Drag Along Right. If a Class A Member (“Transferring Member”) intends to sell Class A Units to a third party purchaser that would result in such third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company, then the Transferring Member shall have the right (the “Drag-Along Right”) to require each remaining Members to sell some or all of its or his or her Units to the third party in a proportionate amount and on the same terms and conditions as the Transferring Member (taking into account Section 11.8(f)) in accordance with the terms and conditions of this Section 11.8 and otherwise in accordance with the following provisions: (a) The Drag-Along Right may only be exercised by written notice (the “Drag-Along Notice”) from the Transferring Member and the third party purchaser to the remaining Members. (b) The Drag-Along Notice shall: i. state the name of the third party purchaser, the purchase price for the Units of the Transferring Member(s) and the purchase price proposed to be paid for the Units of the remaining Members (in accordance with Section 11.8(f)) and the time, date and place of completion of such sale and purchase; and ii. be given no later than fifteen (15) business days before the date fixed for completion of the sale by the Transferring Member of its or his or her Units to the third party. (c) The delivery of the Drag-Along Notice to a Member shall constitute an irrevocable and binding obligation of the Member to sell, and the third party to purchase, some or all of the Member’s Units in a proportionate amount and on the same terms and conditions, taking into account Section 11.8(f) and subject to Section 11.8(e), as are applicable to the sale by the Transferring Member of its Units to the third party as set forth in the Drag-Along Notice (subject to such terms being accurately reflected in the Drag-Along Notice). (d) At or before the time of completion of the sale of the Units of each Member to the third party purchaser, each such Member shall (i) use its best efforts to cause to be discharged any and all encumbrances of, and security interests in, its or his or her Units and provide written evidence of such discharges to the third party purchaser, and (ii) execute and deliver to the third party purchaser, against payment for such Units, all certificates or other documents representing such Units, duly endorsed for transfer or with duly executed assignment forms attached. (e) Notwithstanding any provision of this Section 11.8, (i) no Member shall be under any obligation to sell any Units unless (A) such sale occurs concurrently with or subsequent to the sale of Units by the Transferring Member in a proportionate amount on the same terms and conditions (taking into account Section 11.8(f)), (B) the sale of Units by the Transferring Member shall qualify as a Permitted Transfer under Section 11.2 and meets the conditions to a Permitted Transfer set forth in Section 11.3 to the extent applicable, and (C) such sale results in a third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company and (ii) nothing in such sale of Units shall require a Member subject to this Section 11.8 to do any of the following, unless all Members similarly situated (e.g., of a similar class or Series of Units) and the Transferring Member are required to do the same: (w) enter into any agreement or make any covenant, (x) make any representation, or warranty other than related to authority, ownership and the ability to convey title to such Units, (y) be liable for the inaccuracy of any representation or warranty made by any person or entity in connection with the sale other than himself or itself and the Company, or (z) be liable in any way other than severally in proportion to the amount of consideration paid to such Member in connection with such sale and such liability not exceed the aggregate consideration received by such Member in such sale. (f) Notwithstanding that a sale pursuant to this Section 11.8 may provide for, or result in, different per Unit consideration for different classes or series of Units, such sale shall be deemed to be for the same terms and conditions regarding consideration if the proceeds of such sale are allocated in the manner that would result if such consideration were distributed to the Members as if the Company were hypothetically liquidated pursuant to the rights and preferences set forth in Section 12.2 (taking into account Section 12.3) as in effect immediately prior to such sale as long as the nature of that consideration (e.g., cash, promissory notes, or other property) is received among the various classes or series of Units in the same proportionate amounts received by the Transferring Member.
Appears in 2 contracts
Samples: Operating Agreement (Franklin Covey Co), Operating Agreement (Franklin Covey Co)
Drag Along Right. If a Class A Member (a) Subject to Section 5.3(d) and the prior approval of the Board, any one or more Members (the “Transferring MemberDragging Members”) intends to sell Class A Units to a third party purchaser that would result in such third party purchaser acquiring control over more collectively holding greater than fifty percent (50%) of all outstanding Class A the Common Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company, then the Transferring Member shall have the right to effect, and to cause the Company and each other Member to consent to and participate in, a sale of all of the Common Units or all or substantially all of the assets of the Company, as the case may be, to any Potential Purchaser in a single transaction or series of related transactions, whether pursuant to a sale of the Common Units or an alternate form of transaction at the election of the Dragging Members (whether by a merger transaction, business combination, consolidation or sale of all of the Common Units or all or substantially all of the assets of the Company) (a “Drag-Along RightTransaction”), and if requested by the Dragging Member, each other Member (each, a “Compelled Member”) to require each remaining Members shall be required to sell some or all of its or his or her Common Units (or, if applicable, to the third party in a proportionate amount take all necessary actions to support and on the same terms and conditions as the Transferring Member (taking into account Section 11.8(f)consummate such alternate form of transaction) in accordance with the terms and conditions of this Section 11.8 and otherwise in accordance with the following provisions:5.3.
(ab) The Drag-Along Right may only be exercised by Dragging Members shall provide a written notice (the “Drag-Along Notice”) from the Transferring Member and the third party purchaser to the remaining Members.
(b) The of such Drag-Along Transaction to each of the Compelled Members, with a copy to the Company, as promptly as practicable and in any event not later than twenty (20) Business Days prior to the proposed consummation of the Drag-Along Transaction by the Potential Purchaser. The Drag- Along Notice shall:
i. state shall contain written notice of the exercise of the rights of the Dragging Members pursuant to Section 5.3(a), stating that such Dragging Members propose to effect a Drag-Along Transaction and setting forth the name of the third party purchaserPotential Purchaser, the purchase applicable form of consideration, and price for the Units of the Transferring Member(s) and the purchase price proposed per Common Unit to be paid by the Potential Purchaser and all other material terms and conditions of the Drag-Along Transaction and a copy of the definitive purchase agreement or similar document providing for the Units of the remaining Members (in accordance with Section 11.8(f)) and the time, date and place of completion of such sale and purchase; and
ii. be given no later than fifteen (15) business days before the date fixed for completion of the sale by the Transferring Member of its or his or her Units to the third partyDrag-Along Transaction.
(c) The delivery At the closing of the Drag-Along Notice Transaction, the Potential Purchaser shall remit to a each Compelled Member shall constitute an irrevocable and binding obligation the total consideration due such Compelled Member in respect of the Common Units sold by such Compelled Member in the Drag-Along Transaction, less a pro rata portion of any amounts to sell, and the third party to purchase, some be held in escrow or all of the Member’s Units in a proportionate amount and on the same terms and conditions, taking into account Section 11.8(f) and subject to an earn-out or similar provision. The closing with respect to any Drag-Along Transaction pursuant to this Section 11.8(e), 5.3 shall be held as are applicable to soon as practicable and at the sale by the Transferring Member of its Units to the third party as set forth time and place specified in the Drag-Along Notice but in any event within one hundred and eighty (subject to such terms being accurately reflected in 180) days of the date the Drag-Along Notice)Notice is delivered to the Members. Consummation of such Transfer of Common Units by any Compelled Member to the Potential Purchaser in a Drag-Along Transaction shall be conditioned upon consummation of such Transfer by each Dragging Member to such Potential Purchaser of the Common Units proposed to be Transferred by the Dragging Members. Any transaction costs, including transfer taxes and legal, accounting and investment banking fees incurred by the Company and the Dragging Members and any other Member participating in a Transfer pursuant to a Drag-Along Notice shall, unless the applicable Potential Purchaser refuses, be borne by the Company in the event of a Sale of the Company and shall otherwise be borne by the Members on a pro rata basis based on the consideration received by each Member in such Transfer.
(d) At or before Except as expressly provided in this Section 5.3, the time of completion of the sale of the Units of each Dragging Members shall have no obligation to any Compelled Member to the third party purchaser, each such Member shall consummate any Drag-Along Transaction (i) use its best efforts to cause to be discharged it being understood that any and all encumbrances ofsuch decisions shall be made by the Dragging Members in their sole discretion). In the event that the Drag-Along Transaction is not consummated by the Dragging Members, the Compelled Members shall not be entitled to sell or otherwise dispose of any of their Common Units directly to any third party or parties pursuant to such Drag-Along Transaction (it being understood that all such sales and security interests in, its or his or her Units other dispositions shall be made only on the terms and provide written evidence of such discharges pursuant to the third party purchaser, and (ii) execute and deliver to the third party purchaser, against payment for such Units, all certificates or other documents representing such Units, duly endorsed for transfer or with duly executed assignment forms attachedprocedures set forth in this Article V).
(e) Notwithstanding In furtherance of, and not in limitation of, the foregoing, in connection with any provision of this Section 11.8Drag-Along Transaction, each Member will (i) no Member shall be under any obligation to sell any Units unless (A) such sale occurs concurrently with or subsequent to the sale fullest extent permitted by law, raise no objections in its capacity as a Member against the Drag-Along Transaction or the process pursuant to which it was arranged and waive all dissenters rights, appraisal rights and similar rights in connection with the Drag-Along Transaction, (ii) vote or provide its written consent with respect to all of its Common Units by in favor of the Transferring Member in a proportionate amount on transaction pursuant to which the same Transfer is effected and (iii) execute all documents containing terms and conditions (taking into account Section 11.8(f)), (B) the sale of Units by the Transferring Member shall qualify as a Permitted Transfer under Section 11.2 and meets the conditions to a Permitted Transfer set forth in Section 11.3 to the extent applicable, and (C) such sale results in a third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to consistent with the provisions of this Section 11.85.3 which are also executed by the Dragging Members and are reasonably necessary to effect the transaction; provided, however, that no Compelled Member shall be required to enter into a release or non-compete or non-solicitation or no-hire provision, an exclusivity provision, any other restrictive covenant (other than customary and reasonable covenants regarding confidentiality that are consistent with those set forth in which this Agreement) or any other provision that is not a strictly financial term related directly to such Drag-Along Transaction; provided, further, that (A) the Transferring liability of each Member shall be several and not joint with respect to the other Members, (together with B) no Compelled Member shall have any affiliates liability to the Company or any other Member for any breaches of the Transferring representations, warranties or covenants of any other Member or the fraud or willful misconduct of any other Member, (C) any obligations of a Compelled Member under the agreement governing such transaction and any related escrow agreement shall be borne pro rata among the Members based on the proceeds and assets payable to such Members in such transaction (other than with respect to representations and warranties that relate specifically to a particular Member or its Common Units, which obligations shall be borne solely by such Member) would not retain a controlling interest and shall in no event exceed the Company actual proceeds and assets received by such Compelled Member in such transaction, and (iiD) nothing in such sale of Units no Compelled Member shall require a Member subject to this Section 11.8 to do any of the following, unless all Members similarly situated (e.g., of a similar class or Series of Units) and the Transferring Member are be required to do the same: (w) enter into any agreement or make any covenant, (x) make any representation, representations or warranty other than related to authority, ownership and the ability to convey title to such Units, (y) be liable for the inaccuracy of any representation warranties or warranty made by any person or entity in connection with the sale other than himself or itself and the Company, or (z) be liable in any way other than severally in proportion to the amount of consideration paid to such Member covenants in connection with such sale and transaction except, as applicable, with respect to (1) such liability not exceed the aggregate consideration received by such Member in such sale.
(f) Notwithstanding that a sale pursuant to this Section 11.8 may provide for, or result in, different per Unit consideration for different classes or series of Units, such sale shall be deemed to be for the same terms and conditions regarding consideration if the proceeds Compelled Member’s ownership of such sale are allocated in the manner that would result if such consideration were distributed to the Members as if the Company were hypothetically liquidated pursuant to the rights and preferences set forth in Section 12.2 (taking into account Section 12.3) as in effect immediately prior to such sale as long as the nature of that consideration (e.g., cash, promissory notes, or other property) is received among the various classes or series of Units in the same proportionate amounts received by the Transferring Compelled Member.’s Common Units,
Appears in 1 contract
Samples: Limited Liability Company Agreement
Drag Along Right. If (i) Subject to Section 2.6(b), if, at any time and from time to time after the date of this Agreement, Xxxxxxx wishes to Transfer in a Class A bona fide arms' length sale (for purposes of this Section 2.6(d), the "Proposed Transfer") 30% or more of his Units to any Person or Persons who are not Affiliates of Xxxxxxx (for purposes of this Section 2.6(d), the "Proposed Transferee"), Xxxxxxx shall have the right (for purposes of this Section 2.6(d), the "Drag-Along Right") to require each Member (“Transferring Member”) intends to sell Class A Units to the Proposed Transferee all or a third party purchaser that would result in ratable portion of each such third party purchaser acquiring control over more than fifty percent Member's Units, as the case may be, (50%) of all outstanding Class A Units and otherwise result in a Change of Controlfor the same proportional consideration received by Xxxxxxx, after taking into account all consideration received by Xxxxxxx under related agreements) then owned by such Member. Each Member agrees to take all steps necessary to enable him or it to comply with the provisions of this Section 2.6(d). For purposes of this Section 2.6(d) only, the term "Xxxxxxx" shall include Xxxxxxx and/or his Permitted Transferees or Affiliates and/or their Permitted Transferees or Affiliates, as the case may be, and the term "Member" shall not include Xxxxxxx or his Affiliates, but only to the extent that Xxxxxxx or his Affiliates do not participate in the Proposed Transfer. Notwithstanding the foregoing, this Section 2.6(d) shall not apply to any Management Interest of the Management Members until such time as the Management Members are deemed to own Incentive Units equal to 4% (as adjusted under Section 3.2) of the total Units outstanding pursuant to Section 2.4 of this Agreement.
(ii) To exercise a Drag-Along Right, Xxxxxxx shall comply with Section 2.6(b) and, if the Other Members do not exercise their rights thereunder, give each Member a written notice (for purposes of this Section 2.6(d), a "Drag-Along Notice") containing (i) the name and address of the Proposed Transferee and (ii) the proposed purchase price, terms of payment and other material terms and conditions of the Proposed Transferee's offer. Subject to Section 2.6(b), each Member shall thereafter be obligated to sell its Units subject to such Drag-Along Notice, provided, that the sale to the Proposed Transferee is consummated within ninety (90) days of Units by delivery of the Members Drag-Along Notice. If the sale is not consummated within such 90-day period, then each Member shall no longer be obligated to sell such Member's shares pursuant to that specific Drag-Along Right but shall remain subject to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company, then the Transferring Member shall have the right (the “Drag-Along Right”) to require each remaining Members to sell some or all of its or his or her Units to the third party in a proportionate amount and on the same terms and conditions as the Transferring Member (taking into account Section 11.8(f)) in accordance with the terms and conditions of this Section 11.8 and otherwise in accordance with the following provisions:
(a) The Drag-Along Right may only be exercised by written notice (the “Drag-Along Notice”) from the Transferring Member and the third party purchaser to the remaining Members.
(b) The Drag-Along Notice shall:
i. state the name of the third party purchaser, the purchase price for the Units of the Transferring Member(s) and the purchase price proposed to be paid for the Units of the remaining Members (in accordance with Section 11.8(f)) and the time, date and place of completion of such sale and purchase; and
ii. be given no later than fifteen (15) business days before the date fixed for completion of the sale by the Transferring Member of its or his or her Units to the third party.
(c) The delivery of the Drag-Along Notice to a Member shall constitute an irrevocable and binding obligation of the Member to sell, and the third party to purchase, some or all of the Member’s Units in a proportionate amount and on the same terms and conditions, taking into account Section 11.8(f) and subject to Section 11.8(e), as are applicable to the sale by the Transferring Member of its Units to the third party as set forth in the Drag-Along Notice (subject to such terms being accurately reflected in the Drag-Along Notice2.6(d).
(diii) At Notwithstanding anything contained in this Section 2.6(d), in the event that all or before a portion of the time purchase price consists of completion of securities and the sale of the Units of each Member to the third party purchaser, each such Member shall (i) use its best efforts to cause to be discharged any and all encumbrances of, and security interests in, its or his or her Units and provide written evidence of such discharges to the third party purchaser, and (ii) execute and deliver to the third party purchaser, against payment for such Units, all certificates or other documents representing such Units, duly endorsed for transfer or with duly executed assignment forms attached.
(e) Notwithstanding any provision of this Section 11.8, (i) no Member shall be under any obligation to sell any Units unless (A) such sale occurs concurrently with or subsequent to the sale of Units by the Transferring Member in a proportionate amount on the same terms and conditions (taking into account Section 11.8(f)), (B) the sale of Units by the Transferring Member shall qualify as a Permitted Transfer under Section 11.2 and meets the conditions to a Permitted Transfer set forth in Section 11.3 to the extent applicable, and (C) such sale results in a third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company and (ii) nothing in such sale of Units shall require a Member subject to this Section 11.8 to do any of the following, unless all Members similarly situated (e.g., of a similar class or Series of Units) and the Transferring Member are required to do the same: (w) enter into any agreement or make any covenant, (x) make any representation, or warranty other than related to authority, ownership and the ability to convey title to such Units, (y) be liable for the inaccuracy of any representation or warranty made by any person or entity in connection with the sale other than himself or itself and the Company, or (z) be liable in any way other than severally in proportion to the amount of consideration paid to such Member in connection with such sale and such liability not exceed the aggregate consideration received by such Member in such sale.
(f) Notwithstanding that a sale pursuant to this Section 11.8 may provide for, or result in, different per Unit consideration for different classes or series of Units, such sale shall be deemed to be for the same terms and conditions regarding consideration if the proceeds of such sale are allocated in the manner that would result if such consideration were distributed securities to the Members as if would require either a registration under the Company were hypothetically liquidated Securities Act or the preparation of a disclosure document pursuant to Regulation D under the rights and preferences set forth Securities Act (or any successor regulation) or a similar provision of any state securities law, then, at the Managing Member's option, the Members may receive, in Section 12.2 (taking into account Section 12.3) as lieu of such securities, the fair market value of such securities in effect immediately prior to such sale as long as the nature of that consideration (e.g., cash, promissory notes, or other property) is received among the various classes or series of Units as determined in the same proportionate amounts received good faith by the Transferring MemberBoard.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Internet Com Corp)
Drag Along Right. If a Class A Member (“Transferring Member”) intends to sell Class A Units to a third party purchaser that would result in such third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company, then the Transferring Member shall have the right (the “Drag-Along Right”) to require each remaining Members to sell some or all of its or his or her Units to the third party in a proportionate amount and on the same terms and conditions as the Transferring Member (taking into account Section 11.8(f)) in accordance with the terms and conditions of this Section 11.8 and otherwise in accordance with the following provisions:
: (a) The Drag-Along Right may only be exercised by written notice (the “Drag-Along Notice”) from the Transferring Member and the third party purchaser to the remaining Members.
(b) The Drag-Along Notice shall:
: i. state the name of the third party purchaser, the purchase price for the Units of the Transferring Member(s) and the purchase price proposed to be paid for the Units of the remaining Members (in accordance with Section 11.8(f)) and the time, date and place of completion of such sale and purchase; and
and 46 ii. be given no later than fifteen (15) business days before the date fixed for completion of the sale by the Transferring Member of its or his or her Units to the third party.
(c) The delivery of the Drag-Along Notice to a Member shall constitute an irrevocable and binding obligation of the Member to sell, and the third party to purchase, some or all of the Member’s Units in a proportionate amount and on the same terms and conditions, taking into account Section 11.8(f) and subject to Section 11.8(e), as are applicable to the sale by the Transferring Member of its Units to the third party as set forth in the Drag-Along Notice (subject to such terms being accurately reflected in the Drag-Along Notice).
(d) At or before the time of completion of the sale of the Units of each Member to the third party purchaser, each such Member shall (i) use its best efforts to cause to be discharged any and all encumbrances of, and security interests in, its or his or her Units and provide written evidence of such discharges to the third party purchaser, and (ii) execute and deliver to the third party purchaser, against payment for such Units, all certificates or other documents representing such Units, duly endorsed for transfer or with duly executed assignment forms attached.
(e) Notwithstanding any provision of this Section 11.8, (i) no Member shall be under any obligation to sell any Units unless (A) such sale occurs concurrently with or subsequent to the sale of Units by the Transferring Member in a proportionate amount on the same terms and conditions (taking into account Section 11.8(f)), (B) the sale of Units by the Transferring Member shall qualify as a Permitted Transfer under Section 11.2 and meets the conditions to a Permitted Transfer set forth in Section 11.3 to the extent applicable, and (C) such sale results in a third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company and (ii) nothing in such sale of Units shall require a Member subject to this Section 11.8 to do any of the following, unless all Members similarly situated (e.g., of a similar class or Series of Units) and the Transferring Member are required to do the same: (w) enter into any agreement or make any covenant, (x) make any representation, or warranty other than related to authority, ownership and the ability to convey title to such Units, (y) be liable for the inaccuracy of any representation or warranty made by any person or entity in connection with the sale other than himself or itself and the Company, or (z) be liable in any way other than severally in proportion to the amount of consideration paid to such Member in connection with such sale and such liability not exceed the aggregate consideration received by such Member in such sale.
. (f) Notwithstanding that a sale pursuant to this Section 11.8 may provide for, or result in, different per Unit consideration for different classes or series of Units, such sale shall be deemed to be for the same terms and conditions regarding consideration if the proceeds of such sale are allocated in the manner that would result if such consideration were distributed to the Members as if the Company were hypothetically liquidated pursuant to the rights and preferences set forth in Section 12.2 (taking into account Section 12.3) as in effect immediately prior to such sale as long as the nature of that consideration (e.g., cash, promissory notes, or other 47 property) is received among the various classes or series of Units in the same proportionate amounts received by the Transferring Member.
Appears in 1 contract
Samples: Operating Agreement
Drag Along Right. If (a) In the event the holders of a Class A Member majority or more of the voting shares of the Corporation (the “Transferring MemberControl Group”) intends elect to sell Class A Units transfer all of the shares of stock owned by them to a an unaffiliated third party purchaser (a “Third Party”) (including any transfer of shares that would result in such third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in is being effected by a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates merger or consolidation of the Transferring Member) would not retain a controlling interest in Corporation with another person), the Company, then the Transferring Member Control Group shall have the right (the “Drag-Along Right”) to require cause each remaining Members of the Shareholders as a group to sell some or transfer all of its or his or her Units their Shares to the third party in a proportionate amount Third Party (or to exchange such shares pursuant to the terms of such merger or consolidation) at the same price and on the same terms and conditions as the Transferring Member (taking into account Section 11.8(f)) in accordance with the terms and conditions of this Section 11.8 and otherwise in accordance with the following provisions:
(a) The Drag-Along Right may only be exercised by written notice (the “Drag-Along Notice”) from the Transferring Member and the third party purchaser Control Group proposes to the remaining Memberstransfer their Shares.
(b) The Control Group may elect to exercise the Drag-Along Notice shall:
i. Right by delivering written notice to the Shareholders and the Corporation thirty (30) days prior to the consummation of the transfer described in Section 3.2(a) above. The notice delivered pursuant to this subsection will contain a copy of the definitive documentation pursuant to which the Shares will be transferred to the Third Party and will state (i) the bona fide intention of the Control Group to effect the transfer described in Section 3.2(a) above, (ii) the name and address of the third party purchaserThird Party, and (iii) the purchase price for the Units of the Transferring Member(s) and the purchase price proposed to be paid for the Units of the remaining Members (in accordance with Section 11.8(f)) and the time, expected closing date and place of completion of such sale and purchase; and
ii. be given no later than fifteen (15) business days before the date fixed for completion of the sale by the Transferring Member of its or his or her Units to the third partytransfer.
(c) The delivery Each Shareholder as part of its participation in the transfer pursuant to the Drag-Along Notice Right hereby agrees with respect to all Shares which he or she owns or otherwise exercises voting or dispositive authority if the transaction is structured as (i) a Member shall constitute an irrevocable merger or consolidation, to vote (in person, by proxy or by action by written consent, as applicable) in favor of such merger or consolidation and binding obligation to refrain from exercising any dissenters’ rights or rights of the Member to sellappraisal under applicable law at any time with respect thereto, and the third party (ii) a sale of stock, to purchase, some or sell all of the Member’s Units in a proportionate amount and its Shares on the same terms and conditions, taking into account Section 11.8(f) and subject to Section 11.8(e), as are applicable to the sale conditions approved by the Transferring Member of its Units to the third party as set forth in the Drag-Along Notice (subject to such terms being accurately reflected in the Drag-Along Notice)Control Group.
(d) At or before the time of completion of the sale of the Units of each Member to the third party purchaser, each such Member Each Shareholder shall (i) use its best efforts to cause to be discharged any and all encumbrances of, and security interests in, its or his or her Units and provide written evidence of such discharges to the third party purchaser, and (ii) execute and deliver to the third party purchaserThird Party at a closing to be held at the offices of the Corporation (or such other place as the parties agree), against payment for such Unitsone or more certificates, all certificates or other documents representing such Units, duly properly endorsed for transfer or with duly executed assignment forms attached.
(e) Notwithstanding any provision of this Section 11.8transfer, (i) no Member which represent all the Shares owned by such Shareholder and each Shareholder shall be under any obligation to sell any Units unless (A) make such sale occurs concurrently with or subsequent to the sale of Units by the Transferring Member in a proportionate amount on the same terms representations and conditions (taking into account Section 11.8(f)), (B) the sale of Units by the Transferring Member shall qualify as a Permitted Transfer under Section 11.2 and meets the conditions to a Permitted Transfer set forth in Section 11.3 to the extent applicablewarranties, and (C) shall enter into such sale results agreements, as are customary and reasonable in a third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates context of the Transferring Memberproposed sale, including, without limitation, representations and warranties (and indemnities with respect thereto) would not retain a controlling interest in that the Company and (ii) nothing in such sale of Units shall require a Member subject to this Section 11.8 to do any transferee of the following, unless all Members similarly situated Shares (e.g., of a similar class or Series of Unitsinterests therein) is receiving good and the Transferring Member are required to do the same: (w) enter into any agreement or make any covenant, (x) make any representation, or warranty other than related to authority, ownership and the ability to convey marketable title to such UnitsShares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Shareholder shall agree to provide indemnification (y) other than its own title to such Shares), such Shareholder shall in no event be liable required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the inaccuracy basis of any representation or warranty made the percentage of the total Shares involved in such transfer that are represented by any person or entity the Shares owned by such Shareholder. In addition, each Shareholder and the Control Group shall reasonably cooperate and consult with each other in order to effect the transfer described in this Section 4.2, and each Shareholder shall provide reasonable assistance to the Control Group in connection with the sale other than himself or itself preparation of disclosure schedules relating to representations and warranties to be made to the CompanyThird Party involved in such transfer and in the determination of the appropriate scope of, or (z) be liable in any way other than severally in proportion to the amount of consideration paid to such Member in connection with such sale and such liability not exceed the aggregate consideration received by such Member in such sale.
(f) Notwithstanding that a sale pursuant to this Section 11.8 may provide for, limitations or result in, different per Unit consideration for different classes or series of Unitsexceptions to, such sale shall be deemed to be for the same terms representations and conditions regarding consideration if the proceeds of such sale are allocated in the manner that would result if such consideration were distributed to the Members as if the Company were hypothetically liquidated pursuant to the rights and preferences set forth in Section 12.2 (taking into account Section 12.3) as in effect immediately prior to such sale as long as the nature of that consideration (e.g., cash, promissory notes, or other property) is received among the various classes or series of Units in the same proportionate amounts received by the Transferring Memberwarranties.
Appears in 1 contract
Samples: Shareholder Agreement (Spherix Inc)
Drag Along Right. If (a) Notwithstanding anything to the contrary contained in this Agreement, if at any time, and from time to time, a Class A Member bona fide written offer to acquire the Company, whether by merger, stock sale or sale of assets (“Transferring Member”) intends to sell Class A Units to the "Drag-Along Offer"), is made by a third party purchaser that would result in such third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to Company or to the provisions holders of this Section 11.8, in which the Transferring Member (together with any affiliates at least % of the Transferring Memberthen outstanding Units (the "Controlling Members") would not retain a controlling interest in and Company or the CompanyControlling Members wish to accept the Drag-Along Offer, then Company or the Transferring Member shall Controlling Members, as the case may be, will have the right (the “"Drag-Along Right”") to require each remaining the other Members (including Drexel, the "Minority Members") to sell some or all of its or his or her their Units to the third third-party in a proportionate amount proposed purchaser(s) at the same price per unit and on upon the same terms and conditions as the Transferring Member (taking into account Section 11.8(f)) in accordance with the terms and conditions of this Section 11.8 and otherwise in accordance with the following provisions:
(a) The Drag-Along Right may only be exercised by written notice (the “Drag-Along Notice”) from the Transferring Member and the third party purchaser to the remaining Members.
(b) The Drag-Along Notice shall:
i. state the name of the third party purchaser, the purchase price for the Units of the Transferring Member(s) and the purchase price proposed to be paid for the Units of the remaining Members (in accordance with Section 11.8(f)) and the time, date and place of completion of such sale and purchase; and
ii. be given no later than fifteen (15) business days before the date fixed for completion of the sale by the Transferring Member of its or his or her Units to the third party.
(c) The delivery of the Drag-Along Notice to a Member shall constitute an irrevocable and binding obligation of the Member to sell, and the third party to purchase, some or all of the Member’s Units in a proportionate amount and on the same terms and conditions, taking into account Section 11.8(f) and subject to Section 11.8(e), as are applicable to the sale by the Transferring Member of its Units to the third party as set forth in the Drag-Along Notice (subject Offer. Each Member will take all reasonable actions requested by the Controlling Members to such terms being accurately reflected in facilitate the exercise of the Drag-Along Notice)Right, including, but not limited to, voting to approve the transaction.
(db) At To exercise a Drag-Along Right, Company or before the time of completion Controlling Members will deliver to each Minority Member a written notice (a "Drag-Along Notice") containing (a) the name and address of the sale of the Units of each Member to the third third-party purchaser, each such Member shall (i) use its best efforts to cause to be discharged any and all encumbrances of, and security interests in, its or his or her Units and provide written evidence of such discharges to the third party purchaser, and (ii) execute and deliver to the third party purchaser, against payment for such Units, all certificates or other documents representing such Units, duly endorsed for transfer or with duly executed assignment forms attached.
(e) Notwithstanding any provision of this Section 11.8proposed purchaser(s), (ib) no Member shall be under any obligation to sell any Units unless (A) such sale occurs concurrently with or subsequent to the sale proposed price per unit, terms of Units by the Transferring Member in a proportionate amount on the same payment and other material terms and conditions of the Drag-Along Offer and (taking into account Section 11.8(f))c) all such other documents, instruments and information as may be required to enable the Members to effectuate the transfer of their Units. Within thirty (B30) days from their receipt of the sale of Drag- Along Notice, the Minority Members will take such actions as are necessary to transfer their Units by the Transferring Member shall qualify as a Permitted Transfer under Section 11.2 and meets the conditions to a Permitted Transfer set forth in Section 11.3 to the extent applicable, and (C) such sale results in a third third-party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company and (ii) nothing in such sale of Units shall require a Member subject to this Section 11.8 to do any of the following, unless all Members similarly situated (e.g., of a similar class or Series of Units) and the Transferring Member are required to do the same: (w) enter into any agreement or make any covenant, (x) make any representation, or warranty other than related to authority, ownership and the ability to convey title to such Units, (y) be liable for the inaccuracy of any representation or warranty made by any person or entity in connection with the sale other than himself or itself and the Company, or (z) be liable in any way other than severally in proportion to the amount of consideration paid to such Member in connection with such sale and such liability not exceed the aggregate consideration received by such Member in such saleproposed purchaser(s).
(f) Notwithstanding that a sale pursuant to this Section 11.8 may provide for, or result in, different per Unit consideration for different classes or series of Units, such sale shall be deemed to be for the same terms and conditions regarding consideration if the proceeds of such sale are allocated in the manner that would result if such consideration were distributed to the Members as if the Company were hypothetically liquidated pursuant to the rights and preferences set forth in Section 12.2 (taking into account Section 12.3) as in effect immediately prior to such sale as long as the nature of that consideration (e.g., cash, promissory notes, or other property) is received among the various classes or series of Units in the same proportionate amounts received by the Transferring Member.
Appears in 1 contract
Samples: Operating Agreement
Drag Along Right. If 7.4.1 At any time on or after the date hereof, if one or more Members propose to Transfer (in a Class A Member (“Transferring Member”) intends to sell Class A Units sale consummated in a single Transfer or a series of related Transfers to a third party single purchaser that would result in such third party purchaser acquiring control over or a group of purchasers as part of a single transaction or through a merger or other corporate reorganization) Percentage Interests representing 51% or more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Companyaggregate Percentage Interests held by all Members, then the Transferring such Member shall have the right (the “Drag-Along Right”), but not the obligation, to cause each of the Preferred Members and other Members and Economic Interest Holders (the “Drag-Along Members”) to require each remaining tender for purchase to such purchaser(s) the Drag-Along Members’ respective Percentage Interests or to cause such other Preferred Members, Members and Economic Interest Holders to sell some vote in favor of, and not object to, any merger or corporate reorganization. Subject to paragraph 7.4.4 below, any Percentage Interest purchased from a Drag-Along Member pursuant to this Paragraph 7.4 shall be paid for at a price (the “Deemed Price”) equal to the balance of such Member(s)’ and/or Economic Interest Holder(s)’ Capital Account(s) that would result if the Company had sold all of its or his or her Units assets for a price equal to the third party “Deemed Value” (which Deemed Value shall be based upon the price offered to the Selling Member(s)), and upon the Transfer Terms; provided, however, that in a proportionate amount and on the same terms and conditions as the Transferring Member (taking into account Section 11.8(f)) in accordance with the terms and conditions of this Section 11.8 and otherwise in accordance with the following provisions:
(a) The no event will any Drag-Along Right may only Member be exercised by written notice compelled to accept consideration in such transaction for his Percentage Interest other than cash or marketable securities.
7.4.2 If the Selling Member(s) elect to exercise the Drag-Along Right, then they shall so notify each of the Drag-Along Members (the “Drag-Along Notice”) from the Transferring Member and the third party purchaser to the remaining Members.
(b) The ). Each Drag-Along Notice shall:
i. state shall set forth the name and address of the third party proposed purchaser, the purchase price for Deemed Value, proposed amount and form of consideration and other Transfer Terms offered by the Units of proposed purchaser, the Transferring Member(s) and the purchase price aggregate Percentage Interest proposed to be paid for the Units of the remaining Members (in accordance with Section 11.8(f)) purchased by such purchaser, and the time, date and place of completion of such sale and purchase; and
ii. be given no later than fifteen (15) business days before the date fixed for completion of the sale by the Transferring Member of its or his or her Units Deemed Price applicable to the third partyeach Drag-Along Member.
(c) The delivery 7.4.3 All Transfers of Percentage Interests or Preferred Interests pursuant to the Drag-Along Notice to a Member Right shall constitute an irrevocable and binding obligation be effectuated within thirty (30) days after the date of the Member to sell, and Drag Along Notice. Upon the third party to purchase, some or all receipt of the Member’s Units in a proportionate amount and on the same terms and conditions, taking into account Section 11.8(f) and subject to Section 11.8(e), as are applicable to the sale by the Transferring Member of its Units to the third party as set forth in the Drag-Along Notice (subject to such terms being accurately reflected in the Drag-Along Notice).
(d, each Drag-Along Member shall be entitled and obligated to Transfer his portion of his Percentage Interest set forth therein as calculated under Paragraph 7.4.1 to the proposed purchaser on the terms and for the price set forth in Paragraph 7.4.1 above; provided, however, that neither the Selling Member(s) At or before the time of completion of nor any Drag-Along Member shall consummate the sale of any Percentage Interest or Preferred Interest if the Units of each Member to the third party purchaser, each such Member shall (i) use its best efforts to cause to be discharged any and proposed purchaser does not purchase all encumbrances of, and security interests in, its or his or her Units and provide written evidence of such discharges to the third party purchaser, and (ii) execute and deliver to the third party purchaser, against payment for such Units, all certificates or other documents representing such Units, duly endorsed for transfer or with duly executed assignment forms attached.
(e) Notwithstanding any provision of this Section 11.8, (i) no Member shall be under any obligation to sell any Units unless (A) such sale occurs concurrently with or subsequent to the sale of Units by the Transferring Member in a proportionate amount on the same terms and conditions (taking into account Section 11.8(f)), (B) the sale of Units by the Transferring Member shall qualify as a Permitted Transfer under Section 11.2 and meets the conditions to a Permitted Transfer set forth in Section 11.3 to the extent applicable, and (C) such sale results in a third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by Percentage Interests which the Members are entitled or obligated to Transfer pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company and (ii) nothing in such sale of Units shall require a Member subject to this Section 11.8 to do any of the following, unless all Members similarly situated (e.g., of a similar class or Series of Units) and the Transferring Member are required to do the same: (w) enter into any agreement or make any covenant, (x) make any representation, or warranty other than related to authority, ownership and the ability to convey title to such Units, (y) be liable for the inaccuracy of any representation or warranty made by any person or entity in connection with the sale other than himself or itself and the Company, or (z) be liable in any way other than severally in proportion to the amount of consideration paid to such Member in connection with such sale and such liability not exceed the aggregate consideration received by such Member in such salehereto.
(f) Notwithstanding that a sale pursuant to this Section 11.8 may provide for, or result in, different per Unit consideration for different classes or series of Units, such sale shall be deemed to be for the same terms and conditions regarding consideration if the proceeds of such sale are allocated in the manner that would result if such consideration were distributed to the Members as if the Company were hypothetically liquidated pursuant to the rights and preferences set forth in Section 12.2 (taking into account Section 12.3) as in effect immediately prior to such sale as long as the nature of that consideration (e.g., cash, promissory notes, or other property) is received among the various classes or series of Units in the same proportionate amounts received by the Transferring Member.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Wise Metals Group LLC)
Drag Along Right. (i) If HMNY proposes to Transfer (in a Class A Member (“Transferring Member”) intends to sell Class A Units sale consummated in a single Transfer, or a series of related Transfers, to a third party single purchaser that would result in such third party purchaser acquiring control over more or group of purchasers as part of a single transaction) Units (other than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates Permitted Transfer of the Transferring Member) would not retain a controlling interest type set forth in the CompanySection 9.2), then the Transferring Member HMNY shall have the right (“Drag-Along Right”), but not the obligation, to cause any other Member (the “Drag-Along RightMember(s)”) to require each remaining Members to sell some or all of tender its or his or her Units to the third party in a proportionate amount and on the same terms and conditions as the Transferring Member (taking into account Section 11.8(f)) in accordance with the terms and conditions of this Section 11.8 and otherwise in accordance with the following provisions:proposed purchaser for purchase.
(aii) The If HMNY elects to exercise its Drag-Along Right may only be exercised by written notice under this Section 9.3(e), then HMNY shall notify the Company and the Drag-Along Member(s) in writing (the “Drag-Along Notice”). Each Drag-Along Notice shall set forth: (A) from the Transferring Member name and address of the proposed purchaser to which HMNY proposes to Transfer Units and the third party purchaser number of Units proposed to be Transferred; (B) the amount and form of consideration and terms and conditions of payment offered by the proposed purchaser, and any other material terms pertaining to the remaining Members.
Transfer; and (bC) that the proposed purchaser has been informed of the rights provided for in this Section 9.3(e) and has agreed to purchase Units in accordance with the terms hereof. The Drag-Along Notice shall:
i. state the name shall be given at least thirty (30) days before Closing of the third party purchaserproposed Transfer.
(iii) Upon the receipt of a Drag-Along Notice, the Drag-Along Member(s) shall be obligated to sell all, but not less than all, of its Units to the proposed purchaser on the terms set forth in the Drag-Along Notice. If the proposed purchaser designated in the Drag-Along Notice does not then purchase price for all of the Units of the Transferring Member(s) and the purchase price proposed to be paid for Transferred by HMNY and all of the Units of the remaining Members (in accordance with Section 11.8(f)) and the time, date and place of completion of such sale and purchase; and
ii. be given no later than fifteen (15) business days before the date fixed for completion of the sale by the Transferring Member of its or his or her Units to the third party.
(c) The delivery of the Drag-Along Notice to a Member shall constitute an irrevocable and binding obligation of the Member to sell, and the third party to purchase, some or all of the Member’s Units in a proportionate amount and on the same terms and conditions, taking into account Section 11.8(fMember(s) and subject to Section 11.8(e), as are applicable to the sale by the Transferring Member of its Units to the third party as set forth in the Drag-Along Notice (subject to such terms being accurately reflected in the Drag-Along Notice).
(d) At or before the time of completion of the sale of the , no Member may Transfer any Units of each Member to the third party proposed purchaser, each such Member shall (i) use its best efforts to cause to be discharged any and all encumbrances of, and security interests in, its or his or her Units and provide written evidence of such discharges to the third party purchaser, and (ii) execute and deliver to the third party purchaser, against payment for such Units, all certificates or other documents representing such Units, duly endorsed for transfer or with duly executed assignment forms attached.
(e) Notwithstanding any provision of this Section 11.8, (i) no Member shall be under any obligation to sell any Units unless (A) such sale occurs concurrently with or subsequent to the sale of Units by the Transferring Member in a proportionate amount on the same terms and conditions (taking into account Section 11.8(f)), (B) the sale of Units by the Transferring Member shall qualify as a Permitted Transfer under Section 11.2 and meets the conditions to a Permitted Transfer set forth in Section 11.3 to the extent applicable, and (C) such sale results in a third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company and (ii) nothing in such sale of Units shall require a Member subject to this Section 11.8 to do any of the following, unless all Members similarly situated (e.g., of a similar class or Series of Units) and the Transferring Member are required to do the same: (w) enter into any agreement or make any covenant, (x) make any representation, or warranty other than related to authority, ownership and the ability to convey title to such Units, (y) be liable for the inaccuracy of any representation or warranty made by any person or entity in connection with the sale other than himself or itself and the Company, or (z) be liable in any way other than severally in proportion to the amount of consideration paid to such Member in connection with such sale and such liability not exceed the aggregate consideration received by such Member in such sale.
(f) Notwithstanding that a sale pursuant to this Section 11.8 may provide for, or result in, different per Unit consideration for different classes or series of Units, such sale shall be deemed to be for the same terms and conditions regarding consideration if the proceeds of such sale are allocated in the manner that would result if such consideration were distributed to the Members as if the Company were hypothetically liquidated pursuant to the rights and preferences set forth in Section 12.2 (taking into account Section 12.3) as in effect immediately prior to such sale as long as the nature of that consideration (e.g., cash, promissory notes, or other property) is received among the various classes or series of Units in the same proportionate amounts received by the Transferring Member.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Helios & Matheson Analytics Inc.)
Drag Along Right. If At any time (i) prior to September 11, 2020 with regard to a Class A Transfer of Units with respect to which a Member may not unreasonably withhold its Consent pursuant to Section 6.01(a), or (“Transferring Member”ii) intends after September 11, 2020 with regard to sell Class A any Transfer of Units, if GAHR3 receives a bona fide offer from an independent third party to Transfer all, but not less than all, of its Units to a third party purchaser that would result in such third party purchaser acquiring control over more than fifty percent (50%) which is not an Affiliate of all outstanding Class A Units and otherwise result GAHR3 in a Change single, arm’s length transaction, or in a series of Controlrelated arm’s length transactions, after taking into account through the sale of Units by the Members pursuant to the provisions of this Section 11.8Units, in which the Transferring Member (together with any affiliates or a merger, consolidation or other similar corporate reorganization of the Transferring Member) would not retain a controlling interest in the Company, then the Transferring Member shall have the right Company (the “Drag-Along RightSale”), then GAHR3 shall provide written notice to NHI, GAHR4 and the other Members at least thirty (30) to require each remaining Members to sell some or all of its or his or her Units days prior to the third party in a proportionate amount and on the same terms and conditions as the Transferring Member (taking into account Section 11.8(f)) in accordance with the terms and conditions date of this Section 11.8 and otherwise in accordance with the following provisions:
(a) The Drag-Along Right may only be exercised by written notice such proposed Transfer (the “Drag-Along Notice”) from ), which shall specify the Transferring Member identity of the prospective purchaser and the third party purchaser material terms and conditions of such proposed Transfer and the amount and type of consideration to be paid in respect thereof. Subject to Section 6.07 (d), the remaining Members.
(b) The Drag-Along Notice shall:
i. state shall also constitute the name Proposed Sale Notice pursuant to Section 6.06(b). Subject to Section 6.07 (d), if neither NHI nor GAHR4 provide a Purchase Notice to GAHR3 as provided in Section 6.06(c), then GAHR3 may at its option, require all of the third party purchaser, the purchase price for the Units other Members of the Transferring Member(s) Company, including NHI and the purchase price proposed GAHR4, to be paid for the Units Transfer all, but not less than all, of the remaining Members (in accordance with Section 11.8(f)) and the time, date and place of completion of such sale and purchase; and
ii. be given no later than fifteen (15) business days before the date fixed for completion of the sale by the Transferring Member of its or his or her their respective Units to such purchaser on the third party.
(c) The delivery same terms and conditions offered to GAHR3; provided, however, that the gross proceeds of the Drag-Along Notice to a Member shall constitute an irrevocable Sale, less the aggregate reasonable and binding obligation customary expenses of the Member to sellCompany incurred in connection therewith, and shall be shared by the third party to purchase, some or Members in the same manner as if all of the Member’s Units assets of the Company were sold for such sale price and the proceeds of such sale were distributed to the Members in a proportionate amount accordance with Section 4.02 (and on the same terms and conditions, taking into account power of attorney contained in Section 11.8(f6.06(e) and subject shall apply with respect to Section 11.8(eany Drag-Along Sale), as are applicable to the sale by the Transferring Member .
(a) The closing of its Units to the third party as set forth in the Drag-Along Notice (subject to Sale shall take place at such terms being accurately reflected time and place as GAHR3 shall specify in the Drag-Along Notice). At the closing of the Drag-Along Sale, each Member shall deliver such customary transfer documents as GAHR3 may reasonably request to Transfer the Units to be sold by such Member, against delivery of the applicable consideration.
(db) At or before the time By execution of completion of the sale of the Units of this Agreement, each Member hereby agrees, subject to the third party purchaser, each such NHI’s and GAHR4’s rights pursuant to Section 6.06 and Section 6.07(d) to Consent to and to participate in a Drag-Along Sale in a timely manner. If any Member shall (i) use default in its best efforts to cause to be discharged any and all encumbrances of, and security interests in, its or his or her Units and provide written evidence of such discharges to the third party purchaser, and (ii) execute and deliver to the third party purchaser, against payment for such Units, all certificates or other documents representing such Units, duly endorsed for transfer or with duly executed assignment forms attached.
(e) Notwithstanding any provision of this Section 11.8, (i) no Member shall be under any obligation to sell any its Units unless (A) such sale occurs concurrently with or subsequent to the sale of Units by the Transferring Member in a proportionate amount on the same terms and conditions (taking into account Drag-Along Sale, then GAHR3 may seek specific performance of such Member’s obligations under this Section 11.8(f))6.07 or pursue any other remedies at law or in equity. In addition, (B) the sale of Units by the Transferring Member shall qualify as a Permitted Transfer under Section 11.2 and meets the conditions to a Permitted Transfer set forth in Section 11.3 to the extent applicable, and (C) such sale results in a third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant any Member fails to the provisions of this Section 11.8, in which the Transferring Member (together with take any affiliates of the Transferring Member) would not retain a controlling interest in the Company and (ii) nothing in such sale of Units shall require a Member subject to this Section 11.8 to do any of the following, unless all Members similarly situated (e.g., of a similar class or Series of Units) and the Transferring Member are required to do the same: (w) enter into any agreement or make any covenant, (x) make any representation, or warranty other than related to authority, ownership and the ability to convey title to such Units, (y) be liable for the inaccuracy of any representation or warranty made by any person or entity action in connection with the sale other than himself or itself and the Companythis Section 6.07, or (z) be liable in any way other than severally in proportion each Member hereby grants GAHR3 power of attorney to the amount take such action on such Member’s behalf. The power of consideration paid to such Member in connection with such sale and such liability not exceed the aggregate consideration received by such Member in such sale.
(f) Notwithstanding that a sale attorney granted pursuant to this Section 11.8 may provide for6.07(b) is a special power of attorney coupled with an interest and is irrevocable.
(c) Notwithstanding anything to the contrary contained herein, or result inas a condition and prior to the closing of a Drag-Along Sale, different per Unit consideration for different classes or series of Units, each Member and its respective Affiliates (unless waived by such sale Member) shall be deemed released from any personal liability with respect to be for the same terms and conditions regarding consideration if the proceeds of such sale are allocated in the manner that would result if such consideration were distributed all Loans (including, without limitation, any liability associated with any guaranty or indemnity relating to the Members as if the Company were hypothetically liquidated pursuant to the rights and preferences set forth in Section 12.2 (taking into account Section 12.3) as in effect immediately prior to such sale as long as the nature of that consideration (e.g., cash, promissory notes, or other property) is received among the various classes or series of Units in the same proportionate amounts received by the Transferring Membera Loan).
Appears in 1 contract
Samples: Limited Liability Company Agreement (Griffin-American Healthcare REIT III, Inc.)
Drag Along Right. (a) If one or more Members (such Member(s), the “Dragging Member(s)”), proposes to consummate, in one transaction or a Class A Member (“Transferring Member”) intends to sell Class A Units to series of related transactions, a third party purchaser that would result in such third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates greater than 50% of the Transferring Member) would not retain then outstanding Membership Units (a controlling interest in “Drag-Along Sale”), the Company, then the Transferring Dragging Member shall have the right (the “Drag-Along Right”) to require each remaining Members to sell some or all of its or his or her Units to the third party in right, after delivering a proportionate amount and on the same terms and conditions as the Transferring Member (taking into account Section 11.8(f)) in accordance with the terms and conditions of this Section 11.8 and otherwise in accordance with the following provisions:
(a) The Drag-Along Right may only be exercised by written notice (the “Drag-Along Notice”) from to each other Member requiring that each other Member (each, a “Drag-Along Member”) participate in such Drag-Along Sale on substantially the Transferring same terms and conditions as the Dragging Member as set forth in the applicable Drag-Along Notice. Notwithstanding any other provision of this Section 3.16, any Drag-Along Sale must satisfy the conditions set forth in Section 3.7 and the third party purchaser to the remaining Membersotherwise be a Permitted Transfer.
(b) The If the Drag-Along Notice shall:
i. state the name of the third party purchaser, the purchase price for the Units of the Transferring Member(sSale has not been consummated within ninety (90) and the purchase price proposed to be paid for the Units of the remaining Members (in accordance with Section 11.8(f)) and the time, date and place of completion of such sale and purchase; and
ii. be given no later than fifteen (15) business days before the date fixed for completion of the sale by the Transferring Member of its or his or her Units to the third party.
(c) The following delivery of the Drag-Along Notice to a Member shall constitute an irrevocable and binding obligation of the Member to sellNotice, and the third party to purchase, some or all of the Member’s Units in a proportionate amount and on the same terms and conditions, taking into account Section 11.8(f) and subject to Section 11.8(e), as are applicable to the sale by the Transferring Member of its Units to the third party as set forth in the Drag-Along Notice (subject to such terms being accurately reflected in shall be null and void, each Drag-Along Member shall be released from his, her or its obligation under the Drag-Along Notice).
(d) At or before Notice and it shall be necessary for the time of completion of the sale of the Units of each Dragging Member to the third party purchaser, each such Member shall (i) use its best efforts furnish a new Drag-Along Notice to cause to be discharged any and all encumbrances of, and security interests in, its or his or her Units and provide written evidence of such discharges to the third party purchaser, and (ii) execute and deliver to the third party purchaser, against payment for such Units, all certificates or other documents representing such Units, duly endorsed for transfer or Drag-Along Members in accordance with duly executed assignment forms attached.
(e) Notwithstanding any provision of this Section 11.8, (i) no Member shall be under any obligation to sell any Units unless (A) such sale occurs concurrently with or subsequent to the sale of Units by the Transferring Member in a proportionate amount on the same terms and conditions (taking into account Section 11.8(f)), (B) the sale of Units by the Transferring Member shall qualify as a Permitted Transfer under Section 11.2 and meets the conditions to a Permitted Transfer set forth in Section 11.3 to the extent applicable, and (C) such sale results in a third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, 3.16 in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company and (ii) nothing in order to consummate such sale of Units shall require a Member subject to this Section 11.8 to do any of the following, unless all Members similarly situated (e.g., of a similar class or Series of Units) and the Transferring Member are required to do the same: (w) enter into any agreement or make any covenant, (x) make any representation, or warranty other than related to authority, ownership and the ability to convey title to such Units, (y) be liable for the inaccuracy of any representation or warranty made by any person or entity in connection with the sale other than himself or itself and the Company, or (z) be liable in any way other than severally in proportion to the amount of consideration paid to such Member in connection with such sale and such liability not exceed the aggregate consideration received by such Member in such sale.
(f) Notwithstanding that a sale Drag-Along Sale pursuant to this Section 11.8 may provide for, or result in, different per Unit consideration for different classes or series of Units, such sale shall be deemed to be for the same terms and conditions regarding consideration if the proceeds of such sale are allocated in the manner that would result if such consideration were distributed to the Members as if the Company were hypothetically liquidated pursuant to the rights and preferences set forth in Section 12.2 (taking into account Section 12.3) as in effect immediately prior to such sale as long as the nature of that consideration (e.g., cash, promissory notes, or other property) is received among the various classes or series of Units in the same proportionate amounts received by the Transferring Member3.16.
Appears in 1 contract
Drag Along Right. If a Class A Member (“Transferring Member”a) intends Prior to sell Class A Units to a third party purchaser that would result an IPO, in such third party purchaser acquiring control over more than fifty percent connection with any Transfer for value (50%whether by sale, merger or otherwise) of all outstanding Class A of the Subordinated Units and otherwise result in a Change of Control, after taking into account the sale of Units beneficially owned by the Members pursuant Initial Limited Partner to any Person, the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company, then the Transferring Member Initial Limited Partner shall have the right to require all of the Purchasers to sell all, but not less than all, of their Common Units on the terms described in Section 2.02(b) below (the “Drag-Along Right”).
(b) In connection with any proposed Transfer subject to require each remaining Members to sell some or all of its or his or her Units to the third party in a proportionate amount and on the same terms and conditions as the Transferring Member (taking into account Section 11.8(f)) in accordance with the terms and conditions of this Section 11.8 and otherwise in accordance with 2.02, the following provisions:
(a) The Drag-Along Right may only be exercised by Initial Limited Partner shall give written notice to each Purchaser at least twenty (20) days prior to such Transfer, which notice shall specify the amount of consideration to be received by the Initial Limited Partner for its Subordinated Units in connection with such Transfer and the place and date on which the Transfer is expected to be consummated (a “Drag-Along Notice”) from ). Until the Transferring Member and the third party purchaser to the remaining Members.
(b) The Drag-Along Notice shall:
i. state the name first anniversary of the third party purchaserdate of this Agreement, the purchase price for the Units of the Transferring Member(s) and the purchase price proposed to be paid for the Units of the remaining Members (in accordance with Section 11.8(f)) and the time, date and place of completion of such sale and purchase; and
ii. be given no later than fifteen (15) business days before the date fixed for completion of the sale by the Transferring Member of its or his or her Units to the third party.
(c) The delivery of the Drag-Along Notice Right shall be limited such that the amount of consideration to a Member shall constitute an irrevocable and binding obligation be received by the Purchasers for their Common Units must be equal to or greater than $18.02 per unit. Following the first anniversary of the Member date of this Agreement, the per unit consideration to sell, and the third party to purchase, some or all of the Member’s Units be received by Purchasers in a proportionate amount and on the same terms and conditions, taking into account Transfer governed by this Section 11.8(f) and subject to Section 11.8(e), as are applicable 2.02 shall be equal to the sale per unit consideration to be received by the Transferring Member of its Units to the third party Initial Limited Partner as set forth in the Drag-Along Notice (subject to such terms being accurately reflected in the Drag-Along Notice.
(c) The closing of such purchase by the transferee shall be on the same date that the transferee acquires securities from the Initial Limited Partner (it being acknowledged that (i) in no event shall the Initial Limited Partner be obligated to Transfer any securities and (ii) the Purchasers shall not be obligated to Transfer any securities unless and until the Initial Limited Partner Transfers securities hereunder), provided that the Purchasers have been given twenty (20) days’ advance notice of such closing; provided further, however, that any such closing shall be delayed, to the extent required, until the next succeeding Business Day following the expiration of any required waiting periods under the HSR Act and the obtaining of all other governmental approvals reasonably deemed necessary by a party to such Transfer.
(d) At or before The Initial Limited Partner shall have the time of completion right to require the Company to cooperate fully with potential acquirors of the sale of the Units of each Member to the third party purchaser, each such Member shall (i) use its best efforts to cause to be discharged any and all encumbrances of, and security interests in, its or his or her Units and provide written evidence of such discharges to the third party purchaser, and (ii) execute and deliver to the third party purchaser, against payment for such Units, all certificates or other documents representing such Units, duly endorsed for transfer or with duly executed assignment forms attached.
(e) Notwithstanding any provision of this Section 11.8, (i) no Member shall be under any obligation to sell any Units unless (A) such sale occurs concurrently with or subsequent to the sale of Units by the Transferring Member Company in a proportionate amount on the same terms and conditions (taking into account Section 11.8(f)), (B) the sale of Units by the Transferring Member shall qualify as a Permitted Transfer under Section 11.2 and meets the conditions to a Permitted Transfer set forth in Section 11.3 to the extent applicable, and (C) such sale results in a third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company and (ii) nothing in such sale of Units shall require a Member subject to this Section 11.8 to do any of the following, unless all Members similarly situated (e.g., of a similar class or Series of Units) and the Transferring Member are required to do the same: (w) enter into any agreement or make any covenant, (x) make any representation, or warranty other than related to authority, ownership and the ability to convey title to such Units, (y) be liable for the inaccuracy of any representation or warranty made by any person or entity in connection with the sale other than himself or itself and the Company, or (z) be liable in any way other than severally in proportion to the amount of consideration paid to such Member in connection with such sale and such liability not exceed the aggregate consideration received by such Member in such sale.
(f) Notwithstanding that a sale prospective transaction pursuant to this Section 11.8 may provide for2.02 by taking all customary and other actions reasonably requested by such Persons or such potential acquirors, or result inincluding without limitation, different per Unit consideration making the Company’s properties, books and records, and other assets reasonably available for different classes or series of Units, inspection by such sale shall be deemed to be potential acquirors and making its employees reasonably available for the same terms and conditions regarding consideration if the proceeds of such sale are allocated in the manner that would result if such consideration were distributed to the Members as if the Company were hypothetically liquidated pursuant to the rights and preferences set forth in Section 12.2 (taking into account Section 12.3) as in effect immediately prior to such sale as long as the nature of that consideration (e.g., cash, promissory notes, or other property) is received among the various classes or series of Units in the same proportionate amounts received by the Transferring Memberinterviews.
Appears in 1 contract
Samples: Tag Along Agreement (Eagle Rock Energy Partners, L.P.)
Drag Along Right. If a Class A Member Subject to the approval of the holders of the Investor Units as provided in Section 13.1, Sellers who deliver notice of their intention to exercise their Drag-along Right in the manner specified in Section 13.1 shall be entitled, at their option, to require that all (“Transferring Member”) intends to sell Class A Units to a third party purchaser that would result in such third party purchaser acquiring control over more but not less than fifty percent (50%all) of all outstanding Class A the Investor Units and otherwise result in a Change of Control, after taking into account the sale of Units held by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company, then the Transferring Member shall have the right remaining Limited Partners (the “Drag-Along Rightalong Units”) to require each remaining Members to sell some or all of its or his or her must be sold along with the Sellers’ Units to the third party in a proportionate amount and on the same terms and conditions as disclosed in the Transferring Member (taking into account notice referred to in Section 11.8(f)) in accordance with the terms 13.1. The purchase and conditions of this Section 11.8 and otherwise in accordance with the following provisions:
(a) The Drag-Along Right may only be exercised by written notice (the “Drag-Along Notice”) from the Transferring Member and the third party purchaser to the remaining Members.
(b) The Drag-Along Notice shall:
i. state the name sale of the third party purchaser, the purchase price for the Units of the Transferring Member(s) and the purchase price proposed to be paid for the Units of the remaining Members (in accordance with Section 11.8(f)) and the time, date and place of completion of such sale and purchase; and
ii. be given no later than fifteen (15) business days before the date fixed for completion of the sale by the Transferring Member of its or his or her Units to the third party.
(c) The delivery of Sellers and the Drag-Along Notice along Units shall be completed within one hundred and Eighty (180) days of delivery by the Sellers of notice of their intention to a Member shall constitute an irrevocable and binding obligation exercise their Drag-along Right. If no sale is consummated, the rights of the Member Limited Partners under Section 13.1 shall revive and if the Sellers shall thereafter desire to sellsell Units they shall again give notice under this Article 13 and so on from time to time. For the purposes thereof, and the third party to purchase, some or all each of the Member’s Limited Partners (other than the Sellers) hereby agree to: (i) deliver to the General Partner Unit Certificates representing the Units in held by such Limited Partner, together with a proportionate amount and power of attorney on substantially the same terms and conditionsas the power of attorney granted under Section 2.14 authorising the General Partner to, taking into account Section 11.8(f) and subject to Section 11.8(e)inter alia, as are applicable sell such Units pursuant to the sale by the Transferring Member of its Units to the third party as terms set forth in the Drag-Along Notice Drag- along Notice, (subject ii) become a party to the sale agreement if the Sellers so request, (iii) provide representations, warranties, covenants and indemnities to the purchaser, as the case may be, that replicate (on a proportionate basis where applicable) those given by the Sellers to such terms being accurately reflected in the Drag-Along Notice).
(d) At or before the time of completion of the sale of the Units of each Member to the third party purchaser, each such Member shall (i) use its best efforts to cause to be discharged any and all encumbrances of, and security interests in, its or his or her Units and provide written evidence of such discharges to the third party purchaser, and (iiiv) execute and deliver to the third party purchaser, against payment for such Units, all certificates or other documents representing such Units, duly endorsed for transfer or with duly executed assignment forms attached.
(e) Notwithstanding any provision of this Section 11.8, (i) no Member shall be under any obligation to sell any Units unless (A) such sale occurs concurrently with or subsequent to the sale of Units by the Transferring Member in a proportionate amount on the same terms and conditions (taking into account Section 11.8(f)), (B) the sale of Units by the Transferring Member shall qualify as a Permitted Transfer under Section 11.2 and meets the conditions to a Permitted Transfer set forth in Section 11.3 to the extent applicable, and (C) such sale results in a third party purchaser acquiring control over more than fifty percent (50%) pay its pro-rata share of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company and (ii) nothing in such sale of Units shall require a Member subject to this Section 11.8 to do any of the following, unless all Members similarly situated (e.g., of a similar class or Series of Units) and the Transferring Member are required to do the same: (w) enter into any agreement or make any covenant, (x) make any representation, or warranty other than related to authority, ownership and the ability to convey title to such Units, (y) be liable for the inaccuracy of any representation or warranty made by any person or entity in connection with the sale other than himself or itself and the Company, or (z) be liable in any way other than severally in proportion to the amount of consideration paid to such Member third-party expenses incurred in connection with such sale and such liability not exceed the aggregate consideration received by such Member in such sale.
(f) Notwithstanding that a sale pursuant to this Section 11.8 may provide for, or result in, different per Unit consideration for different classes or series of Units, such sale shall be deemed to be for the same terms and conditions regarding consideration if the proceeds of such sale are allocated in the manner that would result if such consideration were distributed to the Members as if the Company were hypothetically liquidated pursuant to the rights and preferences set forth in Section 12.2 (taking into account Section 12.3) as in effect immediately prior to such sale as long as the nature of that consideration (e.g., cash, promissory notes, or other property) is received among the various classes or series of Units in the same proportionate amounts received by the Transferring Member.
Appears in 1 contract
Samples: Limited Partnership Agreement
Drag Along Right. If a Class A Member (“Transferring Member”a) intends to sell Class A Units to In the event that the Majority in Interest and the Managers shall approve an acquisition of the Company by a third party purchaser (a “Purchaser”) (i) by means of any transaction or series of related transactions (including any reorganization, merger or consolidation) that would result in such third party purchaser acquiring control over more than the transfer of fifty percent (50%) or more of all outstanding Class A Units and otherwise result in a Change the voting interests of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, Company or in which the Transferring Member (together with any affiliates Unit Holders immediately prior to such transaction would own, as a result of such transaction, less than a majority of the Transferring Membervoting interests of the successor or surviving entity immediately thereafter, or (ii) would not retain in which all, substantially all or a controlling interest in majority of the Companytangible and/or intangible assets of the Company (as determined by the Managers) are sold (each, a “Company Sale”), then the Transferring Member Majority in Interest shall have the right (the “Drag-Drag Along Right”) to require each remaining Members to sell some or cause all of its or his or her Units the Unit Holders to (and each Unit Holder shall) (x) consent to, vote for, and raise no dissenter rights against the Company Sale, (y) if applicable, sell to the third party in a proportionate amount and Purchaser all of their respective Units on the same terms and conditions as the Transferring Member (taking into account Section 11.8(f)) in accordance with the terms and conditions of this Section 11.8 approved or directed by the Majority in Interest and otherwise the Managers, and (z) promptly take all necessary and desirable actions approved or directed by the Managers in accordance connection with the following provisions:
(a) The Drag-Along Right may only be exercised by written notice (consummation of the “Drag-Along Notice”) from the Transferring Member and the third party purchaser to the remaining MembersCompany Sale.
(b) The Drag-Along Notice shall:
i. state Company shall deliver to each Unit Holder a written notice not less than ten (10) business days prior to the name consummation of any Company Sale, or such lesser period of time as is commercially reasonable under the circumstances (but in no event less than five (5) business days prior to such consummation) (the “Sale Notice”), which notice shall describe all material terms of the third party purchaserCompany Sale, the purchase price for including, without limitation, (i) the Units of the Transferring Member(sor assets (as applicable) and the purchase price proposed to be paid for sold in the Units of Company Sale, (ii) the remaining Members (in accordance with Section 11.8(f)) proposed purchase price and the timeportion thereof payable to each Unit Holder, date and place of completion of such sale and purchase; and
ii. be given no later than fifteen (15iii) business days before the date fixed for completion of the sale by the Transferring Member of its or his or her Units to the third partyproposed closing date.
(c) The delivery of the Drag-Along Notice to a Member shall constitute an irrevocable and binding obligation of the Member to sell, and the third party to purchase, some or all of the Member’s Units in a proportionate amount and on the same terms and conditions, taking into account Section 11.8(f) and subject to Section 11.8(e), as are applicable to the sale by the Transferring Member of its Units to the third party as set forth in the Drag-Along Notice (subject to such terms being accurately reflected in the Drag-Along Notice).
(d) At or before the time of completion of the sale of the Units of each Member to the third party purchaser, each such Member shall Each Unit Holder hereby (i) use irrevocably appoints any Manager as his, her or its best efforts attorney-in-fact (with full power of substitution) to cause execute all agreements, instruments and certificates and take all actions necessary or desirable to be discharged effectuate any and all encumbrances of, and security interests in, its or his or her Units and provide written evidence of such discharges to the third party purchaser, sale under this Section 8.5; and (ii) execute and deliver grants to the third party purchaser, against payment for such Units, all certificates or other documents representing such Units, duly endorsed for transfer or with duly executed assignment forms attached.
any Manager a proxy (e) Notwithstanding any provision of this Section 11.8, (i) no Member shall be under any obligation to sell any Units unless (A) such sale occurs concurrently with or subsequent to the sale of Units by the Transferring Member in a proportionate amount on the same terms and conditions (taking into account Section 11.8(f)), (B) the sale of Units by the Transferring Member shall qualify as a Permitted Transfer under Section 11.2 and meets the conditions to a Permitted Transfer set forth in Section 11.3 to the extent applicable, and (C) such sale results in a third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company and (ii) nothing in such sale of Units shall require a Member subject to this Section 11.8 to do any of the following, unless all Members similarly situated (e.g., of a similar class or Series of Units) and the Transferring Member are required to do the same: (w) enter into any agreement or make any covenant, (x) make any representation, or warranty other than related to authority, ownership and the ability to convey title to such Units, (y) be liable for the inaccuracy of any representation or warranty made by any person or entity in connection with the sale other than himself or itself and the Company, or (z) be liable in any way other than severally in proportion to the amount of consideration paid to such Member in connection with such sale and such liability not exceed the aggregate consideration received by such Member in such sale.
(f) Notwithstanding that a sale pursuant to this Section 11.8 may provide for, or result in, different per Unit consideration for different classes or series of Units, such sale shall be deemed to be for coupled with an interest and irrevocable) to vote the same terms Units held by such Unit Holder and conditions regarding consideration if the proceeds exercise any consent rights applicable thereto in favor of any sale under this Section 8.5; provided, that no Manager shall exercise such sale are allocated power-of-attorney or proxy until a Unit Holder has failed to cooperate or is otherwise in the manner that would result if such consideration were distributed to the Members as if the Company were hypothetically liquidated pursuant to the rights and preferences set forth in breach of his, her or its obligations under this Section 12.2 (taking into account Section 12.3) as in effect immediately prior to such sale as long as the nature of that consideration (e.g., cash, promissory notes, or other property) is received among the various classes or series of Units in the same proportionate amounts received by the Transferring Member8.5.
Appears in 1 contract
Samples: Limited Liability Company Agreement
Drag Along Right. If a Class A Member In the event that the Company and the Non-Selling Members do not exercise their right to purchase all of the Offered Units pursuant to Section 6.2, and subject to the terms of Sections 6.6(b), 6.6(c), 6.6(e) and Section 7.7(f)(4), if applicable, and notwithstanding the requirements that would otherwise apply pursuant to Section 6.6(a), if, (i) at any time prior to December 23, 2010, Initial Members owning at least 70% of the Percentage Interests held by all of the Initial Members as of the Merger Date, or (ii) at any time on or after December 23, 2010, Members holding greater than 50% of the Percentage Interests, (such Initial Members or such Members, the “Transferring MemberCompellors”) intends shall, in any transaction or series of related transactions, directly or indirectly, propose to sell Class A for value all Units held by them (the “Controlling Units”) to a third party purchaser that would result in such third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company, then the Transferring Member shall have the right Potential Purchaser (the “Drag-Along RightOffer”), the provisions set forth in this Section 6.3 shall apply at the option of the Compellors.
(a) The Compellors may, at their option, require the other Members (the “Compelled Members”) to require each remaining Members sell all Units owned or held by them to sell some or all of its or his or her Units to the such third party in a proportionate amount or parties for the same consideration and otherwise on the same terms and conditions as upon which the Transferring Member (taking into account Section 11.8(f)) in accordance with the terms and conditions of Compellors sell their Units, subject to this Section 11.8 and otherwise in accordance with the following provisions:6.3.
(ai) The Drag-Along Right may only be exercised by Compellors shall provide a written notice (the “Drag-Along Notice”) from of such Drag-Along Offer to each of the Transferring Member and the third party purchaser Compelled Members, with a copy to the remaining Members.
(b) Company, not later than the date of acceptance of the Drag-Along Offer by the Potential Purchaser. The Drag-Along Notice shall:
i. state shall contain written notice of the name exercise of the rights of the Compellors pursuant to Section 6.3(a), setting forth the consideration to be paid by the third party purchaseror parties and all other material terms and conditions of the Drag-Along Offer, as well as a copy of the Drag-Along Offer, if available. Within ten Business Days following the date the Drag-Along Notice is given, each of the Compelled Members shall deliver to the Compellors a special irrevocable power-of-attorney authorizing the Compellors, on behalf of such Compelled Member, to sell or otherwise dispose of such Units pursuant to the terms of the Drag-Along Offer and to take all such actions as shall be necessary or appropriate in order to consummate such sale or disposition.
(ii) Promptly after the consummation of the sale of Units of the Compellors and the Compelled Members to the Potential Purchaser pursuant to the Drag-Along Offer, but in no event more than two Business Days thereafter, the purchase Compellors shall remit to the Compelled Members the total sales price for of the Units of the Transferring Member(sCompelled Members sold pursuant thereto less a pro rata portion of the expenses (including, without limitation, reasonable legal expenses) incurred by the Compellors in connection with such sale.
(iii) If, at the end of the 270-day period following the giving of the Drag-Along Notice, the Compellors shall not have completed the sale of all the Controlling Units and the purchase price proposed Units delivered to be paid for the Units Compellors pursuant to Section 6.3(b)(i), then no Member shall have any obligation with respect to such Drag-Along Offer; provided, that the provisions of this Section 6.3 shall apply to any subsequent Drag-Along Offer.
(iv) Except as expressly provided in this Section 6.3, the remaining Members (in accordance Compellors shall have no obligation to any Compelled Member with Section 11.8(f)) and the time, date and place of completion of such sale and purchase; and
ii. be given no later than fifteen (15) business days before the date fixed for completion of respect to the sale or other disposition of any Units owned by the Transferring Compelled Member, and in particular, the Compellors shall have no obligation to any Compelled Member to consummate any Drag-Along Offer (it being understood that any and all such decisions shall be made by the Compellors in their sole discretion). In the event that the Drag-Along Offer is not consummated by the Compellors, the Compelled Members shall not be entitled to sell or otherwise dispose of its Units directly to any third party or his or her Units parties pursuant to such Drag-Along Offer (it being understood that all such sales and other dispositions shall be made only on the terms and pursuant to the third partyprocedures set forth in this Article VI).
(c) The In furtherance of, and not in limitation of the foregoing, in connection with any compelled sale, each Member will (i) to the fullest extent permitted by law, raise no objections in its capacity as a Member of the Company, against the compelled sale or the process pursuant to which it was arranged, and (ii) execute all documents containing such terms and conditions as those executed by other Members that are reasonably necessary to effect the transaction; provided, however, that (A) no Compelled Member shall be required to enter into a non-compete or non-solicitation or no-hire provision, an exclusivity provision, a provision providing for the licensing of intellectual property or the delivery of any products or services, including support arrangements, or any other provision that is not a strictly financial term related directly to the sale of the Units, subject to ISE LLC’s obligations set forth in Section 6.3(e), (B) the liability of the Members is several and not joint, (C) no Compelled Member shall have any liability to the Company or any other Member for any breaches of the representations, warranties or covenants of any other Member, (D) any obligations of a Compelled Member under the agreement governing such transaction and any related escrow agreement shall be borne pro rata among the Members based on the proceeds and assets payable to such Members in such transaction (other than any such obligations that relate specifically to a particular Member’s Units, which obligations shall be borne solely by such Member) and shall in no event exceed the actual proceeds and assets received by such Compelled Member in such transaction, (E) no Compelled Member shall be required to make any representations or warranties or covenants in connection with such transaction except with respect to (1) such Compelled Member’s ownership of its Units, (2) subject to the provisions of clauses (B) and (C) above, customary security holder indemnities for breaches of such Compelled Member’s representations, warranties and covenants, (3) such Compelled Member’s ability to convey title to its Units free and clear of liens, (4) such Compelled Member’s ability to enter into the transaction and such Compelled Member’s power and organization and (5) customary and reasonable covenants regarding confidentiality, publicity and similar matters, (E) if any Member is given an option as to the form of consideration to be received, all other Members shall be given the same option on the same terms, and (F) if the form of consideration to be received by any Compelled Member is other than cash, such Compelled Member shall have the right to receive cash in lieu of such other consideration.
(d) Notwithstanding anything in this Section 6.3 to the contrary, if the Compellors or any of their respective Representatives, directly or indirectly, receive any consideration from the acquiror or any of the acquiror’s Affiliates in connection with a compelled sale other than (i) the consideration that is received by all the Members on a pro rata basis as part of the compelled sale, and (ii) consideration that is received by any Member for bona fide services rendered to the Company following the closing of a compelled sale, then the Compellors shall cause each of the Compelled Members to receive their pro rata share, determined by reference to the respective amounts of consideration otherwise payable to each Member (including the Compellors) as part of the compelled sale, of such securities or other cash consideration.
(e) For a period up to nine months following the consummation of the sale of Units of the Compellors and the Compelled Members to the Potential Purchaser pursuant to the Drag-Along Offer (or for such other period as the parties may otherwise agree), ISE LLC shall provide transition support and services to such Potential Purchaser (the “Successor”) consistent with the services ISE LLC provided to the Company pursuant to the Services Agreements immediately prior to delivery of the Drag-Along Notice to a Member shall constitute an irrevocable Notice. During the period in which ISE LLC provides such transition support and binding obligation of the Member to sell, and the third party to purchase, some or all of the Member’s Units in a proportionate amount and on the same terms and conditions, taking into account Section 11.8(f) and subject to Section 11.8(e), as are applicable services to the sale by the Transferring Member of its Units to the third party as set forth Successor, notwithstanding any duty otherwise existing at law or in the Drag-Along Notice (subject to such terms being accurately reflected in the Drag-Along Notice).
(d) At or before the time of completion of the sale of the Units of each Member to the third party purchaserequity, each such Member shall (i) use its best efforts to cause to be discharged ISE Holdings and any and all encumbrances ofPerson employed by, and security interests in, its or his or her Units and provide written evidence of such discharges to the third party purchaser, and (ii) execute and deliver to the third party purchaser, against payment for such Units, all certificates or other documents representing such Units, duly endorsed for transfer or with duly executed assignment forms attached.
(e) Notwithstanding any provision of this Section 11.8, (i) no Member shall be under any obligation to sell any Units unless (A) such sale occurs concurrently with or subsequent to the sale of Units by the Transferring Member in a proportionate amount on the same terms and conditions (taking into account Section 11.8(f)), (B) the sale of Units by the Transferring Member shall qualify as a Permitted Transfer under Section 11.2 and meets the conditions to a Permitted Transfer set forth in Section 11.3 to the extent applicable, and (C) such sale results in a third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company and (ii) nothing in such sale of Units shall require a Member subject to this Section 11.8 to do any of the following, unless all Members similarly situated (e.g., of a similar class or Series of Units) and the Transferring Member are required to do the same: (w) enter into any agreement or make any covenant, (x) make any representation, or warranty other than related to authority, ownership and the ability to convey title to such Units, (y) be liable for the inaccuracy of any representation or warranty made by any person or entity in connection with the sale other than himself or itself and the Company, or (z) be liable in any way affiliated with ISE Holdings may have other than severally business interests and may engage in proportion to any business or trade, profession, employment or activity whatsoever (regardless of whether any such activity competes, directly or indirectly, with the amount business or activities of consideration paid to such Member the Successor), for its own account, or in connection with such sale and such liability not exceed the aggregate consideration received by such Member in such salepartnership or participation with, or as an employee, officer, director, stockholder, member, manager, trustee, general or limited partner, agent or representative of, any other Person.
(f) Notwithstanding that a sale pursuant This Section 6.3 shall terminate effective as of and not apply to this Section 11.8 may provide for, or result in, different per Unit consideration for different classes or series Transfers of Units, such sale shall be deemed to be for the same terms and conditions regarding consideration if the proceeds of such sale are allocated in the manner that would result if such consideration were distributed to the Members as if the Company were hypothetically liquidated Units made pursuant to the rights and preferences set forth in Section 12.2 (taking into account Section 12.3) as in effect immediately prior to such sale as long as Initial Public Offering of the nature of that consideration (e.g., cash, promissory notes, or other property) is received among the various classes or series of Units in the same proportionate amounts received by the Transferring MemberCompany.
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Drag Along Right. If At any time (i) prior to September 11, 2020 with regard to a Class A Transfer of Units with respect to which a Member may not unreasonably withhold its Consent pursuant to Section 6.01(a), or (“Transferring Member”ii) intends after September 11, 2020 with regard to sell Class A any Transfer of Units, if GAHR3 receives a bona fide offer from an independent third party to Transfer all, but not less than all, of its Units to a third party purchaser that would result in such third party purchaser acquiring control over more than fifty percent (50%) which is not an Affiliate of all outstanding Class A Units and otherwise result GAHR3 in a Change single, arm’s length transaction, or in a series of Controlrelated arm’s length transactions, after taking into account through the sale of Units by the Members pursuant to the provisions of this Section 11.8Units, in which the Transferring Member (together with any affiliates or a merger, consolidation or other similar corporate reorganization of the Transferring Member) would not retain a controlling interest in the Company, then the Transferring Member shall have the right Company (the “Drag-Along RightSale”), then GAHR3 shall provide written notice to NHI, GAHR4 and the other Members at least thirty (30) to require each remaining Members to sell some or all of its or his or her Units days prior to the third party in a proportionate amount and on the same terms and conditions as the Transferring Member (taking into account Section 11.8(f)) in accordance with the terms and conditions date of this Section 11.8 and otherwise in accordance with the following provisions:
(a) The Drag-Along Right may only be exercised by written notice such proposed Transfer (the “Drag-Along Notice”) from ), which shall specify the Transferring Member identity of the prospective purchaser and the third party material terms and conditions of such proposed Transfer and the amount and type of consideration to be paid in respect thereof. Subject to Section 6.07 (d), the Drag-Along Notice shall also constitute the Proposed Sale Notice pursuant to Section 6.06(b). Subject to Section 6.07 (d), if neither NHI nor GAHR4 provide a Purchase Notice to GAHR3 as provided in Section 6.06(c), then GAHR3 may at its option, require all of the other Members of the Company, including NHI and GAHR4, to Transfer all, but not less than all, of their respective Units to such purchaser on the same terms and conditions offered to GAHR3; provided, however, that the gross proceeds of the Drag-Along Sale, less the aggregate reasonable and customary expenses of the Company incurred in connection therewith, shall be shared by the Members in the same manner as if all of the assets of the Company were sold for such sale price and the proceeds of such sale were distributed to the remaining MembersMembers in accordance with Section 4.02 (and the same power of attorney contained in Section 6.06(e) shall apply with respect to any Drag- Along Sale).
(a) The closing of the Drag-Along Sale shall take place at such time and place as GAHR3 shall specify in the Drag-Along Notice. At the closing of the Drag-Along Sale, each Member shall deliver such customary transfer documents as GAHR3 may reasonably request to Transfer the Units to be sold by such Member, against delivery of the applicable consideration.
(b) The By execution of this Agreement, each Member hereby agrees, subject to NHI’s and GAHR4’s rights pursuant to Section 6.06 and Section 6.07(d) to Consent to and to DMNORTH #6535211 v11 participate in a Drag-Along Notice shall:
i. state the name of the third party purchaserSale in a timely manner. If any Member shall default in its obligation to sell its Units in a Drag-Along Sale, the purchase price for the Units of the Transferring Member(s) and the purchase price proposed to be paid for the Units of the remaining Members (in accordance with Section 11.8(f)) and the time, date and place of completion then GAHR3 may seek specific performance of such sale and purchase; and
iiMember’s obligations under this Section 6.07 or pursue any other remedies at law or in equity. be given no later than fifteen (15) business days before the date fixed for completion of the sale by the Transferring Member of its or his or her Units In addition, to the third partyextent any Member fails to take any required action in connection with this Section 6.07, each Member hereby grants GAHR3 power of attorney to take such action on such Member’s behalf. The power of attorney granted pursuant to this Section 6.07(b) is a special power of attorney coupled with an interest and is irrevocable.
(c) The delivery Notwithstanding anything to the contrary contained herein, as a condition and prior to the closing of a Drag-Along Sale, each Member and its respective Affiliates (unless waived by such Member) shall be released from any personal liability with respect to all Loans (including, without limitation, any liability associated with any guaranty or indemnity relating to a Loan).
(d) This Section 6.07 (d) shall govern the rights of NHI and GAHR4 with respect to the Drag-Along Notice constituting the Proposed Sale Notice pursuant to a Member shall constitute an irrevocable and binding obligation of the Member Section 6.06(b). If NHI or GAHR4, but not both, elect to sell, and the third party to purchase, some or purchase from GAHR3 all of the Member’s Units owned by GAHR3 within the time periods and in a proportionate amount and the manner required by Section 6.06, then the Member making such election to purchase shall also be required to purchase all of the Units owned by all other Members on the same terms and conditions, taking into account conditions offered by GAHR3 (subject to the proviso set forth in Section 11.8(f6.07(a) and subject the other terms and conditions of this Section 6.07). If both NHI and GAHR4 elect to purchase from GAHR3 all of the Units owned by GAHR3 within the time periods and in the manner required by Section 11.8(e)6.06, as are applicable then NHI shall have the sole right to purchase the sale all of the Units owned by GAHR3 and all of the Transferring Member Units owned by GAHR4 at a price designated by NHI which price shall be required to be in excess of its Units to price offered by GAHR3 (the third party as “NHI Drag- Along Price”) and otherwise on terms set forth in the Drag-Along Notice and the other terms and conditions of this Section 6.07. Such election (subject to such terms being accurately reflected in the “NHI Drag-Along Notice).
(dElection”) At or before the time of completion of the sale of the Units of each Member shall be made by NHI by written notice to the third party purchaser, each such Member shall other Members (ithe “NHI Drag-Along Election Notice”) use its best efforts to cause to be discharged any and all encumbrances of, and security interests in, its or his or her Units and provide written evidence of such discharges to the third party purchaser, and (ii) execute and deliver to the third party purchaser, against payment for such Units, all certificates or other documents representing such Units, duly endorsed for transfer or with duly executed assignment forms attached.
(e) Notwithstanding any provision of this Section 11.8, (i) no Member shall be under any obligation to sell any Units unless (A) such sale occurs concurrently with or subsequent to the sale of Units by the Transferring Member in a proportionate amount on the same terms and conditions (taking into account Section 11.8(f)), (B) the sale of Units by the Transferring Member shall qualify as a Permitted Transfer under Section 11.2 and meets the conditions to a Permitted Transfer set forth in Section 11.3 to the extent applicable, and (C) such sale results in a third party purchaser acquiring control over more than fifty percent (50%) of all outstanding Class A Units and otherwise result in a Change of Control, after taking into account the sale of Units by the Members pursuant to the provisions of this Section 11.8, in which the Transferring Member (together with any affiliates of the Transferring Member) would not retain a controlling interest in the Company and (ii) nothing in such sale of Units shall require a Member subject to this Section 11.8 to do any of the following, unless all Members similarly situated (e.g., of a similar class or Series of Units) and the Transferring Member are required to do the same: (w) enter into any agreement or make any covenant, (x) make any representation, or warranty other than related to authority, ownership and the ability to convey title to such Units, (y) be liable for the inaccuracy of any representation or warranty made by any person or entity in connection with the sale other than himself or itself and the Company, or (z) be liable in any way other than severally in proportion to the amount of consideration paid to such Member in connection with such sale and such liability not exceed the aggregate consideration received by such Member in such sale.
(f) Notwithstanding that a sale pursuant to this Section 11.8 may provide for, or result in, different per Unit consideration for different classes or series of Units, such sale shall be deemed to be for the same terms and conditions regarding consideration if the proceeds of such sale are allocated in the manner that would result if such consideration were distributed to the Members as if the Company were hypothetically liquidated pursuant to the rights and preferences set forth in Section 12.2 (taking into account Section 12.3) as in effect immediately prior to such sale as long as the nature of that consideration (e.g., cash, promissory notes, or other property) is received among the various classes or series of Units in the same proportionate amounts received by the Transferring Member.within ten
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Samples: Limited Liability Company Agreement (NorthStar Healthcare Income, Inc.)