Stockholder Approval of Interested Party Transactions under DGCL 144

Here are certain sample recitals/stockholders resolutions that are useful in approving a charter amendment in compliance with Section 144 of DGCL to increase authorized capitalization of an issuer company in a subsequent round of a private placement transaction:

"WHEREAS, pursuant to Section 144 of the Delaware General Corporation Law, no contract or  transaction between the Company and any other corporation, partnership, association or other organization in which one or more of the officers or directors of the Company is an officer or director, or has a financial interest (any such contract or transaction is referred to herein as an “Interested Party Transaction”), shall be void or voidable solely for that reason, or solely because the director or officer is present at or participates in the meeting of the Board, at which the Board authorized the Interested Party Transaction or solely because the vote of any such director is counted for such purpose, if: (a) the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the Board, and the Board in good faith authorizes the contract or transaction by affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum, (b) the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by the requisite vote of the stockholders, or (c) the contract or transaction is fair as to the Company as of the time it is authorized, approved or ratified by the Board or the stockholders;

WHEREAS, it is hereby disclosed or made known to the undersigned that:

• ___________, a director of the Company, is a principal of and has a financial interest in the _______________, L.P. and its affiliates (the “Existing Investor Entities”) and the Existing Investor Entities have expressed an interest in purchasing _________ shares of Company stock;
• [Or any other transactions that amount to Interested Party Transactions

NOW THEREFORE BE IT RESOLVED, that Company’s _____ Amended and Restated Certificate of Incorporation (the “Restated Certificate”) in substantially the form as set forth in Exhibit A hereto, is hereby approved and adopted in all respects.

RESOLVED FURTHER, that the Board may elect to abandon the financing and/or the Restated Certificate, before or after stockholder approval thereof, without further action by the stockholders at any time prior to the effectiveness of the Restated Certificate.

RESOLVED FURTHER, the foregoing resolutions may be executed in separate counterparts, each of which shall constitute an original, but all of which together shall constitute one and the same instrument."

And don't forget to obtain waivers from the existing investors/stockholders (certain qualified investors) regarding their right of first offer and notice requirements of the issuer company to purchase the pro rata share of the shares to be issued in the later rounds (most commonly found in NVCA styly Investors Rights Agreement).