Governments can buy back shares to gain a majority stake in a company important to a country`s economy through nationalization – another form of recapitalization. (d) Accredited or regulated investor S. This shareholder is a “qualified investor” within the meaning of Regulation D of the Securities Act or not a “U.S. person” within the meaning of Regulation S of the Securities Act. In other cases, recapitalizations occur when a company wants to reduce its financial obligations. In this case, the company could repay its debt securities and reduce its debt ratio. This reduces the amount of the company`s financial obligations and allows the company to pass on more of its profits to shareholders. It can also allow a company to buy back a block of its shares on the open market and support the share price. The reverse can also happen if a highly indebted company repays all its debt-related obligations and issues new shares to raise capital.

A recapitalization can help a company increase its liquidity in some cases. 7.3 Successors and Assigns; Mission. All agreements, conditions, terms and conditions and agreements contained in this Agreement are binding on and for the benefit of the parties and, to the extent permitted by this Agreement, their respective successors and assigns. Neither the Company nor any shareholder may assign their respective rights or obligations under this Agreement (by operation of law or otherwise) to any person (other than an affiliate) without notice. In addition, recapitalization is a viable strategy to prevent stock prices from falling. If a company finds that its shares are losing value, it may decide to exchange equity for debt to raise the share price. Recapitalization is a strategy that allows a company to improve its financial stability or revise its financial structure. To achieve this, the company must change its debt ratio by adding more debt or more equity to its capital. There are many reasons why a company may consider a recapitalization, including: With a stock recapitalization, a company spends new shares to raise funds in order to buy back debt securities. This decision can benefit companies that have a high level of debt. A high debt-to-equity ratio places an additional burden on a company because it has to pay interest on its debt securities.

Higher debt levels also increase a company`s level of risk, making it less attractive to investors. Therefore, a company may try to reduce its debt burden by issuing new shares and using the money raised from them to repay some of its current debt. “Affiliate” means, with respect to a person or shareholder, any other person or shareholder who directly or indirectly controls, is controlled by, or is under common control with such person or shareholder. For the purposes of this Agreement, the term “control” (including the terms “control”, “controlled by” or “under common control with”), as used in respect of any person or shareholder, means, directly or indirectly, the possession of the power to determine, directly or indirectly, the management and policy of such person or shareholder; whether by possession of voting securities, by contract or otherwise. Recapitalization is the fundamental restructuring of a company`s finances. The company may want to move from debt financing to an equity financing agreement. Or it could go the other way, where a company issues new debt and uses the money to buy all of its currently outstanding shares. Bankruptcy is the legal status of a human or non-human entity (a business or government agency) that is unable to repay its outstanding debts to its creditors. or companies that have already filed for bankruptcy can use recapitalization as part of their reorganization strategy. A successful recapitalization is a key factor for an insolvent company to survive the insolvency process. Changes to the capital structure should satisfy all parties involved in the process, including the bankruptcy court, creditors and investors.

If successful, the company adopts a new capital structure that can help it continue its activities and avoid liquidation. Governments also participate in the massive recapitalization of their countries` banking sectors in times of financial crisis and when the solvency and liquidity of banks and the financial system as a whole are called into question. ==External links==The government recapitalized the country`s banking sector with various forms of capital to maintain the solvency of banks and the financial system and maintain liquidity through the Troubled Asset Relief Program (TARP) in 2008. Typically, companies perform a recapitalization to create their capital structureCapital structureThe capital structure refers to the amount of debt and/or equity used by a company to fund its operations and assets. The capital structure of a company is more stable or optimal. Recapitalization is essentially exchanging one type of financing for another – debt for equity or equity for debt. An example is when a company issues debtscustomersThe cost of debt is the return that a company offers to its creditors and creditors. Borrowing costs are used in wacc calculations for valuation analysis. buy back its shares. Nationalization is a special type of equity recapitalization when the government where the company has its registered office buys a sufficient number of shares of the company to obtain a majority stake. CONSIDERING that the Company and each shareholder believe that it is in the best interests of the Company and each shareholder to recapitalize the Company (the “Recapitalization”) under which the Class A common shares of the Carlyle Companies are to be exchanged for Series A Preferred Shares of the Company valued at $0.001 of the Company (the “Series A Preferred Shares”), and the Class B Common Shares of Conexant are to be exchanged for Series B Preferred Shares with a par value of $0.001 of the Company (the “Series B Preferred Shares” and, together with the Series A Preferred Shares, the “Designated Preferred Shares”).

7.2 Survival. The representations, warranties, representations and agreements contained herein shall survive any investigation by a shareholder and the completion of the transactions contemplated herein. .