Provisions Generally Applicable to Transfers. (a) Applicability of Sections 2 and 3. The rights, obligations and restrictions set out in Sections 2 and 3: (i) apply to Company Equity (or, in the case of Section 3, to Company Shares) presently owned or hereafter acquired by a Shareholder Party, or by the successor of any Shareholder Party or a Related Party; (ii) apply (subject to the limitations of clauses (iii) and (iv) below) to any direct or indirect disposition, including, within that concept and without limitation, a sale, bequest, exchange, assignment or gift, the creation of any security interest or other encumbrance, a transfer in connection with a receivership, bankruptcy, insolvency, dissolution, liquidation, judicial determination of incompetency or similar proceeding, and any other disposition of any kind, whether voluntary or involuntary, and however accomplished (including, among other means, by way of merger, recapitalization, share exchange or other extraordinary corporate action), affecting title to or possession of any Company Equity ("Transfer"); (iii) do not apply (A) to transfers to be made by a Shareholder Party to a Control Affiliate, or (B) (1) in the case of a transfer by FondElec or a successor to FondElec, to an entity that has as a general partner, a Person that is Controlled by, FondElec Group or an entity which Controls, is Controlled by or under Common Control with FondElec Group, (2) in the case of a transfer by TCW or a successor to TCW, to an entity that has as a general partner, a Person that is Controlled by, TCW/Latin America Partners LLC or an entity which Controls, is Controlled by or under Common Control with TCW/Latin America Partners LLC, (3) in the case of a transfer by Telematica to an entity that is a Control Affiliate of Corporacion EDC, C.A. or of C.A. Electricidad de Caracas and, (4) in the case of a transfer by Glacier or a successor to Glacier, to an entity that has as an investment advisor, Fenway Capital Ltd. or an entity which Controls, is Controlled by or under Common Control with Fenway Capital Ltd. (in any case, such Control having been evidenced to the reasonable satisfaction of the other Shareholder Parties), or (C) in the case of Internexus, to transfers of interests in Internexus made to a spouse, or to a relative within the first degree of consanguinity, of any of the current holders of Internexus or to trusts or similar estate planning vehicles for the benefit of any of them, or (D) in the case of any of the D'Ambrosio Parties, to transfers made to a spouse or to a relative within the first degree of consanguinity, or to trusts or similar estate planning vehicles for the benefit of any of them (any entity or person described in this clause (iii), a "Related Party"); and (iv) do not apply to the transfer of Common Stock upon exercise by the optionee of the "Diamond D Options" or of the "Continental LLC Option" which are described in Schedule 1 hereto. (b) Restructure or Disassociation. (i) If, during the term of this Agreement, a Shareholder Party (the "Proposing Party") in its reasonable discretion determines that its continued investment in the Company and/or the Company's subsidiaries, as the investment may be structured from time to time, exposes the Proposing Party to substantial claims from third parties or other legal or regulatory process that results in substantial burdens or liability arising from arrangements or circumstances existing as of the date hereof or changes in law or regulation after the date hereof, (a "Trigger Event") then, at the Proposing Party's request, the other Shareholder Parties (the "Responding Parties") and the Proposing Party shall exercise reasonable, diligent and timely efforts to restructure their respective investments so as to remove or mitigate the risk of liability to the Proposing Party while preserving the Proposing Party's investment, provided that the Responding Parties need not agree to the restructuring if it would (a) reduce the rights or preferences that the Responding Parties had prior to the restructuring, (b) change the relative aggregate ownership interests in the enterprise that the Responding Parties had prior to the restructuring, (c) reduce the rights of representation or participation in corporate governance that the Responding Parties enjoy by virtue of the CCI Shareholders' Agreement, (d) create any substantial liability on the Responding Parties for which that the Proposing Party does not agree to be responsible, (e) reduce the overall value of the Responding Parties' investment, (f) substantially reduce the likelihood of a Qualified Disposition or a Qualified Public Offering, or (g) otherwise adversely affect the Company, any Subsidiary or the Responding Parties, except in immaterial respect. (ii) If the Proposing Party makes, in its sole discretion, a good faith determination that a restructuring, as contemplated by the preceding paragraph, would involve terms and conditions (economic or otherwise) not satisfactory to the Proposing Party, then the Proposing Party may cease to be obligated to continue funding the Company or any of its subsidiaries and may dispose of the entirety of its interest in the Company (the "Proponent's Interest") as provided in the following clauses (A) through (D): (A) if the Proposing Party holds any direct equity right or interest or an interest or right convertible or exchangeable into an equity interest in a subsidiary of the Company; the Proposing Party first, with the good faith cooperation of the Company, shall have exchanged such interest for Common Stock of the Company at fair value (as determined pursuant to Section 12 (b)) or otherwise caused the transferee to acquire only Common Stock of the Company; (B) the Proposing Party shall negotiate to dispose of its interest in the following order, in each case for a reasonable time, first, to the Company, then, on a pro rata basis, to the other Shareholder Parties or such of them as wish to purchase the entirety of the Proponent's Interest, next, to the third party designated by the majority of the other Shareholder Parties, and last, to one or more third parties, except that if the transfer to a third party is proposed to occur on terms and conditions substantially equal or more favorable to the third party than negotiated with any of the other Shareholder Parties or their designee, the Shareholder Parties may elect to purchase at that price, or their designee may do so; (C) each transferee of the Proponent's Interest adheres to the CCI Shareholders' Agreement in its entirety (and shall have the benefit of all the rights and privileges available to the Proposing Party with respect to its Company Equity, including the Registration Rights Agreement and the other Transaction Documents, except that if the transferee is a Shareholder Party, it shall not have the benefit of designating a greater number of directors than it had prior to the transfer); and (D) each transferee, in the good faith opinion of the Responding Parties, is reputable, creditworthy and not a substantial competitor of the Company or its Subsidiaries. The tag along rights under Section 3 of the CCI Shareholders Agreements shall not apply to a transfer under this Agreement. (iii) The Parties acknowledge and agree that the Proposing Party shall have no liability to the other Parties under any Transaction Document for any (i) loss or damages to or suffered by the other Parties flowing from the Proposing Party's need to restructure or sell pursuant to this Section, or the restructuring or sale itself, or (ii) the consequences of the restructuring or sale, including any loss or damages to or suffered by other Parties flowing from or that result from such restructuring or sale, such as the loss of funding commitments associated with the Proposing Shareholder, the loss of the Proposing Party's ability to support the Company and its subsidiaries, and loss of reputation and prestige associated therewith, provided that the Proposing Party shall indemnify the Responding Parties for the reasonable out-of-pocket expenses incurred by the Responding Parties, and any out-of-pocket damages against the Responding Parties assessed against them, as a result of claims by third parties who may bring the substantial claims or other legal process referred to above. The Parties further acknowledge and agree that the restructuring or mere disassociation of the Proposing Party from all or a part of its investment as originally structured will not, in and of itself, be or be deemed to result in any loss to the other Parties or be taken into account in determining whether the overall value of the Responding Parties' investment has been reduced for purposes of clause (e) of the first paragraph of this Section. (iv) In no event shall the Proposing Party be liable for damages other than direct out-of-pocket damages, and therefore will not be responsible for other damages such as loss of profits, indirect, consequential, special or punitive damages. (v) If a Qualified Disposition Event occurs at any time after a Trigger Event, then, except for transactions previously consummated under this Section 4(b), the right to restructure under Section 4(b)(i) and the right to dispose under Section 4(b)(ii) will expire, but not the other rights under this Section 4(b), including the right to cease funding under Section 4(b)(ii) and the provisions of Sections 4(b)(iii) and 4(b)(iv).
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Samples: Shareholder Agreements (TCW Group Inc), Shareholder Agreements (Convergence Communications Inc)
Provisions Generally Applicable to Transfers. (a) Applicability of Sections 2 and 3. The rights, obligations and restrictions set out in Sections 2 and 3:
(i) apply to Company Equity (or, in the case of Section 3, to Company Shares) presently owned or hereafter acquired by a Shareholder Party, or by the successor of any Shareholder Party or a Related Party;
(ii) apply (subject to the limitations of clauses (iii) and (iv) below) to any direct or indirect disposition, including, within that concept and without limitation, a sale, bequest, exchange, assignment or gift, the creation of any security interest or other encumbrance, a transfer in connection with a receivership, bankruptcy, insolvency, dissolution, liquidation, judicial determination of incompetency or similar proceeding, and any other disposition of any kind, whether voluntary or involuntary, and however accomplished (including, among other means, by way of merger, recapitalization, share exchange or other extraordinary corporate action), affecting title to or possession of any Company Equity ("Transfer");
(iii) do not apply (A) to transfers to be made by a Shareholder Party to a Control Affiliate, or (B) (1) in the case of a transfer by FondElec or a successor to FondElec, to an entity that has as a general partner, a Person that is Controlled by, FondElec Group or an entity which Controls, is Controlled by or under Common Control with FondElec Group, (2) in the case of a transfer by TCW or a successor to TCW, to an entity that has as a general partner, a Person that is Controlled by, TCW/Latin America Partners LLC or an entity which Controls, is Controlled by or under Common Control with TCW/Latin America Partners LLC, (3) in the case of a transfer by Telematica to an entity that is a Control Affiliate of Corporacion EDC, C.A. or of C.A. Electricidad de Caracas and, (4) in the case of a transfer by Glacier or a successor to Glacier, to an entity that has as an investment advisor, Fenway Capital Ltd. or an entity which Controls, is Controlled by or under Common Control with Fenway Capital Ltd. (in any case, such Control having been evidenced to the reasonable satisfaction of the other Shareholder Parties), or (C) in the case of Internexus, to transfers of interests in Internexus made to a spouse, or to a relative within the first degree of consanguinity, of any of the current holders of Internexus or to trusts or similar estate planning vehicles for the benefit of any of them, or (D) in the case of any of the D'Ambrosio Parties, to transfers made to a spouse or to a relative within the first degree of consanguinity, or to trusts or similar estate planning vehicles for the benefit of any of them (any entity or person described in this clause (iii), a "Related Party"); and
(iv) do not apply to the transfer of Common Stock upon exercise by the optionee of the "Diamond D Options" or of the "Continental LLC Option" which are described in Schedule 1 hereto.
(b) Restructure or Disassociation.
(i) If, during the term of this Agreement, a Shareholder Party (the "Proposing Party") in its reasonable discretion determines that its continued investment in the Company and/or the Company's subsidiaries, as the investment may be structured from time to time, exposes the Proposing Party to substantial claims from third parties or other legal or regulatory process that results in substantial burdens or liability arising from arrangements or circumstances existing as of the date hereof or changes in law or regulation after the date hereof, (a "Trigger Event") then, at the Proposing Party's request, the other Shareholder Parties (the "Responding Parties") and the Proposing Party shall exercise reasonable, diligent and timely efforts to restructure their respective investments so as to remove or mitigate the risk of liability to the Proposing Party while preserving the Proposing Party's investment, provided that the Responding Parties need not agree to the restructuring if it would (a) reduce the rights or preferences that the Responding Parties had prior to the restructuring, (b) change the relative aggregate ownership interests in the enterprise that the Responding Parties had prior to the restructuring, (c) reduce the rights of representation or participation in corporate governance that the Responding Parties enjoy by virtue of the CCI Shareholders' Agreement, (d) create any substantial liability on the Responding Parties for which that the Proposing Party does not agree to be responsible, (e) reduce the overall value of the Responding Parties' investment, (f) substantially reduce the likelihood of a Qualified Disposition or a Qualified Public Offering, or (g) otherwise adversely affect the Company, any Subsidiary or the Responding Parties, except in immaterial respect.
(ii) If the Proposing Party makes, in its sole discretion, a good faith determination that a restructuring, as contemplated by the preceding paragraph, would involve terms and conditions (economic or otherwise) not satisfactory to the Proposing Party, then the Proposing Party may cease to be obligated to continue funding the Company or any of its subsidiaries and may dispose of the entirety of its interest in the Company (the "Proponent's Interest") as provided in the following clauses (A) through (D): (A) if the Proposing Party holds any direct equity right or interest or an interest or right convertible or exchangeable into an equity interest in a subsidiary of the Company; the Proposing Party first, with the good faith cooperation of the Company, shall have exchanged such interest for Common Stock of the Company at fair value (as determined pursuant to Section 12 (b)) or otherwise caused the transferee to acquire only Common Stock of the Company; (B) the Proposing Party shall negotiate to dispose of its interest in the following order, in each case for a reasonable time, first, to the Company, then, on a pro rata basis, to the other Shareholder Parties or such of them as wish to purchase the entirety of the Proponent's Interest, next, to the third party designated by the majority of the other Shareholder Parties, and last, to one or more third parties, except that if the transfer to a third party is proposed to occur on terms and conditions substantially equal or more favorable to the third party than negotiated with any of the other Shareholder Parties or their designee, the Shareholder Parties may elect to purchase at that price, or their designee may do so; (C) each transferee of the Proponent's Interest adheres to the CCI Shareholders' Agreement in its entirety (and shall have the benefit of all the rights and privileges available to the Proposing Party with respect to its Company Equity, including the Registration Rights Agreement and the other Transaction Documents, except that if the transferee is a Shareholder Party, it shall not have the benefit of designating a greater number of directors than it had prior to the transfer); and (D) each transferee, in the good faith opinion of the Responding Parties, is reputable, creditworthy and not a substantial competitor of the Company or its Subsidiaries. The tag along rights under Section 3 of the CCI Shareholders Agreements shall not apply to a transfer under this Agreement.
(iii) The Parties acknowledge and agree that the Proposing Party shall have no liability to the other Parties under any Transaction Document for any (i) loss or damages to or suffered by the other Parties flowing from the Proposing Party's need to restructure or sell pursuant to this Section, or the restructuring or sale itself, or (ii) the consequences of the restructuring or sale, including any loss or damages to or suffered by other Parties flowing from or that result from such restructuring or sale, such as the loss of funding commitments associated with the Proposing Shareholder, the loss of the Proposing Party's ability to support the Company and its subsidiaries, and loss of reputation and prestige associated therewith, provided that the Proposing Party shall indemnify the Responding Parties for the reasonable out-of-pocket expenses incurred by the Responding Parties, and any out-of-pocket damages against the Responding Parties assessed against them, as a result of claims by third parties who may bring the substantial claims or other legal process referred to above. The Parties further acknowledge and agree that the restructuring or mere disassociation of the Proposing Party from all or a part of its investment as originally structured will not, in and of itself, be or be deemed to result in any loss to the other Parties or be taken into account in determining whether the overall value of the Responding Parties' investment has been reduced for purposes of clause (e) of the first paragraph of this Section.
(iv) In no event shall the Proposing Party be liable for damages other than direct out-of-pocket damages, and therefore will not be responsible for other damages such as loss of profits, indirect, consequential, special or punitive damages.
(v) If a Qualified Disposition Event occurs at any time after a Trigger Event, then, except for transactions previously consummated under this Section 4(b), the right to restructure under Section 4(b)(i) and the right to dispose under Section 4(b)(ii) will expire, but not the other rights under this Section 4(b), including the right to cease funding under Section 4(b)(ii) and the provisions of Sections 4(b)(iii) and 4(b)(iv).
(c) Acknowledgment of Agreement Required. Prior to making any Transfer of Company Equity to a Related Party other than pursuant to the provisions of paragraph 3(d), the transferring Shareholder Party shall cause the transferee to execute, and deliver to each other Party, a copy of this Shareholders' Agreement so as to bind the transferee as a Shareholder Party for all purposes of this Shareholders' Agreement, and to assume all of the obligations and liabilities of the transferring Shareholder Party, from and after the date of the Transfer.
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Provisions Generally Applicable to Transfers. (a) Applicability of Sections 2 and 3. The rights, obligations and restrictions set out in Sections 2 and 3:
(i) apply to Company Equity (or, in the case of Section 3, to Company Shares) presently owned or hereafter acquired by a Shareholder Party, or by the successor of any Shareholder Party or a Related Party;
(ii) apply (subject to the limitations of clauses (iii) and (iv) below) to any direct or indirect disposition, including, within that concept and without limitation, a sale, bequest, exchange, assignment or gift, the creation of any security interest or other encumbrance, a transfer in connection with a receivership, bankruptcy, insolvency, dissolution, liquidation, judicial determination of incompetency or similar proceeding, and any other disposition of any kind, whether voluntary or involuntary, and however accomplished (including, among other means, by way of merger, recapitalization, share exchange or other extraordinary corporate action), affecting title to or possession of any Company Equity ("Transfer");
(iii) do not apply (A) to transfers to be made by a Shareholder Party or one or more successive transferees or successors under this Clause (A) or of direct or indirect equity interests in the Shareholder Party to a Control Affiliate, or (B) (1) in the case of a transfer by FondElec TCW or a successor to FondElecone or more successive transferees or successors under this Clause B(1) (or of direct or indirect equity interests in TCW or such successor, to an entity that has has, directly or indirectly, as a general partner, any of TCW/Latin America Partners LLC or a Person that is Controlled by, FondElec Group or an entity which Controls, is Controlled by or under Common Control with FondElec Group, (2) in the case of a transfer by TCW or a successor to TCW, to an entity that has as a general partner, a Person that is Controlled by, TCW/Latin America Partners LLC or an entity which Controls, is Controlled by or under Common Control with TCW/Latin America Partners LLC, (32) in the case of a transfer by Telematica to an entity that Controls, is a Controlled by or is under common Control Affiliate of with Corporacion EDC, C.A. or of C.A. La Electricidad de Caracas andCaracas, or which succeeds to all or substantially all of the business and assets of Telematica, (3) in the case of a transfer by MCM III or a successor to MCM III, to an entity that has, as an investment advisor, White Capital Private Equity Management or an entity which Controls, is Controlled by or under Common Control with White Capital Private Equity Management (in any case, such Control having been evidenced to the reasonable satisfaction of the other Shareholder Parties), (4) in the case of a transfer by Glacier or a successor to Glacier, to an entity that has has, as an investment advisor, Fenway Capital Capital, Ltd. or an entity entity, which Controls, is Controlled by or under Common Control with Fenway Capital Capital, Ltd. (in any case, such Control having been evidenced to the reasonable satisfaction of the other Shareholder Parties), or (C) in the case of InternexusPriu and Ostry, to transfers of interests in Internexus made to a spouse, or to a relative within the first degree of consanguinity, of any of the current holders of Internexus or to trusts or similar estate planning vehicles for the benefit of any of them, or (D) in the case of any of the D'Ambrosio Parties, to transfers made to a spouse or to a relative within the first degree of consanguinity, or to trusts or similar estate planning vehicles for the benefit of any either of them (any entity or person described in this clause (iii), a "Related Party"); and
(iv) do not apply to the transfer of Common Stock upon exercise by the optionee of the "Diamond D Options" or of the "Continental LLC Option" which are described in Schedule 1 hereto.
(b) Restructure or Disassociation.
(i) If, during the term of this Agreement, a Shareholder Party (the "Proposing Party") in its reasonable discretion determines that its continued investment in the Company and/or the Company's subsidiaries, as the investment may be structured from time to time, exposes the Proposing Party to substantial claims from third parties or other legal or regulatory process that results in substantial burdens or liability arising from arrangements or circumstances existing as of the date hereof or changes in law or regulation after the date hereof, (a "Trigger Event") then, at the Proposing Party's request, the other Shareholder Parties (the "Responding Parties") and the Proposing Party shall exercise reasonable, diligent and timely efforts to restructure their respective investments so as to remove or mitigate the risk of liability to the Proposing Party while preserving the Proposing Party's investment, provided that the Responding Parties need not agree to the restructuring if it would (a) reduce the rights or preferences that the Responding Parties had prior to the restructuring, (b) change the relative aggregate ownership interests in the enterprise that the Responding Parties had prior to the restructuring, (c) reduce the rights of representation or participation in corporate governance that the Responding Parties enjoy by virtue of the CCI Shareholders' Agreement, (d) create any substantial liability on the Responding Parties for which that the Proposing Party does not agree to be responsible, (e) reduce the overall value of the Responding Parties' investment, (f) substantially reduce the likelihood of a Qualified Disposition or a Qualified Public Offering, or (g) otherwise adversely affect the Company, any Subsidiary or the Responding Parties, except in immaterial respect.
(ii) If the Proposing Party makes, in its sole discretion, a good faith determination that a restructuring, as contemplated by the preceding paragraph, would involve terms and conditions (economic or otherwise) not satisfactory to the Proposing Party, then the Proposing Party may cease to be obligated to continue funding the Company or any of its subsidiaries and may dispose of the entirety of its interest in the Company (the "Proponent's Interest") as provided in the following clauses (A) through (D): (A) if the Proposing Party holds any direct equity right or interest or an interest or right convertible or exchangeable into an equity interest in a subsidiary of the Company; the Proposing Party first, with the good faith cooperation of the Company, shall have exchanged such interest for Common Stock of the Company at fair value (as determined pursuant to Section 12 (b)) or otherwise caused the transferee to acquire only Common Stock of the Company; (B) the Proposing Party shall negotiate to dispose of its interest in the following order, in each case for a reasonable time, first, to the Company, then, on a pro rata basis, to the other Shareholder Parties or such of them as wish to purchase the entirety of the Proponent's Interest, next, to the third party designated by the majority of the other Shareholder Parties, and last, to one or more third parties, except that if the transfer to a third party is proposed to occur on terms and conditions substantially equal or more favorable to the third party than negotiated with any of the other Shareholder Parties or their designee, the Shareholder Parties may elect to purchase at that price, or their designee may do so; (C) each transferee of the Proponent's Interest adheres to the CCI Shareholders' Agreement in its entirety (and shall have the benefit of all the rights and privileges available to the Proposing Party with respect to its Company Equity, including the Registration Rights Agreement and the other Transaction Documents, except that if the transferee is a Shareholder Party, it shall not have the benefit of designating a greater number of directors than it had prior to the transfer); and (D) each transferee, in the good faith opinion of the Responding Parties, is reputable, creditworthy and not a substantial competitor of the Company or its Subsidiaries. The tag along rights under Section 3 of the CCI Shareholders Agreements shall not apply to a transfer under this Agreement.
(iii) The Parties acknowledge and agree that the Proposing Party shall have no liability to the other Parties under any Transaction Document for any (i) loss or damages to or suffered by the other Parties flowing from the Proposing Party's need to restructure or sell pursuant to this Section, or the restructuring or sale itself, or (ii) the consequences of the restructuring or sale, including any loss or damages to or suffered by other Parties flowing from or that result from such restructuring or sale, such as the loss of funding commitments associated with the Proposing Shareholder, the loss of the Proposing Party's ability to support the Company and its subsidiaries, and loss of reputation and prestige associated therewith, provided that the Proposing Party shall indemnify the Responding Parties for the reasonable out-of-pocket expenses incurred by the Responding Parties, and any out-of-pocket damages against the Responding Parties assessed against them, as a result of claims by third parties who may bring the substantial claims or other legal process referred to above. The Parties further acknowledge and agree that the restructuring or mere disassociation of the Proposing Party from all or a part of its investment as originally structured will not, in and of itself, be or be deemed to result in any loss to the other Parties or be taken into account in determining whether the overall value of the Responding Parties' investment has been reduced for purposes of clause (e) of the first paragraph of this Section.
(iv) In no event shall the Proposing Party be liable for damages other than direct out-of-pocket damages, and therefore will not be responsible for other damages such as loss of profits, indirect, consequential, special or punitive damages.
(v) If a Qualified Disposition Event occurs at any time after a Trigger Event, then, except for transactions previously consummated under this Section 4(b), the right to restructure under Section 4(b)(i) and the right to dispose under Section 4(b)(ii) will expire, but not the other rights under this Section 4(b), including the right to cease funding under Section 4(b)(ii) and the provisions of Sections 4(b)(iii) and 4(b)(iv).
Appears in 1 contract
