Rights of Co-Sale. (a) In the event the Investors fail to exercise their rights under Section 2.1 or do not reach an agreement for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a), and if at any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”). The Transfer Notice shall include (i) a description of the Equity Securities to be transferred (for purposes of this Section 2.2, the “Offered Shares”), (ii) the name(s) and address(es) of the prospective transferee(s), (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made. (b) Each Investor that notifies the Company and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”) shall have the right to participate in such sale of Equity Securities on the same terms and conditions as specified in the Transfer Notice. Such Co-selling Investor’s notice to the Company and the Selling Holder shall indicate the maximum number of shares of capital stock of the Company that the Co-selling Investor wishes to sell under his, her or its right to participate. To the extent one or more of the Investors exercise such right of participation in accordance with the terms and conditions set forth below, the number of shares of Equity Securities that the Selling Holder may sell in the Transfer shall be correspondingly reduced. (c) Each Co-selling Investor may sell all or any part of that number of shares of capital stock of the Company equal to the product obtained by multiplying (i) the aggregate number of shares of Equity Securities covered by the Transfer Notice by (ii) a fraction, the numerator of which is the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Co-selling Investor on the date of the Transfer Notice and the denominator of which is the total number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Selling Shareholder and all of the Co-selling Investors on the date of the Transfer Notice. (d) Each Co-selling Investor shall effect its participation in the sale by promptly delivering to the Selling Holder for transfer to the prospective purchaser one or more certificates, properly endorsed for transfer to the purchaser, which represent: (i) if the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor elects to sell, or that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale; (ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale; (iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are at such time convertible into the number of shares of Common Stock, that such Co-selling Investor elects to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company in lieu of Common Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling Investor shall convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transfer. (e) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation of the sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser shall concurrently therewith remit to such Co-selling Investor that portion of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration and on the same terms and conditions as the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects to participate in a sale of Equity Securities pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.2. (f) To the extent that the Investors have not exercised their right to participate in the sale of the Offered Shares within the time periods specified in Section 2.2(b), the Selling Holder shall have a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms and conditions (including the purchase price) no more favorable than those specified in the Transfer Notice, to the third-party transferee(s) identified in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreement. In the event the Selling Holder does not consummate the sale or disposition of the Offered Shares within the ninety (90) day period from the expiration of these rights, the Investors’ first offer and co-sale rights shall continue to be applicable to any subsequent disposition of the Offered Shares by the Selling Holder until such right lapses in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise of the rights of the Investors under this Section 2.2 to participate in sales of Equity Securities by the Selling Holder shall not adversely affect their rights to make subsequent offers to purchase from the Selling Holder of Equity Securities or subsequently participate in sales of Equity Securities by the Selling Shareholder.
Appears in 2 contracts
Samples: Note Purchase Agreement (Orion Energy Systems, Inc.), First Offer and Co Sale Agreement (Orion Energy Systems, Inc.)
Rights of Co-Sale. (a) In The shareholders listed on the event signature page hereof (the Investors fail "Management Shareholders") shall not enter into any transaction that would result in the sale by him or it of any capital common stock of the Company now or hereafter owned by him or it, unless prior to such sale such Management Shareholder shall give written notice (the "Co-Sale Notice") to Holder addressed and delivered as set forth in Section 14 hereof, of his or its intention to effect such sale in order that Holder may exercise their its rights under Section 2.1 or do not reach an agreement for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a), and if at any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”)12 as hereinafter described. The Transfer Notice Such notice shall include set forth (i) a description the number of the Equity Securities shares to be transferred (for purposes of this Section 2.2, the “Offered Shares”)sold by such Management Shareholder, (ii) the name(s) and address(es) principal terms of the prospective transferee(s)sale, including the price at which the shares are intended to be sold, and (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is an offer by such Management Shareholder to use his or its best efforts to cause to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
(b) Each Investor that notifies the Company and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”) shall have the right to participate in such sale of Equity Securities on the same terms and conditions as specified in the Transfer Notice. Such Co-selling Investor’s notice to the Company and the Selling Holder shall indicate the maximum number of shares of capital stock of the Company that the Co-selling Investor wishes to sell under his, her or its right to participate. To the extent one or more of the Investors exercise such right of participation in accordance included with the terms and conditions set forth below, the number of shares of Equity Securities that the Selling Holder may sell in the Transfer shall to be correspondingly reduced.
(c) Each Co-selling Investor may sell all sold by him or any part of that number of shares of capital stock of the Company equal to the product obtained by multiplying (i) the aggregate number of shares of Equity Securities covered by the Transfer Notice by (ii) a fraction, the numerator of which is the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Co-selling Investor on the date of the Transfer Notice and the denominator of which is the total number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Selling Shareholder and all of the Co-selling Investors on the date of the Transfer Notice.
(d) Each Co-selling Investor shall effect its participation in the sale by promptly delivering to the Selling Holder for transfer to the prospective purchaser one or more certificates, properly endorsed for transfer to the purchaser, which represent:
(i) if the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor elects to sell, or that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating it in the sale;
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Coon a share-selling Investors) would be permitted to sell if the Coby-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are at such time convertible into the number of shares of Common Stock, that such Co-selling Investor elects to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company in lieu of Common Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling Investor shall convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transfer.
(e) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation of the sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser shall concurrently therewith remit to such Co-selling Investor that portion of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration share basis and on the same terms and conditions as conditions, the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects Shares issuable or issued to participate in a sale of Equity Securities Holder pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.2Warrant.
(fb) To If Holder has not accepted such offer in writing within a period of ten (10) days from the extent that the Investors have not exercised their right to participate in the sale date of receipt of the Offered Shares within the time periods specified in Section 2.2(b)Co-Sale Notice, the Selling Holder then such Management Shareholder shall have thereafter be free for a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms number of shares specified in the Co-Sale Notice, at a price no greater than the price set forth in the Co-Sale Notice and conditions (including the purchase price) on otherwise no more favorable terms to such Management Shareholder than those specified as set forth in the Transfer Co-Sale Notice, without any further obligation to the third-party transferee(s) identified Holder in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreementconnection with such sale. In the event that such Management Shareholder fails to consummate such sale within such ninety-day period, the Selling shares specified in Co-Sale Notice shall continue to be subject to this Section 12.
(c) If Holder does not consummate accepts such offer in writing within ten-day period, then such acceptance shall be irrevocable unless such Management Shareholder shall be unable to cause to be included in the sale or disposition the number of Shares of stock held by Holder and set forth in the Offered Shares within written acceptance. In that event, such Management Shareholder and Holder shall participate in the ninety sale equally, with such Management Shareholder and Holder each selling half the total number of such shares to be sold in the sale.
(90d) day period from the expiration of these rights, the Investors’ first offer and The co-sale rights granted pursuant to this Section 12 shall continue expire on the Expiration Date.
(e) Notwithstanding anything contained in this Warrant or any other Loan Document (as defined in the Loan Agreement) to be applicable to any subsequent disposition of the Offered Shares by contrary, in the Selling event Holder until accepts such right lapses offer in accordance with the terms and provisions of this Agreement. FurthermoreParagraph 12(c) above, then Xxxx Xxxxxxxxxx shall participate in the exercise or nonsale with such Management Shareholder and Holder to the extent of twenty-exercise five percent (25%) of the rights total number of such shares to be sold in the sale (i.e., in the event the Management Shareholder other than Xxxx Xxxxxxxxxx receives an offer to sell $1,000,000 shares, and Holder accepts such offer, then the Holder shall have the right to sell 500,000 shares, Xxxx Xxxxxxxxxx shall have the right to sell 250,000 shares, and the Management Shareholder in question shall have the right to sell 250,000 shares). In the event Xxxx Xxxxxxxxxx is the Management Shareholder who receives the offer to sell shares, then if Holder elects to accept such offer, then Holder and Xxxx Xxxxxxxxxx shall have equally in the sale, each selling half of the Investors under this Section 2.2 total number of shares to participate be sold in sales of Equity Securities by the Selling Holder shall not adversely affect their rights to make subsequent offers to purchase from the Selling Holder of Equity Securities or subsequently participate in sales of Equity Securities by the Selling Shareholdersale.)
Appears in 2 contracts
Samples: Loan Agreement (Dreams Inc), Loan Agreement (Dreams Inc)
Rights of Co-Sale. (a) In None of Xxxxx X. Xxxxxx, Xxxxxxx X. Xxxx, Xxxxxx X. Xxxxx, Xxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxx or Xxxxxx X. Xxxxxx (the event "Management Shareholders") shall enter into any transaction that would result in the Investors fail sale by it of any Common Stock now or hereafter owned by him, unless prior to such sale such Management Shareholder shall give written notice (the "Co-Sale Notice") to Holder addressed and delivered as set forth in Section 14 hereof, of its intention to effect such sale in order that Holder may exercise their its rights under Section 2.1 or do not reach an agreement for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a), and if at any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”)12 as hereinafter described. The Transfer Notice Such notice shall include set forth (i) a description the number of the Equity Securities shares to be transferred (for purposes of this Section 2.2, the “Offered Shares”)sold by such Management Shareholder, (ii) the name(s) and address(es) principal terms of the prospective transferee(s)sale, including the price at which the shares are intended to be sold, and (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is an offer by such Management Shareholder to use his best efforts to cause to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
(b) Each Investor that notifies the Company and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”) shall have the right to participate in such sale of Equity Securities on the same terms and conditions as specified in the Transfer Notice. Such Co-selling Investor’s notice to the Company and the Selling Holder shall indicate the maximum number of shares of capital stock of the Company that the Co-selling Investor wishes to sell under his, her or its right to participate. To the extent one or more of the Investors exercise such right of participation in accordance included with the terms and conditions set forth below, the number of shares of Equity Securities that the Selling Holder may sell in the Transfer shall to be correspondingly reduced.
(c) Each Co-selling Investor may sell all or any part of that number of shares of capital stock of the Company equal to the product obtained sold by multiplying (i) the aggregate number of shares of Equity Securities covered by the Transfer Notice by (ii) a fraction, the numerator of which is the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Co-selling Investor on the date of the Transfer Notice and the denominator of which is the total number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Selling Shareholder and all of the Co-selling Investors on the date of the Transfer Notice.
(d) Each Co-selling Investor shall effect its participation in the sale by promptly delivering to the Selling Holder for transfer to the prospective purchaser one or more certificates, properly endorsed for transfer to the purchaser, which represent:
(i) if the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor elects to sell, or that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating it in the sale;
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Coon a share-selling Investors) would be permitted to sell if the Coby-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are at such time convertible into the number of shares of Common Stock, that such Co-selling Investor elects to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company in lieu of Common Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling Investor shall convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transfer.
(e) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation of the sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser shall concurrently therewith remit to such Co-selling Investor that portion of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration share basis and on the same terms and conditions as conditions, the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects Shares issuable or issued to participate in a sale of Equity Securities Holder pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.2Warrant Agreement.
(fb) To If Holder has not accepted such offer in writing within a period of ten (10) days from the extent that the Investors have not exercised their right to participate in the sale date of receipt of the Offered Shares within the time periods specified in Section 2.2(b)Co-Sale Notice, the Selling Holder then such Management Shareholder shall have thereafter be free for a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms number of shares specified in the Co-Sale Notice, at a price no greater than the price set forth in the Co-Sale Notice and conditions (including the purchase price) on otherwise no more favorable terms to such Management Shareholder than those specified as set forth in the Transfer Co-Sale Notice, without any further obligation to the third-party transferee(s) identified Holder in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreementconnection with such sale. In the event the Selling Holder does not that such Management Shareholder fails to consummate the such sale or disposition of the Offered Shares within the ninety (90) such ninety-day period from the expiration of these rightsperiod, the Investors’ first offer and coshares specified in Co-sale rights Sale Notice shall continue to be applicable subject to any subsequent disposition of the Offered Shares by the Selling Holder until such right lapses in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise of the rights of the Investors under this Section 2.2 12.
(c) If Holder accepts such offer in writing within ten-day period, then such acceptance shall be irrevocable unless such Management Shareholder shall be unable to cause to be included in his sale the number of Shares of stock held by Holder and set forth in the written acceptance. In that event, such Management Shareholder and Holder shall participate in sales the sale equally, with such Management Shareholder and Holder each selling half the total number of Equity Securities by such shares to be sold in the Selling Holder shall not adversely affect their rights to make subsequent offers to purchase from the Selling Holder of Equity Securities or subsequently participate in sales of Equity Securities by the Selling Shareholdersale.
Appears in 2 contracts
Samples: Stock Purchase Warrant and Registration Rights Agreement (Imtek Office Solutions Inc), Stock Purchase Warrant and Registration Rights Agreement (Imtek Office Solutions Inc)
Rights of Co-Sale. 6.1 To the extent a Preferred Holder (aother than any of Founders and the FounderCos) In the event the Investors fail does not exercise its Rights of First Refusal with respect to exercise their rights under Section 2.1 all or do not reach an agreement for the purchase and sale any part of the Offered Shares, the Company Unsubscribed Shares within or the time periods specified in Section 2.1(aRemaining Shares (as applicable), and if at any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling such ROFR Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”). The Transfer Notice shall include (i) a description of the Equity Securities to be transferred (for purposes of this Section 2.2, the “Offered Shares”), (ii) the name(s) and address(es) of the prospective transferee(s), (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
(b) Each Investor that notifies the Company and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling InvestorSale Holder”) shall have the right Rights of Co-Sale to participate in such sale of Equity Securities such remaining Offered Shares not purchased pursuant to Section 5 (the “Residual Shares”) to the Prospective Purchaser on a pro rata basis with the Transferor and on the same terms and conditions as specified in the Transfer NoticeNotice (but in no event on terms and conditions less favorable than those offered to holder of Ordinary Shares or a Key Employee by the Prospective Purchaser). Such The Transferor shall promptly notify each Co-selling Investor’s Sale Holder after the expiration of the Series E Exercise Period and the Prior Holder Exercise Period (if applicable) regarding their respective Rights of Co-Sale under this Section 6 (the “Co-Sale Notice”). To exercise its rights hereunder, each Co-Sale Holder must provide a written notice to the Company and Transferor within ten (10) days of its receipt of the Selling Holder shall indicate Co-Sale Notice indicating the maximum number of shares Ordinary Shares (on an as-converted basis) it wishes to sell pursuant to this Section 6.1.
6.2 If the aggregate number of capital stock of the Company Ordinary Shares (on an as-converted basis) that the Co-selling Investor wishes Sale Holders desire to sell under his, her or its right to participate. To the extent one or more of the Investors exercise such right of participation in accordance with the terms and conditions set forth below, exceeds the number of shares of Equity Securities that the Selling Residual Shares, each Co-Sale Holder may sell in the Transfer shall be correspondingly reduced.
(c) Each Co-selling Investor may entitled to sell all or any part of that number of shares of capital stock up to its pro rata share of the Company Residual Shares, which shall be equal to the product obtained by multiplying of (i) the aggregate number of shares of Equity Securities covered by the Transfer Notice Residual Shares, multiplied by (ii) a fraction, the numerator of which is the number of shares of Common Stock Ordinary Shares (including shares of Common Stock issuable upon conversion of Preferred Stock or the Noteson an as-converted basis) owned elected to be sold by the such Co-selling Investor on the date of the Transfer Notice Sale Holder and the denominator of which is the total number of shares of Common Stock Ordinary Shares (including shares of Common Stock issuable upon conversion of Preferred Stock or the Noteson an as-converted basis) owned elected to be sold by the Selling Shareholder and all of the Co-selling Investors on the date of the Transfer NoticeSale Holders.
(d) Each 6.3 Subject to Section 9, a Co-selling Investor Sale Holder shall effect exercise its participation in the sale Rights of Co-Sale by promptly delivering to the Selling Holder for transfer to the prospective purchaser Prospective Purchaser one or more certificates, properly endorsed for transfer to transfer, representing the purchaser, which represent:
(i) if the Offered Shares are shares of Series C Preferred Stock, the type and number of shares of Series C Preferred Stock of the Company that Shares which such Co-selling Investor Sale Holder elects to sell, or that number of shares of Common Stock equal which shall be Transferred to the as converted to Common Stock equivalent of that number of Offered Shares that Prospective Purchaser at the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are at such time convertible into the number of shares of Common Stock, that such Co-selling Investor elects to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company in lieu of Common Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling Investor shall convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transfer.
(e) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation of the sale of the Equity Securities Shares pursuant to the terms and conditions specified in the Transfer Notice, . The Company shall update its register of members upon the consummation of any such Transfer and provide such most updated register of members to each Preferred Holder as soon as practicable.
6.4 The Rights of Co-Sale shall not apply to the Ordinary Shares sold or to be sold to the Preferred Holders pursuant to the Rights of First Refusal. The Rights of Co-Sale and the prospective purchaser shall concurrently therewith remit to such Co-selling Investor that portion Rights of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling Holder First Refusal shall not sell apply to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration and on the same terms and conditions as the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects to participate in a sale of Equity Securities Shares pursuant to this Section 2.2, Sections 12 and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.216 hereof.
(f) To the extent that the Investors have not exercised their right to participate in the sale of the Offered Shares within the time periods specified in Section 2.2(b), the Selling Holder shall have a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms and conditions (including the purchase price) no more favorable than those specified in the Transfer Notice, to the third-party transferee(s) identified in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreement. In the event the Selling Holder does not consummate the sale or disposition of the Offered Shares within the ninety (90) day period from the expiration of these rights, the Investors’ first offer and co-sale rights shall continue to be applicable to any subsequent disposition of the Offered Shares by the Selling Holder until such right lapses in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise of the rights of the Investors under this Section 2.2 to participate in sales of Equity Securities by the Selling Holder shall not adversely affect their rights to make subsequent offers to purchase from the Selling Holder of Equity Securities or subsequently participate in sales of Equity Securities by the Selling Shareholder.
Appears in 2 contracts
Samples: Shareholder Agreement (DouYu International Holdings LTD), Shareholder Agreement (DouYu International Holdings LTD)
Rights of Co-Sale. (a) In the event the Investors fail to exercise their rights under Section 2.1 or do not reach an agreement for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a), and if at connection with any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”). The Transfer Notice shall include (i) a description of the Equity Securities to be transferred (for purposes of this Section 2.2, the “Offered Shares”), (ii) the name(s) and address(es) of the prospective transferee(s), (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being Offer made pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
(b) Each Investor that notifies the Company and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred 9.3 with respect to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”) shall have the right to participate in such sale of Equity Securities on the same terms and conditions as specified in the Transfer Notice. Such Co-selling Investor’s notice to the Company and the Selling Holder shall indicate the maximum number of shares of capital stock of the Company that the Co-selling Investor wishes to sell under his, her or its right to participate. To the extent one an Offered Interest representing 10% or more of the Investors exercise such right of participation in accordance with the terms and conditions set forth below, the number of shares of Equity Securities that the Selling Holder may sell in the Transfer shall be correspondingly reduced.
(c) Each Cofully-selling Investor may sell all or any part of that number of shares of capital stock diluted equity of the Company equal to the product obtained by multiplying (i) the aggregate number of shares of Equity Securities covered by the Transfer Notice by (ii) a fractionPartnership, the numerator of which is the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Coany Non-selling Investor on the date of the Transfer Notice and the denominator of which is the total number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Selling Shareholder and all of the Co-selling Investors on the date of the Transfer Notice.
(d) Each Co-selling Investor shall effect its participation in the sale by promptly delivering to the Selling Holder for transfer to the prospective purchaser one or more certificatesPartner may, properly endorsed for transfer to the purchaser, which represent:
(i) if the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor elects to sell, or that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are at such time convertible into the number of shares of Common Stock, that such Co-selling Investor elects to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company in lieu of Common Stockpurchasing the Offered Interest pursuant to said Section, or notify the Co-Selling Investor desires to deliver Common Stock issuable upon Partner and the conversion of a NotePartnership, such Co-selling Investor shall convert such shares of capital stock within 30 days of the Company or such Note into Common Stock and deliver Common Stock as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transfer.
(e) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation receipt of the sale of notice from the Equity Securities pursuant to the terms and conditions specified in the Transfer NoticePartnership that there is a Remaining Interest, and the prospective purchaser shall concurrently therewith remit to such Co-selling Investor that portion of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration and on the same terms and conditions as the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects to participate in a sale of Equity Securities pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.2.
(f) To the extent that the Investors have not exercised their right desire to participate in the sale of the Offered Shares within Interest on the time periods specified terms set forth in the Offer, and the number of Units it wishes to sell. If any Non-Selling Partner has expressed a desire to sell Units in the transaction, the Partnership shall promptly notify the Selling Partner of the aggregate number of Units any Non-Selling Partner wishes to sell. The Selling Partner shall use his or her best efforts to interest the Offeror in purchasing, in addition to the Offered Interest, the Units such Non-Selling Partner wishes to sell. If the Offeror does not wish to purchase all of the Units made available by the Selling Partner and such Non-Selling Partner, then the Selling Partner and such Non-Selling Manager shall be entitled to sell, at the price and on the terms and conditions set forth in the Offer (provided that the price set forth in the Offer with respect to Class D Units shall be appropriately adjusted, if necessary, based on the conversion ratio of any Class C Units to be sold), a portion of the Offered Interest being sold to the Offeror, in the same proportion as the selling holder's ownership of Units bears to the aggregate number of Units owned by the Selling Partner and such Non- Selling Manager. The transaction contemplated by the Offer shall be consummated not later than 90 days after the date of the Offer.
(b) If any Non-Selling Partner does not elect to sell the full number of Units that it is entitled to sell pursuant to Section 2.2(b9.10(a), the Selling Holder Partner shall have a period of ninety (90) days from the expiration of such rights in which be entitled to sell to the Offered Shares Offeror, according to the terms set forth in the Offer, that number of his or her own Units that equals the difference between the number of Units desired to be purchased by the Offeror and the number of Units such Non-Selling Manager has elected to sell pursuant to Section 9.10(a). If the Selling Partner wishes to sell any such Units at a price per Unit that differs from that set forth in the Offer, upon terms different from those previously offered to the Partnership and the Non-Selling Partner, or more than 90 days after the date of the Offer, then, as a condition precedent to such transaction, such Units must first be offered to the Partnership and the Non- Selling Partner, on the same terms and conditions (including as given the purchase price) no more favorable than those specified in the Transfer NoticeOfferor, to the third-party transferee(s) identified in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreement. In the event the Selling Holder does not consummate the sale or disposition of the Offered Shares within the ninety (90) day period from the expiration of these rights, the Investors’ first offer and co-sale rights shall continue to be applicable to any subsequent disposition of the Offered Shares by the Selling Holder until such right lapses in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise of the rights of the Investors under procedures and time periods set forth in Section 9.3 and this Section 2.2 to participate in sales 9.10.
(c) The proceeds of Equity Securities any sale made by the Selling Holder Partner without compliance with the provisions of this Section 9.10 shall not adversely affect their rights be deemed to make subsequent offers to purchase from be held in constructive trust in such amount as would have been due any Non-Selling Partner if the Selling Holder of Equity Securities or subsequently participate in sales of Equity Securities by the Selling ShareholderPartner had complied with this Agreement.
Appears in 1 contract
Samples: Limited Partnership Agreement (Advisors Disciplined Trust Series 1)
Rights of Co-Sale. (a) In the event the Investors fail to exercise their rights under Section 2.1 or do not reach an agreement for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a), and if at any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”). The Transfer Notice shall include (i) a description of the Equity Securities to be transferred (for purposes of this Section 2.2, the “Offered Shares”), (ii) the name(s) and address(es) of the prospective transferee(s), (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that any Selling Major Holder desires, at any time, to sell, transfer, assign or otherwise dispose of any Voting Securities (whether now held or hereafter acquired), and receives a bona fide offer from a third party to purchase such Voting Securities (the Transfer is being "Major Holder Offered Securities"), then, unless such Selling Major Holder became a Selling Major Holder subsequent to and as a result of the death of a prior Major Holder, such Selling Major Holder shall give each Holder 20 days' prior written notice (the "Major Holder Offer"), delivered or mailed as provided in Section 7.4, of the Selling Major Holder's intention to sell, transfer, assign or otherwise dispose of such Voting Securities (the "Major Holder Offered Securities"), stating the proposed price per Voting Security, the number of Voting Securities offered and the other material terms of such proposed sale. Such notice shall include a representation to the Holders that a person has made a bona fide offer to consummate such Major Holder Offer and the Selling Major Holder has a good faith intention to sell such Voting Securities to such person on the terms specified. Each Holder shall have the right, exercisable upon written notice to the Selling Major Holder within 20 days after receipt by such Holder of the Major Holder Offer, to participate in the sale of Major Holder Offered Securities pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
(b) Each Investor that notifies the Company and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”) shall have the right to participate in such sale of Equity Securities on the same specified terms and conditions as specified in the Transfer Notice. Such Co-selling Investor’s notice to the Company and the Selling Holder shall indicate the maximum number of shares of capital stock of the Company that the Co-selling Investor wishes to sell under his, her or its right to participateMajor Holder Offer. To the extent one or more of the Investors exercise a Holder exercises such right of participation in accordance with the terms and conditions set forth below, the number of shares of Equity Major Holder Offered Securities that which the Selling Major Holder may sell in pursuant to the Transfer Major Holder Offer shall be correspondingly reduced.. The right of participation of each Holder shall be subject to the following terms and conditions:
(ca) Each Co-selling Investor Holder may sell all or any part of that number of shares of capital stock of the Company Common Stock then held by such Holder equal to the product obtained by multiplying (i) the aggregate number of shares of Equity Major Holder Offered Securities covered by the Transfer Notice Major Holder Offer by (ii) a fraction, the numerator of which is shall be the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned then held by the Co-selling Investor on the date of the Transfer Notice such Holder, and the denominator of which is shall be the total aggregate number of shares of Common Stock then held by the Selling Major Holder and all Holders. For purposes of this subsection (including a) and making such computation, each Holder and the Selling Major Holder shall be deemed to own the number of shares of Common Stock which are issuable upon exercise of Warrants and exercise or conversion of Preferred Stock all other classes or the Notes) owned by the Selling Shareholder and all series of the Co-selling Investors on the date of the Transfer NoticeCompany's securities exercisable or convertible into Common Stock then held by such Holder.
(db) Each Co-selling Investor shall Holder may effect its participation in the sale by promptly delivering to the Selling Major Holder for transfer to the prospective purchaser purchase offeror one or more certificates, properly endorsed for transfer to the purchasertransfer, which represent:
(i) if represent the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor elects to sell, or that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are at such time convertible into the number of shares of Common Stock, that such Co-selling Investor elects to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company in lieu of Common Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling Investor shall convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transfer.
(e) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation of the sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser shall concurrently therewith remit to such Co-selling Investor that portion of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling which such Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration and on the same terms and conditions as the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects to participate in a sale of Equity Securities sell pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.24.
(f) To the extent that the Investors have not exercised their right to participate in the sale of the Offered Shares within the time periods specified in Section 2.2(b), the Selling Holder shall have a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms and conditions (including the purchase price) no more favorable than those specified in the Transfer Notice, to the third-party transferee(s) identified in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreement. In the event the Selling Holder does not consummate the sale or disposition of the Offered Shares within the ninety (90) day period from the expiration of these rights, the Investors’ first offer and co-sale rights shall continue to be applicable to any subsequent disposition of the Offered Shares by the Selling Holder until such right lapses in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise of the rights of the Investors under this Section 2.2 to participate in sales of Equity Securities by the Selling Holder shall not adversely affect their rights to make subsequent offers to purchase from the Selling Holder of Equity Securities or subsequently participate in sales of Equity Securities by the Selling Shareholder.
Appears in 1 contract
Samples: Investors Agreement (Canion Rod)
Rights of Co-Sale. (a) INVESTORS CO-SALE OPTION. In the event the Investors fail to exercise their rights under Section 2.1 or do not reach an agreement any Shareholder (including for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a), and if at any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for all purposes of this Section 2.25.3 any permitted transferees of a Shareholder as contemplated by Section 5.1(b)) proposes to sell any shares or receives an Offer and any of such shares are not purchased pursuant to Section 5.2, such Shareholder may Transfer the “Transfer Notice”). The Transfer Notice shall include shares subject thereto only following compliance with this Section 5.3 and Section 5.4 below:
(i) a description In such event, immediately following the last day of the Equity Securities Notice Period, the Shareholder shall give an additional notice of the proposed sale to the Investors, once again enclosing a copy of the Offer, if applicable, which shall identify the Offeror and the number of shares proposed to be transferred sold (for purposes of this Section 2.2, the “Offered Shares”"Co-Sale Notice"), .
(ii) Upon the name(s) and address(eselection of an Investor or Investors holding at least ten percent (10%) of the prospective transferee(sSecurities, each of the Investors shall have the right, exercisable upon written notice to the Shareholder and any such permitted transferee within 20 days after delivery to it of the Co-Sale Notice (the "Co-Sale Notice Period"), (iii) to participate in the consideration, and (iv) sale on the material terms and conditions stated in the Co-Sale Notice, except that any Investor who holds Convertible Preferred Shares shall be permitted to sell to the relevant purchaser shares of Common Stock acquired upon which conversion thereof or, at its election, either (A) an option to acquire such Common Stock when it receives the proposed Transfer is to be made. The Transfer Notice shall certify that same upon such conversion at the Selling Holder has received a firm offer from election of such Investor or as otherwise provided in the prospective transferee(sCompany's Articles of Incorporation with the same effect as if Common Stock were being conveyed, or (B) and in good faith believes a binding agreement shares of Convertible Preferred Stock provided the acquiror pays the full liquidation preference of the shares being sold plus the relevant price per share for the Transfer is obtainable on underlying Common Stock. Each of the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
(b) Each Investor that notifies the Company and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”) Investors shall have the right to participate in such sale sell all or any portion of Equity Securities its shares on the same terms and conditions as specified in the Transfer Notice. Such Co-selling Investor’s notice Sale Notice (subject to the Company and the Selling Holder shall indicate foregoing), with the maximum number of shares of capital stock of the Company that the Co-selling Investor wishes to sell under his, her or its right to participate. To the extent one or more of the Investors exercise such right of participation in accordance with the terms and conditions set forth below, the number of shares of Equity Securities that the Selling Holder may sell in the Transfer shall be correspondingly reduced.
(c) Each Co-selling Investor may sell all or any part of that number of shares of capital stock of the Company equal to the product obtained by multiplying (i) the aggregate number of shares of Equity Securities covered proposed to be sold by the Transfer relevant Shareholder and any of such Shareholder's permitted transferees as described in the Co-Sale Notice by (ii) a fraction, the numerator of which is the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Co-selling such Investor on the date of the Transfer Co-Sale Notice on an as converted basis, and the denominator of which is the total sum of the number of shares of Common Stock (including owned by the Shareholders and their permitted transferees and the number of shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by all of the Selling Shareholder and Investors (including all assignees of the Investors) as of the date of the Co-selling Sale Notice on an as converted basis. To the extent one or more Investors on elect not to sell the date full amount of shares which they are entitled to sell pursuant to this Section 5.3(a), the Transfer Noticeother participating Investors' rights to sell shares shall be increased proportionately to their relative holdings of Securities, such that the Investors shall have the right to sell the full number of shares allocable to them in any transaction subject to this Section 5.3(a) even if some Investors elect not to participate.
(diii) Within five (5) days after the expiration of the Co-Sale Notice Period, the relevant Shareholder shall notify each participating Investor of the number of shares held by such Investor that will be included in the sale and the date on which the sale will be consummated, which shall be no later than the later of (i) 30 days after the delivery of the Co-Sale Notice and (ii) the satisfaction of all governmental approval requirements, if any.
(iv) Each Co-selling Investor shall of the Investors may effect its participation in the any sale hereunder by promptly delivering delivery to the Selling Holder for transfer purchaser, or to the prospective purchaser one or more certificates, properly endorsed relevant Shareholder for transfer to the purchaser, which represent:
(i) if of one or more instruments, certificates and/or option agreements, properly endorsed for transfer, representing the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor it elects to sellsell therein, or provided that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are at such time convertible into the number of shares of Common Stock, that such Co-selling Investor elects to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company in lieu of Common Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling no Investor shall convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock as provided in this Section 2.2. The Company agrees be required to make any such conversion concurrent representations or warranties or to provide any indemnities in connection therewith other than with the actual transfer of such shares respect to title to the purchaser and contingent on such transfer.
(e) The stock certificate or certificates that being conveyed. At the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in time of consummation of the sale of sale, the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser shall concurrently therewith remit directly to such Co-selling each Investor that portion of the sale proceeds to which such Co-selling each Investor is entitled by reason of its participation in therein. No shares may be purchased by a purchaser from the relevant Shareholder or any of such sale. To Shareholder's permitted transferees unless the extent purchaser simultaneously purchases from the Investors all of the shares that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses they have elected to purchase shares or other securities from a Cosell pursuant to this Section 5.3(a).
(b) SHAREHOLDERS CO-selling Investor exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration and on the same terms and conditions as the proposed transfer described in the Transfer NoticeSALE OPTION. In the event that any Investor (a Co-selling "Transferring Investor") receives a bona fide offer to purchase all or any portion of the Common Shares or shares of Common Stock received by such Investor elects upon conversion of its Convertible Preferred Shares (collectively, "Shares") (an "Investor Transaction Offer") from an offeror that is not a TA Fund (a "Purchaser"), such Transferring Investor may Transfer the number of Shares held by the Transferring Investor subject to participate in a sale of Equity Securities the Investor Transaction Offer only pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the following provisions of this Section 2.2.5.3(b):
(fi) To Such Transferring Investor shall deliver a written notice containing equivalent information to that required under Section 5.2(a) hereof to the extent that Company and each of the Investors Shareholders (an "Offer Notice"). Each of the Shareholders shall have not exercised their the right to participate in the sale Investor Transaction Offer on the terms and conditions herein stated (the "Shareholder Co- Sale Option"), which right shall be exercisable upon written notice (an "Acceptance Notice") to the Transferring Investor within the Co-Sale Notice Period. The Acceptance Notice shall indicate the maximum number of shares of Common Stock such Shareholder wishes to sell (including the number of shares it would sell if one or more other Shareholders do not elect to participate in the sale) on the terms and conditions stated in the Offer Notice.
(ii) Each of the Offered Shares within the time periods specified in Section 2.2(b), the Selling Holder Shareholders shall have the right to sell a period portion of ninety his or her shares of Common Stock pursuant to the Investor Transaction Offer which is equal to or less than twenty percent (9020%) of the product obtained by multiplying (i) the total number of Shares subject to the Investor Transaction Offer divided by the total number of Shares held by the Investors and (ii) the total number of Shares of Common Stock held by such Shareholder on the date of the Acceptance Notice. To the extent one or more Shareholders elect not to exercise their Shareholder Co-Sale Option, then the rights of the other Shareholders (who exercise their Shareholder Co-Sale Option) to sell Shares shall be increased proportionately by the full amount of Shares which the non-electing Shareholders were entitled to sell pursuant to this Section 5.3(b)
(iii) Within five (5) days from after the expiration of the Co-Sale Notice Period, the Transferring Investor shall notify each participating Shareholder of the number of shares held by such rights Shareholder that will be included in the sale and the date on which the Investor Transaction Offer will be consummated, which shall be no later than the later of (i) thirty (30) days after the date by which the Shareholders were required to notify the Transferring Investor of their intent to exercise their Shareholder Co-Sale Option and (ii) the satisfaction of any governmental approval or filing requirements, if any.
(iv) Each of the Shareholders participating in the sale may effect its participation in any Investor Transaction Offer hereunder by delivery to the Purchaser, or to the Transferring Investor for delivery to the Purchaser, of one or more instruments or certificates, properly endorsed for transfer, representing the shares it elects to sell therein, provided that no Shareholder shall be required to make any representations or warranties or provide any indemnities in connection therewith other than with respect to the Offered stock being conveyed. At the time of consummation of the Investor Transaction Offer, the Purchaser shall remit directly to each Shareholder that portion of the sale proceeds to which each Shareholder is entitled by reason of its participation therein. No Shares upon may be purchased by a purchaser from the relevant Investor or any of such Investor's permitted transferees unless the purchaser simultaneously purchases from the Shareholders all of the shares that they have elected to sell pursuant to this Section 5.3(b).
(c) Any shares held by an Investor or Shareholder or any of their permitted transferees that the Investor, Shareholder or transferee desires to sell following compliance with Section 5.3(a) may be sold to the purchaser only during the 90-day period after the expiration of the Co-Sale Notice Period and only on terms and conditions (including the purchase price) no more favorable to the Investor, Shareholder or transferee than those specified contained in the Transfer Noticerelevant notice. Promptly after such sale, such Investor or Shareholder shall notify the parties hereto of the consummation thereof and shall furnish such evidence of the completion and time of completion of such sale and of the terms thereof as may reasonably be requested by the other parties hereto. So long as the purchaser is neither a party, nor an affiliate or relative of a party, to this Agreement, such purchaser shall take the third-party transferee(s) identified in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares shares so Transferred free and clear of subsequent rights any further restrictions of first offer and cothis Section 5. If, at the end of such 90-sale under this Agreement. In the event the Selling Holder does day period, such Investor, Shareholder or any of such transferees have not consummate completed the sale or disposition of such shares as aforesaid, all the Offered Shares within the ninety (90) day period from the expiration of these rights, the Investors’ first offer and co-sale rights shall continue to be applicable to any subsequent disposition of the Offered Shares by the Selling Holder until such right lapses restrictions on Transfer contained in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise of the rights of the Investors under this Section 2.2 5 shall again be in effect with respect to participate in sales of Equity Securities by the Selling Holder shall not adversely affect their rights to make subsequent offers to purchase from the Selling Holder of Equity Securities or subsequently participate in sales of Equity Securities by the Selling Shareholdersuch shares.
Appears in 1 contract
Samples: Stock Purchase and Shareholders Agreement (Conley Canitano & Associates Inc)
Rights of Co-Sale. (a) In the event the Investors fail to exercise their rights under Section 2.1 or do not reach an agreement for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a), and if at Each Holder (other than any time thereafter Holder who is a Shareholder proposes to Transfer Equity Securities Selling Holder) (and thereby become a “Selling Co-selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”). The Transfer Notice shall include (i) a description of the Equity Securities to be transferred (for purposes of this Section 2.2, the “Offered Shares”), (ii) the name(s) and address(es) of the prospective transferee(s), (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
(b) Each Investor that notifies the Company and the Selling Holder in writing within five ten (510) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”2.1(a) shall have the right to participate in such sale of Equity Securities (including, without limitation, a sale of Equity Securities to a Holder or Holders pursuant to the Holders’ right of first refusal under Section 2.1(b)) on the same terms and conditions as specified in the Transfer Notice. Such Co-selling InvestorHolder’s notice to the Company and the Selling Holder shall indicate the maximum number of shares of capital stock of the Company that the Co-selling Investor Holder wishes to sell (pursuant to Section 2.2(b), below) under his, her or its right to participate. To the extent one or more of the Investors Holders exercise such right of participation in accordance with the terms and conditions set forth below, the number of shares of Equity Securities that the Selling Holder may sell in the Transfer shall be correspondingly reduced. Notwithstanding the foregoing, in no event shall a Co-selling Holder’s Transfer of Equity Securities pursuant to this Section 2.2 be deemed a Transfer to which the Company’s and the Holders’ rights of first refusal and co-sale shall apply. Any Holder electing to participate in a Transfer pursuant to this Section 2.2 shall be deemed to have waived such Holder’s right of first refusal set forth in Section 2.1 with respect to the Transfer described in the aforementioned Transfer Notice.
(cb) Each Co-selling Investor Holder may sell all or any part of that number of shares of capital stock of the Company equal to the product obtained by multiplying (i) the aggregate number of shares of Equity Securities covered by the Transfer Notice that have not been subscribed for pursuant to Section 2.1 by (ii) a fraction, the numerator of which is the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the NotesStock) owned by the Co-selling Investor Holder on the date of the Transfer Notice and the denominator of which is the total number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the NotesStock) owned by the Selling Shareholder Holder and all of the Co-selling Investors Holders on the date of the Transfer Notice.
(dc) Each Co-selling Investor Holder shall effect its participation in the sale by promptly delivering to the Selling Holder for transfer to the prospective purchaser one or more certificates, properly endorsed for transfer to the purchaser, which represent:
(i) if the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor Holder elects to sell, or that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;; or
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities shares of capital stock of the Company that are at such time convertible into the number of shares of Common Stock, that such Co-selling Investor Holder elects to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company in lieu of Common Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling Investor Holder shall convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transfer.
(ed) The stock certificate or certificates that the Co-selling Investor Holder delivers to the Selling Shareholder selling Stockholder pursuant to Section 2.2(d2.2(c) shall be transferred to the prospective purchaser in consummation of the sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser selling Stockholder shall concurrently therewith remit to such Co-selling Investor Holder that portion of the sale proceeds to which such Co-selling Investor Holder is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor Holder exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor Holder for the same consideration and on the same terms and conditions as the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects to participate in a sale of Equity Securities pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.2.
(f) To the extent that the Investors have not exercised their right to participate in the sale of the Offered Shares within the time periods specified in Section 2.2(b), the Selling Holder shall have a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms and conditions (including the purchase price) no more favorable than those specified in the Transfer Notice, to the third-party transferee(s) identified in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreement. In the event the Selling Holder does not consummate the sale or disposition of the Offered Shares within the ninety (90) day period from the expiration of these rights, the Investors’ first offer and co-sale rights shall continue to be applicable to any subsequent disposition of the Offered Shares by the Selling Holder until such right lapses in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise of the rights of the Investors under this Section 2.2 to participate in sales of Equity Securities by the Selling Holder shall not adversely affect their rights to make subsequent offers to purchase from the Selling Holder of Equity Securities or subsequently participate in sales of Equity Securities by the Selling Shareholder.
Appears in 1 contract
Rights of Co-Sale. (a) In the event the Investors fail to exercise their rights under Section 2.1 or do not reach an agreement for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a), and if at any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”). The Transfer Notice shall include (i) a description of the Equity Securities to be transferred (for purposes of this Section 2.2, the “Offered Shares”), (ii) the name(s) and address(es) of the prospective transferee(s), (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
(b1) Each Investor that notifies the Company and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”) shall will have the right to participate in such sale of Equity Securities sell, on the same terms and conditions as specified in the Transfer Notice. Such Co-selling Investor’s notice to the Company and the Selling Holder shall indicate the maximum number of shares of capital stock of the Company that the Co-selling Investor wishes to sell under his, her or its right to participate. To the extent one or more of the Investors exercise such right of participation in accordance with the terms and conditions set forth below, to the number of shares of Equity Securities that proposed transferee described in the Selling Holder may sell in the Transfer shall be correspondingly reduced.
(c) Each Co-selling Investor may sell all or any part of Principal Shareholder’s Notice, that number of shares of capital stock of the Company Shares equal to the product obtained by multiplying (i) the aggregate number of shares of Equity Securities covered by the Transfer Notice Offered Shares by (ii) a fraction, the numerator of which is the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned Shares then held by the Co-selling Investor on the date of the Transfer Notice such Holder, and the denominator of which is the total combined number of shares of Common Stock Shares then held by the Selling Principal Shareholder (including shares transferred pursuant to Permitted Transfers by such selling Principal Shareholder in accordance herewith) and the number of Common Stock Shares issued or issuable to all Holders that desire to exercise their co-sale rights pursuant to this Section 15. For purposes of making such computation, the Holder shall be deemed to own the number of Shares issued or issuable upon conversion of all its Preferred Stock or the Notes) owned Shares. Holders may exercise such rights of co-sale by giving written notice to the Selling Principal Shareholder and all of the Co-selling Investors on within ten (10) days after the date of the Transfer Selling Principal Shareholder’s Notice, specifying the number of Shares which the Holder desires to transfer to the Selling Principal Shareholder’s proposed transferee, in which case the number of Offered Shares which the Selling Principal Shareholder may sell pursuant to the Selling Principal Shareholder’s Notice shall be correspondingly reduced.
(d2) Each CoThe Holder may effectuate its right of co-selling Investor shall effect its participation in the sale contemplated by promptly this Section 15 by delivering to the Selling Holder Principal Shareholder for transfer to the prospective purchaser proposed transferee one or more certificates, properly endorsed for transfer to the purchasertransfer, which represent:
(i) if the Offered Shares are shares of Series C Preferred Stock, i. the number of shares of Series C Preferred Stock of Common Shares which the Company that such Co-selling Investor Holder is entitled to, and elects to, sell pursuant to sell, this Section 15; or ii. that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Preferred Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are which is at such time convertible into the number of shares of Common Stock, that Shares which such Co-selling Investor Holder elects to sellsell pursuant to this Section 15; provided, however, that if the prospective third-party purchaser proposed transferee objects to the delivery of shares of capital stock of the Company Preferred Shares in lieu of Common StockShares, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling Investor shall Holder may convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock Shares as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transfersubparagraph 15.2(2)i above.
(e) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation of the sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser shall concurrently therewith remit to such Co-selling Investor that portion of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration and on the same terms and conditions as the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects to participate in a sale of Equity Securities pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.2.
(f) To the extent that the Investors have not exercised their right to participate in the sale of the Offered Shares within the time periods specified in Section 2.2(b), the Selling Holder shall have a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms and conditions (including the purchase price) no more favorable than those specified in the Transfer Notice, to the third-party transferee(s) identified in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreement. In the event the Selling Holder does not consummate the sale or disposition of the Offered Shares within the ninety (90) day period from the expiration of these rights, the Investors’ first offer and co-sale rights shall continue to be applicable to any subsequent disposition of the Offered Shares by the Selling Holder until such right lapses in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise of the rights of the Investors under this Section 2.2 to participate in sales of Equity Securities by the Selling Holder shall not adversely affect their rights to make subsequent offers to purchase from the Selling Holder of Equity Securities or subsequently participate in sales of Equity Securities by the Selling Shareholder.
Appears in 1 contract
Samples: Investors Rights Agreement (Oculus Innovative Sciences, Inc.)
Rights of Co-Sale. (a) In the event a Founder desires, at any time, to sell, transfer, assign or otherwise dispose of any Founders' Shares greater than the Investors fail to exercise their rights under Section 2.1 or do not reach an agreement for the purchase and sale number of the Offered Exempt Shares within the time periods specified (as defined in Section 2.1(a4.6 below), and if at including any time thereafter a Shareholder proposes to Transfer Equity Securities Exempt Shares previously sold (and thereby become a “Selling Holder”whether now held or hereafter acquired) (the "Offered Shares"), or receives a bona fide offer from a third party to purchase such Offered Shares, such Founder shall deliver a notice (the Selling Holder shall promptly give "Notice") to the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”). The Transfer Notice shall include stating (i) a description of such Founder's bona fide intention to sell or transfer the Equity Securities to be transferred (for purposes of this Section 2.2, the “Offered Shares”), (ii) the name(s) and address(es) number of the prospective transferee(s)Offered Shares to be sold or transferred, (iii) the considerationprice for which such Founder proposes to sell or transfer such Offered Shares, and (iv) the name of the proposed purchaser or transferee, or class of purchaser or transferee, and (v) all other material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement provisions relating to the proposed Transfersale or transfer. In The Secretary of the event that Company shall then promptly give notice of the Transfer is being made pursuant contemplated transfer to each Series A Holder and Series B Holder, who shall have the right, exercisable upon written notice to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
Founder holding such Offered Shares within thirty (b) Each Investor that notifies the Company and the Selling Holder in writing within five (530) days after Delivery receipt by such Series A Holder and Series B Holder (an "Electing Holder") from the Company of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”) shall have the right notice described above, to participate in such Founder's sale of Equity Securities on the same terms and conditions as specified in the Transfer Notice. Such Co-selling Investor’s notice to the Company and the Selling Holder shall indicate the maximum number of shares of capital stock of the Company that the Co-selling Investor wishes to sell under his, her or its right to participateOffered Shares. To the extent one or more of the Investors exercise such Electing Holder exercises such right of participation in accordance with the terms and conditions set forth below, the number of shares of Equity Securities that the Selling Holder Offered Shares which such Founder may sell in pursuant to the Transfer Notice shall be correspondingly reduced.. The right of participation of such Electing Holder shall be subject to the following terms and conditions:
(c) Each Co-selling Investor 4.1.1 The Electing Holder may sell all or any part of that number of shares of capital stock Common Stock of the Company equal to the product obtained by multiplying (i) the aggregate number of shares of Equity Securities Offered Shares covered by the Transfer Notice by (ii) a fraction, the numerator of which is the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) Company acquired by the Electing Holder pursuant to the Series A Purchase Agreements and/or the Series B Purchase Agreement and at the time owned by the Co-selling Investor on the date of the Transfer Notice Electing Holder, and the denominator of which is the total combined number of shares of Common Stock (including of the Company acquired by the Electing Holders pursuant to the Series A Purchase Agreements or the Series B Purchase Agreement and at the time owned by such Electing Holders and the Founders' Shares owned by the selling Founder. For purposes of making such computation, the Series A Holder and Series B Holder shall be deemed to own the number of shares of Common Stock issuable upon conversion of into which all its Series A Preferred Stock or the Notes) owned by the Selling Shareholder and all Series B Preferred Stock of the Co-selling Investors on Company, if any, is at the date of the Transfer Noticetime convertible.
(d) Each Co-selling Investor shall 4.1.2 The Electing Holder may effect its participation in the sale by promptly delivering to the Selling Holder Founder for transfer to the prospective purchaser purchase offeror one or more certificates, properly endorsed for transfer to the purchasertransfer, which represent:
(ia) if the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor elects to sell, or that number of shares of Common Stock equal to which the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Series A Holder (together with any other Co-selling Investors) would be permitted and Series B Holder elects to sell if the Co-selling Investor were not participating in the sale;pursuant to this Section 4.1; or
(iib) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C A Preferred Stock or Common and Series B Preferred Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are which is at such time convertible into the number of shares of Common Stock, that Stock which such Co-selling Investor purchaser elects to sellsell pursuant to this Section 4.1; provided, however, that if the prospective third-party purchaser purchase offeror objects to the delivery of shares of capital stock of the Company Series A Preferred Stock and/or Series B Preferred Stock in lieu of Common Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling Investor shall Series A Holder and Series B Holder may convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transferStock.
(e) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation of the sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser shall concurrently therewith remit to such Co-selling Investor that portion of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration and on the same terms and conditions as the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects to participate in a sale of Equity Securities pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.2.
(f) To the extent that the Investors have not exercised their right to participate in the sale of the Offered Shares within the time periods specified in Section 2.2(b), the Selling Holder shall have a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms and conditions (including the purchase price) no more favorable than those specified in the Transfer Notice, to the third-party transferee(s) identified in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreement. In the event the Selling Holder does not consummate the sale or disposition of the Offered Shares within the ninety (90) day period from the expiration of these rights, the Investors’ first offer and co-sale rights shall continue to be applicable to any subsequent disposition of the Offered Shares by the Selling Holder until such right lapses in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise of the rights of the Investors under this Section 2.2 to participate in sales of Equity Securities by the Selling Holder shall not adversely affect their rights to make subsequent offers to purchase from the Selling Holder of Equity Securities or subsequently participate in sales of Equity Securities by the Selling Shareholder.
Appears in 1 contract
Rights of Co-Sale. (a) In the event the Investors fail to exercise their rights under Section 2.1 or do not reach an agreement for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a), and if at any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”). The Transfer Notice shall include (i) a description of the Equity Securities to be transferred (for purposes of this Section 2.2, the “Offered Shares”), (ii) the name(s) and address(es) of the prospective transferee(s), (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. a. In the event that the Transfer value of the shares to be transferred by the Transferor is being made pursuant $100,000.00 or greater and the number of shares to be transferred by the Transferor is three percent (3%) or greater than the Corporation's then outstanding stock on a fully diluted basis, then the provision of this Section 3 shall apply. In such event, the Transferor shall also state in his Notice to the provisions Corporation and the other Shareholders that the co-sale rights under Section 3 of the Shareholders Agreement shall apply. It shall be the responsibility of the Transferor to determine if this Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer 3 is being madeapplicable.
(b) Each Investor that notifies b. Within 30 days after receipt of the Company Notice delivered under Section 2 above, each Shareholder may also notify the Transferor and the Selling Holder Corporation (which notice may be included in writing within five (5the notice under Section 2(b) days after Delivery of a Transfer Notice referred to in Section 2.2(aabove) that whether it wishes to exercise exercises its rights right of co-sale (a “Co-selling Investor”) shall have the right to participate in such sale of Equity Securities on the same terms and conditions as specified in the Transfer Notice. Such Co-selling Investor’s notice to the Company and the Selling Holder shall indicate the maximum number of shares of capital stock of the Company that the Co-selling Investor wishes to sell under his, her or its right to participate. To the extent one or more of the Investors exercise such right of participation in accordance with the terms and conditions set forth below, the number of shares of Equity Securities that the Selling Holder may sell in the Transfer shall be correspondingly reduced.
(c) Each Co-selling Investor may sell all or any part of that number of shares of capital stock of the Company equal to the product obtained by multiplying (i) the aggregate number of shares of Equity Securities covered by the Transfer Notice by (ii) a fraction, the numerator of which is the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Co-selling Investor on the date of the Transfer Notice and the denominator of which is the total number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Selling Shareholder and all of the Co-selling Investors on the date of the Transfer Notice.
(d) Each Co-selling Investor shall effect its participation in the sale by promptly delivering to the Selling Holder for transfer to the prospective purchaser one or more certificates, properly endorsed for transfer to the purchaser, which represent:
(i) if the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor elects to sell, or that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are at such time convertible into the number of shares of Common Stock, that such Co-selling Investor elects to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company in lieu of Common Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling Investor shall convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transfer.
(e) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation of the sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser shall concurrently therewith remit to such Co-selling Investor that portion of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration and on the same terms and conditions as the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects to participate in a sale of Equity Securities pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.2.
(f) To 3 in the extent that event all of the Investors offered stock is not purchased by the Corporation or the Shareholders pursuant to the right of first refusal under Section 2. If all of the offered stock is not purchased by the Corporation or the Shareholders pursuant to the right of first refusal under the provisions of Section 2, then the Transferor and the Shareholders who have not so exercised their right of co-sale shall be entitled to participate in the proposed sale or transfer pro rata based on the respective numbers of shares held by the Transferor and each Shareholder (but only to the extent a Shareholder owns, or may obtain upon conversion, the securities which are the subject of the Offered Shares within offer). Any Shareholder who has notified the time periods specified in Section 2.2(b), Corporation during such 30-day period that the Selling Holder shall have a period Shareholder elects to exercise its right of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms and conditions (including the purchase price) no more favorable than those specified in the Transfer Notice, to the third-party transferee(s) identified in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreement. In shall, in the event the Selling Holder does not consummate the sale or disposition all of the Offered Shares within offered stock is not sold to the ninety (90) day period from the expiration of these rightsShareholders pursuant to Section 2, the Investors’ first offer and co-sale rights shall continue be obligated to be applicable to any subsequent disposition sell its portion of the Offered Shares by the Selling Holder until such right lapses offered stock in accordance with the terms of the offer, and the Transferor may only sell his portion of the offered stock.
c. In the event all of the offered stock is not purchased by the Shareholders pursuant to Section 2(b), and none of the Shareholders exercise its right of co-sale pursuant to this Agreement. FurthermoreSection 3, the exercise or non-exercise Transferor may consummate the sale in accordance with the terms of the rights Notice and upon no more favorable terms, provided that if the Transferor does not consummate the sale of the Investors under offered stock in accordance with the terms of the Notice within 90 days after the expiration of the last election period referred to in Section 2, the offered stock may not be sold unless the provisions of this Section 2.2 to participate 3 are complied with again in sales of Equity Securities by the Selling Holder shall not adversely affect their rights to make subsequent offers to purchase from the Selling Holder of Equity Securities or subsequently participate in sales of Equity Securities by the Selling Shareholderconnection with such sale.
Appears in 1 contract
Samples: Shareholder Agreement (Horizon Organic Holding Corp)
Rights of Co-Sale. (a) In the event the Investors fail to exercise their rights under Section 2.1 or do not reach an agreement for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a), and if at any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”). The Transfer Notice shall include (i) a description of the Equity Securities to be transferred (for purposes of this Section 2.2, the “Offered Shares”), (ii) the name(s) and address(es) of the prospective transferee(s), (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant Subject to the provisions of Section 2.36(c) and to the last sentence of this Section 6(a), in the Transfer Notice shall state under which specific subsection the Transfer is being made.
event that a Stockholder (b) Each Investor that notifies the Company and the Selling Holder hereinafter in writing within five (5) days after Delivery of a Transfer Notice this Section 6 referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “as the "Co-selling Investor”Sale Offeree") shall have receives a bona fide offer (the right to participate in such sale of Equity Securities on the same terms and conditions as specified in the Transfer Notice. Such "Co-selling Investor’s notice Sale Offer") from a third party which is not an Affiliate of the Co-Sale Offeree (the "Co-Sale Offeror") to the Company and the Selling Holder shall indicate the maximum purchase from such Co-Sale Offeree any number of shares of capital stock of the Company that Common Stock held by such Stockholder, for a specified price payable in cash or otherwise and on specified terms and conditions, the Co-selling Investor wishes Sale Offeree shall promptly forward a notice (the "Co-Sale Notice") complying with Section 6(b) to sell under his, her or its right the Corporation and to participatethe other Stockholders holding Common Stock (the Stockholders receiving a Co-Sale Notice collectively referred to herein as the "Other Stockholders"). To The Co-Sale Offeree shall not Transfer any shares of Stock prior to the extent one or more expiration of the Investors exercise such right of participation in accordance with 15-day period referred to below to the Co-Sale Offeror unless the terms and conditions set forth below, of the number of shares of Equity Securities that the Selling Holder may sell in the Transfer shall be correspondingly reduced.
(c) Each Co-selling Investor may sell all or any part Sale Offer are extended to each Other Stockholder with respect to each Other Stockholder's Proportionate Percentage of that number of shares of capital stock of the Company equal to the product obtained by multiplying (i) the aggregate number of shares of Equity Securities covered by Common Stock to which the Co-Sale Offer relates, whereupon (i) each Other Stockholder shall be entitled to Transfer Notice by such Other Stockholder's Proportionate Percentage of the aggregate number of shares of Common Stock to which the Co-Sale Offer relates and (ii) a fraction, the numerator of which is Co-Sale Offeree shall be entitled to Transfer the difference between the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by to which the Co-selling Investor on the date of the Transfer Notice Sale Offer relates and the denominator of which is the total number of shares of Common Stock to which the Other Stockholders have exercised there rights to Transfer hereunder. Each Other Stockholder shall have a period of 15 days to deliver a written notice (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes"Co-Sale Acceptance") owned by to the Selling Shareholder and all Co-Sale Offeree evidencing its acceptance of the Co-selling Investors on the date of the Transfer NoticeSale Offer.
(db) Each The Co-selling Investor Sale Notice shall effect its participation in the sale by promptly delivering to the Selling Holder for transfer to the prospective purchaser one or more certificates, properly endorsed for transfer to the purchaser, which represent:
set forth (i) if the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor elects to sell, or that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if which the Co-selling Investor were not participating in Sale Offer relates and the sale;
name of the Co-Sale Offeree, (ii) if the Offered Shares are shares name and address of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
Sale Offeror, (iii) the proposed amount and type of consideration payable for such Common Stock (including, if the Offered Shares are shares consideration consists in whole or in part of Common Stocknon-cash consideration, such information that number of shares of Common Stock, or such number of Equity Securities that are at such time convertible into the number of shares of Common Stock, that such Co-selling Investor elects was provided to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company in lieu of Common Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon Sale Offeree by the conversion of a Note, such Co-selling Investor shall convert such shares of capital stock of Sale Offeror to analyze the Company or such Note into Common Stock economic value and deliver Common Stock as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer investment risk of such shares to non-cash consideration) and the purchaser terms and contingent on such transfer.
conditions of payment offered by the Co-Sale Offeror and (eiv) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation Sale Offeror has been informed of the sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser shall concurrently therewith remit to such Co-selling Investor that portion of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration and on the same terms and conditions as the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects to participate in a sale of Equity Securities pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.2.
(f) To the extent that the Investors have not exercised their right to participate in the sale of the Offered Shares within the time periods specified in Section 2.2(b), the Selling Holder shall have a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms and conditions (including the purchase price) no more favorable than those specified in the Transfer Notice, to the third-party transferee(s) identified in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreement. In the event the Selling Holder does not consummate the sale or disposition of the Offered Shares within the ninety (90) day period from the expiration of these rights, the Investors’ first offer and co-sale rights shall continue provided for in this Section 6, and has agreed to be applicable to any subsequent disposition purchase shares of the Offered Shares Stock held by the Selling Holder until such right lapses Other Stockholders in accordance with the terms of this Agreement. Furthermore, Section 6 (which agreement may contain the exercise or nonCo-exercise Sale Offeror's obligation to purchase all of the rights shares of the Investors under this Section 2.2 to participate in sales of Equity Securities Stock held by the Selling Holder Other Stockholders subject to the Co-Sale Offer from the Co-Sale Offeree so long as such Co-Sale Offeree agrees to purchase simultaneously with such sale from the Other Stockholders if they deliver a Co-Sale Acceptance the Stock held by the Other Stockholders subject to such Co-Sale Notice of Acceptance).
(c) The restrictions on Transfer contained in Section 6 shall not adversely affect their rights apply to make subsequent offers to purchase from the Selling Holder of Equity Securities (i) any Permitted Transfers or subsequently participate in sales of Equity Securities by the Selling Shareholder(ii) any Public Sales.
Appears in 1 contract
Samples: Stockholders' Agreement (Young America Holdings Inc)
Rights of Co-Sale. (a) In the event the Investors fail Subject to exercise their rights under Section 2.1 or do not reach an agreement for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a), and if at any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”). The Transfer Notice shall include (i) a description of the Equity Securities to be transferred (for purposes of this Section 2.2, the “Offered Shares”), (ii) the name(s) and address(es) of the prospective transferee(s), (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant to Stockholder first complying with the provisions of Section 2.36 of this Agreement, if the Transfer Notice shall state under which specific subsection Rightholders do not exercise their option to purchase all or any portion of the Transfer is being made.
Shares now owned or hereinafter acquired by a Selling Stockholder, then each Rightholder that did not elect to purchase Shares pursuant to Section 6 above (b) Each Investor that notifies the Company and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “"Co-selling Investor”Sale Holders") shall have the right right, exercisable upon written notice to the Selling Stockholder within fifteen (15) days after receipt by the Co-Sale Holders of the Offer delivered pursuant to Section 6 hereof (hereinafter referred to as the "Transfer Notice"), to participate in such sale transfer of Equity Securities Shares on the same terms and conditions as specified stated in the Transfer Notice. Such Co-selling Investor’s notice to the Company and the Selling Holder shall indicate the maximum number of shares of capital stock of the Company Shares that the Co-selling Investor wishes Sale Holders wish to sell under his, her or its their right to participateparticipate in such sale. To the extent one or more of the Investors Co-Sale Holders exercise such right of participation co-sale in accordance with the terms and conditions set forth below, the number of shares of Equity Securities Shares that the such Selling Holder Stockholder may sell in the Transfer transaction shall be correspondingly reducedreduced in accordance with paragraph (b) below.
(cb) Each Co-selling Investor Sale Holder that exercises its right of co-sale pursuant to this Section 7, may sell all or any part of that number of shares of capital stock of the Company Shares equal to the product obtained by multiplying (i) the aggregate number of shares of Equity Securities Shares covered by the Transfer Notice Notice, less any such shares sold to the Rightholders pursuant to Section 6 hereof, by (ii) a fraction, the numerator of which is the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) Shares owned by the such participating Co-selling Investor on Sale Holder upon the date of the Transfer Notice and the denominator of which is the total number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) Shares owned by the Selling Shareholder and all of the Co-selling Investors on at the date of the Transfer Notice, by all Co-Sale Holders that exercise their right of co-sale in accordance with this Section 7 and the Selling Stockholder.
(dc) Each If any Co-selling Investor Sale Holder elects to participate in the transfer of Shares pursuant to this Section 7, then such Co-Sale Holder shall effect its participation in the sale transfer by executing and delivering all agreements, instruments and other documents reasonably required of a transferor in such transfer and promptly delivering to the Selling Holder for transfer to the prospective purchaser one or more certificates, properly endorsed for transfer to the purchasertransfer, which represent:
(i) if the Offered Shares are shares of Series C Preferred Stock, the type and number of shares of Series C Preferred Stock of Shares which the Company that such Co-selling Investor Sale Holder elects to sell, or that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;; or
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series B or Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if held by the Co-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are Sale Holders which is at such time convertible into the number of shares of Common Stock, that such Stock which the Co-selling Investor elects Sale Holders elect to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company Series B or Series C Preferred Stock in lieu of Common Stock or Series A Preferred Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling Investor Sale Holders shall convert such shares of capital stock of the Company Series B or such Note Series C Preferred Stock into Common Stock and deliver Common Stock as provided in this Section 2.27(c)(i) above. The Company agrees to make any such conversion concurrent with the actual transfer of such shares Shares to the purchaser and contingent on such transfer.purchaser. Exhibit 10.18
(ed) The stock certificate or certificates that the Co-selling Investor delivers Sale Holders deliver to the Selling Shareholder prospective purchaser pursuant to Section 2.2(d7(c) hereof shall be transferred to the such prospective purchaser in consummation of the sale of the Equity Securities Shares pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser Co-Sale Holders shall concurrently therewith remit to such Co-selling Investor receive that portion of the sale proceeds to which such the Co-selling Investor is Sale Holders are entitled by reason of its participation in such sale. .
(e) To the extent that any prospective purchaser or purchasers prohibits purchaser(s) prohibit(s) such assignment or otherwise refuses to purchase shares or other securities from a the Co-selling Investor Sale Holders exercising its their rights of co-sale hereunder, the Selling Holder Stockholders shall not sell to such prospective purchaser or purchasers any Equity Securities Shares unless and until, simultaneously with such sale, the such Selling Holder Stockholder shall purchase such shares or other securities from such the Co-selling Investor for the same consideration and Sale Holders on the same terms and conditions as the proposed transfer described specified in the Transfer Notice. In the event that a Co-selling Investor elects to participate in a sale of Equity Securities pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.2.
(f) To the extent that the Investors have not exercised their right to participate in the sale of the Offered Shares within the time periods specified in Section 2.2(b), the Selling Holder shall have a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms and conditions (including the purchase price) no more favorable than those specified in the Transfer Notice, to the third-party transferee(s) identified in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreement. In the event the Selling Holder does not consummate the sale or disposition of the Offered Shares within the ninety (90) day period from the expiration of these rights, the Investors’ first offer and co-sale rights shall continue to be applicable to any subsequent disposition of the Offered Shares by the Selling Holder until such right lapses in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise of the rights of the Investors under this Section 2.2 Co-Sale Holders hereunder to participate in sales one or more transfers of Equity Securities Shares made by the Selling such Co-Sale Holder shall not adversely affect their rights to make participate in subsequent offers transfers of Shares subject to purchase from Section 7(a) hereof.
(g) If the Co-Sale Holders elect not to participate in the sale of the Shares subject to the Transfer Notice, the Selling Holder Stockholders may, not later than ninety (90) days following delivery to the Company of Equity Securities or subsequently participate in sales the Transfer Notice, enter into an agreement providing for the closing of Equity Securities the transfer of the Shares covered by the Transfer Notice within thirty (30) days of such agreement on terms and conditions not more materially favorable to the Selling ShareholderStockholder than those described in the Transfer Notice.
(h) Any proposed transfer on terms and conditions materially more favorable than those described in the Transfer Notice, as well as any subsequent proposed transfer of any Shares by a Selling Stockholder, shall again be subject to the co-sale rights of the Rightholders and shall require compliance by a Selling Stockholder with procedures described in this Section 7.
(i) Prior to the sale of any Shares to be sold by such Co-Sale Holder or a participating Selling Stockholder pursuant to this Section 7, the Co-Sale Holder and Selling Stockholder shall deliver to the Company (in a form reasonably acceptable to the Company) a written agreement of the proposed buyer agreeing to become a party to this Agreement as a Prior Stockholder.
Appears in 1 contract
Samples: Stockholders Agreement (Animas Corp)
Rights of Co-Sale. (a) In the event the Investors fail to exercise their rights under Section 2.1 or do not reach an agreement for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a), and if at any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”). The Transfer Notice shall include (i) a description of the Equity Securities to be transferred (for purposes of this Section 2.2, the “Offered Shares”), (ii) the name(s) and address(es) of the prospective transferee(s), (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
(b1) Each Investor that notifies the Company and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”) shall will have the right to participate in such sale of Equity Securities sell, on the same terms and conditions as specified in the Transfer Notice. Such Co-selling Investor’s notice to the Company and the Selling Holder shall indicate the maximum number of shares of capital stock of the Company that the Co-selling Investor wishes to sell under his, her or its right to participate. To the extent one or more of the Investors exercise such right of participation in accordance with the terms and conditions set forth below, to the number of shares of Equity Securities that proposed transferee described in the Selling Holder may sell in the Transfer shall be correspondingly reduced.
(c) Each Co-selling Investor may sell all or any part of Principal Shareholder’s Notice, that number of shares of capital stock of the Company Shares equal to the product obtained by multiplying (i) the aggregate number of shares of Equity Securities covered by the Transfer Notice Offered Shares by (ii) a fraction, the numerator of which is the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned Shares then held by the Co-selling Investor on the date of the Transfer Notice such Holder, and the denominator of which is the total combined number of shares of Common Stock Shares then held by the Selling Principal Shareholder (including shares transferred pursuant to Permitted Transfers by such selling Principal Shareholder in accordance herewith) and the number of Common Stock Shares issued or issuable to all Holders that desire to exercise their co-sale rights pursuant to this Section 15. For purposes of making such computation, the Holder shall be deemed to own the number of Shares issued or issuable upon conversion of all its Preferred Stock or the Notes) owned Shares. Holders may exercise such rights of co-sale by giving written notice to the Selling Principal Shareholder and all of the Co-selling Investors on within ten (10) days after the date of the Transfer Selling Principal Shareholder’s Notice, specifying the number of Shares which the Holder desires to transfer to the Selling Principal Shareholder’s proposed transferee, in which case the number of Offered Shares which the Selling Principal Shareholder may sell pursuant to the Selling Principal Shareholder’s Notice shall be correspondingly reduced.
(d2) Each CoThe Holder may effectuate its right of co-selling Investor shall effect its participation in the sale contemplated by promptly this Section 15 by delivering to the Selling Holder Principal Shareholder for transfer to the prospective purchaser proposed transferee one or more certificates, properly endorsed for transfer to the purchasertransfer, which represent:
(i) if the Offered Shares are shares of Series C Preferred Stock, i. the number of shares of Series C Preferred Stock of Common Shares which the Company that such Co-selling Investor Holder is entitled to, and elects to, sell pursuant to sell, this Section 15; or ii. that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Preferred Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are which is at such time convertible into the number of shares of Common Stock, that Shares which such Co-selling Investor Holder elects to sellsell pursuant to this Section 15; provided, however, that if the prospective third-party purchaser proposed transferee objects to the delivery of shares of capital stock of the Company Preferred Shares in lieu of Common StockShares, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling Investor shall Holder may convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock Shares as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transfersubparagraph 15.2(2)(i) above.
(e) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation of the sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser shall concurrently therewith remit to such Co-selling Investor that portion of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration and on the same terms and conditions as the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects to participate in a sale of Equity Securities pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.2.
(f) To the extent that the Investors have not exercised their right to participate in the sale of the Offered Shares within the time periods specified in Section 2.2(b), the Selling Holder shall have a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms and conditions (including the purchase price) no more favorable than those specified in the Transfer Notice, to the third-party transferee(s) identified in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreement. In the event the Selling Holder does not consummate the sale or disposition of the Offered Shares within the ninety (90) day period from the expiration of these rights, the Investors’ first offer and co-sale rights shall continue to be applicable to any subsequent disposition of the Offered Shares by the Selling Holder until such right lapses in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise of the rights of the Investors under this Section 2.2 to participate in sales of Equity Securities by the Selling Holder shall not adversely affect their rights to make subsequent offers to purchase from the Selling Holder of Equity Securities or subsequently participate in sales of Equity Securities by the Selling Shareholder.
Appears in 1 contract
Samples: Investors Rights Agreement (Oculus Innovative Sciences, Inc.)
Rights of Co-Sale. (a) In Jxxx Xxxxx (the event "Management/Venture Capital Shareholders") shall enter into any transaction that would result in the Investors fail sale by him of any Common Stock now or hereafter owned by him unless prior to such sale such Management Shareholder shall give written notice (the "Co-Sale Notice") to Holder addressed and delivered as set forth in Section 14 hereof, of its intention to effect such sale in order that Holder may exercise their its rights under Section 2.1 or do not reach an agreement for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a), and if at any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”)12 as hereinafter described. The Transfer Notice Such notice shall include set forth (i) a description the number of the Equity Securities shares to be transferred (for purposes of this Section 2.2, the “Offered Shares”)sold by such Management Shareholder, (ii) the name(s) and address(es) principal terms of the prospective transferee(s)sale, including the price at which the shares are intended to be sold, and (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is an offer by such Management Shareholder to use his best efforts to cause to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
(b) Each Investor that notifies the Company and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”) shall have the right to participate in such sale of Equity Securities on the same terms and conditions as specified in the Transfer Notice. Such Co-selling Investor’s notice to the Company and the Selling Holder shall indicate the maximum number of shares of capital stock of the Company that the Co-selling Investor wishes to sell under his, her or its right to participate. To the extent one or more of the Investors exercise such right of participation in accordance included with the terms and conditions set forth below, the number of shares of Equity Securities that the Selling Holder may sell in the Transfer shall to be correspondingly reduced.
(c) Each Co-selling Investor may sell all or any part of that number of shares of capital stock of the Company equal to the product obtained sold by multiplying (i) the aggregate number of shares of Equity Securities covered by the Transfer Notice by (ii) a fraction, the numerator of which is the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Co-selling Investor on the date of the Transfer Notice and the denominator of which is the total number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Selling Shareholder and all of the Co-selling Investors on the date of the Transfer Notice.
(d) Each Co-selling Investor shall effect its participation in the sale by promptly delivering to the Selling Holder for transfer to the prospective purchaser one or more certificates, properly endorsed for transfer to the purchaser, which represent:
(i) if the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor elects to sell, or that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating him in the sale;
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Coon a share-selling Investors) would be permitted to sell if the Coby-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are at such time convertible into the number of shares of Common Stock, that such Co-selling Investor elects to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company in lieu of Common Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling Investor shall convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transfer.
(e) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation of the sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser shall concurrently therewith remit to such Co-selling Investor that portion of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration share basis and on the same terms and conditions as conditions, the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects Shares issuable or issued to participate in a sale of Equity Securities Holder pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.2Warrant.
(fb) To If Holder has not accepted such offer in writing within a period of ten (10) days from the extent that the Investors have not exercised their right to participate in the sale date of receipt of the Offered Shares within the time periods specified in Section 2.2(b)Co-Sale Notice, the Selling Holder then such Management Shareholder shall have thereafter be free for a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms number of shares specified in the Co-Sale Notice, at a price no greater than the price set forth in the Co-Sale Notice and conditions (including the purchase price) on otherwise no more favorable terms to such Management Shareholder than those specified as set forth in the Transfer Co-Sale Notice, without any further obligation to the third-party transferee(s) identified Holder in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreementconnection with such sale. In the event the Selling Holder does not that such Management Shareholder fails to consummate the such sale or disposition of the Offered Shares within the ninety (90) such ninety-day period from the expiration of these rightsperiod, the Investors’ first offer and coshares specified in Co-sale rights Sale Notice shall continue to be applicable subject to any subsequent disposition of the Offered Shares by the Selling Holder until such right lapses in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise of the rights of the Investors under this Section 2.2 12.
(c) If Holder accepts such offer in writing within ten- day period, then such acceptance shall be irrevocable unless such Management Shareholder shall be unable to cause to be included in the sale the number of Shares of stock held by Holder and set forth in the written acceptance. In that event, such Management Shareholder and Holder shall participate in sales the sale equally, with such Management Shareholder and Holder each selling half the total number of Equity Securities by such shares to be sold in the Selling Holder shall not adversely affect their rights to make subsequent offers to purchase from the Selling Holder of Equity Securities or subsequently participate in sales of Equity Securities by the Selling Shareholdersale.
Appears in 1 contract
Samples: Stock Purchase Warrant (Metrisa Inc)
Rights of Co-Sale. (aA) Investors Co-Sale Option Covering Founder Shares. In the event the Investors fail to exercise their rights under Section 2.1 or do not reach an agreement any Founder (including for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a), and if at any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for all purposes of this Section 2.22.2 any Permitted Transferees of a Founder) proposes to sell any Common Shares and any of such shares are not purchased pursuant to Section 2.1 (the "Remaining Shares"), such Founder may transfer the “Transfer Notice”). The Transfer Notice shall include Remaining Shares only following compliance with this Section 2.2(a):
(i) a description In such event, immediately upon receipt of the Equity Securities Expiration Notice, the Transferor shall give an additional notice of the proposed sale to the Investors if applicable, which shall identify the offeror and the number of Remaining Shares proposed to be transferred sold (for purposes of this Section 2.2, the “Offered Shares”"Co-Sale Notice"), .
(ii) the name(s) and address(es) Each of the prospective transferee(sInvestors shall have the right, exercisable upon written notice to the Transferor or any Permitted Transferee within 10 days after the date of the Co-Sale Notice (the "Co-Sale Notice Period"), (iii) to participate in the consideration, and (iv) sale on the material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth stated in the Transfer Co-Sale Notice. The Transfer Notice shall also include a copy Each of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
(b) Each Investor that notifies the Company and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”) Investors shall have the right to participate in such sale sell all or any portion of Equity Securities its Investor Shares on the same terms and conditions as specified in the Transfer Notice. Such Co-selling Investor’s notice Sale Notice (subject to the Company and the Selling Holder shall indicate foregoing), with the maximum number of shares of capital stock of the Company that the Co-selling Investor wishes to sell under his, her or its right to participate. To the extent one or more of the Investors exercise such right of participation in accordance with the terms and conditions set forth below, the number of shares of Equity Securities that the Selling Holder may sell in the Transfer shall be correspondingly reduced.
(c) Each Co-selling Investor may sell all or any part of that number of shares of capital stock of the Company Shares equal to the product obtained by multiplying (i) the aggregate number of shares of Equity Securities covered by Remaining Shares proposed to be sold as described in the Transfer Co-Sale Notice by (ii) a fraction, the numerator of which is the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) Investor Shares owned by the Co-selling such Investor on the date of the Transfer Notice Co-Sale Notice, and the denominator of which is the total sum of the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Selling Shareholder Founders and their Permitted Transferees and the number of Investor Shares owned by all of the Investors as of the date of the Co-selling Sale Notice. To the extent an Investor elects not to sell the full amount of Investor Shares which they are entitled to sell pursuant to this Section 2.2, the other participating Investors' rights to sell shares shall be increased proportionately to their relative holdings of Investor Shares, such that the Investors on shall have the date right to sell the full number of shares allocable to them in the Transfer Noticeaggregate in any transaction subject to this Section 2.2 even if some Investors elect not to participate.
(diii) Within five (5) days after the expiration of the Co-Sale Notice Period, the Transferor shall notify each participating Investor of the number of shares held by such Investor that will be included in the sale and the date on which the sale will be consummated.
(iv) Each Co-selling Investor shall of the Investors may effect its participation in the any sale hereunder by promptly delivering delivery to the Selling Holder for transfer purchaser, or to the prospective purchaser one or more certificates, properly endorsed Transferor for transfer to the purchaser, which represent:
(i) if of one or more instruments, certificates and/or option agreements, properly endorsed for transfer, representing the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor it elects to sellsell therein, or provided that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are at such time convertible into the number of shares of Common Stock, that such Co-selling Investor elects to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company in lieu of Common Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling no Investor shall convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock as provided in this Section 2.2. The Company agrees be required to make any such conversion concurrent representations or warranties or to provide any indemnities in connection therewith other than with the actual transfer of such shares respect to title to the purchaser and contingent on such transfer.
(e) The stock certificate or certificates that being conveyed. At the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in time of consummation of the sale of sale, the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser shall concurrently therewith remit directly to such Co-selling each Investor that portion of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such saletherein. To No shares may be purchased by a purchaser from the extent Transferor or Permitted Transferee unless the purchaser simultaneously purchases from the Investors all of the shares that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses they have elected to purchase shares or other securities from a sell pursuant to this Section 2.2(a).
(B) Investors/Founders Co-selling Sale Option covering Investor exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration and on the same terms and conditions as the proposed transfer described in the Transfer NoticeShares. In the event that any Investor (a Co-selling "Transferring Investor") receives a bona fide offer to purchase (an "Investor elects to participate in a sale Offer") all or any portion of Equity Securities the Investor Shares (the "Investor Offered Shares") from an offeror other than another Investor or an affiliate of such Transferring Investor, such Transferring Investor may transfer the Investor Offered Shares only pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the following provisions of this Section 2.2.2.2(b):
(fi) To Such Transferring Investor shall deliver a written notice containing equivalent information to that required under Section 2.1 hereof to the extent that Company and each of the Investors and Founders (an "Investor Offer Notice"). Each of the Investors and Founders shall have not exercised their the right to participate in the sale Investor Offer on the terms and conditions herein stated (the "Investor/Founder Co-Sale Option"), which right shall be exercisable upon written notice (an "Acceptance Notice") to the Transferring Investor within the 10 days after the date of the Offered Investor Offer Notice (the "Investor/Founder Co-Sale Notice Period"). The Acceptance Notice shall indicate the maximum number of Investor Shares within such Investor or Founder wishes to sell (including the time periods specified number of shares it would sell if one or more other Investors or Founders do not elect to participate in the sale) on the terms and conditions stated in the Investor Offer Notice.
(ii) Each of the Investors and Founders shall have the right to sell a portion of such Investor's Investor Shares or Founder's Common Shares, as the case may be, pursuant to the Investor Offer Notice which is equal to or less than the product obtained by multiplying the number of shares proposed to be sold in the Investor Offer Notice by a fraction, the numerator of which is the number of Investor Shares or Common Shares owned by such Investor or Founder, as the case may be, on the date of the Investor Offer Notice, and the denominator of which is the sum of the number of shares of Common Shares owned by the Founders and their Permitted Transferees and the number of shares of Investor Shares owned by all of the Investors as of the date of the Investor Offer Notice. To the extent an Investor or Founder elects not to sell the full amount of Investor Shares or Common Shares which they are entitled to sell pursuant to this Section 2.2(b), the Selling Holder other participating Investors' and Founders' rights to sell shares shall have a period be increased proportionately by the full amount of ninety Investor Shares or Common Shares which the non-electing Investors or Founders were entitled to sell pursuant to this Section 2.2(b).
(90iii) Within five (5) days from after the expiration of the Investor/Founder Co-Sale Notice Period, the Transferring Investor shall notify each participating Investor and Founder of the number of shares held by such rights in which to sell the Offered Shares upon terms and conditions (including the purchase price) no more favorable than those specified Investor or Founder that will be included in the Transfer Notice, to sale and the third-party transferee(sdate on which the Investor Offer will be consummated.
(iv) identified in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreement. In the event the Selling Holder does not consummate the sale or disposition of the Offered Shares within the ninety (90) day period from the expiration of these rights, the Investors’ first offer and co-sale rights shall continue to be applicable to any subsequent disposition of the Offered Shares by the Selling Holder until such right lapses in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise of the rights Each of the Investors under and Founders participating in the sale pursuant to this Section 2.2 2.2(b) may effect its participation in any Investor Offer hereunder by delivery to participate in sales the purchaser, or to the Transferring Investor for delivery to the purchaser, of Equity Securities by one or more instruments or certificates, properly endorsed for transfer, representing the Selling Holder Common Shares or Investor Shares it elects to sell therein, provided that no Investor or Founder shall not adversely affect their rights be required to make subsequent offers any representations or warranties or provide any indemnities in connection therewith other than with respect to purchase title to the stock being conveyed. At the time of consummation of the sale, the purchaser shall remit directly to each Investor or Founder that portion of the sale proceeds to which such Investor or Founder is entitled by reason of its participation therein. No Investor Offered Shares may be purchased by a purchaser from the Selling Holder relevant Investor or any of Equity Securities such Investor's Permitted Transferees unless the purchaser simultaneously purchases from the other Investors or subsequently participate in sales Founders all of Equity Securities by the Selling Shareholdershares that they have elected to sell pursuant to this Section 2.2(b).
Appears in 1 contract
Rights of Co-Sale. (a) In the event the Investors fail Subject to exercise their rights under Section 2.1 or do not reach an agreement for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a)2(c) below, and if at any time thereafter a Shareholder proposes to Transfer Equity Securities any Holder (and thereby become a the “Selling Holder”), ) has received and wishes to accept (x) a bona fide offer (the Selling Holder shall promptly give “Third Party Offer”) from a Person other than the Company and each Investor written notice (the “Offeror”) for all or any portion of the Selling Holder’s intention to make the Transfer shares of Common Stock or (for purposes of this Section 2.2, the “Transfer Notice”). The Transfer Notice shall include (iy) a description of the Equity Securities to be transferred (for purposes of this Section 2.2, the “Offered Shares”), (ii) the name(s) and address(es) of the prospective transferee(s), (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Selling Holder has received a firm an offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy Company to acquire any of any written proposal, term sheet or letter its shares of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
(b) Each Investor that notifies the Company Common Stock and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”) shall have the right Transfer to participate in such sale of Equity Securities on the same terms and conditions as specified in the Transfer Notice. Such Co-selling Investor’s notice to Offeror or the Company and all or any portion of the Selling Holder’s shares of Common Stock, the Selling Holder shall indicate will give not less than thirty (30) days’ prior written notice of such intended Transfer to each Investor (the maximum number of shares of capital stock “Section 2 Notice”), which will specifically identify the identity of the Offeror or, if applicable, the Company that (the Co-selling Investor wishes to sell under his, her or its right to participate. To the extent one or more of the Investors exercise such right of participation in accordance with the terms and conditions set forth below“Section 2 Offeror”), the number of shares of Equity Securities that Common Stock being Transferred, the purchase price therefor, and a summary of the other material terms and conditions of the proposed Transfer, and will contain an offer (the “Section 2 Offer”) by the Section 2 Offeror to each Investor, which will be irrevocable for a period of 15 days after delivery thereof (the “Section 2 Period”), to purchase at the same price per share and upon the other terms offered by the Section 2 Offeror to the Selling Holder may sell Holder, which will be set forth in the Transfer shall be correspondingly reduced.
(c) Each Co-selling Investor may sell all or any part Section 2 Notice, such Investor’s Allocable Portion of that number of the aggregate shares of capital stock Common Stock to be acquired by the Section 2 Offeror. For purposes of the Company equal to the product obtained this Agreement, an Investor’s “Allocable Portion” is expressed by multiplying a fraction, (i) the aggregate number of shares of Equity Securities covered by the Transfer Notice by (ii) a fraction, the numerator of which is the number of the shares of Common Stock held by such Investor, including the number of shares of Common Stock issued or issuable to such Investor upon the exercise or conversion of all securities exercisable for or convertible into shares of Common Stock (including shares Warrants) held by such Investor as of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Co-selling Investor on the date of the Transfer Notice Section 2 Offer, and (ii) the denominator of which is the total aggregate number of shares of Common Stock held by (A) such Investor, including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Selling Shareholder and all of the Co-selling Investors on the date of the Transfer Notice.
(d) Each Co-selling Investor shall effect its participation in the sale by promptly delivering to the Selling Holder for transfer to the prospective purchaser one or more certificates, properly endorsed for transfer to the purchaser, which represent:
(i) if the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor elects to sell, or that number of shares of Common Stock equal issued or issuable to such Investor upon the as converted to Common Stock equivalent exercise or conversion of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock all securities exercisable for or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(iii) if the Offered Shares are convertible into shares of Common StockStock (including Warrants) held by such Investor, that number of shares of Common Stock(B) each other Investor exercising its co-sale rights under this Section 2, or such number of Equity Securities that are at such time convertible into including the number of shares of Common Stock, that such Co-selling Investor elects to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company in lieu of Common Stock, Stock issued or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling Investor shall convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transfer.
(e) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation of the sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser shall concurrently therewith remit to such Co-selling other Investor that portion of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration and on the same terms and conditions as the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects to participate in a sale of Equity Securities pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.2.
(f) To the extent that the Investors have not exercised their right to participate in the sale of the Offered Shares within the time periods specified in Section 2.2(b), the Selling Holder shall have a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms and conditions (including the purchase price) no more favorable than those specified in the Transfer Notice, to the third-party transferee(s) identified in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreement. In the event the Selling Holder does not consummate the sale or disposition of the Offered Shares within the ninety (90) day period from the expiration of these rights, the Investors’ first offer and co-sale rights shall continue to be applicable to any subsequent disposition of the Offered Shares by the Selling Holder until such right lapses in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise conversion of the rights of the Investors under this Section 2.2 to participate in sales of Equity Securities by the Selling Holder shall not adversely affect their rights to make subsequent offers to purchase from the Selling Holder of Equity Securities or subsequently participate in sales of Equity Securities by the Selling Shareholder.all securities exercisable for or
Appears in 1 contract
Samples: Investor Rights Agreement (Tel Instrument Electronics Corp)
Rights of Co-Sale. (a) In Morini Investments Limited Partnerships (the event "Management Shareholder shall enter into any transaction that would result in the Investors fail sale by it of any Common Stock now or hereafter owned by it, unless prior to such sale such Management Shareholder shall give written notice (the "Co-Sale Notice") to Holder addressed and delivered as set forth in Section 14 hereof, of its intention to effect such sale in order that Holder may exercise their its rights under Section 2.1 or do not reach an agreement for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a), and if at any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”)12 as hereinafter described. The Transfer Notice Such notice shall include set forth (i) a description the number of the Equity Securities shares to be transferred (for purposes of this Section 2.2, the “Offered Shares”)sold by such Management Shareholder, (ii) the name(s) and address(es) principal terms of the prospective transferee(s)sale, including the price at which the shares are intended to be sold, and (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is an offer by such Management Shareholder to use its best efforts to cause to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
(b) Each Investor that notifies the Company and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”) shall have the right to participate in such sale of Equity Securities on the same terms and conditions as specified in the Transfer Notice. Such Co-selling Investor’s notice to the Company and the Selling Holder shall indicate the maximum number of shares of capital stock of the Company that the Co-selling Investor wishes to sell under his, her or its right to participate. To the extent one or more of the Investors exercise such right of participation in accordance included with the terms and conditions set forth below, the number of shares of Equity Securities that the Selling Holder may sell in the Transfer shall to be correspondingly reduced.
(c) Each Co-selling Investor may sell all or any part of that number of shares of capital stock of the Company equal to the product obtained sold by multiplying (i) the aggregate number of shares of Equity Securities covered by the Transfer Notice by (ii) a fraction, the numerator of which is the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Co-selling Investor on the date of the Transfer Notice and the denominator of which is the total number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Selling Shareholder and all of the Co-selling Investors on the date of the Transfer Notice.
(d) Each Co-selling Investor shall effect its participation in the sale by promptly delivering to the Selling Holder for transfer to the prospective purchaser one or more certificates, properly endorsed for transfer to the purchaser, which represent:
(i) if the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor elects to sell, or that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating it in the sale;
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Coon a share-selling Investors) would be permitted to sell if the Coby-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are at such time convertible into the number of shares of Common Stock, that such Co-selling Investor elects to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company in lieu of Common Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling Investor shall convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transfer.
(e) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation of the sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser shall concurrently therewith remit to such Co-selling Investor that portion of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration share basis and on the same terms and conditions as conditions, the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects Shares issuable or issued to participate in a sale of Equity Securities Holder pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.2Warrant.
(fb) To If Holder has not accepted such offer in writing within a period of ten (10) days from the extent that the Investors have not exercised their right to participate in the sale date of receipt of the Offered Shares within the time periods specified in Section 2.2(b)Co-Sale Notice, the Selling Holder then such Management Shareholder shall have thereafter be free for a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms number of shares specified in the Co-Sale Notice, at a price no greater than the price set forth in the Co-Sale Notice and conditions (including the purchase price) on otherwise no more favorable terms to such Management Shareholder than those specified as set forth in the Transfer Co-Sale Notice, without any further obligation to the third-party transferee(s) identified Holder in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreementconnection with such sale. In the event the Selling Holder does not that such Management Shareholder fails to consummate the such sale or disposition of the Offered Shares within the ninety (90) such ninety-day period from the expiration of these rightsperiod, the Investors’ first offer and coshares specified in Co-sale rights Sale Notice shall continue to be applicable subject to this Section 12.
(c) If Holder accepts such offer in writing within ten-day period, then such acceptance shall be irrevocable unless such Management Shareholder shall be unable to cause to be included in the sale the number of Shares of stock held by Holdxx xxx set forth in the written acceptance. In that event, such Management Shareholder and Holder shall participate in the sale equally, with such Management Shareholder and Holder each selling half the total number of such shares to be sold in the sale.
(d) The provisions of this Section 12 shall not apply to (i) sales by the Management Shareholder in customary broker's transactions or (ii) to other transactions if the amount of Common Stock being sold in any subsequent disposition such transaction (or any series of transactions occurring within six (6) months of each other to the same purchaser), is less than five percent (5%) of the Offered Shares by Management Shareholder's then current holdings in the Selling Holder until such right lapses in accordance with the terms of Company, provided, that transactions pursuant to this Agreement. Furthermore, the exercise or non-exercise of the rights of the Investors under this Section 2.2 to participate in sales of Equity Securities by the Selling Holder subsection (ii) shall not adversely affect their rights to make subsequent offers to purchase from exceed 20% of its holdings on the Selling Holder of Equity Securities or subsequently participate date hereof in sales of Equity Securities by the Selling Shareholderaggregate.
Appears in 1 contract
Rights of Co-Sale. (a) In Subject to the provisions of Section 12(c), in the event that on or after the Investors fail to exercise their rights under Section 2.1 or do not reach an agreement for the purchase and sale third anniversary of the Offered Shares within the time periods specified in Section 2.1(a)Original Agreement Date a Stockholder or group of Stockholders (hereinafter, and if at any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling HolderSection 12 Offeree”)) receives a bona fide offer (the “Section 12 Offer”) from a third party which is not an Affiliate of the Section 12 Offeree (the “Section 12 Offeror”) to purchase from such Section 12 Offeree Securities, the Selling Holder for a specified price payable in cash or otherwise and on specified terms and conditions, such Section 12 Offeree shall promptly give the Company and each Investor written forward a notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Section 12 Notice”) complying with Section 12(b) to the Corporation and to the Table of Contents other Stockholders (the Stockholders receiving a Section 12 Notice collectively referred to herein as the “Other Stockholders”). The Section 12 Offeree shall not Transfer any Securities prior to the expiration of the 15 day period referred to below to the Section 12 Offeror unless the terms of the Section 12 Offer are extended to each Other Stockholder with respect to its Proportionate Percentage of the aggregate number and classes of Securities to which the Section 12 Offer relates, whereupon each Other Stockholder shall be entitled to Transfer such Other Stockholder’s Proportionate Percentage of the aggregate number of Securities to which the Section 12 Offer relates. Each Other Stockholder shall have a period of 15 days to deliver a written notice (the “Section 12 Acceptance”) to the Section 12 Offeree evidencing its acceptance of the Section 12 Offer.
(b) The Section 12 Notice shall include set forth (i) a description the number of Securities to which the Section 12 Offer relates and the name of the Equity Securities to be transferred (for purposes of this Section 2.2, the “Offered Shares”)12 Offeree, (ii) the name(s) name and address(es) address of the prospective transferee(s)Section 12 Offeror, (iii) the proposed amount and type of consideration (including, if the consideration consists in whole or in part of non-cash consideration, such information to the Section 12 Offeree as may be reasonably necessary for the Other Stockholders to properly analyze the economic value and investment risk of such non-cash consideration) and the terms and conditions of payment offered by the Section 12 Offeror and (iv) the material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Selling Holder Section 12 Offeror has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
(b) Each Investor that notifies the Company and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”) shall have the right to participate in such sale of Equity Securities on the same terms and conditions as specified in the Transfer Notice. Such Co-selling Investor’s notice to the Company and the Selling Holder shall indicate the maximum number of shares of capital stock been informed of the Company that the Co-selling Investor wishes to sell under his, her or its right to participate. To the extent one or more of the Investors exercise such right of participation in accordance with the terms and conditions set forth below, the number of shares of Equity Securities that the Selling Holder may sell in the Transfer shall be correspondingly reduced.
(c) Each Co-selling Investor may sell all or any part of that number of shares of capital stock of the Company equal to the product obtained by multiplying (i) the aggregate number of shares of Equity Securities covered by the Transfer Notice by (ii) a fraction, the numerator of which is the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Co-selling Investor on the date of the Transfer Notice and the denominator of which is the total number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Selling Shareholder and all of the Co-selling Investors on the date of the Transfer Notice.
(d) Each Co-selling Investor shall effect its participation in the sale by promptly delivering to the Selling Holder for transfer to the prospective purchaser one or more certificates, properly endorsed for transfer to the purchaser, which represent:
(i) if the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor elects to sell, or that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are at such time convertible into the number of shares of Common Stock, that such Co-selling Investor elects to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company in lieu of Common Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling Investor shall convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transfer.
(e) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation of the sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser shall concurrently therewith remit to such Co-selling Investor that portion of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration and on the same terms and conditions as the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects to participate in a sale of Equity Securities pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.2.
(f) To the extent that the Investors have not exercised their right to participate in the sale of the Offered Shares within the time periods specified in Section 2.2(b), the Selling Holder shall have a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms and conditions (including the purchase price) no more favorable than those specified in the Transfer Notice, to the third-party transferee(s) identified in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreement. In the event the Selling Holder does not consummate the sale or disposition of the Offered Shares within the ninety (90) day period from the expiration of these rights, the Investors’ first offer and co-sale rights shall continue provided for in this Section 12, and has agreed to be applicable to any subsequent disposition of the Offered Shares purchase Securities held by the Selling Holder until such right lapses Other Stockholders in accordance with the terms of this Agreement. Furthermore, Section 12 (which agreement may contain the exercise or non-exercise Section 12 Offeror’s obligation to purchase all of the rights Securities held by the Other Stockholders subject to the Section 12 Offer from the Section 12 Offeree so long as such Section 12 Offeree agrees to purchase simultaneously with such sale from the Other Stockholders if they deliver a Section 12 Acceptance the Securities held by the Other Stockholders subject to such Section 12 Notice of Acceptance).
(c) The foregoing provisions of this Section 12 shall not apply to a Transfer or Transfer(s) by a Stockholder or group of Stockholders of up to the greater of (i) 0.50% of the Investors under this Section 2.2 to participate in sales Common Equivalents outstanding at such time, and (ii) 10% of Equity the Securities held by the Selling Holder shall not adversely affect their rights to make subsequent offers to purchase from the Selling Holder such Stockholder or group of Equity Securities or subsequently participate in sales of Equity Securities by the Selling ShareholderStockholders at such time.
Appears in 1 contract
Samples: Stockholders Agreement (Better Minerals & Aggregates Co)
Rights of Co-Sale. (a) In No officer or director of the event Parent (each, a "Key Shareholder") shall enter into any private transaction that would result in the Investors fail sale by it of any securities of the Parent now or hereafter owned by it, unless prior to such sale such Key Shareholder shall give written notice (the "Co-Sale Notice") to the Shareholders addressed and delivered as set forth in Section 8(a) hereof, of its intention to effect such sale in order that the Shareholders may exercise their its rights under Section 2.1 or do not reach an agreement for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a), and if at any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”)6 as hereinafter described. The Transfer Notice Such notice shall include set forth (i) a description the number of the Equity Securities securities to be transferred (for purposes of this Section 2.2, the “Offered Shares”)sold by such Key Shareholder, (ii) the name(s) and address(es) principal terms of the prospective transferee(s)sale, including the price at which the securities are intended to be sold, and (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is an offer by such Key Shareholder to use its best efforts to cause to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
(b) Each Investor that notifies the Company and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”) shall have the right to participate in such sale of Equity Securities on the same terms and conditions as specified in the Transfer Notice. Such Co-selling Investor’s notice to the Company and the Selling Holder shall indicate the maximum number of shares of capital stock of the Company that the Co-selling Investor wishes to sell under his, her or its right to participate. To the extent one or more of the Investors exercise such right of participation in accordance included with the terms and conditions set forth below, the number of shares of Equity Securities that the Selling Holder may sell in the Transfer shall securities to be correspondingly reduced.
(c) Each Co-selling Investor may sell all or any part of that number of shares of capital stock of the Company equal to the product obtained sold by multiplying (i) the aggregate number of shares of Equity Securities covered by the Transfer Notice by (ii) a fraction, the numerator of which is the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Co-selling Investor on the date of the Transfer Notice and the denominator of which is the total number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Selling Shareholder and all of the Co-selling Investors on the date of the Transfer Notice.
(d) Each Co-selling Investor shall effect its participation in the sale by promptly delivering to the Selling Holder for transfer to the prospective purchaser one or more certificates, properly endorsed for transfer to the purchaser, which represent:
(i) if the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor elects to sell, or that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Coon a securities-selling Investors) would be permitted to sell if the Coby-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are at such time convertible into the number of shares of Common Stock, that such Co-selling Investor elects to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company in lieu of Common Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling Investor shall convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transfer.
(e) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation of the sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser shall concurrently therewith remit to such Co-selling Investor that portion of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration basis and on the same terms and conditions as conditions, the proposed transfer described in Exchange Shares issuable or issued to the Transfer Notice. In the event that a Co-selling Investor elects to participate in a sale of Equity Securities Shareholders pursuant to this Section 2.2Agreement. For purposes of clarity, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the foregoing provisions of this Section 2.26 shall not apply to any public market sales of securities, including, without limitation, any transactions executed within the scope of Rule 144. Notwithstanding the foregoing, this Section 6 shall not apply to any transfers by any Key Shareholder for estate planning purposes to: (i) a trust for the benefit of such Key Shareholder or the Key Shareholder's spouse or issue; or (ii) to a family partnership, limited liability company or similar entity of which the members are the foregoing persons.
(fb) To the extent that the Investors If Shareholders have not exercised their right to participate accepted such offer in writing within a period of ten (10) days from the sale date of receipt of the Offered Shares within the time periods specified in Section 2.2(b)Co-Sale Notice, the Selling Holder such Key Shareholder shall have thereafter be free for a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms number of securities specified in the Co-Sale Notice, at a price no greater than the price set forth in the Co-Sale Notice and conditions (including the purchase price) on otherwise no more favorable terms to such Key Shareholder than those specified as set forth in the Transfer Co-Sale Notice, without any further obligation to the third-party transferee(s) identified Shareholders in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreementconnection with such sale. In the event the Selling Holder does not that such Key Shareholder fails to consummate the such sale or disposition of the Offered Shares within the such ninety (90) day period from the expiration of these rightsperiod, the Investors’ first offer and coShareholders specified in the Co-sale rights Sale Notice shall continue to be applicable subject to any subsequent disposition of the Offered Shares by the Selling Holder until such right lapses in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise of the rights of the Investors under this Section 2.2 6.
(c) If Shareholders accept such offering in writing within a ten (10) day period, then such acceptance shall be irrevocable unless Key Shareholder shall be unable to cause to be included in his sale the number of Exchange Shares held by Shareholders and set forth in the written acceptance. In the event, such Key Shareholder and Shareholders shall participate in sales the sale equally, with such Key Shareholder and Shareholders each selling half the number of Equity Securities by such securities to be sold in the Selling Holder shall not adversely affect their rights to make subsequent offers to purchase from the Selling Holder of Equity Securities or subsequently participate in sales of Equity Securities by the Selling Shareholdersale.
Appears in 1 contract
Samples: Share Purchase and Exchange Agreement (Manchester Inc)
Rights of Co-Sale. (a) In Tag-Along Rights. Prior to making any Transfer of Common Stock, any Investor proposing to make such a Transfer (a "Selling Holder") shall give at least fifteen (15) days prior written notice to each Investor (each an "Other Holder") and the event Company, which notice (the Investors fail "Sale Notice") shall identify the shares of Common Stock that are proposed to exercise their rights under Section 2.1 or do not reach an agreement for be sold (the purchase and sale of the "Co-Sale Offered Shares within the time periods specified in Section 2.1(aSecurities"), and if at any time thereafter describe in reasonable detail the terms and conditions of such proposed Transfer and identify each prospective Transferee. Any of the Other Holders may, within ten (10) days of the receipt of the Sale Notice, give written notice (each, a Shareholder proposes "Tag-Along Notice") to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”). The Transfer Notice shall include (i) a description of the Equity Securities to be transferred (for purposes of this Section 2.2, the “Offered Shares”), (ii) the name(s) and address(es) of the prospective transferee(s), (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Selling such Other Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
(b) Each Investor that notifies the Company and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”) shall have the right to participate in such sale of Equity Securities on the same terms and conditions as specified in the proposed Transfer Notice. Such Co-selling Investor’s notice to the Company and the Selling Holder shall indicate the maximum number of shares of capital stock of the Company that the Co-selling Investor wishes to sell under his, her or its right to participate. To the extent one or more of the Investors exercise such right of participation in accordance with upon the terms and conditions set forth below, the number of shares of Equity Securities that the Selling Holder may sell in the Transfer Sale Notice, which Tag-Along Notice shall be correspondingly reduced.
(c) Each Co-selling Investor may sell all or any part of that number of shares of capital stock of specify the Company equal to the product obtained by multiplying (i) the aggregate number of shares of Equity Securities covered by the Transfer Notice by (ii) a fraction, the numerator of which is the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Co-selling Investor on the date of the Transfer Notice and the denominator of which is the total number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned by the Selling Shareholder and all of the Co-selling Investors on the date of the Transfer Notice.
(d) Each Co-selling Investor shall effect its participation such Other Holder desires to include in the sale by promptly delivering to the Selling Holder for transfer to the prospective purchaser one or more certificates, properly endorsed for transfer to the purchaser, which represent:
(i) if the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor elects to sell, or that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are at such time convertible into the number of shares of Common Stock, that such Co-selling Investor elects to sellproposed Transfer; provided, however, that if (1) each Other Holder shall be required, as a condition to being permitted to sell Common Shares pursuant to this Section 2.1(a) in connection with a Transfer of Co-Sale Offered Securities, to sell its proportionate amount (based on the prospective thirdrespective Pro Rata Amounts of the Selling Holder and each Other Holder exercising tag-party purchaser objects along rights under this Section 2.1(a)) of the Common Stock proposed to be sold by the Selling Holder and (2) to exercise its tag-along rights hereunder, each Other Holder must agree to make to the delivery Transferee the same representations, warranties, covenants, indemnities and agreements as the Selling Holder agrees to make in connection with the Transfer of the Co-Sale Offered Securities (except that in the case of representations and warranties pertaining specifically to, or covenants made specifically by, the Selling Holder, the Other Holders shall make comparable representations and warranties pertaining specifically to (and, as applicable, covenants by) themselves), and must agree to bear his or its ratable share (which shall be proportionate based on the value of shares of capital stock Common Stock that are Transferred but shall not exceed the amount of proceeds received in connection with such Transfer) of all liabilities to the Transferees arising out of representations, warranties and covenants (other than those representations, warranties and covenants that pertain specifically to a given Investor, who shall bear all of the Company liability related thereto), indemnities or other agreements made in lieu connection with the Transfer. Each participating Other Holder will bear its or his pro-rata share (based upon the relative amount of shares of Common Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion sold) of a Note, such Co-selling Investor shall convert such shares of capital stock of the Company or such Note into Common Stock all reasonable and deliver Common Stock as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transfer.
(e) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation customary costs of the sale of the Equity Securities Common Stock pursuant to this Section 2.1(a) to the extent such costs are not otherwise paid by the Transferee. If none of the Other Holders gives the Selling Holder a Tag-Along Notice prior to the expiration of the 10-day period for giving Tag-Along Notices with respect to the Transfer proposed in the Sale Notice, then (notwithstanding the first sentence of this Section 2.1(a)) the Selling Holder may Transfer such Co-Sale Offered Securities on the terms and conditions specified set forth, and to or among any of the Transferees identified (or Affiliates of Transferees identified), in the Transfer Notice, and Sale Notice at any time within 180 days after expiration of the prospective purchaser shall concurrently therewith remit 10-day period for giving Tag-Along Notices with respect to such Transfer. Any such Co-selling Investor that portion of the sale proceeds to which such Co-selling Investor is entitled Sale Offered Securities not Transferred by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration and on the same terms and conditions as the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects to participate in a sale of Equity Securities pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.2.
(f) To the extent that the Investors have not exercised their right to participate in the sale of the Offered Shares within the time periods specified in Section 2.2(b), the Selling Holder shall have a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms and conditions (including the purchase price) no more favorable than those specified in the Transfer Notice, to the third-party transferee(s) identified in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreement. In the event the Selling Holder does not consummate the sale or disposition of the Offered Shares within the ninety (90) day period from the expiration of these rights, the Investors’ first offer and co-sale rights shall continue to be applicable to any subsequent disposition of the Offered Shares by the Selling Holder until such right lapses in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise of the rights of the Investors under this Section 2.2 to participate in sales of Equity Securities by the Selling Holder shall not adversely affect their rights to make subsequent offers to purchase from the Selling Holder of Equity Securities or subsequently participate in sales of Equity Securities by the Selling Shareholder.the
Appears in 1 contract
Samples: Stockholders Agreement (Refco Inc.)
Rights of Co-Sale. (a) In the event the Investors fail to exercise their rights under Section 2.1 or do not reach an agreement for the purchase and sale of the Offered Shares within the time periods specified in Section 2.1(a), and if at any time thereafter a Shareholder proposes to Transfer Equity Securities (and thereby become a “Selling Holder”), the Selling Holder shall promptly give the Company and each Investor written notice of the Selling Holder’s intention to make the Transfer (for purposes of this Section 2.2, the “Transfer Notice”). The Transfer Notice shall include (i) a description of the Equity Securities to be transferred (for purposes of this Section 2.2, the “Offered Shares”), (ii) the name(s) and address(es) of the prospective transferee(s), (iii) the consideration, and (iv) the material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Selling Holder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that any Selling Major Holder desires, at any time, to sell, transfer, assign or otherwise dispose of any Voting Securities (whether now held or hereafter acquired), and receives a bona fide offer from a third party to purchase such Voting Securities (the Transfer is being "Major Holder Offered Securities"), then, unless such Selling Major Holder became a Selling Major Holder subsequent to and as a result of the death of a prior Major Holder, such Selling Major Holder shall give each December 1998 Holder 20 days' prior written notice (the "Major Holder Offer"), delivered or mailed as provided in Section 7.4, of the Selling Major Holder's intention to sell, transfer, assign or otherwise dispose of such Voting Securities (the "Major Holder Offered Securities"), stating the proposed price per Voting Security, the number of Voting Securities offered and the other material terms of such proposed sale. Such notice shall include a representation to the December 1998 Holders that a person has made a bona fide offer to consummate such Major Holder Offer and the Selling Major Holder has a good faith intention to sell such Voting Securities to such person on the terms specified. Each December 1998 Holder shall have the right, exercisable upon written notice to the Selling Major Holder within 20 days after receipt by such December 1998 Holder of the Major Holder Offer, to participate in the sale of Major Holder Offered Securities pursuant to the provisions of Section 2.3, the Transfer Notice shall state under which specific subsection the Transfer is being made.
(b) Each Investor that notifies the Company and the Selling Holder in writing within five (5) days after Delivery of a Transfer Notice referred to in Section 2.2(a) that it wishes to exercise its rights of co-sale (a “Co-selling Investor”) shall have the right to participate in such sale of Equity Securities on the same specified terms and conditions as specified in the Transfer Notice. Such Co-selling Investor’s notice to the Company and the Selling Holder shall indicate the maximum number of shares of capital stock of the Company that the Co-selling Investor wishes to sell under his, her or its right to participateMajor Holder Offer. To the extent one or more of the Investors exercise a December 1998 Holder exercises such right of participation in accordance with the terms and conditions set forth below, the number of shares of Equity Major Holder Offered Securities that which the Selling Major Holder may sell in pursuant to the Transfer Major Holder Offer shall be correspondingly reduced.. The right of participation of each December 1998 Holder shall be subject to the following terms and conditions:
(ca) Each Co-selling Investor December 1998 Holder may sell all or any part of that number of shares of capital stock of the Company Common Stock then held by such December 1998 Holder equal to the product obtained by multiplying (i) the aggregate number of shares of Equity Major Holder Offered Securities covered by the Transfer Notice Major Holder Offer by (ii) a fraction, the numerator of which is shall be the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of Preferred Stock or the Notes) owned then held by the Co-selling Investor on the date of the Transfer Notice such December 1998 Holder, and the denominator of which is shall be the total aggregate number of shares of Common Stock then held by the Selling Major Holder and all December 1998 Holders. For purposes of this subsection (including a) and making such computation, each December 1998 Holder and the Selling Major Holder shall be deemed to own the number of shares of Common Stock which are issuable upon exercise of Warrants and exercise or conversion of Preferred Stock all other classes or the Notes) owned by the Selling Shareholder and all series of the Co-selling Investors on the date of the Transfer NoticeCompany's securities exercisable or convertible into Common Stock then held by such December 1998 Holder.
(db) Each Co-selling Investor shall December 1998 Holder may effect its participation in the sale by promptly delivering to the Selling Major Holder for transfer to the prospective purchaser purchase offeror one or more certificates, properly endorsed for transfer to the purchasertransfer, which represent:
(i) if represent the Offered Shares are shares of Series C Preferred Stock, the number of shares of Series C Preferred Stock of the Company that such Co-selling Investor elects to sell, or that number of shares of Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(ii) if the Offered Shares are shares of Preferred Stock other than shares of Series C Preferred Stock, that number of shares of Series C Preferred Stock or Common Stock equal to the as converted to Common Stock equivalent of that number of Offered Shares that the Selling Holder (together with any other Co-selling Investors) would be permitted to sell if the Co-selling Investor were not participating in the sale;
(iii) if the Offered Shares are shares of Common Stock, that number of shares of Common Stock, or such number of Equity Securities that are at such time convertible into the number of shares of Common Stock, that such Co-selling Investor elects to sell; provided, however, that if the prospective third-party purchaser objects to the delivery of shares of capital stock of the Company in lieu of Common Stock, or the Co-Selling Investor desires to deliver Common Stock issuable upon the conversion of a Note, such Co-selling Investor shall convert such shares of capital stock of the Company or such Note into Common Stock and deliver Common Stock as provided in this Section 2.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent on such transfer.
(e) The stock certificate or certificates that the Co-selling Investor delivers to the Selling Shareholder pursuant to Section 2.2(d) shall be transferred to the prospective purchaser in consummation of the sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the prospective purchaser shall concurrently therewith remit to such Co-selling Investor that portion of the sale proceeds to which such Co-selling Investor is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from a Co-selling Investor exercising its rights of co-sale hereunder, the Selling which such December 1998 Holder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, the Selling Holder shall purchase such shares or other securities from such Co-selling Investor for the same consideration and on the same terms and conditions as the proposed transfer described in the Transfer Notice. In the event that a Co-selling Investor elects to participate in a sale of Equity Securities sell pursuant to this Section 2.2, and notwithstanding such election any Selling Holder fails to comply with such election, such Selling Holder agrees to purchase the Equity Securities held by such Co-selling Investor in accordance with this Agreement provided such Co-selling Investor has otherwise complied with the provisions of this Section 2.26.
(f) To the extent that the Investors have not exercised their right to participate in the sale of the Offered Shares within the time periods specified in Section 2.2(b), the Selling Holder shall have a period of ninety (90) days from the expiration of such rights in which to sell the Offered Shares upon terms and conditions (including the purchase price) no more favorable than those specified in the Transfer Notice, to the third-party transferee(s) identified in the Transfer Notice. The third-party transferee(s) shall acquire the Offered Shares free and clear of subsequent rights of first offer and co-sale under this Agreement. In the event the Selling Holder does not consummate the sale or disposition of the Offered Shares within the ninety (90) day period from the expiration of these rights, the Investors’ first offer and co-sale rights shall continue to be applicable to any subsequent disposition of the Offered Shares by the Selling Holder until such right lapses in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise of the rights of the Investors under this Section 2.2 to participate in sales of Equity Securities by the Selling Holder shall not adversely affect their rights to make subsequent offers to purchase from the Selling Holder of Equity Securities or subsequently participate in sales of Equity Securities by the Selling Shareholder.
Appears in 1 contract
Samples: Investors' Rights Agreement (Tricord Systems Inc /De/)