Page 18 of 21 – SEC Filing
Under the Series A Certificate, if Silver Holdings and certain of its affiliates have elected to
effect a conversion of some or all of their shares of Series A Preferred Stock and if the sum, without duplication, of (i) the aggregate number of shares of Common Stock issued to such holders upon such conversion and any shares of Series A
Preferred Stock previously issued to such holders upon conversion, plus (ii) the number of shares of Common Stock underlying shares of Series A Preferred Stock that would be held at such time by such holders (after giving effect to such
conversion), would exceed the 19.9% of the issued and outstanding shares of the Companys voting stock on an as converted basis (the Conversion Cap), then such holders would only be entitled to convert such number of shares
as would result in the sum of clauses (i) and (ii) (after giving effect to such conversion) being equal to the Conversion Cap (after giving effect to any such limitation on conversion). Any shares of Series A Preferred Stock which a holder has
elected to convert but which, by reason of the previous sentence, are not so converted, will be treated as if the holder had not made such election to convert and such shares of Series A Preferred Stock will remain outstanding. Also, under the
Series A Certificate, if the sum, without duplication, of (i) the aggregate voting power of the shares previously issued to Silver Holdings and certain of its affiliates held by such holders at the record date, plus (ii) the aggregate
voting power of the shares of Series A Preferred Stock held by such holders as of such record date, would exceed 19.99% of the total voting power of the Companys outstanding voting stock at such record date, then, with respect to such shares,
Silver Holdings and certain of its affiliates will only be entitled to cast a number of votes equal to 19.99% of such total voting power. The limitation on conversion and voting will cease to apply upon receipt of the requisite approval of holders
of Common Stock under the applicable listing standards.
The Series A Certificate is filed as Exhibit 99.8 to this Amendment No. 7 and
incorporated into this Item 4 by reference, and the foregoing summary of the Series A Certificate is qualified in its entirety by reference to Exhibit 99.8.
Form of Investor Rights Agreement
Concurrently with the closing of the Preferred Transaction, the Company and Silver Holdings will enter into an Investor Rights Agreement (the
Investor Rights Agreement). Under the terms of the Investor Rights Agreement, Silver Holdings and the Company have agreed that, effective as of the closing of the Preferred Transaction, the Board will consist of ten members. From
and after the closing of the Preferred Transaction, so long as the holders of Series A Preferred have the right to nominate a member to the Board pursuant to the Series A Certificate, the Board will consist of (i) two directors nominated and
elected by the holders of shares of Series A Preferred Stock; (ii) four directors who meet the independence criteria set forth in the applicable listing standards (each of whom will be initially agreed upon by the Company and Silver Holdings);
and (iii) four other directors, two of whom shall satisfy the independence criteria of the applicable listing standards and, as of the closing of the Preferred Transaction, one of whom shall be the individual then serving as chief executive
officer of the Company and one of whom shall be the current chairman of the Board as of the date of execution of the Investors Rights Agreement. Following the closing of the Preferred Transaction, so long as the holders of
Series A Preferred have the right to nominate at least one director to the Board pursuant to the Series A Certificate, Silver Holdings will have the right to designate two members of the Nominating and Corporate Governance Committee of the Board.
