Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05, if a Shareholder (the “Drag-Along Seller”) proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable. (b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof. (c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect. (d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders. (e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller. (f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale. (g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale. (h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 6 contracts
Samples: Stockholder Subscription Agreement, Stockholder Subscription Agreement, Stockholder Subscription Agreement
Drag-Along Rights. (aA) Subject to Sections 4.04(g) and 4.05At any time on or after August 1, 2011, if a Shareholder Preferred Supermajority, only including in such calculation those Preferred Stockholders then entitled to exercise rights under this Section 3(d)(ii), approve (the “Approving Stockholders”) a bona fide offer from a Proposed Transferee (who is unaffiliated with the holders of such Preferred Stock approving such offer) to purchase all of the stock or all or substantially all of the assets of the Company (which offer must not value the Series A Preferred Stock at a value exceeding the Series A Accreted Value (as defined in the Certificate of Designation of Series A Preferred Stock), and otherwise treats the holders of Common Stock and Preferred Stock identically), the provisions of Section 3(c) and (d)(i) shall not apply and the Company shall have forty-five (45) days to elect to purchase the Preferred Stock and Common Stock of the Approving Stockholders on substantially the same terms, or their substantial economic equivalent in cash, as the Approving Stockholders would have received (taking into account tax consequences) as a result of the transaction contemplated by such bona fide offer. If the Company does not elect to purchase the Approving Stockholders’ shares, the other Preferred Stockholders and Common Stockholders (the “Drag-Along SellerOwners”) proposes shall have forty-five (45) days to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) elect to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of purchase the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic Preferred Stock and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for Stock on substantially the same consideration per share terms, or unit of the relevant class of Shares, (ii) their substantial economic equivalent in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options Approving Stockholders would have received (taking into account tax consequences) as a result of the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required transaction contemplated by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect theretobona fide offer. If the Drag-Along Sale is Owners do not consummated with respect so elect to any Common Shares acquired upon exercise of such optionspurchase, or then the Approving Stockholders shall have the right to require the Drag-Along Sale is not consummated, such options shall be deemed not Owners to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice sell to the Proposed Transferee all of the Preferred Stock and Common Stock of such Drag-Along Sale Owner, or to vote to sell all or substantially all of the assets of the Company to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior Proposed Transferee on the same terms offered to the proposed Approving Stockholders.
(B) If such transaction is structured as a merger or consolidation of the Company, or a sale of all or substantially all of the Company’s assets, each Drag-Along Sale. The Drag- Owner shall take all actions necessary (at both the Board and the stockholder level, assuming compliance with any applicable fiduciary duties) to approve the transaction and cause the transaction to be consummated, including but not limited to: (i) voting the shares of Preferred Stock and Common Stock then beneficially held by such Drag-Along Sale Notice shall identify Owner in favor of such transaction at any meeting of the Company’s Stockholders called to vote on the transaction or, in the alternative, approve such transaction by written consent of the Company’s Stockholders and raise no objections to the transaction or the process pursuant to which the transaction was arranged, (ii) voting the shares of Preferred Stock and Common Stock then beneficially held by such Drag-Along Owner in opposition to any and all other proposals that could reasonably be expected to delay or impair the ability of the Company to consummate such transaction, (iii) waiving any dissenters’ rights, appraisal rights or similar rights in connection with such transaction, (iv) not depositing any shares of Preferred Stock or Common Stock held by such Drag-Along Owner in a voting trust or subjecting any such shares to any arrangement or agreement with respect to the voting of such shares, unless specifically requested to do so by the Proposed Transferee in connection with such transaction, and (v) taking all other necessary and desirable actions reasonably requested by the Approving Stockholders to cause such transaction to be consummated, including executing and delivering all related documents.
(C) In the event that such transaction involves a sale of securities by the Drag-Along TransfereeOwners then, at the number closing of Shares subject such transaction, against payment of the purchase price for the securities to be sold by the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such periodOwners, the Drag-Along Seller Owners shall promptly return deliver to each the Proposed Transferee the certificate or certificates representing all of the other Stockholders any limited powersuch Drag-of-attorney (Along Owners’ shares of Preferred Stock and Common Stock, free and clear of all copies thereof) liens, claims and all certificates encumbrances, and other applicable instruments representing Shares that such other Stockholders delivered properly endorsed for Transfer pursuant heretotransfer, together with any all other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve effect such transaction, and shall take all other necessary and desirable actions reasonably requested by the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees Approving Stockholders to cause such transaction to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Saleconsummated.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 4 contracts
Samples: Stockholder Agreement, Stockholder Agreement (Renewable Energy Group, Inc.), Stockholder Agreement (REG Newco, Inc.)
Drag-Along Rights. (a) Subject For so long as Heartland is entitled to Sections 4.04(g) and 4.05the right to designate directors as set forth in Section 6.3, if a Shareholder in the event that one or more of the Heartland Entities (the “"Drag-Along Seller”Rightholders") proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in receive a Change of Control (i) to any bona fide offer from a Third Party or Parties or Purchaser to purchase (iiincluding a purchase by merger) to any Person in connection with a reorganization or restructuring all of the Company as determined Shares held by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (Investor Stockholders or equivalent securities) all or a substantial portion of the successor entity to consolidated assets of the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”)Company, the Drag-Along Rightholders may send written notice (the "Drag-Along Notice") to the Company and the other Stockholders (the "Drag-Along Sellers") notifying them they will be required to sell all (but not less than all) of their Shares in such sale (or, in the case of a merger or asset sale, vote in favor of such sale). Upon receipt of a Drag-Along Notice, each Drag-Along Seller may at receiving such notice shall be obligated to (i) sell all of its option require each other Stockholder to Transfer Shares in the transaction (including a sale by merger or asset sale) contemplated by the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) Notice for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per Rightholders (including payment of its pro rata share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise all costs associated with such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”transaction), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received; if, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such periodonly if, the Drag-Along Seller shall promptly return to each receive cash and/or other freely tradable consideration having a fair market value of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates at least $11 per Share, adjusted for stock splits, stock dividends, reclassifications and other applicable instruments representing recapitalizations and (ii) otherwise take all necessary action in its capacity as a stockholder to cause the consummation of such transaction, including voting its Shares that in favor of such other Stockholders delivered for Transfer pursuant hereto, together with transaction and not exercising any other documents appraisal rights in the possession connection therewith. The obligations of the Drag-Along Seller executed by Sellers in respect of a Transaction under this Section 3.1(g) are subject to the other Stockholders in connection with such proposed Transfer, and all satisfaction of the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
following conditions: (di) Concurrently with upon the consummation of the Drag-Along SaleTransaction, the each Drag-Along Seller shall give notice thereof have the right to receive cash and/or other consideration having a fair market value of at least $11 per Share (adjusted for stock splits, stock dividends, reclassifications and recapitalizations) in the other Stockholders, shall remit or cause same form and amount per share of consideration paid to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale Rightholders in such transaction or any other transaction related thereto (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) as a payment for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
consulting or management services or non-compete payments); (e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Sellerii) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the any Drag-Along Seller is in given an option as to the sole form and absolute discretion amount of the consideration to be received, each other Drag-Along Seller.
Seller will be given the same option with respect to its applicable Pro Rata Share; and (fiii) A no Drag-Along Sale may also Seller shall be affected obligated under the terms of any agreement respecting any transaction subject to this Section 3.1(g) to indemnify any person in an amount greater than the proceeds to be received by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the such Drag-Along SaleSeller in such transaction.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 4 contracts
Samples: Stock Purchase Agreement (Cypress Capital Advisors LLC), Stockholders Agreement (Heartland Industrial Partners L P), Share Purchase Agreement (Cypress Capital Advisors LLC)
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05, if a Shareholder (In the “Drag-Along Seller”) proposes event Old Ironsides or its Permitted Transferees propose to Transfer (not including, however, all or any pledge, encumbrance or hypothecation) any shares portion of any class its Interests other than to a Permitted Transferee of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring such Member and such Interests constitute more than 50% of the Company as determined by the Board of Directors outstanding Class A Units (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), Old Ironsides and its Permitted Transferees effecting such Transfer (collectively, the Drag-Along Seller may at its option “Dragging Member”) shall have the right to require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares Member (each, a “Drag-Along RightsMember”) then to sell their Interests in such Drag-Along Sale by Transferring up to a proportion (based on the percentage of the Class A Units being Transferred by the Dragging Member relative to the number of Class A Units owned by the Dragging Member) of the Class A Units held by such each Drag-Along Member at the purchase price and upon the other Stockholder, terms and (subject to and at the closing conditions of the Drag-Along Sale) to exercise such number Sale (all of options for Common Shares held by such other Stockholder as is required which shall be set forth in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicableNotice).
(b) The Dragging Member shall provide each Drag-Along Seller shall provide Member written notice of the terms and conditions of such proposed Transfer (the “Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) 15 Business Days prior to the closing of the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along TransfereeNotice shall contain a true and complete copy of any and all available documents constituting the agreement to transfer and, to the extent not set forth in the accompanying documents, the number of Shares subject price offered for the Interests, all information reasonably available to the Drag-Along SaleDragging Member regarding the acquirer, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the proposed Drag-Along Sale. The number Sale and, in the case of Shares to be sold by each other Stockholder shall be the a proposed Drag-Along Portion Sale in which the consideration payable for the Interests consists in whole or in part of the class of Shares that consideration other than cash, such information relating to such other Stockholder ownsconsideration as is reasonably available to the Dragging Member. Each other Stockholder Drag-Along Member shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and this Section 6.2. No Member shall have any dissenters’ or appraisal rights in connection with the Drag-Along Sale, and each Member hereby releases, and will execute such further instrument as the Company reasonably requests to further evidence the waiver of, such rights.
(c) Within 10 Business Days following receipt of the Drag-Along Notice (the “Drag-Along Notice Period”), each Drag-Along Member must deliver to such Dragging Member (i) wire transfer instructions for payment of the cash portion of purchase price for the consideration Interests to be received sold in such Drag-Along Sale, orand (ii) all other documents required to be executed in connection with such Drag-Along Sale. Each Member makes, if constitutes, and appoints the Manager (or its chief executive officer, in his official corporate capacity) as its true and lawful attorney-in-fact for such delivery person and in its name, place, and stead and for its use and benefit, to sign, execute, certify, acknowledge, swear to, file, and record any instrument that is not permitted now or may hereafter be deemed necessary by applicable lawthe Company in its reasonable discretion to carry out fully the provisions and the agreement, an unconditional agreement to deliver obligations, and covenants of such Shares Member in this Section 6.2 in the event that such Member is or becomes a Drag-Along Member pursuant to this Section 4.04(b) at the closing for 6.2. Each Member hereby gives such attorney-in-fact full power and authority to do and perform each and every act or thing whatsoever requisite or advisable to be done in connection with such Member’s obligations and agreements as a Drag-Along Sale against delivery Member pursuant to this Section 6.2 as fully as such other Stockholder Member might or could do personally, and hereby ratifies and confirms all that any such attorney-in-fact shall lawfully do or cause to be done by virtue of the consideration thereforepower of attorney granted hereby. If The power of attorney granted pursuant hereto is a special power of attorney, coupled with an other Stockholder should fail to deliver to interest, and is irrevocable, and shall survive the bankruptcy, insolvency, dissolution or cessation of existence of the applicable Member.
(d) If, at the end of the 90-day period after the date on which the Dragging Member gives the Drag-Along Seller the limited powerNotice (which 90-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney day period shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to extended if any of the Drag-Along Seller and transactions contemplated by the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended approval until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) 120 days following the date of receipt delivery of the Drag-Along Sale Notice. If ), the Drag-Along Sale shall has not have been consummated during such periodcompleted on substantially the same terms and conditions set forth in the Drag-Along Notice, the Drag-Along Seller Members shall promptly no longer be obligated to sell their Interests pursuant to such Drag-Along Notice and the Dragging Member shall return to each of the other Stockholders Drag-Along Member any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Dragging Member executed by or on behalf of such Drag-Along Seller executed by the other Stockholders Member in connection with such the proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effectDrag-Along Sale.
(de) Concurrently with the consummation of the Drag-Along Sale, Dragging Member shall (i) notify the Drag-Along Seller shall give notice thereof Members thereof, (ii) remit to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and Drag-Along Members the total consideration to be paid at for the closing Interests of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Members Transferred pursuant hereto thereto, and shall (iii) promptly after the consummation of the Drag-Along Sale, furnish such other evidence of the completion and time the date of completion of such Transfer and the terms thereof as may be reasonably requested by such other Stockholdersthe Drag-Along Members.
(ef) Notwithstanding anything contained in this Section 4.046.2, there shall be no liability on the part of the Drag- Along Seller Dragging Member to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) Members if the Transfer of Shares the Interests pursuant to this Section 4.04 6.2 is not consummated for whatever reason.
(g) Notwithstanding anything contained in this Section 6.2, regardless the obligations of whether the Drag- Drag-Along Seller has delivered Members to participate in a Drag-Along Sale Notice. The decision are subject to effect the following conditions:
(i) upon consummation of such Drag-Along Sale, (A) all of the Members participating therein will receive the same form of consideration, and (B) the aggregate consideration received by the Members will be paid to the Members subject to the allocation provisions set forth in Section 5.4;
(ii) no Drag-Along Member participating therein shall be obligated to pay any expenses incurred in connection with any unconsummated Drag-Along Sale, and each Drag-Along Member shall be obligated to pay only its pro rata share (based on the amount of the purchase price received) of expenses incurred in connection with a Transfer consummated Drag-Along Sale to the extent such expenses are incurred for the benefit of Shares pursuant all Members and are not otherwise paid by the Company or another person;
(iii) without the written consent of a Drag-Along Member, such Drag-Along Member shall not be obligated with respect to this Section 4.04 (A) any representation or warranty other than (I) a representation and warranty that relates solely to such Drag-Along Member’s title to its Interest, and its authority and capacity to execute and deliver the subject purchase and sale agreement or (II) a representation and warranty that relates to the Company and its operations which each Member is severally making to the buyer, or (B) any indemnity obligation beyond a pro rata portion (based on and limited to the value of consideration received by such Drag-Along Member in the Drag-Along Sale) of the indemnity obligations which obligate the Dragging Member and all Drag-Along Members and then, such indemnity obligations shall be several and not joint, or (C) any other continuing obligation on such Drag-Along Member in favor of any other person following the Disposition of such Drag-Along Member’s Interests (other than obligations relating to representations and warranties that relate solely to such Drag-Along Member and not to any other Member or the indemnification obligation provided for in clause (B) above);
(iv) no Drag-Along Member shall be obligated to consummate such Drag-Along Sale contemplated by the Drag-Along Seller is in Notice with respect to its Interests unless the sole Dragging Member consummates such Drag-Along Sale with respect to all (but not less than all) of their Interests on the terms and absolute discretion of conditions contemplated by the Drag-Along Seller.Notice; and
(fv) A no Drag-Along Member shall be obligated to participate in a Drag-Along Sale may that is an Excluded Affiliate Transfer.
(h) If a Member whose Class A Units are Transferred pursuant to this Section 6.2 also holds Class B Units or Class C Units and all of such Member’s Class A Units are Transferred pursuant to this Section 6.2, then all Class B Units and all Class C Units held by such Member shall be affected Transferred together with such Member’s Class A Units in the Drag-Along Sale. If a Member whose Class A Units are Transferred pursuant to this Section 6.2 also holds Class B Units or Class C Units and less than all of such Member’s Class A Units are Transferred pursuant to this Section 6.2, then all Class B Units and all Class C Units held by a merger or other corporate transaction such Member shall be retained by such Member and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary not included in order to approve the consummation of the Drag-Along Sale.
(gi) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, In any rights of appraisal, any dissenters’ rights and any similar rights relating to Drag-Along Sale in which a Drag-Along Member participates pursuant to this Section 6.2, the aggregate consideration to be paid by the acquiring party shall be allocated among each class of Units included in such Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares and the holders of Company Shares owned by Stockholder Class A Units (with respect to a their Class A Units), the holders of Class B Units (with respect to their Class B Units) and the holder of Class C Units (with respect to the Class C Units) included in the Drag-Along SaleSale as provided in Section 6.11.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 2 contracts
Samples: Limited Liability Company Agreement (Carbon Natural Gas Co), Limited Liability Company Agreement (Carbon Natural Gas Co)
Drag-Along Rights. 6.2.1 In the event an Acquisition (ai) Subject has been approved by the Board, (ii) does not involve an acquirer in which an Affiliate (and, in the case of Equinox, for the avoidance of doubt, its direct and indirect shareholders) of any Stockholder is involved in any capacity, and (c) in which the consideration payable to Sections 4.04(gthe Stockholders in connection therewith consists solely of cash or securities publicly traded on a national securities exchange having an average daily trading volume over each trading day (whether or not any shares traded on such day) and 4.05during the twelve-month period immediately preceding such Corporate Transaction Event equal to or greater than Twenty Million Dollars ($20,000,000) per trading day, if a Shareholder then Equinox shall have the right (the “Drag-Along SellerRight”), but not the obligation, to require all (but not less than all) proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors Stockholders (the “BoardDragged Holders”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to Transfer to the Company (the “Drag-Along same Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as apply to Equinox, the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share same percentage of which shares of Common Stock held by such Dragged Holders as Equinox is greater than the per share price at which transferring of the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made Stock (the “Drag-Along Sale PriceTransfer”) and all other material terms and conditions of the ).
6.2.2 If Equinox elects to exercise its Drag-Along Sale. The number of Shares to be sold by each other Stockholder Right, then Equinox shall be notify the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate Dragged Holders in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice writing (the “Drag-Along Sale Notice PeriodNotice”), each ) no less than thirty (30) calendar days prior to the proposed date of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Acquisition. The Drag-Along Notice and wire transfer instructions for payment shall set forth (i) the name of the Transferee, (ii) the proposed amount of cash portion and terms and conditions of payment offered by the Transferee and a detailed summary of all other material terms pertaining to the Acquisition, and (iii) the number of shares of Common Stock that the Dragged Holders are required to sell in connection with such Drag-Along Right.
6.2.3 The consummation of such proposed Acquisition shall be subject to the sole discretion of Equinox, who shall have no liability or obligation whatsoever to the Dragged Holders participating therein for not consummating such proposed Acquisition other than their obligations as set forth herein. The Dragged Holders shall receive the benefits of the same terms and conditions in such Acquisition. Any such Acquisition shall be on terms that provide that the Dragged Holders shall (i) not be subject to personal liability for indemnification or otherwise beyond being required to contribute to an indemnification escrow on a pro rata basis with all other Stockholders based on consideration to be received by each and (ii) not be subject to any restrictive covenants that extend beyond the closing of such Acquisition. No Dragged Holder shall be required to make any representations or warranties in connection with any such proposed Acquisition other than to represent to such Transferee that such Dragged Holder is the record and beneficial owner of its shares of Common Stock free and clear of all liens and encumbrances, that the instrument of transfer relating to such shares entered into by such Dragged Holder will be effective to vest ownership of such shares in such Drag-Along SaleTransferee free and clear of all liens and encumbrances, that such Dragged Holder has all requisite authority to engage in the proposed Acquisition, that the Dragged Holder, if an entity, is duly organized and that the proposed Acquisition will not contravene applicable law or, if applicable, such delivery is not permitted Dragged Holder’s Organizational Documents.
6.2.4 To the extent required under applicable law, each Stockholder shall take all actions necessary (at both the Board level (except to the extent prohibited by applicable law) and the stockholder level) to approve the Acquisition and cause the Acquisition to be consummated including: (i) voting the shares of Common Stock then beneficially held by such Stockholder in favor of the Acquisition at any meeting of the Stockholders called to vote on the Acquisition or, an unconditional agreement in the alternative, approving the Acquisition by written consent of the Stockholders, (ii) raising no objections to deliver such Shares the Acquisition or the process pursuant to this Section 4.04(b) at which the closing for such Drag-Along Sale against delivery to such Acquisition was arranged other Stockholder of than objections, if applicable, that the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions terms of this Section 4.04(b6.2 were not adhered to in some material respect, (iii) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Noticewaiving any dissenters’ rights, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders appraisal or similar rights in connection with such proposed Transfer, the Acquisition and (iv) taking all other necessary and desirable actions reasonably requested by Equinox to cause the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause Acquisition to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with consummated. Each Dragged Holder also shall enter into such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer customary agreements as may be reasonably requested required of and entered into by such other all Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney including Equinox and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reasonits Affiliates, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of close the Drag-Along SaleAcquisition.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 2 contracts
Samples: Redemption Agreement (SoulCycle Inc.), Redemption Agreement (SoulCycle Inc.)
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05Section 2.06, if a Shareholder the LLC (or any of its Permitted Transferees) or any MSCP Fund (or any of them) (the “Drag-Along Seller”) proposes propose to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in effect a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring Sale of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) require the Optionee to: (i) Transfer a number of the Shares then held owned by such other StockholderOptionee in such Drag-Along Sale equal to the product of (x) the aggregate number of Shares then owned by such Optionee times (y) a fraction, the numerator of which is the aggregate number of Shares proposed to sold in such Drag-Along Sale by the Drag-Along Seller and the denominator of which is the aggregate number of Shares then owned by the LLC and the MSCP Funds; (ii) (subject to and at the closing of the Drag-Along Sale) to exercise such number all or some portion of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available this Option and to Transfer all of the relevant Shares received upon such exercise in such Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along SellerSale; provided that any other Stockholder that holds options if the exercise price per share of which Share is greater than the per share price at which the Common Shares are to be Transferred to in the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, maySale, in place of such exercise, the Optionee shall submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. ; and (iii) otherwise take all other actions necessary or desirable to consummate the Drag-Along Sale.
(b) If the Drag-Along Sale is not consummated with respect Seller elects to any Common Shares acquired upon exercise of such options, or the its Drag-Along Sale is not consummatedRights, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The the Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders Optionee (a “Drag- Drag-Along Sale Notice”) not later than twenty (20) Business Days 10 days prior to the proposed Drag-Along Sale. The Drag- Drag-Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to purchaser in the Drag-Along Sale, the consideration for which a Transfer is number of Shares proposed to be made sold in the Drag-Along Sale (including the number of Shares required to be Transferred by the Optionee pursuant to this Section 2.05), the consideration per Share (the “Drag-Along Sale Price”) ), and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder Optionee shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be .
(c) If requested by the Drag-Along Sale Price. Not Seller, not later than ten (10) Business Days five days after the date of the Drag-Along Sale Notice (Notice, the “Drag-Along Sale Notice Period”), each of the other Stockholders Optionee shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, Sale Notice (i) the certificate and other applicable instruments representing the Shares of such other Stockholder Optionee required to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and check or wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) 2.05 at the closing for such Drag-Along Sale against delivery to such other Stockholder the Optionee of the consideration therefore. If an therefor and/or (ii) all other Stockholder should fail documents required to deliver to be executed in connection with the Drag-Along Seller Sale, including documents required in connection with the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power exercise or cancellation of attorney hereunder to effect such Drag-Along Sale on behalf all (or applicable portion) of such other Stockholder, which power of attorney shall be deemed to be coupled with an interestthis Option. If an other Stockholder the Optionee should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummatedSeller, the Company (subject to Section 2.05(d)) shall cause the books and records of the Company to show that such Shares and this Option (or applicable portion of this Option) are bound by the provisions of this Section 4.04(b) 2.05 and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(cd) The Drag-Along Seller shall have a period of thirty (30) 120 days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) 120-day period shall be extended until the expiration of five (5) Business Days business days after all such approvals have been received, but in no event later than sixty (60) 270 days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any Optionee the limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders the Optionee delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders Optionee in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Award Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders Optionee shall again be in effect.
(de) Concurrently with Promptly after the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof (i) notify the Optionee thereof, (ii) remit to the other Stockholders, shall remit or cause to be remitted to each Optionee the net proceeds for the Shares of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale Optionee Transferred pursuant thereto (with the cash portion of which is to be the purchase price paid by check or wire transfer of immediately available funds in accordance with such other Stockholder’s the wire transfer instructionsinstructions provided by the Optionee) for the Shares Transferred pursuant hereto and shall (iii) furnish such other evidence of the completion and time the date of completion of such Transfer transfer and the terms thereof as may be reasonably requested by such other Stockholdersthe Optionee.
(ef) Notwithstanding anything contained in this Section 4.042.05, there shall be no liability on the part of the Drag- Drag-Along Seller to the other Stockholders Optionee (other than the obligation to return any the limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 Drag-Along Sale is not consummated for whatever reason, regardless of whether the Drag- Drag-Along Seller has delivered a Drag-Along Sale Notice. The decision Whether to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller Sale is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 2 contracts
Samples: Award Agreement (Aventine Renewable Energy Holdings Inc), Award Agreement (Aventine Renewable Energy Holdings Inc)
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05Section 4.03, if a Shareholder the Xxxxxx Xxxxxxx Investors, or any of them (the “Drag-Along Seller”) ), proposes to Transfer Common Shares representing (1) not includingless than a majority of the outstanding Fully- Diluted Common Shares or (2) all of the Common Shares beneficially owned by the Xxxxxx Xxxxxxx Investors, howeverin each case, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in to a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and bona fide sale (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder all Other Shareholders (i) to Transfer the Drag-Along Portion of the class of Shares Company Securities (“Drag-Along Rights”) then held by such other Stockholderevery Other Shareholder, and (ii) to exercise such number of options for Company Securities held by every Other Shareholder as is required in order that a sufficient number of the Company Securities are available to Transfer the relevant Drag-Along Portion of Company Securities of each such Other Shareholder (but subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required ), in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) case for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; , provided that any other Stockholder Other Shareholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares Company Securities are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place lieu of such exercise, submit to an irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to consummated, any Common Shares acquired upon exercise options exercised or cancelled in contemplation of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) . The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders Other Shareholders (a “Drag- Drag-Along Sale Notice”) not later than twenty (20) 15 Business Days prior to the proposed Drag-Along Sale. The Drag- Drag-Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares Company Securities subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares Company Securities to be sold by each other Stockholder Other Shareholder shall be the Drag-Along Portion of the class of Shares Company Securities that such other Stockholder Other Shareholder owns. Each other Stockholder Other Shareholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of all its Shares Company Securities as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) 10 Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders Other Shareholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments Sale Notice the certificates representing the Shares Company Securities of such other Stockholder Other Shareholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such its representative to Transfer such Shares Company Securities on the terms set forth in the Drag-Along Notice and wire transfer or other instructions for payment of the cash portion or delivery of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares Company Securities pursuant to this Section 4.04(b4.02(a) at the closing for such Drag-Along Sale against delivery to such other Stockholder Other Shareholder of the consideration thereforetherefor. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder Other Shareholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummatedSeller, the Company (subject to reversal under Section 4.02(b)) shall cause the books and records of the Company to show that such Shares Company Securities are bound by the provisions of this Section 4.04(b4.02(a) and that such Shares Company Securities shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(cb) The Drag-Along Seller shall have a period of thirty (30) 120 days from the date of receipt delivery of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) 120-day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) 180 days following the date of receipt delivery of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any Other Shareholders the limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares Company Securities that such other Stockholders Other Shareholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders Other Shareholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares Company Securities owned by the other Stockholders Other Shareholders shall again be in effect.
(dc) Concurrently with the consummation of the Drag-Along SaleTransfer of Company Securities pursuant to this Section 4.02, the Drag-Along Seller shall give notice thereof to the other StockholdersOther Shareholders, shall remit or cause to be remitted to each of the other Stockholders all Other Shareholders that have surrendered their certificates and other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other StockholderOther Shareholder’s wire transfer instructions) for the Shares Company Securities Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer and the terms thereof as may be reasonably requested by such other StockholdersOther Shareholders.
(ed) Notwithstanding anything contained in this Section 4.044.02, there shall be no liability on the part of the Drag- Drag-Along Seller to the other Stockholders Other Shareholders (other than the obligation to return any the limited power-of-attorney and the certificates and other applicable instruments representing Shares Company Securities received by the Drag-Along Seller) or any other Person if the Transfer of Shares Company Securities pursuant to this Section 4.04 4.02 is not consummated for whatever reason, regardless of whether the Drag- Drag-Along Seller has delivered a Drag-Along Sale Notice. The decision Whether to effect a Transfer of Shares Company Securities pursuant to this Section 4.04 4.02 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 2 contracts
Samples: Shareholders Agreement (Tops Markets Ii Corp), Shareholders’ Agreement (Tops PT, LLC)
Drag-Along Rights. (a) Subject In the event that a Disposition Event is approved by the board of directors of the Corporation or is otherwise effected or to Sections 4.04(g) be effected with the consent or approval of the board of directors of the Corporation, Blueapple and 4.05, if a Shareholder (the “Drag-Along Seller”) proposes its Permitted Transferees agrees to Transfer all of their respective Common Units on the terms and conditions contemplated by this Section 10.09, effective and contingent upon the consummation of such Disposition Event, for consideration per Common Unit (not includingbefore taking into account any rights such Person may have under the Tax Receivable Agreement) equal to the same kind and amount of stock or securities, howevercash or other property, any pledgeas the case may be, encumbrance into which a share of Class A Common Stock is converted or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder exchanged in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactionsTransaction, and (any otherwise with respect to such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise Units on the same terms and conditions as apply to the Drag-Along Sellershares of Class A Common Stock in such Disposition Event, with such modifications as are appropriate, as determined in good faith by the Manager, to reflect the fact that Common Units rather than shares of Class A Common Stock will be Transferred. Such Transfer shall be structured in the sole discretion of the Manager and, without limitation to any other structure, the Manager will use its reasonable best efforts expeditiously and in good faith to take all such actions and do all such things as are necessary or desirable to enable and permit Blueapple and its Permitted Transferees to participate in such Disposition Event to the same extent or on an economically equivalent basis as the holders of shares of Class A Common Stock without discrimination; provided that, without limiting the generality of this sentence, the Manager will use its reasonable best efforts expeditiously and in good faith to ensure that Blueapple and its Permitted Transferees may participate in each such Disposition Event without being required to have their Common Units and any associated shares of Class B Common Stock redeemed (or, if so required, to ensure that any other Stockholder that holds options such redemption shall be effective only upon, and shall be conditional upon, the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place closing of such exercisedisposition Event, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceledor, as applicable, to the extent necessary to exchange the number of Common Units being repurchased).
(b) The Drag-Along Seller Corporation shall provide send written notice of such Drag-Along Sale to the other Stockholders Blueapple and its Permitted Transferees at least thirty (a “Drag- Along Sale Notice”30) not later than twenty (20) Business Days days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify closing of any Disposition Event to which this Section 10.09 applies informing them of the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions related to the transfer of the Drag-Along Saletheir respective Common Units in connection with such Disposition Event. The number of Shares to be sold by each other Stockholder Blueapple and its Permitted Transferees shall be the Drag-Along Portion obligated to sell all of the class their respective Common Units and any associated shares of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate Class B Common Stock in the Drag-Along Sale Disposition Event contemplated by such notice, on the terms and conditions as the Drag-Along Seller is participating as set forth described in the Drag-Along Sale Notice this Section 10.09, including by executing any document containing customary representations, warranties and agreements with respect to tender the Drag-Along Portion of itself and its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date ownership of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”)Common Units or any associated shares of Class B Common Stock, each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Saleas applicable, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated as requested by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders Manager in connection with such proposed TransferDisposition Event, which representations, warranties, indemnities and all agreements shall be substantially the restrictions on Transfer same as those contained in this Agreement or otherwise applicable at such time with respect any documentation to such Shares owned be executed by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation holders of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance Class A Common Stock with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer modifications as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained are appropriate, as determined in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received good faith by the Drag-Along Seller) if Manager, to reflect the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares fact that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any Common Units rather than shares of Company Shares owned by Stockholder with respect to a Drag-Along SaleClass A Common Stock will be transferred.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 2 contracts
Samples: Limited Liability Company Agreement (EVO Payments, Inc.), Limited Liability Company Agreement (EVO Payments, Inc.)
Drag-Along Rights. (a) Subject to Sections 4.04(gIf the DCP Investor proposes that it or the Company enter into a transaction (other than with a Permitted Transferee) and 4.05, if a Shareholder (that would result in the “Drag-Along Seller”) proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class an amount of Shares Company Securities that results would result in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares then such DCP Investor shall provide written notice (a “Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) to each other Shareholder (an “Other Holder”) not later less than twenty (20) 12 Business Days prior to the consummation of the proposed Drag-Along Sale. The Drag- Drag-Along Sale Notice shall identify state the Drag-Along Transferee, the number proposed amount and type of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “paid by such Third Party Prospect in such Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. .
(b) Each other Stockholder Other Holder shall be required to participate in the Drag-Along Sale on the same economic terms and conditions as are applicable to the Drag-Along Seller is participating DCP Investor, including the same consideration per Company Security (including the same form of consideration) as received by the DCP Investor (on no later than the same date as the DCP Investor); provided, however, that in no event shall any Other Holder have any greater obligations in connection with such sale than the DCP Investor; provided, further, that the consideration per share, terms and conditions shall be adjusted as necessary to the extent such Other Holder and the DCP Investor are selling different series or classes of Company Securities; provided, further, that any adjustment between any preferred Company Securities and Common Stock shall be made by determining the valuation implied by such sale (by extrapolating such valuation to a sale of all Company Securities) and determining the proceeds of such sale which would have been distributed to the Company with respect to a share of such preferred Company Security and Common Stock in a complete liquidation pursuant to the rights and preferences set forth in the Company’s articles of incorporation as in effect immediately prior to such sale. Notwithstanding the foregoing, if the consideration to be received in the Drag-Along Sale Notice and includes securities, any Other Holder that is unable to tender certify to the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date reasonable satisfaction of the Drag-Along Sale Notice (DCP Investor that it is an Accredited Investor may, at the “Drag-Along Sale Notice Period”), each election of the other Stockholders shall deliver DCP Investor, be required to a representative receive, in lieu of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder securities to which it would otherwise be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative entitled to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received receive in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver amount in cash equal to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. Fair Market Value thereof.
(c) If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummatedstructured as a sale of Company Securities, the DCP Investor or the Company shall cause may require each Other Holder to Transfer a portion of its Company Securities that represents the books and records same percentage of the Company to show that Securities held by such Shares are bound Other Holder as the number of Company Securities being sold by the provisions DCP Investor (for example, if the DCP Investor is selling 70% of this Section 4.04(b) and that its Company Securities, then such Shares shall Other Holders will be Transferred required to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereofsell 70% of their Company Securities).
(cd) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of If the Drag-Along Sale Notice is structured as a merger, sale of assets or other transaction that requires approval of the Shareholders, then each Other Holder shall cooperate in, and shall take all actions that the DCP Investor deems reasonably necessary or desirable to consummate the Drag-Along Sale on the terms Sale, including, without limitation, (i) voting their respective Company Securities (or executing and conditions set forth delivering written consents in such Drag-Along Sale Noticelieu thereof) in favor of, provided thator otherwise consenting to, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such periodand against any action or proposal that may prevent, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement hinder or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with impede the consummation of the Drag-Along Sale, and (ii) not exercising any dissenters’ or appraisal rights to which they may be entitled in connection with the Drag-Along Seller shall give notice thereof Sale. Each Other Holder (other than the Golden Gate Investor and the other 2011 Rollover Holders) hereby grants to the other StockholdersDCP Investor, an irrevocable proxy to vote, including in any action by written consent, such Other Holder’s Company Securities in accordance with this Section 3.5.
(e) Except as set forth in Section 3.5(b), upon the consummation of such Drag-Along Sale, all Shareholders holding the same kind of Company Security participating in such Drag-Along Sale shall remit or cause to be remitted to each receive (on the same date as the DCP Investor in the case of the other Stockholders all other applicable instruments Golden Gate Investor and the total other 2011 Rollover Holders) the same form and amount of consideration per Company Security, or, if any Shareholder is given an option as to the form and amount of consideration to be paid at received, all Shareholders participating therein with the closing same Company Securities will be given the same option.
(f) The DCP Investor’s right to consummate (or cause the consummation of) the Drag-Along Sale as proposed in the applicable Drag-Along Sale Notice (and, then, solely in accordance with the requirements of this Section 3.5 and Section 3.6) shall survive (without any requirement for sending a new Drag-Along Sale Notice to the Other Holder) for a period lasting until the date that is later of (i) 90 days after receipt of the Drag-Along Sale Notice by the Other Holder and (ii) 30 days after the cash portion receipt of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion any material required approval of such Transfer as may be reasonably requested by sales from any governmental entity (that is a condition precedent in the definitive documentation with respect to such other Stockholderssale).
(eg) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller herein to the other Stockholders contrary, (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the i) no Drag-Along SellerSale shall be permitted to be effectuated (whether by combination of shares, recapitalization, merger, consolidation, reorganization, reclassification or similar transaction) if whereby the Transfer DCP Investor, any Diamond Castle Funds, the Golden Gate Investor or any Golden Gate Funds would hold interests in a successor to the Company which is a limited liability company, a partnership or any other non corporate entity which is treated as a partnership for income tax purposes in a manner that would reasonably be likely to cause any of Shares pursuant the DCP Investor, any Diamond Castle Fund, the Golden Gate Investor or any Golden Gate Fund to this recognize (A) any “unrelated business taxable income” (within the meaning of Section 4.04 512 of the Code) or (B) any income that is not consummated for whatever reasoneffectively connected with the conduct of a trade or business within the United States (as described in Section 864(c) of the Code), unless the DCP Investor and the Golden Gate Investor are given 10 days prior written notice of such transaction and consent (in their sole discretion) thereto; and (ii) regardless of whether the Drag- Along Seller has delivered form a Drag-Along Sale Notice. The decision to effect a Transfer would take (whether by combination of Shares pursuant to this Section 4.04 by shares, recapitalization, merger, consolidation, reorganization, reclassification or other transaction), the Drag-Along Seller is in the sole and absolute discretion proceeds of the Drag-Along Seller.
(f) A any such Drag-Along Sale may also shall be affected by a merger or other corporate transaction distributed to the Shareholders in accordance with the liquidation preference and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as distribution allocation requirements contained in the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along SaleCompany’s charter.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 2 contracts
Samples: Shareholder Agreement (Reliant Software, Inc.), Shareholder Agreement (Community Choice Financial Inc.)
Drag-Along Rights. (a) Subject If (i) the Company or the holders of outstanding shares of Capital Stock receive from a Person (as limited by the immediately succeeding clauses (x), (y), and (z), a “Third Party Offeror”), who is not (x) a holder of any outstanding Capital Stock or Common Stock Equivalent, (y) an Affiliate of any such holder or (z) an Affiliate of the Company, a bona fide proposal for the sale, transfer, exchange or any acquisition or disposition (including by way of merger, consolidation or other business combination) of issued and outstanding shares of Common Stock or Common Stock Equivalents, which Common Stock or Common Stock Equivalents represent beneficial ownership of 50% or more of the Common Stock of the Company, determined on a fully diluted basis, excluding compensatory Common Stock Equivalents (a “Drag Along Transaction”), and (ii) such Drag Along Transaction is approved by (A) the Board of Directors and (B) Holders who hold a majority of the outstanding shares of Preferred Stock, determined on an as-converted to Sections 4.04(g) and 4.05Common Stock basis, if a Shareholder held by all Holders (the “Drag-Majority Holders”), then the Company shall have the right to require all Holders to sell their shares of Capital Stock to such Third Party Offeror, in the case of a Drag Along SellerTransaction that involves the purchase of outstanding shares of Capital Stock, in such Drag Along Transaction or otherwise to participate in such Drag Along Transaction, in any such case on terms that do not discriminate among holders of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock or, in case a Holder who owns shares of Common Stock issued upon conversion of shares of Preferred Stock, does not discriminate among holders of Common Stock. The Company shall exercise such right by giving notice (a “Drag Along Notice”) proposes to Transfer the Holders, which notice shall state (not includinga) that the Board of Directors and the Majority Holders have approved the Drag Along Transaction, however, any pledge, encumbrance or hypothecation(b) any if less than all shares of Preferred Stock and shares of Common Stock issued upon conversion of Preferred Stock and held by any class Holder are to be included in the Drag Along Transaction, the percentage of Shares that results the shares of Preferred Stock and such Common Stock to be included in a Change of Control the Drag Along Transaction, (ic) the proposed purchase price or other consideration to any be paid by the Third Party Offeror or Parties otherwise received by the Holders for each share of Preferred Stock and shares of Common Stock issued upon conversion of Preferred Stock and held by any Holder, and (d) the name of the Third Party Offeror. Once the Company gives a Drag Along Notice, each Holder shall be obligated to participate in such Drag Along Transaction, upon the terms and subject to the conditions of such Drag Along Transaction and otherwise to take all action necessary or (ii) appropriate to cause the completion of the proposed Drag Along Transaction. Consideration payable in any Person Drag Along Transaction shall be allocated among the holders of Capital Stock on the basis of the relative liquidation preferences to which the holders are entitled in connection with a reorganization or restructuring of the Company Liquidation Event (as determined by the Board of Directors (the “Board”) so long as each Stockholder defined in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) Series A Certificate of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”)Designations, the Drag-Along Seller may at its option require each other Stockholder to Transfer Series B Certificate of Designations, the Drag-Along Portion Series C Certificate of Designations and the class Series D Certificate of Shares (“Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceledDesignations, as applicable) as if such Drag Along Transaction was a Liquidation Event.
(b) The Drag-If the Company shall give a Drag Along Seller Notice to the Holders in connection with a proposed Drag Along Transaction, each Holder shall provide notice (i) vote such Holder’s shares of Capital Stock in favor of, and otherwise consent to and raise no objection to, such Drag Along Transaction, and waive any dissenters’ rights, appraisal rights or similar rights that such Holder may have in connection therewith, (ii) take all necessary and desirable actions as directed by the Company in connection with the completion of such Drag-Drag Along Sale Transaction, (iii) execute any and all purchase agreements, certificates, instruments and other agreements required by the Third Party Offeror to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to complete the proposed Drag-Drag Along Sale. The Drag- Along Sale Notice Transaction; provided, however, that all such purchase agreements, certificates, instruments and other agreements shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material contain terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder that do not discriminate among Holders; provided further, that (A) in no event shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall any Holder be required to participate enter into any non-competition agreement (whether as a separate agreement or as part of any other agreement), (B) no agreement shall obligate any Holder to indemnify any other Person(s) in an aggregate amount greater than the aggregate amount of consideration received by such Holder in the Drag-Drag Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer Transaction, (C) no Holder shall be liable for the Drag-inaccuracy of any representation or warranty made by any other Person in connection with the Drag Along Sale Price. Not later Transaction, other than ten the Company (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver except to the Drag-Along Seller the limited power-of-attorney referenced thereinextent that funds may be paid out of an escrow established to cover breach of representations, then such other Stockholder hereby grants hereunder to the Company warranties and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records covenants of the Company to show that such Shares are bound as well as breach by any stockholder of any identical representations, warranties and covenants provided by all stockholders), (D) the liability for indemnification, if any, of each Holder in the Drag Along Transaction and for the inaccuracy of any representations and warranties made by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders Company in connection with such proposed TransferDrag Along Transaction, is several and not joint with any other Person (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any identical representations, warranties and covenants provided by all stockholders), and all is pro rata in proportion to the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect amount of consideration paid to such Shares owned Holder in connection with such Drag Along Transaction (in accordance with the provisions of the Company’s Certificate of Incorporation), (E) any representations and warranties to be made by such Holder in connection with the Drag Along Transaction are limited to representations and warranties related to authority, ownership and the ability to convey title to such shares, including, but not limited to, representations and warranties that (1) the Holder holds all right, title and interest in and to the shares such Holder purports to hold, free and clear of all liens and encumbrances, (2) the obligations of the Holder in connection with the transaction have been duly authorized, if applicable, (3) the documents to be entered into by the other Stockholders shall again Stockholder have been duly executed by the Holder and delivered to the acquirer and are enforceable against the Holder in accordance with their respective terms; and (4) neither the execution and delivery of documents to be entered into in effect.
connection with the transaction, nor the performance of the Holder’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency, and (dF) Concurrently with upon the consummation of the Drag-Drag Along SaleTransaction (1) each holder of each class or series of the Company’s stock will receive the same form of consideration for their shares of such class or series as is received by other holders in respect of their shares of such same class or series of stock, (2) each holder of a series of Preferred Stock will receive the Drag-Along Seller same amount of consideration per share of such series of Preferred Stock as is received by other holders in respect of their shares of such same series, (3) each holder of Common Stock will receive the same amount of consideration per share of Common Stock as is received by other holders in respect of their shares of Common Stock, and (4) the aggregate consideration receivable by all holders of the Preferred Stock and Common Stock shall give notice thereof be allocated among the holders of Preferred Stock and Common Stock on the basis of the relative liquidation preferences to which the holders of each respective series of Preferred Stock and the holders of Common Stock are entitled in a Liquidation Event in accordance with the Company’s Certificate of Incorporation in effect immediately prior to the other StockholdersDrag Along Transaction, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid (iv) deliver, at the closing of any such proposed Drag Along Transaction, to or as directed by the Drag-Along Sale (Third Party Offeror or the cash portion Company, as the case may be, such instruments of which is transfer, transmittal or surrender as shall be requested by the Third Party Offeror or the Company with respect to the shares of Capital Stock to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence transferred, transmitted or surrendered, against receipt of the completion and time of completion of such Transfer as may be reasonably requested by such purchase price or other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller consideration therefor. The Holders hereby grant to the Company full power of attorney, in their name, place and xxxxx, to execute and deliver a stock power or powers and all other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision documents necessary to effect any such Drag Along Transaction. If a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger Holder fails or other corporate transaction and each Stockholder agrees refuses to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation shares of Capital Stock of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent Company as required by the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions terms of this Section 4.04 4.1(b), this Agreement shall terminate upon constitute the consummation irrevocable appointment by such Holder of the Initial Public OfferingChairman of the Board, the Chief Executive Officer and the President of the Company, with full power of substitution, each as such Holder’s attorney-in-fact and proxy, coupled with an interest, to vote such Holder’s shares of Capital Stock in accordance with this Section 4.1(b).
Appears in 2 contracts
Samples: Investor Rights Agreement (Kolltan Pharmaceuticals Inc), Investor Rights Agreement (Kolltan Pharmaceuticals Inc)
Drag-Along Rights. (a) Subject to Sections 4.04(g4.02(g) and 4.054.03, if a Shareholder Oak Hill (the “Drag-Along Seller”) proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares Company Securities that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a bona fide reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Other Stockholder to Transfer the Drag-Along Portion of the class of Shares Company Securities (“Drag-Along Rights”) then held by such other Other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares Company Securities held by each such other Other Stockholder, (i) for the same consideration per share or unit of the relevant class of SharesCompany Securities, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Other Stockholders (a “Drag- Drag-Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Drag-Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares Company Securities subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares Company Securities to be sold by each other Other Stockholder shall be the Drag-Along Portion of the class of Shares Company Securities that such other Other Stockholder owns. Each other Other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares Company Securities as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.the
Appears in 2 contracts
Samples: Stockholder Agreement, Stockholders' Agreement (Dave & Buster's Entertainment, Inc.)
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05Section 4.03, if a Shareholder Majority in Interest of the Shareholders of a Company (the “Drag-Along Seller”) ), proposes to Transfer (Common Shares of such Company representing not including, however, any pledge, encumbrance or hypothecation) any shares less than a majority of any class the outstanding Fully-Diluted Common Shares of Shares that results in such Company to a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and bona fide sale (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller Seller, if the Drag-Along Sale is of Common Shares of MBOCo, may at its their option require each all other Stockholder Shareholders of MBOCo and Holding, and if the Drag-Along Sale is of Common Shares of Holding, shall require all other Shareholders of Holding (i) to Transfer the Drag-Along Portion of the class of Shares Securities (“Drag-Along Rights”) then held by every other Shareholder of such other StockholderCompany or Companies, as applicable, and (ii) to exercise such number of options for Securities held by every other Shareholder of such Company, or Companies, as applicable, as is required in order that a sufficient number of the Securities are available to Transfer the relevant Drag-Along Portion of Securities of each such other Shareholder (but subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required ), in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) case for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; , provided that any other Stockholder Shareholder of such Company that holds options the exercise price per share of which is greater than the per share price at which the Common Shares Securities are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place lieu of such exercise, submit to an irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to consummated, any Common Shares acquired upon exercise options exercised or cancelled in contemplation of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) . The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders Shareholders of such Company (a “Drag- Drag-Along Sale Notice”) not later than twenty (20) 15 Business Days prior to the proposed Drag-Along Sale. The Drag- Drag-Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares Securities subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares Securities to be sold by each other Stockholder Shareholder of such Company shall be the Drag-Along Portion of the class of Shares Securities that such other Stockholder Shareholder owns. Each other Stockholder Shareholder of the Company shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion all of its Shares such other Shareholder’s Securities as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) 10 Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the such other Stockholders Shareholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments Sale Notice the certificates representing the Shares Securities of such other Stockholder Shareholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such its representative to Transfer such Shares Securities on the terms set forth in the Drag-Along Notice and wire transfer or other instructions for payment of the cash portion or delivery of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares Securities pursuant to this Section 4.04(b4.02(a) at the closing for such Drag-Along Sale against delivery to such other Stockholder Shareholder of the consideration thereforetherefor. If an any other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail Shareholder fails to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummatedSeller, the such Company (subject to reversal under Section 4.02(b)) shall cause the books and records of the such Company to show that such Shares Securities are bound by the provisions of this Section 4.04(b4.02(a) and that such Shares Securities shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(cb) The Drag-Along Seller shall have a period of thirty (30) 120 days from the date of receipt delivery of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) 120-day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) 180 days following the date of receipt delivery of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any Shareholders the limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares Securities that such other Stockholders Shareholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders Shareholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares Securities owned by the other Stockholders Shareholders shall again be in effect.
(dc) Concurrently with the consummation of the Drag-Along SaleTransfer of Securities pursuant to this Section 4.02, the Drag-Along Seller shall give notice thereof to the such other StockholdersShareholders, shall remit or cause to be remitted to each of the such other Stockholders all Shareholders that have surrendered their certificates and other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other StockholderShareholder’s wire transfer instructions) for the Shares Securities Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer and the terms thereof as may be reasonably requested by such other StockholdersShareholders.
(ed) Notwithstanding anything contained in this Section 4.044.02, there shall be no liability on the part of the Drag- Drag-Along Seller to the such other Stockholders Shareholders (other than the obligation to return any the limited power-of-attorney and the certificates and other applicable instruments representing Shares Securities received by the Drag-Along Seller) or any other Person if the Transfer of Shares Securities pursuant to this Section 4.04 4.02 is not consummated for whatever reason, regardless of whether the Drag- Drag-Along Seller has delivered a Drag-Along Sale Notice. The decision Whether to effect a Transfer of Shares Securities pursuant to this Section 4.04 4.02 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 2 contracts
Samples: Shareholder Agreement, Shareholders Agreement (Tops Markets Ii Corp)
Drag-Along Rights. (a) Subject If prior to Sections 4.04(g) and 4.05the earlier of an initial Public Offering or a listing of the REIT Shares on a national securities exchange or automated quotation system, if a Shareholder the Partnership proposes to sell its Common Units, KREF proposes to sell its Partnership Units, or KKR Alternative Credit L.P. or any Affiliate thereof that owns REIT Shares (each such selling entity, the “Drag-Along SellerDrag Transferor”) proposes to Transfer sell the REIT Shares, to a proposed third party buyer (not includingthe “Drag Partner”), howeverin each case in a transaction or series of related transactions as a result of which such buyer would acquire more than 50% of the outstanding Common Units, any pledgePartnership Units or REIT Shares, encumbrance as applicable (a “Sale Event”, and the percentage of the Common Units, Partnership Units or hypothecationREIT Shares, as applicable, being sold by the Drag Transferor to a third party buyer as compared to the Common Units, Partnership Units or REIT Shares the Drag Transferor holds is referred to herein as the “Drag Percentage”), then the Drag Partner may require SteepRock (the “Dragged Partner”) any shares to sell to such buyer up to the Drag Percentage of the Common Units, Partnership Units or REIT Shares owned by the Dragged Partner on the same financial terms and conditions to be paid or provided to the Drag Partner. In the event the REIT Shares or Partnership Units are sold to a proposed third party buyer, in respect of any class Common Units being sold by the Dragged Partner pursuant to the exercise of Shares that results the rights set forth in a Change this Section 3.03(a), the Dragged Partner shall be entitled to receive an amount equal to the product of Control (i) the aggregate number of REIT Shares or Partnership Units that would be issued to any Third Party the Dragged Partner if its Drag Percentage of the Common Units were exchanged for REIT Shares in accordance with Section 3.05 immediately prior to the sale of the REIT Shares or Parties or Partnership Units to such third party, multiplied by (ii) to any Person the amount being paid by such third party for each REIT Share or Partnership Unit in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicablesale.
(b) The DragIn order to exercise the “drag-Along Seller along rights” provided by Section 3.03(a), the Drag Partner shall provide give written notice of such Drag-Along Sale to the other Stockholders Dragged Partner promptly after the Drag Partner has entered into an agreement regarding the drag-along transaction. Such notice shall set forth (a “Drag- Along Sale Notice”i) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Common Units, Partnership Units or REIT Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made sold by the Drag Partner, the Drag Percentage and percentage of the Common Units, Partnership Units or REIT Shares owned by the Dragged Partner that is required to be sold, (ii) the “Drag-Along Sale Price”name of the proposed buyer(s), (iii) the proposed amount and all form of consideration, and (iv) the other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion offer, including, if available, a copy of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms relevant definitive purchase and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereofsale agreement.
(c) The Drag-Along Seller Dragged Partner shall have a period of thirty (30i) days from make or provide the date of receipt of same representations, warranties, covenants, agreements, and indemnities as the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, Drag Partner has made or provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transferdrag-along transaction, and (ii) take all necessary action, including, to the restrictions on Transfer contained extent applicable, expressly waiving any dissenter’s rights or rights of appraisal or similar rights, entering into an agreement reflecting the terms of the Sale Event, surrendering certificates, cooperating in this Agreement satisfying any applicable legal requirements and executing any letter of transmittal or other agreements or otherwise applicable at such time with respect to such Shares owned as reasonably required by the other Stockholders shall again be Drag Partner or SR Mezz to assist the Drag Partner in effectthe consummation of such Sale Event.
(d) Concurrently with the consummation The fees and expenses of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof Drag Partner incurred in connection with a Sale Event subject to this Section 3.03 and directly relating to the other StockholdersSale Event (including relating to the decision to enter into the Sale Event) to the extent not paid or reimbursed by the proposed transferee, shall remit or cause to be remitted to each of shared by the other Stockholders all other applicable instruments Drag Partner and the total Dragged Partner, on a pro rata basis, based on the consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid received by wire transfer of immediately available funds each person transferring interests in accordance connection with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other StockholdersSale Event.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 3.03 shall terminate upon the earlier to occur of (x) consummation of an initial Public Offering and (y) the Initial Public Offeringlisting of the REIT Shares on a national securities exchange or automated quotation system.
Appears in 2 contracts
Samples: Investment Agreement (KKR Real Estate Finance Trust Inc.), Investment Agreement (KKR Real Estate Finance Trust Inc.)
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05, if a Shareholder If holders of Common Stock (the “Drag-Along SellerSellers”) proposes owning 50% or more of the Aggregate Common Stock propose to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring Common Stock held by them constituting at least 50% of the Company as determined by the Board of Directors Aggregate Common Stock (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller Sellers may at its their option require each other Stockholder to Transfer (the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held require each other Stockholder (the “Other Stockholders”) to:
(i) sell a number of shares of the (i) Class A Common Stock owned by such other Stockholder, and (subject Other Stockholder equal to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held such Other Stockholder and (ii) Class B Common Stock owned by each such other Other Stockholder equal to the Drag-Along Portion of such Other Stockholder, in each case of clauses (i) for the same consideration per share or unit of the relevant class of Shares, and (ii) in cash, notes, and/or marketable securities, to the Person to whom the Drag-Along Sellers propose to sell their shares of Common Stock (the “Drag-Along Buyer”) and (iii) otherwise on the same terms and conditions as the Drag-Along SellerSellers; provided that the Class B Common Stock shall be sold on the same terms and conditions as the Class A Common Stock;
(ii) if such Drag-Along Sale requires Stockholder approval, with respect to all shares of Common Stock that such Other Stockholder owns or over which such Other Stockholder otherwise exercises voting power, vote (in person, by proxy or by action by written consent, as applicable) all shares of Common Stock in favor of, and adopt, such Drag-Along Sale and to vote in opposition to any and all other Stockholder proposals that holds options could reasonably be expected to delay or impair the exercise price per share ability of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along TransfereeSellers to consummate such Drag-Along Sale;
(iii) subject to Section 4.03(d)(ii), if required by execute and deliver all related documentation and take such other action in support of the Drag-Along Seller Sale as shall reasonably be requested by the Corporation or the Drag-Along Sellers in order to exercise carry out the terms and provision of this Section 4.03, including, without limitation, executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement, indemnity agreement, escrow agreement, consent, waiver, governmental filing, share certificates duly endorsed for transfer (free and clear of impermissible liens, claims and encumbrances), and any similar or related documents;
(iv) not deposit, and to cause their Related Persons not to deposit, except as provided in this Agreement, any shares of Common Stock owned by such options, may, Other Stockholder in place a voting trust or subject any shares of Common Stock to any arrangement or agreement with respect to the voting of such exerciseCommon Stock, submit unless specifically requested to irrevocable cancellation do so by the acquirer in connection with the Drag-Along Sale; and
(v) waive, and refrain from exercising, any dissenters’ rights or rights of appraisal under applicable Law at any time with respect to such Drag-Along Sale.
(b) If the consideration to be paid in exchange for the shares of Common Stock pursuant to this Section 4.03 includes any securities and due receipt thereof without by any liability for payment holder of Common Stock would require (x) the registration or qualification of such securities or of any exercise price Person as a broker or dealer or agent with respect theretoto such securities or (y) the provision to any Stockholder of any information other than such information as a prudent issuer would generally furnish in an offering made solely to “accredited investors” as defined in Regulation D promulgated under the Securities Act, the Corporation may cause to be paid to any such Other Stockholder in lieu thereof, against surrender of the shares of Common Stock which would have otherwise been sold by such Stockholder, an amount in cash equal to the fair value of the securities which such Other Stockholder would otherwise receive as of the date of the issuance of such securities in exchange for the shares of Common Stock (based on the market price of such other securities if such securities are listed on a National Securities Exchange, or as determined in good faith by the Corporation if not so listed); provided that such Other Stockholder shall have the right to object to the determination and require the Corporation retain an independent third-party accounting, valuation, appraisal or investment banking firm of national standing mutually acceptable to the Corporation and the Other Stockholder to determine the then current fair market value of the shares of Common Stock. The Corporation and the Other Stockholder (or if more than one Other Stockholder is objecting, all objecting Other Stockholders) shall each bear one-half of the fees and expenses of the independent third-party accounting, valuation, appraisal or investment banking firm selected as set forth in the preceding sentence.
(c) If the Drag-Along Sale is not consummated with respect Sellers elect to any Common Shares acquired upon exercise of such optionstheir Drag-Along Rights, or the Drag-Along Sale is not consummated, Sellers shall provide notice of such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The proposed Drag-Along Seller Sale to the Corporation (a “Drag-Along Sale Notice”). Upon receipt of any such Drag-Along Sale Notice, the Corporation shall provide promptly (but in no event later than five (5) Business Days following receipt thereof) give written notice of such Drag-Along Sale Notice to each Other Stockholder.
(d) Notwithstanding anything contained in this Section 4.03, the other obligations of the Other Stockholders (to participate in a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify are subject to the following conditions:
(i) the Drag-Along Transferee, Sale must include all Other Stockholders;
(ii) each Other Stockholder (A) shall be required to give representations and warranties (in a form customary for transactions of the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions nature of the Drag-Along Sale. The number ) only in relation to its due organization, authority, noncontravention of Shares laws and agreements and title to be sold by each other Stockholder shall be the Drag-Along Portion its shares of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated Common Stock being transferred in the Drag-Along Sale, applicable instruments representing (B) shall not be required to agree to any restrictive covenant (such as a non-compete or non-solicit or similar restriction) other than a customary confidentiality covenant, (C) shall not be required to provide any indemnification (x) with respect to any representations, warranties, covenants or agreements made by any Drag-Along Seller, the Shares Corporation (except pursuant to a holdback or escrow as described in clause (D) below) or any other Person or (y) in an amount exceeding the net proceeds received by such Other Stockholder in connection with the Drag-Along Sale, and (D) shall not be subject, in excess of such other Stockholder to be included its ratable share of the shares of Common Stock being transferred in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller to any holdback(s) or such representative to Transfer such Shares on the terms set forth escrow(s) in the Drag-Along Notice and wire transfer instructions for payment respect of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
potential indemnification obligations (c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time including with respect to such Shares owned by indemnification for breaches of representations, warranties, covenants or agreements of the other Stockholders shall again be in effect.Corporation) or purchase price adjustment(s) pursuant to the applicable definitive purchase agreement;
(diii) Concurrently with subject to Section 4.03(b), upon the consummation of the Drag-Along Sale, each Other Stockholder will receive the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each same form of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing for its shares of the Drag-Along Sale (the cash portion of which Common Stock as is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along SellerSellers; provided that the Class B Common Stock shall be entitled to the same form of consideration as the Class A Common Stock; and
(iv) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a any Drag-Along Sale Notice. The decision Sellers are given an option as to effect the form and amount of consideration to be received as a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation result of the Drag-Along Sale, all Other Stockholders will be given the same option; provided, however, no Other Stockholder shall be entitled to receive any form of consideration that such holder would be ineligible to receive as a result of such holder’s failure to satisfy any condition, requirement or limitation that is established in good faith and generally applicable to the Corporation’s stockholders.
(ge) Stockholder hereby irrevocably This Section 4.03 and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 obligations contained herein shall terminate upon the earlier of (i) a Listing or (ii) the consummation of the Initial Public Offeringan IPO and shall thereafter have no force or effect.
Appears in 1 contract
Samples: Stockholders Agreement (Superior Energy Services Inc)
Drag-Along Rights. If at any time prior to an Initial Public Offering, any Stockholder (other than the Warrant Securityholders) (any such Person for purposes of this Section 2.5, the "Transferor") wishes to transfer all of the shares of Common Stock owned by it and its Affiliates (provided that such shares of Common Stock constitute more than 50% of all shares of Common Stock on a Fully Diluted Basis (as determined in the Warrants) at such time) in a bona fide sale to any Person (the "Proposed Transferee") pursuant to which the consideration to be paid by the Proposed Transferee consists solely of cash, freely tradeable securities with an active public market or securities of a company in the same or substantially similar business of Holdings at such time and the Transferor and its Affiliates will not receive, in connection with the transactions contemplated at the time of such transfer, any other securities or options to acquire securities of Holdings unless also received by the Warrant Securityholders, then the Transferor shall have the right (the "Drag-Along Right") to require each Warrant Securityholder to sell to the Proposed Transferee for the same per share consideration received by the Transferor all of the Conversion Shares and Warrants (calculated, in the case of the Warrants, on the number of Conversion Shares for which such Warrant is exercisable at such time) held by such Warrant Securityholder; provided that (a) Subject such price per share is not less than the Fair Market Value (as defined in the Warrants) of Holdings per share of outstanding Common Stock on a Fully Diluted Basis and (b) each Warrant Securityholder shall not be obligated to Sections 4.04(g) and 4.05make any representation or warranty, if a Shareholder (the “Drag-Along Seller”) proposes to Transfer (not including, however, or incur any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person liability in connection with a reorganization or restructuring any such transfer, other than as to its ownership of the Company as determined Conversion Shares or Warrants being transferred by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), it. To exercise the Drag-Along Seller may at its option require Right, the Transferor shall first give to Holdings and each other Stockholder Warrant Securityholder (pursuant to Transfer the a list provided by Holdings) a written notice (a "Drag-Along Portion Notice") executed by the Transferor and the Proposed Transferee and containing (a) the name and address of the class Proposed Transferee, (b) the proposed purchase price of Shares (“Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number each share of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each Stock (certifying that such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater not less than the per share price at which the Fair Market Value of outstanding Common Shares are to be Transferred to the Drag-Along TransfereeStock on a Fully Diluted Basis), if required by the Drag-Along Seller to exercise such options, may, in place terms of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Proposed Transferee's offer, and (c) the aggregate number of Conversion Shares or Warrants owned by each Warrant Securityholder with respect to which the Transferor wishes to exercise its Drag-Along SaleRight pursuant to this Section 2.5. The number of Each Warrant Securityholder shall thereafter be obligated to sell to the Proposed Transferee the Conversion Shares and Warrants subject to be sold by each other Stockholder shall be the such Drag-Along Portion Notice; provided that the sale to the Proposed Transferee is consummated within 180 days of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date delivery of the Drag-Along Sale Notice (Notice. If the “Dragsale is not consummated within such 180-Along Sale Notice Period”)day period, then each of the other Stockholders affected Warrant Securityholder may sell, but shall deliver no longer be obligated to a representative of the Drag-Along Seller designated in the Drag-Along Salesell, applicable instruments representing the such Warrant Securityholder's Conversion Shares of such other Stockholder or Warrants pursuant to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 2.5 shall terminate upon not apply to transfers between the consummation Transferor and any of its Affiliates or between Affiliates of the Initial Public OfferingTransferor.
Appears in 1 contract
Samples: Warrantholders Rights Agreement (Lets Talk Cellular & Wireless Inc)
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05, if In the event that the holders of a Shareholder majority of the Shares held by all the Clarion Stockholders (the “Drag-Along SellerRightholders”) proposes receive a bona fide offer from a third party which is not an Affiliate of Clarion to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in consummate a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of Transaction, the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company Drag-Along Rightholders may send written notice (the “Drag-Along TransfereeNotice”) in a single transaction or in a series of related transactions, to the Company and the other Stockholders (any such Transfer, a the “Drag-Along SaleSellers”), the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion ) notifying them of the class Change of Shares (“Drag-Along Rights”) then held by such other Stockholder, Control Transaction and (subject to and at of the closing election of the Drag-Along Sale) Rightholders to exercise such number their rights under this Section 3.1(g). Upon receipt of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by Notice, each Drag-Along Seller receiving such other Stockholder, notice shall be obligated to (i) for sell its Shares in the same consideration per share or unit Change of Control Transaction contemplated by the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise Drag-Along Notice on the same terms (subject to the last sentence of this Section 3.1(g)) and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options Sellers (including representations, warranties and indemnities, in each case related to the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the sold by such Drag-Along TransfereeSeller, if required by and the payment of its pro rata share of all costs associated with such transaction) and (ii) otherwise take all reasonable and necessary action to cause the consummation of such transaction, including executing documents reasonable and appropriate for the Change of Control Transaction, voting its Common Shares in favor of such transaction and not exercising any appraisal or dissenter rights in connection therewith. If any Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, Rightholder or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of sell any Common Stock Equivalent or Preferred Stock Equivalent in any sale pursuant to this Section 3.1(g), such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller Rightholder or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth receive in exchange for such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents Common Stock Equivalent or Preferred Stock Equivalent consideration in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
amount (dif greater than zero) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof equal to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares purchase price received by the Drag-Along Seller) Rightholders in such sale for the number of shares of Common Stock that would be issued upon exercise conversion or exchange of such Common Stock Equivalent or Preferred Stock Equivalent less the exercise price, if any, of such Common Stock Equivalent or Preferred Stock Equivalent (to the Transfer extent exercisable, convertible or exchangeable at the time of such sale), subject to reduction for any tax or other amounts required to be withheld under applicable law. Notwithstanding any other provision of this Section 3.1(g), the Regions Stockholders may only be required to sell Shares in, and approve of, a Change of Control Transaction pursuant to this Section 4.04 3.1(g) where the consideration to be received by the Regions Stockholders in such Change of Control Transaction in exchange for their Shares is not consummated for whatever reasonin the form of either (i) cash or (ii) equity securities of the surviving corporation to the extent that the Regions Stockholders are permitted under Applicable Banking Laws to hold such equity securities of the surviving corporation; provided, regardless however, that after the receipt of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision Notice and prior to effect the consummation of a Transfer Change of Shares Control Transaction pursuant to this Section 4.04 3.1(g), the Regions Stockholders shall use, and shall cause their Affiliates to use, commercially reasonable efforts to obtain all Required Regulatory Consents to permit such Regions Stockholder to hold the equity securities for which the Shares are exchanged in the Change of Control Transaction; provided, further, that in the event that all Required Regulatory Consents are not obtained (or are obtained subject to a condition or restriction in a manner (including requirements relating to the raising of additional capital or the disposition of assets) which would adversely affect Regions, RFC, their respective Affiliates or their respective businesses), then the form of consideration to be received by the Drag-Along Seller is Regions Stockholders in the sole and absolute discretion of the Drag-Along Sellersuch Change in Control Transaction in exchange for their Shares shall be cash.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Drag-Along Rights. (a) Subject If the Selling Shareholder is ANI and ANI intends to Sections 4.04(g) and 4.05, if a Shareholder (the “Drag-Along Seller”) proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any dispose of shares of any class Common Stock constituting not less than 50% of Shares that results the outstanding Common Stock in a Change Transfer to which Section 3.01 applies to a bona fide third party transferee that is not an Affiliate of Control ANI, and (i) to any Third Party or Parties or the Put Option (iias defined below) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic is not and voting interest in the capital stock (or equivalent securities) of the successor entity has not previously been exercised prior to the Company (the “Drag-Along Transferee”) date on which such Class A Shareholder receives a First Right of Purchase Notice in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Sharesaccordance with Section 3.02, (ii) the First Purchase Option has not been exercised in cash, notes, and/or marketable securities, respect of such First Right of Purchase Notice and (iii) otherwise no stay provided for by the last sentence of Section 3.01 is in effect, then ANI shall have the option to require each Class A Shareholder that does not exercise Tag-Along Rights set forth in Section 3.07 with respect to all of its shares of Common Stock (a "DRAGGABLE SHAREHOLDER") to Transfer all of its shares of Common Stock to the proposed transferee specified in such First Right of Purchase Notice on the same terms and conditions as described therein (the "DRAG-ALONG RIGHTS") in connection with the proposed Transfer by ANI of its shares of Common Stock to such transferee. In connection with such Transfer, no Draggable Shareholder (x) shall be required to give any representations or warranties or indemnities other than with respect to itself, its title to the Common Stock and the transfer of such title to the transferee free and clear of all security interests, encumbrances, claims, liens or charges of any kind, other than those created by or through Buyer or its affiliates ("LIENS") (this sentence not being intended to limit a Draggable Shareholder's responsibility for any Purchase Price adjustment or its participation in escrow arrangements), (y) be required to Transfer a greater percentage of the Common Stock held by it than the lowest percentage of Common Stock held that is Transferred by ANI and any other Draggable Shareholder (assuming that all of the Draggable Shareholders comply with their obligations under this Section 3.06) or (z) be required to Transfer any of its shares of Common Stock pursuant to ANI's exercise of such Drag-Along Right later than six (6) months after delivery of the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if Notice required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicableSection 3.06(b).
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale Upon deciding to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify exercise the Drag-Along TransfereeRights, ANI shall simultaneously notify the number Company and each other Shareholder in writing of Shares subject to its intended exercise (the "DRAG-ALONG NOTICES"). Such Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder Notices shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate given as provided in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions 8.02 of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereofAgreement.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Samples: Shareholder Agreement (Garden State Newspapers Inc)
Drag-Along Rights. (a) Subject to Sections 4.04(g) this Section 4.02 and 4.05Section 4.03, if a Shareholder the Avista Entities (together, the “Drag-Along Seller”) proposes propose to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares less than 50% of their collective Initial Ownership of any class of Shares that results in Company Securities to a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and bona fide sale (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder all Management Shareholders (i) to Transfer the Drag-Along Portion of the such class of Shares Company Securities (“Drag-Along Rights”) then held by such other Stockholderevery Management Shareholder, and (ii) subject to and at the closing of the Drag-Along Sale) , to exercise such number of options or warrants for Common Shares held by such other Stockholder every Management Shareholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by Company Securities of each such other StockholderManagement Shareholder, (i) in each case for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, Company Securities and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; , provided that any other Stockholder Management Shareholder that holds options or warrants the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof (subject to Section 4.02(b)) without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, options or the Drag-Along Sale is not consummatedwarrants, such options or warrants shall be deemed not to have been exercised or canceled, as applicable.
(b) . The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders Management Shareholders (a “Drag- Drag-Along Sale Notice”) not later than twenty (20) Business Days 10 days prior to the proposed Drag-Along Sale. The Drag- Drag-Along Sale Notice shall identify the Drag-Along Transfereetransferee, the number of Shares Company Securities subject to the Drag-Along Sale, the type and amount (or value) of consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares Company Securities to be sold by each other Stockholder Management Shareholder shall be the Drag-Along Portion of the class of Shares Company Securities that such other Stockholder Shareholder owns. Each other Stockholder Management Shareholder shall be required to (v) participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and Notice, (w) to tender all its Company Securities as set forth below, (x) waive dissenter’s and/or appraisal rights (if any) with respect to the Drag-Along Portion Sale, (y) vote or consent in favor of its Shares as set forth belowsuch transaction (to the extent a vote or consent is required) and (z) take any other necessary or appropriate action in furtherance of the foregoing. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days 10 days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders Management Shareholders shall deliver to a the representative of the Drag-Along Seller designated in the Drag-Along Sale, Sale Notice the certificate and other applicable instruments representing the Shares Company Securities of such other Stockholder Mangement Shareholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares Company Securities on the terms set forth in the Drag-Along Notice and otherwise on the terms and conditions applicable to the Drag-Along Seller or otherwise more advantageous to the Drag-Along Seller than set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares Company Securities pursuant to this Section 4.04(b4.02(a) at the closing for such Drag-Along Sale against delivery to such other Stockholder Shareholder of the consideration thereforetherefor. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder Management Shareholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummatedSeller, the Company (subject to reversal under Section 4.02(b)) shall cause the books and records of the Company to show that such Shares Company Securities are bound by the provisions of this Section 4.04(b4.02(a) and that such Shares Company Securities shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(ca) The Drag-Along Seller shall have a period of thirty (30) 120 days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) 120-day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) 180 days following the effective date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any Management Shareholders the limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares Company Securities that such other Stockholders Management Shareholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders Management Shareholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares Company Securities owned by the other Stockholders Management Shareholders shall again be in effect.
(db) Concurrently with the consummation of the Drag-Along SaleTransfer of Company Securities pursuant to this Section 4.02, the Drag-Along Seller shall give notice thereof to the other StockholdersManagement Shareholders, shall remit or cause to be remitted to each of the other Stockholders all Management Shareholders that have surrendered their certificates and other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other StockholderManagement Shareholder’s wire transfer instructions) for the Shares Company Securities Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may and the material terms thereof; provided that in no event shall any investment banking or investment advisory fees payable to the Drag-Along Seller or any of its Affiliates be reasonably requested by such other Stockholdersincluded in the amount of consideration.
(ec) Notwithstanding anything contained in this Section 4.044.02, there shall be no liability on the part of the Drag- Drag-Along Seller to the other Stockholders Management Shareholders (other than the obligation to return any the limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares Company Securities pursuant to this Section 4.04 4.02 is not consummated for whatever reason, regardless of whether the Drag- Drag-Along Seller has delivered a Drag-Along Sale Notice. The decision Whether to effect a Transfer of Shares Company Securities pursuant to this Section 4.04 4.02 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(fd) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this This Section 4.04 4.02 shall terminate upon the consummation of the Initial First Public Offering.
Appears in 1 contract
Samples: Shareholders Agreement (Lantheus MI Intermediate, Inc.)
Drag-Along Rights. (a) Subject If the Selling Shareholder is ANI and ANI intends to Sections 4.04(g) and 4.05, if a Shareholder (the “Drag-Along Seller”) proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any dispose of shares of any class Common Stock constituting not less than 50% of Shares that results the outstanding Common Stock in a Change Transfer to which Section 3.01 applies to a bona fide third party transferee that is not an Affiliate of Control ANI, and (i) the Put Option (as defined below) is not and has not previously been exercised prior to any Third Party or Parties or the date on which such Class A Shareholder receives a First Right of Purchase Notice in accordance with Section 3.02, (ii) to any Person the First Purchase Option has not been exercised in connection with a reorganization or restructuring respect of the Company as determined such First Right of Purchase Notice and (iii) no stay provided for by the Board last sentence of Directors Section 3.01 is in effect, then ANI shall have the option to require each Class A Shareholder that does not exercise Tag-Along Rights set forth in Section 3.07 with respect to all of its shares of Common Stock (a “Draggable Shareholder”) to Transfer all of its shares of Common Stock to the proposed transferee specified in such First Right of Purchase Notice on the same terms and conditions described therein (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then in connection with the proposed Transfer by ANI of its shares of Common Stock to such transferee. In connection with such Transfer, no Draggable Shareholder (x) shall be required to give any representations or warranties or indemnities other than with respect to itself, its title to the Common Stock and the transfer of such title to the transferee free and clear of all security interests, encumbrances, claims, liens or charges of any kind, other than those created by or through Buyer or its affiliates (“Liens”) (this sentence not being intended to limit a Draggable Shareholder’s responsibility for any Purchase Price adjustment or its participation in escrow arrangements), (y) be required to Transfer a greater percentage of the Common Stock held by it than the lowest percentage of Common Stock held that is Transferred by ANI and any other Draggable Shareholder (assuming that all of the Draggable Shareholders comply with their obligations under this Section 3.06) or (z) be required to Transfer any of its shares of Common Stock pursuant to ANI’s exercise of such other Stockholder, and Drag-Along Right later than six (subject to and at the closing 6) months after delivery of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if Notice required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicableSection 3.06(b).
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale Upon deciding to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify exercise the Drag-Along TransfereeRights, ANI shall simultaneously notify the number Company and each other Shareholder in writing of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made its intended exercise (the “Drag-Along Sale PriceNotices”) and all other material terms and conditions of the ). Such Drag-Along Sale. The number of Shares to be sold by each other Stockholder Notices shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate given as provided in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions 8.02 of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereofAgreement.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Drag-Along Rights. (a) Subject to Sections 4.04(g4.02(e) and 4.054.03, if a Shareholder the DLJ Funds (collectively, the “Drag"DRAG-Along Seller”ALONG SELLER") proposes propose to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) Company Securities to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag"DRAG-Along Transferee”ALONG TRANSFEREE") in a single transaction or in a series of related transactions, and and
(i) the Company Securities to be Transferred by the Drag-Along Seller represent not less than 50% of their Initial Ownership, or
(ii) the Company Securities to be Transferred by the Drag-Along Seller, together with the Company Securities to be Transferred by the Other Shareholders pursuant to this Section 4.02(a), constitute more than 50% of the Common Shares then outstanding, (any such Transfer, a “Drag"DRAG-Along Sale”ALONG SALE"), the Drag-Along Seller may at its option require each other Stockholder Other Shareholder to Transfer the Drag-Along Portion of the class of Shares Company Securities (“Drag"DRAG-Along Rights”ALONG RIGHTS") then held by such other StockholderOther Shareholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options or Warrants for Common Shares held by such other Stockholder Other Shareholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares Company Securities held by each such other StockholderOther Shareholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, Company Securities and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided PROVIDED that any other Stockholder Other Shareholder that holds options or Warrants the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such optionsoptions or Warrants, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such optionsoptions or Warrants, or the Drag-Along Sale is not consummated, such options or Warrants shall be deemed not to have been exercised or canceled, as applicable.
(b) . The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders Other Shareholders (a “Drag- Along Sale Notice”"DRAG-ALONG SALE NOTICE") not later than twenty (20) Business Days 15 days prior to the proposed Drag-Along Sale. The Drag- Drag-Along Sale Notice shall identify the Drag-Along Transfereetransferee, the number of Shares Company Securities subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag"DRAG-Along Sale Price”ALONG SALE PRICE") and all other material terms and conditions of the Drag-Along Sale. The number of Shares Company Securities to be sold by each other Stockholder Other Shareholder shall be the Drag-Along Portion of the class of Shares Company Securities that such other Stockholder Other Shareholder owns. Each other Stockholder Other Shareholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Drag- Along Sale Notice and to tender the Drag-Along Portion of all its Shares Company Securities as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days 10 days after the date of the Drag-Along Sale Notice (the “Drag"DRAG-Along Sale Notice Period”ALONG SALE NOTICE PERIOD"), each of the other Stockholders Other Shareholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, Sale Notice the certificate and other applicable instruments representing the Shares Company Securities of such other Stockholder Other Shareholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares Company Securities on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares Company Securities pursuant to this Section 4.04(b4.02(a) at the closing for such Drag-Along Sale against delivery to such other Stockholder Other Shareholder of the consideration thereforetherefor. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder Other Shareholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummatedSeller, the Company (subject to reversal under Section 4.02(b)) shall cause the books and records of the Company to show that such Shares Company Securities are bound by the provisions of this Section 4.04(b4.02(a) and that such Shares Company Securities shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(cb) The Drag-Along Seller shall have a period of thirty (30) 120 days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided PROVIDED that, if such Drag-Drag- Along Sale is subject to regulatory approval, such thirty (30) 120-day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) 180 days following the effective date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any Other Shareholders the limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares Company Securities that such other Stockholders Other Shareholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders Other Shareholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares Company Securities owned by the other Stockholders Other Shareholders shall again be in effect.
(dc) Concurrently with the consummation of the Drag-Along Sale, the Drag-Drag- Along Seller shall give notice thereof to the other StockholdersOther Shareholders, shall remit or cause to be remitted to each of the other Stockholders all Other Shareholders that have surrendered their certificates and other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s Other Shareholder's wire transfer instructions) for the Shares Company Securities Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer and the terms thereof as may be reasonably requested by such other StockholdersOther Shareholders.
(ed) Notwithstanding anything contained in this Section 4.044.02, there shall be no liability on the part of the Drag- Drag-Along Seller to the other Stockholders Other Shareholders (other than the obligation to return any the limited power-of-attorney and the certificates and other applicable instruments representing Shares Company Securities received by the Drag-Along Seller) if the Transfer of Shares Company Securities pursuant to this Section 4.04 4.02 is not consummated for whatever reason, regardless of whether the Drag- Drag-Along Seller has delivered a Drag-Along Sale Notice. The decision Whether to effect a Transfer of Shares Company Securities pursuant to this Section 4.04 4.02 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(he) The provisions of this Section 4.04 4.02 shall not apply to any Transfer in a Public Offering or pursuant to Rule 144. With respect to the Existing Shareholders, the DLJIP Funds and Krakoff and Xxxx (to the extent of their respective Rollover Shares), this Section 4.02 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Samples: Shareholder Agreement (Advanstar Communications Inc)
Drag-Along Rights. (a) Subject If Investor, either alone or with any other Person, determines to Sections 4.04(gaccept an offer from any Person (other than a Person that is an Affiliate of Investor) to purchase any Purchased Shares and 4.05as a result of such purchase (and the sale of Holder Shares to such Person as provided in this Section 7) the offeror will have the ability to elect a majority of the members of the Board, if a Shareholder then, at the request of Investor, each Holder shall sell all shares of Common Stock held by such Holder pursuant to such offer to purchase (the “Drag-Along Seller”) proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “"Drag-Along Sale”"), the . All Holders of shares of Common Stock in such Drag-Along Seller Sale (i) shall receive the same consideration per share of Common Stock, shall be subject to the same terms and conditions of sale and shall otherwise be treated equally or, where appropriate, pro rata based upon the number of shares of Common Stock, as the case may at its option require be, held by each other Stockholder to Transfer the Holder, and (ii) shall execute such documents and take such actions as may be reasonably required by Investor. For purposes of Drag-Along Portion Sales, the number of shares owned by each Holder shall include all shares underlying any options, warrants and/or any other securities exercisable, convertible or exchangeable for Common Stock (the class of Shares (“Drag-Along Rights”) then held "Convertible Securities"), which Convertible Securities will be exercised by such other Stockholder, and (subject the Holder thereof immediately prior to and at the closing contingent upon consummation of the Drag-Along Sale; provided, however, that at the option of the holder of any Convertible Securities it may sell rather than exercise the Convertible Securities (x) to exercise such number at a reduced price per share of options for Common Shares held Stock equivalent that takes into account any amount payable by such other Stockholder as is required in order that a sufficient number of Common Shares are available holder to Transfer the relevant Drag-Along Portion of Shares held by each effect such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securitiesexercise, and (iiiy) otherwise at an increased price per share of Common Stock equivalent that takes into account any amount receivable by such holder upon such exercise.
(b) Subject to the proviso in Section 7(a), any such sale by any Holder shall be on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the proposed Drag-Along Sale is not consummated with respect to any Common Shares acquired by Investor; provided, however, that all Holders shall share pro rata, based upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions shares of the Drag-Along Sale. The number of Shares to be Common Stock being sold by each other Stockholder shall be (i) in all transaction expenses (to the Drag-Along Portion of extent not borne by the class of Shares that such other Stockholder owns. Each other Stockholder shall be required Company), (ii) in any indemnity liabilities to participate the purchaser in the Drag-Along Sale on (other than representations as to unencumbered ownership of and ability to transfer the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion shares of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date Common Stock being sold of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the any other Stockholders shall deliver to a representative of the Drag-Along Seller designated seller in the Drag-Along Sale, applicable instruments representing which shall be the Shares sole responsibility of such other Stockholder to be included seller), and (iii) in any escrow for the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or purpose of satisfying any such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereofindemnity liabilities.
(c) The Drag-Along Seller Investor shall have a period of promptly provide each Holder with written notice (the "Sale Notice") not more than sixty (60) nor less than thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof prior to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing scheduled date of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a "Drag-Along Sale NoticeDate"). The decision to effect a Transfer Each Sale Notice shall set forth: (i) the name and address of Shares pursuant to this Section 4.04 by the Drag-Along Seller is each proposed transferee or purchaser of shares of Common Stock in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
; (gii) Stockholder hereby irrevocably the proposed amount and unconditionally waives and agrees to cause form of consideration to be waived paid for such shares of Common Stock and the terms and conditions of payment offered by each proposed transferee or purchaser; (iii) confirmation that the proposed purchaser or transferee has been informed of the "Drag-Along Rights" provided for herein and has agreed to prevent purchase shares of Common Stock (or, if requested by Investor or a Holder, Convertible Securities) in accordance with the exercise of, any rights of appraisal, any dissenters’ rights terms hereof; and any similar rights relating to a (iv) the Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along SaleDate.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Drag-Along Rights. (a) Subject to Sections 4.04(g) 4.02(e), 4.02(f), 4.03 and 4.054.04, if a the Crestview Shareholder (the “Drag-Along Seller”) proposes enters into an agreement to Transfer (not including, however, any pledge, encumbrance sell all or hypothecation) any shares substantially all of any class of Shares that results in its Company Securities to a Change of Control (i) to any Third Party (whether pursuant to a merger acting through Parent, stock sale or Parties or otherwise) (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to all Other Shareholders to, and the Other Shareholders shall, (i) Transfer the Drag-Along Portion of the class of Shares Company Securities (“Drag-Along Rights”) then held by every Other Shareholder (and shall not exercise any appraisal or dissenter’s rights that may otherwise be available to any such other StockholderOther Shareholder under applicable law), and (ii) subject to and at the closing of the Drag-Along Sale) to , exercise such number of options or warrants for Common Shares held by such other Stockholder every Other Shareholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by Company Securities of each such other StockholderOther Shareholder, (i) in each case for the same consideration per share or unit of Share as the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, Drag-Along Seller and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder Other Shareholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place lieu of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such optionsany options or warrants, or the Drag-Along Sale is not consummated, any options or warrants exercised or canceled in contemplation of such options Drag-Along Sale shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05Section 5.03, if a Shareholder at any time the Sponsors constituting the Sponsor Majority (collectively, the “Drag-Along Seller”) proposes propose to Transfer all but not less than all of their Group Equity Securities (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i“Drag-Along Sale”) to any Third Party or Third Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to Transfer Shareholder that is not the Drag-Along Portion of Seller (the class of Shares (“Other Shareholders”), and each Other Shareholder hereby agrees, if such Drag-Along Rights”) Sale is structured as a Transfer of Group Equity Securities, to Transfer all but not less than all of the Group Equity Securities then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise Other Shareholder on the same terms and conditions as are applicable to the Drag-Along Seller; provided that any other Stockholder that holds options , including the exercise price same per share consideration with respect to a specific class of which is greater than Group Equity Securities; provided, that, the terms of such Drag-Along Sale may provide different per share price at consideration for different classes of Group Equity Securities. All Other Shareholders shall cooperate in, and shall take all actions that the Drag-Along Seller deems reasonably necessary or desirable to consummate the Drag-Along Sale, including, without limitation, (i) voting their respective Group Equity Securities (or executing and delivering any written consents in lieu thereof) in favor of the Drag-Along Sale and all actions deemed necessary or appropriate by the Drag-Along Seller in connection with the Drag-Along Sale, including voting to approve a Drag-Along Sale if such Drag-Along Sale is structured as a merger or a sale of all or substantially all of the assets of the Company, and against any action or proposal that may prevent, hinder or impede the consummation of the Drag-Along Sale, (ii) to the extent permitted by applicable law, not exercising any dissenters’ or appraisal rights to which they may be entitled in connection with the Common Shares are Drag-Along Sale, and (iii) subject to be Transferred Section 5.03(b), entering into agreements with the Drag-Along Transferee on terms substantially identical to those (if any) entered into between the Drag-Along Transferee and the Drag-Along Seller. Each Other Shareholder hereby grants to each Sponsor that is part of the Drag-Along Seller, an irrevocable proxy coupled with an interest to vote, including in any action by written consent, such Other Shareholder’s Group Equity Securities in accordance with such Other Shareholder’s agreements in this Section 5.02 and a power of attorney to execute and deliver in the name and on behalf of such Other Shareholder all such agreements, instruments and other documentation (including any written consents of shareholders) as is required to Transfer the Group Equity Securities held by such Other Shareholder to the Drag-Along Transferee. Notwithstanding the foregoing, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the may cause a Drag-Along Sale is pursuant to this Section 5.02(a) in a Transfer for less than all of the outstanding Group Equity Securities; provided, that such retained shares do not consummated with respect exceed 20% of the issued and outstanding Group Equity Securities and; provided, further, that that all Shareholders shall have the right to any Common Shares acquired upon exercise retain a pro rata share of each class of aggregate retained shares (based on their Aggregate Ownership of the specified class at such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicabletime).
(b) The Drag-Along Seller shall provide written notice of such Drag-Along Sale to the other Stockholders Other Shareholders (a “Drag- Drag-Along Sale Notice”) not later than twenty (20) Business Days 10 days prior to the proposed Drag-Along Sale. The Drag- Drag-Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, Transferee and the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder Other Shareholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth belowGroup Equity Securities. The price and form of consideration payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.than
Appears in 1 contract
Drag-Along Rights. (a) Subject If, prior to Sections 4.04(g) and 4.05an IPO, if a Shareholder (the “Drag-Along Seller”) Transferor proposes to make a bona fide Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with or Group that is not an Affiliate of any Drag-Along Transferor (collectively, a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) of Equity Securities which would result in a single transaction or in a series Change of related transactions, and Control Transaction (any such Transfer, a “Drag-Along Sale”), then the Drag-Along Seller Transferor may at its option elect (a “Drag-Along Election”) to require each other Stockholder (the “Dragged Stockholders”) to Transfer the Drag-Along Portion of the class of Shares Equity Securities (“Drag-Along Rights”as calculated below) then held by such other Stockholder, and (subject to and at the closing as a part of the Drag-Along Sale) Sale to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other StockholderTransferee, (i) for at the same amount and form of consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on upon the same terms and subject to the same conditions as the Drag-Along Seller; provided Transferor, all of which shall be set forth in the Drag- Along Notice (as defined below). The Drag-Along Transferor may require each Dragged Stockholder to Transfer that any number of Equity Securities (including for this purpose Common Stock Equivalents but which, at the election of the Drag-Along Transferor, may exclude Unvested Stock (other Stockholder than Common Stock or Common Stock Equivalents that holds options vest as a result of such Drag-Along Sale)) as is equal to the exercise price per share product of (x) a fraction, the numerator of which is greater than the per share price at which the Common Shares are number of Equity Securities as is proposed to be Transferred sold by the Drag-Along Transferor to the Drag-Along Transferee, if required Transferee and the denominator of which is the aggregate number of Equity Securities owned as of the date of the Drag-Along Notice by the Drag-Along Seller to exercise such options, may, in place Transferor and (y) the number of Equity Securities (including for this purpose Common Stock Equivalents but excluding Unvested Stock (other than Common Stock and Common Stock Equivalents that vest as a result of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If Drag-Along Sale) if so elected by the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise Transferor as set forth above) owned by such Dragged Stockholder as of such options, or the date of the Drag-Along Notice; provided that the purchase price to be paid in such Drag-Along Sale is not consummated, for any Common Stock Equivalent shall equal the purchase price per share of Common Stock to be paid in such options shall be deemed not to have been exercised Drag-Along Sale less the amount per share of the exercise or canceled, as applicablepurchase price (if any) of such Common Stock Equivalent.
(b) The rights set forth in Section 7(a) shall be exercised by giving written notice (the “Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to each Dragged Stockholder and to the Company setting forth in detail the terms of the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify including the identity of the Drag-Along Transferee, the form of the Drag-Along Sale including, if applicable, the number of Shares subject Equity Securities proposed to be Transferred in such Drag-Along Sale, the amount and form of the purchase price therefor, the proposed closing date of the Drag-Along Sale, and a summary of the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder In connection with any Drag-Along Sale, all Dragged Stockholders shall be obligated, if applicable, to vote (or consent in writing, as the case may be) all Voting Shares held by them in favor of any Drag-Along Sale being effected by merger or consolidation or other transaction requiring a stockholder vote and the Dragged Stockholders and the Company shall in all other respects support the transaction contemplated by the Drag-Along Portion Sale to the fullest extent permitted by law and shall be obligated to cooperate in the consummation of the class transaction contemplated thereby and shall execute all documents, including a sale, purchase or merger agreement, consistent with this Section 7 and reasonably requested by the Company or the Drag-Along Transferor containing the terms and conditions of Shares the Drag-Along Sale and the Dragged Stockholders shall waive any and all dissenters’ rights or appraisal rights available to such Dragged Stockholder under applicable law; provided, however, that such other Stockholder owns. Each other no Dragged Stockholder shall be required to participate make any representations or warranties in any agreement relating to a Drag-Along Sale other than representations and warranties relating to such Dragged Stockholder and the ownership of its Equity Securities that are on terms no less favorable to such Dragged Stockholder than those made by the Drag-Along Transferor and are customary in similar transactions including representations and warranties relating to title, authorization and execution and delivery, nor shall any Dragged Stockholder be required to provide indemnification with respect to any representations or warranties made by any other Stockholder or in an amount exceeding the amount of the proceeds received by such Dragged Stockholder in the Drag-Along Sale on the terms and conditions as the or to participate in any escrow relating to a Drag-Along Seller is participating as set forth Sale in excess of such Dragged Stockholder’s pro rata participation in the Drag-Along Sale Notice and (based on proceeds received) (but will otherwise agree to tender any indemnification or escrow provisions agreed to by the Drag-Along Portion Transferor). In addition, no Dragged Stockholders shall exercise any rights of its Shares as set forth below. The price payable appraisal or dissenters rights that such Dragged Stockholder may have (whether under applicable law or otherwise) or could potentially have or acquire in such Transfer shall be the connection with any Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver or any proposal that is necessary or desirable to a representative of the Drag-Along Seller designated in consummate the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller Transferee and any Drag-Along Sale transaction pursuant to this Section 7 shall have be selected pursuant to a period sale process determined by the Drag-Along Transferor, which may include an auction process managed by an investment banking firm selected by the Drag-Along Transferor. All fees and expenses related to any Drag-Along Sale, including the fees of thirty any such investment banking firm but not including the fees of counsel for any individual Stockholder, shall be paid by the Company.
(30d) days from Upon delivery of a Drag-Along Notice to the date of receipt of Company, the Company will take such actions as are necessary to accomplish the Drag-Along Sale Notice specified therein as soon as is reasonably practicable.
(e) All Transfers of Equity Securities to consummate the Drag-Along Sale Transferee pursuant to this Section 7 shall be consummated contemporaneously at the offices of the Company on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty later of (30i) day period shall be extended until the expiration of five a Business Day not less than fifteen (515) Business Days after all such approvals have been received, but in no event later or more than sixty (60) days following the date of receipt of after the Drag-Along Sale NoticeNotice is delivered to the Dragged Stockholders or (ii) the fifth (5th) Business Day following the expiration or termination of all waiting periods under the HSR Act or receipt of other regulatory approvals applicable to such Transfers, or at such other time and/or place as the Drag-Along Transferor may otherwise determine. The delivery of certificates or other instruments evidencing such Equity Securities duly endorsed for Transfer shall be made on such date against payment of the purchase price for such Equity Securities. If the Drag-Along Sale shall not have been consummated during such period, proposed pursuant to the Drag-Along Seller shall promptly return to each of Notice is not consummated within a 180 calendar day period from the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession delivery of the Drag-Along Seller executed by the other Stockholders Notice, then each Dragged Stockholder shall no longer be obligated to Transfer its Equity Securities in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or to otherwise support or take any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder action with respect to a such proposed Drag-Along Sale.
(h) The provisions Sale unless the Drag-Along Transferor send a new Drag-Along Notice and again comply with the terms of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering7.
Appears in 1 contract
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05, if a Shareholder 4.5.1 If NantWorks and/or any other Holders (the “Drag-Along SellerSelling Parties”) proposes propose to Transfer (not including, however, any pledge, encumbrance or hypothecation) any sell a majority of the outstanding shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring Common Stock of the Company as determined by the Board of Directors to an unaffiliated third party (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Drag Along Sale”), then the Selling Parties shall have the right, by written notice to each of the other Holders (the “Drag Along Holders”) given at least fifteen (15) days prior to the Drag Along Sale and setting out the terms of the Drag Along Sale, to require that each Drag Along Holder sell the same percentage of each Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number Holders’ shares of Common Shares Stock as are available sold by the Selling Parties, with such sale to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise be on the same terms and conditions as (other than the Drag-Along Seller; provided that any other Stockholder that holds options the exercise purchase price payable on a per share of which is greater than the per share price at which the Common Shares are to be Transferred basis) relating to the Drag-Along Transfereesale of the Selling Parties’ shares of Common Stock; provided, if required by however, that the Drag-Along Seller to exercise such options, may, Selling Parties shall only have the rights set forth in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated this Section 4.5 with respect to any Common Shares acquired upon exercise of such options, or the Drag-a Drag Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
in which (ba) The Drag-each Drag Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate Holder receives in the Drag-Along Sale transaction the same form of consideration, in the same proportion (on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion basis of the consideration to be received in such Drag Along Sale) as the Selling Parties and (b) the Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for Holders receive such Drag-Along Sale against delivery to such other Stockholder Holder’s pro rata share of the consideration therefore. If an other Stockholder should fail paid (or proposed to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated be paid) by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth transferee in such Drag-Along Sale NoticeSale. For purposes of this Section 4.5.1, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period each Holder’s “pro rata share” shall be extended until calculated based on the expiration relative amount each Holder would be entitled to receive assuming the only outstanding shares of five Common Stock are those being sold (5or proposed to be sold) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments Selling Parties and the total consideration to be paid at the closing of the Drag-Drag Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds Holders in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent 4.5.2 If the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Drag Along Sale is structured as a merger, consolidation or similar business combination, each Drag Along Holder will, if Holder approval of the transaction is required, vote in favor of the transaction. Each Drag Along Holder will take all necessary or reasonably appropriate, advisable or desirable actions and will execute and deliver all necessary or reasonably appropriate, advisable or desirable documents, in each case in connection with the Drag Along Sale as requested by the Selling Parties provided, that in connection with any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
, (ha) The provisions no Drag Along Holder shall be required to agree to any non-competition covenant or other agreement restricting the business operations of this Section 4.04 such Drag Along Holder or its Affiliates, (b) no Drag Along Holder shall terminate upon be required to make or become liable for any representations and warranties relating to the consummation Company or specifically to any Holder other than their self; (c) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of the Initial Public OfferingDrag-Along Holder’s obligations thereunder, will cause a breach or violation of the terms of any law, judgment, order or decree of any court or governmental agency applicable to such Drag-Along Holder or any agreement that would have a material adverse effect on such Drag-Along Holder; and (d) any indemnification provided by a Drag Along Holder shall not exceed and shall be based on, the relative purchase price being received by the Selling Parties and Drag Along Holders in the Drag-Along Sale, on a several, not joint, basis, or with recourse solely to an escrow established for the benefit of the proposed purchaser (the Selling Parties’ and Drag Along Holders’ contribution to such escrow to be on a pro rata basis in accordance with the proceeds received from such Drag-Along Sale).
Appears in 1 contract
Drag-Along Rights. (a) Subject to Sections 4.04(gIf one or more Class A Members (each such Class A Member in its capacity as such, the “Dragging Member”) and 4.05, if its or their respective Affiliates hold a Shareholder Class A Equity Percentage Interest of at least eighty percent (80%) and the “Drag-Along Seller”) proposes Dragging Members desire to Transfer (sell all of the Class A Units held by such Dragging Members and their respective Affiliates pursuant to a sale to a Third Party that is not including, however, any pledge, encumbrance or hypothecation) any shares an Affiliate of any class of Shares that results in such Dragging Member (a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions), and such Dragging Member may require each other Member (any such Transfereach, a “Drag-Along SaleRequired Seller”)) to sell all of their Membership Interests in the Company, subject to reasonable allowances (applied Pro Rata to the Drag-Along Dragging Members and each Required Seller may at its option require each other Stockholder to Transfer based on the Drag-Along Portion relative Equity Percentage Interests of the class of Shares (“Drag-Along Rights”) then held by such other Stockholder, Dragging Members and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (iRequired Seller) for the same consideration per share or unit “roll-over” of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to equity required by the Drag-Along Transferee, if required in a bona fide arm’s length transaction or series of transactions, including pursuant to a merger, equity purchase, tender offer, business combination, asset sale contemplated by the Drag-Along Seller to exercise Section 9.4(d) or otherwise (such optionstransaction or series of related transactions, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale NoticeDrag Sale”) not later than twenty (20) Business Days prior to at the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) purchase price and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on upon the terms set forth in the Drag-Along Notice (or Amended Drag-Along Notice) described below; provided, that, notwithstanding the foregoing provisions with respect to allowances for the “roll-over” of equity required by the Drag-Along Transferee, each Required Seller may, in its sole discretion, require that 100% of its Membership Interests be sold in connection with any Drag Sale. In connection with a Drag Sale, the Dragging Members may also require each Required Seller to vote in favor of such Drag Sale or act by written consent approving the same with respect to all Membership Interests owned by such Required Seller, as necessary or desirable to approve and wire transfer instructions for payment consummate the Drag Sale. The consummation of a Drag Sale by any Dragging Members shall be subject to the sole discretion of such Dragging Members, who shall have no liability or obligation whatsoever (other than compliance with this Section 9.4) to any Required Sellers participating therein in connection with such Required Sellers’ Disposition of Membership Interests.
(b) Two (2) Business Days after being instructed to do so by any Dragging Member, the Company shall provide written notice (the “Drag-Along Notice”) of a Drag Sale to each Required Seller. In the event that the terms and/or conditions set forth in the Drag-Along Notice are thereafter amended in any material respect, the Dragging Members shall give written notice (an “Amended Drag-Along Notice”) of the cash portion amended terms and conditions of the consideration proposed Disposition to each Required Seller and the Company. Each Drag-Along Notice and Amended Drag-Along Notice shall set forth: (i) the name of the Drag-Along Transferee and the amount of Membership Interests proposed to be received in purchased by such Drag-Along Transferee; (ii) the proposed amount and type of consideration and the material terms and conditions of payment offered by the Drag-Along Transferee; and (iii) a summary of any other material terms of the Drag Sale. Upon the delivery of a Drag-Along Notice, or, if such delivery is not no further Dispositions of Membership Interests by any Member shall be permitted by applicable law, an unconditional agreement to deliver such Shares (including pursuant to this Section 4.04(ba Permitted Disposition) at the closing for until such Drag-Along Sale against delivery to such other Stockholder of Notice is withdrawn or the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Drag Sale is consummated, the Company shall cause the books and records .
(c) All Dispositions of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred Membership Interests to the Drag-Along Transferee immediately upon surrender for Transfer by pursuant to this Section 9.4 shall be consummated simultaneously at the holder thereof.
offices of the Company, on the later of (ci) The Drag-Along Seller shall have a period of thirty Business Day not less than twenty (3020) days from the date of receipt of nor more than ninety (90) Days after the Drag-Along Sale Notice to consummate is received by such Required Sellers and the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty Company or (30ii) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of all material approvals, including approvals of Governmental Authorities and any approval of any party to any material agreement of the Company. The aggregate purchase price payable for the Membership Interests purchased by the Drag-Along Transferee (the “Drag Consideration”) will be allocated, paid and distributed among the Members participating in such Drag Sale Notice. If in accordance with the Drag-Along Sale shall not have been consummated during Hypothetical Value of each such periodMember’s Membership Interests; provided, that (i) if any Dragging Member is granted the Drag-Along Seller shall promptly return right to each of the other Stockholders designate any limited power-of-attorney (and all copies thereofmanager(s) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders or director(s) in connection with such proposed Transfersale, the Required Sellers shall not receive any portion of such right, and all (ii) if any of the restrictions on Transfer contained consideration is in this Agreement a form other than cash, the consideration payable to the Required Sellers shall, if requested by the Required Sellers, consist solely of cash with the same Fair Market Value as the non-cash consideration. To the extent that the Members provide any indemnification or otherwise applicable at such time assume any other post-closing liabilities in connection with the Drag Sale, each of the Dragging Members and the Required Sellers shall do so severally and not jointly (and on a Pro Rata basis in accordance with the Membership Interests being sold by each, except with respect to the representations and warranties described in the following sentence) and their respective potential liability thereunder shall not exceed the proceeds received as consideration for their respective Membership Interests. Each Required Seller shall give customary representations and warranties in connection with a Drag Sale relating to title to the Membership Interests conveyed (free and clear of all liens and encumbrances), due authorization, legal authority and capacity to Dispose of their Membership Interests and non-contravention of other agreements to which such Shares owned by Required Seller is a party. Any indemnification or other post-closing liabilities related to such representations and warranties shall be specific to the other Stockholders Required Seller making such representations and warranties. No Required Seller shall again be required to enter into any non-competition agreement pursuant to a Drag Sale. Each Required Seller shall be required to enter into any instrument, undertaking or obligation necessary or reasonably requested and deliver all documents necessary or reasonably requested in effectconnection with such Disposition in connection with this Section 9.4.
(d) Concurrently Each Required Seller shall be required to sell its Membership Interests pursuant to a Drag Sale free and clear of all liens and encumbrances. In connection with a Drag Sale, each Member subject thereto will also (A) consent to and raise no objections against the Drag Sale or the process pursuant to which the Drag Sale was arranged, (B) waive any dissenter’s rights and other similar rights, (C) take all actions reasonably required or desirable or requested by the Dragging Members to consummate such Drag Sale, (D) comply with the consummation terms of the documentation relating to such Drag Sale and (E) use commercially reasonable efforts to cause any Manager designated to the Board by such Member to facilitate and take, and cause the Company to facilitate and take, the actions described in the foregoing clauses (A) through (D). Notwithstanding anything in Section 9.4(a) to the contrary, if desirable to the Dragging Members and Drag-Along SaleTransferee, in lieu of a transfer of Membership Interests, the Drag-Along Seller shall give notice thereof Drag Sale may be exercised to cause a sale of all or substantially all of the assets of the Company, so long as it would have substantially the same economic effect to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Required Sellers as a substantially similar Drag Sale (the cash portion of which is to be paid by wire involving a transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other StockholdersMembership Interests.
(e) Notwithstanding anything contained The Company will pay the reasonable fees and expenses of legal counsel (and such local counsel as may be appropriate) for each Dragging Member in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return connection with any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares Disposition pursuant to this Section 4.04 is not consummated for whatever reason9.4 (including by way of a purchase agreement, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a tender offer, merger or other corporate business combination transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Saleotherwise).
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Samples: Limited Liability Company Agreement (TransMontaigne Partners L.P.)
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05, if a Shareholder (the “Drag-Along Seller”) If Buyer proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares sell all of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting its interest in the capital stock (or equivalent securities) of the successor entity 50% Assets to the Company (the “Drag-Along Transferee”) an unaffiliated third party transferee, in a single one transaction or in a series of related transactions, and transactions (any such Transfer, a “Drag-Drag Along Sale”), then Buyer shall have the Drag-right to include the Seller Retained Interests in such Drag Along Sale on the following terms:
(1) Buyer shall give Seller may at not less than ten (10) days prior written notice of its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by such other Stockholderintention, and identifying (subject to and at the closing of the Drag-Along Salereasonable confidentiality provisions) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Sharesprice offered, (ii) in cash, notes, and/or marketable securitiesall other materials terms and conditions of the Drag Along Sale and the name of the third party purchaser, and (iii) otherwise if the consideration payable pursuant to the Drag Along Sale consists in whole or in part of consideration other than cash, such information relating to such other consideration as Seller may reasonably request;
(2) In connection with the Drag Along Sale, Buyer shall have the right to sell the Seller Retained Interests to the third party purchaser, for the same consideration and on the same terms and conditions as the Drag-sale of Buyer’s interest in the 50% Assets. . Seller shall take all actions necessary in connection with the consummation of the Drag Along Sale as requested by the Buyer, including the execution of such agreements and such other actions reasonably necessary to execute the transfer documents, provided such transfer documents are applied equally on an equivalent basis to Buyer and Seller; . Seller acknowledges that such transfer documents are expected to provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred representations warranties indemnities and escrow arrangements related to the Drag-Drag Along Transferee, Sale; and
(3) Seller will not be required to sell the Seller Retained Interests in the Drag Along Sale if required the consideration payable by the Drag-Along Seller to exercise such options, may, in place third party purchaser does not meet a minimum price or allocated value of such exercise, submit to irrevocable cancellation thereof without any liability a PV15 value for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or PDP on the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
50% Assets (b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to based on the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions report of the Drag-Along SaleBuyer’s independent petroleum engineers, X. X. Xxx Xxxxxx & Associates) based on the NYMEX strip with the proper differentials applied for the PDP assets, but the Seller may elect to participate, notwithstanding this minimum price provision. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall Seller will also not be required to participate in the Drag-any Drag Along Sale on unless at least 75% of the terms and conditions as purchase price paid for the Drag-Along Seller is participating as set forth Retained Interests in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereofcash.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Delta Petroleum Corp/Co)
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05, if a Shareholder (In the “Drag-Along Seller”) event that any time Kelso proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any sell for cash shares of Common Stock owned by it xx xxy Proposed Purchaser other than any class of Shares that results in a Change of Control Transfer (i) pursuant to any Third Party a Registration or Parties Rule 144, or (ii) to any Person in connection an Affiliate, and the shares proposed to be sold, together with a reorganization or restructuring all shares of Common Stock previously sold by Kelso would represent more than 85% of the Company as determined aggregate number of sharxx xx Common Stock owned by Kelso immediately after the Closing, then Kelso may provide each Nox-Xxxso Securityholder written notice (a "Xxxx-Along Notice") of such Xxxxosed Sale and the Material Terms thereof not less than 25 business days prior to the proposed closing date of the Proposed Sale and each such Non-Kelso Securityholder hereby agrees to sell to such Proposed Purchasxx xxat number of shares of Common Stock equal to the product of (i) the number of shares of Common Stock then held or acquirable pursuant to the exercise of Exchange Options by such Non-Kelso Securityholder or of options (to the extent exercisable) granxxx xo a Management Securityholder under the Stock Incentive Plan multiplied by (ii) the aggregate percentage of the Common Stock held by Kelso and its Affiliates that is represented by the Board of Directors (the “Board”) so long as each Stockholder Common Stock thxx Xxlso and its Affiliates propose to sell in the Company maintains their proportionate economic and voting interest in the capital stock Proposed Sale.
(or equivalent securitiesb) Shares of the successor entity Common Stock subject to the Company (the “a Drag-Along Transferee”) in a single transaction or in a series Notice (including any shares of related transactions, and (any Common Stock acquired pursuant to the exercise of options that are subject to such Transfer, a “Drag-Along Sale”)Notice) will be included in the Proposed Sale pursuant hereto and to any agreement with the Proposed Purchaser relating thereto, the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and subject to the same conditions as applicable to the Dragshares of Common Stock which Kelso and its Affiliates propose to sell in the Proposed Sale. Such xxxxs and conditions shall include, without limitation, (i) the sale consideration (which shall be reduced by the fees and expenses incurred by Kelso and the Company in connection with the Proposed Sale) and (ii) xxx provision of information, representations, warranties, covenants and requisite indemnifications, provided, however, that (x) any representations and warranties relating specifically to any Securityholder shall only be made by that Securityholder and shall only be with respect to title, ownership, capacity to engage in the sale or similar matters; (y) any indemnification provided by the Securityholders shall be based on the number of shares of Common Stock being sold by each Securityholder in the Proposed Sale either on a several, not joint, basis or solely with recourse to an escrow established for the benefit of the Proposed Purchaser (the Securityholders' contributions to such escrow to be on a pro-Along Seller; provided rata basis in accordance with the number of shares of Common Stock (including shares acquired pursuant to the exercise of options) being sold by each Securityholder in such Proposed Sale), it being understood and agreed that any other Stockholder such indemnification obligation of a Securityholder shall in no event exceed the net proceeds of such Securityholder from such Proposed Sale and (z) the form of consideration to be received by Kelso or any of its Affiliates in connection with the Proposed Sale xxx be different from that holds options received by the exercise price per share of which is greater than Non-Kelso Securityholders (including, but not limited to, non-cash consxxxxxtion) so long as the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion value of the consideration to be received by Kelso or any of its Affiliates is the same or less than that to be xxxxxved by the Non-Kelso Securityholders (as reasonably determined by the Board of Dirxxxxxs of the Company in good faith) and the Non-Kelso Securityholders receive cash. No Non-Kelso Securityholders shxxx xxercise any dissenter's rights with rexxxxx to the consummation of any such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares Proposed Sale pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof6.2.
(c) Each Non-Kelso Securityholder will, if requested by Kelso, execute and delivxx x Custody Agreement and Power of Attornex xx form and substance satisfactory to Kelso with respect to the shares of Common Stock which are to be inxxxxxd in the Proposed Sale pursuant to this Section 6.2. The Drag-Along Seller shall have a period Custody Agreement and Power of thirty (30) days from Attorney will provide that, subject to the date inclusion of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in Section 6.2(b) in an agreement regarding the Proposed Sale, each such Non-Kelso Securityholder will deliver to and deposit in custody with Kexxx, named as the custodian and attorney-in-fact therein, a certixxxxxe or certificates representing such shares of Common Stock (duly endorsed in blank by the registered owner or owners thereof or accompanied by duly endorsed stock powers in blank) and irrevocably appoint Kelso as such Non-Kelso Securityholder's agent and attorney-in-fact xxxx full power axx xxtorney to act under a custody agreement and power of attorney on behalf of such Non-Kelso Securityholder with respect to the matters specified therein. Xxxxithstanding anything to the contrary in this Section 6.2(c), each Non-Kelso Stockholder shall have the right to review the agreement and xxxxx documentation relating to such Proposed Sale.
(d) Each Non-Kelso Securityholder agrees that he or she will execute such other xxxxxments as Kelso may reasonably request in connection with the consummation of x Xxoposed Sale and Drag-Along Notice and the transactions contemplated thereby, including, without limitation, any purchase, merger or recapitalization agreement, escrow agreement or other ancillary agreements, proxies, written consents in lieu of meetings or waivers of appraisal rights.
(e) Each Non-Kelso Securityholder holding shares of Common Stock that are acquirxxxx pursuant to the exercise of Exchange Options and that are to be included in a Proposed Sale Notice, provided that, if such pursuant to a Drag-Along Sale is subject Notice agrees to regulatory approvalprovide to Kelso, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt upon delivery of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during , an irrevocable commixxxxx to exercise such periodExchange Options, the Drag-Along Seller shall promptly return subject only to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Proposed Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05, if a Shareholder If CPN Management (the “Drag-Along SellerTransferor”) at any time, or from time to time, in one transaction or a series of related transactions, proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control Common Stock (ior rights to acquire Common Stock) to any Third Party one or Parties or (ii) more non-Affiliate Persons other than to any Person in connection with other Stockholder (collectively, a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) and such Transfer would constitute a Transfer of at least 50% of the shares of Common Stock or a Change in a single transaction or in a series of related transactions, and Control (any such Transfer, a “Drag-Along Sale”), then the Drag-Along Seller may at its option Transferor shall have the right (a “Drag-Along Right”), but not the obligation, to require each other Stockholder to Transfer tender for purchase to the Drag-Along Portion Transferee a number of shares of Common Stock (including shares of Common Stock issuable upon exercise of any vested options to purchase Common Stock (“Vested Options”) and any options that vest as a result of the class consummation of Shares the Transfer to the Drag-Along Transferee) that, in the aggregate, equal the number derived by multiplying (A) the total number of shares of Common Stock owned by the Stockholder (including shares of Common Stock issuable in respect of all Vested Options held by the Stockholder whether or not exercised and including any options that vest as a result of the consummation of the Transfer to the Drag-Along Transferee) by (B) a fraction, the numerator of which is the total number of shares of Common Stock to be sold by the Drag-Along Transferor in connection with the transaction or series of related transactions and the denominator of which is the total number of the then outstanding shares of Common Stock (including shares issuable upon the exercise of rights to acquire Common Stock) held by the Drag-Along Transferor.
(b) If the Drag-Along Transferor elects to exercise its Drag-Along Right under this Section 3 with respect to the shares of Common Stock held by the Stockholders, the Drag- Along Transferor shall notify each Stockholder in writing (collectively, the “Drag-Along RightsNotices”). Each Drag-Along Notice shall set forth: (i) then held by such other Stockholder, the name and (subject to and at the closing address of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of SharesTransferee, (ii) in cashthe proposed amount and form of consideration and terms and conditions of payment offered by the Drag-Along Transferee, notes, and/or marketable securities(iii) the expected closing date of the proposed Drag-Along Sale, and (iiiiv) otherwise a summary of any other material terms pertaining to the Transfer (“Third Party Terms”). The Drag-Along Notices shall be given at least thirty (30) days before the expected closing of the proposed Transfer.
(c) Upon the giving of a Drag-Along Notice, each Stockholder shall (i) be obligated to sell the number of shares of Common Stock and Vested Options determined pursuant to Section 3(a) on the Third Party Terms at the same time and for the same price of the Common Stock and on no worse terms in any material respect (subject to any applicable legal, tax and conditions accounting differences among the Stockholders and the Drag-Along Transferor) applicable to the Common Stock being Transferred by the Drag-Along Transferor in such Drag-Along Sale; provided that (A) in the event of a Drag-Along Sale, each Stockholder acknowledges and agrees that it shall be entitled to the same form of consideration, unless otherwise elected by such Stockholder, as the Drag-Along SellerTransferor, (B) at the request of the Drag-Along Transferee, all or a portion of the purchase price payable to the Stockholders in connection with a Drag-Along Sale may be held back in an escrow account (on a pro rata basis among the Stockholders based on the aggregate number of shares of Common Stock to be Transferred in such Drag-Along Sale) for the purpose of satisfying such Stockholders’ obligations under the applicable documents relating to the Drag-Along Sale, including indemnity obligations, and (C) in the case of any shares of Common Stock issuable upon the exercise of Vested Options, the Drag-Along Transferor may require a Drag-Along Transferee to exercise such Vested Options, in whole or in part, prior to or simultaneously with the closing of the Transfer(s) described in Section 3(a), (ii) execute such documents and make such representations, warranties, covenants, indemnities and agreements as are (and when) executed and made by the Drag-Along Transferor in connection with such Transfer and will take and cause its Affiliates to take, any and all other actions as may be reasonably necessary or advisable to consummate the Drag-Along Sale; provided that any (A) other Stockholder that holds options than for fraud by such Stockholder, the exercise price per share maximum amount of which is a Stockholder’s liability in a Drag-Along Sale will be no greater than the per share price at consideration that such Stockholder actually receives in such Drag-Along Sale, (B) any indemnification obligations will be several and not joint to the extent that any amount of consideration held in escrow is exhausted and will be apportioned on a pro rata basis (based on the aggregate consideration to be received by each such Stockholder in such Drag-Along Sale) as among the Drag-Along Transferor and the Stockholders, other than, in each case, with respect to representations, warranties and covenants relating to, and made individually by, a Stockholder (which representations and warranties shall be limited to title, organization, authority, execution, no conflicts and broker’s fees) and (C) no Stockholder shall be obligated to provide any post-Closing restrictive covenants (other than customary confidentiality restrictions) in connection with the Drag-Along Sale, (iii) consent to and raise no objections against the Drag-Along Sale or the process pursuant to which the Drag-Along Sale was arranged, (iv) waive any dissenter’s rights and other similar rights, (v) take all actions reasonably required, desirable or requested by the Drag-Along Transferor to consummate such Drag-Along Sale, (vi) comply with the terms of the documentation relating to the Drag-Along Sale and (vii) use commercially reasonable efforts to cause the Company to facilitate and take the actions described in this Section 3(c).
(d) At the closing of the Transfer to any Drag-Along Transferee pursuant to this Section 3, the Drag-Along Transferee shall remit to the Stockholder the consideration for the total sales price of the Common Shares are Stock and unexercised Vested Options held by the Stockholder sold pursuant hereto, minus any consideration to be escrowed or otherwise held back in accordance with the Third Party Terms, and minus the aggregate exercise price of any unexercised Vested Options being Transferred by the Stockholder to the Drag-Along Transferee, if required against delivery by the Drag-Along Seller to exercise such optionsStockholder of certificates for Common Stock, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability duly endorsed for payment of any exercise price Transfer or with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceledduly executed stock powers and, as applicable.
(b) The Drag-Along Seller shall provide notice , an instrument evidencing the transfer or the cancellation of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares unexercised Vested Options subject to the Drag-Along SaleRight reasonably acceptable to the Company, and the consideration for which a Transfer is proposed compliance by the Stockholder with any other conditions to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of closing generally applicable to the Drag-Along Sale. The number Transferor and all other holders of Shares to be sold Common Stock selling shares in the transaction.
(e) All reasonable costs and expenses incurred by each other Stockholder shall be the Drag-Along Portion of Transferor and the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate Company in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the connection with any proposed Drag-Along Sale, applicable instruments representing whether or not consummated (including all attorneys’ fees and charges, all accounting fees and charges and all finders, brokerage or investment banking fees, charges or commissions) (“Transaction Expenses”), shall be paid by the Shares Company or its subsidiaries. For the avoidance of such other Stockholder to be included in the Drag-Along Saledoubt, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery it is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to understood that this Section 4.04(b3(e) at the closing for such shall not prevent any Drag-Along Sale against delivery to be structured in a manner such other Stockholder that some or all of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder Transaction Expenses result in a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents pro rata reduction in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is Stockholders in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the such Drag-Along Sale.
(gf) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this This Section 4.04 3 shall terminate upon the consummation of the an Initial Public Offering.
Appears in 1 contract
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05Until such time, if ever, as Viant consummates a Shareholder Qualified Public Offering, if Members representing more than 50% of the outstanding Common Units on an as converted basis (the “Drag-Along SellerSellers”) proposes desire to Transfer effect a Sale of Viant to a Person other than Time Inc.’s Affiliates (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single bona fide transaction for cash and/or equity of a class of securities which is then listed or in quoted on the New York Stock Exchange or quoted on the NASDAQ Stock Market System (including cash and/or equity securities, the receipt of which may be deferred pursuant to an escrow, earnout, milestone payment, note or other mechanism pursuant to which a series portion of related transactionsthe sale proceeds are deferred beyond the Initial Closing (as defined below) (collectively, and “Contingent Consideration”)) (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller Sellers may at its option require each other Stockholder all Members to Transfer sell the same pro rata portion of their respective Units (including, without limitation, only for purposes of the calculations set forth in this Section 11.1 and without requiring any such actual conversion, assuming the conversion of all Preferred Units to be sold into Common Units so that the sale will be on an as-converted basis) as the proportion of Units (including, without limitation, only for purposes of the calculations set forth in this Section 11.1 and without requiring any such actual conversion, assuming the conversion of all Preferred Units to be sold into Common Units so that the sale will be on an as-converted basis) the Drag-Along Portion of the class of Shares (“Sellers propose to sell to any Drag-Along Rights”) then held by Transferee in such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise Sale on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are apply to be Transferred to the Drag-Along Transferee, if required those Units sold by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect theretoSellers (except as set forth below). If Such Members other than the Drag-Along Sale is not consummated with respect Sellers are referred to any Common Shares acquired upon exercise of such options, herein as the “Compelled Sellers”. Any consideration received at (or within three (3) days of) the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice initial closing of such Drag-Along Sale (the “Initial Closing”) is referred to herein as the “Initial Closing Consideration.” Notwithstanding anything to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares contrary herein but subject to the Drag-Along Saleproviso set forth in this sentence, the consideration for which a Transfer is proposed Executives and Plan LLC shall not be required to be made sell their Units (the “Compelled Units”) in a Drag-Along Sale Price”) and all other material terms and conditions if the portion of the Drag-Along Sale. The number of Shares purchase price to be sold received by each other Stockholder shall be the Drag-Along Portion of Compelled Sellers at the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate Initial Closing for the Compelled Units is not (x) all cash, and (y) in the Drag-Along Sale on aggregate, at least equal to or greater than the terms and conditions Adjusted OIBDA Multiple Value (as the Drag-Along Seller is participating as set forth defined in the Drag-Along Sale Notice and to tender Put/Call Agreement, but assuming for purposes of this calculation that (i) the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be determination date is the Drag-Along Sale Price. Not later than ten (10) Business Days after the proposed closing date of the Drag-Along Sale Notice and the calculation will be made for the twelve (12) months ending on the last day of the most recently completed fiscal quarter prior to such Initial Closing, (ii) the “Employee Interests” as used in the definition of “Adjusted OIBDA Multiple Value” in the Put/Call Agreement shall be the Compelled Units, and (iii) such calculation shall not be subject to the Time Liquidation Preference Election (as defined in the Put/Call Agreement) (the “Minimum Drag-Along Consideration”); provided, however, that the Compelled Sellers shall be required to sell the Compelled Units in a Drag-Along Sale Notice Periodpursuant to this Section 11.1 if the Compelled Sellers receive an amount equal to or greater than the Minimum Drag-Along Consideration at (or within three (3) days of) the Initial Closing, and such amount is paid in all cash. The difference between the Minimum Drag-Along Consideration and the amount the Compelled Sellers would have received pursuant to Section 13.2 is referred to herein as the “Catch-Up Amount”). In addition, each notwithstanding anything to the contrary herein, the Compelled Sellers shall only be required to accept consideration in the form of Contingent Consideration if the other Stockholders Compelled Sellers shall deliver have received Initial Closing Consideration at least equal to the Minimum Drag-Along Consideration, and such amount is paid in all cash. For purposes of this Section 11.1, it is understood and agreed that, in the event the Initial Closing Consideration to be paid by a representative of Drag-Along Transferee does not include sufficient cash to pay the Drag-Along Seller designated Sellers the Minimum Drag-Along Consideration in all cash, then Holding or its Affiliates may pay the Compelled Sellers an amount in cash at (or within three (3) days of) the Initial Closing to make up the difference. In the event Holding or its Affiliate pays such amount in cash, the amounts of consideration to be paid to the Drag-Along Sellers and the Compelled Sellers shall be adjusted accordingly. For example, if the consideration to be received in a Drag-Along Sale is all equity securities and the Compelled Sellers are entitled to a Minimum Drag-Along Consideration of $40 million, Holding or its Affiliate may pay the Compelled Sellers $40 million in cash and the consideration to be received in the Drag-Along Sale would be adjusted such that Holding would receive the $40 million of equity securities that the Compelled Sellers would have otherwise received; provided that if Holding or its Affiliate elect not to pay the Compelled Sellers $40 million in cash on (or within three (3) days of) the Initial Closing, the Compelled Sellers shall not be required to sell the Compelled Units in a Drag-Along Sale pursuant to this Section 11.1.
(b) If a Drag-Along Sale results in the payment of a Catch-Up Amount, then one hundred percent (100%) of any Contingent Consideration paid with respect to such Drag-Along Sale shall be paid to the Drag-Along Sellers (on an as converted basis, except with respect to the proviso in this sentence) until such time, if any, as the Drag-Along Sellers have received their Percentage Interest of the consideration paid (such amount equal to the Initial Closing Consideration plus the Contingent Consideration paid prior to the calculation), and, thereafter, the Members shall share pro rata in accordance with each Member’s Percentage Interest (on an as converted basis) in the payment of any additional Contingent Consideration; provided, however, if the Drag-Along Sellers elect not to convert their Preferred Units into Common Units, the Drag-Along Sellers shall be entitled to all remaining payments of the Initial Closing Consideration in excess of the Minimum Drag-Along Consideration and all payments of Contingent Consideration until such time, if any, as the Drag-Along Sellers have received their Liquidation Preference, and, thereafter, the Compelled Sellers shall share pro rata in accordance with each Compelled Seller’s Percentage Interest (subtracting for this purpose the Units held by the Drag-Along Sellers) in the payment of any additional Initial Closing Consideration and/or Contingent Consideration. For example, if (a) the aggregate price to be paid as consideration for a Sale of Viant pursuant to this Section 11.1 is equal to $1.0 billion ($800 million of which is to be paid at an Initial Closing and $200 million of which constitutes Contingent Consideration), (b) the Drag-Along Sellers represent a 60% Percentage Interest, (c) the Compelled Sellers represent a 40% Percentage Interest, (d) the Minimum Drag-Along Consideration is equal to $300 million and (e) the Drag-Along Sellers elect to convert their Preferred Units into Common Units, the calculation of payments would be as follows: • At (or within three (3) days of) the Initial Closing, the Drag-Along Sellers would receive $480 million (60% of $800 million), and the Compelled Sellers would receive $320 million (40% of $800 million). Since the Compelled Sellers would receive an amount in cash in excess of the Minimum Drag-Along Consideration at the Initial Closing ($300 million), the Drag-Along Sellers would be permitted to compel the Compelled Sellers to sell their Units in the Drag-Along Sale. • In addition, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along SaleSellers and the Compelled Sellers would share pro rata in accordance with each Member’s Percentage Interest in the payment of the remaining $200 million in Contingent Consideration. By way of additional example, together with if (a) the aggregate price to be paid as consideration for a limited power-of-attorney authorizing Sale of Viant pursuant to this Section 11.1 is equal to $800 million ($600 million of which is to be paid at an Initial Closing and $200 million of which constitutes Contingent Consideration), (b) the Drag-Along Seller or such representative Sellers represent a 60% Percentage Interest, (c) the Compelled Sellers represent a 40% Percentage Interest, (d) the Minimum Drag-Along Consideration is equal to Transfer such Shares on the terms set forth in $300 million and (e) the Drag-Along Notice and wire transfer instructions for payment Sellers elect to convert their Preferred Units into Common Units, the calculation of payments would be as follows: • At (or within three (3) days of) the cash portion of Initial Closing, the consideration to be received in such Drag-Along Sale, orSellers would receive $300 million (in contrast, if such delivery is not permitted by applicable law, an unconditional agreement the distribution of sale proceeds was to deliver such Shares be calculated pursuant to this the waterfall set forth in Section 4.04(b13.2, the Drag-Along Sellers would have received $360 million (60% of $600 million) at the closing for such Initial Closing), and the Compelled Sellers would receive $300 million (in contrast, if the distribution of sale proceeds was to be calculated pursuant to the waterfall set forth in Section 13.2, the Compelled Sellers would have received $240 million (40% of $600 million) at the Initial Closing). • In addition, the Drag-Along Sale against delivery Sellers would be entitled to such other Stockholder receive the following payments prior to receipt of any Contingent Consideration by the consideration therefore. If an other Stockholder should fail Compelled Sellers: • Pursuant to deliver clause (b) above, payments of any Contingent Consideration are to be made to the Drag-Along Seller Sellers until the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf Sellers receive consideration equal to their Percentage Interest of the consideration paid (such other Stockholderamount equal to the Initial Closing Consideration plus the Contingent Consideration paid prior to the calculation). In this example, the calculation of the additional consideration the Drag-Along Sellers would be entitled to receive before payments were paid in accordance with each Member’s Percentage Interest (i.e., 60%/40%) is calculated by determining the value of x in an equation where 0.60 is equal to a fraction (A) the numerator of which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates equals the amount paid to the Drag-Along Seller Sellers prior to the calculation ($300 million in this example) plus x and (B) the denominator of which equals the amount of all consideration paid prior to the calculation ($600 million in this example) plus x. In this example, x is equal to $150 million. Accordingly, the Drag-Along Sellers would receive the next $150 million of consideration before any Contingent Consideration was paid to the Compelled Sellers and, thereafter, any consideration would be paid in accordance with each Member’s Percentage Interest (i.e., 60%/40%). By way of further additional example, if (a) the aggregate price to be paid as consideration for a Sale is consummated, the Company shall cause the books and records of the Company Viant pursuant to show that such Shares are bound by the provisions of this Section 4.04(b11.1 is equal to $140 million ($120 million of which is to be paid at an Initial Closing and $20 million of which constitutes Contingent Consideration), (b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by Sellers represent a 60% Percentage Interest, (c) the holder thereofCompelled Sellers represent a 40% Percentage Interest, (d) the Minimum Drag-Along Consideration is equal to $48 million and (e) the Drag-Along Sellers elect not to convert their Preferred Units into Common Units, the calculation of payments would be as follows: • At (or within three (3) days of) the Initial Closing, the Drag-Along Sellers would receive $72 million, and the Compelled Sellers would receive $48 million. • The Drag-Along Sellers would be entitled to payment of the balance of their Liquidation Preference prior to the payment of any Contingent Consideration to the Compelled Sellers. Accordingly, the Drag-Along Sellers would receive the first $18 million of payments of Contingent Consideration and the remaining $2 million of payments of Contingent Consideration would be paid to the Compelled Sellers.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give Written notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a “Drag-Along Sale Notice”) shall be provided by Viant to all holders of Units. The decision Such Drag-Along Sale Notice shall disclose in reasonable detail the number and class of Units to effect a Transfer of Shares pursuant be subject to this Section 4.04 by the Drag-Along Seller is in Sale (the sole and absolute discretion of the “Drag-Along Seller.
Securities”), an estimate of the proposed price (f) A Dragincluding, without limitation, only for purposes of the calculations set forth in this Section 11.1 and without requiring any such actual conversion, assuming the conversion of all Preferred Units to be sold into Common Units so that the sale will be on an as-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may beconverted basis), and the identity of the prospective purchaser. Viant shall pay for one counsel reasonably acceptable to take all other actions necessary the Compelled Sellers to represent the Compelled Sellers in order to approve the consummation of the Drag-Along Sale; provided, however, that Viant shall not be required to pay the fees of such counsel in excess of $50,000.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Viant Technology Inc.)
Drag-Along Rights. (a) Subject In the event that Holdco Inc. desires to Sections 4.04(g) and 4.05Transfer, if a Shareholder (the “Drag-Along Seller”) proposes to Transfer (not including, however, in any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and all of its Shares to any Third-Party Purchaser (any in such context, a “Drag Along Purchaser”), then Holdco Inc. shall have the right (a “Drag Along Right”) to require all Investor Shareholders to Transfer all of their respective Shares to the Drag Along Purchaser in accordance with the procedures set forth in this Section 3.4 (such Transfer, a “Drag-Drag Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the per Share price (which shall be payable in cash or Listed Securities valued at their weighted average closing price on the stock exchange of such Listed Securities during the Drag-Along Salelast thirty (30) trading days immediately preceding the date on which such Listed Securities are to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (ibe paid) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Transfer of Shares by Holdco Inc. to the Drag Along SellerPurchaser; provided that any other Stockholder Drag Along Sale must be effected at a per Share price that holds options the exercise price per share of which is equal to or greater than the per share price at which Drag Along Minimum Price in effect as of the Common Shares are to be Transferred to date that is three hundred (300) days after the Drag-date of the Drag Along TransfereeNotice; provided further that, if required by the Drag-Along Seller to exercise such options, may, in place any Affiliate of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated Holdco Inc. exercises a drag along right with respect to any Common Shares acquired upon other equity interest in the Companies Beneficially Owned by an Investor Shareholder or its Affiliates and Holdco Inc. does not concurrently exercise of such optionsits Drag Along Right hereunder, or the Drag-Along Sale is not consummated, such options Holdco Inc. shall be deemed not to have been exercised its Drag Along Right hereunder, at a price per Share and other material terms and conditions that provide such Investor Shareholder with economic value for its Shares equivalent to that received by such Investor Shareholder or canceledits Affiliates in the other drag along transactions taking into account all relevant factors, or, if higher than such price per Share, at a per Share price that is equal to the Drag Along Minimum Price in effect as applicableof the date that is three hundred (300) days after the date of such deemed exercise, and otherwise in accordance with this Section 3.4.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion Following satisfaction of its Shares as set forth below. The price payable in such Transfer shall be the Drag-obligations pursuant to Section 3.3, Holdco Inc. may exercise its Drag Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares Right pursuant to this Section 4.04(b) at the closing for such Drag-3.4 by providing written notice of its election to do so to each Investor Shareholder (a “Drag Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other StockholderNotice”), which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.23
(c) The Drag-Drag Along Seller Sale must be consummated within the Regulatory Approval Period applicable to the Transfer by Holdco Inc. to the Drag Along Purchaser. No Investor Shareholder shall have a Transfer or agree to Transfer any Shares to any Person other than the Drag Along Purchaser during the period of thirty (30) days from between the date it receives a Drag Along Notice and the conclusion of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale NoticeRegulatory Approval Period. If the Drag-Drag Along Sale shall not have been consummated during such periodRegulatory Approval Period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such the Shares owned by the other Stockholders Shareholders shall again be in effect.
(d) Concurrently In connection with any exercise of its Drag Along Right pursuant to this Section 3.4, Holdco Inc. shall pay each Investor Shareholder an amount equal to the Daily Ticking Fee multiplied by the number of days between the date that is three hundred (300) days after the date of the Drag Along Notice and the consummation of the Drag-Drag Along Sale, solely to extent such payments are necessary to ensure that the Drag-Along Seller shall give notice thereof Investor Shareholder receives a per Share price equal to the other Stockholders, shall remit or cause to be remitted to each Drag Along Minimum Price in effect as of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing date of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence consummation of the completion and time of completion of such Transfer as may be reasonably requested by such other StockholdersDrag Along Sale.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on In the part of the Drag- event that Holdco Inc. exercises its Drag Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares Right pursuant to this Section 4.04 is not consummated 3.4, the Investor Shareholders shall take all actions as may be reasonably necessary to consummate the Drag Along Sale, including making the representations, warranties and covenants set forth on Schedule 3.4(d) and entering into such definitive agreements as are customary for whatever reasontransactions of the nature of the proposed Transfer. Notwithstanding anything herein to the contrary, regardless the Investor Shareholders agree to (i) vote in favor of whether the Drag- transaction or transactions with the Drag Along Seller has delivered a Drag-Along Sale Notice. The decision Purchaser, (ii) take such other action as may be required to effect a Transfer of Shares pursuant such transaction and (iii) take all actions to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger waive any dissenters, appraisal or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Salethereto.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Samples: Shareholder Agreement
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05, if a Shareholder (In the “Drag-Along Seller”) proposes to Transfer (not including, however, event that at any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control time (i) the LLC proposes to sell shares of Common Stock owned by it to any Third Party Proposed Purchaser, other than any Transfer (1) pursuant to a Registration or Parties Rule 144, (2) to an Affiliate, or (3) to a Shareholder who is a member of the LLC in connection with a distribution to such member in accordance with the LLC Agreement or (ii) to any Person in connection with a reorganization or restructuring of the Company Dragging Majority Members (as determined by the Board of Directors (the “Board”) so long as each Stockholder defined in the Company maintains their proportionate economic and voting interest in LLC Agreement) (1) propose to transfer Units such that the capital stock (or equivalent securitiesDragging Majority Members would have drag along rights under Section 12.9(c) of the successor entity LLC Agreement with respect to any Units held by any Management Shareholder (in its capacity as a Management Member under the Company LLC Agreement) or (2) desires to effect an Exit Event (as defined in the “Drag-Along Transferee”) in a single transaction or in a series of related transactionsLLC Agreement), and then the LLC may provide each Other Shareholder written notice (any such Transfer, a “Drag-Along Notice”) of such Proposed Sale and the Material Terms thereof not less than 25 business days prior to the proposed closing date of the Proposed Sale and each such Other Shareholder hereby agrees to sell to such Proposed Purchaser that number of shares of Common Stock equal to the product of (i) the number of shares of Common Stock then held, or acquirable by such Other Shareholder pursuant to the exercise of Exchange Options or of options (to the extent exercisable, including as a result of the Proposed Sale”) granted to such Other Shareholder under any Option Plan multiplied by (ii) the aggregate percentage of the Common Stock held by the LLC that is represented by the Common Stock that the LLC proposes to sell in the Proposed Sale (or, in the case of a sale of Units by the Dragging Majority Members, or an Exit Event, the aggregate percentage of Units owned by Dragging Majority Members that is represented by the Units that the Dragging Majority Members propose to sell in the Proposed Sale).
(b) Subject to Section 6.2(f), the shares of Common Stock subject to a Drag-Along Seller may at its option require each other Stockholder Notice (including any shares of Common Stock acquired pursuant to Transfer the exercise of options that are subject to such Drag-Along Portion of Notice) will be included in the class of Shares (“Drag-Along Rights”) then held by such other StockholderProposed Sale pursuant hereto and to any agreement with the Proposed Purchaser relating thereto, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and subject to the same conditions applicable to the shares of Common Stock which the LLC proposes to sell (or Units which the Dragging Majority Members propose to sell) in the Proposed Sale. Such terms and conditions shall include, without limitation, (i) the sale consideration (which shall be reduced by the fees and expenses incurred by the LLC and the Company, to the extent applicable (or, in the case of a sale of Units, the LLC, the Dragging Majority Members or other members of the LLC, as applicable) in connection with the DragProposed Sale); provided, that in the case of a sale of Units by the Dragging Majority Members, the sale consideration shall be the implied per share consideration with respect to shares underlying the Units proposed to be sold, and (ii) the provision of information, representations, warranties, covenants and requisite indemnifications; provided, however, that (x) any representations and warranties relating specifically to any Shareholder shall only be made by that Shareholder, (y) any indemnification provided by the Shareholders (other than with respect to the representations referenced in the foregoing subsection (x)) shall be based on the number of shares of Common Stock being sold by each Shareholder in the Proposed Sale (including any shares of Common Stock acquired pursuant to the exercise of options), either on a several, not joint, basis or solely with recourse to an escrow established for the benefit of the Proposed Purchaser (it being understood and agreed that the Shareholders’ contributions to such escrow shall be on a pro-Along Seller; provided rata basis in accordance with the number of shares of Common Stock (including shares acquired pursuant to the exercise of options) plus the number of shares of Common Stock underlying the Units, if any, being sold in such Proposed Sale), it being understood and agreed that any such indemnification obligation of a Shareholder shall in no event exceed the net proceeds to such Shareholder from such Proposed Sale, and (z) if the Other Shareholders holding a majority of the Shares held by all of the Other Shareholders consent, the form of consideration to be received by the LLC (which shall be reduced by the fees and expenses incurred by the LLC and the Company in connection with the Proposed Sale (or, in the case of a sale of Units, the LLC, the Dragging Majority Members or other Stockholder members of the LLC, as applicable) in connection with the Proposed Sale may be different from that holds options received by the exercise price per share of which is greater than Other Shareholders (including, but not limited to, non-cash consideration) so long as the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion value of the consideration to be received by the LLC (which shall be reduced by the fees and expenses incurred by the LLC and the Company, to the extent applicable) (or implied per share value of the consideration to be received by the Dragging Majority Members or any of their Affiliates, or any other members of the LLC, as applicable) is the same or less than that to be received by the Other Shareholders (as determined by the Board in good faith). Notwithstanding anything to the contrary, in determining the consideration received by the LLC (or the Dragging Majority Members or any of their Affiliates, or any other members of the LLC, as applicable) pursuant to Section 6.2, any management, advisory or transaction fees payable to the LLC or any of its members or any of their Affiliates in connection with such Drag-Along SaleTransfer shall not be included in determining the sale proceeds and will not be deemed consideration received by the LLC, orthe Dragging Majority Members or any of their Affiliates, if or any other members of the LLC, as applicable. No Other Shareholders shall exercise any dissenter’s rights with respect to the consummation of any such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares Proposed Sale pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof6.2.
(c) Each Other Shareholder will, if requested by the LLC, execute and deliver a Custody Agreement and Power of Attorney in form and substance satisfactory to the LLC with respect to the shares of Common Stock which are to be included in the Proposed Sale pursuant to this Section 6.2. The Custody Agreement and Power of Attorney will provide, among other things, that each such Other Shareholder will deliver to and deposit in custody with the LLC, named as the custodian and attorney-in-fact therein, a certificate or certificates representing such shares of Common Stock (duly endorsed in blank by the registered owner or owners thereof or accompanied by duly endorsed stock powers in blank) and irrevocably appoint the LLC as such Other Shareholder’s agent and attorney-in-fact with full power and authority to act under a custody agreement and power of attorney on behalf of such Other Shareholder with respect to the matters specified therein.
(d) Each Other Shareholder agrees that he or she will execute such other agreements as the LLC (or the Dragging Majority Members, as applicable) may reasonably request in connection with the consummation of a Proposed Sale and Drag-Along Seller Notice and the transactions contemplated thereby, including, without limitation, any purchase, merger or recapitalization agreement, escrow agreement or other ancillary agreements, proxies, written consents in lieu of meetings or waivers of appraisal rights. The drag-along provisions set forth in this Section 6.2 shall have apply regardless of the form of the transaction in respect of which the Drag-Along Notice is delivered, including without limitation, a period sale of thirty Shares, a merger, consolidation, sale of assets and distribution of proceeds or otherwise.
(30e) days from Each Other Shareholder holding shares of Common Stock that are acquirable pursuant to the date exercise of receipt Exchange Options or any other options granted under any Option Plan and that are to be included in a Proposed Sale pursuant to a Drag-Along Notice agrees to provide to the LLC, upon delivery of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided thatan irrevocable commitment to exercise such Exchange Options or, if such Drag-Along Sale is subject to regulatory approvalexercisable (including as a result of the Proposed Sale), such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been receivedother options, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return subject only to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along SellerProposed Sale.
(f) A Drag-Along Notwithstanding anything to the contrary, if in any Proposed Sale may also of Units, the Dragging Majority Members are informed that the Proposed Purchaser in good faith desires to proceed with such sale with the inclusion of additional shares of Common Stock held by any Other Shareholder (including any shares exercisable upon the exercise of options), in lieu of all or a portion of Units held by such Other Shareholder which would be affected includable therein by a merger or other corporate transaction and virtue of the Dragging Majority Members’ drag along rights pursuant to the LLC Agreement, then in the discretion of the Dragging Majority Members, each Stockholder Other Shareholder agrees to vote hissell in the Proposed Sale, her in lieu of selling all or its Shares a portion of Units (and in addition to shares of Common Stock agreed to be sold pursuant to Section 6.2(a)), such number of additional shares of Common Stock (including shares exercisable upon the exercise of options) equaling the number of shares of Common Stock beneficially deemed to be owned by virtue of such Other Shareholder’s ownership of Units that are entitled to vote or execute proxies or written consents, as would otherwise be includable in the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Proposed Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Drag-Along Rights. (a) Subject to Sections 4.04(g) 4.01(e), and 4.054.02, if a Shareholder FP (the “Drag"DRAG-Along Seller”ALONG SELLER") proposes proposes:
(i) to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares less than 50% of its Aggregate Ownership of any class of Shares that results Company Securities to a Third Party (the "DRAG-ALONG TRANSFEREE") in a Change of Control (i) to any Third Party or Parties or bona fide sale, or
(ii) to Transfer Company Securities in any Person in connection amount that, together with a reorganization the Company Securities to be Transferred by the Other Shareholders pursuant to this Section 4.01(a), constitutes more than 50% of the voting power or restructuring the outstanding principal, as the case may be, of any class of the Company as determined by the Board of Directors Securities then outstanding, (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity Transfers referred to the Company in clauses (the “Drag-Along Transferee”i) in a single transaction or in a series of related transactions, and (any such Transferii) above, a “Drag"DRAG-Along Sale”ALONG SALE"), the Drag-Along Seller may at its option require each other Stockholder all Other Securityholders (i) to Transfer the Drag-Along Portion of the such class of Shares Company Securities (“Drag"DRAG-Along Rights”ALONG RIGHTS") then held by such other Stockholderevery Other Securityholder, and (ii) in the case of a Drag-Along Sale involving Common Shares (but subject to and at the closing of the Drag-Along Sale) ), to exercise such number of options for Common Shares that are vested (or would become vested on or prior to the consummation of the Drag-Along Sale) held by such other Stockholder every Other Securityholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by Company Securities of each such other StockholderOther Securityholder, (i) in each case for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, Company Securities and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; , provided that any other Stockholder Other Securityholder that holds such options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) . The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders Other Securityholders (a “Drag- Along Sale Notice”"DRAG-ALONG SALE NOTICE") not later less than twenty (20) 10 Business Days prior to the proposed Drag-Along Sale. The Drag- Drag-Along Sale Notice shall identify the Drag-Along Transfereetransferee, the number and class of Shares Company Securities subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag"DRAG-Along Sale Price”ALONG SALE PRICE") and all other material terms and conditions of the Drag-Along Sale. The number of Shares Company Securities to be sold by each other Stockholder Other Securityholder shall be the Drag-Along Portion of the class of Shares Company Securities that such other Stockholder Other Securityholder owns. Each other Stockholder Other Securityholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of all its Shares Company Securities as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) five Business Days after the date of the Drag-Along Sale Notice (the “Drag"DRAG-Along Sale Notice Period”ALONG SALE NOTICE PERIOD"), each of the other Stockholders Other Securityholders shall deliver to a representative of the Drag-Along Seller (designated in the Drag-Along Sale, Sale Notice) the certificates and other applicable instruments representing the Shares Company Securities of such other Stockholder Other Securityholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares Company Securities on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares Company Securities pursuant to this Section 4.04(b4.01(a) at the closing for such Drag-Along Sale against delivery to such other Stockholder Other Securityholder of the consideration thereforetherefor. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder Other Securityholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummatedSeller, the Company (subject to reversal under Section 4.01(b)) shall cause the books and records of the Company to show that such Shares Company Securities are bound by the provisions of this Section 4.04(b4.01(a) and that such Shares Company Securities shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(cb) The Drag-Along Seller shall have a period of thirty (30) 180 days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) 180-day period shall be extended until the expiration of five (5) 10 Business Days after all such approvals have been received, but in no event later than sixty (60) 365 days following the effective date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any Other Securityholders the limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares Company Securities that such other Stockholders Other Securityholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders Other Securityholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares Company Securities owned by the other Stockholders Other Securityholders shall again be in effect.
(dc) Concurrently with the consummation of the Drag-Along SaleTransfer of Company Securities pursuant to this Section 4.01, the Drag-Along Seller shall give notice thereof to the other StockholdersOther Securityholders, shall remit or cause to be remitted to each of the other Stockholders all Other Securityholders that have surrendered their certificates and other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s Other Securityholder's wire transfer instructions, or otherwise as directed by such Other Securityholder) for the Shares Company Securities Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer and the terms thereof as may be reasonably requested by such other StockholdersOther Securityholders.
(ed) Notwithstanding anything contained in this Section 4.044.01, there shall be no liability on the part of the Drag- Drag-Along Seller to the other Stockholders Other Securityholders (other than the obligation to return any the limited power-of-attorney and the certificates and other applicable instruments representing Shares Company Securities received by the Drag-Along Seller) if the Transfer of Shares Company Securities pursuant to this Section 4.04 4.01 is not consummated for whatever reason, regardless of whether the Drag- Drag-Along Seller has delivered a Drag-Along Sale Notice. The decision Whether to effect a Transfer of Shares Company Securities pursuant to this Section 4.04 4.01 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(he) The provisions of this Section 4.04 4.01 shall terminate upon not apply to any proposed Transfer of Company Securities by the consummation of the Initial Drag-Along Seller in a Public OfferingOffering or pursuant to Rule 144.
Appears in 1 contract
Samples: Restricted Securities Purchase Agreement (Ultra Clean Holdings Inc)
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05Section 5.03, if a Shareholder at any time, prior to an IPO, the Avista Entities (the “Drag-Along Seller”) proposes propose to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results Equity Securities in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, transactions that qualifies as a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder that is not the Drag-Along Seller (the “Other Stockholders”) to participate in such Drag-Along Sale. Each Other Stockholder hereby agrees (i) if such Drag-Along Sale is structured as a Transfer of Equity Securities, whether by stock sale, merger, consolidation, recapitalization, reclassification or similar transaction, to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) Equity Securities then held by such other StockholderOther Stockholder on the same terms and conditions as are applicable to the Drag-Along Seller, including the same per share consideration with respect to a specific class of Equity Securities; provided, that the terms of such Drag Along Sale may provide different per share consideration for different classes of Equity Securities, and (ii) in the case of each Management Stockholder, subject to and at the closing of the Drag-Along Sale) , to exercise such number of options or other equity based awards for Common Shares Incentive Securities held by such other Management Stockholder as is required in order that a sufficient number of Common Shares Equity Securities are available to Transfer the relevant Drag-Along Portion of Shares held by each Equity Securities of such other Management Stockholder, (i) in each case for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, Equity Securities and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that that, with respect to any such options or other Stockholder that holds options the equity based awards having an exercise price per share of which that is greater than the per share price at which the Common Shares Equity Securities are to be Transferred to the Drag-Along Transferee, if such Management Stockholder shall, to the extent required by the Drag-Along Seller to exercise such options, may, options or other equity based awards in place of such exercise, submit to irrevocable cancellation thereof (subject to Section 5.02(e)) without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares Equity Securities acquired upon exercise of such options, options or the Drag-Along Sale is not consummatedother equity based awards, such options or other equity based awards shall be deemed not to have been exercised or canceled, as applicable. All Other Stockholders shall reasonably cooperate in, and shall take all actions requested by the Drag-Along Seller that are reasonably necessary or desirable to consummate the Drag-Along Sale, including (i) voting their respective Equity Securities (or executing and delivering any written consents in lieu thereof) in favor of the Drag-Along Sale (to the extent a vote is required) and all actions deemed reasonably necessary by the Drag-Along Seller in connection with the Drag-Along Sale, including voting to approve a Drag-Along Sale if such Drag-Along Sale is structured as a merger or a sale of all or substantially all of the assets of the Company, and against any action or proposal that may prevent, hinder or impede the consummation of the Drag-Along Sale, (ii) waiving any dissenters’ or appraisal rights to which they may be entitled in connection with the Drag-Along Sale, (iii) subject to Section 5.03, entering into agreements with the Drag-Along Transferee on terms substantially identical to those (if any) entered into between the Drag-Along Transferee and the Drag-Along Seller, and (iv) take all actions necessary to cause the Board to approve the Drag-Along Sale, including, if applicable, removing and replacing any Avista Designees pursuant to Section 2.02. For purposes of clarity, the Drag-Along Seller may cause a Drag-Along Sale pursuant to this Section 5.02(a) in a Transfer for less than all of the outstanding Equity Securities.
(b) Each Other Stockholder hereby grants to the Drag-Along Seller, an irrevocable proxy coupled with an interest to vote, including in any action by written consent, such Other Stockholder’s Equity Securities in accordance with such Other Stockholder’s agreements in this Section 5.02 and a power of attorney to execute and deliver in the name and on behalf of such Other Stockholder all such agreements, instruments and other documentation (including any written consents of stockholders) as is required to Transfer the Equity Securities held by such Other Stockholder to the Drag-Along Transferee.
(c) The Drag-Along Seller shall provide written notice of such Drag-Along Sale to the other Other Stockholders (a “Drag- Drag-Along Sale Notice”) not later than twenty ten (2010) Business Days days prior to the proposed Drag-Along Sale. The Drag- Drag-Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares Equity Securities subject to the Drag-Along Sale, Sale and the type and amount (or value) of consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05Section 5.03, if a Shareholder at any time, prior to an IPO, the Avista Entities (the “Drag-Along Seller”) proposes propose to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results Equity Securities in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, transactions that qualifies as a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder that is not the Drag-Along Seller (the “Other Stockholders”) to participate in such Drag-Along Sale. Each Other Stockholder hereby agrees (i) if such Drag-Along Sale is structured as a Transfer of Equity Securities, whether by stock sale, merger, consolidation, recapitalization, reclassification or similar transaction, to Transfer the Drag-Along Portion of the applicable class or classes of Shares (“Drag-Along Rights”) Equity Securities then held by such other StockholderOther Stockholder on the same terms and conditions as are applicable to the Drag-Along Seller, including the same per share consideration with respect to a specific class of Equity Securities; provided, that the terms of such Drag Along Sale may provide different per share consideration for different classes of Equity Securities to the extent consistent with the Company’s certificate of incorporation, and (ii) in the case of each Management Stockholder, subject to and at the closing of the Drag-Along Sale) , to exercise exercise, immediately prior to the Drag-Along Sale such number of options or other equity based awards for Common Shares Incentive Securities held by such other Management Stockholder as is required (taking into account all options, shares and other Equity Securities held by such Management Stockholder) in order that a sufficient number of Common Shares Equity Securities are available to Transfer the relevant Drag-Along Portion of Shares held by each Equity Securities of such other Management Stockholder, (i) in each case for the same consideration per share or unit of the relevant class of Shares, Equity Securities (iisubject to any exercise price and any required withholding or other taxes) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that that, with respect to any such options or other Stockholder that holds options the equity based awards having an exercise price per share of which that is greater than the per share price at which the Common Shares Equity Securities are to be Transferred to the Drag-Along Transferee, if such Management Stockholder shall, to the extent required by the Drag-Along Seller to exercise such options, may, options or other equity based awards in place of such exercise, submit to irrevocable cancellation thereof (subject to Section 5.02(e)) without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares Equity Securities acquired upon exercise of such options, options or the Drag-Along Sale is not consummatedother equity based awards, such options or other equity based awards shall be deemed not to have been exercised or canceled, as applicable. All Other Stockholders shall reasonably cooperate in, and shall take all actions requested by the Drag-Along Seller that are reasonably necessary or desirable to consummate the Drag-Along Sale, including (i) voting their respective Equity Securities (or executing and delivering any written consents in lieu thereof) in favor of the Drag-Along Sale (to the extent a vote is required) and all actions deemed reasonably necessary by the Drag-Along Seller in connection with the Drag-Along Sale, including voting to approve a Drag-Along Sale if such Drag-Along Sale is structured as a merger or a sale of all or substantially all of the assets of the Company, and against any action or proposal that may prevent, hinder or impede the consummation of the Drag-Along Sale, (ii) waiving any dissenters’ or appraisal rights to which they may be entitled in connection with the Drag-Along Sale, (iii) subject to Section 5.03, entering into agreements with the Drag-Along Transferee on terms substantially identical to those (if any) entered into between the Drag-Along Transferee and the Drag-Along Seller, and (iv) take all actions necessary to cause the Board to approve the Drag-Along Sale, including, if applicable, removing and replacing any Avista Designees pursuant to Section 2.02. For purposes of clarity, the Drag-Along Seller may cause a Drag-Along Sale pursuant to this Section 5.02(a) in a Transfer for less than all of the outstanding Equity Securities of any class.
(b) Each Other Stockholder, other than Kinderhook, hereby grants to the Drag-Along Seller, an irrevocable proxy coupled with an interest to vote, including in any action by written consent, such Other Stockholder’s Equity Securities in accordance with such Other Stockholder’s agreements in this Section 5.02 and a power of attorney to execute and deliver in the name and on behalf of such Other Stockholder all such agreements, instruments and other documentation (including any written consents of stockholders) as is required to Transfer the applicable Equity Securities held by such Other Stockholder to the Drag-Along Transferee.
(c) The Drag-Along Seller shall provide written notice of such Drag-Along Sale to the other Other Stockholders (a “Drag- Drag-Along Sale Notice”) not later than twenty ten (2010) Business Days days prior to the proposed Drag-Along Sale. The Drag- Drag-Along Sale Notice shall identify the Drag-Along Transferee, the number and class of Shares Equity Securities subject to the Drag-Along Sale, Sale and the type and amount (or value) of consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Drag-Along Rights. (a) Subject At any time prior to Sections 4.04(gan IPO, in connection with a Change of Control approved by Requisite Consent pursuant to Section 3.2(i), the Investors (together, the “Selling Stockholders”) may exercise drag-along rights in accordance with the terms, conditions and 4.05, if a Shareholder procedures set forth herein (the “Drag-Along SellerTransfer”).
(b) The Selling Stockholders shall promptly give written notice (a “Drag-Along Notice”) proposes to Transfer each other Stockholder and each Key Individual (not includingtogether, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, Stockholders” and (any such Transfereach, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along RightsStockholder”) then held by such other Stockholder, and not later than fifteen (subject 15) days prior to and at the closing consummation of the Drag-Along Sale) Transfer of any election by the Selling Stockholder to exercise such their drag-along rights under this Section 4.3, setting forth the name of the Transferee, the total number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are Share Equivalents proposed to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such optionsSelling Stockholders, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number amount and form of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) such Share Equivalents, and all other material terms and conditions of the Drag-Along SaleTransfer. The Such notice shall also specify the number of Shares to be sold by each other Stockholder shall be the Share Equivalents such Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the transfer, up to such Drag-Along Sale on the terms and conditions as the Stockholder’s Pro Rata Portion of Share Equivalents. With respect to any Shares for which a Drag-Along Seller is participating as set forth in Stockholder holds vested and exercisable but unexercised Options, to the extent that such Shares are to be sold pursuant to this Section 4.3, the price per Share shall be reduced by the exercise price of such Options. Any transfer of Share Equivalents by a Drag-Along Sale Notice and Stockholder pursuant to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer terms hereof shall be at the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth price per Share Equivalent specified in the Drag-Along Notice and wire transfer instructions for payment all Stockholders shall receive the same form of the cash portion of the consideration to be received in such connection with a Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereofTransfer.
(c) The Each Drag-Along Seller shall have a period of thirty Stockholder must agree (30i) days from to make the date of receipt of same representations, warranties, covenants, indemnities and agreements as made by the Selling Stockholders in connection with the Drag-Along Sale Transfer (other than any non-competition or similar agreements or covenants that would bind the Drag-Along Stockholder or its Affiliates), and (ii) to the same terms and conditions to the transfer as the Selling Stockholders agree. Notwithstanding the foregoing, however, all such representations, warranties, covenants, indemnities and agreements shall be made by each Selling Stockholder and Drag-Along Stockholder severally and not jointly and any liability for breach of any representations and warranties related to the Parent (which shall exclude, for the sake of clarity, all representations and indemnities concerning such Selling Stockholder’s title to its Share Equivalents and authority, power and right to enter into and consummate the Transfer without contravention of any law or agreement which representations and warranties shall be personal to such Selling Stockholder and also several and not joint)) shall be allocated among each Selling Stockholder and Drag-Along Stockholder pro rata based on the relative number of Share Equivalents Transferred by each of them, and the aggregate amount of liability for each such Selling Stockholder and Drag-Along Stockholder shall not exceed the U.S. dollar value of the total consideration to be paid by the Transferee to such Selling Stockholder or Drag-Along Stockholder, respectively. If the Investors are transferring less than all of the Share Equivalents held by the Investors, then each Key Individual will transfer a number of Share Equivalents and/or Options (as may be provided in a Drag-Along Notice by the applicable Investors, in their sole discretion) equal to the product of the following: (x) the number of Share Equivalents (including any Shares issued in respect of exercised Options or issuable upon the exercise of Options to the extent such Options are then vested and exercisable) and/or Options beneficially owned by such Key Individual multiplied by (y) a fraction, the numerator of which is the aggregate number of Share Equivalents being transferred by the Investors and the denominator of which equals the aggregate number of Share Equivalents beneficially owned by the Investors.
(d) All Stockholders shall cooperate in, and shall take all actions that the Selling Stockholders deem reasonably necessary or desirable to consummate the Drag-Along Sale on Transfer, including, without limitation, as applicable, (i) voting their respective Share Equivalents (or executing and delivering any written consents in lieu thereof) in favor of the terms and conditions set forth in such Drag-Along Sale NoticeTransfer and all actions deemed necessary or appropriate by the Selling Stockholders in connection with the Drag-Along Transfer, provided that, including voting to approve a Drag-Along Transfer if such Drag-Along Sale Transfer is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration structured as a merger or a sale of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt or substantially all of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each assets of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed TransferParent, and all the restrictions on Transfer contained in this Agreement against any action or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with proposal that may prevent, hinder or impede the consummation of the Drag-Along SaleTransfer, (ii) to the extent permitted by applicable Law, waiving any dissenters’ or appraisal rights to which they may be entitled in connection with the Drag-Along Seller shall give notice thereof to the other StockholdersTransfer, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of (iii) entering into agreements with the Drag-Along Sale Buyer on terms substantially identical to those (if any) entered into between the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with Drag-Along Buyer and the Selling Stockholders, and (iv) selling such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence Pro Rata Portion of the completion and time of completion of such Transfer as may be reasonably requested by such other StockholdersShare Equivalents being sold.
(e) Notwithstanding anything contained Solely for purposes of Section 4.3(c) and Section 4.3(d) and in this Section 4.04, there shall be no liability on order to secure the part performance of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the each Drag-Along SellerStockholder’s obligations under Section 4.3(c) if the Transfer of Shares pursuant to this and Section 4.04 is not consummated for whatever reason4.3(d), regardless of whether the Drag- Along Seller has delivered a each Drag-Along Sale Notice. The decision to effect a Transfer Stockholder hereby irrevocably appoints each of Shares pursuant to this Section 4.04 by the Selling Stockholders as the attorney-in-fact and proxy of such Drag-Along Seller is Stockholder (with full power of substitution) to vote, provide a written consent or take any other action with respect to its Shareholder Equivalents as described in the sole this paragraph, which proxy shall become effective immediately and absolute discretion of the without further action by such Drag-Along SellerStockholder upon receipt by it or by the Selling Stockholders (and delivery to such Drag-Along Stockholder) of a signed letter of intent or other commitment from a qualified Drag Along Transfer Person to pursue a Drag Along Transfer based on specific terms and conditions outlined in such letter of intent or other commitment, including, without limitation, a final purchase price or purchase price formula or other definitive consideration. Such proxy shall be irrevocable and coupled with an interest, and each Drag-Along Stockholder shall take such further action and execute such other instruments as may be necessary to effectuate the intent of this proxy and hereby revoke any proxy previously granted by it with respect to the matters set forth in Section 4.3(c) and Section 4.3(d) with respect to the Share Equivalents owned by such Drag-Along Stockholder.
(f) A If any Drag-Along Sale Stockholder fails to transfer the Share Equivalents to be sold pursuant to this Section 4.3 to the applicable acquirer of such Share Equivalents (the “Drag-Along Buyer”), the Selling Stockholders may, at their option, in addition to all other remedies they may also be affected by a merger have, deposit the purchase price (including any promissory note constituting all or other corporate transaction any portion thereof) for such Share Equivalents with any national bank or trust company having combined capital, surplus and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as undivided profits in excess of $500 million (the case may be“Escrow Agent”), and thereupon all of such Drag-Along Stockholder’s rights in and to take all other actions necessary in order such Share Equivalents shall terminate. Thereafter, upon delivery to approve the consummation Parent by such Drag-Along Stockholder of appropriate documentation evidencing the transfer of such Share Equivalents to the Drag-Along SaleBuyer, the Selling Stockholders shall instruct the Escrow Agent to deliver the purchase price (without any interest from the date of the closing to the date of such delivery, any such interest to accrue to the Parent) to such Drag-Along Stockholder.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to In connection with a Drag-Along Sale or any related transaction that Stockholder or any Transfer, if requested by a majority of the members of the Board, the Parent will promptly engage, on customary terms (including customary indemnification from the Parent), a nationally recognized investment banking firm selected by the Selling Stockholders to provide financial advisory services to the Parent, the Selling Stockholders and the other Person may have by virtue ofStockholders, or with respect to, any shares and the Companies shall pay the fees and expenses of Company Shares owned by Stockholder with respect to a Drag-Along Salesuch investment banking firm.
(h) In connection with a Drag-Along Transfer, the Parent will, if applicable, enter into a definitive agreement with the proposed transferee(s) providing for such Transfer and make and agree to representations, warranties, covenants and indemnities and other similar agreements that are reasonable and customary for negotiated transactions of the type contemplated by such Transfer.
(i) The provisions of this Section 4.04 shall terminate Parent agrees to cooperate with any Stockholder and any proposed transferee, and their respective advisors, to facilitate and effect any Drag-Along Transfer and, upon the consummation request of any Selling Stockholder, subject to any proposed transferee executing a reasonably satisfactory confidentiality agreement with the Initial Public OfferingParent, the Parent will, and will cause its and its Subsidiaries’ employees and personnel to, use its and their reasonable best efforts to facilitate and support any due diligence process being undertaken in connection with such proposed Drag-Along Transfer.
(j) The Parent and the Stockholders will cooperate in the obtaining of all governmental and third-party approvals and consents reasonably necessary or desirable to consummate such Drag-Along Transfer.
(k) All reasonable costs and expenses incurred by the Stockholders or the Parent in connection with any proposed Drag-Along Transfer (whether or not consummated), including all attorneys fees and charges, all accounting fees and charges and all finders, brokerage or investment banking fees, charges or commissions, shall be paid by the Parent.
Appears in 1 contract
Samples: Major Stockholders’ Agreement (TransUnion Holding Company, Inc.)
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05, if a Shareholder (the “Drag-Along Seller”) If DCCLP proposes to Transfer (not including, however, any pledge, encumbrance sell or hypothecation) any shares otherwise dispose of any class of Control Shares that results in connection with an Extraordinary Transaction (a Change of Control "Drag Trigger Transaction"), to any Person (a "Drag Along Purchaser"), then DCCLP shall be entitled to provide an irrevocable written election (a "Drag Along Election") to Lender, which election shall (i) identify the number of Control Shares which DCCLP proposes to any Third Party sell or Parties or (ii) to any Person otherwise dispose of in connection with a reorganization or restructuring of the Company as determined by the Board of Directors such Drag Trigger Transaction (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”)shares, the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of "Offered Drag Shares"), (ii) in cashidentify the proposed purchase price per share at which DCCLP intends to sell the Offered Drag Shares, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of such Drag Trigger Transaction and (iv) advise Lender that DCCLP irrevocably elects to exercise its rights pursuant to this Section 6.2. In such event, Lender shall be required (the Drag-"Drag Along Sale. The Obligation") to (i) vote the Conversion Shares, if applicable, in favor of the Drag Trigger Transaction and (ii) sell or otherwise transfer (e.g., pursuant to a merger) to the Drag Along Purchaser, for the same purchase price per share at which DCCLP intends to sell the Offered Drag Shares, a number of Conversion Shares which is equal to the product obtained by multiplying (x) the number of Conversion Shares then held by Lender by (y) a fraction, the numerator of which shall be equal to the number of Offered Drag Shares and the denominator of which shall be equal to number of Control Shares held by DCCLP immediately prior to such Drag Trigger Transaction (such shares, the "Drag Conversion Shares").
(b) Lender shall effect its participation in connection with any Drag Trigger Transaction by delivering to the Drag Along Purchaser, or to DCCLP for delivery to the Drag Along Purchaser, one or more instruments or certificates, properly endorsed for transfer, representing the Drag Conversion Shares to be sold by each other Stockholder shall be Lender in connection with such Drag Trigger Transaction. At the Drag-Along Portion time of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date consummation of the Drag-Drag Trigger Transaction, the Drag Along Sale Notice Purchaser shall remit directly to Lender (or, if applicable, to the “Drag-Along Sale Notice Period”), each of exchange agent for the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash Drag Trigger Transaction) that portion of the consideration sales proceeds to be received which Lender is entitled by reason of its participation in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereofDrag Trigger Transaction.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on Lender's compliance with the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration provisions of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale this Section 6.2 shall not have been consummated during such periodconstitute a waiver of any of its rights under, or the Drag-Along Seller shall promptly return to each giving of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other consent under, any applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant heretostatute, together with law, rule or regulation or any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect agreement to such Shares owned by the other Stockholders shall again be in effectwhich Lender is a party.
(d) Concurrently with Notwithstanding the consummation provisions of Section 6.2(a) above, Lender shall not be required to (i) vote the Drag-Conversion Shares, if applicable, in favor of a Drag Trigger Transaction or (ii) sell or otherwise transfer any Drag Conversion Shares to any Drag Along Sale, Purchaser if the Drag-consideration per share to be received by Lender upon the sale or other transfer of such Drag Conversion Shares (the "Drag Along Seller shall give notice thereof Price") is less than the greater of (1) the Class A Market Price on the Business Day immediately preceding the Closing Date and (2) the Class A Market Price on the Business Day immediately preceding the date as of which the principal parties to the other StockholdersDrag Trigger Transaction publicly announce the entry into either a letter of intent or a definitive agreement, shall remit or cause to be remitted to each whichever is earlier (the "Announcement Date"), for the Drag Trigger Transaction (the "Pre-Announcement Price"). For purposes of this Section 6.2(d), if (x) the other Stockholders all other applicable instruments and the total form of consideration to be paid at received by Lender upon the closing sale or other transfer of the Drag-Along Sale Drag Conversion Shares in the Drag Trigger Transaction consists, either in whole or in part, of a fixed amount or fixed ratio of securities and the value of such securities is subject to fluctuation, and (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructionsy) for the Shares Transferred pursuant hereto and shall furnish such other evidence as of the completion and time of completion Announcement Date, the Drag Along Price, including the value of such Transfer securities, is equal to or greater than the Pre-Announcement Price, then, so long as may be reasonably requested by the value of such other Stockholders.
securities does not decline after the Announcement Date to such a level that the Drag Along Price is less than 80% of the Pre-Announcement Price, the condition in clause (e2) Notwithstanding anything contained in this Section 4.04, there above shall be no liability on the part of the Drag- Along Seller deemed to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Sellerhave been satisfied.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Samples: Stock Purchase Agreement (Bank of America Corp /De/)
Drag-Along Rights. (a) Subject to Sections 4.04(g) If the holders of at least a majority of the Series A Preferred then issued and 4.05, if a Shareholder outstanding (the “Drag-Drag Along SellerInvestors”) proposes desire to Transfer (not including, however, any pledge, encumbrance or hypothecation) any sell their shares of Preferred Stock (or the shares of Common Stock into which such shares of Preferred Stock have been converted) pursuant to a Bona Fide Sale approved by the Board where all Stockholders will receive the same form and rate of consideration after giving effect to any class applicable liquidation or other preferences set forth in the Certificate of Shares Incorporation of the Company, then the Drag Along Investors shall furnish a written notice to each of the other Stockholders (the “Drag Along Notice”), which notice shall set forth, in reasonable detail, the principal terms of the Bona Fide Sale. Each Stockholder hereby agrees that results in if the Drag Along Investors desire to consummate a Change of Control sale pursuant to a Bona Fide Sale and (i) the Bona Fide Sale involves the sale of at least a majority of the issued and outstanding shares of capital stock of the Company, each Stockholder shall be required to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring sell the same percentage of the shares of capital stock of the Company held by him or it as determined proposed to be sold by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity Drag Along Investors pursuant to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise Bona Fide Sale on the same terms and conditions as set forth in the Drag-Along SellerBona Fide Sale; provided that any other or (ii) the Bona Fide Sale involves the merger, recapitalization, consolidation or sale or exclusive license of all or substantially all of the assets of the Company, each Stockholder that holds options hereby agrees to vote all of the exercise price per share shares of which is greater than capital stock of the per share price at which the Common Shares are Company held by him or it in favor of, and to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummatedconsent to, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Bona Fide Sale. The Drag- Along Sale Notice shall identify Notwithstanding the Drag-Along Transfereeforegoing, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other no Investor or Stockholder shall be required as part of a Bona Fide Sale to participate become subject to a hold-back, indemnity or similar provision which involves (x) joint and several liability or (y) possible recourse in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date excess of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each shares of capital stock of the other Stockholders shall deliver to a representative of Company held by such Investor or Stockholder or the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller proceeds received or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received by such Investor or Stockholder in such Drag-Along Bona Fide Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to . For purposes of this Section 4.04(b3.6, “Bona Fide Sale” shall mean a bona fide written offer from any Person unaffiliated with any Stockholder (i) at the closing for such Drag-Along Sale against delivery to such other Stockholder purchase or exclusively license all or substantially all of the consideration therefore. If an other Stockholder should fail assets of the Company, (ii) to deliver purchase at least a majority of the outstanding capital stock of the Company, (iii) to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to merge or consolidate the Company and any representative designated by with another entity, as a result of which at least a majority of the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records voting securities of the Company to show that such Shares or surviving entity is held by Persons other than those who are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt Stockholders of the Drag-Along Sale Notice Company immediately prior to consummate such transaction; or (iv) the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt recapitalization of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each Company as a result of which at least a majority of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession voting securities of the Drag-Along Seller executed Company is held by Persons other than those who are Stockholders of the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect Company immediately prior to such Shares owned by the other Stockholders shall again be in effecttransaction.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Drag-Along Rights. (a) Subject In the event that Cinergy desires to Sections 4.04(g) and 4.05Transfer, if a Shareholder (the “Drag-Along Seller”) proposes to Transfer (not including, however, in any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and all of the Units owned by the Cinergy Holders to any Third-Party Purchaser that is not an Affiliate of Cinergy (any in such Transfercontext, a “Drag-Drag Along Purchaser”), then, subject to Section 11.5(g) and satisfaction of the conditions set forth in Section 11.5(f), Cinergy shall have the right (a “Drag Along Right”) to require all Investor Members to Transfer all of their respective Units to the Drag Along Purchaser in accordance with the procedures set forth in this Section 11.5 (such Transfer that complies with the requirements of this Section 11.5, a “Drag Along Sale”)) at the per Unit price (which shall be payable in cash or Listed Securities (that are Freely Tradable) valued at their weighted average closing price on the stock exchange of such Listed Securities during the last thirty (30) trading days immediately preceding the date on which such Listed Securities are to be paid; provided, however, that if and to the extent such payment is made in the form of Listed Securities, the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion receipt of such payment shall in no event result in any Investor Member holding more than five percent (5%) of the class Listed Securities of Shares (“Drag-Along Rights”such issuer) then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options Transfer of Units by the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred Cinergy Holders to the Drag-Drag Along TransfereePurchaser (with each Investor Member participating in such Transfer on a pro rata basis in proportion to their respective Company Percentage Interest, if required by relative to the Drag-Along Seller to exercise such options, may, in place aggregate Company Percentage Interests of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If Cinergy and the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicableother Investor Members).
(b) The Drag-Following satisfaction of its obligations pursuant to Section 11.4, Cinergy may exercise its Drag Along Seller shall provide Right pursuant to this Section 11.5 by providing written notice of such Drag-Along Sale its election to the other Stockholders do so to each Investor Member (a “Drag- Drag Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice ), which notice shall identify the Drag-Drag Along Transferee, Purchaser and specify the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) price per Unit and all other material terms and conditions of the Drag-Drag Along Sale. The number of Shares to be sold by each other Stockholder shall be , including the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the anticipated closing date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Drag Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Drag Along Seller Sale must be consummated within the Regulatory Approval Period applicable to the Transfer by the Cinergy Holders to the Drag Along Purchaser. No Investor Member shall have a Transfer or agree to Transfer any Units to any Person other than the Drag Along Purchaser during the period of thirty (30) days from between the date it receives a Drag Along Notice and the conclusion of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale NoticeRegulatory Approval Period. If the Drag-Drag Along Sale shall not have been consummated during such periodRegulatory Approval Period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares the Units owned by the other Stockholders Members shall again be in effect.
(d) Concurrently with In the consummation of the Drag-event that Cinergy exercises its Drag Along SaleRight pursuant to this Section 11.5, the Drag-Along Seller Investor Members shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders take all other applicable instruments customary and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer reasonable actions as may be reasonably requested by necessary to consummate the Drag Along Sale, including making the Investor Representations and entering into such other Stockholdersdefinitive agreements as are customary for transactions of the nature of the proposed Transfer.
(e) Notwithstanding anything contained The Investor Members agree to (i) vote in this Section 4.04, there shall be no liability on the part favor of the Drag- transaction or transactions with the Drag Along Seller Purchaser and (ii) take all actions to the waive any dissenters, appraisal or other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Sellersimilar rights with respect thereto.
(f) A Drag-Notwithstanding anything to the contrary in this Agreement, Cinergy shall not have the right to exercise its Drag Along Right unless (i) the total consideration paid to New Investor in connection with such Drag Along Sale may also would cause New Investor to achieve at least a nine percent (9%) IRR on each Common Unit, (ii) each Investor Member receives in such Drag Along Sale the same consideration per Unit, in the same form, and otherwise on the same terms and conditions as are applicable to the sale of Units by the Cinergy Holders, (iii) in circumstances where Cinergy exercises its Drag Along Right hereunder in connection with a Cinergy Change of Control pursuant to Section 11.7, the total consideration paid to New Investor in connection with such Drag Along Sale would cause New Investor to receive at least the higher of: (A) nine percent (9%) IRR on each Common Unit or (B) Fair Market Value on each Common Unit, (iv) the liability of each Investor Member in such Drag Along Sale is several and not joint and several with any other Member, (v) the maximum liability of each Investor Member in the Drag Along Sale is capped in the aggregate at the portion of the purchase price received by such Investor Member, (vi) no Investor Member shall be affected by subject to any non-competition covenants or non-solicitation covenants (other than customary non-solicitation of senior employees with carve-outs permitting general solicitations and any hiring therefrom), (vii) no Investor Member shall be subject to liability in connection with the Drag Along Sale in excess of its pro rata share of the liability except with respect to Investor Representations, and (viii) no Investor Member will be required to make any representations and warranties in connection with such Drag Along Sale, other than the individual representations and warranties on a merger several basis and solely as to itself set forth on Schedule 11.5(f) (the “Investor Representations”), nor shall any Investor Member be required to make representations relating to the Company or any other corporate transaction Member. The parties shall use commercially reasonable efforts to cooperate with and provide reasonable assistance to Cinergy and each Stockholder agrees to vote his, her Investor Member participating in the Drag Along Sale in connection with obtaining or its Shares that are entitled to vote or execute proxies or written making any necessary consents, as the case may beapprovals, filings and notices from governmental authorities to take all other actions necessary in order to approve the consummation of the Drag-Along Saleconsummate a Transfer contemplated by this Section 11.5.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees Cinergy shall not have the right to cause to be waived and to prevent the exercise of, its Drag Along Right hereunder in connection with any rights transaction or series of appraisal, any dissenters’ rights and any similar rights relating to related transactions resulting in a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares Duke Change of Company Shares owned by Stockholder with respect to a Drag-Along SaleControl.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Samples: Limited Liability Company Operating Agreement (Duke Energy Indiana, LLC)
Drag-Along Rights. (a) Subject If at any time prior to Sections 4.04(ga Company Initial Public Offering, Holdings or any Company Stockholder (any such Person for purposes of this Section 2.05(a), the "Transferor") and 4.05, if wishes to transfer all of the shares of Company Common Stock owned by it (provided that such shares of Company Common Stock constitute more than 50% of all shares of Company Common Stock on a Shareholder Fully Diluted Basis (as defined in the Warrants) at such time) in a bona fide sale to any Person (the “"Proposed Transferee") pursuant to which the consideration to be paid by the Proposed Transferee consists solely of cash and freely tradeable securities with an active public market and the Transferor will not receive, in connection with the transactions contemplated at the time of such transfer, any other securities or options to acquire securities of the Company, then the Transferor shall have the right (the "Drag-Along Seller”Right") proposes to Transfer require each Warrant Securityholder to sell to the Proposed Transferee for the same per share consideration received by the Transferor all of the Conversion Shares and Warrants (not includingcalculated, however, any pledge, encumbrance or hypothecation) any shares in the case of any class Warrants, on the number of Conversion Shares that results in a Change of Control (ifor which such Warrant is exercisable at such time) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined held by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), Warrant Securityholder. To exercise the Drag-Along Seller may at its option require Right, the Transferor shall first give to the Company and each other Stockholder Warrant Securityholder (pursuant to Transfer a list provided by the Company) a written notice (a "Drag-Along Portion Notice") executed by the Transferor and the Proposed Transferee and containing (a) the number of shares of Company Common Stock that the Proposed Transferee proposes to acquire from the Transferor and its Permitted Transferee, and certifying that such shares constitute all of the class shares of Shares (“Drag-Along Rights”) then held Company Common Stock owned by such other Stockholder, the Transferor and (subject to its Permitted Transferees and at the closing more than 50% of the Drag-Along Sale) to exercise shares of Company Common Stock on a Fully Diluted Basis at such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholdertime, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice the name and address of such Drag-Along Sale to the other Stockholders Proposed Transferee and (a “Drag- Along Sale Notice”c) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transfereepurchase price, the number terms of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) payment and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold Proposed Transferee's offer, (d) a statement by each other Stockholder shall be the Drag-Along Portion of Proposed Transferee that the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten Proposed
(10i) Business Days after the date has been informed of the Drag-Along Sale Notice Right provided for in this Section 2.05(a) and (ii) has agreed to purchase the “Conversion Shares and Warrants in accordance with the terms of this Section 2.05(a) and (e) the aggregate number of Conversion Shares or Warrants owned by each Warrant Securityholder with respect to which the Transferor wishes to exercise its Drag-Along Sale Notice Period”Right pursuant to this Section 2.05(a). Each Warrant Securityholder shall thereafter be obligated to sell to the Proposed Transferee the Warrants and Conversion Shares subject to such Drag-Along Notice, each provided that the sale to the Proposed Transferee is consummated within 60 days of the other Stockholders shall deliver to a representative delivery of the Drag-Along Seller designated in Notice. If the Dragsale is not consummated within such 60-Along Saleday period, applicable instruments representing the then each affected Warrant Securityholder may sell, but shall no longer be obligated to sell, such Warrant Securityholder's Warrants or Conversion Shares of such other Stockholder pursuant to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 2.05(a) shall terminate not apply to transfers between the Transferor and any of its Affiliates or between any of its Affiliates.
(i) If at any time prior to a Holdings Initial Public Offering, Security Capital or any other Holdings Stockholder (any such Person for purposes of this Section 2.05(b), the "Transferor") wishes to transfer all of the shares of Holdings Common Stock owned by it (provided that such shares of Holdings Common Stock constitute more than 50% of all shares of Holdings Common Stock on a Fully Diluted Basis (as defined in the Warrants) at such time in a bona fide sale to any Person (the "Proposed Transferee") pursuant to which the consideration to be paid by the Proposed Transferee consists solely of cash and freely tradeable securities with an active public market and the Transferor will not receive, in connection with the transactions contemplated at the time of such transfer, any other securities or options to acquire securities of Holdings (any such proposed transfer, a "Redemption Transfer"), then the Transferor shall have the right to require the Company to redeem all, but not less than all, of the Warrants outstanding at such time in accordance with the terms thereof and all Conversion Shares outstanding on such date. The provisions of this Section 2.05(b) shall not apply to transfers between the Transferor and any of its Affiliates or between any of its Affiliates.
(ii) In addition, on or within 30 days after the date on which the Company shall have delivered a Trigger Notice (as defined in the Warrants) with respect to a Redemption Transfer, the Company shall have the right to redeem all, but not less than all, of the outstanding Conversion Shares at the Trigger Redemption Price (as defined in the Warrants; provided that, for purposes of this clause (ii), the numerator in the number set forth in clause (A) of such definition shall be the number of Conversion Shares) with respect to such Redemption Transfer. Irrevocable notice of such right of redemption shall be given by the Company to all Warrant Securityholders not more than 30 days nor less than 15 days prior to the date scheduled for redemption, stating the date of such redemption, which shall be the date of consummation of the Redemption Transfer with respect to which a Trigger Notice has been delivered; provided that such notice of redemption may provide that the obligations of the Company to redeem all outstanding Conversion Shares shall be conditioned upon the consummation of the Initial Public OfferingRedemption Transfer. On the date scheduled for redemption, the Company shall pay to each Warrant Securityholder the Trigger Redemption Price in immediately available funds upon surrender of the certificates representing all outstanding Conversion Shares held by such Warrant Securityholder on such date.
Appears in 1 contract
Samples: Warrantholders Rights Agreement (Security Capital Corp/De/)
Drag-Along Rights. (a) Subject If the KPS Funds desire to Sections 4.04(g) and 4.05, if a Shareholder sell or transfer more than 10% of the Common Stock or Preferred Stock held by the KPS Funds (the “Drag-Along SellerKPS Sale”) proposes to Transfer a third party (“Acquiror”) not includingan Affiliate of the KPS Funds, however, any pledge, encumbrance or hypothecation) any shares to effect a sale of any class all or substantially all of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring the assets of the Company as determined by and its subsidiaries on a consolidated basis, then the Board of Directors (KPS Funds shall have the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) right, subject to all of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series provisions of related transactions, and (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares this Section 4.7 (“Drag-Along RightsRight”) then held and to the extent permitted by applicable law, to require each of the other Shareholders to (a) if such KPS Sale is structured as a sale of Capital Stock, sell, transfer and deliver or cause to be sold, transferred and delivered to such Acquiror the same percentage of Common Stock or Preferred Stock owned by such Shareholders, or (b) if such KPS Sale is structured as a merger, consolidation, sale of all or substantially all assets or other Stockholdertransaction requiring the consent or approval of the Company’s stockholders, vote such Shareholder’s shares of Voting Stock in favor thereof, and (otherwise consent to and raise no objection to such transaction, and waive any dissenters’ rights, appraisal rights or similar rights which such Shareholder may have in connection therewith; and, in any such event, subject to the provisions of subsection (c) of this Section 4.7, each such other Shareholder shall agree to and at shall be bound by the closing same terms, provisions and conditions in respect of the KPS Sale as are applicable to the Shareholders. The provisions of Sections 4.1 through 4.5, inclusive, shall not apply to any transaction to which this Section 4.7 applies to the extent the KPS Funds shall have in fact exercised their “Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicableRight” under this Section 4.7.
(b) The If the KPS Funds desire to exercise their Drag-Along Seller Rights, they shall provide give written notice to the other Shareholders (“Drag-Along Notice”) of the KPS Sale, setting forth the name and address of the Acquiror, the date on which such transaction is proposed to be consummated (which shall be not less than 15 calendar days after the date such Drag-Along Sale Notice is given) and the proposed amount of consideration and copies of any form of agreement proposed to be included by the KPS Funds and the other Stockholders (a “Drag- Along Sale Notice”) Shareholders. The KPS Funds shall not later than twenty (20) Business Days prior be entitled to the proposed exercise their Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and Rights under this Section 4.7 unless all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver paid to the Drag-Along Seller other Shareholders is in the limited power-of-attorney referenced therein, then such form of cash or readily marketable securities or as the other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney Shareholders shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereofreasonably agree.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt obligations of the Drag-Along Shareholders in respect of a KPS Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is under this Section 4.7 are subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt satisfaction of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney following conditions: (and all copies thereofi) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public OfferingKPS Sale, each Shareholder shall have the right to receive the same form of consideration and the Pro Rata Share of consideration paid to each respective class of Capital Stock in the transaction; (ii) if any Shareholder is given an option as to the form and amount of consideration to be received, each other Shareholder will be given the same option with respect to its applicable Pro Rata Share; and (iii) each holder of then currently exercisable Contingent Rights will be given a reasonable opportunity to exercise such Contingent Rights prior to the consummation of the KPS Sale and thereby to participate in the KPS Sale as a holder of Capital Stock.
Appears in 1 contract
Samples: Shareholder Agreement (BRPP LLC)
Drag-Along Rights. (a) Subject to Sections 4.04(g) Section 3.5(h), an Initiating Drag-Along Seller shall be entitled to give, or direct the Company to give and 4.05if so directed by the Initiating Drag-Along Seller the Company shall so promptly give, if written notice (a Shareholder (the “Drag-Along SellerSale Notice”) proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “New Class C Stockholders that such Initiating Drag-Along Transferee”) in Seller or the Company has entered into a single transaction or in a series of related transactions, and Qualified Sale Transaction (any such Transfer, a “Drag-Along Sale”), and that such Initiating Drag-Along Seller is requiring the New Class C Stockholders (all New Class C Stockholders participating in a Drag-Along Sale pursuant to this Section 3.5, the “Dragged-Along Sellers,” together with the Initiating Drag-Along Seller and all other Persons (other than any Affiliates of the Initiating Drag-Along Seller) who otherwise are transferring, have a contractual obligation to transfer, or have exercised a contractual or other right to transfer, DTI Securities in connection with such Drag-Along Sale, the “Drag-Along Sellers”) to participate, agree and take such actions reasonably necessary to sell in such Drag-Along Sale, on the same price per share equivalent of DTI Common Stock (notwithstanding clause (3) of the definition of “Qualified Sale Transaction,” to the extent applicable), consideration, terms and conditions as the Initiating Drag-Along Seller and in the manner set forth in this Section 3.5, a number of DTI Securities held by such Dragged-Along Sellers determined by multiplying (A) the number of DTI Securities held by such Dragged-Along Sellers at the time the Drag-Along Sale Notice for such Drag-Along Sale is given, by (B) a fraction, expressed as a percentage, the numerator of which is the number of DTI Securities to be transferred by the Initiating Drag-Along Seller may and its Permitted Transferees in such Drag-Along Sale and the denominator of which is the total number of DTI Securities held at such time by the Initiating Drag-Along Seller and its option require each other Stockholder Permitted Transferees (such fraction, the “Drag-Along Sale Percentage”), subject to Transfer adjustment pursuant to the Drag-Along Portion of the class of Shares (“Sale Priority as contemplated in Section 3.5(c). The Drag-Along Rights”Sale Notice shall be delivered to all Dragged-Along Sellers at least fifteen (15) then held by days prior to each of the consummation of such Drag-Along Sale and the delivery of a Drag-Along Sale Notice setting forth (i) the number and type of each class of DTI Securities proposed to be transferred, (ii) the consideration to be received for such DTI Securities including any Additional Consideration, (iii) the identity of the other Stockholder, and (subject Person(s) party to and at the closing of the Drag-Along Sale, (iv) to exercise such number a detailed summary of options for Common Shares held by such other Stockholder as is required in order that a sufficient number all material terms and conditions of Common Shares are available to Transfer the relevant proposed transfer, (v) the Drag-Along Portion Sale Percentage, (vi) the date of Shares the anticipated completion of the proposed Drag-Along Sale (which date shall not be less than fifteen (15) days after the delivery of such notice) and (vii) any action or actions required of the Dragged-Along Sellers in connection with the Drag-Along Sale. In the event that any MD Related Party directly or indirectly receives any Additional Consideration in connection with any Drag-Along Sale, the value of such Additional Consideration (as reasonably determined by the Board, subject to the consent of the SLP Stockholders, not to be unreasonably withheld, conditioned or delayed) shall be deemed to have been part of the consideration paid or payable to the MD Stockholders in respect of their DTI Securities in such Drag-Along Sale transaction and shall be reflected in the amount offered by the proposed transferee set forth in the applicable Drag-Along Sale Notice. In the event that more than one MD Stockholder and/ or more than one SLP Stockholder is the Initiating Drag-Along Seller, then all such transferring MD Stockholders and/or SLP Stockholders, as the case may be, shall be treated as the Initiating Drag-Along Seller, and the DTI Securities held and to be transferred by such MD Stockholders and/or SLP Stockholders, as the case may be, shall be aggregated as set forth in Section 6.16, including for purposes of calculating the applicable Drag-Along Sale Percentage; provided, that if the group of stockholders treated as the Initiating Drag-Along Seller pursuant to this sentence includes any SLP Stockholders, then the Drag-Along Sale Percentage applicable to the New Class C Stockholders shall be calculated as if the SLP Stockholders are the only stockholders treated as the Initiating Drag-Along Seller. Notwithstanding anything in this Section 3.5 to the contrary, but subject to Section 3.5(c), if the MD Stockholders and the MSD Partners Stockholders are transferring some, but not all of their DTI Common Stock or vested in-the-money Company Stock Options in any Drag-Along Sale, each of the New Class C Stockholders shall be entitled to transfer the same proportion of the DTI Securities it holds as the proportion, in the aggregate, of the MD Stockholders’ and the MSD Partners Stockholders’ DTI Common Stock and vested in-the-money Company Stock Options being sold by the MD Stockholders and the MSD Partners Stockholders in such Drag-Along Sale, relative to the total number of all such DTI Securities held by the MD Stockholders and the MSD Partners Stockholders (with each vested in-the-money Company Stock Option counting as a share of DTI Common Stock for purposes of the foregoing calculation).
(b) Upon delivery of a Drag-Along Sale Notice, all Dragged-Along Sellers participating in a Drag-Along Sale pursuant to this Section 3.5 shall be required to agree to make the same representations, warranties, covenants, indemnities and agreements as the applicable Initiating Drag-Along Seller and all other Drag-Along Sellers in such Drag-Along Sale (and shall be subject to the same escrow or other holdback arrangements as such Persons so long as such escrows or other holdbacks are proportionately based on the amount of consideration received for the sale of DTI Securities in such Drag-Along Sale transaction); provided, that:
(i) each Dragged-Along Seller shall be entitled to receive its pro rata portion (based on the relative amount (and taking into account the per share equivalent of DTI Common Stock) of DTI Securities sold in such Drag-Along Sale transaction) of any deferred consideration or indemnification payments relating to such Drag-Along Sale transaction (provided, however, that, with respect to any unexercised Company Stock Options proposed to be transferred in such Drag-Along Sale by any Drag-Along Seller, the per share consideration in respect thereof shall be reduced by the exercise price of such options or, if required pursuant to the terms of such options or such Drag-Along Sale, such Drag-Along Seller must exercise the relevant option and transfer the relevant shares of DTI Common Stock (rather than the option) (in each case, net of any amounts required to be withheld by the Company in connection with such exercise));
(ii) the aggregate amount of liability of each Dragged-Along Seller shall not exceed the proceeds received by such Dragged-Along Seller in such Drag-Along Sale;
(iii) all indemnification obligations (other than with respect to the matters referenced in Section 3.5(b)(iv)) shall be on a several and not joint basis to the Drag-Along Sellers pro rata (based on the amount of consideration received by each Drag-Along Seller in the Drag-Along Sale transaction);
(iv) no Dragged-Along Seller shall be responsible for any indemnification obligations and/or liabilities (including through escrow or hold back arrangements) for (A) breaches or inaccuracies of representations and warranties made with respect to any other Drag-Along Seller’s (1) ownership of and title to equity securities, (2) organization and authority or (3) conflicts and consents and any other matter concerning such other StockholderDrag-Along Seller and/or (B) breaches of any covenant specifically relating to any other Drag-Along Sellers; and
(v) no Dragged-Along Seller shall be required in connection with such Drag-Along Sale transaction to agree to (A) any employee, customer or other non-solicitation, no-hire or other similar provision, (B) any non-competition or similar restrictive covenant and/or (C) any term that purports to bind any portfolio company or investment of any a Dragged-Along Seller or any of their respective Affiliates.
(c) Notwithstanding anything in this Section 3.5 to the contrary, (i) for the same consideration per share if a Drag-Along Sale is structured or unit otherwise effected (A) such that less than 100% of the relevant class DTI Securities are being transferred or (B) as a sale of Sharesless than all of the assets of the DTI Group (as defined in the Company’s Fourth Amended and Restated Certificate of Incorporation), each New Class C Stockholder shall have the option of selling in such Drag-Along Sale 100% of the equity securities of the Company, Dell and their respective Subsidiaries held by such New Class C Stockholder (iiexcluding any shares of Class V Stock) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any applicable to other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, DTI Securities being sold in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transfereesuch right, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale PricePriority”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate (ii) in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth event that in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to connection with a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing MD, the Shares MD Stockholders, the MSD Partners Stockholders or their Permitted Transferees, Affiliates or family members that beneficially own DTI Securities, roll over or exchange (or are entitled to roll over or exchange) all or a portion of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received DTI Securities in such Drag-Along Sale, orthey shall only be permitted to do so if the New Class C Stockholders are permitted, if such delivery is but not permitted by applicable lawrequired, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) roll over a pro rata portion of their DTI Securities at the closing for same price per DTI Security and with the same rights and preferences related thereto (other than differences in governance rights attributable to the size of such Person’s post-Drag-Along Sale ownership).
(d) In connection with a Drag-Along Sale, at the request of the Initiating Drag-Along Seller or the Company (at the direction of the Initiating Drag-Along Seller), each Drag-Along Seller shall, subject to the limitations set forth in Section 3.5(b):
(i) (A) sign a written resolution voting all of such Dragged-Along Seller’s voting DTI Securities in favor of such Drag-Along Sale against delivery to (if such a vote is required) or (B) at the Company’s annual meeting of stockholders or at any other Stockholder meeting of the consideration therefore. If an other Stockholder should fail to deliver stockholders of the Company, however called, including any adjournment, recess or postponement thereof, in each case to the Dragextent that such Dragged-Along Seller’s DTI Securities are entitled to vote thereon, or in any other circumstance in which the vote, consent or other approval of the stockholders of the Company is sought, (x) appear at each meeting of stockholders or otherwise cause all of the voting DTI Securities beneficially owned by such Dragged-Along Seller as of the limited powerapplicable record date to be counted as present thereat for purposes of calculating a quorum and (y) vote (or cause to be voted), in person or by proxy, all of such Dragged-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to Along Seller’s voting DTI Securities as of the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power applicable record date in favor of attorney hereunder to effect such Drag-Along Sale on behalf (if such a vote is required); and
(ii) take or cause to be taken all such actions as are reasonably required or necessary in order to facilitate and consummate expeditiously such Drag-Along Sale pursuant to this Section 3.5, including (A) executing, acknowledging and delivering consents, assignments, waivers and other documents or instruments and (B) filing applications, reports, returns, filings and other documents or instruments with governmental authorities.
(e) Notwithstanding the delivery of any Drag-Along Sale Notice, all determinations as to whether to complete any Drag-Along Sale and as to the timing, manner, price and, subject to Section 3.5(b)(i) through (iv), other terms and conditions of any such other Stockholder, which power of attorney Drag-Along Sale shall be deemed at the sole discretion of the Initiating Drag-Along Seller, and none of the Initiating Drag-Along Seller, its Affiliates and their respective Representatives shall have any liability to be coupled any Dragged-Along Seller arising from, relating to or in connection with an interest. If an other Stockholder should fail to deliver such certificates the pursuit, consummation, postponement, abandonment or terms and conditions of any proposed Drag-Along Sale except to the extent such Initiating Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company failed to show that such Shares are bound by comply with the provisions of this Section 4.04(b3.5; provided, that (i) and that such Shares shall be Transferred to if the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Initiating Drag-Along Seller shall have a period of thirty (30) days from agrees to amend, restate, modify or supplement the date of receipt terms and/or conditions of the Drag-Along Sale Notice to consummate after such time that the Drag-Along Sale on Notice has been delivered to the Dragged-Along Sellers in accordance with the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such periodthis Section 3.5, the Initiating Drag-Along Seller shall promptly return notify the Company and cause to be delivered to each Dragged-Along Seller a revised Drag-Along Sale Notice containing all of the other Stockholders any limited poweritems required of a Drag-Along Sale Notice as set forth in Section 3.5(a) at least fifteen (15) days prior to the consummation of such Drag-Along Sale.
(f) All reasonable and documented out-of-attorney (pocket costs and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant heretoexpenses incurred by the Company, together with its Subsidiaries, any other documents in the possession of the Sponsor Stockholders and their Permitted Transferees and any Drag-Along Sellers and their Permitted Transferees in connection with a Drag-Along Sale shall either be (i) borne in full by the Company or (ii) if the Company determines not to bear in full such costs and expenses, allocated and borne on a pro rata basis by each Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently accordance with the consummation amount of the consideration otherwise received by each Drag-Along Seller in such Drag-Along Sale. For the avoidance of doubt, the Drag-Along Seller it is understood that this Section 3.5(f) shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the not prevent any Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds structured in accordance with a manner such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence that some or all of the completion such costs and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained expenses result in this Section 4.04, there shall be no liability on a pro rata reduction in the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares consideration received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is Sellers in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the such Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees Notwithstanding anything herein to cause to be waived and to prevent the exercise ofcontrary, any rights of appraisal, any dissenters’ rights and any similar rights relating to a if the Initiating Drag-Along Seller has not completed the proposed Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares within one hundred eighty (180) days following delivery of Company Shares owned by Stockholder with respect to a the Drag-Along SaleSale Notice in accordance with this Section 3.5, then such Drag-Along Sale Notice shall be null and void, each Dragged-Along Seller shall be released from its obligations under such Drag-Along Sale Notice and it shall be necessary for a separate Drag-Along Sale Notice to be furnished by the Initiating Drag-Along Seller, and the other terms and provisions of this Section 3.5 separately complied with, in order to consummate such Drag-Along Sale pursuant to this Section 3.5; provided, that if such proposed Drag-Along Sale is subject to, and conditioned on, one or more prior regulatory approvals, then such one hundred eighty (180) day period shall be extended solely to the extent necessary until no later than the expiration of ten (10) days after all such approvals shall have been received.
(h) The provisions of this This Section 4.04 shall terminate 3.5 automatically terminates without any further action upon the consummation of the Initial Public Offeringan IPO.
Appears in 1 contract
Samples: Class C Stockholders Agreement (Dell Technologies Inc)
Drag-Along Rights. (a) Subject to Sections 4.04(g) this Section 4.01 and 4.05Section 4.02, if a Shareholder the Avista Entities (together, the “Drag-Along Seller”) proposes propose to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares less than 50% of their collective Aggregate Ownership of any class of Shares that results in Company Securities to a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and bona fide sale (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder all Employee Shareholders (i) to Transfer the Drag-Along Portion of the such class of Shares Company Securities (“Drag-Along Rights”) then held by such other Stockholderevery Employee Shareholder, and (ii) subject to and at the closing of the Drag-Along Sale) , to exercise such number of options or warrants for Common Shares such class of Company Securities held by such other Stockholder every Employee Shareholder as is required in order that a sufficient number of Common Shares such class of Company Securities are available to Transfer the relevant Drag-Along Portion of Shares held by Company Securities of each such other StockholderEmployee Shareholder, (i) in each case for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, Company Securities and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; , provided that any other Stockholder Employee Shareholder that holds options or warrants the exercise price per share of which is greater than the per share price at which the Common Shares such class of Company Securities are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof (subject to Section 4.01(b)) without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares Company Securities acquired upon exercise of such options, options or the Drag-Along Sale is not consummatedwarrants, such options or warrants shall be deemed not to have been exercised or canceled, as applicable.
(b) . The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders Employee Shareholders (a “Drag- Drag-Along Sale Notice”) not later than twenty (20) Business Days 10 days prior to the proposed Drag-Along Sale. The Drag- Drag-Along Sale Notice shall identify the Drag-Along Transfereetransferee, the number and class of Shares Company Securities subject to the Drag-Along Sale, the type and amount (or value) of consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares Company Securities to be sold by each other Stockholder Employee Shareholder shall be the Drag-Along Portion of the class of Shares Company Securities that such other Stockholder Shareholder owns. Each other Stockholder Employee Shareholder shall be required to (v) participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and Notice, (w) to tender all its Company Securities as set forth below, (x) waive dissenter’s and/or appraisal rights (if any) with respect to the Drag-Along Portion Sale, (y) vote or consent in favor of its Shares as set forth belowsuch transaction and (z) take any other necessary or appropriate action in furtherance of the foregoing. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days 10 days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders Employee Shareholders shall deliver to a the representative of the Drag-Along Seller designated in the Drag-Along Sale, Sale Notice the certificate and other applicable instruments representing the Shares Company Securities of such other Stockholder Employee Shareholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares Company Securities on the terms set forth in the Drag-Along Notice and otherwise on the terms and conditions applicable to the Drag-Along Seller or otherwise more advantageous to the Drag-Along Seller than set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares Company Securities pursuant to this Section 4.04(b4.01(a) at the closing for such Drag-Along Sale against delivery to such other Stockholder Shareholder of the consideration thereforetherefor. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder Employee Shareholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummatedSeller, the Company (subject to reversal under Section 4.01(b)) shall cause the books and records of the Company to show that such Shares Company Securities are bound by the provisions of this Section 4.04(b4.01(a) and that such Shares Company Securities shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(cb) The Drag-Along Seller shall have a period of thirty (30) 120 days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) 120-day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) 180 days following the effective date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any Employee Shareholders the limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares Company Securities that such other Stockholders Employee Shareholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders Employee Shareholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares Company Securities owned by the other Stockholders Employee Shareholders shall again be in effect.
(dc) Concurrently with the consummation of the Drag-Along SaleTransfer of Company Securities pursuant to this Section 4.01, the Drag-Along Seller shall give notice thereof to the other StockholdersEmployee Shareholders, shall remit or cause to be remitted to each of the other Stockholders all Employee Shareholders that have surrendered their certificates and other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other StockholderEmployee Shareholder’s wire transfer instructions) for the Shares Company Securities Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may and the material terms thereof; provided that in no event shall any investment banking or investment advisory fees payable to the Drag-Along Seller or any of its Affiliates be reasonably requested by such other Stockholdersincluded in the amount of consideration.
(ed) Notwithstanding anything contained in this Section 4.044.01, there shall be no liability on the part of the Drag- Drag-Along Seller to the other Stockholders Employee Shareholders (other than the obligation to return any the limited power-of-attorney and the certificates and other applicable instruments representing Shares Company Securities received by the Drag-Along Seller) if the Transfer of Shares Company Securities pursuant to this Section 4.04 4.01 is not consummated for whatever reason, regardless of whether the Drag- Drag-Along Seller has delivered a Drag-Along Sale Notice. The decision Whether to effect a Transfer of Shares Company Securities pursuant to this Section 4.04 4.01 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(fe) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this This Section 4.04 4.01 shall terminate upon the consummation of the Initial First Public Offering.
Appears in 1 contract
Samples: Employee Shareholders Agreement (Lantheus MI Intermediate, Inc.)
Drag-Along Rights. (a) Subject to Sections 4.04(gIf at any time any Existing Shareholder or group of Existing Shareholders holding at least a majority of the outstanding Ordinary Shares (assuming the conversion of all Preference Shares into Ordinary Shares) and 4.05(collectively, if a Shareholder (the “Drag-Along SellerDragging Shareholders”) proposes determine to Transfer (not includingor cause to be Transferred, however, in any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Dragsingle arm’s-Along Transferee”) in a single length transaction or in a series of related arm’s-length transactions, Ordinary Shares representing all of the then-issued and outstanding Ordinary Shares (any such Transfer, assuming the conversion of all Preference Shares into Ordinary Shares) then held by the Existing Shareholders to one or more Persons who are unaffiliated bona fide third-party purchasers (a “Drag-Along Sale”), then the Dragging Shareholders may elect to require all other Shareholders (the “Dragged Shareholders”) to, and the Dragged Shareholders shall, (i) if such Drag-Along Seller may at its option require each other Stockholder Sale is structured as sale of Ordinary Shares, Transfer, or caused to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by be Transferred, to such other StockholderPerson, and (subject to and at the closing of concurrently with the Drag-Along Sale) to exercise such number , Preference Shares or Ordinary Shares representing all of options for Common the Ordinary Shares then held by the Dragged Shareholders (in the case of Preference Shares, assuming the conversion of all Preference Shares into Ordinary Shares) or (ii) if such other Stockholder Transfer is structured as is required a merger, consolidation or sale of all or substantially all of the assets of the Company, to vote in order that a sufficient number of Common Shares are available favor thereof, and otherwise to Transfer the relevant consent to and raise no objection to such Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securitiesSale, and (iii) otherwise on the same terms and conditions as Dragged Shareholders shall waive dissenters’ rights, appraisal rights or similar rights, if any, which the Dragged Shareholders may have in connection therewith; provided that upon the consummation of any Drag-Along Seller; provided that Sale, (y) before any other Stockholder distribution or payment shall be made to any Dragging Shareholders in connection with such Drag-Along Sale, each Dragged Shareholder that holds options Preference Shares shall be entitled to receive the exercise price per share of which Sale Payment, for each Preference Share it holds that is greater than the per share price at which the Common Shares are to be Transferred to the in such Drag-Along Transferee, Sale in accordance with the Memorandum and (z) if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect entered into prior to any Common the three year anniversary of the Closing, then the consideration payable to each Dragged Shareholder that holds Preference Shares acquired upon exercise of such optionsshall be payable either (i) solely in cash or Liquid Securities, or (ii) solely to the extent holders of Ordinary Shares are receiving securities, other than Liquid Securities, in such Drag-Along Sale is not consummatedSale, such options then each holder of Preference Shares shall have the option of receiving non-Liquid Securities of either the same class received by holders of Ordinary Shares or in the form of Acceptable Securities. For greater certainty, under no circumstances shall any Affiliate of the Company be deemed not to have been exercised or canceled, as applicableconsidered an unaffiliated bona fide third-party purchaser for purposes of this Section 3.7.
(b) The Dragging Shareholders may exercise their drag-along rights pursuant hereto by delivering to each Dragged Shareholder and the Company, at least twenty (20) days in advance of the anticipated closing date for the Drag-Along Seller Sale, a written notice (the “Drag Notice”), which shall provide notice set forth (i) the number of Ordinary Shares the Dragging Shareholders proposed to be sold in such Drag-Along Sale to Sale, (ii) the other Stockholders name and address of the proposed Transferee in such Drag-Along Sale, (a “Drag- iii) the material terms and conditions of such proposed Drag-Along Sale Notice”(including the per Ordinary Share purchase price or a reasonable estimate of the maximum and minimum per Ordinary Share purchase price) not later than twenty and (20iv) Business Days prior to the proposed effective date of the proposed Drag-Along Sale. The Drag- Along Sale Drag Notice shall identify the Drag-Along Transferee, also specify the number of Ordinary Shares subject required to be Transferred by the Dragged Shareholder.
(c) Prior to or in connection with the closing of any such proposed Drag-Along Sale, the consideration for which a Transfer is proposed each Dragged Shareholder shall take, or cause to be made (the “Drag-Along Sale Price”) taken, all commercially reasonable actions, and all other material terms and conditions of the Drag-Along Sale. The number of Shares do, or cause to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that done, all things commercially reasonable or advisable to consummate or make effective such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable including (i) together with the proposed purchaser or purchasers, execute any purchase agreement or other certificates, instruments representing the Shares of and other agreement required to consummate and make effective such other Stockholder to be included in the proposed Drag-Along Sale, together with a limited power-of-attorney authorizing Sale and (ii) using commercially reasonable efforts to obtain all necessary consents from third parties and take such other actions as may be necessary to effectuate the Drag-Along Seller or intent of the foregoing so long as such representative to Transfer such Shares Dragging Shareholders execute the same agreements and other documents on the terms set forth in same terms; provided that:
(i) a Dragged Shareholder shall not be required to provide representations, warranties, covenants, or agreements other than those individual representations, warranties covenants, or agreements (so long as such Dragging Shareholders agree to do the Drag-Along Notice same) related to such Dragged Shareholder’s (A) ownership of and wire transfer instructions for payment of title to the cash portion of the consideration to be received Shares it is transferring in such Drag-Along Sale, or(B) organization, if (C) authority to enter in the Drag-Along Sale and (D) conflicts and consents related to such delivery is not permitted Drag-Along Sale;
(ii) any indemnity given by applicable law, an unconditional agreement the Dragging Shareholders to deliver such Shares pursuant to this Section 4.04(b) at the closing for purchaser in connection with such Drag-Along Sale against delivery applicable to liabilities not specific to the Dragging Shareholders shall be apportioned among the Dragging Shareholders and Dragged Shareholders (as the case may be) according to the consideration received by each Dragging Shareholder and Dragged Shareholder and shall not exceed the lesser of (A) such other Stockholder Dragging Shareholder’s or Dragged Shareholder’s (as the case may be) pro rata portion of any such liability, to be determined in accordance with such Dragging Shareholder’s or Dragged Shareholder’s (as the case may be) portion of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced thereintotal value for his, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect her or its Shares included in such Drag-Along Sale on behalf of or (B) such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to Dragging Shareholder’s or Dragged Shareholder’s (as the case may be) proceeds from the Drag-Along Seller Sale;
(iii) other than a customary confidentiality covenant, a Dragged Shareholder shall not be obligated to enter into any non-compete, non-solicit or other post-closing covenant that restricts its activities in any way; and
(iv) a Dragged Stockholder shall not be responsible for breaches of representations, warranties, covenants, or agreements made by any other seller in such Drag-Along Sale with respect to such other seller. Subject to clauses (i) through (iv) above, at the closing of any such proposed Drag-Along Sale, the Dragged Shareholders shall deliver to the proposed purchaser or purchasers (x) such certificates and other instruments of transfer as shall be reasonably requested by the proposed purchaser or purchasers with respect to the Ordinary Shares to be Transferred, against receipt of the purchase price therefor in such Drag-Along Sale (so long as such Dragging Shareholders agree to do the same) and (y) the Dragged Shareholder’s Preference Shares or Ordinary Shares, free and clear of any liens (so long as such Dragging Shareholders agree to do the same). At the closing of any proposed Drag-Along Sale, the proposed purchaser or purchasers shall deliver payment (in full in immediately available funds) for the Shares purchased by such proposed purchaser or purchasers.
(d) In the event that the Drag-Along Sale is consummatedeffectuated through a business combination (whether by way of merger, recapitalization or otherwise) or asset sale, the Company Shareholders shall cause the books and records of the Company use their commercially reasonable efforts to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Noticetake, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted taken, all commercially reasonable action, and to each of the other Stockholders all other applicable instruments and the total consideration do, or cause to be paid at done, all things commercially reasonable or advisable to consummate and make effective the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholdersbusiness combination.
(e) Notwithstanding anything contained in this Section 4.04, there There shall be no liability on the part of the Drag- Along Seller Dragging Shareholders, the Board or the Company to the other Stockholders (other than the obligation to return Dragged Shareholders or any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the of their respective Affiliates if any Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 Sale is not consummated for whatever reason. For the avoidance of doubt, regardless the determination of whether the Drag- Along Seller has delivered to effect a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is shall be in the sole and absolute discretion of the Drag-Along SellerDragging Shareholders.
(f) A If more than 90 days elapse from the date of delivery of the Drag Notice without the consummation of such Drag-Along Sale, the Shareholders shall be released from their obligations with respect to such Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 3.7 shall terminate upon the consummation of the Initial Public Offeringagain apply to any future Transfers that otherwise come within its terms.
Appears in 1 contract
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05, if a Shareholder (the “Drag-Along Seller”) If at any time Ripplewood and/or any of its Affiliates proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares at least 50% of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) the Stock then held by Ripplewood and its Affiliates to any Person in connection with a reorganization or restructuring (other than Affiliates of the Company as determined by the Board of Directors Ripplewood) (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), then Ripplewood may cause to be included in such Drag-Along Sale a proportionate amount of the Stock held by each of the Other Stockholders (the “Drag-Along Stockholders”) and shall provide notice at least 15 days prior to the date proposed for such Drag-Along Sale (the “Drag-Along Notice”) to the Drag-Along Seller may at its option require each other Stockholder to Transfer Stockholders stating the material terms and conditions of such Drag-Along Portion Sale (including the kind and amount of consideration to be paid for such Stock and the name of the class of Shares proposed purchaser).
(“b) In the event Ripplewood provides a Drag-Along Rights”) then held by such other StockholderNotice in accordance with this Section 5, and (subject to and at the closing of the each Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, shall (i) be obligated to Transfer to the proposed purchaser its Stock for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, Share and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceledRipplewood and/or its Affiliates, as applicable.
applicable (b) The Drag-Along Seller shall provide notice with appropriate adjustments as may be determined by Ripplewood in the case of an indirect Transfer of Stock), as such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if Notice and (ii) execute and deliver such Drag-Along Sale is subject instruments of conveyance and transfer and take such other actions as Ripplewood or the proposed purchaser may reasonably require in order to regulatory approval, such thirty carry out the terms of this Section 5.
(30c) day period shall be extended until the expiration The instruments of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the conveyance and transfer for a Drag-Along Sale shall not have been consummated during such period, the include any representations and warranties of any Drag-Along Seller shall promptly return to each Stockholder except such representations and warranties as are ordinarily given by a seller of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant heretosecurities, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time including with respect to such Shares owned seller’s authority to sell, enforceability of agreements against such seller, such seller’s good title in such securities and good title in such securities to be acquired by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid purchaser at the closing of such sale; provided, however, that all representations and warranties, covenants, indemnities and agreements shall be made by Ripplewood and/or its Affiliates, on the one hand, and each Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part other hand, thereunder severally and not jointly and that any liability of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or Ripplewood and/or its Shares that are entitled to vote or execute proxies or written consentsAffiliates, as the case may be, and to take all other actions necessary in order to approve the consummation of the each Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to thereunder shall be waived and to prevent borne by each of them on a pro rata basis based on the exercise of, any rights relative number of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned Stock being sold by Stockholder with respect to a Drag-Along Saleit.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Samples: Stockholders’ Agreement (Readers Digest Association Inc)
Drag-Along Rights. (a) Subject A. Except for Permitted Transfers, in the event that the Oaktree Entities determine to Sections 4.04(g) and 4.05, if a Shareholder (the “Drag-Along Seller”) proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) Sell to any Person in connection with (other than a reorganization or restructuring Permitted Transfer) a majority of the Company as determined by aggregate number of Oaktree Shares and the Board of Directors (Oaktree Co-Investor Shares, then, if the “Board”) Oaktree Entities so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transferelects, a (“Drag-Drag Along Sale”), the Drag-MTS Entities shall sell up to a number of Shares equal to the product of (i) the total number of Shares owned by the MTS Entities multiplied by (ii) a fraction, the numerator of which shall equal the number of Shares owned by the Oaktree Entities proposed to be sold and the denominator of which shall equal the aggregate number of Shares owned by the Oaktree Entities immediately prior to the Drag Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion Sale. The foregoing rights of the class of Shares (Oaktree Entities are referred to herein as the “Drag-Along Rights”.” If the Oaktree Entities exercises its Drag Along Rights, the MTS Entities (i) then held by such other Stockholdershall receive the same consideration per share of Common Stock, and (shall be subject to the same terms and at conditions of sale and shall otherwise be treated equally or, where appropriate, pro rata based upon the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder; provided, however, that MTS and MTS Co-Investors shall share, based upon the number of Shares being sold by each Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (iia) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred indemnity liabilities to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, Proposed Purchaser in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect (other than representations as to unencumbered ownership of and ability to transfer the Shares being sold of any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to seller in the Drag-Along Sale, which shall be the sole responsibility of such other seller) and (b) in any escrow for the purpose of satisfying any such indemnity liabilities; provided that each Stockholder’s sharing obligation hereunder with respect to such indemnity or other liabilities shall be several and limited to the consideration received for which a Transfer is proposed the Shares being sold by such Stockholder, except with respect to fraud or willful misconduct by the Stockholder; and (ii) shall execute such documents and take such actions as may be made reasonably required by Oaktree.
B. Oaktree shall promptly provide the MTS Entities with written notice (the “Drag-Along Sale PriceNotice”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not no later than ten five (105) Business Days after prior to the date of the consummation of the Drag-Along Sale Notice (the “Drag-Along Sale Notice PeriodDate”), each of the other Stockholders shall deliver to a representative of the . Each Drag-Along Seller designated Sale Notice shall set forth: (i) the name and address of the Proposed Purchaser of Shares in the Drag-Along Sale, applicable instruments representing (ii) the Shares proposed amount and form of such other Stockholder consideration to be included paid for such Shares and the terms and conditions of payment offered by the Proposed Purchaser, (iii) the number of Shares that the MTS Entities will be obligated to sell, and Drag-Along Sale Date.
C. The provisions of this Section VI shall apply regardless of the form of consideration to be received in the Drag-Along Sale, together with a limited powerand if any non-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth cash consideration is proposed in the Drag-Along Notice and wire transfer instructions for payment Sale to each member of the cash portion of the consideration to be received in such selling Stockholder, then each Drag-Along SaleStockholder shall accept its pro rata share of such non-cash consideration for the Shares based upon its proportional ownership of Shares.
D. Each Stockholder affirms its agreement (i) to vote for the approval of the transaction (and to waive any applicable rights of appraisal or dissenter’s rights), orand (ii) to take such other actions as are necessary or appropriate, if such delivery is not permitted by applicable law, an unconditional agreement with respect to deliver such the Transfer of Shares pursuant to the Proposed Purchaser under this Section 4.04(b) at the closing for VI (regardless of whether such Drag-Along Sale against delivery to such other Stockholder transaction is effected through a merger, sale of all or substantially all of the consideration therefore. If an assets of the Company, or any other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then form) is given as a provision of this Agreement and as such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be is coupled with an interestinterest and is irrevocable. If an other Stockholder should fail to deliver such certificates This voting agreement shall remain in full force and effect throughout the time that this Section VI is in effect. It is understood that this voting agreement relates solely to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of transaction with a Proposed Purchaser as described in this Section 4.04(b) VI and that such Shares shall be Transferred does not constitute the agreement to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereofvote or consent as to any other matters.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event E. Not later than sixty fifteen (6015) days following the date of receipt of the Drag-Along Sale Notice, the MTS Entities shall deliver to Oaktree certificates representing the MTS Shares and MTS Co-Investor Shares to be transferred, accompanied by duly executed stock powers. If the Drag-Along Sale shall Sales does not have been consummated during such periodoccur, the Drag-Along Seller Oaktree shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all delivered certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other StockholdersMTS Entities.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Samples: Stockholders' Agreement (OCM Principal Opportunities Fund IV, LP)
Drag-Along Rights. (a) Subject to Sections 4.04(gSection 11.01 and Section 11.07, if, (i) upon the consent and approval of Members holding the Required Percentage of Units (provided, however, that if Fuxx.xxx xs in default under the Purchase and Contribution Agreement, none of the Units held by Fuxx.xxx xhall be counted towards the calculation of the Required Percentage) and 4.05(ii) after the earlier of (A) the date as of which the Company’s assets under management exceeds $500,000,000 and (B) October 31, if 2011, the Company accepts a Shareholder bona fide proposal from a Person that is not an Affiliate of any Member to purchase all, but not less than all, of the Units outstanding, whether by way of merger, consolidation, sale of Units or assets, or otherwise (each, a “Required Sale”), the Company shall give written notice (the “Required Sale Notice”) to all other Members at least 30 days prior to the closing of such Required Sale. The Required Sale Notice shall describe in reasonable detail the terms of the Required Sale and the identity of the Persons involved in the Required Sale (collectively, the “Required Sale Transferee”).
(b) If in the Required Sale Notice the Company requires all Members to participate in the Required Sale (the “Drag-Along Seller”) proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along SaleElection”), the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion upon delivery of the class Required Sale Notice, each Member shall be obligated to sell all, but not less than all, of Shares (“Drag-Along Rights”) then the Units held by such other Stockholder, and (subject Member to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise Required Sale Transferee on the same terms and conditions as specified in the Drag-Along Seller; provided that Required Sale Notice, to vote their interests in favor of the Required Sale at any other Stockholder that holds options meeting of the exercise price per share of which is greater than Members called to vote on or approve the per share price at which the Common Shares are to be Transferred Required Sale and/or consent in writing to the Drag-Along TransfereeRequired Sale, if required by to waive all dissenters’ or appraisal rights in connection with the Drag-Along Seller Required Sale, to exercise such optionsenter into agreements of sale or merger agreements relating to the Required Sale, mayto agree (as to itself) to make to the Required Sale Transferee representations, warranties, covenants, indemnities and agreements in place connection with the Required Sale, and otherwise to take all actions reasonably necessary or desirable to cause the Company and the Members to consummate the Required Sale. Any terms of such exerciseRequired Sale may be amended from time to time (so long as they continue to comply with this Section 11.05, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares and subject to the Drag-Along Salecontinuing requirements of Section 11.07), the consideration for which a Transfer is proposed and any such Required Sale Notice may be rescinded. The Company shall give prompt written notice of any such amendment, modification or rescission to be made (the “Drag-Along Sale Price”) and all other material terms and conditions Members. The obligations of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares Members pursuant to this Section 4.04(b) at 11.05 are in all respects subject to the closing for such Drag-Along Sale against delivery to such other Stockholder satisfaction of the following conditions:
(i) each Member shall receive the same proportion of the aggregate consideration therefore. If an other Stockholder should fail to deliver from such Required Sale that such Member would have received if such aggregate consideration had been distributed by the Company to the Drag-Along Seller the limited powerMembers in complete liquidation pursuant to Article XIII;
(ii) no Member shall be obligated to make any out-of-attorney referenced therein, then such other Stockholder hereby grants hereunder pocket expenditure prior to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along SaleRequired Sale (excluding modest expenditures for postage, copies, etc.), and no Member shall be obligated to pay more than its pro rata share (based upon the Drag-Along Seller shall give notice thereof amount of consideration received) of reasonable expenses incurred in connection with a consummation of the Required Sale to the other Stockholders, shall remit extent such costs are incurred for the benefit of all Members and are not otherwise paid by the Company or cause to the Required Sale Transferee (costs incurred by or on behalf of a Member for its sole benefit will not be remitted to each considered costs of the other Stockholders all other applicable instruments and transaction hereunder), provided, that a Member’s liability for such expenses shall not exceed the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested purchase price received by such other Stockholders.Member for its Units; and
(eiii) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of event that the Drag- Along Seller Members are required to provide any representations or indemnities in connection with the other Stockholders Required Sale (other than representations and indemnities concerning each Member’s valid ownership of its Units, free of all liens and encumbrances (other than those arising under applicable securities laws), and each Member’s authority, power, and right to enter into and consummate such purchase or merger agreement without violating any other agreement), then each Member shall not be liable for more than its pro rata share (based upon the obligation to return amount of consideration received) of any limited power-of-attorney liability for misrepresentation or indemnity, and such liability shall not exceed the certificates and other applicable instruments representing Shares total purchase price received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated such Member for whatever reasonits Units, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole after taxes and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may beexpenses, and to take all other actions necessary in order to approve the consummation such liability shall be satisfied solely out of the Drag-Along Saleany funds escrowed for such purpose.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Samples: Limited Liability Company Agreement (FUND.COM Inc.)
Drag-Along Rights. (a) Subject If at any time prior to Sections 4.04(gthe date of consummation of the earlier of a Qualified Public Offering or a Qualified Sale, (i) POI Acquisition receives a bona fide offer from any third party who is not an Affiliate of either the Company or POI Acquisition to purchase (including a purchase by merger, consolidation or similar transaction) 100% of the shares of Common Stock owned by POI Acquisition at such time, (ii) at least 90% of the fair market value of the consideration to be received by POI Acquisition in such offer is in the form of cash, Cash Equivalents or Marketable Securities and 4.05(iii) such offer is accepted by POI Acquisition, then the Management Stockholder hereby agrees that, if a Shareholder requested by POI Acquisition, it will transfer to such purchaser, subject to Section 5.2(b), on the terms of the offer so accepted by POI Acquisition, including time of payment, form of consideration and adjustments to purchase price, all of the shares of his or her Purchase Stock (the “Drag-Along SellerRights”).
(b) proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company POI Acquisition will give notice (the “Drag-Along TransfereeNotice”) to the Management Stockholder of any proposed transfer giving rise to the rights of POI Acquisition set forth in a single transaction or in a series of related transactions, and Section 5.2(a) (any such Transfer, a “Drag-Along Sale”), ) not more than 10 days after the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion execution and delivery by all of the class of Shares (“Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the closing parties thereto of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred definitive agreement relating to the Drag-Along TransfereeSale and, if required by in any event, no later than 20 days prior to the closing date for such Drag-Along Sale. The Drag-Along Notice will set forth the number of shares of Common Stock proposed to be so transferred, the name of the purchaser, the proposed amount and form of consideration, the number of shares of Common Stock sought and the other terms and conditions of the offer. The Management Stockholder shall make to the purchaser in the Drag-Along Seller Sale the same representations, warranties, covenants, indemnities and agreements as POI Acquisition makes in connection with the proposed Drag-Along Sale (except that in the case of representations, warranties, covenants, indemnities and agreements pertaining specifically to exercise such optionsPOI Acquisition, maythe Management Stockholder subject to this Drag-Along Rights shall make the comparable representations, warranties, covenants, indemnities and agreements pertaining specifically to his or herself); provided, that all representations, warranties, covenants and indemnities shall be made by POI Acquisition, the Management Stockholder and any Other Selling Stockholders severally and not jointly. Each of POI Acquisition, the Management Stockholder and any Other Selling Stockholders participating in place of such exercise, submit to irrevocable cancellation thereof without any liability the Drag-Along Sale will be responsible for payment funding its proportionate share of any exercise price escrow arrangements in connection with respect theretothe Drag-Along Sale and for its proportionate share of any withdrawals therefrom. All fees, commissions, adjustments to purchase price, expenses and indemnities of POI Acquisition, the Management Stockholder and any Other Selling Stockholders under the applicable transaction agreement shall be borne by each of them on a pro rata basis based on the number of shares of Common Stock sold by each of them in such Drag-Along Sale. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after within 90 days from the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”subject to extension to obtain any necessary regulatory approvals), each of the other Stockholders shall POI Acquisition must deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the another Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration in order to be received in exercise their rights under this Section 5.2 with respect to such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Samples: Management Stockholder's Agreement (Protection One Alarm Monitoring Inc)
Drag-Along Rights. (a) Subject to Sections 4.04(g) Section 3.5(g), an Initiating Drag-Along Seller shall be entitled to give, or direct the Company to give and 4.05if so directed by the Initiating Drag-Along Seller the Company shall so promptly give, if written notice (a Shareholder (the “Drag-Along SellerSale Notice”) proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “New Class A Stockholders that such Initiating Drag-Along Transferee”) in a single transaction Seller or in the Company has entered into one or a series of related transactionstransactions (including any merger or consolidation) involving the sale, transfer, exchange or conversion of a majority of the issued and outstanding shares of the DTI Common Stock to any Person (any other than the Company and its Subsidiaries, one or more Affiliates or Permitted Transferees of such Transfer, Initiating Drag-Along Seller) (a “Drag-Along Sale”), the and that such Initiating Drag-Along Seller may at its option require each other Stockholder to Transfer is requiring the New Class A Stockholders (all New Class A Stockholders participating in a Drag-Along Portion Sale pursuant to this Section 3.5, the “Dragged-Along Sellers,” together with the Initiating Drag-Along Seller and all other Persons (other than any Affiliates of the class of Shares (Initiating Drag-Along Seller) who otherwise are transferring, have a contractual obligation to transfer, or have exercised a contractual or other right to transfer, DTI Securities in connection with such Drag-Along Sale, the “Drag-Along RightsSellers”) then held by to participate, agree and take such other Stockholder, and (subject actions reasonably necessary to and at the closing of the sell in such Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same price per share equivalent of DTI Common Stock, consideration, terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Initiating Drag-Along Seller to exercise and in the manner set forth in this Section 3.5, a number of DTI Securities held by such options, may, in place Dragged-Along Seller determined by multiplying (A) the number of DTI Securities held by such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If Dragged-Along Sellers at the time the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of notice for such options, or the Drag-Along Sale is not consummatedgiven, by (B) a fraction, expressed as a percentage, the numerator of which is the number of DTI Securities to be transferred by the Initiating Drag-Along Seller and its Permitted Transferees in such options shall be deemed not to have been exercised or canceledDrag-Along Sale and the denominator of which is the total number of DTI Securities held at such time by the Initiating Drag-Along Seller and its Permitted Transferees (such fraction, as applicable.
(b) the “Drag-Along Sale Percentage”). The Drag-Along Seller Sale Notice shall provide notice be delivered to all Dragged-Along Sellers at least fifteen (15) days prior to each of the consummation of such Drag-Along Sale to and the other Stockholders (delivery of a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, setting forth (i) the number and type of Shares subject each class of DTI Securities proposed to be transferred, (ii) the consideration to be received for such DTI Securities, (iii) the identity of the other Person(s) party to the Drag-Along Sale, the consideration for which (iv) a Transfer is proposed to be made (the “Drag-Along Sale Price”) and detailed summary of all other material terms and conditions of the proposed transfer, (v) the Drag-Along Sale Percentage, (vi) the date of the anticipated completion of the proposed Drag-Along Sale (which date shall not be less than fifteen (15) days after the delivery of such notice) and (vii) any action or actions required of the Dragged-Along Sellers in connection with the Drag-Along Sale. The In the event that more than one MD Stockholder and/or more than one SLP Stockholder is the Initiating Drag-Along Seller, then all such transferring MD Stockholders and/or SLP Stockholders, as the case may be, shall be treated as the Initiating Drag-Along Seller, and the DTI Securities held and to be transferred by such MD Stockholders and/or SLP Stockholders, as the case may be, shall be aggregated as set forth in Section 6.15, including for purposes of calculating the applicable Drag-Along Sale Percentage. If the MD Stockholders and MSD Partners Stockholders are transferring some, but not all of their DTI Common Stock or vested in-the-money Company Stock Options in any Drag-Along Sale, each of the New Class A Stockholders shall be entitled to transfer the same proportion of the DTI Securities it holds as the proportion, in the aggregate, of the MD Stockholders’ and the MSD Partners Stockholders’ DTI Common Stock and vested in-the-money Company Stock Options being sold by the MD Stockholders and the MSD Partners Stockholders in such Drag-Along Sale, relative to the total number of Shares all such DTI Securities held by the MD Stockholders and the MSD Partners Stockholders (with each vested in-the-money Company Stock Option counting as a share of DTI Common Stock for purposes of the foregoing calculation).
(b) Upon delivery of a Drag-Along Sale Notice, all Dragged-Along Sellers participating in a Drag-Along Sale pursuant to this Section 3.5 shall be required to agree to make the same representations, warranties, covenants, indemnities and agreements as the applicable Initiating Drag-Along Seller and all other Drag-Along Sellers in such Drag-Along Sale (and shall be subject to the same escrow or other holdback arrangements as such Persons so long as such escrows or other holdbacks are proportionately based on the amount of consideration received for the sale of DTI Securities in such Drag-Along Sale transaction); provided, that:
(i) each Dragged-Along Seller shall be entitled to receive its pro rata portion (based on the relative amount (and taking into account the per share equivalent of DTI Common Stock) of DTI Securities sold in such Drag-Along Sale transaction) of any deferred consideration or indemnification payments relating to such Drag-Along Sale transaction (provided, however, that, with respect to any unexercised Company Stock Options proposed to be sold transferred in such Drag-Along Sale by each other Stockholder any Drag-Along Seller, the per share consideration in respect thereof shall be reduced by the exercise price of such options or, if required pursuant to the terms of such options or such Drag-Along Sale, such Drag-Along Seller must exercise the relevant option and transfer the relevant shares of DTI Common Stock (rather than the option) (in each case, net of any amounts required to be withheld by the Company in connection with such exercise));
(ii) the aggregate amount of liability of each Dragged-Along Seller shall not exceed the proceeds received by such Dragged-Along Seller in such Drag-Along Sale;
(iii) all indemnification obligations (other than with respect to the matters referenced in Section 3.5(b)(iv)) shall be on a several and not joint basis to the Drag-Along Portion Sellers pro rata (based on the amount of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate consideration received by each Drag-Along Seller in the Drag-Along Sale on transaction); and
(iv) no Dragged-Along Seller shall be responsible for any indemnification obligations and/or liabilities (including through escrow or hold back arrangements) for (A) breaches or inaccuracies of representations and warranties made with respect to any other Drag-Along Seller’s (1) ownership of and title to equity securities, (2) organization and authority or (3) conflicts and consents and any other matter concerning such other Drag-Along Seller and/or (B) breaches of any covenant specifically relating to any other Drag-Along Sellers.
(c) In connection with a Drag-Along Sale, at the request of the Initiating Drag-Along Seller or the Company (at the direction of the Initiating Drag-Along Seller), each Drag-Along Seller shall, subject to the limitations set forth in Section 3.5(b):
(i) (A) sign a written resolution voting all of such Dragged-Along Seller’s voting DTI Securities in favor of such Drag-Along Sale (if such a vote is required) or (B) at the Company’s annual meeting of stockholders or at any other meeting of the stockholders of the Company, however called, including any adjournment, recess or postponement thereof, in each case to the extent that such Dragged-Along Seller’s DTI Securities are entitled to vote thereon, or in any other circumstance in which the vote, consent or other approval of the stockholders of the Company is sought, (x) appear at each meeting of stockholders or otherwise cause all of the voting DTI Securities beneficially owned by such Dragged-Along Seller as of the applicable record date to be counted as present thereat for purposes of calculating a quorum and (y) vote (or cause to be voted), in person or by proxy, all of such Dragged-Along Seller’s voting DTI Securities as of the applicable record date in favor of such Drag-Along Sale (if such a vote is required); and
(ii) take or cause to be taken all such actions as are reasonably required or necessary in order to facilitate and consummate expeditiously such Drag-Along Sale pursuant to this Section 3.5, including (A) executing, acknowledging and delivering consents, assignments, waivers and other documents or instruments and (B) filing applications, reports, returns, filings and other documents or instruments with governmental authorities.
(d) Notwithstanding the delivery of any Drag-Along Sale Notice, all determinations as to whether to complete any Drag-Along Sale and as to the timing, manner, price and, subject to Section 3.5(b)(i) through (iv), other terms and conditions as of any such Drag-Along Sale shall be at the sole discretion of the Initiating Drag-Along Seller, and none of the Initiating Drag-Along Seller, its Affiliates and their respective Representatives shall have any liability to any Dragged-Along Seller arising from, relating to or in connection with the pursuit, consummation, postponement, abandonment or terms and conditions of any proposed Drag-Along Sale except to the extent such Initiating Drag-Along Seller failed to comply with the provisions of this Section 3.5; provided, that (i) if the Initiating Drag-Along Seller agrees to amend, restate, modify or supplement the terms and/or conditions of the Drag-Along Seller is participating as set forth in Sale after such time that the Drag-Along Sale Notice has been delivered to the Dragged-Along Sellers in accordance with the terms of this Section 3.5, the Initiating Drag-Along Seller shall promptly notify the Company and cause to tender be delivered to each Dragged-Along Seller a revised Drag-Along Sale Notice containing all of the items required of a Drag-Along Sale Notice as set forth in Section 3.5(a) at least fifteen (15) days prior to the consummation of such Drag-Along Sale.
(e) All reasonable and documented out-of-pocket costs and expenses incurred by the Company, its Subsidiaries, any of the Sponsor Stockholders and their Permitted Transferees and any Drag-Along Sellers and their Permitted Transferees in connection with a Drag-Along Sale shall either be (i) borne in full by the Company or (ii) if the Company determines not to bear in full such costs and expenses, allocated and borne on a pro rata basis by each Drag-Along Seller in accordance with the amount of consideration otherwise received by each Drag-Along Seller in such Drag-Along Sale. For the avoidance of doubt, it is understood that this Section 3.5(e) shall not prevent any Drag-Along Sale to be structured in a manner such that some or all of the such costs and expenses result in a pro rata reduction in the consideration received by the Drag-Along Portion of its Shares as set forth below. The price payable Sellers in such Transfer shall be Drag-Along Sale.
(f) Notwithstanding anything herein to the contrary, if the Initiating Drag-Along Seller has not completed the proposed Drag-Along Sale Price. Not later than ten within one hundred eighty (10180) Business Days after the date days following delivery of the Drag-Along Sale Notice (the “in accordance with this Section 3.5, then such Drag-Along Sale Notice Period”)shall be null and void, each of the other Stockholders shall deliver to a representative of the DragDragged-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to shall be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for released from its obligations under such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company Notice and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney it shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender necessary for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the separate Drag-Along Sale Notice to consummate be furnished by the Initiating Drag-Along Sale on Seller, and the other terms and conditions set forth provisions of this Section 3.5 separately complied with, in order to consummate such Drag-Along Sale Noticepursuant to this Section 3.5; provided, provided that, that if such proposed Drag-Along Sale is subject to to, and conditioned on, one or more prior regulatory approvalapprovals, then such thirty one hundred eighty (30180) day period shall be extended solely to the extent necessary until no later than the expiration of five ten (510) Business Days days after all such approvals shall have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, This Section 3.5 automatically terminates without any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Salefurther action upon an IPO.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Samples: Class a Stockholders Agreement (Dell Technologies Inc)
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05, if a Shareholder (the “Drag-Along Seller”) proposes to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control 7.1. If (i) to any Third Party or Parties or the Board and (ii) to any Person in connection with the Holders holding a reorganization or restructuring majority of the shares of Common Stock then issued and outstanding (assuming full conversion, exercise or settlement of all outstanding convertible securities, rights, options, restricted stock units and warrants) then held by all Holders approve a Company as determined by the Board of Directors Sale (such Holders, the “Board”) so long as each Stockholder in the Electing Holders” and such Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such TransferSale, a “Drag-Along SaleTransfer”), the DragElecting Holders may exercise drag-Along Seller may at its option require each other Stockholder along rights in accordance with and subject to Transfer the Drag-Along Portion of the class of Shares terms, conditions and procedures set forth in this Section 7 (“Drag-Along Rights”) then held by such other Stockholder, and ).
7.2. The Electing Holders shall give written notice (subject to and at the closing of the a “Drag-Along SaleNotice”) at least fifteen (15) days prior to exercise the consummation of such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant proposed Drag-Along Portion Transfer to each other Holder (each, a “Drag-Along Holder”) of Shares held any election by each such other Stockholderthe Electing Holders to exercise its drag-along rights under this Section 7, setting forth (i) for the same consideration per share or unit number of the relevant class of SharesSecurities proposed to be Transferred, (ii) in cashthe consideration to be received for such Securities by such Electing Holders, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as identity of the Drag-Along Seller; provided that prospective transferee, (iv) any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the proposed Transfer, and (v) the date of the proposed Transfer. Such notice shall also specify the aggregate number of shares of Common Stock such Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder Holder shall be required to participate Transfer, which shall be an amount determined by the Board equal to the product of (x) the total number of Securities held by such Drag-Along Holder and (y) a fraction, the numerator of which is the total number of Securities proposed to be Transferred by the Electing Holders and their Affiliates, and the denominator of which is the total number of Securities held by the Electing Holders and their Affiliates immediately prior to the Transfer. Any Transfer of Securities by such Drag-Along Holder pursuant to the terms hereof shall be for the same amount and form of consideration per Security as the Electing Holders and their Affiliates will receive in such Drag-Along Transfer, as specified in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion Notice.
7.3. Within seven (7) days of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date delivery of the Drag-Along Sale Notice (the “to a Drag-Along Sale Notice Period”)Holder, each of the other Stockholders such Drag-Along Holder shall deliver to a representative the Company such instruments of transfer as shall be reasonably requested by the Electing Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for Transfer to the transferee, representing the number of Securities that such Drag-Along Seller designated Holder will include in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along SaleTransfer, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative Company to Transfer such Shares Securities on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment Notice.
7.4. In the event that any Transfer pursuant to this Section 7 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, each Drag-Along Holder must further agree to (i) vote or provide a written consent in favor of the cash portion of the consideration transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors (which shall be received in paid by such Drag-Along SaleHolder), oras may be required to effect such transaction, if and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
7.5. Solely for purposes of Section 7.4 and in order to secure the performance of such delivery Drag-Along Holder’s obligations under Section 7.4, each Drag-Along Holder hereby irrevocably appoints the Chief Executive Officer of the Company as its attorney-in-fact and proxy of such Drag-Along Holder (with full power of substitution) to vote, provide a written consent or take any other action with respect to its Securities as described in this paragraph if, and only in the event that, such Drag-Along Holder fails to vote or provide a written consent with respect to its Securities in accordance with the terms of Section 7.4(i) or fails to take any other action in accordance with the terms of Section 7.4(ii) or Section 7.4(iii) within three (3) days of a request for such vote, written consent or action. Upon such failure, the Chief Executive Officer of the Company shall have and is not permitted hereby irrevocably granted a proxy to vote or provide a written consent with respect to such Drag-Along Holder’s Securities for the purposes of taking the actions required by applicable lawSection 7.4. Each Drag-Along Holder intends this proxy to be, and it shall be, irrevocable and coupled with an unconditional agreement interest, and such Drag-Along Holder shall take such further action and execute such other instruments as may be necessary to deliver such Shares effectuate the intent of this proxy.
7.6. If a Drag-Along Holder fails to Transfer to the drag-along transferee the Securities to be Transferred pursuant to this Section 4.04(b7 as required to do so hereunder, the Electing Holders may, at their option, in addition to all other remedies it may have, deposit the purchase price (including, without limitation, any promissory note from the underlying transaction constituting all or any portion thereof) at for such Securities with any national bank or trust company (the closing for “Escrow Agent”), and thereupon all of such Drag-Along Sale against Holder’s rights in and to such Securities shall terminate (except for the right to receive the purchase price to which such Drag-Along Holder is entitled under this Section 7). Thereafter, upon delivery to the Company by such other Stockholder Drag-Along Holder of appropriate documentation evidencing the Transfer of such Securities to the drag-along transferee, the Electing Holders shall instruct the Escrow Agent to deliver the purchase price (without any interest from the date of the closing to the date of such delivery, any such interest to accrue to the Company) to such Drag-Along Holder, less any holdback or escrow of such purchase price made on a pro rata basis to any holdback or escrow agreed by the Electing Holders with respect to the consideration therefore. If an other Stockholder should fail to deliver received by the Electing Holders and their Affiliates for their Securities, with any such withheld amount being released to the Drag-Along Seller Holder on a pro rata basis with any release of such amounts to the Electing Holders and their Affiliates for their Securities.
7.7. If the Drag-Along Transfer is not consummated with in one hundred eighty (180) days after delivery of the Drag-Along Notice, the Electing Holders shall return to each Drag- Along Holder the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares the Securities that such other Stockholders Tag Along Holder delivered for Transfer pursuant hereto, together with to Section 7.3 and any other documents in the possession of the Electing Holders executed by such Drag- Along Holder in connection with the proposed Drag-Along Seller Transfer.
7.8. Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 7 in connection with any proposed Drag-Along Transfer, unless:
(a) any representations and warranties to be made by such Drag-Along Holder in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to such Securities, including, but not limited to, representations and warranties that (i) the Drag-Along Holder holds all right, title and interest in and to the Securities such Drag-Along Holder purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of the Drag-Along Holder in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by the Drag-Along Holder have been duly executed by the Drag-Along Holder and delivered to the acquirer and are enforceable against the Drag-Along Holder in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into by the Drag-Along Holder in connection with the transaction, nor the performance of the Drag-Along Holder’s obligations thereunder, will cause a breach or violation of the terms of any agreement to which the Drag-Along Holder is a party, or any law or judgment, order or decree of any court or governmental agency that applies to such Drag-Along Holder;
(b) the Drag-Along Holder is not required to agree (unless such Drag-Along Holder is a Company officer or employee) to any restrictive covenant in connection with the Drag-Along Transfer (including, without limitation, any covenant not to compete or covenant not to solicit customers, employees or suppliers of any party to the Drag-Along Transfer) or any release of claims other Stockholders than a release in customary form of claims arising solely in such Drag-Along Holder’s capacity as a stockholder of the Company;
(c) the Drag-Along Holder and its Affiliates are not required to amend, extend or terminate any contractual or other relationship with the Company, the acquirer or their respective Affiliates, except that the Drag-Along Holder may be required to agree to terminate this Agreement;
(d) the Drag-Along Holder shall not be liable for the breach of any representation or warranty or covenant made by any other Person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of identical representations, warranties and covenants provided by all stockholders);
(e) the liability for indemnification, if any, of such Drag-Along Holder in the Drag-Along Transfer and for the breach of any representations and warranties made by the Company, Tulco or Drag-Along Holders in connection with such proposed Drag-Along Transfer, is several and not joint with any other Person (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the restrictions Company’s Organizational Documents, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to such Drag-Along Holder in connection with such Drag-Along Transfer;
(f) liability shall be limited to such Drag-Along Holder’s applicable share (determined based on the respective proceeds payable to each Drag-Along Holder in connection with such Drag-Along Transfer contained in this Agreement or accordance with any applicable provisions of the Company’s Organizational Documents) of a negotiated aggregate indemnification amount that applies equally to all Drag-Along Holders but that in no event exceeds the amount of consideration otherwise applicable at payable to such time Drag-Along Holder in connection with such Drag-Along Transfer, except with respect to claims related to fraud by such Shares owned by Drag-Along Holder, the other Stockholders shall again liability for which need not be in effect.limited as to such Drag-Along Holder;
(dg) Concurrently with upon the consummation of the Drag-Along SaleTransfer, each Drag-Along Holder will receive the same amount and form of consideration per Security for her Securities as is received by the Electing Holders in respect of their respective Securities; and
(h) subject to clause (g) above, requiring the same amount and form of consideration per Security to be available to the Electing Holders and the Drag-Along Seller shall give notice thereof Holders, if the Electing Holders are given an option as to the other Stockholders, shall remit or cause form and amount of consideration per Security to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing received as a result of the Drag-Along Sale Transfer, each Drag-Along Holder will be given the same option; provided, however, that nothing in this clause (the cash portion h) shall entitle any Drag-Along Holder to receive any form of which is consideration per Security that such Drag-Along Holder would be ineligible to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion receive as a result of such Transfer as may Drag-Along Holder’s failure to satisfy any condition, requirement or limitation that is generally applicable to the Holders.
7.9. All costs and expenses incurred by a Holder in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be reasonably requested borne by such other StockholdersHolder participating in such Drag-Along Transfer.
(e) 7.10. Notwithstanding anything contained in this Section 4.047 to the contrary, there shall be no liability on the part of the Drag- Along Seller Electing Holders to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) Holders if the a Drag-Along Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever any reason, and the Electing Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Drag- Along Seller has Electing Holders have delivered a Drag-Along Sale Notice. The decision to effect a Transfer Notice in respect of Shares pursuant to this Section 4.04 by the such proposed Drag-Along Seller is in the sole and absolute discretion of the Drag-Along SellerTransfer.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Samples: Stockholders’ Agreement (FIGS, Inc.)
Drag-Along Rights. (a) Subject to Sections 4.04(g) 4.02(e), 4.02(f), 4.03 and 4.054.04, if a the Crestview Shareholder (the “Drag-Along Seller”) proposes enters into an agreement to Transfer (not including, however, any pledge, encumbrance sell all or hypothecation) any shares substantially all of any class of Shares that results in its Company Securities to a Change of Control (i) to any Third Party (whether pursuant to a merger acting through Parent, stock sale or Parties or otherwise) (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to all Other Shareholders to, and the Other Shareholders shall, (i) Transfer the Drag-Along Portion of the class of Shares Company Securities (“Drag-Along Rights”) then held by every Other Shareholder (and shall not exercise any appraisal or dissenter’s rights that may otherwise be available to any such other StockholderOther Shareholder under applicable law), and (ii) subject to and at the closing of the Drag-Along Sale) to , exercise such number of options or warrants for Common Shares held by such other Stockholder every Other Shareholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by Company Securities of each such other StockholderOther Shareholder, (i) in each case for the same consideration per share or unit of Share as the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, Drag-Along Seller and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder Other Shareholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place lieu of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such optionsany options or warrants, or the Drag-Along Sale is not consummated, any options or warrants exercised or canceled in contemplation of such options Drag-Along Sale shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.23
Appears in 1 contract
Drag-Along Rights. (a) Subject In the event that a Disposition Event is approved by the board of directors of the Corporation or is otherwise effected or to Sections 4.04(g) be effected with the consent or approval of the board of directors of the Corporation, Blueapple and 4.05, if a Shareholder (the “Drag-Along Seller”) proposes its Permitted Transferees agrees to Transfer all of their respective Common Units on the terms and conditions contemplated by this Section 10.09, effective and contingent upon the consummation of such Disposition Event, for consideration per Common Unit (not includingbefore taking into account any rights such Person may have under the Tax Receivable Agreement) equal to the same kind and amount of stock or securities, howevercash or other property, any pledgeas the case may be, encumbrance into which a share of Class A Common Stock is converted or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder exchanged in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactionsTransaction, and (any otherwise with respect to such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise Units on the same terms and conditions as apply to the Drag-Along Sellershares of Class A Common Stock in such Disposition Event, with such modifications as are appropriate, as determined in good faith by the Manager, to reflect the fact that Common Units rather than shares of Class A Common Stock will be Transferred. Such Transfer shall be structured in the sole discretion of the Manager and, without limitation to any other structure, the Manager will use its reasonable best efforts expeditiously and in good faith to take all such actions and do all such things as are necessary or desirable to enable and permit Blueapple and its Permitted Transferees to participate in such Disposition Event to the same extent or on an economically equivalent basis as the holders of shares of Class A Common Stock without discrimination; provided that, without limiting the generality of this sentence, the Manager will use its reasonable best efforts expeditiously and in good faith to ensure that Blueapple and its Permitted Transferees may participate in each such Disposition Event without being required to have their Common Units and any associated shares of Class B Common Stock redeemed (or, if so required, to ensure that any other Stockholder that holds options such redemption shall be effective only upon, and shall be conditional upon, the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place closing of such exercisedisposition Event, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceledor, as applicable, to the extent necessary to exchange the number of Common Units being repurchased).
(b) The Drag-Along Seller Corporation shall provide send written notice of such Drag-Along Sale to the other Stockholders Blueapple and its Permitted Transferees at least thirty (a “Drag- Along Sale Notice”30) not later than twenty (20) Business Days days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify closing of any Disposition Event to which this Section 10.09 applies informing them of the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions related to the transfer of the Drag-Along Saletheir respective Common Units in connection with such Disposition Event. The number of Shares to be sold by each other Stockholder Blueapple and its Permitted Transferees shall be the Drag-Along Portion obligated to sell all of the class their respective Common Units and shares of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate Class B Common Stock in the Drag-Along Sale Disposition Event contemplated by such notice, on the terms and conditions as the Drag-Along Seller is participating as set forth described in the Drag-Along Sale Notice this Section 10.09, including by executing any document containing customary representations, warranties and agreements with respect to tender the Drag-Along Portion of itself and its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date ownership of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”)Common Units or shares of Class B Common Stock, each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Saleas applicable, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated as requested by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders Manager in connection with such proposed TransferDisposition Event, which representations, warranties, indemnities and all agreements shall be substantially the restrictions on Transfer same as those contained in this Agreement or otherwise applicable at such time with respect any documentation to such Shares owned be executed by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation holders of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance Class A Common Stock with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer modifications as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained are appropriate, as determined in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received good faith by the Drag-Along Seller) if Manager, to reflect the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares fact that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any Common Units rather than shares of Company Shares owned by Stockholder with respect to a Drag-Along SaleClass A Common Stock will be transferred.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Samples: Limited Liability Company Agreement (EVO Payments, Inc.)
Drag-Along Rights. (a) Subject If, following the end of the Lock-Up Period, Mars Snacking proposes to Sections 4.04(gTransfer, in one or a series of related bona fide transactions (including pursuant to a merger, consolidation, share exchange, business combination, or other similar transaction) and 4.05Shares to any other Person that is not an Affiliate of Mars Snacking or to a Person in connection with any reorganization, if a Shareholder restructuring or other corporate (or similar) action required to facilitate an Exit (the “Drag-Along SellerPurchaser”) proposes to Transfer (not including), howeversuch that following the consummation of such Transfer, any pledge, encumbrance such Person will directly or hypothecation) any shares indirectly hold a majority of any class of the outstanding Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Drag- Along Sale”), then Mars Snacking shall have the right to require each Rollover Shareholder (each, a “Dragged Shareholder”) to Transfer to the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by such other StockholderPurchaser, and (subject to and at the closing sole discretion of the Drag-Along Sale) to exercise such number Mars Snacking, all of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of its Rollover Shares, (ii) in casheach case, notes, and/or marketable securities, and (iii) otherwise on substantially the same terms and conditions as the Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transfereethose received by Mars Snacking and, if a vote or consent of Shareholders is required by the Drag-Along Seller to exercise such options, may, or sought in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price connection with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made vote (the “Drag-Along Sale Price”or provide consent in respect of) and all other material terms and conditions of such Dragged Shareholder’s Rollover Shares in favor of the Drag-Along Sale. The number of Shares Sale as provided in Section 3.4(b) and take any related actions reasonably requested by Mars Snacking to be sold by each other Stockholder shall be the consummate such Drag-Along Portion of Sale; provided, that where the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate consideration in the Drag-Along Sale on consists of or includes securities, if the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion issuance of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver securities to a representative Dragged Shareholder would require either a registration statement under the Securities Act, or preparation of a disclosure statement pursuant to Regulation D (or any successor regulation) under the Drag-Along Seller designated Securities Act or a similar provision of any state securities law or similar Law, and such registration statement or disclosure statement is not otherwise being prepared in connection with the Drag-Along Sale, applicable instruments representing then, at the Shares option of Mars Snacking, such Dragged Shareholder shall be entitled to receive, in lieu of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable lawsecurities, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver amount equal to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf Fair Market Value of such other Stockholder, which power of attorney shall be deemed to be coupled with an interestsecurities in cash. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.Section
Appears in 1 contract
Samples: Shareholders’ Agreement
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05, if If any Principal or Principals approve or authorize a Shareholder sale or exchange (the “Drag"COMPANY SALE") of more than 80% of the then outstanding capital stock of Weekly Reader or the Company in a bona fide arm's-Along Seller”) proposes length transaction to Transfer (a third party that is not including, however, any pledge, encumbrance or hypothecation) any shares an Affiliate of any class of Shares that results in a Change of Control (i) to any Third Party Principal or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by or Weekly Reader (an "INDEPENDENT THIRD PARTY"), then the Board Principal or Principals shall have the right, subject to all the provisions of Directors this Section 4 (the “Board”) so long as "DRAG-ALONG RIGHT"), to require each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity Holders of Unit Common Stock and Exchange Common Stock to sell, transfer and deliver or cause to be sold, transferred and delivered to such Independent Third Party all Unit Common Stock and Exchange Common Stock owned by them; PROVIDED, HOWEVER, that if the Principals agree to sell less than all of their shares to such Independent Third Party, each of the other Holders shall only be required to sell, transfer and deliver to such Independent Third Party an amount of Unit Common Stock and Exchange Common Stock equal to the Company product obtained by multiplying the amount by such Holder's Pro Rata Portion.
(b) If the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder Principals desire to Transfer the Drag-Along Portion of the class of Shares (“exercise Drag-Along Rights”, it shall give written notice to the Holders (the "DRAG-ALONG NOTICE") then held by such other Stockholder, and (subject to and at the closing of the Company Sale, setting forth the name and address of the transferee, the date on which such transaction is proposed to be consummated (which shall be not less than 30 days after the date such Drag-Along Sale) to exercise such number Notice is given), and the proposed amount and form of options for Common Shares held consideration and terms and conditions of payment offered by such other Stockholder transferee, including, without limitation, the material terms of any debt or equity securities proposed to be included as is required part of such consideration, identifying the issuer or issuers thereof. If such consideration includes any non-cash consideration, such notice shall also state the fair market value of such non-cash consideration and shall describe in order that a sufficient number reasonable detail the method by which such value shall have been determined.
(c) The consideration to be received by the Holders of Unit Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for Stock and Exchange Common Stock shall be at the same consideration price per share of common stock (net, in the case of any options, warrants or unit rights, of any amounts required to be paid by the relevant class of Shares, (iiHolder upon exercise thereof) in cash, notes, and/or marketable securities, and (iii) otherwise on upon the same terms and conditions as such proposed transfer of common stock of the Drag-Along Seller; provided that any Company and Weekly Reader by the Principals, adjusted in the case of Exchange Common Stock, for the applicable Exchange Ratio. Such consideration shall be of the same type of consideration received by the Principals. If the securities to be purchased in the Company Sale includes securities other Stockholder that holds options than common stock, the exercise price to be paid for such securities shall be the same price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be denomination paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if Principals for like securities purchased from the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along SellerPrincipals.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Samples: Stockholders Agreement (World Almanac Education Group Inc)
Drag-Along Rights. (a) Subject to Sections 4.04(g) and 4.05Section 4.03, if a Shareholder at any time the Sponsors constituting the Sponsor Majority (collectively, the “Drag-Along Seller”) proposes propose to Transfer all but not less than all of their Group Equity Securities (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i“Drag-Along Sale”) to any Third Party or Third Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfer, a “Drag-Along Sale”), the Drag-Along Seller may at its option require each other Stockholder Management Shareholder, and each Management Shareholder hereby agrees, if such Transfer is structured as a Transfer of Group Equity Securities, to Transfer the Drag-Along Portion all but not less than all of the class of Shares (“Drag-Along Rights”) Group Equity Securities then held by such other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise Management Shareholder on the same terms and conditions as are applicable to the Drag-Along Seller; provided that any other Stockholder that holds options , including the exercise price same per share consideration with respect to a specific class of which is greater than Group Equity Securities; provided, that, the terms of such Drag-Along Sale may provide different per share price at consideration for different classes of Group Equity Securities. All Management Shareholders shall cooperate in, and shall take all actions that the Drag-Along Seller deems reasonably necessary or desirable to consummate the Drag-Along Sale, including, without limitation, (i) voting their respective Group Equity Securities (or executing and delivering any written consents in lieu thereof) in favor of the Drag-Along Sale and all actions deemed necessary or appropriate by the Drag-Along Seller in connection with the Drag-Along Sale, including voting to approve a Drag-Along Sale if such Drag-Along Sale is structured as a merger or a sale of all or substantially all of the assets of the Company, and against any action or proposal that may prevent, hinder or impede the consummation of the Drag-Along Sale, (ii) to the extent permitted by applicable law, not exercising any dissenters’ or appraisal rights to which they may be entitled in connection with the Common Shares are Drag-Along Sale, and (iii) subject to be Transferred Section 4.03(b), entering into agreements with the Drag-Along Transferee on terms substantially identical to those (if any) entered into between the Drag-Along Transferee and the Drag-Along Seller. Each Management Shareholder hereby grants to each Sponsor that is part of the Drag-Along Seller, an irrevocable proxy coupled with an interest to vote, including in any action by written consent, such Management Shareholder’s Group Equity Securities in accordance with such Management Shareholder’s agreements in this Section 4.03 and a power of attorney to execute and deliver in the name and on behalf of such Management Shareholder all such agreements, instruments and other documentation (including any written consents of shareholders) as is required to Transfer the Group Equity Securities held by such Management Shareholder to the Drag-Along Transferee. Notwithstanding the foregoing, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the may cause a Drag-Along Sale is pursuant to this Section 4.02(a) in a Transfer for less than all of the outstanding Group Equity Securities; provided, that such retained shares do not consummated with respect exceed 20% of the issued and outstanding Group Equity Securities and; provided, further that all Management Shareholders shall have the right to any Common Shares acquired upon exercise retain a pro rata share of each class of aggregate retained shares (based on their Aggregate Ownership of the specified class at such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicabletime).
(b) The Drag-Along Seller shall provide written notice of such Drag-Along Sale to the other Stockholders Management Shareholders (a “Drag- Drag-Along Sale Notice”) not later than twenty (20) Business Days 10 days prior to the proposed Drag-Along Sale. The Drag- Drag-Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, Transferee and the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder Management Shareholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth belowGroup Equity Securities. The price and form of consideration payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days five days after the date receipt of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders Management Shareholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, Sale Notice the certificate or certificates and other applicable instruments representing the Shares Group Equity Securities of such other Stockholder Management Shareholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares Group Equity Securities pursuant to this Section 4.04(b4.02(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder Management Shareholder of the consideration thereforetherefor. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder Management Shareholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company Companies shall cause the books and records of the Company to show reflect that such Shares Group Equity Securities are bound by the provisions of this Section 4.04(b4.02(b) and that such Shares Group Equity Securities shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) 120 days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice; provided, provided that, that if such Drag-Along Sale is subject to regulatory approval, such thirty (30) 120-day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) 180 days following after the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and Management Shareholders all certificates and other applicable instruments representing Shares Group Equity Securities that such other Stockholders Management Shareholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders Management Shareholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares Group Equity Securities owned by the other Stockholders Management Shareholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other StockholdersManagement Shareholders, shall remit or cause to be remitted to each of the other Stockholders all Management Shareholders that have surrendered their certificates and other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale for the Group Equity Securities Transferred (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other StockholderManagement Shareholder’s wire transfer instructions) for the Shares Transferred pursuant hereto ), and shall furnish such other evidence of the completion and time of completion of such Transfer and the terms thereof as may be reasonably requested by such other StockholdersManagement Shareholders.
(e) Notwithstanding anything contained in this Section 4.044.02, there shall be no liability on the part of the Drag- Drag-Along Seller to the other Stockholders Management Shareholders (other than the obligation to return any the limited power-of-attorney and the certificates and other applicable instruments representing Shares Group Equity Securities received by the Drag-Along Seller) if the Transfer of Shares Group Equity Securities pursuant to this Section 4.04 4.02 is not consummated for whatever reason, regardless of whether the Drag- Drag-Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares Group Equity Securities pursuant to this Section 4.04 4.02 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
Appears in 1 contract
Samples: Management Shareholders Agreement (Warner Chilcott CORP)
Drag-Along Rights. (a) Subject to Sections 4.04(g4.02(f) and 4.054.03, if a Shareholder one or more of the DLJMB Funds (collectively, the “"Drag-Along Seller”") proposes propose to Transfer (not including, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) Company Securities to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “"Drag-Along Transferee”") in a single transaction or in a series of related transactions, and and
(i) the Company Securities to be Transferred by the Drag-Along Seller represent not less than 50% of the Initial Ownership of that class of Company Securities owned by the DLJMB Funds (in which case the provisions of Sections 4.02(b)-(e) shall apply), or
(ii) the Company Securities to be Transferred by the Drag-Along Seller, together with the Company Securities to be Transferred by the Other Stockholders pursuant to this Section 4.02(a), constitute more than 50% of the Common Shares then outstanding (in which case the provisions of Sections 4.02(b)-(e) shall apply), (any such Transfer, a “"Drag-Along Sale”"), the Drag-Along Seller may at its option require each other Other Stockholder to Transfer the Drag-Along Portion of the class of Shares Company Securities (“"Drag-Along Rights”") then held by such other Other Stockholder, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares Company Securities held by each such other Other Stockholder, (i) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, Company Securities and (iii) otherwise on the same terms and conditions as the Drag-Along Seller; provided that any other Other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Drag-Along Transferee, if required by the Drag-Along Seller to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated with respect to any Common Shares acquired upon exercise of such options, or the Drag-Along Sale is not consummated, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Other Stockholders (a “Drag- "Drag-Along Sale Notice”") not later than twenty five (205) Business Days prior to the proposed Drag-Along Sale. The Drag- Drag-Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares Company Securities subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “"Drag-Along Sale Price”") and all other material terms and conditions of the Drag-Along Sale. The number of Shares Company Securities to be sold by each other Other Stockholder shall be the Drag-Along Portion of the class of Shares Company Securities that such other Other Stockholder owns. Each other Other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares Company Securities as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten five (105) Business Days after the date of the Drag-Along Sale Notice (the “"Drag-Along Sale Notice Period”"), each of the other Other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, Sale Notice the certificate and other applicable instruments representing the Shares Company Securities of such other Other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares Company Securities on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares Company Securities pursuant to this Section 4.04(b4.02(b) at the closing for such Drag-Along Sale against delivery to such other Other Stockholder of the consideration thereforetherefor. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares Company Securities are bound by the provisions of this Section 4.04(b4.02(b) and that such Shares Company Securities shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) 120 days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) 120-day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) 180 days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Other Stockholders any the limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares Company Securities that such other Other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares Company Securities owned by the other Other Stockholders shall again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Other Stockholders, shall remit or cause to be remitted to each of the other Other Stockholders all that have surrendered their certificates and other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Other Stockholder’s 's wire transfer instructions) for the Shares Company Securities Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer and the terms thereof as may be reasonably requested by such other Other Stockholders.
(e) Notwithstanding anything contained in this Section 4.044.02, there shall be no liability on the part of the Drag- Drag-Along Seller to the other Other Stockholders (other than the obligation to return any the limited power-of-attorney and the certificates and other applicable instruments representing Shares Company Securities received by the Drag-Along Seller) if the Transfer of Shares Company Securities pursuant to this Section 4.04 4.02 is not consummated for whatever reason, regardless of whether the Drag- Drag-Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares Company Securities pursuant to this Section 4.04 4.02 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 4.02 shall terminate upon not apply to any Transfer of the Common Shares in a Public Offering. The provisions of this Section 4.02 shall continue in effect following the consummation of the Initial Public Offering.
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Drag-Along Rights. (a) Subject In the event that Holdco Inc. desires to Sections 4.04(g) and 4.05Transfer, if a Shareholder (the “Drag-Along Seller”) proposes to Transfer (not including, however, in any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring of the Company as determined by the Board of Directors (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and all of its Shares to any Third-Party Purchaser (any in such context, a “Drag Along Purchaser”), then Holdco Inc. shall have the right (a “Drag Along Right”) to require all Investor Shareholders to Transfer all of their respective Shares to the Drag Along Purchaser in accordance with the procedures set forth in this Section 3.4 (such Transfer, a “Drag-Drag Along Sale”), the Drag-Along Seller may at its option require each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by such other Stockholder, and (subject to and at the per Share price (which shall be payable in cash or Listed Securities valued at their weighted average closing price on the stock exchange of such Listed Securities during the Drag-Along Salelast thirty (30) trading days immediately preceding the date on which such Listed Securities are to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (ibe paid) for the same consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as the Drag-Transfer of Shares by Holdco Inc. to the Drag Along SellerPurchaser; provided that any other Stockholder Drag Along Sale must be effected at a per Share price that holds options the exercise price per share of which is equal to or greater than the per share price at which Drag Along Minimum Price in effect as of the Common Shares are to be Transferred to date that is three hundred (300) days after the Drag-date of the Drag Along TransfereeNotice; provided further that, if required by the Drag-Along Seller to exercise such options, may, in place any Affiliate of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the Drag-Along Sale is not consummated Holdco Inc. exercises a drag along right with respect to any Common Shares acquired upon other equity interest in the Companies Beneficially Owned by an Investor Shareholder or its Affiliates and Holdco Inc. does not concurrently exercise of such optionsits Drag Along Right hereunder, or the Drag-Along Sale is not consummated, such options Holdco Inc. shall be deemed not to have been exercised its Drag Along Right hereunder, at a price per Share and other material terms and conditions that provide such Investor Shareholder with economic value for its Shares equivalent to that received by such Investor Shareholder or canceledits Affiliates in the other drag along transactions taking into account all relevant factors, or, if higher than such price per Share, at a per Share price that is equal to the Drag Along Minimum Price in effect as applicableof the date that is three hundred (300) days after the date of such deemed exercise, and otherwise in accordance with this Section 3.4.
(b) The Drag-Following satisfaction of its obligations pursuant to Section 3.3, Holdco Inc. may exercise its Drag Along Seller shall provide Right pursuant to this Section 3.4 by providing written notice of such Drag-Along Sale its election to the other Stockholders do so to each Investor Shareholder (a “Drag- Drag Along Sale Notice”) not later than twenty (20) Business Days prior to the proposed Drag-Along Sale. The Drag- Along Sale Notice ), which 23 notice shall identify the Drag-Drag Along Transferee, Purchaser and specify the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) price per Share and all other material terms and conditions of the Drag-Drag Along Sale. The number of Shares to be sold by each other Stockholder shall be , including the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the anticipated closing date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Drag Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares pursuant to this Section 4.04(b) at the closing for such Drag-Along Sale against delivery to such other Stockholder of the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Drag Along Seller Sale must be consummated within the Regulatory Approval Period applicable to the Transfer by Holdco Inc. to the Drag Along Purchaser. No Investor Shareholder shall have a Transfer or agree to Transfer any Shares to any Person other than the Drag Along Purchaser during the period of thirty (30) days from between the date it receives a Drag Along Notice and the conclusion of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale NoticeRegulatory Approval Period. If the Drag-Drag Along Sale shall not have been consummated during such periodRegulatory Approval Period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such the Shares owned by the other Stockholders Shareholders shall again be in effect.
(d) Concurrently In connection with any exercise of its Drag Along Right pursuant to this Section 3.4, Holdco Inc. shall pay each Investor Shareholder an amount equal to the Daily Ticking Fee multiplied by the number of days between the date that is three hundred (300) days after the date of the Drag Along Notice and the consummation of the Drag-Drag Along Sale, solely to extent such payments are necessary to ensure that the Drag-Along Seller shall give notice thereof Investor Shareholder receives a per Share price equal to the other Stockholders, shall remit or cause to be remitted to each Drag Along Minimum Price in effect as of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing date of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence consummation of the completion and time of completion of such Transfer as may be reasonably requested by such other StockholdersDrag Along Sale.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on In the part of the Drag- event that Holdco Inc. exercises its Drag Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares Right pursuant to this Section 4.04 is not consummated 3.4, the Investor Shareholders shall take all actions as may be reasonably necessary to consummate the Drag Along Sale, including making the representations, warranties and covenants set forth on Schedule 3.4(d) and entering into such definitive agreements as are customary for whatever reasontransactions of the nature of the proposed Transfer. Notwithstanding anything herein to the contrary, regardless the Investor Shareholders agree to (i) vote in favor of whether the Drag- transaction or transactions with the Drag Along Seller has delivered a Drag-Along Sale Notice. The decision Purchaser, (ii) take such other action as may be required to effect a Transfer of Shares pursuant such transaction and (iii) take all actions to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger waive any dissenters, appraisal or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Salethereto.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
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Drag-Along Rights. Notwithstanding any provision of this Agreement to the contrary, if, at any time after the Effective Date, both the Series B Preferred Stockholders holding a Series B Majority and the Series C Preferred Stockholders holding a Series C Majority propose to effect a Deemed Liquidation Event (a) Subject to Sections 4.04(g) and 4.05, if a Shareholder (the “Drag-Along SellerTransaction”) proposes to Transfer (), such Series B Preferred Stockholders and Series C Preferred Stockholders shall be entitled to, but shall not includingbe obligated to, however, any pledge, encumbrance or hypothecation) any shares of any class of Shares that results in a Change of Control (i) to any Third Party or Parties or (ii) to any Person in connection with a reorganization or restructuring require each of the other Company as determined by the Board of Directors Stockholders or other persons or entities holding any Equity Securities (the “Board”) so long as each Stockholder in the Company maintains their proportionate economic and voting interest in the capital stock (or equivalent securities) of the successor entity to the Company (the “Drag-Along Transferee”) in a single transaction or in a series of related transactions, and (any such Transfereach, a “Drag-Along SaleStockholder”) to join in (participating pro rata in the same proportion that the Equity Securities owned by each such Series B Preferred Stockholder, Series C Preferred Stockholder and Drag-Along Stockholder (determined on an as-if-converted, Common Stock-equivalent basis with respect to all Equity Securities, including the Preferred Stock) represents to all of the issued and outstanding Equity Securities of the Company (on an as-if-converted, Common Stock-equivalent basis)), and to include in and to sell any and all of the Equity Securities held by such Drag-Along Stockholder in the Drag-Along Seller may at its option require Transaction, in each other Stockholder to Transfer the Drag-Along Portion of the class of Shares (“Drag-Along Rights”) then held by such other Stockholdercase, and (subject to and at the closing of the Drag-Along Sale) to exercise such number of options for Common Shares held by such other Stockholder as is required in order that a sufficient number of Common Shares are available to Transfer the relevant Drag-Along Portion of Shares held by each such other Stockholder, (i) for the same proportionate, Common Stock-equivalent consideration per share or unit of the relevant class of Shares, (ii) in cash, notes, and/or marketable securities, and (iii) otherwise on the same terms and conditions as such Series B Preferred Stockholders and Series C Preferred Stockholders propose to sell their shares of Preferred Stock (after payment to the Preferred Investor Stockholders of all preferences and dividends payable as to the Preferred Stock (the “Preferred Preferences”), as described in the Charter, with all Equity Securities within any particular series or class being treated for such purposes on equivalent terms (after payment of the Preferred Preferences); provided, however that the Series A Investor Stockholders shall not be subject to any Drag-Along Seller; provided that any other Stockholder that holds options the exercise price per share of which is greater than the per share price at which the Common Shares are to be Transferred to the Transaction unless such Drag-Along Transferee, if required Transaction either (a) ensures payment in full (in cash proceeds) of all preferences and dividends payable as to outstanding Series A Preferred Stock as described in the Charter; or (b) has been approved by the a Series A Majority. The closing of any Drag-Along Seller Transaction shall occur not less than thirty (30) days after delivery of written notice by the Series B Preferred Stockholders and Series C Preferred Stockholders to exercise such options, may, in place of such exercise, submit to irrevocable cancellation thereof without any liability for payment of any exercise price with respect thereto. If the all Drag-Along Sale is not consummated with respect to any Common Shares acquired Stockholders stating the applicable terms and timing thereof, promptly upon exercise of which notice all such options, or the Drag-Along Sale is not consummatedStockholders shall execute such documents and take such other actions as necessary for or incidental to such closing, such options shall be deemed not to have been exercised or canceled, as applicable.
(b) The and each Drag-Along Seller Stockholder hereby grants to the Company its power of attorney, which is durable and coupled with an interest and shall provide notice survive the death or disability of such Drag-Along Sale Stockholder, to the other Stockholders (a “Drag- Along Sale Notice”) not later than twenty (20) Business Days prior execute and deliver any and all documents, and to the proposed Drag-Along Sale. The Drag- Along Sale Notice shall identify the Drag-Along Transferee, the number of Shares subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) take any and all other material terms and conditions of the Drag-Along Sale. The number of Shares to be sold by each other Stockholder shall be the Drag-Along Portion of the class of Shares that such other Stockholder owns. Each other Stockholder shall be required to participate actions, as reasonably necessary in the Drag-Along Sale on the terms and conditions as the Drag-Along Seller is participating as set forth in the Drag-Along Sale Notice and to tender the Drag-Along Portion of its Shares as set forth below. The price payable in such Transfer shall be the Drag-Along Sale Price. Not later than ten (10) Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the other Stockholders shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale, applicable instruments representing the Shares of such other Stockholder to be included in the Drag-Along Sale, together connection with a limited power-of-attorney authorizing the Drag-Along Seller or such representative to Transfer such Shares on the terms set forth in the Drag-Along Notice and wire transfer instructions for payment of the cash portion of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Shares Stockholder’s sale of its Equity Securities pursuant to this Section 4.04(b) at 3.4. Upon any closing of a Drag-Along Transaction, the closing for Series B Preferred Stockholders, the Series C Preferred Stockholders and any and all Drag-Along Stockholders shall have been deemed to have sold and disposed of their Equity Securities in their entirety pursuant to the applicable terms of such Drag-Along Sale against delivery Transaction, and shall retain no further right with respect to such Equity Securities other Stockholder of than the right to receive the consideration therefore. If an other Stockholder should fail to deliver to the Drag-Along Seller the limited power-of-attorney referenced therein, then such other Stockholder hereby grants hereunder to the Company and any representative designated by the Board without further action by such other Stockholder a limited irrevocable power of attorney hereunder to effect such Drag-Along Sale on behalf of such other Stockholder, which power of attorney shall be deemed to be coupled with an interest. If an other Stockholder should fail to deliver such certificates to the Drag-Along Seller and the Drag-Along Sale is consummated, the Company shall cause the books and records of the Company to show that such Shares are bound by the provisions of this Section 4.04(b) and that such Shares shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of thirty (30) days from the date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth paid or payable in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such thirty (30) day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than sixty (60) days following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall promptly return to each of the other Stockholders any limited power-of-attorney (and all copies thereof) and all certificates and other applicable instruments representing Shares that such other Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Stockholders respect thereof in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Shares owned by the other Stockholders shall again be in effectsale.
(d) Concurrently with the consummation of the Drag-Along Sale, the Drag-Along Seller shall give notice thereof to the other Stockholders, shall remit or cause to be remitted to each of the other Stockholders all other applicable instruments and the total consideration to be paid at the closing of the Drag-Along Sale (the cash portion of which is to be paid by wire transfer of immediately available funds in accordance with such other Stockholder’s wire transfer instructions) for the Shares Transferred pursuant hereto and shall furnish such other evidence of the completion and time of completion of such Transfer as may be reasonably requested by such other Stockholders.
(e) Notwithstanding anything contained in this Section 4.04, there shall be no liability on the part of the Drag- Along Seller to the other Stockholders (other than the obligation to return any limited power-of-attorney and the certificates and other applicable instruments representing Shares received by the Drag-Along Seller) if the Transfer of Shares pursuant to this Section 4.04 is not consummated for whatever reason, regardless of whether the Drag- Along Seller has delivered a Drag-Along Sale Notice. The decision to effect a Transfer of Shares pursuant to this Section 4.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(f) A Drag-Along Sale may also be affected by a merger or other corporate transaction and each Stockholder agrees to vote his, her or its Shares that are entitled to vote or execute proxies or written consents, as the case may be, and to take all other actions necessary in order to approve the consummation of the Drag-Along Sale.
(g) Stockholder hereby irrevocably and unconditionally waives and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar rights relating to a Drag-Along Sale or any related transaction that Stockholder or any other Person may have by virtue of, or with respect to, any shares of Company Shares owned by Stockholder with respect to a Drag-Along Sale.
(h) The provisions of this Section 4.04 shall terminate upon the consummation of the Initial Public Offering.
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