Common use of Right of Preemption Clause in Contracts

Right of Preemption. (a) The Company shall give each Eligible Holder at least ten (10) days prior written notice (“Preemptive Rights Notice”) of the issuance by the Company for cash in connection with a Qualified Business Combination of any Shares or any other shares of capital stock and any options, warrants, convertible or exchangeable securities, or other rights to acquire Shares or other capital stock of the Company or securities exercisable, convertible or exchangeable for Shares or other capital stock of the Company (collectively, “QBC Securities”). (b) The Preemptive Rights Notice must set forth (i) the approximate number and type of QBC Securities proposed to be issued and sold and the proposed material terms of such QBC Securities, (ii) the proposed price or range of prices at which such QBC Securities are proposed to be sold and the terms of payment, and (iii) any other material feature, term or condition relating to such QBC Securities or the proposed sale thereof. Upon receipt of a Preemptive Rights Notice, each Eligible Holder will have the right, but not the obligation, to elect, within five (5) business days of receipt of the Preemptive Rights Notice, to purchase up to its pro rata share of such QBC Securities. Such pro rata share, for any Eligible Holder, shall be the ratio of (x) the sum, without duplication, of the total number of Shares held by such Eligible Holder prior to the issuance of QBC Securities to (y) the sum, without duplication, of the total number of Shares of the Company outstanding immediately prior to the issuance of QBC Securities held by all shareholders of the Company (in the case of both (x) and (y), assuming the full exercise, conversion or exchange of any options, warrants, convertible or exchangeable securities or other rights to acquire Shares of the Company). Any such election, if made, shall be irrevocable. (c) Each Eligible Holder’s purchase must be on the same terms and conditions as the balance of such issuance of QBC Securities. The closing of each Eligible Holder’s purchase of its portion of such QBC Securities will occur simultaneously with and will be conditioned upon the closing of the balance of the issuance of such QBC Securities. Any Holder of Shares that for any reason is not able to complete the purchase on such terms and conditions and on such closing date shall not be deemed an Eligible Holder and shall have no rights in respect of QBC Securities.