Reservation of Authorized Shares Clause Example from Business Contracts
This example Reservation of Authorized Shares clause appears in
6 contracts
from
1 company
Reservation of Authorized Shares. (a)Reservation. From the Exchange Date through May 30, 2017, inclusive, the Company shall reserve shares of Common Stock for issuances with respect to this Note as set forth in Section 1.1 of the Exchange Agreement. From and after May 31, 2017 and for so long as any Notes or Additional Notes remain outstanding, the Company shall at all times reserve at least 300% of the number of shares of Common Stock as shall from time to time be necessary to effect the conversion of all of the Notes and Addit
...ional Notes then outstanding (without regard to any limitations on conversions and assuming such Notes and Additional Notes remain outstanding until the Maturity Date) (the "Required Reserve Amount"). The Required Reserve Amount (including, without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the Notes and the Additional Notes based on the original principal amount of the Notes and Additional Notes (if any) held by each holder of Notes on the Exchange Date or increase in the number of reserved shares, as the case may be (the "Authorized Share Allocation"). In the event that a holder of Notes shall sell or otherwise transfer any of such holder's Notes, each transferee shall be allocated a pro rata portion of such holder's Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Notes or Additional Notes shall be allocated to the remaining holders of Notes and Additional Notes, pro rata based on the principal amount of the Notes and Additional Notes (if any) then held by such holders of Notes (in each case, without regard to any limitations on conversions). (b)Insufficient Authorized Shares. If at any time while any of the Notes or the Additional Notes remain outstanding the Company does not have a number of authorized and unreserved shares of Common Stock that is equal to or greater than the applicable Required Reserve Amount (an "Authorized Share Failure"), then the Company shall immediately take all action necessary to increase the Company's authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the Notes and the Additional Notes then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than seventy-five (75) days after the occurrence of such Authorized Share Failure, the Company shall either (x) obtain the written consent of its stockholders for the approval of an increase in the number of authorized shares of Common Stock and provide each stockholder with an information statement with respect thereto or (y) hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders' approval of such increase in authorized shares of Common Stock and to cause its Board of Directors to recommend to the stockholders that they approve such proposal. Notwithstanding the foregoing, if during any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority of the shares of its issued and outstanding Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent and submitting for filing with the SEC an Information Statement on Schedule 14C. If, upon any conversion of this Note, the Company does not have sufficient authorized shares to deliver in satisfaction of such conversion, then unless the Holder elects to void such attempted conversion, the Holder may require the Company to pay to the Holder within three (3) Trading Days of the applicable attempted conversion, cash by wire transfer of immediately available funds, in exchange for cancellation of the applicable portion of the Conversion Amount that is subject to such Conversion Notice, which cash amount for each share of Common Stock that the Company is unable to deliver pursuant to this Section 10 shall be equal to the highest trading price of the Common Stock in effect at any time during the period beginning on the applicable Conversion Date and ending on the date the Company makes the payment provided for in this sentence.
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