Common use of Indirect Transfers Clause in Contracts

Indirect Transfers. (a) Upon the occurrence of any Indirect Transfer of the shares of Preferred Stock and/or Common Stock held by a Stockholder (any such Stockholder is hereinafter referred to as a “Indirect Transferee”), the Indirect Transferee shall give written notice (the “Indirect Transfer Notice”) to the Company and the Preferred Stockholders stating that an Indirect Transfer has occurred and specifying the number of shares of Preferred Stock or Common Stock held by the Indirect Transferee (the “Indirect Transfer Shares”). Within twenty (20) business days following its receipt of the Indirect Transfer Notice, the Company shall determine the Fair Market Value (as defined below) of each share of Preferred Stock and/or Common Stock, as applicable, covered by the Indirect Transfer Notice and notify the Indirect Transferee and the Preferred Stockholders of its determination. (b) For purposes of calculating the Fair Market Value of the Indirect Transfer Shares, the “Fair Market Value” per share shall be determined in good faith by the Board of Directors (other than those directors, if any, affiliated with or nominated by the Indirect Transferee) as of the date of the Indirect Transfer and in making such determination it shall not give consideration to any discount related to shares representing minority interest or related to any illiquidity or lack of marketability of shares arising from restrictions on transfer under applicable federal or state securities laws, but shall take into consideration the rights and preferences of the Preferred Stock and/or Common Stock, as applicable, held by such Indirect Transferee. If the Indirect Transferee disagrees with such determination of Fair Market Value for either or both of the Preferred Stock or the Common Stock (each, a “Value Dispute”), the Indirect Transferee shall provide written notice to the Company thereof within five (5) business days after delivery of the Company’s determination, and the Fair Market Value per share of the Preferred Stock and/or Common Stock, as the case may be, shall be determined by the following procedures. Each of the Company and the Indirect Transferee shall appoint an independent appraiser, each of whom shall independently determine the Fair Market Value per share of the Preferred Stock and/or Common Stock, as the case may be (the “Appraised Values”). If the higher of the Appraised Values with respect to the Preferred Stock or the Common Stock is not more than 25% higher than the lower of the Appraised Values for the Preferred Stock and/or the Common Stock, as applicable, then the Fair Market Value per share will be the average of the two Appraised Values for the Preferred Stock and/or Common Stock, as applicable. If the higher of the Appraised Values is more than 25% higher than the lower of the Appraised Values, than the parties shall appoint a third independent appraiser who shall, within thirty (30) days following receipt of the Appraised Values, select one of the two Appraised Values as the Fair Market Value per share which is closest to the Fair Market Value per share determined by such third party appraiser (the “Third Party Determination”). The Third Party Determination shall be binding on and non-appealable by the Company, the Indirect Transferee and the Preferred Stockholders. All costs of the appraisers pursuant to this Section 4(b) shall be borne by the Indirect Transferee. (c) Within five (5) business days following the earlier of (i) the expiration of the time period provided in Section 4(b) above to submit a Value Dispute if the Indirect Transferee does not submit a Value Dispute or, if earlier, acceptance of the Company’s determination of Fair Market Value, and (ii) determination of the Fair Market Value in accordance with the provisions of Section 4(b) above in the event of a Value Dispute, the Company shall, subject to Section 4(d) below, have the irrevocable and exclusive option to purchase all or any portion of the Indirect Transfer Shares by delivery of a written notice to the Indirect Transferee of its election to exercise its option under this Section 4 and the number and type of Indirect Transfer Shares it is electing to purchase. To the extent the Company does not elect to purchase all of the Indirect Transfer Shares or does not make any election within such five (5) business day period, the Indirect Transferee shall notify the Preferred Stockholders of the number of Indirect Transfer Shares that remain eligible for purchase, and the Preferred Stockholders, excluding the Indirect Transferee, shall, subject to Section 4(d) below, have the irrevocable and exclusive option for ten (10) business days following receipt of such notice to purchase all or any portion of the remaining Indirect Transfer Shares at the Fair Market Value by delivery of written notice to the Indirect Transferee and the Company of their election to exercise their option under this Section 4(c) (any such holder exercising this election, a “Indirect Transfer Participant”) and the maximum number of shares (up to that portion of such Indirect Transfer Shares that equals the proportion that the aggregate number of shares of Common Stock that were issued and/or are issuable upon conversion of the Preferred Stock held by an Indirect Transfer Participant plus the aggregate number of shares of Common Stock issued to such holder if the Indirect Transfer Participant is West Central bears to the sum of the total number of shares of Common Stock that were issued or are issuable upon conversion of all of the issued and outstanding shares of Preferred Stock and the number of shares of Common Stock issued to West Central, in each case excluding any such shares held by the Indirect Transferee) that they are willing to purchase, as well as the number of additional shares that such holder desires to purchase in the event all of the remaining Indirect Transfer Shares are not elected to be purchased by the other Preferred Stockholders which shall be allocated on a pro rata basis (calculated in a similar manner as described in the preceding sentence, and continuing in a like manner until the Indirect Transfer Participants have purchased all of the Indirect Transfer Shares as they may elect). Within thirty (30) days of receipt of the Indirect Transfer Notice, the Indirect Transfer Participants shall deliver to the Indirect Transferee a written notice of their election to purchase any remaining Indirect Transfer Shares. (d) The Company and the Indirect Transfer Participants shall deliver the aggregate Fair Market Value for any Indirect Transfer Shares that any such party elects to purchase to the Indirect Transferee no later than the later of sixty (60) days after receipt of the Indirect Transfer Notice and fifteen (15) business days after the determination of the Fair Market Value in accordance with the provisions of Section 4(b) above in the event of a Value Dispute. In the event the Company and the Indirect Transfer Participants, taken together, do not elect to purchase all of the Indirect Transfer Shares pursuant to Section, then any subsequent Transfer or Indirect Transfer shall be subject to the provisions of this Agreement.