rate of 6.50% per annum. Holders of Series A Preferred Stock are entitled to vote together with the holders of the common stock as a single class, in each case, on an
as-converted
basis, except when law requires a separate class vote of the common stockholders. Pursuant to the Shareholders Agreement, the selling stockholder and certain related parties if the preferred stock
is transferred to those parties (collectively, the Original Holder Group)
are entitled to vote their shares in their discretion, except they have agreed to vote their shares in favor of director nominees that the Board nominates
until June 10, 2020. Holders of Series A Preferred Stock have certain limited special approval rights, including with respect to the issuance of pari passu or senior equity securities of the Company.
The Series A Preferred Stock is convertible at the option of the holders into shares of common stock at an initial conversion rate of 55.9284
shares of common stock for each share of Series A Preferred Stock, which represents an initial conversion price of approximately $17.88 per share of common stock, subject to adjustment. On or after the fifth anniversary of the initial issuance of
the Series A Preferred Stock, we will have the option to redeem, in whole but not in part, all the outstanding shares of Series A Preferred Stock, subject to certain redemption price adjustments on the basis of the date of the conversion. We may
elect to convert the Series A Preferred Stock, in whole but not in part, into the relevant number of shares of common stock on or after the 54th month after the initial issuance of the Series A Preferred Stock if the last reported sale price of the
common stock has been at least 150% of the conversion price then in effect for a specified period. The conversion rate is subject to customary anti-dilution and other adjustments.
Pursuant to the Shareholders Agreement, for so long as the Original Holders maintains at least 33% of its original investment (whether
in preferred stock or shares of common stock issued upon conversion of the preferred stock), the selling stockholder will have the right to appoint a single representative, in a
non-voting
observer capacity,
to attend all meetings of the board of directors, subject to certain exceptions.
Pursuant to the Shareholders Agreement, the
Original Holders have certain registration rights, including customary demand and piggyback registration rights in respect of the shares of preferred stock and any shares of common stock issued upon conversion of the preferred stock.
Pursuant to the Shareholders Agreement, for so long as the Original Holders Group maintains at least 33% of their original investment
(whether in preferred stock or shares of common stock issued upon conversion of the preferred stock), the Company is required to, prior to the issuance of equity securities to a third party (subject to certain exceptions), offer the Original Holders
Group the right to acquire its pro rata portion of such equity securities.
Standstill
Pursuant to the Shareholders Agreement the Original Holders Group will not, until after June 10, 2020, among other things, acquire
any of our or our subsidiaries equity securities, enter into any merger, business combination, recapitalization, restructuring or other extraordinary transaction involving us or our subsidiaries, participate in any solicitation of proxies to
vote, or seek to advise or influence any person with respect to the voting of, any of our securities or form, join or in any way participate in a group with respect to the voting of any of our securities.
Notwithstanding the foregoing, the Original Holders Group may vote its shares as it desires, including for or against one of the transactions
subject to the standstill obligation (subject to the requirement to vote for the Companys nominees for the board of directors until June 10, 2020). The standstill will terminate when the selling stockholders ownership percentage in
us falls below 10 percent, in the case of certain insolvency events with respect to the Company and in certain customary circumstances relating to a change of control transaction or the making or announcement of a proposal with respect to a
change of control transaction.
8