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Tag Along Sample Clauses

Tag Along. 2.1. If TIC and/or any of its Subsidiaries (collectively, “the Shareholder”) proposes to sell, in one or a series of related transactions, any of its Shares and/or Convertible Securities to any person and/or any of such person’s Affiliates (other than non-prearranged sales of Shares into the market executed on any stock exchange on which the Shares are then listed for trading or submitted for quotation), such that, immediately following any such sale, the Shareholder would cease to be the largest holder of: (a) the then issued and outstanding Shares (for the avoidance of doubt, not taking into account any Convertible Securities); or (b) the Shares on a fully-diluted basis, taking into account the Convertible Securities (for the avoidance of doubt, as determined pursuant to clause 1.3 above), the Shareholder may only sell such Shares or Convertible Securities if it complies with the provisions of this clause 2. 2.2. TIC shall give written notice (“the Offer Notice”) to the Bank of such intended sale on the earlier of (i) 5 (five) days after any person or persons comprising the Shareholder enters into an agreement to effect such sale (whether or not subject to conditions) and (ii) 30 (thirty) days prior to the Proposed Sale Date (as defined below). The Offer Notice shall specify the identity of the proposed purchaser (“the Third Party Purchaser”), the purchase price (“the Purchase Price”), including the purchase price per Share (“the Per Share Price”), and other terms and conditions of payment, the proposed date of sale (“the Proposed Sale Date”), the number of Shares and/or Convertible Securities (together with details of such Convertible Securities) proposed to be purchased by the Third Party Purchaser (“the Offered Shares”) and the percentage that the Offered Shares represent of all (a) Shares owned by the Shareholder, in the event the Shareholder proposes to sell Shares only and/or only clause 2.1(a) above is applicable; or (b) the Shareholder’s Shares and Convertible Securities, in the event that the Shareholder proposes to sell both Shares and Convertible Securities or Convertible Securities only and clause 2.1(b) above is (or for the avoidance of doubt, both clauses 2.1(a) and 2.1(b) above are) applicable. For the avoidance of doubt, the Offer Notice shall describe any other transactions relating to the Shares and/or Convertible Securities with the Third Party Purchaser and/or its Affiliates that have taken place or are proposed to take place or certi...
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Tag Along. With the exception of Transfers by the Oaktree Entities of an aggregate of twenty-five percent (25%) or less of the aggregate number of shares of Common Stock held by the Oaktree Entities on the date hereof as set forth on Schedule 1 hereto, at least twenty (20) days prior to any subsequent Transfer by any Oaktree Entities (the "Selling Oaktree Entity") to any person or entity other than (a) partners of any Oaktree Entity pursuant to in-kind distributions (so long as no sale of such shares is then contemplated), (b) pursuant to a sale on a national securities exchange, an automated quotation system or over the counter system, or (c) an Affiliate of such Oaktree Entity if such Affiliate has first agreed in writing to be bound by the terms of this Agreement, the Selling Oaktree Entity shall provide to Prudential/Gateway a Transfer Notice explaining the terms of such Transfer and identifying the name and address of the potential Acquiror. Upon receipt of such Transfer Notice, each of Prudential and Gateway shall have the right, upon delivery of a written request to the Selling Oaktree Entity within twenty (20) days of the date the Transfer Notice is received by Prudential/Gateway, to cause to be sold to the potential Acquiror its Pro-Rata Portion of the total number of shares of Common Stock which are proposed to be sold by the Selling Oaktree Entity in the Transfer Notice at the same price and on the same terms and conditions contained in the Transfer Notice delivered in connection with such proposed transaction, simultaneously with (and conditioned upon) the Transfer described in the Transfer Notice. The rights and obligations set forth in this Section 3 shall terminate concurrent with any termination of the agreements of Prudential/Gateway set forth in Section 5 resulting from an election to terminate the agreement of Prudential/Gateway set forth in Section 5 hereof permitted pursuant to the terms of Section 5 hereof.
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Tag Along. (a) If at any time any member of the Onex Group proposes to sell any Shares except for (i) sales to another member of the Onex Group that becomes bound by the terms of this Agreement (an "Onex Group Member"), (ii) sales to a Director Holder or other management employee or director of the Corporation or a subsidiary of the Corporation, (iii) sales of the 500 Shares purchased by Onex on June 30, 1992 for later disposition to persons providing services to the Corporation or any of the Corporation's subsidiaries (the "500 Shares"), (iv) sales effected on a national securities exchange in the regular way or in the over-the-counter market, or (v) sales made pursuant to an offering of securities registered under the 1933 Act (a "Tag Along Disposition"), each of the Director Holders shall have the right to sell to the proposed purchaser a number of his Director Shares equal to the total number of his Director Shares multiplied by a ratio, the numerator of which is the number of Shares to be sold by the Onex Group Member to the proposed purchaser and the denominator of which is the total number of Shares then owned by the Onex Group. Such ratio is referred to herein as the "Share Ratio." A sale of Director Shares pursuant to this Section shall be made at the same price, upon the same terms, and at the same time as the sale by the Onex Group Member of its Shares. (b) The Onex Group Member shall give notice (the "Tag Along Notice") to each Director Holder of the proposed Tag Along Disposition at least 20 days prior to the same. The Tag Along Notice shall be in writing and shall describe the terms of the Tag Along Disposition in reasonable detail, the identity of the proposed purchaser, the proposed date of sale, the purchase price per Share, and the Share Ratio and shall state that (i) the Director Holder has the option to sell to the proposed purchaser a number of Director Shares equal to the total number of Director Shares then owned by such Holder multiplied by the Share Ratio, (ii) the sale, if made, shall be made at the same price per share, upon the same terms, and at the same time as the sale by the Onex Group Member of its Shares to the proposed purchaser, and (iii) the sale by Director Holders will be conditioned upon a sale of Shares by the Onex Group Member pursuant to this Section. (c) A Director Holder may exercise his sale option pursuant to Section 4.1 by delivering to the Onex Group Member, within ten days after such Director Holder receives the Tag A...
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See more samples of Tag Along

Tag Along: Everything you need to know

Tag-Along rights, commonly known as "co-sale rights" or the piggyback clause, are in place to protect the minority shareholders in a company. Often companies sell with the majority stakeholder selling their share through a transaction; this is when Tag Along rights come in. These rights allow the minority investor to also hop onto the negotiation train and sell their shares as well if needed.

Effectively, the majority shareholder is obliged to include the interests of the minority shareholder due to the contractual obligations, which are co-sale rights. This is a common scenario seen in a venture capital deal, especially in startups and other companies.

Minority investors can protect themselves with the help of Tag Along with rights. They will ensure that the price and terms delivered to the majority holder are the same as for the minority. The basic idea of these rights is to provide greater liquidity to minority holders.

Why is Tag Along rights required?

Co-sale rights are exactly as the term suggests. The minority investors can tag along with the majority shareholders to protect their interests. In a situation where stakeholders wish to sell their shares in the company, they would offer those shares to the other shareholders. If you want to further understand how Tag-along rights can be structured, this article can be helpful.

More control for shareholders

Given, the other shareholders exercise their first right to refusal; both can exist on a fair plane. What makes the situation further fair is that minority holders can exercise their co-sale right, as mentioned in the Article of Association. Minority shareholders are restricted in selling their shares to other shareholders. Tag-Along is a helpful clause that allows them to join the majority shareholders.

Encouraging for investors

Tag-Along right is usually a pre-negotiated clause and is added to the agreement. It is common when a company works in a high risk-bearing sector where results expected are high. The presence of Tag Along is also an encouragement for investors to buy a company's stock.

Attracts better investors

Angel Investors are known to fund a startup for a part of their equity, given Tag Along is present in the agreement. In simple terms, in a situation where investor A wishes to sell their shares, B can also do so by exercising Tag Along. This would get B the same price and terms as A, ensuring balance and fair play.

Benefits of Tag-Along

These rights offer legal and financial protection to investors who might not have the resources. This helps them negotiate a better deal for their shares with the majority shareholder. There are ideally two benefits that Tag Along rights bring with them:

Control over decisions

Minority shareholders will otherwise not have as much control over a company's sale as compared to a majority shareholder. They can't sell their shares to other holders, but their rights can obligate the majority holders to turn over control to them. Technically, they have a say in the situation provided by the control Tag Along offers.

Protection of rights

When a company is being sold, owners can just sell their stake and leave the minority shareholders on their own. This will happen when co-sale is not present. In a reverse scenario, owners will be obligated to sell their stake as well as that of the minority. This means the minority will not be left with selling their stake at bad prices.

Fair play

Often owners or majority holders will have resources in terms of legal knowledge and the means to exercise it. This will allow them to initiate a better sale transaction which will most likely not happen with minority investors. Hence, using a piggyback clause becomes fair for either party.

Reasons for not using Tag Along

Co-sale rights are one of the best deals for minority investors. Things become even for them, but it is not the best scenario for majority holders. Sometimes, it can even become a difficult situation for the minority shareholders.

Difficulty in Liquidation

Most investors are looking to buy a certain number of shares or are willing to invest only a certain amount. Now, this amount will be distributed over X + the minority shares as well. Liquidation will become rather difficult, along with bargaining for the price.

This can be better explained by an example. Say, company A is being bought by investor B, who is offering a certain price for X number of shares. When the investor is informed that he/she has to buy additional shares, which would be the minority shares, he might waive the price.

Uncertainty in the company

When the minority holders sell their shares to the majority under Tag Along, a major part of the company will be possessed by them. This could cause a lot of issues given only a certain number of shareholders have a major part of ownership. Decisions could be affected, especially when a company is going under sale.

Common mistakes in understanding Tag Along

Often terms are misunderstood when it comes to defining what minority is and what majority is. These common mistakes have been found when it comes to exercising Tag Along rights.

Unclear definitions

Most important of all is defining what percentage of the ownership is declared to be the majority and how much remaining will be the minority. Most of the time, 51% ownership is called majority, but whatever it must be, the definition of it should be present in the contract.

Not defined parties

The agreement should also clearly mention which types of shares will have Tag Along rights. All shareholders don't need to have these rights, and the difference must be specified in the agreement itself.

Not showing interest

When the situation arises where Tag Along rights are available, a notice of sale is sent to applicable holders. Interested shareholders must respond to the notice to be a part of the sale. No response will be considered as no interest.

Exceptions from Tag Along

There are always exceptions to any clause. The key shareholder can, in such a situation, request a certain number of his/her shares to be exempted from the co-sale clause. This will further allow him/her to sell that portion of shares to a willing buyer.

In a way, it would be a rewarding situation for the key shareholder, which can keep them motivated towards the progress of the company. You can find a few samples of a Tag-Along clause here to understand them better.

The Piggyback clause can be a beneficial aspect for both parties if used wisely. There are different ways to even structure the clause, which could result in the majority and minority both ending up happy. There is a lot to consider as well here, including which shareholders are of more importance to the company's progress. If the inclusion of Tag Along would be something that aids it, then that's a green signal.

More Samples of Tag Along

Tag Along. (a) In the event that PBF Member or its Affiliates desire to market for sale all or substantially all of the Chalmette Refinery, including PBF Member’s Member Interest and associated Units in the Company, PBF Member will provide written notice to Eni Member and Eni Member shall have the right to participate by including for sale all (but not less than all) of Eni Member’s Member Interest and associated Units in connection with the sale of PBF Member’s Member Interest and associated Units (a “Joint Divestiture”). Within ninety (90) days following delivery of PBF Member’s notice, Eni Member shall have the right to deliver a written notice to PBF Member electing, or declining, to participate in such Joint Divestiture. If Eni Member declines to participate in such Joint Divestiture or fails to respond to PBF Member’s notice within such ninety (90) day period, Eni Member shall be deemed to have irrevocably and unconditionally waived its right to participate in a Joint Divestiture during such sale process, and PBF Member shall be entitled to commence its marketing efforts and, without limitation or requirement to consummate a sale within a certain time period, consummate the sale of all or substantially all of the Chalmette Refinery and its Member Interest and associated Units in the Company without inclusion by Eni Member, provided that the transferee meets the Compliance Criteria. (b) If PBF Member is approached by a Third Party for a direct, private sale of the Chalmette Refinery and its Member Interest and associated Units in the Company, the following provisions shall apply: (i) PBF Member shall provide notice to Eni Member of such approach, stating the details of the sale, including the consideration offered for PBF Member’s Member Interest and associated Units in the Company and the related terms and conditions of such sale. Thereafter, Eni Member shall notify PBF Member within thirty (30) days of receipt of such notice whether Eni Member elects to engage in a Joint Divestiture in connection with such direct, private sale. If Eni Member notifies PBF Member within such thirty (30) day time period that Eni Member elects to participate in such direct, private sale, then Eni Member shall have the right to participate in such sale and PBF Member shall ensure that the Third Party purchases simultaneously with the purchase of PBF Member’s Member Interest and associated Units in the Company all of Eni Member’s Member Interest and associated Units in the Company, ...
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Tag Along. A Participating Seller may Transfer Shares pursuant to and in accordance with the provisions of Section 4(a) below. Shares Transferred pursuant to this Section 3(b)(ii) shall conclusively be deemed thereafter not to be Shares under this Addendum.
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Tag Along. If one or more holders of Investor Shares (each such holder, a “Prospective Selling Investor”) proposes to Transfer any such Shares to any Prospective Buyer in a transaction subject to Section 3.2(a)(i), then as required by Section 3.2(a)(i):
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Tag Along. If either Xxxxx or Xxxxxx (for purposes of this Section 8.4, a “Tag-Along Member”) receives a bona-fide offer from a third party (a “Tag-Along Transferee”) to effect a Transfer of all or a portion of its Interest (which such Transfer shall otherwise satisfy the terms of this Agreement) (such Transfer, a “Tag-Along Transfer”) and such Tag-Along Member (the “Tag-Along Seller”) desires to effect such Tag-Along Transfer, then prior to consummation thereof, the Tag-Along Seller or its Affiliate shall cause the Tag-Along Transferee to offer (the "Tag-Along Offer") in writing to the Tag-Along Member that is not the Tag-Along Seller (the “Tag-Along Optionor”) to purchase that portion of the Tag-Along Optionor’s and/or its Affiliates’ Interest equivalent to the portion of the Tag-Along Seller’s aggregate Interest proposed to be the subject of the Tag-Along Transfer for the Tag-Along Purchase Price and otherwise on the same terms and conditions on which the Tag-Along Transferee has agreed to acquire, and the Tag-Along Seller or its Affiliate has agreed to sell, such portion of the Tag-Along Seller’s or such Affiliate’s Interest (the "Tag-Along Terms"). The Tag-Along Optionor shall have ten (10) Business Days from the date of receipt of the Tag Along Offer in which to accept such Tag Along Offer, and the closing of such purchase shall occur within fifteen (15) calendar days after such acceptance or at such other time as the Tag-Along Seller and the Tag-Along Transferee may agree. The Tag-Along Optionor shall be deemed to have rejected such Tag Along Offer if such offer is not affirmatively accepted, in writing, by the Tag-Along Optionor within such ten (10) Business-Day period, and the Tag-Along Seller or its Affiliate, shall for one hundred twenty (120) days thereafter, be permitted to proceed with the Transfer on the Tag Along Terms without again obtaining a Tag Along Offer as above-provided.
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Tag Along. Subject to prior compliance with Section 4.4, if applicable, if any Prospective Selling Stockholder proposes to Sell any Shares to any Prospective Buyer(s) that is not a Permitted Transferee (including a First Offer Purchaser pursuant to Section 4.4) in a Transfer that is subject to Section 3.1.5:
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Tag Along. (a) Prior to a Qualified Public Offering, if the Major Holder proposes to Transfer to an unaffiliated third party (in one or a series of related transactions) shares of Common Stock constituting in the aggregate 30% or more of the Common Stock owned by the Major Holder, then the Major Holder shall refrain from effecting such transaction unless, prior to the consummation thereof, each Minority Holder shall have been afforded the opportunity to join in such Transfer on a pro rata basis as provided in this Section 3. (b) Prior to the consummation of any proposed Transfer of shares of Common Stock by the Major Holder that is subject to this Section 3, the Major Holder shall cause the person or group that proposes to acquire such shares of Common Stock (the "Purchaser") to offer (the "Offer") in writing to each Minority Holder to purchase from each Minority Holder, up to the number of whole shares of Common Stock owned by each such Minority Holder equal to the product obtained by multiplying the total number of shares of Common Stock then owned by such Minority Holder by a fraction, the numerator of which is the aggregate number of shares of Common Stock proposed to be purchased by the Purchaser from all the Stockholders (including the Major Holder) and the denominator of which is the aggregate number of shares of Common Stock then outstanding and subject to the provisions of this Agreement. Such purchase shall be made at the price per share and on such other terms and conditions as the Purchaser has offered to purchase the shares of Common Stock to be sold by the Major Holder, including any consulting or other fees payable to the Major Holder to the extent such fees exceed the fair market value of the services to be provided. Each Minority Holder shall have 15 days from the date of receipt of the Offer in which to accept such Offer, and the closing of such purchase shall occur within 60 calendar days after such acceptance or at such other time as such Minority Holder and the Purchaser may agree. The number of shares of Common Stock to be sold to the Purchaser by the Major Holder shall be reduced by the aggregate number of shares of Common Stock purchased by the Purchaser from the other Minority Holders pursuant to the acceptance by them of the Offer in accordance with the provisions of this Section 3(b). (c) Any provision herein to the contrary notwithstanding, the exercise of the rights under this Section 3 shall be conditioned upon the agreement by each part...
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Tag Along. If any Prospective Selling Shareholder proposes to Sell any Shares to any Prospective Buyer(s) other than in a Transfer pursuant to Section 3.2.1, 3.2.2, 3.2.3 or 3.2.7:
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