Common use of Stand Still Clause in Contracts

Stand Still. Until the earlier of (i) conversion in full by the Investor of the Preferred Shares, (ii) the occurrence of a Significant Event, the Investor covenants and agrees with the Company that it will not directly or in concert with others make any nominations to the Board (other than pursuant to this Agreement) or make any shareholder proposals for other shareholder business. A “Significant Event” shall mean any of the following: (a) the acquisition by any person or 13D Group (as defined below) of beneficial ownership of Voting Securities (as defined below) representing 10% or more of the then outstanding Voting Securities of the Company or a right to nominate or appoint a member of the Board; (b) the announcement or commencement by any person or 13D Group of a tender or exchange offer to acquire Voting Securities which, if successful, would result in such person or 13D Group owning, when combined with any other Voting Securities owned by such person or 13D Group, 10% or more of the then outstanding Voting Securities; and (c) the Company enters into or otherwise determines to seek to enter into any merger, sale or other business combination transaction pursuant to which the outstanding shares of common stock of the Company (the “Common Stock”) would be converted into cash or securities of another person or 13D Group or 50% or more of the then outstanding shares of Common Stock would be owned by persons other than current holders of shares of Common Stock, or which would result in all or a substantial portion of the Company’s assets being sold to any person or 13D Group. “Voting Securities” shall mean at any time shares of any class of capital stock of the Company that are then entitled to vote generally in the election of directors; provided that for purposes of this definition any securities that at such time are convertible or exchangeable into or exercisable for shares of Common Stock shall be deemed to have been so converted, exchanged or exercised. “13D Group” shall mean any group of persons formed for the purpose of acquiring, holding, voting or disposing of Voting Securities that would be required under Section 13(d) of the Exchange Act and the rules and regulations thereunder to file a statement on Schedule 13D with the SEC as a “person” within the meaning of Section 13(d)(3) of the Exchange Act.