders receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share consummation of such Shares sales, (ii) either the Company or the Avista Entity purchasing such Equity Securities commits (at the time of such initial sale) to make available for sale to such Stockholders a number of shares of such Equity Securities equal to (x) the number of shares of such Equity Securities issued by the Company to the Avista Entities multiplied by (y) a fraction, the numerator of which is the Aggregate Ownership of Common Stock of such Stockholder (excluding the number of Common Stock, if applicable, issued by the Company with respect to this provision) and the denominator of which is equal to the Aggregate Ownership of Common Stock of all Stockholders (excluding the number of Common Stock, if applicable, issued by the Company with respect to this provision), within forty-five sixty (4560) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such prior sale, however, and (iii) the price per share of such Shares Equity Security shall be identical to the price per share paid in such offer and prior sale.
(g) The preemptive rights under this Section 5.04 shall not apply to (i) issuances or sales of Equity Securities upon exercise, conversion or exchange of Equity Securities that were either outstanding as of the Closing Date or which, when issued, were issued to officers and/or directors of the Company or any of its Subsidiaries pursuant to employee benefit or similar plans or arrangements of the Company approved in accordance with Section 2.07(m), (ii) Equity Securities distributed or set aside ratably to all holders of a specified class of Equity Securities on a per share equivalent basis, (iii) issuances or sales in, or in connection with, the IPO, a merger of the Company with or into another Person or an acquisition by the Company of another Person or substantially all the assets of another Person, subject to the provisions of this Section 4.02 shall terminate after the Initial Public Offering2.07(f) and Section 2.07(g), or (iv) issuances of any Equity Security as a bona-fide “equity kicker” to any Avista Entity that provides any debt financing.
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Preemptive Rights. (a) The Company Partnership shall give each Stockholder of Buyer and L Brands, for so long as each such Person (together with its Permitted Transferees) holds at least 50% of such Person’s Initial Ownership (each such Person that meets such criteria, a “Preemptive Partner”), written notice (an “Issuance Notice”) of any proposed issuance by the Company Partnership of any Shares Units, by any Subsidiary of the Partnership of any equity securities of such Subsidiary, or by the Partnership or any Subsidiary of any securities convertible into or exchangeable for Units or any equity securities of the Partnership or any Subsidiary of the Partnership) (the “New Securities”) at least ten (10) Business Days 30 days prior to the proposed issuance date. The Issuance Notice shall specify the number and class of such Shares and set forth the price at which such Shares New Securities are to be issued and the all other material terms and conditions of the such issuance. Subject to Section 4.02(e) below, if any such Shares are purchased9.05(f), each Stockholder Preemptive Partner shall be entitled to purchase up to such StockholderLimited Partner’s Pro Rata Share Percentage Interest (as determined immediately before giving effect to such issuance) of the Shares aggregate number of New Securities proposed to be issued to a third-party(such amount, the “Pro Rata Share”), at the price and on the other terms and conditions specified in the Issuance Notice. For purposes of this Section 4.02, “Excluded Securities” shall include any Shares: (i) issued as a dividend or a distribution, (ii) granted or issued to employees, officers, directors, consultants or advisors of the Company or any of its Subsidiaries pursuant to incentive agreements, equity purchase or equity option plans, equity bonuses or awards, warrants, contracts or other arrangements that are approved by the Board, (iii) issued or issuable to lenders or lessors in connection with any financing or leasing transactions, (iv) issued pursuant to the acquisition of another Person by the Company or any of its Subsidiaries by consolidation, merger, purchase or other transaction in which the Company or such Subsidiary acquires, in a single transaction or series of related transactions, a material amount of the assets or equity ownership of such other Person, (v) issued to Persons who the Board in good faith reasonably believes will provide strategic benefits to the Company or any of its Subsidiaries and (vi) issued in connection with an Initial Public Offering.
(b) Each Stockholder may exercise his Preemptive Partner who desires to purchase any or her rights under this Section 4.02 by delivering all of its Pro Rata Share of the New Securities specified in the Issuance Notice shall deliver written notice to the Partnership (each, an “Exercise Notice”) of his or her its election to purchase such Shares to the Company, New Securities within ten (10) Business Days of 30 days after its receipt of the Issuance Notice. A delivery of such notice (which notice The Exercise Notice shall specify the number (or amount) of Shares New Securities to be purchased by such Stockholder submitting such notice) Preemptive Partner and shall constitute exercise by such Stockholder shall constitute Preemptive Partner of its rights under this Section 9.05 and a binding agreement of such Stockholder Preemptive Partner to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of shares (or amount) of Shares New Securities specified in such Stockholder’s noticethe Exercise Notice. If, at the termination of such ten (10) Business Day- 30-day period, any Stockholder Preemptive Partner shall not have exercised his or her rights delivered an Exercise Notice to purchase any of such Stockholder’s Pro Rata Share of such Sharesthe Partnership, such Stockholder Preemptive Partner shall be deemed to have waived all of its rights under this Section 4.02 Section 9.05 with respect to, and only with respect to, to the purchase of such SharesNew Securities. Promptly following the termination of such 30-day period, the Partnership shall deliver to each Preemptive Partner a copy of all Exercise Notices it received.
(c) If any Stockholder elects Preemptive Partner fails to exercise his or her its preemptive rights under this Section 4.02 Section 9.05 or elects to exercise such rights with respect to less than such StockholderPreemptive Partner’s Pro Rata Share (Share, the “Excess Shares”)Partnership shall notify the other Preemptive Partner, any participating Stockholder electing if the other Preemptive Partner has delivered an Exercise Notice to exercise his or her its rights with respect to his or her full purchase its entire Pro Rata Share (a “Fully Participating Stockholder”) Share, that such other Preemptive Partner shall be entitled to purchase an additional number of Shares equal from the Partnership all New Securities with respect to which the product of (i) the Excess Shares and (ii) a fraction, the numerator of which is the Aggregate Ownership of that class of Shares by the Fully Participating Stockholder, as the case may be, and the denominator of which is equal to the sum of the Aggregate Ownership of that class of Shares by all Fully Participating Stockholdersother Preemptive Partner shall not have exercised its preemptive rights.
(d) The Company Partnership shall have ninety (90) 90 days from the date of the Issuance Notice to consummate the proposed issuance of any or all of such Shares the New Securities that each Stockholder the Preemptive Partners have not elected not to purchase at on substantially the price and upon same or more favorable (as to the Partnership) terms and conditions that are not materially less favorable to the Company than those specified as were set forth in the Issuance Notice with respect to such New Securities at a price not less than the price set forth in such Issuance Notice, ; provided that, if such issuance is subject to regulatory approval, such ninety (90) -day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than one hundred and twenty (120) ; provided further that such issuance shall be consummated within 180 days from of the date of the Issuance Notice. At the consummation of such issuance, the Company shall record the Shares in book entry format representing the Shares to be purchased by each Stockholder exercising preemptive rights pursuant to this Section 4.02 registered in the name of such Stockholder, against payment by such Stockholder of the purchase price for such Shares. If the Company Partnership proposes to issue any class of Shares such New Securities after such one hundred and twenty 90-day (120or 180-day) day period or on other terms materially less favorable to the issuerperiod, it shall again comply with the procedures set forth in this Section 4.02Section 9.05.
(e) The Company shall not be under any obligation to consummate any proposed At the consummation of the issuance of Shares such New Securities, the Partnership shall issue certificates or other instruments representing the New Securities (if, in the General Partner acting by the GP Board’s discretion, such New Securities are to be certificated) to be purchased by each Preemptive Partner exercising preemptive rights pursuant to this Section 9.05 registered in the name of such Preemptive Partner, against payment by such Preemptive Partner of the purchase price for such New Securities in accordance with the terms and conditions as specified in the Issuance Notice.
(f) Notwithstanding the foregoing, no Preemptive Partner shall be entitled to purchase New Securities as contemplated by this Section 9.05 in connection with (i) issuances of Units or other New Securities (or options to acquire Units or other New Securities) to officers, directors or service providers of the Partnership or any of its Subsidiaries pursuant to the Equity Plan or any other incentive compensation agreement, plan or arrangement approved by the General Partner acting by the GP Board, (ii) issuance of equity securities of any wholly owned Subsidiary of the Partnership to the Partnership or any other wholly owned Subsidiary of the Partnership, (iii) issuances of Units or other equity securities to a Third Party as consideration for any bona fide, arm’s length direct or indirect merger, acquisition or similar transaction approved by the General Partner acting by the GP Board in accordance with the provisions of this Agreement including Section 4.02(f), (iv) a transaction or reorganization pursuant to Section 9.06 or (v) issuances of any Units or other equity securities or any securities issued or issuable in respect of Units or other equity securities by way of conversion, exchange, stock dividend, split or combination, recapitalization, merger, consolidation, other reorganization or otherwise pursuant to a Public Offering, in each case that is in accordance with the provisions of this Agreement including Section 4.02(f), if applicable.
(g) Notwithstanding anything contained in this Section 9.05, there will shall be no liability on the part of the Company Partnership to any Stockholder Preemptive Partner or any other Person if the Company has not consummated any proposed issuance of Shares New Securities pursuant to this Section 4.02 9.05 is not consummated for whatever reason, regardless of whether it shall have delivered an Issuance Notice in respect of such proposed issuance.
(f) The Company may offer and sell Shares subject to the preemptive rights under this . This Section 4.02 without first offering such Shares to each Stockholder or complying with the procedures of this Section 4.02, so long as each Stockholder receives prompt written notice of such sales and thereafter is given the opportunity to purchase his or her respective Pro Rata Share of such Shares within forty-five (45) days after the close of such sale and in any event no later than ten (10) Business Days from receipt of the notice referred to herein on substantially the same terms and conditions as such sale, however, the price of such Shares shall be identical to the price paid such offer and sale.
(g) The provisions of this Section 4.02 9.05 shall terminate after upon the Initial Public Offeringconsummation of an IPO.
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