Common use of Spin-Out Preemptive Rights Clause in Contracts

Spin-Out Preemptive Rights. If, at any time after the date of this Agreement, (i) Company creates a subsidiary that is not a wholly owned subsidiary (as hereinafter defined); (ii) any wholly owned subsidiary sells or transfers any shares of capital stock to any entity that is not a wholly owned subsidiary; (iii) any wholly-owned Subsidiary merges, consolidates or takes any other action that results in such subsidiary not remaining a wholly owned subsidiary; or (iv) any wholly owned subsidiary sells all or substantially all of its assets (in a transaction that is not an Extraordinary Transaction) to any person or entity that is not a wholly owned subsidiary, then in each case Company shall cause such subsidiary (or the surviving or successor entity or purchaser of assets) (the “Spin-out Entity”) to (A) issue to Investor shares of preferred stock or common stock, as applicable, of the Spin-out Entity having relative rights, privileges and preferences equivalent to the relative rights, privileges and preferences of the Conversion Shares, Warrant Shares and Option Shares and (B) enter into agreements with Investor having substantially the same rights as any agreements between Investor and Company. The number of shares of such preferred stock and common stock of the Spin-out Entity issued to Investor shall be sufficient so that Investor shall thereafter have an equity ownership interest in the Spin-out Entity equal to its equity ownership interest in Company at such time on a fully-diluted basis, including all options reserved for issuance under any stock incentive, stock option, stock purchase or stock appreciation plan or arrangement maintained by Company or such Spin-out Entity. A “wholly owned subsidiary” is any entity that Company owns, holds and controls all of its capital stock, equity securities or other interests, either directly or through one or more other wholly owned subsidiaries.

Spin-Out Preemptive Rights. If, at any time after the date of this Agreement, (i) Company creates a subsidiary that is not a wholly owned subsidiary (as hereinafter defined); (ii) any wholly owned subsidiary sells or transfers any shares of capital stock to any entity that is not a wholly owned subsidiary; (iii) any wholly-owned Subsidiary merges, consolidates or takes any other action that results in such subsidiary not remaining a wholly owned subsidiary; or (iv) any wholly owned subsidiary sells all or substantially all of its assets (in a transaction that is not an Extraordinary Transaction) to any person or entity that is not a wholly owned subsidiary, then in each case Company shall cause such subsidiary (or the surviving or successor entity or purchaser of assets) (the “Spin-out Entity”) to (A) issue to Investor Cisco shares of preferred stock or common stock, as applicable, of the Spin-out Entity having relative rights, privileges and preferences equivalent to the relative rights, privileges and preferences of the Conversion Shares, Warrant Shares and Option Shares Series F Preferred Stock and (B) enter into agreements with Investor Cisco having substantially the same rights as any agreements between Investor Cisco and Company. The number of shares of such preferred stock and common stock of the Spin-out Entity issued to Investor Cisco shall be sufficient so that Investor Cisco shall thereafter have an equity ownership interest in the Spin-out Entity equal to its equity ownership interest in Company at such time on a fully-diluted basis, including all options reserved for issuance under any stock incentive, stock option, stock purchase or stock appreciation plan or arrangement maintained by Company or such Spin-out Entity. A “wholly owned subsidiary” is any entity that Company owns, holds and controls all of its capital stock, stock equity securities or other interests, either directly or through one or more other wholly owned subsidiaries.

Spin-Out Preemptive Rights. If, at any time after the date of this Agreement, (i) Company creates a subsidiary that is not a wholly owned subsidiary (as hereinafter defined); (ii) any wholly owned subsidiary sells or transfers any shares of capital stock to any entity that is not a wholly owned subsidiary; (iii) any wholly-owned Subsidiary merges, consolidates or takes any other action that results in such subsidiary not remaining a wholly owned subsidiary; or (iv) any wholly owned subsidiary sells all or substantially all of its assets (in a transaction that is not an Extraordinary Transaction) to any person or entity that is not a wholly owned subsidiary, then in each case Company shall cause such subsidiary (or the surviving or successor entity or purchaser of assets) (the “Spin-out Entity”) to (A) issue to the Investor shares of preferred stock or common stock, as applicable, of the Spin-out Entity having relative rights, privileges and preferences equivalent to the relative rights, privileges and preferences of the Conversion Shares, Warrant Shares and Option Shares Series F Preferred Stock and (B) enter into agreements with the Investor having substantially the same rights as any agreements between the Investor and the Company. The number of shares of such preferred stock and common stock of the Spin-out Entity issued to the Investor shall be sufficient so that the Investor shall thereafter have an equity ownership interest in the Spin-out Entity equal to its equity ownership interest in the Company at such time on a fully-diluted basis, including all options reserved for issuance under any stock incentive, stock option, stock purchase or stock appreciation plan or arrangement maintained by the Company or such Spin-out Entity. A “wholly owned subsidiary” is any entity that Company owns, holds and controls all of its capital stock, stock equity securities or other interests, either directly or through one or more other wholly owned subsidiaries.