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Assumed Average Purchase Price
Per Share |
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Number of Shares
to be Issued in this Offering if Full Purchase(1) |
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Percentage of
Outstanding Shares After Giving Effect to the Issuance to Lincoln Park(2) |
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Gross Proceeds from
the Issuance and Sale of Shares to Lincoln Park Under the Purchase Agreement |
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$0.50
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| | | | 10,372,556(4) | | | | | | 16.0% | | | | | $ | 5,186,278 | | |
$0.75
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| | | | 10,372,556(4) | | | | | | 16.0% | | | | | $ | 7,779,417 | | |
$1.15(3) | | | | | 10,372,556(4) | | | | | | 16.0% | | | | | $ | 11,928,439 | | |
$1.50
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| | | | 15,333,333(5) | | | | | | 22.0%(5) | | | | | $ | 23,000,000(5) | | |
$2.00
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| | | | 11,500,000(5) | | | | | | 17.5%(5) | | | | | $ | 23,000,000(5) | | |
Name of Selling Shareholder
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Shares
Beneficially Owned Prior to Offering |
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Percentage of
Shares Beneficially Owned Prior to Offering |
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Shares to
be Sold in this Offering Assuming We Issue the Maximum Number of Shares Under the Purchase Agreement(2) |
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Percentage of
Shares to be Beneficially Owned After Offering |
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Lincoln Park Capital Fund, LLC(1)
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| | | | 2,426,767 | | | | | | 4.47% | | | | | | 17,632,474 | | | | | | 2.5% | | |
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Ireland
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Delaware
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Board System
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| | Under Irish law, a company has a unitary board structure and it is the responsibility of the board of directors to manage the business of the company in the best interests of the shareholders of the company. | | | Under Delaware law, a corporation has a unitary board structure and it is the responsibility of the board of directors to appoint and oversee the management of the corporation on behalf of and in the best interests of the shareholders of the corporation. | |
| | | | | | Management is responsible for running the corporation and overseeing its day-to-day operations. | |
Number of Directors
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| | The Irish Companies Act provides for a minimum of two directors. | | | Under Delaware law, a corporation must have at least one director and | |
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Ireland
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Delaware
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| | | Nabriva Ireland’s articles of association provide that the number of directors will not be less than two and not more than 12. Nabriva Ireland’s articles of association provide that the authorized number of directors within the prescribed range will be determined solely by the Nabriva Ireland Board and does not require approval or ratification by the shareholders in general meeting. | | | the number of directors shall be fixed by or in the manner provided in the bylaws. | |
Removal of Directors
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| | Under the Irish Companies Act and notwithstanding anything contained in Nabriva Ireland’s constitution or in any agreement between Nabriva Ireland and a director, the shareholders may, by ordinary resolution, remove a director from office before the expiration of his or her term, provided that notice of the intention to move any such resolution is given by the shareholders to Nabriva Ireland not less than 28 days before the meeting at which the director is to be removed, and at which the director is entitled to be heard. Because of this provision of the Irish Companies Act, a director may be so removed before the expiration of his or her period of office. The power of removal is without prejudice to any claim for damages for breach of contract (e.g., employment contract) that the director may have against Nabriva Ireland in respect of his or her removal. | | | Under Delaware law, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors, except (a)unless the certificate of incorporation provides otherwise, in the case of a corporation whose board of directors is classified, shareholders may effect such removal only for cause, or (b)in the case of a corporation having cumulative voting, if less than the entire board of directors is to be removed, no director may be removed without cause if the votes cast against his removal would be sufficient to elect him if then cumulatively voted at an election of the entire board of directors, or, if there are classes of directors, at an election of the class of directors of which he is a part. | |
Vacancies on the Board of Directors
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| | Nabriva Ireland’s constitution provides that the Board of Directors may fill any vacancy occurring on the Board of Directors. During any vacancy on the Board, the remaining directors will have full power to act as the Board but, if and so long as, their number is reduced below the minimum number required under the constitution, the continuing directors or director may only act to appoint additional directors up to that minimum number or to summon a general meeting of | | | Under Delaware law, vacancies and newly created directorships may be filled by a majority of the directors then in office (even though less than a quorum) or by a sole remaining director unless (a) otherwise provided in the certificate of incorporation or by-laws of the corporation or (b) the certificate of incorporation directs that a particular class of stock is to elect such director, in which case a majority of the other directors elected by such class, or a sole | |
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Ireland
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Delaware
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| | | Nabriva Ireland to elect directors and for no other purpose. | | | remaining director elected by such class, will fill such vacancy. | |
Annual General Meeting
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| | Nabriva Ireland is required to hold an annual general meeting within 18 months of incorporation and thereafter at intervals of no more than 15 months from the previous annual general meeting, provided that an annual general meeting is held in each calendar year following the first annual general meeting and no more than nine months after Nabriva Ireland’s fiscal year-end. Each general meeting will be held at such time and place as designated by the Nabriva Ireland Board of Directors and as specified in the notice of meeting. Subject to Section 176 of the Irish Companies Act, general meetings may be held outside of Ireland. The only matters that must, as a matter of Irish law, be transacted at an annual general meeting are the consideration of the statutory financial statements, report of the directors, report of the statutory auditors, review by the shareholders of the company’s affairs and the appointment or re-appointment of the statutory auditors. If no resolution is made in respect of the reappointment of an existing auditor at an annual general meeting, the existing auditor will be deemed to have continued in office. | | | Under Delaware law, the annual meeting of stockholders shall be held at such place, on such date and at such time as may be designated from time to time by the board of directors or as provided in the certificate of incorporation or by the bylaws. | |
General Meeting
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| | Under Irish law, extraordinary general meetings of Nabriva Ireland may be convened by (i) the Board of Directors, (ii) on requisition of the shareholders holding not less than 10% of the paid up share capital of Nabriva Ireland carrying voting rights, (iii) on requisition of Nabriva Ireland’s auditors; or (iv) in exceptional cases, by order of the Irish High Court. | | | Under Delaware law, special meetings of the stockholders may be called by the board of directors or by such person or persons as may be authorized by the certificate of incorporation or by the bylaws. | |
| | | If the Nabriva Ireland Board of Directors becomes aware that the net assets of Nabriva Ireland are not greater than half of the amount of Nabriva Ireland’s called-up share capital, it must convene an extraordinary general meeting of | | | | |
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Ireland
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Delaware
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| | | Nabriva Ireland’s shareholders not later than 28 days from the date that the directors learn of this fact to consider how to address the situation. | | | | |
Notice of General Meetings
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| | Under Irish law, notice of an annual or extraordinary general meeting must be given to all Nabriva Ireland shareholders and to the auditors of Nabriva Ireland. Nabriva Ireland’s constitution provides for a minimum notice period of 21 days for an annual general meeting, which is the minimum permitted under Irish law. Under Irish law and Nabriva Ireland’s constitution, the minimum notice periods are 21 days’ notice in writing for an extraordinary general meeting to approve a special resolution and 14 days’ notice in writing for any other extraordinary general meeting. | | | Under Delaware law, unless otherwise provided in the certificate of incorporation or bylaws, written notice of any meeting of the stockholders must be given to each stockholder entitled to vote at the meeting not less than ten nor more than 60 days before the date of the meeting and shall specify the place, date, hour, and purpose or purposes of the meeting. | |
Proxy
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| | Under Irish law, a shareholder may designate another person to attend, speak and vote at a general meeting of the company on their behalf by proxy, which proxy need not be a shareholder. Where interests in shares are held by a nominee trust company, this company may exercise the rights of the beneficial holders on their behalf as their proxy. | | | Under Delaware law, at any meeting of stockholders, a stockholder may designate another person to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A director of a Delaware corporation may not issue a proxy representing the director’s voting rights as a director. | |
Pre-emptive Rights
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| | Under Irish law, certain statutory pre-emption rights apply automatically in favor of shareholders when shares are to be issued for cash. However, Nabriva Ireland has opted out of these pre-emption rights in its articles of association as permitted under Irish law. Irish law requires this opt-out to be renewed every five years by a special resolution of the shareholders. The current opt-out will expire on June 23, 2022, if not renewed before that date. If the opt-out is not renewed, shares issued for cash must be offered to existing shareholders of Nabriva Ireland on a pro rata basis to their existing shareholding before the shares may be issued to any new shareholders. | | | Under Delaware law, stockholders have no pre-emptive rights to subscribe to additional issues of stock or to any security convertible into such stock unless, and except to the extent that, such rights are expressly provided for in the certificate of incorporation. | |
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Ireland
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Delaware
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| | | Statutory pre-emption rights do not apply (i) when shares are issued for non-cash consideration (such as in a share-for-share acquisition), (ii) to the issue of non-equity shares (that is, shares that have the right to participate only up to a specified amount in any income or capital distribution) or (iii) where shares are issued pursuant to an employee share option or similar equity plan. | | | | |
Authority to Allot
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| | Under Irish law, the Board of Directors may allot and issue shares (or rights to subscribe for or convert into shares) only with the prior authorization of shareholders, such authorization to be valid for a maximum period of five years, each as specified in the articles of association or relevant shareholder resolution. Nabriva Ireland’s shareholders granted the Board of Directors authority to allot and issue shares at the 2021 annual general meeting up to a maximum amount of the company’s authorized, but unissued share capital for a period of five years from the passing of the resolution. This authorization will need to be renewed by ordinary resolution upon expiration but may be sought more frequently for additional five year terms (or any shorter period). | | | Under Delaware law, if the corporation’s charter or certificate of incorporation so provides, the board of directors has the power to authorize the issuance of stock. It may authorize capital stock to be issued for consideration consisting of cash, any tangible or intangible property or any benefit to the corporation or any combination thereof. It may determine the amount of such consideration by approving a formula. In the absence of actual fraud in the transaction, the judgment of the directors as to the value of such consideration is conclusive. | |
Liability of Directors and Officers
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| | Under Irish law, a company may not exempt its directors or company secretary from liability for negligence or a breach of duty. However, where a breach of duty has been established, directors or the company secretary may be statutorily exempted by an Irish court from personal liability for negligence or breach of duty if, among other things, the court determines that they have acted honestly and reasonably, and that they may fairly be excused as a result. Pursuant to Nabriva Ireland’s articles of association, its directors and secretary are indemnified to the extent permitted by the Irish Companies Acts. The | | |
Under Delaware law, a corporation’s certificate of incorporation may include a provision eliminating or limiting the personal liability of a director to the corporation and its stockholders for damages arising from a breach of fiduciary duty as a director. However, no provision can limit the liability of a director for:
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any breach of the director’s duty of loyalty to the corporation or its stockholders;
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acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
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intentional or negligent
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Ireland
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Delaware
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aforementioned restrictions in the Irish Companies Act does not apply to executives who are not directors or the company secretary of Nabriva Ireland.
Under Irish law, shareholders may not agree to exempt a director or officer from any claim or right of action a shareholder may have, whether individually or in the right of a company, on account of any action taken or the failure to take any action in the performance of such director’s or officer’s duties to the company.
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payment of unlawful dividends or stock purchases or redemptions; or
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any transaction from which the director derives an improper personal benefit.
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Voting Rights
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| | Nabriva Ireland’s articles of association provide that each Nabriva Ireland shareholder is entitled to one vote for each ordinary share that he or she holds as of the record date for the meeting. | | | Delaware law provides that, unless otherwise provided in the certificate of incorporation, each stockholder is entitled to one vote for each share of capital stock held by such stockholder. | |
| | | Irish law requires approval of certain matters by “special resolution” of the shareholders at a general meeting. A special resolution requires the approval of not less than 75% of the votes of Nabriva Ireland’s shareholders cast at a general meeting at which a quorum is present. Ordinary resolutions, by contrast, require a simple majority of the votes of Nabriva Ireland cast at a general meeting at which a quorum is present. | | | | |
Shareholder Vote on Certain Transactions
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Pursuant to Irish law, shareholder approval in connection with a transaction involving Nabriva Ireland would be required under the following circumstances:
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in connection with a scheme of arrangement, both a court order from the Irish High Court and the approval of a majority in number representing 75% in value of the shareholders present and voting in person or by proxy at a meeting called to approve such a scheme would be required;
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in connection with an
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Generally, under Delaware law, unless the certificate of incorporation provides for the vote of a larger portion of the stock, completion of a merger, consolidation, sale, lease or exchange of all or substantially all of a corporation’s assets or dissolution requires:
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the approval of the board of directors; and
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approval by the vote of the holders of a majority of the outstanding stock or, if the certificate of incorporation provides for more or less than one vote per share, a majority
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Ireland
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Delaware
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acquisition of Nabriva Ireland by way of a merger with an EU company under the EU Cross-Border Mergers Directive (EU) 2019/2121, approval by a special resolution of the shareholders would be required; and
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in connection with a merger with an Irish company under the Irish Companies Act, approval by a special resolution of shareholders would be required.
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of the votes of the outstanding stock of a corporation entitled to vote on the matter.
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Standard of Conduct for Directors
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The directors of Nabriva Ireland have certain statutory and fiduciary duties as a matter of Irish law. All of the directors have equal and overall responsibility for the management of Nabriva Ireland (although directors who also serve as employees may have additional responsibilities and duties arising under their employment agreements (if applicable), and it is likely that more will be expected of them in compliance with their duties than non-executive directors). The Irish Companies Act provides specifically for certain fiduciary duties of the directors of Irish companies, including duties:
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to act in good faith and in the best interests of the company;
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to act honestly and responsibly in relation to the company’s affairs;
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to act in accordance with the company’s constitution and to exercise powers only for lawful purposes;
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not to misuse the company’s property, information and/or opportunity;
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not to fetter their independent judgment;
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to avoid conflicts of interest;
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Delaware law does not contain specific provisions setting forth the standard of conduct of a director. The scope of the fiduciary duties of directors is generally determined by the courts of the State of Delaware. In general, directors have a duty to act without self-interest, on a well-informed basis and in a manner they reasonably believe to be in the best interest of the stockholders.
Directors of a Delaware corporation owe fiduciary duties of care and loyalty to the corporation and to its shareholders. The duty of care generally requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. In general, but subject to certain exceptions, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by
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Ireland
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Delaware
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to exercise care, skill and diligence; and
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to have regard for the interests of the company’s shareholders.
Additional statutory duties under the Irish Companies Act include ensuring the maintenance of proper books of account, having annual accounts prepared, having an annual audit performed, and the duty to maintain certain registers and make certain filings as well as certain disclosures of personal interests.
For public limited companies like Nabriva Ireland, directors are under a specific duty to ensure that the company secretary has the skills or resources and the requisite knowledge and experience to discharge the role.
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evidence of a breach of one of the fiduciary duties. Delaware courts have also imposed a heightened standard of conduct upon directors of a Delaware corporation who take any action designed to defeat a threatened change in control of the corporation.
In addition, under Delaware law, when the board of directors of a Delaware corporation approves the sale or break- up of a corporation, the board of directors may, in certain circumstances, have a duty to obtain the highest value reasonably available to the shareholders.
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Shareholder Suits
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In Ireland, the decision to institute proceedings is generally taken by a company’s board of directors, who will usually be empowered to manage the company’s business. In certain limited circumstances, a shareholder may be entitled to bring a derivative action on behalf of the company. The central question at issue in deciding whether a minority shareholder may be permitted to bring a derivative action is whether, unless the action is brought, a wrong committed against the company would otherwise go un-redressed.
The principal case law in Ireland indicates that to bring a derivative action a person must first establish a prima facie case (i) that the company is entitled to the relief claimed and (ii) that the action falls within one of the five exceptions derived from case law, as follows:
(1) where an ultra vires or illegal act is perpetrated;
(2) where more than a bare majority is required to ratify the “wrong” complained of;
(3) where the shareholders’ personal rights are infringed;
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Under Delaware law, a stockholder may initiate a derivative action to enforce a right of a corporation if the corporation fails to enforce the right itself. The complaint must:
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state that the plaintiff was a stockholder at the time of the transaction of which the plaintiff complains or that the plaintiffs shares thereafter devolved on the plaintiff by operation of law; and
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allege with particularity the efforts made by the plaintiff to obtain the action the plaintiff desires from the directors and the reasons for the plaintiff’s failure to obtain the action; or
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state the reasons for not making the effort.
Additionally, the plaintiff must remain a stockholder through the duration of the derivative suit. The action will not be dismissed or compromised without the approval of the Delaware Court of Chancery.
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Ireland
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Delaware
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(4) where a fraud has been perpetrated upon a minority by those in control; or
(5) where the justice of the case requires a minority to be permitted to institute proceedings.
Shareholders may also bring proceedings against the company where the affairs of the company are being conducted, or the powers of the directors are being exercised, in a manner oppressive to the shareholders or in disregard of their interests. Oppression connotes conduct that is burdensome, harsh or wrong. Conduct must relate to the internal management of the company. This is an Irish statutory remedy and the court can grant any order it sees fit, usually providing for the purchase or transfer of the shares of any shareholder.
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