Board of Directors Voting. So long as at least 1,000,000 shares of Preferred Stock (as adjusted for any stock dividends, combinations or splits with respect to such shares occurring after the date hereof) remain outstanding, each Initial Stockholder and Investor hereby agrees to vote all shares of the Company’s capital stock now or hereafter directly or indirectly owned (of record or beneficially) by such Initial Stockholder or Investor and otherwise to take such action as shall be necessary to: (a) elect and appoint to the Board of Directors of the Company the following persons: (i) three (3) individuals designated by the holders of a majority of the outstanding shares of Preferred Stock, voting as a single class, one (1) of which shall be the designee of ▇▇▇▇▇ ▇▇▇▇▇ Fund VII, L.P. (“SRF”) for so long as SRF and its Affiliates hold not less than 2,000,000 shares of Preferred Stock in the aggregate (as adjusted for any stock dividends, combinations or splits with respect to such shares occurring after the date hereof), and one (1) of which shall be the designee of Communications Ventures IV, L.P. (“ComVen”) for so long as ComVen and its affiliates hold not less than 2,000,000 shares of Preferred Stock in the aggregate (as adjusted for any stock dividends, combinations or splits with respect to such shares occurring after the date hereof); and (ii) two (2) individuals designated by the holders of a majority of the outstanding shares of Common Stock, voting as a class, one (1) of which shall be the then-current Chief Executive Officer of the Company and one (1) of which shall be the designee of the holders of a majority of the outstanding shares of Common Stock held by persons and entities whose shares of Common Stock were not issued by reason of the conversion of any series of the Company’s Preferred Stock, voting as a class; (b) ensure that in the event the number of authorized directors is increased beyond five (5), the persons filling any newly-created seats shall be approved by both the holders of a majority of the outstanding Common Stock, voting as a class, and the holders of a majority of the Preferred Stock, voting as a class; (c) allow for Enterprise Development Fund II, Limited Partnership (“EDF”) to have an observer attend all meetings of the Board of Directors for so long as EDF and its Affiliates hold not less than 700,000 shares of Preferred Stock in the aggregate (as adjusted for any stock dividends, combinations or splits with respect to such shares occurring after the date hereof); provided that such observer shall first enter into a standard nondisclosure agreement with the Company; (d) allow for ARCH Venture Fund IV, L.P. (“ARCH”) to have an observer attend all meetings of the Board of Directors for so long as ARCH and its Affiliates hold not less than 700,000 shares of Preferred Stock in the aggregate (as adjusted for any stock dividends, combinations or splits with respect to such shares occurring after the date hereof); provided that such observer shall first enter into a standard nondisclosure agreement with the Company; and (e) ensure that the Board of Directors shall consist of the following persons immediately following the first closing of the Company’s Series A-1 Preferred financing pursuant to the Purchase Agreement: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ (who shall be Chairman), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇.
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Board of Directors Voting. So long as at least 1,000,000 shares of Preferred Stock (as adjusted for any stock dividends, combinations or splits with respect to such shares occurring after the date hereof) remain outstanding, each Initial Stockholder and Investor hereby agrees to vote all shares of the Company’s capital stock now or hereafter directly or indirectly owned (of record or beneficially) by such Initial Stockholder or Investor and otherwise to take such action as shall be necessary to:
(a) elect and appoint to the Board of Directors of the Company the following persons:
(i) two (2) individuals designated by the holders of a majority of the outstanding shares of Series B-1 Preferred Stock (each, a “Series B-1 Director”), voting as a single class, one (1) of which shall be the designee of ARCH Venture Partners (“AVP”) for so long as AVP and its Affiliates hold not less than 2,000,000 shares of Preferred Stock in the aggregate (as adjusted for any stock dividends, combinations or splits with respect to such shares occurring after the date hereof), and one (1) of which shall be the designee of New Enterprise Associates (“NEA”) for so long as NEA and its affiliates hold not less than 2,000,000 shares of Preferred Stock in the aggregate (as adjusted for any stock dividends, combinations or splits with respect to such shares occurring after the date hereof); and
(ii) three (3) individuals designated by the holders of a majority of the outstanding shares of Series A-1 Preferred StockStock (each, a “Series A-1 Director”), voting as a single class, one (1) of which shall be the designee of ▇▇▇▇▇ ▇▇▇▇▇ Fund VII, L.P. (“SRF”) for so long as SRF and its Affiliates hold not less than 2,000,000 shares of Preferred Stock in the aggregate (as adjusted for any stock dividends, combinations or splits with respect to such shares occurring after the date hereof), and one (1) of which shall be the designee of Communications Ventures IV, L.P. (“ComVen”) for so long as ComVen and its affiliates hold not less than 2,000,000 shares of Preferred Stock in the aggregate (as adjusted for any stock dividends, combinations or splits with respect to such shares occurring after the date hereof); and;
(iiiii) two one (21) individuals individual designated by the holders of a majority of the outstanding shares of Common Stock, voting as a class, one (1) of which shall be the then-current Chief Executive Officer of the Company and (the “CEO Director”); and
(iv) one (1) of which shall be the designee individual designated by mutual agreement of the holders of a majority of Series B-1 Directors, the outstanding shares of Common Stock held by persons Series A-1 Directors and entities whose shares of Common Stock were not issued by reason of the conversion of any series of CEO Director (the Company’s Preferred Stock, voting as a class“Outside Director”);
(b) ensure that in the event the number of authorized directors is increased beyond five seven (57), the persons filling any newly-created seats shall be approved by both the holders of a majority of the outstanding Common Stock, voting as a class, and the holders of a majority of the Preferred Stock, voting as a class;
(c) allow for Enterprise Development Fund II, Limited Partnership The Wellcome Trust (“EDFTWT”) to have an observer attend all meetings of the Board of Directors for so long as EDF TWT and its Affiliates hold not less than 700,000 2,000,000 shares of Preferred Stock in the aggregate (as adjusted for any stock dividends, combinations or splits with respect to such shares occurring after the date hereof); and to receive all materials provided to the Board of Directors at the time as such directors; provided that such observer shall first enter into a standard nondisclosure agreement with the Company;
(d) allow for ARCH Venture Fund IV, L.P. (“ARCH”) to have an observer attend all meetings of the Board of Directors for so long as ARCH and its Affiliates hold not less than 700,000 at least 1,000,000 shares of Preferred Stock in the aggregate (as adjusted for any stock dividends, combinations or splits with respect to such shares occurring after shares) remain issued and outstanding, each authorized committee of the date hereof); provided that such observer Board of Directors shall first enter into a standard nondisclosure agreement with the Company; andinclude at least 1 Series B-1 Director;
(e) ensure that the Board of Directors shall consist of the following persons immediately following the first closing of the Company’s Series A-1 B-1 Preferred financing pursuant to the Purchase Agreement: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (Series B-1 Director), ▇▇▇ ▇▇▇▇▇▇▇ (▇, who shall be ChairmanChairman (SRF designee and Series A-1 Director), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (ComVen designee and Series A-1 Director), ▇▇▇▇▇▇ ▇▇▇▇▇▇ (Series A-1 Director), ▇▇▇ ▇▇▇▇▇▇ (CEO Director) and Tingye Li (Outside Director);
(f) elect the second Series B-1 Director upon designation of such director by NEA; and
(g) ensure that the Company shall execute and deliver a Director Indemnification Agreement for the Series B-1 Director designated by NEA in the form attached as Exhibit I to the Purchase Agreement.
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Sources: Preferred Stockholder Agreement (Xtera Communications, Inc.)