Approved Sale Drag Along Obligations. (i) If the Board approves a Sale of the Company (an “Approved Sale”), each holder of Stockholder Shares shall vote for, consent to and raise no objections against, and not otherwise impede or delay, such Approved Sale, regardless of the consideration being paid in such Approved Sale, provided that such consideration complies with the requirements of this Section 9(b). In furtherance of the foregoing, if the Approved Sale is structured as (i) a merger or consolidation, each holder of Stockholder Shares shall vote such holder’s Stockholder Shares to approve such merger or consolidation, whether by written consent or at a stockholders meeting, and waive all dissenters rights, appraisal rights and similar rights (if any) in connection with such merger or consolidation, (ii) a sale of stock, each holder of Stockholder Shares shall agree to sell, and shall sell, all of such holder’s Stockholder Shares and rights to acquire Stockholder Shares (or, if such Sale of the Company is structured as a sale of less than all of the stock of the Company, a pro rata share of such holder’s Stockholder Shares and rights to acquire Stockholder Shares, based upon the portion of the stock of the Company being sold) on the terms and conditions approved by the Board, as applicable, or (iii) a sale of assets, each holder of Stockholder Shares shall vote such holder’s Stockholder Shares to approve such sale and any subsequent liquidation of the Company or other distribution of the proceeds therefrom, whether by written consent or at a stockholders meeting, and waive all dissenters rights, appraisal rights and similar rights (if any) in connection with such sale of assets. (ii) In furtherance of its obligations under Section 9(b)(i) above, (i) each holder of Stockholder Shares will take all necessary or desirable actions reasonably requested by the Board in connection with the consummation of the Approved Sale and (ii) each holder of Stockholder Shares will make the same indemnities and agreements as each other holder, including without limitation, voting to approve such transaction and executing all documents reasonably requested by the Board to be executed by such holder, including the applicable purchase agreement, stockholders agreement and/or indemnification and/or contribution agreement. Each holder of Stockholder Shares shall be obligated to make affirmative representations and warranties only as to such holder’s title to and ownership of Stockholder Shares (free and clear of all liens), authorization, execution and delivery of relevant documents by such holder, enforceability of relevant agreements against such holder and other matters relating to such holder, to enter into covenants in respect of a Transfer of such holder’s Stockholder Shares (or portion thereof) in connection with such Approved Sale (including, without limitation, the delivery of certificates, stock powers and other instruments of transfer) and to enter into indemnification obligations (which shall be on a several basis) with respect to the foregoing, in each case to the extent that the New Astoria Majority Holders are similarly obligated; provided that no holder shall be obligated to enter into indemnification obligations with respect to any of the foregoing to the extent relating to any other holder of Stockholder Shares or such other holder’s Stockholder Shares, and in no event shall any holder of Stockholder Shares be liable in respect of any indemnity obligations pursuant to any Approved Sale in an aggregate amount in excess of the net total consideration payable to such holder in such Approved Sale. Each holder of Stockholder Shares shall enter into any indemnification or contribution agreement requested by the Board to ensure compliance with this Section 9(b)(ii) and the provisions of this Section 9(b) shall be deemed complied with if the requirement for several liability is addressed through such agreement, even if the purchase and sale agreement or merger agreement related to the Approved Sale provides for joint and several liability. Notwithstanding anything herein to the contrary, this Section 9(b)(ii) shall also be deemed complied with if a portion of the consideration otherwise payable in an Approved Sale is withheld through an escrow which provides for indemnification, in whole or in part, through such escrow. (iii) The obligations of the holders of Stockholder Shares with respect to an Approved Sale are subject to the satisfaction of the following conditions: (i) upon the consummation of the Approved Sale, each holder of Stockholder Shares shall receive in exchange for the Stockholder Shares held by such holder the same amount of the aggregate consideration that such holder of Stockholder Shares would have received, if such aggregate consideration had been distributed by the Company in complete liquidation pursuant to the rights and preferences in the Company’s Certificate of Incorporation in effect immediately prior to the Approved Sale (as reduced in the case of holders of rights to acquire any class of Stockholder Shares by the applicable purchase price or exercise price per share thereof, if any); provided, however, in the event that some or all of the consideration to be received by the holders of Stockholder Shares in an Approved Sale is not cash, such consideration shall be deemed to have the fair market value determined by the Board (whose determination shall, absent bad faith or manifest error, be final and binding and not subject to any challenge whatsoever) and the portion of aggregate consideration delivered hereunder shall be treated as if such non-cash consideration were cash in an amount equal to such fair market value; (ii) if any holders of Stockholder Shares are given an option as to the form and amount of consideration to be received, each holder of the same type and class of Stockholder Shares shall be given the same option; and (iii) each holder of then currently exercisable rights to acquire shares of a class of Stockholder Shares shall be given the opportunity to either (A) exercise such rights prior to the consummation of the Approved Sale and participate in such sale as a holder of such class of Stockholder Shares or (B) upon the consummation of the Approved Sale, receive in exchange for such rights consideration equal to the amount determined by multiplying (1) the same amount of consideration per share of such class of Stockholder Shares received by the holders of such class of Stockholder Shares in connection with the Approved Sale less the applicable purchase price or exercise price (if any) per share of such class of Stockholder Shares by (2) the number of Stockholder Shares represented by such rights. (iv) If the Company enters into any negotiation or transaction for which Rule 506 under the Securities Act (or any similar rule then in effect) promulgated by the Securities and Exchange Commission may be available with respect to such negotiation or transaction (including a merger, consolidation or other reorganization), the other holders of Stockholder Shares, if required under the Securities Act, will, at the request of the Company, appoint a purchaser representative (as such term is defined in Rule 501) designated by the Board. If any such holder so appoints a purchaser representative, the Company shall pay the fees of such purchaser representative. However, if any such holder declines to appoint the purchaser representative designated by the Company, such holder shall appoint another purchaser representative, and such holder shall be responsible for the fees of the purchaser representative so appointed. (v) Holders of Stockholder Shares will bear their pro rata share (as if such expenses reduced the aggregate proceeds available for distribution in such Approved Sale) of the costs of any sale of Stockholder Shares pursuant to an Approved Sale to the extent such costs are approved by the Board and incurred for the benefit of all holders of Stockholder Shares and are not otherwise paid by the Company or the acquiring party, provided, however, that no holder of Stockholder Shares shall be obliged to make any out-of-pocket expenditures prior to the consummation of the Approved Sale. (vi) The rights and obligations of the parties under this Section 9(b) shall terminate upon the initial closing of the Company’s IPO.
Appears in 2 contracts
Samples: Investor Rights Agreement (US Power Generating CO), Investor Rights Agreement (US Power Generating CO)
Approved Sale Drag Along Obligations. (ia) If at any time the Board approves Majority Summit Investors approve a Sale of the Company Holdings LLC in a bona fide arms’ length transaction (an “Approved Sale”), then upon the request of the Majority Summit Investors, each holder Holder shall (and shall cause any Manager(s) designated by it to) take and otherwise facilitate the following actions:
(i) vote for (whether at a meeting of Stockholder Shares shall vote forMembers or by written consent), consent to and raise no objections against, and not otherwise impede or delay, such Approved SaleSale and waive (and hereby waives and releases) any claim such Holder may have in respect of any breach of fiduciary duty (including, regardless for the avoidance of the consideration being paid doubt, any duty of loyalty and duty of disclosure) in connection with such Approved Sale, provided that such consideration complies with the requirements of this Section 9(b). In furtherance of the foregoing, ;
(ii) if the Approved Sale is structured as a (iA) a merger or consolidation, each holder of Stockholder Shares Member shall vote such holder’s Stockholder Shares to approve such merger or consolidation, whether by written consent or at a stockholders meeting, and waive all any dissenters rights, appraisal rights and or similar rights (if any) in connection with such merger or consolidation, consolidation or (iiB) a sale of stockUnits or other securities of Holdings LLC, each holder of Stockholder Shares Unitholder shall agree to sell, sell or dispose of (and shall sellsell and dispose of) all (but not less than all, all provided that a Unitholder may sell less than such Unitholder’s Pro Rata Share to effect customary “rollover” by the Executive Members and, to the extent determined by the Majority Summit Investors, other Unitholders, it being agreed the foregoing does not require any amount of “rollover”) of such holderUnitholder’s Stockholder Shares Units and rights to acquire Stockholder Shares (or, if such Sale other securities of the Company is structured as a sale of less than all of the stock of the Company, a pro rata share of such holder’s Stockholder Shares and rights to acquire Stockholder Shares, based upon the portion of the stock of the Company being sold) Holdings LLC on the terms and conditions approved by the Board, as applicable, Majority Summit Investors (provided that in either case no Holder shall be required to accept consideration other than cash or wire transfer of immediately available funds in connection with the Approved Sale); and
(iii) take all actions reasonably necessary or desirable (in such Holder’s capacity as a sale Manager or Member of assets, each holder of Stockholder Shares shall vote such holder’s Stockholder Shares to approve such sale and any subsequent liquidation of the Company Holdings LLC or other distribution of the proceeds therefrom, whether by written consent or at a stockholders meeting, and waive all dissenters rights, appraisal rights and similar rights (if anyotherwise) in connection with the consummation of the Approved Sale as reasonably requested by the Board or the Majority Summit Investors, including executing and delivering any and all consents, waivers, agreements, instruments and other documents approved (and in substantially the same form as executed) by the Majority Summit Investors (including any applicable purchase agreement, equityholders agreement, confidentiality agreement (which shall not be more restrictive than the confidentiality provisions in this Agreement), employee non- solicitation agreement, and/or indemnification and/or contribution agreement and, only in the case of Unitholders who are Executives Members and their equity holders and any other Holders that are Executives or Permitted Transferees thereof, executing and delivering non-competition and non-solicitation agreements and the like whether or not executed by non-Executive Unitholders so long as such sale agreements and the restrictions contained therein are on commercially reasonable terms; it being understood that Summit Investors, Other Investors who are (or are directly or indirectly owned, managed or controlled by) institutional investors, other holders of assetsSummit Equity and any Managers designated by any of the foregoing shall not be obligated to enter into any non-competition agreements or the like).
(iib) In furtherance connection with any Approved Sale, each Holder and Holdings LLC shall (and Holdings LLC shall cause each of its obligations under Section 9(b)(iSubsidiaries and each of its and their respective officers, managers, directors, employees, financial advisors, consultants, attorneys and other agents and representatives to) above, (i) each holder of Stockholder Shares will take all necessary or desirable actions reasonably requested by the Board in connection with the consummation of the Approved Sale and any related transactions (iiincluding any auction or competitive bid process in connection with or preceding such Approved Sale) each holder of Stockholder Shares will make the same indemnities and agreements as each other holder, including without limitation, voting to approve such transaction and executing all documents reasonably requested by the Board to be executed by such holderMajority Summit Investors, including (i) retaining investment bankers and other advisors approved by the applicable purchase agreementMajority Summit Investors; (ii) participating in management meetings and preparing pitchbooks and confidential information memoranda; (iii) furnishing relevant information and copies of documents; (iv) preparing and making filings with governmental authorities; (v) providing assistance with legal, stockholders agreement and/or indemnification and/or contribution agreement. Each holder of Stockholder Shares shall be obligated to make affirmative representations accounting, tax, financial, benefits and warranties only as to such holder’s title to other due diligence; and ownership of Stockholder Shares (free and clear of all liensvi) otherwise reasonably cooperating with the Majority Summit Investors, the prospective buyer(s), authorizationany investment bankers, execution and delivery of relevant documents by such holder, enforceability of relevant agreements against such holder and consultants or other matters relating to such holder, to enter into covenants in respect of a Transfer of such holder’s Stockholder Shares (or portion thereof) professional advisors who have been retained in connection with such Approved Sale and their respective representatives.
(including, without limitation, c) The obligations of the delivery of certificates, stock powers and other instruments of transfer) and to enter into indemnification obligations (which shall be on a several basis) Holders with respect to the foregoingApproved Sale are subject to the satisfaction of the conditions that (and Holdings LLC shall take such actions as are necessary so that, subject to customary “rollover” by Executive Members) each Unitholder (including, for these purposes, the owners of Corporate Investment Vehicles (assuming a distribution by any Summit Investor or any Xxxxxxx Investor of which a Corporate Investment Vehicle is a partner of the Units it holds to its partners)) shall receive in exchange for the Units held by such Unitholder (but, as provided in Section 9.4(f), that owners of Corporate Investment Vehicles may deliver the Subject Securities of such Corporate Investment Vehicles in lieu of such Units) the same portion of the aggregate consideration (or, in each case the event of a sale of less than all of the issued and outstanding Units, the equity value implied by such aggregate consideration), however described or allocated, from such transaction that such Unitholder would have received if such aggregate consideration (or equity value) had been distributed by Holdings LLC in accordance with the provisions of Section 4.2 (with it being understood and agreed that all consideration (however described or allocated) that is paid directly or indirectly to any Unitholder or Executive (whether in his, her or its capacity as a Unitholder or Executive or otherwise, but excluding repayment of bona fide, pre-existing obligations, sale or stay bonuses in customary amounts, employment agreements, consulting agreements for bona fide services at market rates or other compensation for future services specifically to be provided by one or more Executives) in connection with the Approved Sale shall be deemed to be proceeds of the Approved Sale and shall be allocated among the Unitholders in accordance with the provisions of Section 4.2).
(d) Notwithstanding anything herein to the extent that contrary, the New Astoria Unitholders shall be severally obligated to join on a Pro Rata Basis (as if such indemnification obligations reduced the aggregate proceeds available for distribution or payment to the Unitholders in such Approved Sale) in any indemnification obligations the Majority Holders are similarly obligatedSummit Investors agreed to in connection with such Approved Sale; provided that no holder Unitholder shall be obligated to provide any representations or warranties or to enter into indemnification obligations with respect to any of the foregoing to the extent relating matters particular to any other holder of Stockholder Shares Unitholder or such other holderUnitholder’s Stockholder Shares(or its Permitted Transferees’) Units or Subject Securities (such as a Unitholder’s title to and ownership of Equity Securities or authority), which shall be provided individually by each Unitholder with respect to itself only (and not jointly and severally), and in no event Unitholder shall any holder of Stockholder Shares be liable in respect of any indemnity required to agree to indemnification obligations pursuant to any Approved Sale in an aggregate amount in excess of the net total consideration payable to proceeds received by such holder Unitholder (and its Permitted Transferees) in such Approved Sale; provided, further, that unless a prospective Transferee permits a Unitholder to give a guarantee, letter of credit or other mechanism (which shall be dealt with on an individual basis), any escrow of proceeds of any such transaction shall be withheld on a Pro Rata Basis among all Unitholders (as if such escrow reduced the aggregate proceeds available for distribution or payment to the Unitholders in such Approved Sale). Each holder Unitholder shall pay its share determined on a Pro Rata Basis (as if such expenses reduced the aggregate proceeds available for distribution or payment to the Unitholders in such Approved Sale) of Stockholder Shares the expenses incurred by Holdings LLC pursuant to an Approved Sale to the extent such expenses are incurred for the benefit of all Unitholders (as reasonably determined by the Majority Summit Investors). Expenses incurred by any Holder on its own behalf (including the fees and disbursements of counsel, advisors and other Persons retained by such Holder in connection with the Approved Sale) shall not be considered costs incurred for the benefit of all Unitholders and, to the extent not paid by Holdings LLC, shall be the responsibility of such Holder. Each Unitholder shall enter into any indemnification indemnification, contribution or contribution equityholder/seller representative agreement requested by the Board or the Majority Summit Investors to ensure compliance with this Section 9(b)(ii9.4 and hereby consents and agrees to abide by the customary provisions of any merger or similar agreement providing for an equityholder/seller representative. Each Unitholder shall enter into any other agreement that the Majority Summit Investors approve and (other than non-competition agreements to be entered into by Unitholders who are also Executives) enter into on the same terms and conditions (other than as differences in such terms and conditions might result from holdings of different classes of Units or with respect to a Unitholder’s related Corporate Investment Vehicle), including any applicable purchase agreement, equityholders agreement and/or indemnification and/or contribution agreement, confidentiality agreements (which shall not be more restrictive than the confidentiality provisions in this Agreement), employee non-solicitation agreement, and, only in the case of Unitholders who are Executive Members and their equity holders and any other Unitholders that are Executives or Permitted Transferees thereof, executing and delivering customary non- solicitation and non-competition agreements and the like whether or not executed by non- Executive Unitholders so long as such agreements and the restrictions contained therein are on commercially reasonable terms; it being understood that Summit Investors, Other Investors who are (or are directly or indirectly owned, managed or controlled by) institutional investors, and other holders of Summit Equity shall not be obligated to enter into any non-competition agreements or the like. Without limiting the immediately prior sentence, each Unitholder shall enter into any indemnification, contribution or equityholder/seller representative agreement requested by the Board or the Majority Summit Investors to ensure compliance with this Section 9.4(d) and the provisions of this Section 9(b9.4(d) requiring several liability or no liability for certain matters respecting other Unitholders shall be deemed complied with if the such requirement for several liability is addressed through such agreement, even if the purchase and sale agreement or merger agreement related to the Approved Sale provides for recourse to the entirety of an escrow for any and all matters or joint and several liability. Notwithstanding anything herein to the contrary, this Section 9(b)(ii) shall also be deemed complied with if a portion of the consideration otherwise payable in an Approved Sale is withheld through an escrow which provides for indemnification, in whole or in part, through such escrow.
(iii) The obligations of the holders of Stockholder Shares with respect to an Approved Sale are subject to the satisfaction of the following conditions: (i) upon the consummation of the Approved Sale, each holder of Stockholder Shares shall receive in exchange for the Stockholder Shares held by such holder the same amount of the aggregate consideration that such holder of Stockholder Shares would have received, if such aggregate consideration had been distributed by the Company in complete liquidation pursuant to the rights and preferences in the Company’s Certificate of Incorporation in effect immediately prior to the Approved Sale (as reduced in the case of holders of rights to acquire any class of Stockholder Shares by the applicable purchase price or exercise price per share thereof, if any); provided, however, in the event that some or all of the consideration to be received by the holders of Stockholder Shares in an Approved Sale is not cash, such consideration shall be deemed to have the fair market value determined by the Board (whose determination shall, absent bad faith or manifest error, be final and binding and not subject to any challenge whatsoever) and the portion of aggregate consideration delivered hereunder shall be treated as if such non-cash consideration were cash in an amount equal to such fair market value; (ii) if any holders of Stockholder Shares are given an option as to the form and amount of consideration to be received, each holder of the same type and class of Stockholder Shares shall be given the same option; and (iii) each holder of then currently exercisable rights to acquire shares of a class of Stockholder Shares shall be given the opportunity to either (A) exercise such rights prior to the consummation of the Approved Sale and participate in such sale as a holder of such class of Stockholder Shares or (B) upon the consummation of the Approved Sale, receive in exchange for such rights consideration equal to the amount determined by multiplying (1) the same amount of consideration per share of such class of Stockholder Shares received by the holders of such class of Stockholder Shares in connection with the Approved Sale less the applicable purchase price or exercise price (if any) per share of such class of Stockholder Shares by (2) the number of Stockholder Shares represented by such rights.
(ive) If Holdings LLC, any of its Subsidiaries or the Company Majority Summit Investors enters into any negotiation or transaction for which Rule 506 under the Securities Act (or any similar rule then in effect) promulgated by the Securities and Exchange Commission may be available with respect to such negotiation or transaction (including a merger, consolidation or other reorganization), the other holders of Stockholder Shares, if required under the Securities Act, willthen each Excluded Holder shall, at the request of the CompanyHoldings LLC, appoint a “purchaser representative representative” (as such term is defined in Rule 501501 promulgated under the Securities Act) designated by the BoardHoldings LLC. If any such holder Holder so appoints a such purchaser representative, the Company then Holdings LLC shall pay the fees of such purchaser representative. However, if any such holder Holder declines to appoint the purchaser representative designated by the CompanyHoldings LLC, such holder Holder shall appoint another purchaser representativerepresentative (reasonably acceptable to Holdings LLC), and such holder Holder shall be responsible for the fees of the purchaser representative so appointed.
(vf) Holders Without limiting the generality of Stockholder Shares will bear the foregoing or any other provision of this Agreement, it is understood and agreed that the following structure for a Sale of Holdings LLC (whether such Sale of Holdings LLC is initiated or classified as an Approved Sale or otherwise) shall be utilized by Holdings LLC unless otherwise consented to by all of the Corporate Investment Vehicles which are Unitholders: A Sale of Holdings LLC in which the purchaser or purchasers acquire(s) separately each of the following: (i) all Units of Holdings LLC other than Units held by Corporate Investment Vehicles; and (ii) all outstanding capital stock, other equity interests and all outstanding indebtedness of the Corporate Investment Vehicles and/or all of their pro rata share options, warrants and/or other rights to acquire equity interests in Holdings LLC (which options, warrants or rights the purchaser or purchasers shall then exercise) at the same price per Unit as the Units purchased pursuant to clause (i) above (such price to be paid to the owners of the securities of Corporate Investment Vehicles), determining “same” as follows: calculating price per Unit pursuant to clause (i), computing the aggregate value of all Units held by such Corporate Investment Vehicle on that basis (as if all options, warrants and/or other rights to acquire equity interests in Holdings LLC had been exercised) and, finally, comparing the amount of consideration allocated to the owners of the securities of such expenses reduced Corporate Investment Vehicle to the aggregate proceeds available for distribution in such Approved Sale) of the costs of any sale of Stockholder Shares pursuant to an Approved Sale to the extent such costs are approved by the Board and incurred for the benefit of all holders of Stockholder Shares and are not otherwise paid by the Company or the acquiring party, provided, however, that no holder of Stockholder Shares shall be obliged to make any out-of-pocket expenditures prior to the consummation of the Approved Salevalue so computed.
(vig) The In no manner shall this Section 9.4 be construed to grant to any Member or Unitholder any dissenters rights or appraisal rights or give any Member or Unitholder any right to vote in any Sale of Holdings LLC structured as a merger or consolidation, it being understood that the Members hereby expressly grant to the Majority Summit Investors the sole right to approve or consent to a Sale of Holdings LLC structured as a merger or consolidation of Holdings LLC without approval or consent of the Members or the Unitholders. Notwithstanding anything to the contrary contained herein, the rights, powers, duties and obligations of the parties under Board and Managers hereunder are expressly subject to the requirements of this Section 9(b) shall terminate upon the initial closing of the Company’s IPO9.4.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Solo Brands, Inc.)
Approved Sale Drag Along Obligations. (ia) If the Board (including, if required by Section 5.3(b) of this Agreement, an Investor Manager) approves a Sale of the Company and elects in writing to have such transaction governed by this Section 9.2 (as so approved, an “Approved Sale”), then each holder of Stockholder Shares Unitholder shall vote for, consent to and raise no objections against, and not otherwise impede or delay, against such Approved Sale; provided, regardless however, that the Pinnacle Members shall not be required to vote for, consent to or raise no objections against such Approved Sale if the consideration to be received by them in connection with such transaction consists of property, including equity securities, of the consideration being paid type that state, non-member banks incorporated in such Approved Sale, provided that such consideration complies with the requirements State of this Section 9(b). In furtherance Tennessee or “financial holding companies” under the rules and regulations of the foregoing, if Board of Governors of the Federal Reserve System (the “FRB”) may not own. If the Approved Sale is structured as a (ix) a merger or consolidation, each holder of Stockholder Shares Unitholder shall vote such holder’s Stockholder Shares to approve such merger or consolidation, whether by written consent or at a stockholders meeting, and waive all dissenters any dissenters’ rights, appraisal rights and or similar rights (if any) in connection with such merger or consolidationconsolidation (except that the Pinnacle Members shall not be required to waive such rights if the consideration payable to them in such merger or consolidation is of a type that state, non-member banks incorporated in the State of Tennessee or “financial holding companies” under the rules and regulations of the FRB may not own) or (iiy) a sale of stockUnits, each holder of Stockholder Shares Unitholder shall agree to sell, and shall sell, sell all of such holder’s Stockholder Shares his, her or its Units and rights to acquire Stockholder Shares (or, if such Sale of the Company is structured as a sale of less than all of the stock of the Company, a pro rata share of such holder’s Stockholder Shares and rights to acquire Stockholder Shares, based upon the portion of the stock of the Company being sold) other Equity Securities on the terms and conditions approved by the Board, as applicablesubject to the terms and conditions of this Section 9.2; provided, however, that the Pinnacle Members shall not be required to sell their Units if the consideration they are to receive is of the type that state, non-member banks incorporated in the State of Tennessee or (iii“financial holding companies” under the rules and regulations of the FRB may not own. Subject to the limitations set forth in the first two sentences of this Section 9.2(a) a sale of assetswith respect to the Pinnacle Members, each holder of Stockholder Shares Unitholder shall vote such holder’s Stockholder Shares to approve such sale and any subsequent liquidation of the Company or other distribution of the proceeds therefrom, whether by written consent or at a stockholders meeting, and waive all dissenters rights, appraisal rights and similar rights (if any) in connection with such sale of assets.
(ii) In furtherance of its obligations under Section 9(b)(i) above, (i) each holder of Stockholder Shares will take all necessary or desirable actions reasonably requested by the Board in connection with the consummation of the Approved Sale and (ii) each holder of Stockholder Shares will make the same indemnities and agreements as each other holder, including without limitation, voting to approve such transaction and executing all documents reasonably may be requested by the Board to be executed by such holderBoard, including the applicable purchase agreement, stockholders agreement and/or indemnification and/or contribution agreement. Each holder of Stockholder Shares shall be obligated to make affirmative representations and warranties only as to such holder’s title to and ownership of Stockholder Shares (free and clear of all liens), authorization, execution and delivery of relevant documents by such holder, enforceability of relevant agreements against such holder and other matters relating to such holder, to enter into covenants in respect of a Transfer of such holder’s Stockholder Shares (or portion thereof) in connection with such Approved Sale (including, without limitationbut not limited to, the delivery of certificates, stock powers and other instruments of transfer) and becoming party to enter into indemnification obligations (which shall be on a several basis) with respect to the foregoing, in each case to the extent that the New Astoria Majority Holders are similarly obligated; provided that no holder shall be obligated to enter into indemnification obligations with respect to any of the foregoing to the extent relating to any other holder of Stockholder Shares or such other holder’s Stockholder Shares, and in no event shall any holder of Stockholder Shares be liable in respect of any indemnity obligations pursuant to any Approved Sale in an aggregate amount in excess of the net total consideration payable to such holder in such Approved Sale. Each holder of Stockholder Shares shall enter into any indemnification or contribution agreement requested by the Board to ensure compliance with this Section 9(b)(ii) and the provisions of this Section 9(b) shall be deemed complied with if the requirement for several liability is addressed through such agreement, even if the purchase and sale agreement or agreement, merger agreement and/or other agreements related to the Approved Sale provides which may provide for joint any of the following (among other things): (i) representations and several liability. Notwithstanding anything herein warranties; (ii) indemnification obligations; (iii) earn-outs and working capital, cash, debt and similar adjustments to purchase price; (iv) escrows, holdbacks and similar arrangements to support indemnification obligations and adjustments to purchase price, in each of the cases of clauses (ii), (iii) and (iv) on a pro rata basis (allocated in inverse order of the allocation of distributions set forth in Section 4.1) other than any such obligations that relate specifically to a particular Unitholder, such as indemnification with respect to representations and warranties given by an Unitholder regarding such Unitholder’s title to Units or such Unitholder’s authority, which shall be the sole responsibility of such Unitholder; (v) non-compete, non-solicitation, non-disparagement and confidentiality obligations (excluding, with respect to the contraryFinancial Members, any non-compete and non-solicitation covenants (other than employee non-solicitation covenants that are no more restrictive than those applicable to the Company, Seller Holdco, any Seller Holdco Owner or any Management Party) which shall be binding on Financial Members); (vi) general release of claims against the Company and its Subsidiaries (subject to reasonable and customary exceptions such as rights to compensation, indemnification and professional liability insurance coverage); and (vii) the appointment of a Member or its designee as a seller representative, with customary authority to act on behalf of all Unitholders, including (A) disputing or refraining from disputing, on behalf of each of the Unitholders any amounts to be received by the Unitholders, or any claim made by the counterparty to such transaction agreement, (B) negotiating and compromising, on behalf of each of the Unitholders, any dispute that may arise under, and exercise or refrain from exercising any remedies available under, such transaction agreement, (C) executing, on behalf of each of the Unitholders, any settlement agreement, release or other document with respect to such dispute or remedy (so long as any such settlement or release by any of the Unitholders includes a release of all Unitholders), and (D) determining the amount of, and holding, such reserves (to satisfy known or potential post-closing purchase price adjustments, indemnification claims, defense costs or any fees, costs and expenses incurred in connection with the Approved Sale or by the seller representative in performing its obligations under the transaction agreement) as the Members or such designee reasonably and in good xxxxx xxxxx appropriate; provided that, in each case, the seller representative shall not take any action adverse to any of the Unitholders unless such action is also taken proportionately with respect to all other Unitholders, as the case may be (allocated in inverse order of the allocation of distributions set forth in Section 4.1). Each Unitholder Transferring Units pursuant to this Section 9(b)(ii) 9.2 shall also be deemed complied with if a portion pay its pro rata share (allocated in inverse order of the consideration otherwise payable allocation of distributions set forth in an Approved Sale is withheld through an escrow which provides for indemnification, Section 4.1) of the expenses incurred by the Unitholders in whole or connection with such Transfer if such expenses were expressly approved in part, through such escrowwriting by the Board.
(iiib) The obligations of the holders of Stockholder Shares Unitholders under this Section 9.2 with respect to an Approved Sale are subject to the satisfaction of the following conditions: conditions that (i) upon the consummation of the Approved Sale, each holder of Stockholder Shares the same class or series of Units shall receive in exchange for the Stockholder Shares held by such holder the same amount form of consideration as each other holder of the aggregate consideration that such holder same class or series of Stockholder Shares would have receivedUnits, and if such aggregate consideration had been distributed by the Company in complete liquidation pursuant to the rights and preferences in the Company’s Certificate of Incorporation in effect immediately prior to the Approved Sale (as reduced in the case of holders of rights to acquire any class of Stockholder Shares by the applicable purchase price or exercise price per share thereof, if any); provided, however, in the event that some or all of the consideration to be received by the holders of Stockholder Shares in an Approved Sale is not cash, such consideration shall be deemed to have the fair market value determined by the Board (whose determination shall, absent bad faith any class or manifest error, be final and binding and not subject to any challenge whatsoever) and the portion series of aggregate consideration delivered hereunder shall be treated as if such non-cash consideration were cash in an amount equal to such fair market value; (ii) if any holders of Stockholder Shares Units are given an option as to the form and amount of consideration to be received, each holder all holders of the same type and such class or series of Stockholder Shares Units shall be given the same option; option and (ii) the consideration to be paid by the acquiror with respect to each Unit shall be allocated among each Unit as though the aggregate amount of all such consideration was distributed from the Company in accordance with Section 4.1(a) (assuming, for purposes of this determination, that the Units sold in such Approved Sale are the only Units then outstanding), and, subject to the provisions of this Section 9.2, each Unitholder shall take all actions in connection with the distribution of the aggregate consideration from any transaction described in clause (ii) of the definition of a Sale of the Company as may be requested by the Board to effect such allocation. Notwithstanding anything to the contrary contained in this Section 9.2, in connection with an Approved Sale (i) no Unitholder will be required to grant any indemnification rights except indemnification rights that are pro rata (allocated in inverse order of the allocation of distributions set forth in Section 4.1) and not joint and several (other than any such obligations that relate specifically to a particular Unitholder, such as indemnification with respect to representations and warranties given by an Unitholder regarding such Unitholder’s title to Units or such Unitholder’s authority, which shall be the sole responsibility of such Unitholder), (ii) no Unitholder shall be required to make any representation or warranty that is not made by all other Unitholders and (iii) each holder of then currently exercisable rights the Pinnacle Members shall not be required to acquire shares of a class of Stockholder Shares shall be given the opportunity to either (A) exercise such rights prior to the consummation of the Approved Sale and participate in such sale as a holder of such class of Stockholder Shares or (B) upon the consummation of the Approved Sale, receive accept any consideration in exchange for such rights consideration equal their Units that they are not permitted to own under applicable laws and regulations.
(c) The Board (subject to the amount determined by multiplying requirements of Section 5.3(b)) is hereby granted the sole right to approve or consent to a merger or consolidation of the Company without any approval or consent of any other Members or Unitholders or any class thereof. In no manner shall this Section 9.2 be construed to grant to any Member or Unitholder any dissenters’ rights or appraisal rights or give any other Member or Unitholder any right to vote in any transaction structured as a merger or consolidation.
(1d) The Board (subject to the same amount requirements of consideration per share Section 5.3(b)) may amend the terms of, or terminate, any Approved Sale at any time prior to its consummation at the sole discretion of such class of Stockholder Shares received by the holders of such class of Stockholder Shares Board, and the Board shall have no obligation or liability to any Unitholder or Related Employee in connection with any such amendment (so long as the Approved Sale less the applicable purchase price or exercise price (if any) per share terms of such class of Stockholder Shares by (2) the number of Stockholder Shares represented by such rights.
(iv) If the Company enters into any negotiation or transaction for which Rule 506 amendment are permissible under the Securities Act (other provisions of this Section 9.2) or termination. The Board shall have no obligation or liability to any similar rule then in effect) promulgated Unitholder or Related Employee for any breaches by the Securities and Exchange Commission may be available with respect to such negotiation or transaction (including a merger, consolidation or other reorganization), the other holders of Stockholder Shares, if required under the Securities Act, will, at the request of the Company, appoint a purchaser representative (as such term is defined in Rule 501) designated by the Board. If any such holder so appoints a purchaser representative, the Company shall pay the fees of such purchaser representative. However, if any such holder declines to appoint the purchaser representative designated by the Company, such holder shall appoint another purchaser representative, and such holder shall be responsible for the fees of the purchaser representative so appointed.
(v) Holders of Stockholder Shares will bear their pro rata share (as if such expenses reduced the aggregate proceeds available for distribution in such Approved Sale) of the costs proposed acquirer of any sale of Stockholder Shares pursuant to its obligations in connection with an Approved Sale to the extent such costs are approved by the Board and incurred for the benefit of all holders of Stockholder Shares and are not otherwise paid by the Company or the acquiring party, provided, however, that no holder of Stockholder Shares shall be obliged to make any out-of-pocket expenditures prior to the consummation of the Approved Sale.
(vi) The rights and obligations of the parties under this Section 9(b) shall terminate upon the initial closing of the Company’s IPO.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Pinnacle Financial Partners Inc)
Approved Sale Drag Along Obligations. (i) If at any time the Board approves a Sale of the Company Fundamental Change or Change in Ownership (as applicable, an “Approved Sale”), each holder of Stockholder Shares and each Person that retains voting control of any Stockholder Shares Transferred in accordance with Section 4A (each, a “Holder”) shall (and shall cause any Director(s) designated by it to) take and otherwise facilitate the following actions:
(a) vote forfor (whether at a meeting of the Company’s stockholders or by written consent), consent to and raise no objections against, and not otherwise impede or delay, such Approved Sale, regardless of the consideration being paid in such Approved Sale, provided that such consideration complies with the requirements of this Section 9(b). In furtherance of the foregoing, ;
(b) if the Approved Sale is structured as a (iA) a merger or consolidation, each holder of Stockholder Shares such Holder shall vote such holder’s Stockholder Shares to approve such merger or consolidation, whether by written consent or at a stockholders meeting, and waive all any dissenters rights, appraisal rights and or similar rights (if any) in connection with such merger or consolidation, consolidation or (iiB) a sale of stockcapital stock or other equity securities, each holder of Stockholder Shares such Holder shall agree to sell, sell or dispose of (and shall sell, sell and dispose of) all of such holderHolder’s Stockholder Shares and rights to acquire Stockholder Shares (or, if such Sale other securities of the Company is structured as a sale of less than all of the stock of the Company, a pro rata share of such holder’s Stockholder Shares and rights to acquire Stockholder Shares, based upon the portion of the stock of the Company being sold) on the terms and conditions approved by the Board, as applicable, or (iii) a sale of assets, each holder of Stockholder Shares shall vote such holder’s Stockholder Shares to approve such sale and any subsequent liquidation of the Company or other distribution of the proceeds therefrom, whether by written consent or at a stockholders meeting, and waive all dissenters rights, appraisal rights and similar rights (if any) in connection with such sale of assets.; and
(iic) In furtherance of its obligations under Section 9(b)(i) above, (i) each holder of Stockholder Shares will take all necessary or desirable actions reasonably requested by (in such Holder’s capacity as a stockholder of the Board Company or otherwise) in connection with the consummation of the Approved Sale and (ii) each holder of Stockholder Shares will make the same indemnities and agreements as each other holder, including without limitation, voting to approve such transaction and executing all documents reasonably requested by the Board to be executed by such holder, (including the any applicable purchase agreement, stockholders agreement and/or indemnification and/or contribution agreement. Each agreement and, only in the case of Holders who are Executive Stockholders and any other Holders that are Executives or Permitted Transferees thereof, executing and delivering non-competition and non-solicitation agreements and the like whether or not executed by non-Executive Holders).
(ii) The obligations of the Holders with respect to the Approved Sale are subject to the satisfaction of the conditions that (and the Company shall take such actions as are necessary so that) each holder of Stockholder Shares shall be obligated to make affirmative representations and warranties only as to receive in exchange for the Stockholder Shares held by such holder’s title to and ownership Holder the same portion of the aggregate consideration (however described or allocated) from such transaction that such holder of Stockholder Shares would have received if such aggregate consideration had been distributed by the Company pursuant to a liquidation, dissolution and winding up of the Company in accordance with the provisions of the Certificate of Incorporation.
(free and clear iii) Notwithstanding anything herein to the contrary, the Holders shall be severally obligated to join on a Pro Rata Basis (as if such indemnification obligations reduced the aggregate proceeds available for distribution or payment to the holders of all liens), authorization, execution and delivery of relevant documents by such holder, enforceability of relevant agreements against such holder and other matters relating to such holder, to enter into covenants in respect of a Transfer of such holder’s Stockholder Shares (or portion thereofin such Approved Sale) in any indemnification obligations the Board agreed to in connection with such Approved Sale (including, without limitation, the delivery of certificates, stock powers and other instruments of transfer) and to enter into indemnification obligations (which shall be on a several basis) with respect to the foregoing, in each case to the extent that the New Astoria Majority Holders are similarly obligatedSale; provided that no holder Holder shall be obligated to enter into indemnification obligations with respect to any of the foregoing to the extent relating matters particular to any other holder of Stockholder Shares Holder or such other holderHolder’s Stockholder Shares, and in no event shall any holder of (or its Permitted Transferee’s) Stockholder Shares and no Holder shall be liable in respect of any indemnity required to agree to indemnification obligations pursuant to any Approved Sale in an aggregate amount in excess of the net total consideration payable to proceeds received by such holder Holder (or its Permitted Transferee) in such Approved Sale. Each holder ; provided further that unless a prospective Transferee permits a Holder to give a guarantee, letter of credit or other mechanism (which shall be dealt with on an individual basis), any escrow of proceeds of any such transaction shall be withheld on a Pro Rata Basis among all Holders (as if such escrow reduced the aggregate proceeds available for distribution or payment to the holders of Stockholder Shares in such Approved Sale). Each Holder shall pay its share determined on a Pro Rata Basis (as if such expenses reduced the aggregate proceeds available for distribution or payment to the holders of Stockholder Shares in such Approved Sale) of the expenses incurred by the Company pursuant to an Approved Sale to the extent such expenses are incurred for the benefit of all Holders. Expenses incurred by any Holder on its his, her or its own behalf (including the fees and disbursements of counsel, advisors and other Persons retained by such Holder in connection with the Approved Sale) will not be considered costs incurred for the benefit of all Holders and, to the extent not paid by the Company, will be the responsibility of such Holder. Each Holder shall enter into any indemnification indemnification, contribution or contribution stockholder/seller representative agreement requested by the Board to ensure compliance with this Section 9(b)(ii4D and hereby consents and agrees to abide by the customary provisions of any merger or similar agreement providing for a stockholder/seller representative. Each Holder shall enter into any other agreement that the Board approves and (other than non-competition and non-solicitation agreements to be entered into by Holders who are also employees of the Company or any of its Subsidiaries) enter into such agreements on the same terms and conditions (other than as differences in such terms and conditions might result from holdings of different classes of Stockholder Shares). Without limiting the immediately prior sentence, each Holder shall enter into any indemnification, contribution or stockholder/seller representative agreement requested by the Board to ensure compliance with this Section 4D(iii), and the provisions of this Section 9(b4D(iii) requiring several liability shall be deemed complied with if the such requirement for several liability is addressed through such agreement, even if the purchase and sale agreement or merger agreement related to the Approved Sale provides for joint and several liability. Notwithstanding anything herein to the contrary, this Section 9(b)(ii) shall also be deemed complied with if a portion of the consideration otherwise payable in an Approved Sale is withheld through an escrow which provides for indemnification, in whole or in part, through such escrow.
(iii) The obligations of the holders of Stockholder Shares with respect to an Approved Sale are subject to the satisfaction of the following conditions: (i) upon the consummation of the Approved Sale, each holder of Stockholder Shares shall receive in exchange for the Stockholder Shares held by such holder the same amount of the aggregate consideration that such holder of Stockholder Shares would have received, if such aggregate consideration had been distributed by the Company in complete liquidation pursuant to the rights and preferences in the Company’s Certificate of Incorporation in effect immediately prior to the Approved Sale (as reduced in the case of holders of rights to acquire any class of Stockholder Shares by the applicable purchase price or exercise price per share thereof, if any); provided, however, in the event that some or all of the consideration to be received by the holders of Stockholder Shares in an Approved Sale is not cash, such consideration shall be deemed to have the fair market value determined by the Board (whose determination shall, absent bad faith or manifest error, be final and binding and not subject to any challenge whatsoever) and the portion of aggregate consideration delivered hereunder shall be treated as if such non-cash consideration were cash in an amount equal to such fair market value; (ii) if any holders of Stockholder Shares are given an option as to the form and amount of consideration to be received, each holder of the same type and class of Stockholder Shares shall be given the same option; and (iii) each holder of then currently exercisable rights to acquire shares of a class of Stockholder Shares shall be given the opportunity to either (A) exercise such rights prior to the consummation of the Approved Sale and participate in such sale as a holder of such class of Stockholder Shares or (B) upon the consummation of the Approved Sale, receive in exchange for such rights consideration equal to the amount determined by multiplying (1) the same amount of consideration per share of such class of Stockholder Shares received by the holders of such class of Stockholder Shares in connection with the Approved Sale less the applicable purchase price or exercise price (if any) per share of such class of Stockholder Shares by (2) the number of Stockholder Shares represented by such rights.
(iv) If the Company or any of its Subsidiaries enters into any negotiation or transaction for which Rule 506 under the Securities Act (or any similar rule then in effect) promulgated by the Securities and Exchange Commission may be available with respect to such negotiation or transaction (including a merger, consolidation or other reorganization), the other holders of each Excluded Stockholder Shares, if required under the Securities Act, willshall, at the request of the Company, appoint a “purchaser representative representative” (as such term is defined in Rule 501501 promulgated under the Securities Act) designated by the BoardCompany. If any such holder Holder so appoints a such purchaser representative, the Company shall pay the fees of such purchaser representative. However, if any such holder Holder declines to appoint the purchaser representative designated by the Company, such holder Holder shall appoint another purchaser representativerepresentative (reasonably acceptable to the Company), and such holder Holder shall be responsible for the fees of the purchaser representative so appointed.
(v) Holders of Stockholder Shares will bear their pro rata share (as if such expenses reduced the aggregate proceeds available for distribution in such Approved Sale) of the costs of any sale of Stockholder Shares pursuant to an Approved Sale to the extent such costs are approved by the Board and incurred for the benefit of all holders of Stockholder Shares and are not otherwise paid by the Company or the acquiring party, provided, however, that no holder of Stockholder Shares shall be obliged to make any out-of-pocket expenditures prior to the consummation of the Approved Sale.
(vi) The rights and obligations of the parties under this Section 9(b) shall terminate upon the initial closing of the Company’s IPO.
Appears in 1 contract
Approved Sale Drag Along Obligations. (ia) If Subject to compliance with the Board approves provisions of this Section 7.5, if the Members holding a majority of the Sponsor Interests (the party so approving, the “Approving Party”) approve a Sale of the Company and elect in writing to have such transaction governed by this Section 7.5 (as so approved, an “Approved A pproved Sale”), then each holder of Stockholder Shares Interest Holder shall vote for, consent to (including after the fact and following any prior approval by Members holding a majority of the Sponsor Interests) and raise no objections against, and not otherwise impede or delay, against such Approved Sale, regardless of the consideration being paid in such Approved Sale, provided that such consideration complies with the requirements of this Section 9(b). In furtherance of the foregoing, if If the Approved Sale is structured as a (ix) a merger or consolidation, each holder of Stockholder Shares Interest Holder shall vote such holder’s Stockholder Shares to approve such merger or consolidation, whether by written consent or at a stockholders meeting, and waive all any dissenters rights, appraisal rights and or similar rights (if any) in connection with such merger or consolidation, consolidation or (iiy) a sale of stockInterests, each holder of Stockholder Shares Interest Holder shall agree to sellsell a proportionate amount of his, and shall sell, all of such holder’s Stockholder Shares her or its Interests and rights to acquire Stockholder Shares (or, if such Sale of the Company is structured as a sale of less than all of the stock of the Company, a pro rata share of such holder’s Stockholder Shares and rights to acquire Stockholder Shares, based upon the portion of the stock of the Company being sold) Interests on the same terms and conditions approved by as the BoardApproving Party, as applicable, or (iii) a sale subject to the following provisions of assetsthis Section 7.5. Subject to the terms of this S ection 7.5, each holder of Stockholder Shares Interest Holder shall vote such holder’s Stockholder Shares to approve such sale and any subsequent liquidation of the Company or other distribution of the proceeds therefrom, whether by written consent or at a stockholders meeting, and waive all dissenters rights, appraisal rights and similar rights (if any) in connection with such sale of assets.
(ii) In furtherance of its obligations under Section 9(b)(i) above, (i) each holder of Stockholder Shares will take all necessary or desirable actions reasonably requested by the Board in connection with the consummation of the Approved Sale and (ii) each holder of Stockholder Shares will make the same indemnities and agreements as each other holder, including without limitation, voting to approve such transaction and executing all documents may be reasonably requested by the Board to be executed by such holderApproving Party, including the applicable purchase agreement, stockholders agreement and/or indemnification and/or contribution agreement. Each holder of Stockholder Shares shall be obligated to make affirmative representations and warranties only as to such holder’s title to and ownership of Stockholder Shares (free and clear of all liens), authorization, execution and delivery of relevant documents by such holder, enforceability of relevant agreements against such holder and other matters relating to such holder, to enter into covenants in respect of a Transfer of such holder’s Stockholder Shares (or portion thereof) in connection with such Approved Sale (including, without limitationbut not limited to, the delivery of certificates, stock powers and other instruments of transfer) and becoming party to enter into indemnification obligations (which shall be on a several basis) with respect to the foregoing, in each case to the extent that the New Astoria Majority Holders are similarly obligated; provided that no holder shall be obligated to enter into indemnification obligations with respect to any of the foregoing to the extent relating to any other holder of Stockholder Shares or such other holder’s Stockholder Shares, and in no event shall any holder of Stockholder Shares be liable in respect of any indemnity obligations pursuant to any Approved Sale in an aggregate amount in excess of the net total consideration payable to such holder in such Approved Sale. Each holder of Stockholder Shares shall enter into any indemnification or contribution agreement requested by the Board to ensure compliance with this Section 9(b)(ii) and the provisions of this Section 9(b) shall be deemed complied with if the requirement for several liability is addressed through such agreement, even if the purchase and sale agreement or merger agreement related to the Approved Sale provides providing for joint and several liability. Notwithstanding anything herein to the contrary, this Section 9(b)(ii) shall also be deemed complied with if a portion of the consideration otherwise payable in an Approved Sale is withheld through an escrow which provides for indemnification, in whole or in part, through such escrow.
(iii) The obligations of the holders of Stockholder Shares with respect to an Approved Sale are subject to the satisfaction of the following conditionsfollowing: (i) upon the consummation representations and warranties; (ii) indemnification obligations; (iii) earn- outs, working capital, cash, debt and similar adjustments to purchase price; (iv) escrows, holdbacks and similar arrangements to support indemnification obligations and adjustments to purchase price, in each of the Approved Salecases of clauses (ii), each holder (iii) and (iv) on a pro rata basis (determined based on his, her or its share of Stockholder Shares shall receive in exchange for the Stockholder Shares held by such holder the same final dollar amount of the aggregate consideration proceeds allocated among the Interest Holders in such Approved Sale) other than any such obligations that relate specifically to a particular Interest Holder, such holder as indemnification with respect to representations and warranties given by an Interest Holder regarding such Interest Holder’s title to Interests or such Interest Holder’s authority, which shall be the sole responsibility of Stockholder Shares would have receivedsuch Interest Holder; (v) reasonable and customary non-compete, if such aggregate consideration had been distributed by non-solicitation, non-hire, non- disparagement and confidentiality obligations; (vi) general release of claims against the Company in complete liquidation pursuant and its Subsidiaries (subject to the rights reasonable and preferences in the Company’s Certificate of Incorporation in effect immediately prior to the Approved Sale (customary exceptions such as reduced in the case of holders of rights to acquire any class of Stockholder Shares by the applicable purchase price or exercise price per share thereofcompensation, if anyindemnification and professional liability insurance coverage); providedand (vii) the appointment of a Related Fund or its designee as a seller representative, howeverwith customary authority to act on behalf of all Interest Holders, in the event that some including (A) disputing or all refraining from disputing, on behalf of each of the consideration Interest Holders any amounts to be received by the holders of Stockholder Shares in an Approved Sale is not cashInterest Holders, such consideration shall be deemed to have the fair market value determined or any claim made by the Board (whose determination shall, absent bad faith or manifest error, be final and binding and not subject to any challenge whatsoever) and the portion of aggregate consideration delivered hereunder shall be treated as if such non-cash consideration were cash in an amount equal counterparty to such fair market value; (ii) if any holders of Stockholder Shares are given an option as to the form and amount of consideration to be receivedtransaction agreement, each holder of the same type and class of Stockholder Shares shall be given the same option; and (iii) each holder of then currently exercisable rights to acquire shares of a class of Stockholder Shares shall be given the opportunity to either (A) exercise such rights prior to the consummation of the Approved Sale and participate in such sale as a holder of such class of Stockholder Shares or (B) upon the consummation negotiating and compromising, on behalf of each of the Approved SaleInterest Holders, receive in exchange for any dispute that may arise under, and exercise or refrain from exercising any remedies available under, such rights consideration equal transaction agreement, (C) executing, on behalf of each of the Interest Holders, any settlement agreement, release or other document with respect to such dispute or remedy (so long as any such settlement or release by any of the Interest Holders includes a release of all Interest Holders), and (D) determining the amount determined by multiplying of, and holding, such reserves (1) the same amount of consideration per share of such class of Stockholder Shares received by the holders of such class of Stockholder Shares to satisfy known or potential post-closing purchase price adjustments, indemnification claims, defense costs or any fees, costs and expenses incurred in connection with the Approved Sale less or by the applicable purchase price or exercise price (if any) per share of such class of Stockholder Shares by (2) the number of Stockholder Shares represented by such rights.
(iv) If the Company enters into any negotiation or transaction for which Rule 506 seller representative in performing its obligations under the Securities Act (transaction agreement) as the Sponsor Member or any similar rule then such designee reasonably and in effect) promulgated by the Securities and Exchange Commission may be available with respect to such negotiation or transaction (including a merger, consolidation or other reorganization), the other holders of Stockholder Shares, if required under the Securities Act, will, at the request of the Company, appoint a purchaser representative (as such term is defined in Rule 501) designated by the Board. If any such holder so appoints a purchaser representative, the Company shall pay the fees of such purchaser representative. However, if any such holder declines to appoint the purchaser representative designated by the Company, such holder shall appoint another purchaser representative, and such holder shall be responsible for the fees of the purchaser representative so appointed.
(v) Holders of Stockholder Shares will bear their pro rata share (as if such expenses reduced the aggregate proceeds available for distribution in such Approved Sale) of the costs of any sale of Stockholder Shares pursuant to an Approved Sale to the extent such costs are approved by the Board and incurred for the benefit of all holders of Stockholder Shares and are not otherwise paid by the Company or the acquiring party, provided, however, that no holder of Stockholder Shares shall be obliged to make any out-of-pocket expenditures prior to the consummation of the Approved Sale.
(vi) The rights and obligations of the parties under this Section 9(b) shall terminate upon the initial closing of the Company’s IPO.good xxxxx xxxxx appropriate; and
Appears in 1 contract
Samples: Stock Purchase Agreement
