Board Representation Rights. (a) Effective as of the Closing (as defined in the Investment Agreement), the Board of Directors shall be reconstituted (and the Corporation and the Board of Directors shall cause such reconstitution to occur) such that (i) the number of seats on the Board of Directors shall be as directed by the Principal Investor, (ii) each of such directors (including ▇▇▇▇ ▇▇▇▇▇▇) shall be a person designated by the Principal Investor, (iii) each standing committee of the Board of Directors shall be reconstituted in a manner designated by the Principal Investor and (iv) ▇▇▇▇ ▇▇▇▇▇▇ shall be appointed as the Chairman of the Board of Directors and Chief Executive Officer of the Corporation. The foregoing designations shall be made such that a majority of the Board of Directors and the members of each standing committee of the Board of Directors shall be independent as required in accordance with Nasdaq Stock Market LLC rules (or the rules of any other exchange on which the Corporation’s securities are then listed) and applicable securities laws. Each director designated by the Principal Investor in accordance with this Section 7 of this ARTICLE 6 is referred to herein as an “Principal Investor Appointee.” (b) Subject to Sections 7(d), 7(e) and 7(f) of this ARTICLE 6, in connection with each meeting of stockholders at which directors are to be elected to serve on the Board of Directors, the Corporation shall take all necessary steps to nominate each Principal Investor Appointee (or such alternative persons who are proposed by the Principal Investor and notified to the Corporation on or prior to any date set forth in applicable law with respect to the nomination of directors) and to use its reasonable best efforts to cause the Board of Directors to unanimously recommend that the stockholders of the Corporation vote in favor of each Principal Investor Appointee for election to the Board of Directors. If, for any reason, a candidate designated as an Principal Investor Appointee is determined to be unqualified to serve on the Board of Directors because such appointment would constitute a breach of the fiduciary duties of the Board of Directors or applicable law or stock exchange requirements, the Principal Investor shall have the right to designate an alternative Principal Investor Appointee to be so appointed, and the provisions of this Section 7(b) of this ARTICLE 6 shall apply, mutatis mutandis, to such alternative Principal Investor Appointee. (c) Each appointed or elected Principal Investor Appointee will hold his or her office as a director of the Corporation for such term as is provided in Section 2 of this ARTICLE 6 or until his or her death, resignation or removal from the Board of Directors or until his or her successor has been duly elected and qualified in accordance with the provisions of this Article VI. If any Principal Investor Appointee ceases to serve as a director of the Corporation for any reason during his or her term, the Corporation will use its reasonable best efforts to cause the Board of Directors to fill the vacancy created thereby with a replacement designated by the Principal Investor. (d) Following the Closing, subject to applicable law and applicable stock exchange requirements, the Principal Investor shall have the right to designate persons to the Board of Directors, who shall be Principal Investor Appointees hereunder, as follows: (i) all of the members of the Board of Directors for so long as the Investors (as defined in the Investment Agreement) collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock (as defined in the Investment Agreement) or other voting securities, or Warrants (as defined in the Investment Agreement) exercisable for such securities, representing, in the aggregate, at least eighty percent (80%) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (ii) seventy-five percent (75%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least sixty-five percent (65%) (but less than eighty percent (80%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iii) a majority of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least forty-five percent (45%) (but less than sixty-five percent (65%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iv) forty percent (40%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least thirty percent (30%) (but less than forty-five percent (45%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (v) thirty-three percent (33%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least fifteen (15%) (but less than thirty percent (30%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, and (vi) two members of the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least five percent (5%) (but less than fifteen percent (15%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as converted basis. (e) The Board of Directors shall have no obligation to appoint or nominate any Principal Investor Appointee if such appointment or nomination would violate applicable Law or stock exchange requirements or result in a breach by the Board of Directors of its fiduciary duties to its stockholders; provided, that the foregoing shall not affect the right of the Principal Investor to designate an alternate Principal Investor Appointee. (f) The rights of the Principal Investor set forth in this Section 7 of this ARTICLE 6 shall be in addition to, and not in limitation of, such voting rights that the Principal Investor may otherwise have as a holder of capital stock of the Corporation (including any shares of Preferred Stock held by the Principal Investor).
Appears in 2 contracts
Sources: Investment Agreement (SilverSun Technologies, Inc.), Investment Agreement (SilverSun Technologies, Inc.)
Board Representation Rights. (a) Effective as At or upon completion of the Second Closing (as defined in the Investment Agreement)and provided that PDL BioPharma Inc., fully exercises its Purchase Right, the Board board of Directors directors of the Company shall be reconstituted (and the Corporation and the Board of Directors shall take all actions necessary to cause such reconstitution to occur) such that (i) the number of seats on the Board of Directors shall be as directed by the Principal Investor, (ii) each of such directors (including ▇▇▇▇ ▇▇▇▇▇▇) shall be a person designated by the Principal Investor, (iii) each standing committee of the Board of Directors shall be reconstituted in a manner designated by the Principal Investor and (iv) ▇▇▇▇ ▇▇▇▇▇▇ (in such capacity, the “PDL BioPharma Director” and together with any successors or other directors designated by PDL BioPharma, Inc. pursuant to this Section 8.9, the “PDL BioPharma Directors”) to be appointed to the board of directors of the Company as a class I director. Additionally, at or prior to the Second Closing, ▇▇▇▇ ▇▇▇▇, Ph.D. shall be appointed as a non-voting observer to the Chairman board of directors of the Board of Directors and Chief Executive Officer of Company (in such capacity, the Corporation. The foregoing designations shall be made such that a majority of the Board of Directors and the members of each standing committee of the Board of Directors shall be independent as required in accordance with Nasdaq Stock Market LLC rules (or the rules of any other exchange on which the Corporation’s securities are then listed) and applicable securities laws. Each director designated by the Principal Investor in accordance with this Section 7 of this ARTICLE 6 is referred to herein as an “Principal Investor AppointeePDL BioPharma Observer”).”
(b) Subject to Sections 7(d)From and after the Second Closing Date and provided that PDL BioPharma, 7(e) and 7(f) of this ARTICLE 6Inc. fully exercises its Purchase Right, in connection with each meeting of stockholders for as long as PDL BioPharma, Inc. beneficially own at which directors are to be elected to serve on the Board of Directors, the Corporation shall take all necessary steps to nominate each Principal Investor Appointee (or such alternative persons who are proposed by the Principal Investor and notified to the Corporation on or prior to any date set forth in applicable law with respect to the nomination of directors) and to use its reasonable best efforts to cause the Board of Directors to unanimously recommend that the stockholders least 12.5% of the Corporation vote in favor total number of each Principal Investor Appointee for election to the Board outstanding shares of Directors. IfCommon Stock, for any reasonPDL BioPharma, a candidate designated as an Principal Investor Appointee is determined to be unqualified to serve on the Board of Directors because such appointment would constitute a breach of the fiduciary duties of the Board of Directors or applicable law or stock exchange requirements, the Principal Investor Inc. shall have the exclusive right (but not the obligation), to designate an alternative Principal Investor Appointee to be so appointedthe board of directors, one PDL BioPharma Director and the provisions of this Section 7(b) of this ARTICLE 6 shall apply, mutatis mutandis, to such alternative Principal Investor Appointeeone PDL BioPharma Observer.
(c) Each appointed or elected Principal Investor Appointee will hold his or her office as a director The Company and the board of directors of the Corporation for such term as is provided Company shall consider in Section 2 of this ARTICLE 6 or until his or her death, resignation or removal from good faith designating the Board of Directors or until his or her successor has been duly elected and qualified in accordance with the provisions of this Article VI. If any Principal Investor Appointee ceases PDL BioPharma Director to serve as a director committees of the Corporation for any reason during his or her term, the Corporation will use its reasonable best efforts to cause the Board board of Directors to fill the vacancy created thereby with a replacement designated by the Principal Investordirectors.
(d) Following the ClosingSecond Closing and provided that PDL BioPharma, Inc. fully exercises its Purchase Right, the Company shall take all actions within its power to cause any designee designated pursuant to this Section 8.9 to be included in the slate of nominees recommended by the board of directors of the Company to the holders of Common Stock for election as directors at each meeting of the stockholders of the Company called for the purpose of electing directors (and/or in connection with any election by written consent) and the Company shall use commercially reasonable efforts to cause the election of each such designated PDL BioPharma Directors, including (i) voting or providing a written consent or proxy with respect to Common Stock, and soliciting proxies in favor of the election of such nominees, (ii) causing the adoption of stockholders’ resolutions and amendments to the organizational documents of the Company, (iii) executing required agreements and instruments, (iv) making, or causing to be made, with governmental, administrative or regulatory authorities, all filings, registrations or similar actions that are required to achieve such result and (v) for so long as PDL BioPharma, Inc. retain the rights described under this Section 8.8, not nominating or recommending the election of any other candidates against or in replacement of such designated PDL BioPharma Directors.
(e) Each PDL BioPharma Director and PDL BioPharma Observer designated pursuant to this Section 8.9 shall serve until his or her successor is designated or his or her earlier death, disability, resignation or removal; any vacancy or newly created directorship in the position of an PDL BioPharma Director may be filled only by PDL BioPharma, Inc., subject to applicable law the fulfillment of the requirements set forth in Section 8.9; and applicable stock exchange requirementseach PDL BioPharma Director and PDL BioPharma Observer may, the Principal Investor shall have the right to designate persons during his or her term of office, be removed at any time, without cause, by and only by PDL BioPharma, Inc. and with respect to the Board of DirectorsPDL BioPharma Director, who shall be Principal Investor Appointees hereunderwith cause in accordance with the Delaware General Corporation Law, and with respect to the PDL BioPharma Observer, with cause as follows: (i) all determined by a majority of the members of the Board of Directors for so long as the Investors (as defined in the Investment Agreement) collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock (as defined in the Investment Agreement) or other voting securities, or Warrants (as defined in the Investment Agreement) exercisable for such securities, representing, in the aggregate, at least eighty percent (80%) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (ii) seventy-five percent (75%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least sixty-five percent (65%) (but less than eighty percent (80%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iii) a majority of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least forty-five percent (45%) (but less than sixty-five percent (65%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iv) forty percent (40%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least thirty percent (30%) (but less than forty-five percent (45%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (v) thirty-three percent (33%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least fifteen (15%) (but less than thirty percent (30%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, and (vi) two members of the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least five percent (5%) (but less than fifteen percent (15%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as converted basis.
(e) The Board of Directors shall have no obligation to appoint or nominate any Principal Investor Appointee if such appointment or nomination would violate applicable Law or stock exchange requirements or result in a breach by the Board of Directors of its fiduciary duties to its stockholders; provided, that the foregoing shall not affect the right of the Principal Investor to designate an alternate Principal Investor AppointeeDirectors.
(f) The rights At all times while a PDL BioPharma Director is serving as a member of the Principal Investor set forth board of directors of the Company, and following any such PDL BioPharma Director’s death, disability, resignation or removal, such PDL BioPharma Director shall be entitled to all rights to indemnification and exculpation as are then made available to any other member of the board of directors of the Company.
(g) During any period in which the Mutual Non-Disclosure Agreement, dated February 20, 2019, by and between the Company and PDL BioPharma, Inc. (the “Nondisclosure Agreement”) is not in effect, prior to the PDL Biopharma Observer’s attendance of any meeting of the Company’s board of directors or a committee thereof, the PDL Biopharma Observer will enter into a form of Observer Agreement in a form reasonably acceptable to the Company and PDL BioPharma, Inc. (the “Observer Agreement”). The Observer Agreement will provide, among other things, that the PDL BioPharma Observer shall agree to hold in confidence all information provided to the PDL BioPharma Observer by the Company or its representatives. Notwithstanding anything in this Agreement, the Nondisclosure Agreement or the Observer Agreement, the Board, or applicable committee of the Board, reserves the right in its sole discretion to exclude the PDL BioPharma Observer from any meeting of the Board or committee as applicable, or any portion thereof.
(h) At all times while a PDL BioPharma Director is serving as a member of the board of directors of the Company, the Company shall furnish PDL BioPharma, Inc. with all information provided to members of the board of directors of the Company; provided, however, that all such information derived under this Section 7 8.9(h) shall be subject to the Nondisclosure Agreement.
(i) The provisions of this ARTICLE 6 Section 8.9 shall be in addition apply solely to the extent permitted by applicable Commission and stock exchange requirements, including, but not limited to, Nasdaq Rule 5640 and not in limitation of, such voting rights that the Principal Investor may otherwise have as a holder of capital stock of the Corporation (including any shares of Preferred Stock held by the Principal Investor)related guidance.
Appears in 2 contracts
Sources: Securities Purchase Agreement (PDL Biopharma, Inc.), Securities Purchase Agreement (Evofem Biosciences, Inc.)
Board Representation Rights. (a) Effective as Prior to the closing of the Closing (Restructuring but after the execution of the Restructuring Agreement by at least 75% of Consenting Noteholders, Consenting Noteholders shall have the right to appoint one member to the Company’s Board to monitor the Restructuring and Restructuring Steps, as defined is more particularized in the Investment Restructuring Agreement to which this Term Sheet shall be annexed. The Noteholders’ Board representative shall be required to approve any material corporate actions proposed to be taken by the Company or any subsidiary that is not in accordance with this Term Sheet or the Restructuring Agreement. The Noteholders’ Board representative shall be entitled to serve on any committee of the Board, and shall also have a veto on actions proposed by any such committee. The Principal Shareholders agree to approve any consequential amendments to the Company’s Articles of Association which may be required to make such veto rights effective in accordance with applicable Dutch laws (if any), prior to the closing of the Restructuring. By the close of the Restructuring, the shareholders of the Company shall elect a new Board of Directors (the “New Board”). The New Board shall comprise seven directors in total. The Ad Hoc Committee (or its successors) shall appoint three directors to the New Board from among four nominees whose identities shall be reconstituted (and provided to the Corporation and Principal Shareholders for their selection. The Principal Shareholders shall appoint three directors to the New Board of Directors shall cause such reconstitution to occur) such that (i) the number of seats on the Board of Directors from among four nominees whose identities shall be as directed provided to the Ad Hoc Committee (or its successors) for their selection. One director shall be appointed to the New Board jointly by both the Principal Shareholders and by the Principal InvestorAd Hoc Committee (or its successors) from among the present members of the Company’s management. Upon the closing of the Restructuring, (ii) each of such directors (including ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇) shall be a person designated by the Principal Investor, (iii) each standing committee of the Board of Directors shall be reconstituted in a manner designated by the Principal Investor and (iv) ▇▇▇▇ ▇▇▇▇▇▇ shall will be appointed elected as the Chairman of the Board New Board. Following the expiry of Directors and Chief Executive Officer six (6) calendar months after the appointment of the CorporationNew Board, an election will be held for a new Chairman. The foregoing designations shall be made such that a majority All members of the New Board shall then be entitled to stand for the position of Directors and the members of Chairman, save that each standing committee New Board member shall not be entitled to vote for his own election to that position. This structure of the New Board shall remain in place until the later of Directors shall be independent as required the Exercise Period or other valid resolution of shareholders voting at a shareholders meeting, convened and conducted in accordance with Nasdaq Stock Market LLC rules (or the rules of any other exchange on which the Corporation’s securities are then listed) Dutch law. The Ad Hoc Committee and applicable securities laws. Each director designated by the Principal Investor in accordance with this Section 7 of this ARTICLE 6 is referred to herein as an “Principal Investor Appointee.”
(b) Subject to Sections 7(d), 7(e) Shareholders shall agree upon appropriate mechanisms and 7(f) of this ARTICLE 6, in connection with each meeting of stockholders at which directors are to be elected to serve on the Board of Directors, the Corporation shall take all necessary steps to nominate each Principal Investor Appointee (or such alternative persons who are proposed by the Principal Investor and notified to the Corporation on or prior to any date set forth in applicable law with respect to the nomination of directors) and to use its their respective reasonable best efforts to cause the ensure that this arrangement regarding Board of Directors to unanimously recommend that the stockholders of the Corporation vote in favor of each Principal Investor Appointee for election to the Board of Directors. If, for any reason, a candidate designated as an Principal Investor Appointee representation is determined to be unqualified to serve on the Board of Directors because such appointment would constitute a breach of the fiduciary duties of the Board of Directors or applicable law or stock exchange requirements, the Principal Investor shall have the right to designate an alternative Principal Investor Appointee to be so appointed, and the provisions of this Section 7(b) of this ARTICLE 6 shall apply, mutatis mutandis, to such alternative Principal Investor Appointee.
(c) Each appointed or elected Principal Investor Appointee will hold his or her office as a director of the Corporation for such term as is provided in Section 2 of this ARTICLE 6 or until his or her death, resignation or removal from the Board of Directors or until his or her successor has been duly elected and qualified implemented in accordance with the provisions statutory requirements of this Article VIDutch law. If any Principal Investor Appointee ceases to serve as a director Following the closing of the Corporation for any reason during his Restructuring, except as set out below or her termmay be required by applicable law, the Corporation will use its reasonable best efforts matters to cause the Board of Directors to fill the vacancy created thereby with a replacement designated be determined by the Principal Investor.
(d) Following the Closing, Company’s Board and/or its shareholders shall not be subject to applicable law and applicable stock exchange requirements, the Principal Investor shall have the right to designate persons to the Board of Directors, who shall be Principal Investor Appointees hereunder, as follows: (i) all of the members of the Board of Directors for so long as the Investors (as defined in the Investment Agreement) collectively own supermajority or control (together with their affiliates) Preferred Stock, Company Common Stock (as defined in the Investment Agreement) or other voting securities, or Warrants (as defined in the Investment Agreement) exercisable for such securities, representing, in the aggregate, at least eighty percent (80%) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (ii) seventy-five percent (75%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least sixty-five percent (65%) (but less than eighty percent (80%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iii) a majority of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least forty-five percent (45%) (but less than sixty-five percent (65%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iv) forty percent (40%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least thirty percent (30%) (but less than forty-five percent (45%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (v) thirty-three percent (33%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least fifteen (15%) (but less than thirty percent (30%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, and (vi) two members of the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least five percent (5%) (but less than fifteen percent (15%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as converted basissimilar rights.
(e) The Board of Directors shall have no obligation to appoint or nominate any Principal Investor Appointee if such appointment or nomination would violate applicable Law or stock exchange requirements or result in a breach by the Board of Directors of its fiduciary duties to its stockholders; provided, that the foregoing shall not affect the right of the Principal Investor to designate an alternate Principal Investor Appointee.
(f) The rights of the Principal Investor set forth in this Section 7 of this ARTICLE 6 shall be in addition to, and not in limitation of, such voting rights that the Principal Investor may otherwise have as a holder of capital stock of the Corporation (including any shares of Preferred Stock held by the Principal Investor).
Appears in 1 contract
Board Representation Rights. (a) Effective as Subject to the terms and conditions of this Agreement and provided that the Stockholder together with its Affiliates Beneficially Owns 15.0% or greater of the Closing (as defined in the Investment Agreement)Outstanding Equity, the Board Stockholder shall have the right (but not the obligation) to nominate up to, but not more than, two designees (each, a “Designee” and collectively, the “Designees”) to serve on the Board. Subject to the terms and conditions of Directors this Agreement and provided that the Stockholder together with its Affiliates Beneficially Owns 10.0% or greater of the Outstanding Equity, but less than 15.0% of the Outstanding Equity, the Stockholder shall have the right (but not the obligation) to nominate up to, but not more than, one Designee to serve on the Board. Other than as provided for in this Agreement, for so long as it holds 10.0% or greater of the Outstanding Equity, the Stockholder shall not nominate additional directors to serve on the Board. The initial Designees shall be reconstituted (▇▇▇▇ ▇▇▇▇▇▇ and the Corporation and the Board of Directors shall cause such reconstitution to occur) such that (i) the number of seats on the Board of Directors shall be as directed by the Principal Investor, (ii) each of such directors (including ▇▇▇▇▇ ▇▇▇▇▇▇) ▇, who shall be a person designated appointed by the Principal InvestorBoard on the date hereof, through the filling of any vacancy on the Board and/or through an increase in the size of the Board. The maximum size of the Board shall be fixed at nine directors, including the Designees.
(iiib) One Designee, as directed by the Stockholder, shall serve on each standing committee of the Board that shall exist from time to time, provided, however, that this requirement shall not apply in the event that such appointment would contravene any applicable rule of Directors shall be reconstituted in a manner designated by The NASDAQ Stock Market or the Principal Investor and (iv) ▇▇▇▇ ▇▇▇▇▇▇ shall be appointed as the Chairman Securities Exchange Commission or applicable provision of the Board Securities Exchange Act of Directors and Chief Executive Officer of the Corporation. The foregoing designations shall be made such that a majority of the Board of Directors and the members of each standing committee of the Board of Directors shall be independent 1934, as required in accordance with Nasdaq Stock Market LLC rules (or the rules of any other exchange on which the Corporation’s securities are then listed) and applicable securities laws. Each director designated by the Principal Investor in accordance with this Section 7 of this ARTICLE 6 is referred to herein as an “Principal Investor Appointeeamended.”
(bc) Subject to Sections 7(d), 7(e) and 7(f) of this ARTICLE 6, in connection with each meeting of stockholders at which directors are to be elected to serve If a vacancy is created on the Board of Directors, the Corporation shall take all necessary steps to nominate each Principal Investor Appointee (or such alternative persons who are proposed by the Principal Investor and notified to the Corporation on or prior to any date set forth in applicable law with respect to the nomination of directors) and to use its reasonable best efforts to cause the Board of Directors to unanimously recommend that the stockholders as a result of the Corporation vote in favor death, disability, retirement, resignation or removal of each Principal Investor Appointee for election to any Designee, then the Board of Directors. If, for any reason, a candidate designated as an Principal Investor Appointee is determined to be unqualified to serve on the Board of Directors because such appointment would constitute a breach of the fiduciary duties of the Board of Directors or applicable law or stock exchange requirements, the Principal Investor Stockholder shall have the right to designate an alternative Principal Investor Appointee a replacement director. To exercise its director designation right, the Stockholder shall recommend to be so appointed, the Nominating and the provisions of Corporate Governance Committee a director candidate to fill such vacancy. Each Designee recommended pursuant to this Section 7(b1(c) of this ARTICLE 6 shall apply, mutatis mutandis, to such alternative Principal Investor Appointee.
(c) Each appointed or elected Principal Investor Appointee will hold his or her office as a director of the Corporation for such term as is provided in Section 2 of this ARTICLE 6 or until his or her death, resignation or removal from the Board of Directors or until his or her successor has been duly elected and be qualified in accordance with the provisions of this Article VI. If any Principal Investor Appointee ceases to serve as a director under the Delaware General Corporation Law (any such Designee, an “Eligible Designee”). The Nominating and Corporate Governance Committee shall evaluate the Designee candidate and recommend their appointment to the Board; provided, however, if the Nominating and Corporate Governance Committee determines in good faith and consistent with its fiduciary duties that a Designee candidate is not an Eligible Designee, the Nominating and Corporate Governance Committee may, in its reasonable discretion, reject such Designee. In such event, the Stockholder shall nominate an alternative Designee for the Nominating and Corporate Governance Committee’s evaluation, such process to continue until a Designee is determined to be an Eligible Designee by the Nominating and Corporate Governance Committee, acting in good faith and consistent with its fiduciary duties. The Board shall appoint, upon the recommendation of the Corporation for any reason during his or her termNominating and Corporate Governance Committee, the Corporation will use its reasonable best efforts to cause the Board of Directors such Designee to fill the vacancy created thereby vacancy. The Board shall approve, upon the recommendation of the Nominating and Corporate Governance Committee, the inclusion of the Designees for election or reelection, as the case may be, at such meeting in its slate of designees in the proxy materials it distributes to its stockholders, shall recommend that the Company’s stockholders vote in favor of such Designees, shall solicit proxies from the Company’s stockholders for the election of such Designees at such meeting, and shall otherwise support such Designees for election in a manner consistent with a replacement designated the manner in which the Company supports its other candidates recommended by the Principal InvestorBoard for election at such meeting.
(d) Following In the Closing, subject to applicable law and applicable stock exchange requirements, event that the Principal Investor Stockholder shall have the right to designate persons to the Board of Directors, who shall be Principal Investor Appointees hereunder, as follows: (i) all own 15.0% or less of the members Outstanding Equity, it shall direct one Designee to offer his or her resignation from the Board. In the event that the Stockholder shall own 10.0% or less of the Board of Directors for so long as Outstanding Equity, its remaining Designee shall offer his or her resignation from the Investors (as defined in the Investment Agreement) collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock (as defined in the Investment Agreement) or other voting securities, or Warrants (as defined in the Investment Agreement) exercisable for such securities, representing, in the aggregate, at least eighty percent (80%) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (ii) seventy-five percent (75%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least sixty-five percent (65%) (but less than eighty percent (80%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iii) a majority of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least forty-five percent (45%) (but less than sixty-five percent (65%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iv) forty percent (40%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least thirty percent (30%) (but less than forty-five percent (45%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (v) thirty-three percent (33%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least fifteen (15%) (but less than thirty percent (30%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, and (vi) two members of the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least five percent (5%) (but less than fifteen percent (15%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as converted basisBoard.
(e) In addition, the Stockholder may at any time cause the removal of any Designee nominated by it from the Board, with or without cause, by directing such Designee to offer his or her resignation from the Board. The Board of Directors shall have no obligation to appoint or nominate accept any Principal Investor Appointee if such appointment or nomination would violate applicable Law or stock exchange requirements or result in a breach by the Board of Directors of its fiduciary duties to its stockholders; provided, that the foregoing shall not affect the right of the Principal Investor to designate an alternate Principal Investor AppointeeDesignee’s resignation offer.
(f) If a Designee directed to offer his or her resignation pursuant to this Section does not offer his or her resignation from the Board, then the Board shall remove such Designee as a member of the Board by majority vote.
(g) A Designee shall be entitled to the same compensation paid and expense reimbursement payable to other non-employee directors. At all times while a Designee is serving as a member of the Board, and following any such Designee’s death, disability, retirement, resignation or removal, such Designee shall be entitled to all rights to indemnification and exculpation as are then made available to any other member of the Board.
(h) The Company and the Board shall not amend, and shall not permit the amendment of, the Bylaws or Certificate of Incorporation of the Company in any manner that would, or would be reasonably likely to, have an adverse effect on the board representation rights of the Principal Investor Stockholder as set forth in such amendment and this Section 7 Agreement.
(i) For the avoidance of doubt, the provisions of this ARTICLE 6 Agreement shall be in addition to, and not in limitation of, such voting limit any rights that the Principal Investor Stockholder may otherwise have as a holder of capital stock stockholder of the Corporation (including any shares Company pursuant to Delaware law, the Certificate of Preferred Stock held by Incorporation or the Principal Investor)Bylaws.
Appears in 1 contract
Sources: Board Representation Agreement (Lonestar Resources US Inc.)
Board Representation Rights. (a) Effective Subject to Section 7.1(b) hereof, for so long as the Investor Beneficially Owns 10% or more of the Closing then outstanding Common Shares (as defined in the Investment Agreementon a non-diluted basis), the Board of Directors Investor shall be reconstituted have the right, upon notice to the Corporation, to designate one (and 1) representative (the “Representative”) which the Corporation and shall nominate for election to the Board (or otherwise include in a management slate of Directors shall cause such reconstitution to occur) such that (i) the number of seats on the Board of Directors shall be as directed directors proposed by the Principal Investor, (iiCorporation for election by its shareholders) each at any meeting of such directors (including ▇▇▇▇ ▇▇▇▇▇▇) shall be a person designated by the Principal Investor, (iii) each standing committee shareholders of the Board of Directors shall be reconstituted in a manner designated by Corporation following the Principal Investor date upon which such notice is given, and (iv) ▇▇▇▇ ▇▇▇▇▇▇ shall be appointed as the Chairman of the Board of Directors and Chief Executive Officer of the Corporation. The foregoing designations shall be made such that a majority of the Board of Directors and the members of each standing committee of the Board of Directors shall be independent as required in accordance with Nasdaq Stock Market LLC rules (or the rules of any other exchange on which the Corporation’s securities are then listed) and applicable securities laws. Each director designated by the Principal Investor in accordance with this Section 7 of this ARTICLE 6 is referred to herein as an “Principal Investor Appointee.”
(b) Subject to Sections 7(d), 7(e) and 7(f) of this ARTICLE 6, in connection with at each meeting of stockholders thereafter at which directors are to be elected to serve elected. Where, between meetings of the Corporation’s shareholders, the Investor has no Representative on the Board but Beneficially Owns Common Shares representing 10% or more of Directorsthe then outstanding Common Shares (on a non-diluted basis), and provides notice to the Corporation of its Representative, the Corporation shall take all such steps that are necessary steps to nominate each Principal Investor Appointee (or such alternative persons who are proposed by the Principal Investor and notified to the Corporation on or prior to any date set forth in applicable law with respect to the nomination of directors) and to use its reasonable best efforts to cause for the Board of Directors to unanimously recommend that appoint the stockholders Representative as a member of the Corporation vote in favor of each Principal Investor Appointee for election to Board by having the Board of Directors. If, for directors fill any reason, a candidate designated as an Principal Investor Appointee is determined to be unqualified to serve vacancy on the Board of Directors because such by the appointment would constitute a breach of the fiduciary duties Representative or, to the extent that there are no vacancies on the Board, to allow the Representative to attend and observe all meetings of the Board Board, and partake in discussions at all meetings of Directors or applicable law or stock exchange requirements, the Principal Investor Board. The Representative shall not have the right to designate an alternative Principal vote at meetings of the Board until such time as the Representative is elected to the Board at a meeting of shareholders of the Corporation or otherwise appointed as a director in accordance with this Section 7.1(a). The Investor Appointee shall give prior notice to be so appointedthe Corporation of any contemplated transaction that would result in the Investor being the Beneficial Owners of less than 10% of the then outstanding Common Shares.
(b) Any Representative proposed by the Investor shall (i) have consented in writing to serve as a director of the Corporation, and (ii) meet the provisions qualification requirements to serve as a director under the CBCA and the rules of this Section 7(b) any stock exchange on which the Common Shares are then listed (currently the TSXV). Notwithstanding anything to the contrary contained herein, no Representative may be a person who does not qualify to serve as a director or a person who has been convicted of this ARTICLE 6 shall apply, mutatis mutandis, to such alternative Principal Investor Appointeea felony or a crime involving moral turpitude.
(c) Each appointed or elected Principal Investor Appointee will hold his or her office as a director Immediately following the latter of the Second Closing Date and the date the Meeting is held, subject to approval of the TSXV and the shareholders of the Corporation for such term as is provided in Section 2 of this ARTICLE 6 or until his or her deathat the Meeting, resignation or removal from the Board shall include the Investor’s initial Representative.
(d) The Corporation shall indemnify the Representative pursuant to the Corporation’s standard form indemnity agreement to be entered into between the Representative and the Corporation. The Corporation further covenants that it will, as soon as reasonably practicable following the appointment of Directors or until his or her successor has been duly elected the Representative to the Board, add the Representative as a named insured person under the Corporation’s directors’ and qualified in accordance with officers’ liability insurance policy.
(e) In the provisions of this Article VI. If any Principal event the Investor Appointee ceases is no longer entitled to a Representative to serve as a director of the Corporation for any reason during his or her term, the Corporation will use its reasonable best efforts to cause the Board of Directors to fill the vacancy created thereby with as a replacement designated by the Principal Investor.
(d) Following the Closing, subject to applicable law and applicable stock exchange requirements, the Principal Investor shall have the right to designate persons to the Board of Directors, who shall be Principal Investor Appointees hereunder, as followsresult of: (i) all the Investor no longer holding the requisite number of issued and outstanding Common Shares of the members of Corporation entitling it to appoint a Representative in accordance with Sections 7.1(a); or (ii) such Representative failing to comply with the Board of Directors for so long as requirements set forth in Section 7.1(b)(iii); then in each case the Investors (as defined in Investor shall cause such Representative to forthwith resign from the Investment Agreement) collectively own or control (together with their affiliates) Preferred StockBoard, Company Common Stock (as defined in the Investment Agreement) or other voting securities, or Warrants (as defined in the Investment Agreement) exercisable for such securities, representingprovided that, in the aggregatecase of Section 7.1(e)(ii), at least eighty percent (80%) of the total voting power of the capital stock of the Corporation, calculated on Investor shall be entitled to propose a fully-diluted, as-converted basis, (ii) seventy-five percent (75%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together new Representative in accordance with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least sixty-five percent (65%) (but less than eighty percent (80%Section 7.1(a)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iii) a majority of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least forty-five percent (45%) (but less than sixty-five percent (65%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iv) forty percent (40%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least thirty percent (30%) (but less than forty-five percent (45%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (v) thirty-three percent (33%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least fifteen (15%) (but less than thirty percent (30%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, and (vi) two members of the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least five percent (5%) (but less than fifteen percent (15%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as converted basis.
(e) The Board of Directors shall have no obligation to appoint or nominate any Principal Investor Appointee if such appointment or nomination would violate applicable Law or stock exchange requirements or result in a breach by the Board of Directors of its fiduciary duties to its stockholders; provided, that the foregoing shall not affect the right of the Principal Investor to designate an alternate Principal Investor Appointee.
(f) The rights of the Principal Investor set forth in For greater certainty, this Section 7 7.1 shall continue in full force and effect for such period of this ARTICLE 6 shall be in addition to, and not in limitation of, such voting rights that time as the Principal Investor may otherwise is entitled to have as a holder of capital stock of Representative on the Corporation (including any shares of Preferred Stock held by the Principal InvestorBoard pursuant to Section 7.1(a).
Appears in 1 contract
Board Representation Rights. (a) Effective The Investor shall have the right as of the Closing date hereof to designate, at its option, by notice to the Company prior to or after the date hereof, (as defined in i) one director (the Investment Agreement), “Investor Nominee”) and (ii) one observer (the “Investor Observer”) to the Board of Directors shall be reconstituted (and as of the Corporation date hereof the Board of Directors has elected one Investor Nominee and appointed one Investor Observer, as previously requested in writing by the Investor, pursuant to a valid resolution that has not been amended or revoked, a true and complete copy of which is attached hereto as Exhibit H. In addition, the Investor and the Board of Directors shall cause such reconstitution promptly select an independent director mutually agreed upon by the Company and the Investor (the “Mutual Director”) to occur) such serve on the Board of Directors. In the event that the Mutual Director has not been selected on or prior to the date hereof, then the Board of Directors and the Investor shall use their best efforts to agree to appoint a Mutual Director as soon as practicable after the date hereof. Except as provided in the Company’s Certificate of Incorporation on the date hereof (i) a true and complete copy of which has been provided to the number Investor prior to the execution of seats this Agreement), any Investor Nominee or the Mutual Director, as the case may be, may be removed, with or without cause, by the affirmative vote of the holders of at least 85% of the shares of common stock outstanding and entitled to vote at the election of directors; provided, however; that any vacancy on the Board of Directors shall be created as directed by a result of the Principal Investorresignation, (ii) each removal or other discontinuation of such directors (including ▇▇▇▇ ▇▇▇▇▇▇) shall be service as a person designated by the Principal Investor, (iii) each standing committee member of the Board of Directors of any Investor Nominee shall be reconstituted in a manner filled by an individual who shall have been (i) designated by the Principal Investor and (iv) ▇▇▇▇ ▇▇▇▇▇▇ shall be appointed as Nominee prior to the Chairman effectiveness of such vacancy, other than in the case of removal of the Board of Directors and Chief Executive Officer of the Corporation. The foregoing designations shall be made such that Investor Nominee for cause, or (ii) nominated or approved in writing by both a majority of the Board of Directors and the members Investor, in the case of each standing committee removal of the Investor Nominee for cause; provided, further, that the foregoing vote requirement shall be of no further force and effect on or after the date that the Investor’s aggregate shares of Common Stock, warrants to purchase shares of Common Stock, or any other equity securities convertible into, or exchangeable for, any Common Stock, shall be less than two (2) percent of the outstanding Common Stock of the Corporation (the “Outstanding Stock”), which Outstanding Stock shall include all shares of Common Stock, warrants to purchase shares of Common Stock whose exercise price is equal to or less than the closing price per share of Common Stock on the trading date immediately prior to such calculation, or any other equity securities convertible into, or exchangeable for, any Common Stock at a conversion price or exchange rate, respectively, that is equal to or less than the closing price per share of Common Stock on the trading date immediately prior to such calculation; provided, further, that the Mutual Director shall only be replaced by an individual who shall have been nominated or approved in writing by both a majority of the Board of Directors and the Investor. Notwithstanding anything contained herein to the contrary, the Investor’s right to nominate an Investor Nominee or Mutual Director, or designate an Investor Observer, shall terminate after the date that the Investor’s aggregate shares of Common Stock, warrants to purchase shares of Common Stock, or any other equity securities convertible into, or exchangeable for, any Common Stock, shall be independent as required in accordance with Nasdaq Stock Market LLC rules less than two (or 2) percent of the rules of any other exchange on which the Corporation’s securities are then listed) and applicable securities laws. Each director designated by the Principal Investor in accordance with this Section 7 of this ARTICLE 6 is referred to herein as an “Principal Investor AppointeeOutstanding Stock.”
(b) Subject The Company shall use its best efforts to Sections 7(d)fulfill its obligations under this Section 3, 7(eand shall take all necessary and desirable actions to cause the nomination and election of any Investor Nominee and the Mutual Director as a director at the Special Meeting and at any subsequent Stockholders’ meeting, including, without limitation, to (i) and 7(f) of this ARTICLE 6, in connection with each call a special meeting of stockholders at which directors are to be elected to serve on the Board of Directors, (ii) call a special meeting of the Corporation shall take all necessary steps to nominate each Principal Investor Appointee Stockholders and (or such alternative persons who are proposed by the Principal Investor and notified iii) recommend to the Corporation on or prior Stockholders to any date set forth in applicable law with respect to the nomination of directors) and to use its reasonable best efforts to cause the Board of Directors to unanimously recommend that the stockholders of the Corporation vote in favor of each Principal the election of the Investor Appointee for election Nominee(s) and the Mutual Director at the Special Meeting, or any other meetings of the Stockholders, to the class of directors that was most recently elected by the Stockholders or appointed by the Board of Directors, as the case may be, to the Board of Directors. If; provided, however, that the Company shall not be obligated to make a payment to any of its stockholders for the purpose of obtaining such stockholder’s proxy in favor of the approval of the Proposals.
(c) The Investor Observer shall be permitted to attend all meetings of the Board of Directors, including all committees thereof, solely in a non-voting capacity and, in connection therewith, the Company shall give such Investor Observer copies of all notices, written materials and other information (including, without limitation, advance notice of any reason, a candidate designated as an Principal Investor Appointee is determined committee meetings and copies of meeting minutes) given to be unqualified to serve on members of the Board of Directors because in connection with such appointment would constitute meetings contemporaneously with any transmission, circulation or delivery of such materials and information to the directors, and if the Company proposes to take any action by written consent in lieu of a breach meeting of its Board of Directors or of any committee thereof, the fiduciary duties Company shall give written notice thereof to each such Investor Observer contemporaneously with any transmission, circulation or delivery of such written consent to the directors; provided, however, that if the Board of Directors, based on the advice of outside legal counsel, determines that, with respect to a specific matter to be included on the agenda for the next meeting of the Board of Directors or applicable law or stock exchange requirementsany committee thereof, that the Principal Investor shall have the right disclosure of information directly related to designate an alternative Principal Investor Appointee such matter and required to be so appointeddiscussed at such meeting (the “Privileged Information”) to the Investor Observer would adversely affect the attorney-client privilege in effect at such time between the Board of Directors and its counsel, then the Board of Directors may withhold solely the Privileged Information from the Investor Observer and shall otherwise permit the provisions of this Section 7(bInvestor Observer to (i) of this ARTICLE 6 shall apply, mutatis mutandis, to such alternative Principal Investor Appointee.
(c) Each appointed or elected Principal Investor Appointee will hold his or her office as a director participate in the portions of the Corporation for such term as is provided in Section 2 meeting of this ARTICLE 6 or until his or her death, resignation or removal from the Board of Directors or until his or her successor has been duly elected and qualified in accordance with the provisions of this Article VI. If any Principal Investor Appointee ceases to serve as a director committee thereof that do not include discussions of the Corporation for Privileged Information and (ii) receive any reason during his or her termother information that the Investor Observer would be entitled to receive. Except as specifically provided in the prior sentence, the Corporation will use its reasonable best efforts to cause the Board Investor Observer may participate in discussions of Directors to fill the vacancy created thereby with a replacement designated by the Principal Investor.
(d) Following the Closing, subject to applicable law any and applicable stock exchange requirements, the Principal Investor shall have the right to designate persons all matters brought to the Board of Directors, who shall be Principal Investor Appointees hereunder, as follows: (i) all of the members of the Board of Directors for so long as the Investors (as defined in the Investment Agreement) collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock (as defined in the Investment Agreement) or other voting securities, or Warrants (as defined in the Investment Agreement) exercisable for such securities, representing, in the aggregate, at least eighty percent (80%) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (ii) seventy-five percent (75%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least sixty-five percent (65%) (but less than eighty percent (80%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iii) a majority of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least forty-five percent (45%) (but less than sixty-five percent (65%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iv) forty percent (40%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least thirty percent (30%) (but less than forty-five percent (45%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (v) thirty-three percent (33%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least fifteen (15%) (but less than thirty percent (30%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, and (vi) two members of the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least five percent (5%) (but less than fifteen percent (15%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as converted basis.
(e) The Board of Directors shall have no obligation to appoint or nominate any Principal Investor Appointee if such appointment or nomination would violate applicable Law or stock exchange requirements or result in a breach by the Board of Directors of its fiduciary duties to its stockholders; provided, that the foregoing shall not affect the right of the Principal Investor to designate an alternate Principal Investor Appointee.
(f) The rights of the Principal Investor set forth in this Section 7 of this ARTICLE 6 shall be in addition to, and not in limitation of, such voting rights that the Principal Investor may otherwise have as a holder of capital stock of the Corporation (including any shares of Preferred Stock held by the Principal Investor).
Appears in 1 contract
Sources: Investment and Exchange Agreement (Emisphere Technologies Inc)
Board Representation Rights. (a) Effective Subject to Section 7.1(b) hereof, for so long as the Investor Beneficially Owns 10% or more of the Closing then outstanding Common Shares (as defined in the Investment Agreementon a non-diluted basis), the Board of Directors Investor shall be reconstituted have the right, upon notice to the Corporation, to designate one (and 1) representative (the “Representative”) which the Corporation and shall nominate for election to the Board (or otherwise include in a management slate of Directors shall cause such reconstitution to occur) such that (i) the number of seats on the Board of Directors shall be as directed directors proposed by the Principal Investor, (iiCorporation for election by its shareholders) each at any meeting of such directors (including ▇▇▇▇ ▇▇▇▇▇▇) shall be a person designated by the Principal Investor, (iii) each standing committee shareholders of the Board of Directors shall be reconstituted in a manner designated by Corporation following the Principal Investor date upon which such notice is given, and (iv) ▇▇▇▇ ▇▇▇▇▇▇ shall be appointed as the Chairman of the Board of Directors and Chief Executive Officer of the Corporation. The foregoing designations shall be made such that a majority of the Board of Directors and the members of each standing committee of the Board of Directors shall be independent as required in accordance with Nasdaq Stock Market LLC rules (or the rules of any other exchange on which the Corporation’s securities are then listed) and applicable securities laws. Each director designated by the Principal Investor in accordance with this Section 7 of this ARTICLE 6 is referred to herein as an “Principal Investor Appointee.”
(b) Subject to Sections 7(d), 7(e) and 7(f) of this ARTICLE 6, in connection with at each meeting of stockholders thereafter at which directors are to be elected to serve elected. Where, between meetings of the Corporation’s shareholders, the Investor has no Representative on the Board but Beneficially Owns Common Shares representing 10% or more of Directorsthe then outstanding Common Shares (on a non-diluted basis), and provides notice to the Corporation of its Representative, the Corporation shall take all such steps that are necessary steps to nominate each Principal Investor Appointee (or such alternative persons who are proposed by the Principal Investor and notified to the Corporation on or prior to any date set forth in applicable law with respect to the nomination of directors) and to use its reasonable best efforts to cause for the Board of Directors to unanimously recommend that appoint the stockholders Representative as a member of the Corporation vote in favor of each Principal Investor Appointee for election to Board by having the Board of Directors. If, for directors fill any reason, a candidate designated as an Principal Investor Appointee is determined to be unqualified to serve vacancy on the Board of Directors because such by the appointment would constitute a breach of the fiduciary duties Representative or, to the extent that there are no vacancies on the Board, to allow the Representative to attend and observe all meetings of the Board Board, and partake in discussions at all meetings of Directors or applicable law or stock exchange requirements, the Principal Investor Board. The Representative shall not have the right to designate an alternative Principal vote at meetings of the Board until such time as the Representative is elected to the Board at a meeting of shareholders of the Corporation or otherwise appointed as a director in accordance with this Section 7.1(a). The Investor Appointee shall give prior notice to be so appointedthe Corporation of any contemplated transaction that would result in the Investor being the Beneficial Owners of less than 10% of the then outstanding Common Shares.
(b) Any Representative proposed by the Investor shall (i) have consented in writing to serve as a director of the Corporation, and (ii) meet the provisions qualification requirements to serve as a director under the CBCA and the rules of this Section 7(b) any stock exchange on which the Common Shares are then listed (currently the TSXV). Notwithstanding anything to the contrary contained herein, no Representative may be a person who does not qualify to serve as a director or a person who has been convicted of this ARTICLE 6 shall apply, mutatis mutandis, to such alternative Principal Investor Appointeea felony or a crime involving moral turpitude.
(c) Each appointed or elected Principal Investor Appointee will hold his or her office as a director Immediately following the latter of the Second Closing Date and the date the Meeting is held, subject to approval of the TSXV and the shareholders of the Corporation for such term as is provided in Section 2 of this ARTICLE 6 or until his or her deathat the Meeting, resignation or removal from the Board shall include the Investor’s initial Representative.
(d) The Corporation shall indemnify the Representative pursuant to the Corporation’s standard form indemnity agreement to be entered into between the Representative and the Corporation. The Corporation further covenants that it will, as soon as reasonably practicable following the appointment of Directors or until his or her successor has been duly elected the Representative to the Board, add the Representative as a named insured person under the Corporation’s directors’ and qualified in accordance with officers’ liability insurance policy. (e) In the provisions of this Article VI. If any Principal event the Investor Appointee ceases is no longer entitled to a Representative to serve as a director of the Corporation for any reason during his or her term, the Corporation will use its reasonable best efforts to cause the Board of Directors to fill the vacancy created thereby with as a replacement designated by the Principal Investor.
(d) Following the Closing, subject to applicable law and applicable stock exchange requirements, the Principal Investor shall have the right to designate persons to the Board of Directors, who shall be Principal Investor Appointees hereunder, as followsresult of: (i) all the Investor no longer holding the requisite number of issued and outstanding Common Shares of the members of Corporation entitling it to appoint a Representative in accordance with Sections 7.1(a); or (ii) such Representative failing to comply with the Board of Directors for so long as requirements set forth in Section 7.1(b)(iii); then in each case the Investors (as defined in Investor shall cause such Representative to forthwith resign from the Investment Agreement) collectively own or control (together with their affiliates) Preferred StockBoard, Company Common Stock (as defined in the Investment Agreement) or other voting securities, or Warrants (as defined in the Investment Agreement) exercisable for such securities, representingprovided that, in the aggregatecase of Section 7.1(e)(ii), at least eighty percent (80%) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (ii) seventy-five percent (75%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least sixty-five percent (65%) (but less than eighty percent (80%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iii) a majority of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least forty-five percent (45%) (but less than sixty-five percent (65%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iv) forty percent (40%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least thirty percent (30%) (but less than forty-five percent (45%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (v) thirty-three percent (33%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least fifteen (15%) (but less than thirty percent (30%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, and (vi) two members of the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least five percent (5%) (but less than fifteen percent (15%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as converted basis.
(e) The Board of Directors shall have no obligation to appoint or nominate any Principal Investor Appointee if such appointment or nomination would violate applicable Law or stock exchange requirements or result in a breach by the Board of Directors of its fiduciary duties to its stockholders; provided, that the foregoing shall not affect the right of the Principal Investor to designate an alternate Principal Investor Appointee.
(f) The rights of the Principal Investor set forth in this Section 7 of this ARTICLE 6 shall be entitled to propose a new Representative in addition to, and not in limitation of, such voting rights that the Principal Investor may otherwise have as a holder of capital stock of the Corporation (including any shares of Preferred Stock held by the Principal Investoraccordance with Section 7.1(a).
Appears in 1 contract
Board Representation Rights. For so long as the Purchasers and their Affiliates continue to jointly beneficially own, whether directly or indirectly, at least five percent (5.0%) of the Company’s total issued and outstanding share capital, the Company shall, subject to applicable Law and the Memorandum and Articles, take all necessary or desirable actions as may be required under applicable Law to, upon delivery of written notice from the Purchasers to the Company, (a) Effective as of the Closing (as defined in the Investment Agreement), the Board of Directors shall be reconstituted (and the Corporation and the Board of Directors shall cause such reconstitution to occur) such that (i) the number of seats on the Board of Directors shall be as directed by the Principal Investor, (ii) each of such directors (including ▇▇▇▇ ▇▇▇▇▇▇) shall be a person an individual jointly designated by the Principal Investor, (iii) each standing committee of the Board of Directors shall be reconstituted in a manner designated by the Principal Investor and (iv) ▇▇▇▇ ▇▇▇▇▇▇ shall Purchasers to be appointed as the Chairman initial Purchaser Director with immediate effect as soon as practicable but in no event later than the (x) the fifteenth (15th) Business Day after receiving written notice from the Purchasers or (y) such later date on which the Company receives the necessary shareholder approval if such shareholder approval is required pursuant to the then effective memorandum and articles of association of the Board of Directors Company and Chief Executive Officer of the Corporation. The foregoing designations shall be made such that a majority of the Board of Directors and the members of each standing committee of the Board of Directors shall be independent as required in accordance with Nasdaq Stock Market LLC rules (or the rules of any other exchange on which the Corporationstock exchanges where the Company’s equity securities are then listed) and applicable securities laws. Each director designated by ; provided that the Principal Investor in accordance with this Section 7 of this ARTICLE 6 is referred to herein as an “Principal Investor Appointee.”
(b) Subject to Sections 7(d), 7(e) and 7(f) of this ARTICLE 6, in connection with each meeting of stockholders at which directors are to be elected to serve on the Board of Directors, the Corporation Company shall take all necessary steps to nominate each Principal Investor Appointee (or such alternative persons who are proposed by the Principal Investor and notified to the Corporation on or prior to any date set forth in applicable law with respect to the nomination of directors) and to use its reasonable best efforts to cause the Board of Directors to unanimously recommend that the stockholders obtain such shareholder approval as soon as possible (with a true copy of the Corporation vote in favor register of each Principal Investor Appointee for election to the Board of Directors. If, for any reason, a candidate designated as an Principal Investor Appointee is determined to be unqualified to serve on the Board of Directors because such appointment would constitute a breach director of the fiduciary duties of the Board of Directors or applicable law or stock exchange requirementsCompany reflecting such appointment, the Principal Investor shall have the right to designate an alternative Principal Investor Appointee to be so appointed, and the provisions of this Section 7(b) of this ARTICLE 6 shall apply, mutatis mutandis, to such alternative Principal Investor Appointee.
(c) Each appointed or elected Principal Investor Appointee will hold his or her office as duly certified by a director of the Corporation for Company, which shall be delivered to the Purchasers within five (5) Business Days after such term appointment), and (b) cause the same individual or any other individual jointly designated by the Purchasers to be reelected or appointed as is the Purchaser Director from time to time thereafter, provided that, in Section 2 of this ARTICLE 6 or until his or her deatheach case, resignation or removal from such individual jointly designated by the Board of Directors or until his or her successor has been duly elected and Purchasers shall be qualified in accordance with the provisions of this Article VI. If any Principal Investor Appointee ceases to serve as a director of the Corporation for any reason during his or her termCompany under applicable Laws and Nasdaq rules.”
2. Section 7.10 of the Subscription Agreement is hereby deleted in its entirety.
3. Except as expressly amended by this Amendment, the Corporation will use its reasonable best efforts terms and provisions of the Subscription Agreement shall continue in full force and effect. No reference to cause this Amendment need be made in any instrument or document making reference to the Board of Directors to fill the vacancy created thereby with a replacement designated by the Principal InvestorSubscription Agreement.
(d) Following the Closing4. This Amendment shall be governed by, subject to applicable law and applicable stock exchange requirementsconstrued in accordance with, the Principal Investor shall have the right to designate persons to the Board of Directors, who shall be Principal Investor Appointees hereunder, as follows: (i) all laws of the members State of the Board New York, without regard to principles of Directors for so long as the Investors (as defined in the Investment Agreement) collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock (as defined in the Investment Agreement) or other voting securities, or Warrants (as defined in the Investment Agreement) exercisable for such securities, representing, in the aggregate, at least eighty percent (80%) conflict of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (ii) seventy-five percent (75%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least sixty-five percent (65%) (but less than eighty percent (80%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iii) a majority of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least forty-five percent (45%) (but less than sixty-five percent (65%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iv) forty percent (40%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least thirty percent (30%) (but less than forty-five percent (45%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (v) thirty-three percent (33%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least fifteen (15%) (but less than thirty percent (30%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, and (vi) two members of the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least five percent (5%) (but less than fifteen percent (15%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as converted basislaws thereunder.
(e) The Board of Directors shall have no obligation to appoint or nominate any Principal Investor Appointee if such appointment or nomination would violate applicable Law or stock exchange requirements or result in a breach by the Board of Directors of its fiduciary duties to its stockholders; provided5. Section 9.5 Arbitration, that the foregoing shall not affect the right of the Principal Investor to designate an alternate Principal Investor Appointee.
(f) The rights of the Principal Investor set forth in this Section 7 of this ARTICLE 6 shall be in addition to9.6 Counterparts, and not in limitation of, such voting rights that the Principal Investor may otherwise have as a holder of capital stock of the Corporation (including any shares of Preferred Stock held by the Principal Investor).Section 9.7
Appears in 1 contract
Sources: Subscription Agreement (Hillhouse Capital Advisors, Ltd.)
Board Representation Rights. (a) Effective as of On the Closing (as defined in the Investment Agreement)Date, the Board of Directors of the Company shall be reconstituted (and the Corporation and the Board of Directors shall cause such reconstitution to occur) such that (i) the number of seats on the Board of Directors of the Company shall be as directed by the Principal Investoreight, (ii) each one of such eight directors (including shall be ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (or, in the event ▇▇. ▇▇▇▇▇▇▇ is unable or unwilling to serve as a director, another qualified person reasonably acceptable to the Investor Representative), (iii) seven of such eight directors shall be a person individuals designated by the Principal InvestorInvestor Representative (including ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇), (iiiiv) each standing committee of the Board of Directors of the Company shall be reconstituted in a manner designated by reasonably acceptable to the Principal Investor Representative and (ivv) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall be appointed as the Chairman of the Board of Directors and Chief Executive Officer of the CorporationCompany. The Notwithstanding anything to the contrary, the foregoing designations shall be made such that a majority of the Board of Directors of the Company and the members of each standing committee of the Board of Directors of the Company shall be independent as required in accordance with Nasdaq Stock Market LLC rules (or the rules of any other exchange on which the Corporation’s securities are then listedNYSE Amex Rule 803(A)(2) and applicable securities lawsLaw. In furtherance of the foregoing, the Company shall deliver to the Investor Representative prior to the Closing evidence reasonably satisfactory to the Investor Representative of the resignation of any directors of the Company that are not continuing directors, effective as of the Closing. Each director designated by the Principal Investor Representative in accordance with this Section 7 of this ARTICLE 6 5.06 is referred to herein as an “Principal Investor Representative Appointee”.”
(b) Subject to Sections 7(d5.06(d), 7(e5.06(e) and 7(f) of this ARTICLE 65.06(f), in connection with each meeting of stockholders at which directors are to be elected to serve on the Board of DirectorsDirectors of the Company, the Corporation Company shall take all necessary steps to nominate each Principal Investor Representative Appointee (or such alternative persons who are proposed by the Principal Investor Representative and notified to the Corporation Company on or prior to any date set forth in the Company Certificate, the Company Bylaws or applicable law with respect to the nomination of directorsLaw) and to use its reasonable best efforts to cause the Board of Directors of the Company to unanimously recommend that the stockholders of the Corporation Company vote in favor of each Principal Investor Representative Appointee for election to the Board of DirectorsDirectors of the Company. If, for any reason, a candidate designated as an Principal Investor Representative Appointee is determined to be unqualified to serve on the Board of Directors of the Company because such appointment would constitute a breach of the fiduciary duties of the Board of Directors of the Company or applicable law Law or stock exchange requirements, the Principal Investor Representative shall have the right to designate an alternative Principal Investor Representative Appointee to be so appointed, and the provisions of this Section 7(b5.06(b) of this ARTICLE 6 shall apply, mutatis mutandis, to such alternative Principal Investor Representative Appointee.
(c) Each appointed or elected Principal Investor Representative Appointee will hold his or her office as a director of the Corporation Company for such term as is provided in Section 2 of this ARTICLE 6 the Company Certificate and Company Bylaws or until his or her death, resignation or removal from the Board of Directors of the Company or until his or her successor has been duly elected and qualified in accordance with the provisions of this Article VIAgreement, the Company Certificate, the Company Bylaws and applicable Law. If any Principal Investor Representative Appointee ceases to serve as a director of the Corporation Company for any reason during his or her term, the Corporation Company will use its reasonable best efforts to cause the Board of Directors of the Company to fill the vacancy created thereby with a replacement designated by the Principal InvestorInvestor Representative.
(d) Following the Closing, subject Subject to applicable law Law and applicable stock exchange requirements, the Principal Investor Representative shall have the right to designate persons to the Board of Directors, who shall be Principal Investor Appointees hereunder, as follows: (i) all no less than a majority of the members of the Board of Directors of the Company pursuant to this Section 5.06 for so long as the Investors (as defined in the Investment Agreement) collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock (as defined in the Investment Agreement) or other voting securities, or Warrants (as defined in the Investment Agreement) exercisable for such securities, representing, in the aggregate, at least eighty percent (80%) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (ii) seventy-five percent (75%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Investor Representative owns Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least sixty-five percent (65%) (but no less than eighty percent (80%)) 33% of the total voting power of the capital stock of the CorporationCompany, calculated on a fully-diluted, as-converted diluted basis, and (iiiii) a majority no less than 25% of the total number members of seats (rounded up to the nearest whole number) on the Board of Directors of the Company pursuant to this Section 5.06 for so long as the Investors collectively own or control (together with their affiliates) Investor Representative owns Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least forty-five percent (45%) (but less than sixty-five percent (65%)) 33% but greater than or equal to 20% of the total voting power of the capital stock of the CorporationCompany, calculated on a fully-diluted, as-converted basis, (iv) forty percent (40%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least thirty percent (30%) (but less than forty-five percent (45%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (v) thirty-three percent (33%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least fifteen (15%) (but less than thirty percent (30%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, and (vi) two members of the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least five percent (5%) (but less than fifteen percent (15%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as converted diluted basis.
(e) Nothing in this Section 5.06 shall prevent the Board of Directors of the Company from acting in accordance with its fiduciary duties or applicable Law or stock exchange requirements or from acting in good faith in accordance with the Company Certificate or Company Bylaws, while giving due consideration to the intent of this Agreement. The Board of Directors of the Company shall have no obligation to appoint or nominate any Principal Investor Representative Appointee if such appointment or nomination would violate applicable Law or stock exchange requirements or result in a breach by the Board of Directors of the Company of its fiduciary duties to its stockholders; provided, however, that the foregoing shall not affect the right of the Principal Investor Representative to designate an alternate Principal Investor Representative Appointee.
(f) The rights of the Principal Investor Representative set forth in this Section 7 of this ARTICLE 6 5.06 shall be in addition to, and not in limitation of, such voting rights that the Principal Investor Representative may otherwise have as a holder of capital stock of the Corporation Company (including any shares of Preferred Stock held by the Principal InvestorInvestor Representative).
Appears in 1 contract
Sources: Investment Agreement (Express-1 Expedited Solutions Inc)
Board Representation Rights. Prior to the Closing, the Company shall take all action necessary to cause the following to occur:
(a) Effective effective as of the Closing (as defined in the Investment Agreement)Closing, the Board of Directors of the Company shall be reconstituted (and the Corporation Company and the Board of Directors of the Company shall cause such reconstitution to occur) such that (i) the number of seats on the Board of Directors of the Company shall be as directed by the Principal InvestorInvestor at least five (5) business days prior to the Closing, (ii) each of such directors (including ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇) shall be a person individuals designated by the Principal InvestorInvestor at least five (5) business days prior to the Closing, (iii) each standing committee of the Board of Directors of the Company shall be reconstituted in a manner designated by the Principal Investor at least five (5) business days prior to the Closing and (iv) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall be appointed as the Chairman of the Board of Directors of the Company and Chief Executive Officer of the CorporationCompany. The foregoing designations shall be made such that a majority of the Board of Directors of the Company and the members of each standing committee of the Board of Directors of the Company shall be independent as required in accordance with Nasdaq Stock Market LLC rules (or the rules of any other exchange on which the Corporation’s securities are then listed) and applicable securities lawsLaw. In furtherance of the foregoing, the Company shall deliver to the Principal Investor prior to the Closing evidence reasonably satisfactory to the Principal Investor of the resignation of each director of the Company that has not been designated by the Principal Investor as a director of the Company from and after the Closing, and the resignation of the Chief Executive Officer, which resignations shall be effective as of the Closing. Each director designated by the Principal Investor in accordance with this Section 7 of this ARTICLE 6 5.06 is referred to herein as an “Principal Investor Appointee.”
(b) Subject to Sections 7(dSection 5.06(d), 7(eSection 5.06(e) and 7(f) of this ARTICLE 6Section 5.06(f), in connection with each meeting of stockholders at which directors are to be elected to serve on the Board of DirectorsDirectors of the Company, the Corporation Company shall take all necessary steps to nominate each Principal Investor Appointee (or such alternative persons who are proposed by the Principal Investor and notified to the Corporation Company on or prior to any date set forth in the Company Organizational Documents or applicable law Law with respect to the nomination of directors) and to use its reasonable best efforts to cause the Board of Directors of the Company to unanimously recommend that the stockholders of the Corporation Company vote in favor of each Principal Investor Appointee for election to the Board of DirectorsDirectors of the Company. If, for any reason, a candidate designated as an Principal Investor Appointee is determined to be unqualified to serve on the Board of Directors of the Company because such appointment would constitute a breach of the fiduciary duties of the Board of Directors of the Company or applicable law Law or stock exchange requirements, the Principal Investor shall have the right to designate an alternative Principal Investor Appointee to be so appointed, and the provisions of this Section 7(b5.06(b) of this ARTICLE 6 shall apply, mutatis mutandis, to such alternative Principal Investor Appointee.
(c) Each appointed or elected Principal Investor Appointee will hold his or her office as a director of the Corporation Company for such term as is provided in Section 2 of this ARTICLE 6 the Company Organizational Documents or until his or her death, resignation or removal from the Board of Directors of the Company or until his or her successor has been duly elected and qualified in accordance with the provisions of this Article VIAgreement, the Company Organizational Documents and applicable Law. If any Principal Investor Appointee ceases to serve as a director of the Corporation Company for any reason during his or her term, the Corporation Company will use its reasonable best efforts to cause the Board of Directors of the Company to fill the vacancy created thereby with a replacement designated by the Principal Investor.
(d) Following the Closing, subject Subject to applicable law Law and applicable stock exchange requirements, the Principal Investor shall have the right to designate persons directors to the Board of Directors, who shall be Principal Investor Appointees hereunder, Directors of the Company pursuant to this Section 5.06 as follows: (i) all of the members of the Board of Directors of the Company for so long as the Investors (as defined in the Investment Agreement) collectively own or control (together with their affiliatesAffiliates) Preferred Stock, Company Common Stock (as defined in the Investment Agreement) or other voting securities, or Warrants (as defined in the Investment Agreement) exercisable for such securities, representing, in the aggregate, at least eighty percent (80%) of the total voting power of the capital stock of the CorporationCompany, calculated on a fully-diluted, as-converted basis, (ii) seventy-five percent (75%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors of the Company for so long as the Investors collectively own or control (together with their affiliatesAffiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least sixty-five percent (65%) (but less than eighty percent (80%)) of the total voting power of the capital stock of the CorporationCompany, calculated on a fully-diluted, as-converted basis, (iii) a majority of the total number of seats (rounded up to the nearest whole number) on the Board of Directors of the Company for so long as the Investors collectively own or control (together with their affiliatesAffiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least forty-five percent (45%) (but less than sixty-five percent (65%)) of the total voting power of the capital stock of the CorporationCompany, calculated on a fully-diluted, as-converted basis, (iv) forty percent (40%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors of the Company for so long as the Investors collectively own or control (together with their affiliatesAffiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least thirty percent (30%) (but less than forty-five percent (45%)) of the total voting power of the capital stock of the CorporationCompany, calculated on a fully-diluted, as-converted basis, (v) thirty-three percent (33%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors of the Company for so long as the Investors collectively own or control (together with their affiliatesAffiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least fifteen (15%) (but less than thirty percent (30%)) of the total voting power of the capital stock of the CorporationCompany, calculated on a fully-diluted, as-converted basis, and (vi) two members of the Board of Directors of the Company for so long as the Investors collectively own or control (together with their affiliatesAffiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least five percent (5%) (but less than fifteen percent (15%)) of the total voting power of the capital stock of the CorporationCompany, calculated on a fully-diluted, as converted basis.
(e) The Board of Directors of the Company shall have no obligation to appoint or nominate any Principal Investor Appointee if such appointment or nomination would violate applicable Law or stock exchange requirements or result in a breach by the Board of Directors of the Company of its fiduciary duties to its stockholders; provided, that the foregoing shall not affect the right of the Principal Investor to designate an alternate Principal Investor Appointee.
(f) The rights of the Principal Investor set forth in this Section 7 of this ARTICLE 6 5.06 shall be in addition to, and not in limitation of, such voting rights that the Principal Investor may otherwise have as a holder of capital stock of the Corporation Company (including any shares of Preferred Stock held by the Principal Investor).
Appears in 1 contract
Sources: Investment Agreement (SilverSun Technologies, Inc.)
Board Representation Rights. (a) Effective From and after the Closing, so long as the Investor (alone or together with its Affiliates) beneficially owns (as determined under Rule 13d-3 of the Closing (as defined in Exchange Act) at least 50% of the Investment Agreement)Shares acquired on the Closing, the Board of Directors shall be reconstituted (and the Corporation and the Board of Directors shall cause such reconstitution to occur) such that (i) the number of seats on the Board of Directors shall be as directed by the Principal Investor, (ii) each of such directors (including ▇▇▇▇ ▇▇▇▇▇▇) shall be a person designated by the Principal Investortogether with its Permitted Transferees, (iii) each standing committee of the Board of Directors shall be reconstituted in a manner designated by the Principal Investor and (iv) ▇▇▇▇ ▇▇▇▇▇▇ shall be appointed as the Chairman of the Board of Directors and Chief Executive Officer of the Corporation. The foregoing designations shall be made such that a majority of the Board of Directors and the members of each standing committee of the Board of Directors shall be independent as required in accordance with Nasdaq Stock Market LLC rules (or the rules of any other exchange on which the Corporation’s securities are then listed) and applicable securities laws. Each director designated by the Principal Investor in accordance with this Section 7 of this ARTICLE 6 is referred to herein as an “Principal Investor Appointee.”
(b) Subject to Sections 7(d), 7(e) and 7(f) of this ARTICLE 6, in connection with each meeting of stockholders at which directors are to be elected to serve on the Board of Directors, the Corporation shall take all necessary steps to nominate each Principal Investor Appointee (or such alternative persons who are proposed by the Principal Investor and notified to the Corporation on or prior to any date set forth in applicable law with respect to the nomination of directors) and to use its reasonable best efforts to cause the Board of Directors to unanimously recommend that the stockholders of the Corporation vote in favor of each Principal Investor Appointee for election to the Board of Directors. If, for any reason, a candidate designated as an Principal Investor Appointee is determined to be unqualified to serve on the Board of Directors because such appointment would constitute a breach of the fiduciary duties of the Board of Directors or applicable law or stock exchange requirements, the Principal Investor shall have the right to designate an alternative Principal a person (the “Investor Appointee to be so appointed, and the provisions of this Section 7(bDesignee”) of this ARTICLE 6 shall apply, mutatis mutandis, to such alternative Principal Investor Appointee.
(c) Each appointed or elected Principal Investor Appointee will hold his or her office as a director of the Corporation for such term as is provided in Section 2 of this ARTICLE 6 or until his or her death, resignation or removal from the Board of Directors or until his or her successor has been duly elected and qualified in accordance with the provisions of this Article VI. If any Principal Investor Appointee ceases to serve as a director of the Corporation for any reason during his or her termCompany, and the Corporation will Company shall nominate and use its reasonable best efforts to cause have the Board Investor Designee elected to the Board. For so long as such membership does not conflict with any applicable law or regulation or listing requirement of Directors Nasdaq, the Investor Designee shall be entitled to fill serve as a member of each of the committees of the Board, except for any committee formed to consider a transaction between the Company and the Investor (or any of its Affiliates). Any vacancy created thereby in the position of an Investor Designee shall only be filled with a replacement another designee designated by the Principal Investor.
Investor or its Permitted Transferees in accordance with the terms hereof. Any vacancy created by any removal of an Investor Designee shall also only be filled at the direction of the Investor or its Permitted Transferees. The Company’s proxy statement for the election of directors shall include the Investor Designee and the recommendation of the Board in favor of election of the Investor Designee. The Investor Designee shall be given notice of (din the same manner that notice is given to other members of the Board) Following all meetings (whether in person, telephonic or otherwise) of the ClosingBoard, subject including all committee meetings with respect to applicable law committees on which the Investor Designee serves. The Investor Designee shall receive a copy of all notices, agendas and applicable stock exchange requirements, the Principal Investor shall have the right to designate persons other materials distributed to the Board Board, whether provided to directors in advance or, during or after any meeting, regardless of Directors, who whether the Investor Designee will be in attendance at the meeting. The Company shall be Principal reimburse the reasonable expenses incurred by the Investor Appointees hereunder, as follows: Designee in connection with attending (iwhether in person or telephonically) all meetings of the Board or committees thereof or other Company related meetings to the same extent as all other members of the Board of Directors for so long as the Investors (as defined in the Investment Agreement) collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock (as defined in the Investment Agreement) or other voting securities, or Warrants (as defined in the Investment Agreement) exercisable are reimbursed for such securities, representingexpenses (or, in the aggregatecase any such expense reimbursement policy shall apply only to non-employee directors, at least eighty percent (80%) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (ii) seventy-five percent (75%) of the total number of seats (rounded up to the nearest whole number) same extent as all other non-employee directors). The Company shall maintain director and officer insurance covering the Investor Designee on the Board same terms and with the same amount of Directors for so long coverage as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or is provided to other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least sixty-five percent (65%) (but less than eighty percent (80%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iii) a majority of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least forty-five percent (45%) (but less than sixty-five percent (65%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (iv) forty percent (40%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least thirty percent (30%) (but less than forty-five percent (45%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, (v) thirty-three percent (33%) of the total number of seats (rounded up to the nearest whole number) on the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least fifteen (15%) (but less than thirty percent (30%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as-converted basis, and (vi) two members of the Board of Directors for so long as the Investors collectively own or control (together with their affiliates) Preferred Stock, Company Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least five percent (5%) (but less than fifteen percent (15%)) of the total voting power of the capital stock of the Corporation, calculated on a fully-diluted, as converted basisBoard.
(e) The Board of Directors shall have no obligation to appoint or nominate any Principal Investor Appointee if such appointment or nomination would violate applicable Law or stock exchange requirements or result in a breach by the Board of Directors of its fiduciary duties to its stockholders; provided, that the foregoing shall not affect the right of the Principal Investor to designate an alternate Principal Investor Appointee.
(f) The rights of the Principal Investor set forth in this Section 7 of this ARTICLE 6 shall be in addition to, and not in limitation of, such voting rights that the Principal Investor may otherwise have as a holder of capital stock of the Corporation (including any shares of Preferred Stock held by the Principal Investor).
Appears in 1 contract
Sources: Common Stock Purchase Agreement (Synutra International, Inc.)