Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3: (a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice. (b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders. (c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any. (d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)
Appears in 1 contract
Samples: Investor Rights and Lock Up Agreement (Cadrenal Therapeutics, Inc.)
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The TagNo Stockholder (for purposes of this ----------------
Section 2.1 the "Offering Stockholder") may sell any shares of Stock to any -------------------- non-Along Stockholders shall have the rightAffiliated third party (except through a sale pursuant to a registered underwritten public offering) if such shares, but not the obligation, together with all shares of Stock previously sold by such Offering Stockholder to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated third parties (the “Tag-Along Option”except through a sale pursuant to an underwritten registered public offering), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within would represent more than ten percent (10%) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount sum of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of - Common Stock subject to held by the Majority Stockholders Transfer in Offering Stockholder as of the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by date hereof plus (ii) a fraction, the numerator of which is -- the aggregate number of shares of Common Stock beneficially owned into which the shares of Preferred Stock, if any, held by the Offering Stockholder as of the date thereof would be ultimately convertible, unless each of the other Stockholders, other ------ than the Management Stockholders, is offered the right, on a fully diluted pro rata (except as otherwise provided in Sections 1(c) and 2(c) of the Investors Agreement) basis by such Tag-Along Stockholder and (based on the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Stockholder including the Majority Stockholders and all Tagnumber of shares of Common Stock into which the Preferred Stock would then be convertible) to participate in any such sale by selling to such non-Along StockholdersAffiliated third party its pro rata portion of Common Stock, in the event the Offering Stockholder is selling Common Stock, and at Preferred Stock in the same event the Offering Stockholder is selling Preferred Stock, for a purchase price per share of Common Stock or Preferred Stock, as the case may be, and upon the same on other terms and conditions (including without limitation time of payment and form of consideration) as conditions, not less favorable to be paid and given such Stockholder than those applicable to the Majority StockholdersOffering Stockholder.
(b) This Section 2.1 shall not apply to (i) sales of Common - Stock by any Management Stockholder holding less than one per cent (1%) of the aggregate number of outstanding shares of Common Stock at such time, calculated on a fully diluted basis, so long as the aggregate purchase price of such Common Stock is less than $500,000, or (ii) sales of Stock by an Outside Investor -- pursuant to Section 2.1, 2.2 or 2.3 hereof or Section 1(c) or 2(c) of the Investors Agreement.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes The GE Investors' rights under this Section 2.1 are modified and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented supplemented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Investors Agreement.
Appears in 1 contract
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity one or more Stockholders (collectively, the “Majority Stockholders”"SELLING STOCKHOLDER") want desires to consummate sell in one or more series of related transactions Securities beneficially owned by such Selling Stockholder, constituting more than 25% of the Original Ownership of such Stockholder, to a transaction that constitutes Person (the "BUYER") other than (x) pursuant to a Sale of Control Permitted Transfer or (y) following an Initial Offering, any sale effected on the securities exchange or automated quotation system on which the Common Stock is then listed or quoted, as applicable (each, a “Sale of Control Transaction”"TAG SALE"), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen then, at least thirty (1530) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereaftersale, such Selling Stockholder shall provide to each other Investor or Stockholder that beneficially owns Securities constituting more than 33% of the Original Ownership of such Stockholder (each each, together with its Affiliates, a “Tag-Along Stockholder”"TAG SELLER") may cause a notice (a "TAG ALONG NOTICE") setting forth in reasonable detail the Company or such Majority Stockholders to effect a Transfer terms of such other Stockholder’s Stock; in each casesale, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up such Buyer wishes to purchase (calculated on an as-converted basis) (the product obtained "TAG ALONG SHARES") and identifying the name and address of the Buyer. Upon the written request of any Tag Seller made within fifteen (15) days after the day the Tag Along Notice is received by multiplying (i) such Tag Seller, the aggregate Selling Stockholder proposing to make the sale shall cause the Buyer to purchase from such Tag Seller the number of shares of Common Stock subject underlying the Securities held by such Tag Seller equal to the Majority Stockholders Transfer lesser of (i) the number of shares of Common Stock underlying the Securities requested to be included in the Tag Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by such Tag Seller and (ii) a number determined by multiplying (x) a fraction, the numerator of which is the aggregate total number of shares of Common Stock beneficially owned on a fully diluted basis underlying the Securities held by such Tag-Along Stockholder Tag Seller and the denominator of which shall be is the aggregate total number of shares of Common Stock beneficially owned underlying the Securities held by all of the Tag Sellers by (y) the number of Tag Along Shares to be sold in such Tag Sale. Such purchase shall be made on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, same date and at the same price per share of Common Stock and upon the same on terms and conditions (including without limitation time of payment at least as favorable to such Tag Seller as the terms and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included conditions contained in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Tag Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred Notice delivered in connection with such proposed transaction. Each Tag Seller shall take all actions which the Sale of Control Transaction, and each Tag-Along Selling Stockholder shall make deems reasonably necessary or desirable to consummate such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transactiontransaction, including, without limitation, representations and warranties (and indemnities i) entering into agreements with respect thereto) that the Proposed Transferee of the Notes third parties on terms substantially identical or Conversion Shares (or interests therein) is receiving good and marketable title more favorable to such Notes Tag Seller than those agreed to by the Selling Stockholder and including representations, indemnities, holdbacks, and escrows, and (ii) obtaining all consents and approvals reasonably necessary or Conversion Shares (or interests therein), free desirable to consummate such transaction. The Tag Sellers and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along the Selling Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed each pay its pro rata portion share (based upon the number of shares of Common Stock (on an as-converted basis) included in such Tag Sale by each Tag Seller and the Selling Stockholder) of any reasonable transaction costs associated with the sale other than the legal expenses and selling commissions of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and participants in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Tag Sale.
Appears in 1 contract
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders Except for any proposed Transfer or series ---------------- of related Transfers by Geneseo and Cambridge (in such capacity, a "Transferring ------------ Stockholder") of 500,000 or fewer shares of Common Stock and/or Common Stock ----------- Equivalents individually or 2,000,000 shares of Common Stock and/or Common Stock Equivalents in the aggregate as otherwise permitted hereunder, the Transferring Stockholder shall have the obligation, and each Purchaser shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder Purchaser a number of shares of Common Stock or Common Stock Equivalents in the aggregate up to the product obtained by multiplying (rounded up to the nearest whole number) of (i) the quotient determined by dividing (A) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction and Common Stock Equivalents beneficially owned by such Purchaser by (iiB) a fraction, the numerator of which is the aggregate number of shares of Common Stock and Common Stock Equivalents beneficially owned on a fully diluted basis by such Tag-Along the Transferring Stockholder and (ii) the denominator of which shall be the aggregate total number of shares of Common Stock beneficially owned on a fully diluted basis and Common Stock Equivalents proposed to be Transferred by the Majority Stockholders and all Tag-Along StockholdersTransferring Stockholder to the transferee in the contemplated Transfer, and at the same price (on a per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of considerationbasis) as to be paid and given to the Majority StockholdersTransferring Stockholder, with an appropriate adjustment to take into account the exercise or conversion price payable, if any, in connection with the exercise or conversion of any Common Stock Equivalent to be sold by the Transferring Stockholder or such Purchaser and on substantially the same terms (other than indemnities) applicable to the Transferring Stockholder (to the extent such terms are customary and reasonable). In the event any proposed Transfer by the Transferring Stockholder to which this Section 2.5 applies would result in a Change of Control (other than a Change of Control arising pursuant to a Private Company Business Combination Transaction with respect to which Blackstone has exercised its waiver rights pursuant to subsection 2(h)(ii) of the Certificates of Designations for the Preferred Stock), such Purchaser shall be deemed immediately prior to any such proposed Transfer to beneficially own the shares of Preferred Stock acquired by operation of Section 2(h) of the applicable Certificates of Designations for the Preferred Stock, and shall be permitted to exercise its rights to require the proposed transferee to purchase any such shares of Preferred Stock (or Common Stock into which such shares of Preferred Stock may have been converted) in accordance with this Section 2.5.
(b) The Transferring Stockholder shall give notice to each Purchaser of each proposed Transfer giving rise to the rights of the Purchasers set forth in Section 2.5(a) at least 15 Business Days prior to the proposed consummation of such Transfer, setting forth the number of shares of Common Stock or Common Stock Equivalents proposed to be so transferred, the name and address of the proposed transferee, the proposed amount and form of consideration and other terms and conditions of payment offered by the proposed transferee, including, if applicable, a copy of the offer of the proposed transferee and a copy of the proposed Transfer agreement and a representation that the proposed transferee has been informed of, and agrees to comply with, the tag-along rights provided for in this Section 2.5. The tag-along rights provided by this Section 2.5 must be exercised by any Purchaser within 10 Business Days following receipt of the notice required by the preceding sentence, by delivery of a written notice to the Transferring Stockholder indicating the desire of such Purchaser to exercise its rights and specifying the number of shares of Common Stock or Common Stock Equivalents it desires to sell. Promptly following any such exercise, such Purchaser shall execute the applicable Transfer agreement or other documentation to the extent provided to such Purchaser and otherwise in compliance with this Section 2.5. Any exercise of tag-along rights by any Purchaser hereunder shall only become binding upon execution by such Purchaser of the applicable Transfer agreement or other documentation.
(c) Within ten (10) days after The Transferring Stockholder shall be entitled under this Section 2.5 to Transfer to the date by which a Tag-Along Stockholder notifies proposed transferee the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in shares of Common Stock or Common Stock Equivalents equal to the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later excess of (ix) twenty (20) days after the date by which each Holder was required number referred to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and in clause (ii) five of Section 2.5(a) over (5y) days after the satisfaction aggregate number of any governmental approval shares of Common Stock or filing requirementsCommon Stock Equivalents set forth in the written exercise notice or notices, if any, delivered by any Purchaser, as to which such Purchaser was entitled to exercise its tag-along rights.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of If the proposed Sale transferee fails to purchase shares of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes Common Stock or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to Common Stock Equivalents from any matter Purchaser as to which a Tag-Along such Purchaser has exercised its rights under this Section 2.5, then the Transferring Stockholder shall agree not be permitted to provide indemnification make the proposed Transfer, and any such attempted Transfer shall be void and of no effect, as provided in Section 2.3 hereof.
(other than its own title e) The rights granted to the Purchasers pursuant to this Section 2.5 shall not apply to any Transfer by Geneseo or Cambridge (i) to any of their respective Affiliates in accordance with Section 2.2, (ii) in a Public Offering or (iii) in a transaction in compliance with Rule 144 under the Securities Act.
(f) The rights granted to the Purchasers pursuant to this Section 2.5 shall terminate following a Public Offering at such Notes or Conversion Shares)time that Geneseo and Cambridge shall cease to beneficially own, such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion the aggregate, at least 25% of the total liability for which such indemnification is soughtoutstanding shares of Common Stock and Common Stock Equivalents, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)a fully diluted basis.
Appears in 1 contract
Samples: Stockholders Agreement (Ipcs Inc)
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The TagSo long as the Warrant Agreement shall remain in effect and the Permitted Holders beneficially own on a fully diluted basis, directly or indirectly, an aggregate number of shares of Common Stock equal to not less than forty percent (40%) of the Common Stock owned, directly or indirectly, by the Permitted Holders on the date hereof, with respect to any proposed sale to a non-Along Stockholders Affiliate (a "Transfer") by the Permitted Holders (or any one of them) (in such capacity, a "Transferring Shareholder") of Common Stock permitted hereunder, other than a Public Offering, which, when added to the aggregate amount of all prior Transfers, is not less than twenty percent (20%) of the Common Stock owned, directly or indirectly, by the Permitted Holders on the date hereof, the Transferring Shareholder shall have the obligation, and each Holder of Warrants and Warrant Shares shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder Holder (in such capacity, a "Tagging Shareholder") a number of shares of Common Stock Warrant Shares up to the product obtained by multiplying (rounded up to the nearest whole number) of (i) the quotient determined by dividing (A) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction owned by such Tagging Shareholder by (iiB) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder the Transferring Shareholder and all Tagging Shareholders, and (ii) the denominator of which shall be the aggregate total number of shares of Common Stock beneficially owned on a fully diluted basis proposed to be directly or indirectly transferred by the Majority Stockholders and all Tag-Along StockholdersTransferring Shareholder to the transferee in the contemplated Transfer, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after Transferring Shareholder; provided, that upon any Transfer resulting in a Change of Control, each Holder of Warrants and Warrant Shares shall have the date rights of a Tagging Shareholder pursuant to this Section 5 without regard to the aggregate number of shares theretofore sold by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent Permitted Holder pursuant to any Transfer; provided further, that in order to be entitled to exercise its right to sell shares of Common Stock to the Tag-Along Optionproposed transferee pursuant to this Section 5, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required Tagging Shareholder must agree to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver make to the Proposed Transferee at a closing to be held at transferee the offices of the Company (or such other place same representations, warranties, covenants, indemnities and agreements as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is Transferring Shareholder agrees to be transferred make in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context proposed Transfer of the proposed Sale shares of Control TransactionCommon Stock of the Transferring Shareholder insofar as such provisions relate to transfers of securities under the securities laws, includingdue authorization and other corporate governance matters and title to the Warrant Shares; provided further, without limitation, that all representations and warranties (shall be made by the Tagging Shareholder and indemnities with respect thereto) the Transferring Shareholder severally and not jointly and that the Proposed Transferee liability of the Notes Transferring Shareholder and the Tagging Shareholder (whether pursuant to a representation, warranty, covenant, indemnification provision or Conversion Shares (or interests thereinagreement) is receiving good for liabilities in respect of the Company shall be evidenced in writings executed by them and marketable title to such Notes or Conversion Shares (or interests therein), free the transferee and clear shall be borne by each of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which them on a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)basis.
Appears in 1 contract
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along So long as this Agreement shall remain in ---------------- effect and Vestar (and its Affiliates) beneficially owns more shares of Common Stock than the Xxxx Stockholders and their Permitted Transferees, unless a Public Offering shall have the rightoccurred, but not the obligationwith respect to any proposed Transfer by Vestar or any of its Affiliates' (in such capacity, a "Transferring Stockholder") of Common Stock (excluding any Transfers by ------------------------ Vestar to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”its Affiliates), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Transferring Stockholder shall have the obligation, and each other Stockholder and its Permitted Transferees shall have the right (such Stockholder and its Permitted Transferees that exercise such right shall be referred to as a "Tagging Stockholder"), to ------------------- require the proposed transferee to purchase from each such Tag-Along Tagging Stockholder a number of shares of Common Stock up to the product obtained by multiplying (rounded up to the nearest whole number) of (i) the quotient determined by dividing (A) the aggregate number of shares of Common Stock subject beneficially owned on a fully diluted basis and sought by such Tagging Stockholder to the Majority Stockholders Transfer be included in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction contemplated Transfer by (iiB) the sum of the aggregate number of shares of Common Stock beneficially owned on a fraction, fully diluted basis by the numerator of which is Transferring Stockholder and the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder Tagging Stockholders and sought by all Tagging Stockholders to be included in the denominator of which shall be contemplated Transfer and (ii) the aggregate total number of shares of Common Stock beneficially owned on a fully diluted basis proposed to be acquired by the Majority Stockholders and all Tag-Along Stockholderstransferee in the contemplated Transfer, and at the same price per share of Common Stock and upon the same terms and conditions (including including, without limitation limitation, time of payment and form of consideration) as to be paid and given to the Majority Transferring Stockholder, provided that in order to be -------- entitled to exercise its right to sell shares of Common Stock to the proposed transferee pursuant to this Section 3.6, a Tagging Stockholder must agree to make to the transferee the same representations, warranties, covenants, indemnities and agreements as the Transferring Stockholder agrees to make in connection with the proposed transfer of the shares of Common Stock of the Transferring Stockholder (except that in the case of representations and warranties pertaining specifically to the Transferring Stockholder, a Tagging Stockholder shall make the comparable representations and warranties pertaining specifically to itself, and except that in the case of covenants or agreements capable of performance only by certain Stockholders, such covenants or agreements shall be made only by such certain Stockholders); and provided, further, that all -------- ------- representations, warranties, covenants, agreements and indemnities made by the Transferring Stockholder and the Tagging Stockholders pertaining specifically to themselves shall be made by each of them severally and not jointly; and provided, further, that each of the Transferring Stockholder -------- ------- and each Tagging Stockholder shall be severally (but not jointly) liable for breaches of representations, warranties, covenants and agreements of or (in the case of representations and warranties) pertaining to the Parent and its subsidiaries as the case may be, and for indemnification obligations arising out of or relating to any such breach or otherwise pertaining to the Parent and its subsidiaries, on a pro rata basis, such liability of each such Stockholder not to exceed such Stockholder's pro rata portion of the gross proceeds of the sale.
(b) The Transferring Stockholder shall give notice to each other Stockholder and their Permitted Transferees of each proposed Transfer giving rise to the rights of the Tagging Stockholders set forth in the first sentence of Section 3.6(a) at least 30 days prior to the proposed consummation of such Transfer, setting forth the name of the Transferring Stockholder, the number of shares of Common Stock proposed to be so Transferred, the name and address of the proposed transferee, the proposed amount and form of consideration and other terms and conditions offered by the proposed transferee, and a representation that the proposed transferee has been informed of the tag-along rights provided for in this Section 3.6 and has agreed to purchase shares of Common Stock in accordance with the terms hereof. The tag-along rights provided by this Section 3.6 must be exercised by each Tagging Stockholder within 15 days following receipt of the notice required by the preceding sentence by delivery of a written notice to the Transferring Stockholder indicating such Tagging Stockholder's desire to exercise its rights and specifying the number of shares of Common Stock it desires to sell. If the proposed transferee fails to purchase shares of Common Stock from any Tagging Stockholder that has properly exercised its tag-along rights, then the Transferring Stockholder shall not be permitted to make the proposed Transfer, and any such attempted Transfer shall be void and of no effect.
(c) Within ten (10) days after If any of the date by which a Tag-Along Stockholder notifies the Company or the Majority Tagging Stockholders of its intent to exercise the Tag-Along Optiontheir rights under Section 3.6(a), the Company or the Majority Stockholders shall notify such Tag-Along Stockholder closing of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices purchase of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all shares of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that Common Stock with respect to any matter as which such rights have been exercised shall take place concurrently with the closing of the sale of the Transferring Stockholder's shares of Common Stock. No Transfer shall occur pursuant to which a Tag-Along Stockholder this Section 3.6 unless the transferee shall agree to provide indemnification (other than become a party to, and be bound to the same extent as its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion transferor by the terms of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Stockholders' Agreement.
Appears in 1 contract
Samples: Stockholders' Agreement (St John Knits International Inc)
Tag-Along Rights. If a majority (a) If, at any time prior to when the SK Holders collectively own 30% or less of the holders Common Stock owned collectively by the SK Holders as of the Company’s Effective Date, any Designated Management Stockholder (a "Selling Management Stockholder") proposes to Transfer (other than pursuant to a Public Offering or a Rule 144 Transfer or pursuant to Section 2.7 or to a Management Stockholder Permitted Transferee) any of its Common Stock (other than shares acquired upon exercise of stock options) representing more than 1% of the outstanding voting equity Common Stock either to (collectivelyi) any Third Party pursuant to a bona fide offer to purchase or (ii) the Company (in the case of clause (i) and (ii), a "Tag-Along Offer"), the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors Selling Management Stockholder will provide written notice of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior Tag-Along Offer to the Company and each of the SK Holders in the manner set forth in this Section 2.3; provided, however, that nothing in this Section 2.3 will affect the restrictions on Transfers by the Management Stockholders contained in Section 2.1. Such written notice will identify the proposed purchaser, the number of shares of Common Stock proposed to be purchased from the Selling Management Stockholder (or any if greater, the number of shares of Common Stock such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof Person is willing to purchase (the “Sale Notice’"Desired Shares"). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on Ratio (as defined in Section 2.3(d)) that would apply if all the SK Holders become Co-Selling Stockholders (as defined below), the consideration offered and all other material terms and conditions stated of the Tag-Along Offer. If the offer price consists in part or in whole of consideration other than cash, the Sale NoticeSelling Management Stockholder will provide such information, to the extent reasonably available to the Selling Management Stockholder, relating to such consideration as any XX Xxxxxx may reasonably request in order to evaluate such non-cash consideration.
(b) Each The SK Holders will have the right, exercisable as set forth below, to accept the Tag-Along Offer for up to the number of shares of Common Stock determined pursuant to Section 2.3(d). The SK Holders will, within ten Business Days after receipt of the written notice from the Selling Management Stockholder, provide the Selling Management Stockholder shall with an irrevocable written notice specifying the number of shares of Common Stock the SK Holders wish to Transfer, not to exceed the number of Desired Shares, and the allocation of such shares among the SK Holders and will simultaneously provide a copy of such notice to the Company. If the SK Holders do not accept the Tag-Along Offer within ten Business Days following receipt of written notice from the Selling Management Stockholder, the SK Holders will be deemed to have waived any and all rights under this Section 2.3 with respect to the Transfer of Common Stock pursuant to such Tag-Along Offer but nothing herein will affect the SK Holders' rights in respect of any other transaction or proposed transaction.
(c) Not less than seven Business Days prior to the proposed date of any sale pursuant to a Tag-Along Offer, the Selling Management Stockholders will notify the SK Holders which have accepted the Tag-Along Offer (each, a "Co-Selling Stockholder") of such proposed date. Not less than two Business Days prior to such proposed date of sale, the Co-Selling Stockholders will deliver to an Escrow Agent (the costs of which Escrow Agent will be borne by the Selling Management Stockholder and the Co-Selling Stockholders in proportion to the shares of Common Stock Transferred by such Selling Management Stockholder and Co-Selling Stockholders in connection with such Tag-Along Offer) the Duly Endorsed certificate or certificates representing the Common Stock to be Transferred by the Co-Selling Stockholders and all other documents reasonably required to be executed in connection with such Tag-Along Offer.
(d) Each Co-Selling Stockholder will have the right to require Transfer (and the proposed transferee Selling Management Stockholder will, to purchase from each such the extent necessary, reduce the amount or number of shares of Common Stock to be Transferred by the Selling Management Stockholder by a corresponding amount), pursuant to the Tag-Along Stockholder Offer, a number of shares of Common Stock up equal to the product obtained of the Desired Shares multiplied by multiplying a fraction (i) the "Tag-Along Ratio"), the numerator of which will be the aggregate amount or number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such TagCo-Along Selling Stockholder and the denominator of which shall will be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders Selling Management Stockholder and all TagCo-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Selling Stockholders.
(ce) Within The Selling Management Stockholder will have 90 Business Days from the end of the ten Business Day period referred to in paragraph (10b) days after above in which to consummate the date Transfer of Common Stock owned by which a Tagsuch Selling Management Stockholder and the Co-Along Stockholder notifies the Company or the Majority Selling Stockholders of its intent to exercise as contemplated by the Tag-Along OptionOffer at the price and on the terms contained in such notice. If, at the end of such 90 Business Day period, the Company or Selling Management Stockholder has not completed such Transfer, the Majority Stockholders shall notify such Tag-Along Stockholder right of the amount of Notes and number of Conversion Shares held by Selling Management Stockholder to effect such Tag-Along Stockholder that Transfer will be included in the sale terminate, and the date Common Stock of the Selling Management Stockholders subject to such proposed Transfer will again be subject to all the restrictions on which the Sale of Control Transaction will be consummated, which shall be no later than the later of sale or other disposition and other provisions contained in this Agreement.
(if) twenty (20) days Immediately after the date by which each Holder was required consummation of the Transfer of Common Stock pursuant to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option Offer, the Escrow Agent will notify the Co-Selling Stockholders thereof and (ii) five (5) days after will remit to each Co-Selling Stockholder the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver total sales price attributable to the Proposed Transferee at Common Stock of such Co-Selling Stockholder sold pursuant thereto less a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee expenses incurred in connection with such Sale of Control Transaction and sale.
(g) Notwithstanding anything contained in this Section 2.3, there will be no liability on the determination part of the appropriate scope ofSelling Management Stockholders to any Stockholder (including any Co-Selling Stockholder) if the Transfer of Common Stock by the Selling Management Stockholder and any Co-Selling Stockholder pursuant to Section 2.3 is not consummated for whatever reason. The Management Stockholders, or limitations or exceptions toin their sole discretion, such representations and warranties. At will determine whether to effect a sale of Common Stock to any Person pursuant to this Section 2.3.
(h) In connection with any Transfer of Common Stock as to which the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such SK Holders have Tag-Along Stockholder that portion rights pursuant to this Section 2.3, the Transferee of the sale proceeds such Common Stock will not be required to which such execute a counterpart of this Agreement or become subject to this Agreement.
(i) No failure to exercise any rights or take any other action in respect of any Tag-Along Stockholder is entitled by reason of its participation therein (less Offer will affect any adjustments due to the conversion XX Xxxxxx'x rights in respect of any convertible securities subsequent Tag-Along Offer or the exercise of any exercisable securities)other rights hereunder.
Appears in 1 contract
Samples: Stockholders Agreement (Childrens Place Retail Stores Inc)
Tag-Along Rights. (i) If any Investor (a majority "Selling Holder") intends to Transfer (other than to any of its Affiliates or to the Company) Shares representing at least three percent (3%) of the holders fully-diluted equity of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) Selling Holder shall notify the other remaining Investors (the "Tag-Along Investors"), in writing, of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the its terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within conditions. Within ten (10) business days of receipt the date of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the such notice, each other Tag-Along Stockholder wishes Investor shall notify the Selling Holder if it elects to sell on participate in such Transfer. Any Tag-Along Investor that fails to notify the terms and conditions stated in the Sale Notice.
Selling Holder within such ten (b10) business day period shall be deemed to have waived its rights hereunder. Each Tag-Along Stockholder Investor that so notifies the Selling Holder shall have the right to require sell, at the proposed transferee same price and on the same terms and conditions as the Selling Holder, an amount of Shares equal to the Shares the third party actually proposes to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained multiplied by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is shall be the aggregate number of shares of Common Stock beneficially Shares issued and owned on a fully diluted basis by such Tag-Along Stockholder Investor and the denominator of which shall be the aggregate number of shares of Common Stock beneficially Shares issued and owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Selling Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warrantiesInvestor exercising its rights under this Section 3(c) (assuming, and shall enter into such agreements, as are customary and reasonable in the context case of the proposed Sale sales of Control TransactionCommon Stock, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear full conversion of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion shares of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented Preferred Stock held by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, Selling Holder and each Tag-Along Stockholder Investor exercising its rights under this Section 3(c)). Notwithstanding the foregoing, if the Selling Holder is selling only shares of Preferred Stock, holders of Common Stock shall provide reasonable assistance not have the right to sell shares of Common Stock pursuant to this Section 3(c).
(ii) Notwithstanding anything contained in this Section 3(c), if all or a portion of the purchase price consists of securities and the sale of such securities to the Majority Stockholders in connection with Tag-Along Investors would require either a registration under the Securities Act or the preparation of a disclosure schedules relating document pursuant to representations and warranties to be made to Regulation D under the Proposed Transferee in connection with such Sale Securities Act (or any successor regulation) or a similar provision of Control Transaction and in any state securities law, then, at the determination option of the appropriate scope ofSelling Holder, any one or limitations or exceptions to, such representations and warranties. At the time of consummation more of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion Investors may receive, in lieu of such securities, the sale proceeds to which fair market value of such Tag-Along Stockholder is entitled securities in cash, as determined in good faith by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Board.
Appears in 1 contract
Tag-Along Rights. If a majority of (a) In the holders of the Company’s outstanding voting equity (collectivelyevent that, the “Majority Stockholders”Tenaska Stockholders propose to Transfer shares of Common Stock (or shares of preferred stock convertible into Common Stock) want to consummate a transaction that constitutes a Sale of Control Third Party Purchaser (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along StockholderTransfer”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in ), then each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders Management Stockholder shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated right (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance NoticeRight”) to require that the Company and/or proposed Third Party Purchaser purchase from such Management Stockholder up to the Majority Stockholders, number of whole Restricted Securities (including any Restricted Securities issuable upon the exercise of Vested Awards or any RSUs or SARs that vest as the case may be, within ten (10) days of receipt a result of the Sale Notice. Each Acceptance Notice shall indicate consummation of the maximum amount of Notes or Transfer to the Third Party Purchaser) equal to the number of Conversion Shares that derived by multiplying (x) the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a total number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of and/or shares of preferred stock convertible into Common Stock subject Stock, measured on an as-if converted basis) that the proposed Third Party Purchaser has agreed or committed to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction purchase, by (iiy) a fraction, the numerator of which is the total number of Restricted Securities (including any Restricted Securities issuable upon exercise of Vested Awards (including SARs and RSUs that vest as a result of the consummation of the Transfer to the Third Party Purchaser)) owned by the Management Stockholder, and the denominator of which is the aggregate number of shares of Common Stock beneficially and preferred stock convertible into Common Stock (measured on an as-if converted basis) owned on by all Tenaska Stockholders, the Management Stockholder and all other holders of Common Stock and/or preferred stock convertible into Common Stock that have exercised a fully diluted basis by such Tag-Along Right similar to the rights granted to the Management Stockholder in this Section 4 (including any Restricted Securities issuable upon exercise of all Vested Awards (including RSUs and SARs that vest as a result of the denominator consummation of which the Transfer to the Third Party Purchaser)). The intent of this computation is to accord to the Management Stockholder the right to sell the same percentage of its holdings of Common Stock as the Tenaska Stockholders are entitled to sell in such a transaction (including shares of preferred stock convertible into Common Stock, measured on an as-if converted basis). Any Restricted Securities purchased from the Management Stockholder pursuant to this Section 4(a) shall be purchased upon the aggregate same terms and conditions as such proposed Transfer by the selling Tenaska Stockholder(s).
(b) A Tenaska Stockholder shall notify each Management Stockholder in writing in the event such Tenaska Stockholder proposes to make a Tag-Along Transfer at least seven (7) business days prior to the date on which such Tenaska Stockholder expects to consummate such Transfer (the “Sale Notice”), which notice shall specify the number of shares of Common Stock beneficially owned on a fully diluted basis by and/or preferred stock convertible into Common Stock that the Majority Stockholders and all Third Party Purchaser intends to purchase in such Transfer. The Tag-Along Stockholders, and at Right may be exercised by any Management Stockholder by delivery of a written notice to the same price per share Tenaska Stockholders proposing to sell Restricted Securities (the “Tag-Along Notice”) within seven (7) business days following receipt of Common Stock and upon the Sale Notice from such Tenaska Stockholder(s). The Tag-Along Notice shall state the number of Restricted Securities that the Management Stockholder proposes to include in such Transfer to the proposed Third Party Purchaser (not to exceed the number as determined above). In the event that the proposed Third Party Purchaser does not purchase the specified number of Restricted Securities from the Management Stockholder on the same terms and conditions (including without limitation time as specified in the Sale Notice, then the Tenaska Stockholder(s) shall not be permitted to sell any shares of payment and form of consideration) as to be paid and given Common Stock or preferred stock convertible into Common Stock to the Majority Stockholdersproposed Third Party Purchaser unless the Tenaska Stockholder(s) purchase from the Management Stockholder such specified number of Restricted Securities on the same terms and conditions as specified in such Sale Notice.
(c) Within ten (10) days after At the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders closing of its intent to exercise the Tag-Along OptionTransfer, the Company Third Party Purchaser (or the Majority Stockholders Tenaska Stockholder in the event that the Third Party Purchaser does not purchase the specified number of Restricted Securities as contemplated in Section 4(b) above) shall notify such remit to each Management Stockholder who exercised his Tag-Along Stockholder Right the consideration for the total sales price of the amount of Notes and number of Conversion Shares Restricted Securities held by such Tag-Along Management Stockholder that will sold pursuant hereto and minus any such consideration to be included escrowed or otherwise held back in accordance with the sale and the date on which the Sale Third Party Terms, against delivery by such Management Stockholder of Control Transaction will be consummatedcertificates for such Restricted Securities, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required duly endorsed for Transfer or with duly executed stock powers subject to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option Right reasonably acceptable to the Company, and (iithe compliance by such Management Stockholder with any other conditions to closing generally applicable to the Tenaska Stockholder(s) five (5) days after the satisfaction and all other holders of any governmental approval Common Stock or filing requirements, if anypreferred stock selling shares in such transaction.
(d) Each TagFor the purpose hereof, “Company Sale” shall mean (i) the consummation of any transaction or series of transactions pursuant to which any Person or group of Persons (other than Tenaska Stockholders, its Affiliates or any transferee as a result of any liquidation or dissolution of any Tenaska Stockholder) becomes the beneficial owner (as that term is used in Section 13(d) of the Exchange Act) directly or indirectly of fifty-Along Stockholder may effect its participation in any Sale percent (50%) or more of Control Transaction, and as part of its participation the Company’s capital entitled to vote in the Sale election of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at members of the offices Board of Directors of the Company or its successor(s); (ii) the consummation of any consolidation or such merger of the Company, other place as than a consolidation or merger of the parties agree)Company in which the Tenaska Stockholder holds more than fifty-percent (50%) of the common stock of the surviving corporation immediately after the consolidation or merger, one or more Notes (ii) the sale of all or certificates, properly endorsed for transfer, which represent substantially all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context assets of the proposed Company and its Subsidiaries taken as a whole. Notwithstanding the foregoing, no Company Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee will occur by Reason of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title Company’s contribution of assets to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Joint Venture.
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Tag-Along Rights. If a majority In the event the Series B Investors do not exercise their rights of first refusal as to all of the holders Subject Shares pursuant to Section 3(b) hereto and any Management/Founding Investor intends to consummate the Transfer of any of its Shares (other than Transfers to any Permitted Transferee or to the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then such Management/Founding Investor (the Majority Stockholder(s"Selling Investor") shall notify the other Series B Investors (the "Tag-Along Investors") and the Company in writing, of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the its terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(bnotice specified in Section 3(b) above. Each Tag-Along Stockholder Investor that so notifies the Selling Investor (pursuant to the same terms and conditions regarding notice set forth in Section 3(b) above) shall have the right to require sell, at the proposed transferee same price and on the same terms and conditions as the Selling Investor, an amount of Shares equal to the Shares the third party actually proposes to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained multiplied by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is shall be the aggregate number of shares of Common Stock beneficially Shares owned on a fully diluted basis by such Tag-Along Stockholder Investor on the date of notice and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, Selling Investor and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in Investor exercising its rights under this Section 3(c) on the context date of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liensnotice; provided, however, that with respect to if any matter as to which a Tag-Along Stockholder shall agree Investor has, on the date of notice, the ability to provide indemnification (other than its own title immediately liquidate pursuant to such Notes or Rule 144 of the Securities Act of 1933, as amended, at a price above the then applicable Conversion Shares)Price, a number of Shares equal to the number of Shares such Tag-Along Stockholder shall in no event Investor would otherwise be required entitled to provide indemnification in an amount that would exceed its pro rata portion of sell pursuant to the total liability for which such indemnification is soughtrights granted under this Section 3(c), which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by then such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders Investor shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance not be entitled to the Majority Stockholders in connection with the preparation benefit of disclosure schedules relating to representations and warranties to be made this Section 3(c). The rights granted to the Proposed Transferee in connection with such Sale of Control Transaction and in Series B Investors under this Section 3(c) may be freely assigned or otherwise transferred severally by the determination Series B Investors to any Person acquiring at least twenty percent (20%) of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At shares of Series B Preferred Stock originally owned by the time of consummation original holder of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Series B Preferred Stock.
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Tag-Along Rights. (a) If at any time prior to three years after the completion of a majority public offering of its shares a Shareholder (or Shareholders), (the "Selling Shareholder"), receives a bona fide third party offer (including, without limitation, any such offer from another Shareholder) in writing (a "Bona Fide Offer") which the Selling Shareholder desires to accept, to purchase any or all of the holders of Shares owned by the Company’s outstanding voting equity Selling Shareholder (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”"Offered Shares"), then the Majority Stockholder(s) Selling Shareholder shall notify give the Company and the other Investors Shareholders (each other Shareholder, an "Offeree") written notice (the "Selling Shareholder Notice") of such proposed Sale (i) the name and address of Control Transaction the person who made the Bona Fide Offer (the "Proposed Transferee"), (ii) the number of shares of Common Stock to be purchased, (iii) the price per share of Common Stock to be paid, (iv) the terms and conditions of payment offered by a the Proposed Transferee, (v) the date which shall be not later than fifteen (15) days prior and location of, and procedures for selling Shares to the Company or any such Majority Stockholder(sProposed Transferee and (vi) entering into any definitive binding agreement in respect thereof (a representation that the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Proposed Transferee has been informed of the Tag-Along Stockholder”) may cause the Company or such Majority Stockholders Right provided for in this Section 4.1 and has agreed to effect a Transfer purchase shares of such other Stockholder’s Stock; in each case, only pursuant to and Common Stock in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Noticehereof.
(b) Each Tag-Along Stockholder Offeree shall have the right (the "Tag-Along Right") to require the proposed transferee Proposed Transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock him up to the product obtained number derived by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction Transferee is willing to acquire by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder Offeree, and the denominator of which shall be is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and Selling Shareholder plus the aggregate number of shares of Common Stock owned by all Offerees who validly exercise their respective Tag-Along Stockholders, and Rights. Any shares of Common Stock purchased from an Offeree pursuant to this Section 4.1 shall be paid for at the same price per share of Common Stock Share and upon the same terms and conditions (including without limitation time as are received by the Selling Shareholder for his Shares. The number of payment and form of consideration) as Shares to be paid and given Transferred by the Selling Shareholder to the Majority Stockholders.Proposed Transferee shall be reduced by the number of Shares to be sold by the Offerees pursuant to this Section 4.1
(c) Within ten (10) days after the date by which a The Tag-Along Stockholder notifies Right shall be exercised by delivery of a written notice to the Company or Selling Shareholder (the Majority Stockholders of its intent to exercise the "Tag-Along Option, Acceptance Notice") within 15 days following receipt of the Company or the Majority Stockholders shall notify such Selling Shareholder Notice. The Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which Acceptance Notice shall be no later than the later of state (i) twenty (20) days after the date by number of shares of Common Stock that the Offeree proposed to include in such Transfer to the Proposed Transferee, which each Holder was required number shall not exceed the maximum number of shares of Common Stock which such Offeree would be entitled to notify include if all Offerees elected to participate in the Company or Transfer to the Majority Stockholders of its intent to exercise the Tag-Along Option fullest extent possible, determined as aforesaid, and (ii) five (5) days after whether the satisfaction Offeree would prefer to include additional shares of any governmental approval or filing requirementsCommon Stock in the Transfer in the event that some Offerees choose not to so participate and, if anyso, the aggregate number of such additional Shares.
(d) Each Within 45 days of the dispatch of the Selling Shareholder Notice to the Offerees, the Selling Shareholder shall deliver to each Offeree who validly exercises his Tag-Along Stockholder may effect its participation in Right a notice setting forth the number of shares of Common Stock that such Offeree will be entitled to include and the delivery instructions and procedures required to effectuate the Transfer. In the event that any Sale of Control Transaction, and as part of its participation Offeree does not choose to participate in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver Transfer to the Proposed Transferee at a closing fullest extent possible, the right to be held at the offices of the Company (or include Shares that such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is Offeree would have been entitled to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title include but chose to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion exclude shall be determined apportioned among the Selling Shareholder and the other participating Offerees ratably on the basis of (A) in the percentage case of the Selling Shareholder, the amount by which the total Notes or Conversion number of Shares involved to be included in such transfer that are represented by the Notes or Conversion Shares owned by such Transfer exceeds the number the Selling Shareholder would have
(e) If the Proposed Transferee does not purchase shares of Common Stock from the Offerees who validly exercise their respective Tag-Along Stockholder. In additionRights at the same price and on the same terms and conditions as the Proposed Transferee purchases from the Selling Shareholder, each Tag-Along Stockholder and then the Majority Stockholders Selling Shareholder shall reasonably cooperate and consult with each other in order not be permitted to effect the Sale Transfer any shares of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made Common Stock to the Proposed Transferee in connection with the proposed Transfer. The Selling Shareholder and the Offerees who validly exercise their respective Tag-Along Rights shall have the right, for a 150 day period following the dispatch of the Selling Shareholder Notice, to Transfer to the Proposed Transferee the shares of Common Stock proposed to be transferred on terms and conditions no more favorable to the Selling Shareholder and such Sale of Control Transaction and Offerees than those stated in the determination Selling Shareholder Notice. Any shares of Common Stock which continue to be held by the Selling Shareholder or any such Offerees after the earlier of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale proposed Transfer or the expiration of Control Transaction, the Proposed Transferee such 150-day period shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due again be subject to the conversion provisions of any convertible securities or the exercise of any exercisable securities)this Section 4.1.
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Tag-Along Rights. If In the event any Stockholder or Stockholders (the "Offeree Stockholder(s)") receive a majority bona fide offer or related series of offers from any person (the "Third Party Offeror") to purchase from the Offeree Stockholder(s) not less than ten percent (10)%, by voting power, of the holders then outstanding capital stock of the Company’s outstanding voting equity Company (collectivelya "Third Party Offer"), the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Offeree Stockholder(s) shall notify the other Investors promptly forward a copy of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior Third Party Offer to the Company or and the other Stockholders. The other Stockholders may elect to participate in the sale to the Third Party Offeror at the same price per share and on the same terms by delivering written notice to the Offeree Stockholder(s) within thirty (30) days after delivery to all other Stockholders of such copy of the Third Party Offer. If any other Stockholders elect to participate in the sale to the Third Party Offeror, the Offeree Stockholder(s) and such other Stockholders shall each be entitled to sell to the Third Party Offeror the number of shares of stock as to which the Third Party Offer relates equal to the product of (i) the number of shares of stock to which such Third Party Offer relates times (ii) the ratio of the number of shares of stock owned by such Stockholder over the number of shares of stock owned by all Stockholders electing to sell to the Third Party Offeror. The Offeree Stockholder(s) shall not sell any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (stock to the “Sale Notice’). Thereafter, each Third Party Offeror unless the Third Party Offeror agrees to extend the Third Party Offer to the other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms foregoing and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each the Offeree Stockholder(s) and such Tag-Along Stockholder a number other Stockholders their respective proportionate shares as described above of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject stock as to which the Third Party Offer relates. Each Stockholder participating in the sale to the Majority Stockholders Transfer in Third Party Offeror shall pay its pro rata share (based on the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares to be sold) of Common Stock beneficially owned the expenses incurred by the Offeree Stockholder(s) in connection with such transfer and shall be obligated to join on a fully diluted pro rata basis by such Tag-Along Stockholder and (based on the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid sold) in any indemnification or other obligations that the Offeree Stockholder(s) agree to provide in connection with such transfer (other than any such obligations that relate specifically to a particular Offeree Stockholder such as indemnification with respect to representations and warranties given by a Stockholder regarding such Stockholder's title to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder and ownership of the amount of Notes and number of Conversion Shares held by such Tag-Along shares to be sold; PROVIDED that no participating Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred obligated in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in sale to the context of Third Party Offeror to agree to indemnify or hold harmless the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that Third Party Offeror with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title an amount in excess of the net cash proceeds paid to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale sale). Equity Securities transferred pursuant to SECTIONS 2.3 AND 2.4 shall remain subject to the provisions of Control Transaction SECTIONS 1.1 and in the determination 9.1 of the appropriate scope ofthis Agreement, or limitations or exceptions toand, prior to consummating any such representations and warranties. At the time of consummation of the Sale of Control Transactiontransfer, the Proposed Transferee Transferor shall remit directly require the purchaser to each acknowledge in writing the purchaser's agreement to be bound by such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)restrictions.
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Samples: Stockholders Agreement (Lodgenet Entertainment Corp)
Tag-Along Rights. If (a) In the event of a majority proposed Transfer of shares of Equity Securities by Tengram or any Affiliate of Tengram that is or is required to become a party to this Agreement (each, a “Tengram Stockholder”) other than (x) to a Permitted Transferee or (y) in connection with a Public Offering or brokers' transactions (within the meaning of Section 4(4) of the holders Securities Act) pursuant to Rule 144, each of Dyne and his Affiliates (each, a “Dyne Stockholder”) shall have the right to participate on the same terms and conditions and for the same per share consideration as the Tengram Stockholder in the Transfer in the manner set forth in this Section 2.2. Prior to any such Transfer, the Tengram Stockholder shall deliver to Dyne written notice of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof Transfer (the “Sale Transfer Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right notice shall state (i) the name of the proposed Transferee, (ii) the number of shares of Common Stock (which, for purposes of such calculation, shall include shares of Common Stock underlying the Debenture subject to transfer) proposed to be exercisable upon written notice Transferred (the “Acceptance NoticeTransferred Shares”) to and the Company and/or percentage (the Majority “Tag Percentage”) that such number of shares of Common Stock (which, for purposes of such calculation, shall include shares of Common Stock underlying the Debenture) constitute of the total number of shares of Common Stock owned collectively by the Tengram Stockholders, as (iii) the case may beproposed purchase price therefor, within ten (10) days including a description of receipt any non-cash consideration sufficiently detailed to permit the determination of the Sale Notice. Each Acceptance Notice shall indicate Fair Market Value thereof, and (iv) the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the other material terms and conditions stated of the proposed Transfer, including the proposed Transfer date (which date may not be less than 30 days after delivery to Dyne of the Transfer Notice). Such notice shall be accompanied by a written offer from the proposed Transferee to purchase the Transferred Shares, which offer may be conditioned upon the consummation of the sale by the Tengram Stockholders, or the most recent drafts of the purchase and sale documentation between the Tengram Stockholders and the Transferee which shall make provision for the participation of the Dyne Stockholders in the Sale Noticesuch sale consistent with this Section 2.2.
(b) Each TagDyne Stockholder may elect to participate in the proposed Transfer to the proposed Transferee identified in the Transfer Notice by giving written notice to the Tengram Stockholders within the 30 day period after the delivery of the Transfer Notice to Dyne, which notice shall state that such Dyne Stockholder elects to exercise its rights of tag-Along along under this Section 2.2 and shall state the maximum number of shares of Common Stock sought to be Transferred (which number to be sold by all Dyne Stockholders may not exceed the product of (i) all such shares of Common Stock owned by the Dyne Stockholders, multiplied by (ii) the Tag Percentage). Each Dyne Stockholder shall be deemed to have waived its right of tag-along with respect to the Transferred Shares hereunder if it fails to give notice within the prescribed time period. The proposed Transferee of Transferred Shares will not be obligated to purchase the number of shares of Common Stock exceeding that that number set forth in the Transfer Notice, and in the event such Transferee elects to purchase less than all of the additional shares of Common Stock sought to be Transferred by the Dyne Stockholders, the number of shares of Common Stock (which, for purposes of such calculation, shall include shares of Common Stock underlying the Debenture) to be Transferred by the Tengram Stockholders and each such Dyne Stockholder shall be reduced so that each such Stockholder is entitled to sell its Pro Rata Portion of the number of shares of Common Stock the proposed Transferee elects to purchase (which in no event may be less than the number of Transferred Shares set forth in the Transfer Notice).
(c) Each Dyne Stockholder, if it is exercising its tag-along rights hereunder, shall deliver to Tengram at the closing of the Transfer of the Tengram Stockholder’s Transferred Shares to the Transferee certificates representing the Transferred Shares to be Transferred by such Dyne Stockholder, duly endorsed for transfer or accompanied by stock powers duly executed, in either case executed in blank or in favor of the applicable Transferee against payment of the aggregate purchase price therefor by wire transfer of immediately available funds. Each Stockholder participating in a sale pursuant to this Section 2.2 shall receive consideration in the same form and per share amount after deduction of such Stockholder’s proportionate share of the related expenses. Each Dyne Stockholder participating in a sale pursuant to this Section 2.2 shall agree to make or agree to the same customary representations, covenants, indemnities and agreements as the Tengram Stockholder so long as they are made severally and not jointly and the liabilities thereunder are borne on a pro rata basis based on the consideration to be received by each Stockholder; provided, that any general indemnity given by a Tengram Stockholder, applicable to liabilities not specific to the Tengram Stockholder, to the Transferee in connection with such sale shall be apportioned among the Stockholders participating in a sale pursuant to this Section 2.2 according to the consideration received by each such Stockholder and shall not exceed such Stockholder's net proceeds from the sale; provided, further, that any representation relating specifically to a Stockholder and/or its ownership of the Common Stock to be Transferred shall be made only by that Stockholder. The fees and expenses incurred in connection with a sale under this Section 2.2 and for the benefit of all Stockholders (it being understood that costs incurred by or on behalf of a Stockholder for his, her or its sole benefit will not be considered to be for the benefit of all Stockholders), to the extent not paid or reimbursed by the Company or the Transferee or acquiring Person, shall be shared by all the Stockholders on a pro rata basis, based on the consideration received by each Stockholder in respect of its Common Stock (which, for purposes of such calculation, shall include shares of Common Stock underlying the Debenture) to be Transferred; provided that no Stockholder shall be obligated to make any out-of-pocket expenditure prior to the consummation of the transaction consummated pursuant to this Section 2.2 (excluding de minimis expenditures). The proposed Transfer date may be extended beyond the date described in the Transfer Notice to the extent necessary to obtain required approvals of Governmental Entities and other required approvals and the Company and the Stockholders participating in such Transfer shall use their respective commercially reasonable efforts to obtain such approvals.
(d) If a Tengram Stockholder sells or otherwise Transfers to the Transferee any of its shares of Equity Securities in breach of this Section 2.2, then each Dyne Stockholder shall have the right to require the proposed transferee sell to each Tengram Stockholder, and each Tengram Stockholder undertakes to purchase from each such Tag-Along Stockholder a Dyne Stockholder, the number of shares of Common Stock up that such Dyne Stockholder would have had the right to sell to the product obtained by multiplying (i) Transferee pursuant to this Section 2.2, for a per share amount and form of consideration and upon the aggregate number of terms and conditions on which the Transferee bought such shares of Common Stock subject from the Tengram Stockholder, but without any indemnity being granted by any Dyne Stockholder to the Majority Stockholders Transfer Tengram Stockholder; provided that nothing contained in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (iithis Section 2.2(d) shall preclude any Dyne Stockholder from seeking alternative remedies against any such Tengram Stockholder as a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders result of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder breach of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if anythis Section 2.2.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)
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Tag-Along Rights. (a) If Stockholders ("the Selling Stockholders") are transferring a majority number of shares of Stock equal to 50% or more of the holders then outstanding shares of the Company’s outstanding voting equity Stock (collectively, the “Majority Stockholders”on an As-Converted Basis) want in a single transaction or a series of transactions to consummate a transaction that constitutes a Sale of Control third party (a “Sale of Control Transaction”"Third Party Purchaser"), then each of the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof RWBS Holders (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “"Tag-Along Stockholder”Rightholders") may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require sell to the proposed transferee Third Party Purchaser, upon the terms and conditions set forth in the notice to purchase from each such Tag-Along Stockholder a number the Company provided for in (ii) below, up to that percentage of shares of Common Stock up to the product obtained by multiplying (ion an As-Converted Basis) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder Rightholder as is equal to that will percentage determined by dividing (i) the total number of shares of Stock (on an As-Converted Basis) proposed to be included in transferred by Selling Stockholders by (ii) the sale and total number of shares of Stock (on an As-Converted Basis) then outstanding (the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later quotient of (i) twenty and (20) days after ii), being the date "Percentage of Offered Securities"); provided, however, the total number of shares of Stock (on an As-Converted Basis)a Tag-Along Rightholder shall be entitled to sell shall be inclusive of the number of shares of Stock proposed to be sold by which each such RWBS Holder was required if also acting in the capacity of a Selling Stockholder. The RWBS Holders may allocate their tag-along rights pursuant to notify the Company or the Majority Stockholders of its intent to exercise this Section 4.2 among themselves by mutual agreement; provided the Tag-Along Option Rightholders shall not be entitled pursuant to this Section 4.2 to sell to a Third Party Purchaser a greater number of shares of Stock than the number of shares of Stock collectively held by the Tag-Along Rightholders multiplied by the Percentage of Offered Securities. The Selling Stockholders and the Tag-Along Rightholders shall effect the sale of the Offered Securities as follows: the Tag-Along Rightholders shall sell up to the number of Offered Securities permitted to be sold pursuant to this Section 4.2 and the number of Offered Securities to be sold to the Third Party Purchaser shall be reduced pro-rata among the Selling Shareholders.
(i) For purposes of this Section 4.2, unless otherwise expressly set forth therein, all shares of Stock then outstanding shall be deemed to have been converted into shares of Common Stock on an As-Converted Basis.
(ii) five (5) days after the satisfaction In order to exercise its right to sell shares of any governmental approval or filing requirementsStock to a Third Party Purchaser pursuant to this Section 4.2, if any.
(d) Each a Tag-Along Stockholder may effect its participation in any Sale of Control TransactionRightholder must agree to make, severally and as part not jointly, substantially the same representations, warranties, covenants and indemnities with respect to the title and ownership of its participation in the Sale shares of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing Stock to be held at the offices of the Company (or such other place sold as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along a Selling Stockholder which is agrees to be transferred make in connection with the Sale proposed sale by it of Control Transaction, and Offered Securities to a Third Party Purchaser. Each Selling Stockholder shall give notice to each Tag-Along Stockholder shall make such representations and warrantiesRightholder of each proposed sale by it of Offered Securities which gives rise to the rights of the Tag-Along Rightholders set forth in this Section 4.2, and shall enter into such agreements, as are customary and reasonable in at least thirty (30) days prior to the context proposed consummation of the proposed Sale sale, setting forth the name of Control Transactionthe Selling Stockholder, includingthe number of Offered Securities, without limitationthe name and address of the proposed Third Party Purchaser, representations the proposed amount and warranties (form of consideration and indemnities with respect thereto) the terms and conditions offered by the Third Party Purchaser, the percentage of shares of Stock that the Proposed Transferee Tag-Along Rightholder may sell to the Third Party Purchaser (determined in accordance with Section 4.2 assuming that all Tag-Along Rightholders exercise their rights pursuant to this Section 4.2), and a representation that such Third Party Purchaser has been informed of the Notes or Conversion Shares tag-along rights provided for in this Section 4.2 and has agreed to purchase shares of Stock in accordance with the terms of this Section 4.2. The tag-along rights provided by this Section 4.2 must be exercised by the Tag-Along Rightholder wishing to sell its shares of Stock within thirty (or interests therein30) is receiving good days following receipt of the notice required by the preceding sentence, by delivery of a written notice to the Selling Stockholder indicating the Tag-Along Rightholder's wish to exercise its rights and marketable title specifying the number of shares of Stock (up to such Notes or Conversion Shares (or interests therein), free and clear the maximum number of all pledges, security interests, or other liensshares of Stock owned by the Tag-Along Rightholder permitted to be sold to the Third Party Purchaser) it wishes to sell; provided, however, that the Tag-Along Rightholder may waive its rights under this Section 4.2 prior to the expiration of the thirty (30)-day period by giving written notice to the Selling Stockholder, with respect a copy to any matter as to which the Company. The failure of a Tag-Along Stockholder Rightholder to respond within the thirty (30)-day period shall agree be deemed to provide indemnification (other than its own title to such Notes or Conversion Shares), such be a waiver of the Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Rightholder's rights under this Section 4.2. If a Tag-Along Stockholder. In addition, each Rightholder decides to sell a number of shares which is less than the maximum number of shares permitted to be sold by it pursuant to this Section 4.2 or if a Tag-Along Rightholder fails to close its sale of shares of Stock to the Third Party Purchaser for any reason, then the Selling Stockholder and may sell to the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect Third Party Purchaser the Sale number of Control Transaction, and each shares of Stock as the Tag-Along Stockholder shall provide reasonable assistance Rightholder failed to sell to the Majority Stockholders in connection with Third Party Purchaser. However, if the preparation Third Party Purchaser fails to purchase shares of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Stock from any Tag-Along Rightholder that has properly exercised its tag-along rights pursuant to this Section 4.2, then the Selling Stockholder that portion shall not be permitted to consummate the proposed sale of the Offered Securities, and any proposed attempted sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to shall be null and void and the conversion of any convertible securities or Company shall not register the exercise of any exercisable securities)proposed transfer.
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Tag-Along Rights. If any Holder proposes to sell or transfer ("Transfer") more than 1,000,000 Common Equivalent Shares held by such Holder to a majority Person or group (as such term is used in Rule 13(d)(3) and 14(d)(2) of the holders Exchange Act) who is not a Related Party of the Company’s outstanding voting equity such Holder (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”"Third-Party"), then the Majority Stockholder(s) shall notify the other Investors in a single transaction or a series of such proposed Sale of Control Transaction by a date which shall be not later than related transactions, then, at least fifteen (15) days and no more than forty-five (45) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof Transfer, such Holder shall provide to Sellers a notice (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “"Tag-Along Stockholder”Notice") may cause the Company or such Majority Stockholders delivered to effect a Transfer of such other Stockholder’s Stock; in each caseSellers at their address set forth herein, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on explaining the terms and conditions herein stated of such Transfer (including the “consideration payable) and identifying the name and address of the Third-Party. Upon the written request of any Seller ("Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”Request") to the Company and/or the Majority Stockholders, as the case may be, made within ten (10) days of receipt of after the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that day the Tag-Along Stockholder wishes Notice is received by Sellers, the Holder proposing to sell on make the terms and conditions stated in Transfer shall cause the Sale Notice.
(b) Each TagThird-Along Stockholder shall have the right to require the proposed transferee Party to purchase from each Sellers on the same date (i) in the case of a Transfer of Common Stock by such Tag-Along Stockholder Holder at a time when Sellers hold a sufficient number of shares of Common Stock to participate as set forth in the following formula, a number of shares of Common Stock up equal to the product obtained by multiplying (iA) the aggregate quotient of (1) the total number of Common Equivalent Shares to be Transferred divided by (2) the total number of outstanding Common Equivalent Shares held by all Holders, multiplied by (B) the total number of Common Equivalent Shares held by Sellers, at the same price and on terms and conditions at least as favorable to Sellers as the more favorable of the terms and conditions contained in the Tag-Along Notice delivered in connection with such proposed transaction or the terms actually received by such Holder or (ii) in the event that such Holder does not Transfer Common Stock or Sellers do not then hold a sufficient number of shares of Common Stock subject to participate as set forth in the above formula, a number of Common Equivalent Shares computed as set forth above at the price per Common Equivalent Share that would most nearly result in the same economic benefits and cost per Common Equivalent Share to the Majority Stockholders Transfer in Third-Party, as determined by an independent third party valuation firm chosen by such Holder and reasonably acceptable to Sellers and the Sale of Control Transaction immediately prior to Third-Party. To the Proposed Sale of Control Transaction by extent that (iii) a fraction, the numerator of which is the aggregate Holder seeks to Transfer Common Stock at a time when Sellers do not own a sufficient number of shares of Common Stock beneficially owned on a fully diluted basis to participate in accordance with the above formula and the Third-Party is unwilling to purchase Common Equivalents from Sellers, (ii) the Third-Party is unwilling to purchase Common Equivalents from Sellers that differ in type from the Common Equivalents offered to the Third-Party by such TagHolder or (iii) the Third-Along Stockholder and Party is unwilling to accept a valuation prepared by an independent third party valuation firm, such Holder shall not make the denominator of which shall be proposed Transfer. To the aggregate number of shares of Common Stock beneficially owned on extent a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which Holder does not receive a Tag-Along Stockholder notifies Request with respect to Common Equivalent Shares for which such Holder has provided a Tag-Along Notice within the Company or time period noted above, the Majority Stockholders of its intent to exercise Holder providing the Tag-Along OptionNotice may sell the shares proposed to be Transferred as set forth in the Transfer Notice. At any time prior to the consummation of the Transfer, the Company or the Majority Stockholders shall notify such a Seller may withdraw any Tag-Along Stockholder Request made pursuant to this Agreement. If the Third-Party is unwilling to purchase all of the amount additional securities that would be sold as a result of Notes and the rights set forth herein, then the number of Conversion Shares held securities sold by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which each party shall be no later than cut back pro-rata so that the later number of securities sold by each party bear the same relation to each other as the number of securities that could have been sold if the Third-Party had been willing to purchase the full amount. Notwithstanding the foregoing, (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, Sellers shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that have no rights under this Section 1 with respect to any matter as Transfer by a Holder to which the extent such Transfer is in the form of a Tag-Along Stockholder shall agree distribution to provide indemnification withdrawing partners from such Holder or otherwise among Related Parties of such Holder (other than its own title provided in the case of Transfers among Related Parties of such Holder the Person who will hold the Transferred securities after such Transfer becomes a party to this Agreement prior to such Notes or Conversion SharesTransfer), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders ; (ii) in connection with a call written against the preparation of disclosure schedules relating stock held by any Holder or a put right written with respect to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transactionstock held by a Holder, the Proposed Transferee rights under this Section 1 shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the not arise until exercise of any exercisable securities)such put or call; and (iii) Sellers agree that Common Equivalents held in a separate account for the benefit of others shall not be considered held by a Holder for purposes of this Agreement.
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Tag-Along Rights. (a) If a majority the members of the holders TW Stockholder Group (the "TW Selling Stockholders") propose to sell to an unaffiliated third party (the "Tag Offeror") (i) all but not less than all of the Company’s shares of Class B Common Stock and (ii) shares of Class A Common Stock beneficially owned by them which collectively represent greater than 33% of the issued and outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale shares of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof Common Stock (the “Sale Notice’). Thereafter, each other Investor "TW Shares") or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a an Indirect Transfer of such other Stockholder’s Stock; shares (in each casewhich case the "TW Shares" shall be all the shares of Common Stock owned by the TW Selling Stockholders) (such proposed sale being a "Tag Offer"), only pursuant then, as a condition to and in accordance with effecting such sale or Indirect Transfer, the following provisions of this Section 3:
(a) The Tag-Along TW Selling Stockholders shall have the rightcause proper provisions to be made so that each other Principal Stockholder (each, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”a "Tag Stockholder") to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require participate in such Tag Offer and sell to the proposed transferee to purchase from each such Tag-Along Stockholder Tag Offeror a number of shares of Common Stock up owned by it equal to the product obtained by multiplying of (ix) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction owned by such Tag Stockholder multiplied by (iiy) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder TW Shares and the denominator of which shall be is the aggregate number of issued and outstanding shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and TW Principal Stockholder Group (collectively, with respect to all Tag-Along Tag Stockholders, and at the same price per share "Tag Shares"); provided, however, that if a Tag Stockholder owns both shares of Class B Common Stock and upon Class A Common Stock, the shares of Class B Common Stock owned by such Tag Stockholder shall be included in the Tag Shares prior to the inclusion of any shares of Class A Common Stock owned by such Tag Stockholder. In connection with a Tag Offer, the TW Selling Stockholders shall cause the Tag Offeror to deliver to each Tag Stockholder a notice (a "Tag Notice of Sale") containing a copy of the Tag Offer, the identity of the Tag Offeror and an offer to purchase all of the Tag Shares owned by such Tag Stockholder on the same terms and conditions (including without limitation time of payment as to price and form of consideration) as the terms and conditions contained in the Tag Offer. The Tag Notice of Sale shall specify the price at which the Tag Shares are to be paid and given purchased, as provided in the preceding sentence. If the Tag Offer also constitutes a Third Party Offer pursuant to Section 3.4, the TW Selling Stockholders shall deliver the Tag Notice of Sale at the same time that the First Refusal Notice of Sale is delivered. The Tag Stockholders shall enter into an appropriate confidentiality agreement relating to the Majority StockholdersTag Offer on customary terms if reasonably requested by the TW Selling Stockholders with respect to the Tag Offer. If the Tag Offer contemplates an Indirect Transfer, the Tag Offeror shall offer the Tag Stockholders the option of selling the Tag Shares pursuant to an Indirect Transfer.
(b) If a Tag Stockholder desires to accept the offer set forth in a Tag Notice of Sale as to all of the Tag Shares beneficially owned by such Tag Stockholder, such Tag Stockholder shall, within 45 days of receipt of such Tag Notice of Sale, notify the Tag Offeror and the TW Selling Stockholders of its intention to sell all but not less than all of its Tag Shares to the Tag Offeror, and deliver a copy of such notice to each other Tag Stockholder. If a Tag Stockholder desires to sell its Tag Shares, then the Tag Offeror shall purchase all of such Tag Shares together with the TW Shares pursuant to Section 3.5(c).
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority The TW Selling Stockholders shall notify such Taghave the right, at any time during the 90-Along Stockholder day period beginning on the day following the end of the amount of Notes and number of Conversion Shares held by such Tag45-Along Stockholder that will be included day period referred to in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agreeSection 3.5(b), one or more Notes or certificates, properly endorsed for transfer, which represent to enter into a binding agreement to sell all but not less than all of the Notes TW Shares to the Tag Offeror, or Conversion to effect the Indirect Transfer contemplated by the Tag Offer, as applicable, in either case on terms and conditions no less favorable in the aggregate to the TW Selling Stockholders (and, in the case of an Indirect Transfer, the Person receiving the consideration) than those set forth in the Tag Offer. The Tag Stockholders electing to sell their Tag Shares owned by pursuant to Section 3.5(b) shall become party to such Tag-Along agreement and agree to sell all but not less than all of their Tag Shares to the Tag Offeror (or to effect an Indirect Transfer, as applicable) pursuant thereto on the terms and conditions set forth therein. In connection with such agreement, each Tag Stockholder which is a member of a Principal Stockholder Group which has the right to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title designate Agreed Nominees pursuant to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Section
Appears in 1 contract
Samples: Limited Liability Company Agreement (Time Warner Telecom LLC)
Tag-Along Rights. If In the event of a majority proposed Transfer of Control where (i) the holders Majority Stockholders have not exercised their rights to require the sale, assignment or transfer by the Holder of this Warrant or any Warrant Shares as part of such Transfer of Control pursuant to Section 11.1, , and (ii) the Company’s outstanding voting equity (collectively, Purchaser has not offered to purchase the “Warrant and any Warrant Shares at the same price per share and upon the same terms and conditions as are available to the Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then ; the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall Holder will have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, to require the Purchaser, as a condition precedent or concurrent to such Transfer of Control, to purchase or otherwise acquire at the case may be, within ten (10) days of receipt of same price per share and upon the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the same terms and conditions stated in as to be paid and given to the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each Majority Stockholders, such Tag-Along Stockholder a number of shares of Common Stock up his Warrant Shares equal to the product obtained by multiplying of (ia) the aggregate number of all shares of Common Stock subject to the Majority Stockholders Transfer be included in the Sale Transfer of Control Transaction immediately prior to the Proposed Sale of Control Transaction multiplied by (iib) a fraction, the numerator of which is the aggregate total number of Warrant Shares then owned by the Holder and the denominator of which is the total number of shares of Common Stock beneficially owned on a fully diluted basis by outstanding, taking into account all shares then issuable upon conversion of all outstanding warrants, options, and other rights as of such Tag-Along Stockholder date, including without
(1) the Holder exercises and converts this Warrant in full concurrently with or immediately prior to such Transfer of Control, and (2) the denominator of which Holder agrees to take such actions and execute such documents as shall be the aggregate number reasonably necessary in order to consummate such proposed Transfer of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liensControl; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event shall the Holder be required to provide indemnification assume joint liability with the Majority Stockholders pursuant to the terms of any agreement related to such Transfer of Control or be liable for any amounts in an amount that would exceed its pro rata portion excess of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned proceeds received by such Tag-Along StockholderHolder pursuant to this Section 11.2 on consummation of any such Transfer of Control by way of indemnity or otherwise. In additionthe event that the Holder exercises his, each Tag-Along Stockholder and her or its right to require such purchase or acquisition of Warrant Shares in accordance with this Section 11.2, the Majority Stockholders shall reasonably cooperate collectively be entitled to sell, assign and consult with each other in order transfer to effect the Sale Purchaser the number of shares of capital stock held by them equal to the difference between (a) the number of shares of capital stock proposed to be transferred to the Purchaser pursuant to such Transfer of Control Transactionand (b) the aggregate number of Warrant Shares to be sold, and each Tag-Along Stockholder shall provide reasonable assistance transferred or assigned to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled Purchaser as required by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)this Section 11.2.
Appears in 1 contract
Samples: Warrant Agreement (Tweeter Home Entertainment Group Inc)
Tag-Along Rights. If a majority In the event that (and without limiting the obligations to comply with Sections 3.1 and 3.2 hereof) Holdings or any of the holders of the Company’s outstanding voting equity its Permitted Transferees (collectively, the “Majority Stockholders”"Tag Sellers") want propose, pursuant to consummate a single transaction that constitutes or series of related transactions, to Transfer shares of Common Stock to any Person other than a Sale Permitted Transferee of Control Holdings or, following an IPO, sales to the public in either registered underwritten offerings or pursuant to Rule 144 under the Securities Act of 1933, as amended (a “Sale of Control Transaction”"Purchaser"), then then, the Majority Stockholder(s) Tag Sellers shall notify the other Investors provide notice of such proposed Sale of Control Transaction by Transfer to the TCW Investors (a date which shall be not "Proposal Notice") no later than fifteen twenty (1520) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer proposed closing of such other Stockholder’s Stock; in each caseTransfer, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder TCW Investors shall have the right (a "Tag-Along Right") to require the proposed transferee Tag Seller to purchase from each such Tag-Along Stockholder a reduce the number of shares of Common Stock to be sold by the Tag Seller, and have Purchaser purchase from the TCW Investors, upon the same terms and conditions applicable to the Tag Seller, that number of shares of Common Stock derived by multiplying the total number of shares being offered to Purchaser by the TCW Investors' fractional interest, rounded up to the product obtained nearest whole number. For purposes of this Section, the term "fractional interest" means (a) the sum of the total number of shares of Common Stock owned by multiplying the TCW Investors and its Permitted Transferees (ion a fully diluted basis, assuming exercise of all Warrants and other Convertible Securities as of the time of determination), divided by (b) the sum of (I) the aggregate number of shares of Common Stock subject to owned by the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by TCW Investors and TAMCO and their Permitted Transferees plus (iiII) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on by Holdings and, to the extent shares were Transferred by Holdings to a fully diluted basis by such Tag-Along Stockholder and Permitted Transferee of Holdings, the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned by Holding's Permitted Transferees (on a fully diluted basis by basis, assuming exercise of all Warrants and other Convertible Securities as of the Majority Stockholders and all time of determination). The TCW Investors shall give written notice of its decision to exercise its Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given Right to the Majority Stockholders.
(c) Within Tag Seller no later than ten (10) days after the date by which its receipt of a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if anyProposal Notice.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)
Appears in 1 contract
Samples: Securityholders Agreement (American Restaurant Group Inc)
Tag-Along Rights. If (a) No Stockholder shall, directly or indirectly, Transfer, in any single transaction or series or related transactions to one or more Persons who are not Affiliates or Affiliated Successors of such Stockholder (a majority "CEI Inclusion Event Purchaser") shares of any class of Inclusion Stock in circumstances in which, after giving effect to such Transfer, whether acting alone or in concert with any other Stockholder (such parties referred to herein as "Selling Stockholders") would result in such Selling Stockholder(s) Transferring, (x) ten percent (10%) or more of the holders outstanding shares of Inclusion Stock Beneficially Owned by such Selling Stockholder to a Person who is a party, or an Affiliated Successor of a party, to the Company Stockholder Agreement or (y) ten percent (10%) or more of the Company’s outstanding voting equity (collectively, shares of Inclusion Stock outstanding on the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors date of such proposed Sale of Control Transaction by Transfer on a date which shall be fully diluted basis to a Person who is not later than fifteen (15) days prior a party, or an Affiliated Successor to a party, to the Company or Stockholder Agreement, but, in either case, not more than twenty-five percent (25%) of the outstanding shares of Inclusion Stock outstanding on the date of such proposed Transfer on a fully diluted basis (a "Tag Along Event"), unless the terms and conditions of such sale to such CEI Inclusion Event Purchaser shall include an offer to the Cash Equity Investors other than the Selling Stockholder (each, a "Tag Along Offeree") to Transfer to such CEI Inclusion Event Purchasers up to that number of shares of any class of Inclusion Stock then Beneficially Owned by each Tag Along Offeree that bears the same proportion to the total number of shares of Inclusion Stock at that time Beneficially Owned (without duplication) by each such Majority Stockholder(sTag Along Offeree as the number of shares of Inclusion Stock being Transferred by the Selling Stockholders (including shares of Inclusion Stock theretofore Transferred if in any applicable series of related transactions) entering into bears to the total number of shares of Inclusion Stock at the time Beneficially Owned (without duplication) by the Selling Stockholders (including shares of Inclusion Stock theretofore Transferred if in any definitive binding agreement applicable series of related transactions). If the Selling Stockholders receive a bona fide offer from an Inclusion Event Purchaser to purchase shares of Inclusion Stock in respect thereof circumstances in which, after giving effect to such sale would result in a Tag Along Event, and which offer such Selling Stockholders wish to accept, the Selling Stockholders shall then cause the Inclusion Event Purchaser's offer to be reduced to writing (which writing shall include an offer to purchase shares of Inclusion Stock from each Tag Along Offeree according to the terms and conditions set forth in this Section 3.3) and the Selling Stockholders shall send written notice of the CEI Inclusion Event Purchaser's offer (the “Sale "Tag Along Notice’). Thereafter") to each Tag Along Offeree, each which Tag Along Notice shall specify (i) the names of the Selling Stockholders, (ii) the names and addresses of the proposed acquiring Person, (iii) the amount of shares proposed to be Transferred and the price, form of consideration and other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer terms and conditions of such other Stockholder’s Stock; Transfer (including, if in each casea series of related transactions, only pursuant such information with respect to shares of Inclusion Stock theretofore Transferred), (iv) that the acquiring Person has been informed of the rights provided for in this Section 3.3 and has agreed to purchase shares of Inclusion Stock in accordance with the following provisions of terms hereof, and (v) the date by which each other Selling Stockholder may exercise its respective rights contained in this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”)3.3, which right date shall not be less than thirty (30) days after the giving of the Tag Along Notice. The Tag Along Notice shall be exercisable upon written notice accompanied by a true and correct copy of the CEI Inclusion Event Purchaser's offer. At any time within thirty (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (1030) days of after receipt of the Sale Tag Along Notice. Each Acceptance , each Tag Along Offeree may accept the offer included in the Tag Along Notice shall indicate the maximum amount of Notes or for up to such number of Conversion Shares shares of Inclusion Stock as is determined in accordance with this Section 3.3, by furnishing written notice of such acceptance to each Selling Stockholder, and delivering, to an escrow agent (which shall be a bank or a law or accounting firm designated by the Company), on behalf of the Selling Stockholders, the certificate or certificates representing the shares of Inclusion Stock to be sold pursuant to such offer by each Tag Along Offeree, duly endorsed in blank, together with a limited power-of-attorney authorizing the escrow agent, on behalf of the Tag Along Offeree, to sell the shares to be sold pursuant to the terms of such CEI Inclusion Event Purchaser's offer. In the event that the Tag-CEI Inclusion Event Purchaser does not agree to purchase all of the shares of Inclusion Stock proposed to be sold by the Selling Stockholders and the Tag Along Offerees, then each Selling Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Tag Along Stockholder Offeree shall have the right to require sell to the proposed transferee to purchase from each such Tag-Along Stockholder a CEI Inclusion Event Purchaser that number of shares of Common Inclusion Stock up as shall be equal to the product obtained by multiplying (ix) the aggregate number of shares of Common Inclusion Stock subject which the Inclusion Event Purchaser has agreed to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by purchase times (iiy) a fraction, the numerator of which is the aggregate number of shares of Common Inclusion Stock beneficially owned on a fully diluted basis Beneficially Owned (without duplication) by such Tag-Selling Stockholder or Tag Along Stockholder Offeree and the denominator of which shall be is the aggregate number of shares of Common Inclusion Stock beneficially owned on a fully diluted basis Beneficially Owned (without duplication) by the Majority all Selling Stockholders and Tag Along Offerees. If any Tag Along Offeree desires to sell less than its proportionate amount of shares of Inclusion Stock that it is entitled to sell pursuant to this Section 3.3, then the Selling Stockholders and the remaining Tag Along Offerees shall have the right to sell to the CEI Inclusion Event Purchaser an additional amount of shares of Inclusion Stock as shall be equal to (x) the number of shares of Inclusion Stock not being sold by any such Inclusion Event Purchasers times (y) a fraction, the numerator of which is the number of shares of Inclusion Stock owned such Selling Stockholder or remaining Tag Along Offeree and the denominator of which is the aggregate number of shares of Inclusion Stock Beneficially Owned (without duplication) by all Tag-Selling Stockholders and remaining Tag Along Stockholders, and at Offerees. Such process shall be repeated in series until all of the same price per share remaining Tag Along Offerees agree to sell their remaining proportionate number of Common Stock and upon shares of Inclusion Stock.
(b) The purchase from each Tag Along Offeree pursuant to this Section 3.3 shall be on the same terms and conditions (conditions, including without limitation time the price per share received by the Selling Stockholders and stated in the Tag Along Notice provided to each Tag Along Offeree. In the event that the Inclusion Stock is Common Stock, all Tag Along Offerees shall be required, as a condition of payment and form of consideration) as participating in such transaction, to be paid and given Transfer Common Stock to the Majority StockholdersCEI Inclusion Event Purchaser. In the event that the Tag Along Offerees elect to sell their pro rata share of Series C Preferred Stock or Common Stock pursuant to this Section 3.3 the CEI Inclusion Event Purchaser shall be required to purchase both Series C Preferred Stock and Common Stock, the purchase price allocable to holders of Series C Preferred Stock, on the one hand, and to holders of Common Stock, on the other hand, shall be determined by an independent committee of the Board of Directors selected from among those directors who were not designated by any Selling Stockholders or Tag Along Offerees, it being understood that the directors selected pursuant to Section 2.1(c) shall be deemed independent for such purposes.
(c) Within ten (10) days after Simultaneously with the date by which a Tag-consummation of the sale of the shares of Inclusion Stock of the Selling Stockholders and each Tag Along Stockholder notifies Offeree to the Company or CEI Inclusion Event Purchaser pursuant to the Majority Stockholders of its intent to exercise the Tag-Along OptionInclusion Event Purchaser's offer, the Company or the Majority Selling Stockholders shall notify such Tag-each Tag Along Stockholder Offeree and shall cause the Inclusion Event Purchaser to remit to each Tag Along Offeree the total sales price of the amount shares of Notes Inclusion Stock by each Tag Along Offeree sold pursuant thereto and number shall furnish such other evidence of Conversion Shares held by the completion and time of completion of such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will terms thereof as may be consummated, which shall be no later than the later of (i) twenty (20) days after the date reasonably requested by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Tag Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if anyOfferee.
(d) Each Tag-If within thirty (30) days after receipt of the Tag Along Stockholder may effect its participation in any Sale of Control TransactionNotice, and as part of its participation Tag Along Offeree has not accepted the offer contained in the Sale of Control Transaction pursuant Tag Along Notice, such Tag Along Offeree shall be deemed to a duly exercised Tag-Along Option, shall deliver have waived any and all rights with respect to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable sale described in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties Tag Along Notice (and indemnities but not with respect thereto) that to any subsequent sale, to the Proposed Transferee of the Notes or Conversion Shares (or interests therein) extent this Section 3.3 is receiving good and marketable title applicable to such Notes or Conversion Shares subsequent sale) and the Selling Stockholders shall have sixty (or interests therein)60) days in which to sell not more than the number of shares of Inclusion Stock described in the Tag Along Notice, free and clear of all pledges, security interests, or other lienson terms not more favorable to the Selling Stockholders than were set forth in the Tag Along Notice; provided, however, that with respect if such purchase is subject to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion the consent of the total liability for which such indemnification is soughtFCC or any public service or public utilities commission, which pro rata portion the purchase of the Offered Shares shall be determined closed on the basis of the percentage of the total Notes or Conversion Shares involved in first business day after all such transfer that are represented consents shall have been obtained by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Final Order.
Appears in 1 contract
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The TagSo long as (x) this Agreement shall remain in effect, (y) an initial Public Offering shall not have occurred and (z) Blackstone and its Affiliates beneficially own an aggregate number of shares of Common Stock that is not less than one-Along Stockholders half of the number of shares of Common Stock beneficially owned by Blackstone on the date hereof (giving effect to the transactions contemplated hereby), with respect to any proposed Transfer by Blackstone of Common Stock (other than to an Affiliate of Blackstone, including any of its partners), Blackstone shall have the obligation, and each other Stockholder shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each Stockholder having and exercising such Tag-Along Stockholder right (each, including any Person having and exercising similar rights pursuant to any other agreement, a "Tagging Stockholder") a number of shares of Common Stock up to the product obtained by multiplying (rounded up to the nearest whole number) of (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction quotient determined by dividing (iiA) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Tagging Stockholder and sought by the denominator of which shall Tagging Stockholder to be included in the contemplated Transfer by (B) the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Blackstone and all Tagging Stockholders and sought by Blackstone and all Tag-Along StockholdersTagging Stockholders to be included in the contemplated Transfer and (ii) the total number of shares of Common Stock proposed to be Transferred to the transferee in the contemplated Transfer, and at the same price per share of Common Stock and upon the same terms and conditions (including including, without limitation limitation, time of payment and form of consideration) as to be paid and given to Blackstone; provided that in order to sell shares of Common Stock to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction proposed transferee pursuant to this Section 3.5(a), a duly exercised Tag-Along Option, shall deliver Tagging Stockholder must make to the Proposed Transferee at a closing to be held at transferee the offices of the Company (or such other place same representations, warranties, covenants, indemnities and agreements as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred Blackstone makes in connection with the Sale proposed Transfer by Blackstone of Control TransactionCommon Stock (except that in the case of representations, warranties, covenants, indemnities and each Tag-Along agreements pertaining specifically to Blackstone, a Tagging Stockholder shall make such representations and the comparable representations, warranties, covenants, indemnities and agreements pertaining specifically to itself and only to itself); and provided further that all representations, warranties and indemnities shall enter into be made by the Tagging Stockholders severally and not jointly and that the liability of Blackstone and the Tagging Stockholders thereunder shall be borne by each of them on a pro rata basis.
(b) Blackstone shall give notice to all relevant Stockholders of each proposed Transfer giving rise to the rights of the Tagging Stockholders set forth in Section 3.5(a) at least 20 days prior to the proposed consummation of such agreementsTransfer, as are customary setting forth the name of Blackstone, the number of shares of Common Stock proposed to be so Transferred, the name and reasonable in the context address of the proposed Sale transferee, the proposed amount and form of Control Transaction, including, without limitation, representations consideration and warranties (other terms and indemnities with respect thereto) that conditions offered by the Proposed Transferee proposed transferee. The tag-along rights provided by this Section 3.5 must be exercised by each Tagging Stockholder within 10 days following receipt of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be notice required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned preceding sentence, by delivery of a written notice to Blackstone indicating such Tag-Along Tagging Stockholder. In addition, each Tag-Along Stockholder 's desire to exercise its rights and specifying the Majority Stockholders shall reasonably cooperate and consult with each other in order number of shares of Common Stock it desires to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)sell.
Appears in 1 contract
Samples: Management Stockholders' Agreement (Graham Packaging Holdings Co)
Tag-Along Rights. If a majority On the date of the holders this Agreement, Xxxxxx X. Xxxxxxx owns 3,870,169 shares of Common Stock of the Company’s outstanding voting equity . If Xx. Xxxxxxx (collectively, the “Majority Stockholders”"Selling Investor") want shall receive and determine to consummate a transaction that constitutes a Sale of Control accept any bona fide written offer (a “Sale "Notice of Control Transaction”), then the Majority Stockholder(sOffer") shall notify the other Investors of such proposed Sale of Control Transaction by from a date buyer (which shall be not later include any person and its affiliates) to purchase or otherwise transfer for value, in one transaction or a series of related transactions, a number of shares equal to or greater than fifteen (15) days prior to 5% of the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (Common Stock owned by him as of the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions date of this Section 3:
(a) The Tag-Along Stockholders shall have the rightAgreement, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder eLot shall have the right to require participate in such transaction in the proposed transferee manner set forth in this Section; provided that this Section shall not apply if all sales of Common Stock by the Selling Investor on or after the date of this Agreement amount in the aggregate to less than 1,000,000 shares of Common Stock (adjusted for stock dividends, stock splits, reverse stock splits, combinations, recapitalizations and reclassifications and other similar events affecting the Common Stock). The Selling Investor shall, promptly after its receipt of a Notice of Offer, send a copy thereof to the Company and eLot. eLot shall have the right to cause the Selling Investor to condition its sale to the buyer of any Common Stock owned by the Selling Investor on the simultaneous purchase from each by the buyer of such Tag-Along Stockholder a number of shares of Common Stock up owned by eLot as eLot may designate by written notice delivered to the product obtained Selling Investor within 5 days following the date on which the Notice of Offer is received; provided, however, that eLot may not so designate for purchase a number of shares of the Company's Common Stock greater than that number owned by multiplying it (i) giving effect to conversion of Series B Preferred Stock and the aggregate exercise of the Warrant as of such date), multiplied by a fraction the numerator of which is the number of shares of the Company's Common Stock owned by the Selling Investor which are subject to the offer of the Buyer and the denominator of which is the total number of shares of the Company's Common Stock then owned by the Selling Investor as of the date of this Agreement. The purchase price for each share of the Company's Common Stock subject to the Notice of Offer and the terms of such purchase shall be the same as are applicable to the Selling Investor's sale and shall be set forth in such Notice of Offer. No seller shall receive in connection with sales pursuant to this subsection, any material consideration which is not shared with each other seller in proportion to the number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction sold by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholderseach.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)
Appears in 1 contract
Samples: Registration Rights Agreement (Mdi Entertainment Inc)
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectivelya) Subject to Section 5(b) hereof, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not no later than fifteen (15) 20 days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect proposed date of consummation of a Transfer of such any shares of Common Stock, the transferring Party shall provide each other Stockholder’s Stock; in each caseParty with written notice of the proposed Transfer, only pursuant including the Person to whom it wishes to Transfer shares, the number of shares proposed to be Transferred, and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the price and other material terms and conditions herein stated (of the “Tag-Along Option”), which proposed Transfer. Each such other Party shall then have the right shall be exercisable upon written by notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) given no later than 10 days of following receipt of the Sale Notice. Each Acceptance Notice 20-day notice referred to above, and the transferring Party shall indicate afford each such other Party the maximum amount opportunity, to include in such Transfer a pro rata portion of Notes or number the shares of Conversion Shares that the Tag-Along Stockholder wishes to sell Common Stock held by such other Party on the same terms and conditions stated in conditions. The term "pro rata portion" as used above shall be determined by multiplying the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained owned by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction a Party at such time by (ii) a fraction, the numerator of which is equal to the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder Party at such time and the denominator of which shall be is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by all Parties at such time having elected to participate in such Transfer. If necessary, the Majority Stockholders and all Tag-Along Stockholders, and at party initially proposing the same price per share of Common Stock and upon Transfer shall reduce the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders number of its intent shares to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and Transfer to permit such pro rata participation. In the date on which event any Party elects to sell less than its full pro rata portion, the Sale of Control Transaction will be consummated, which difference shall be no later than the later of (i) twenty (20) days after the date by which allocated among each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or other Parties having elected to participate in such Transfer and each such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by Party shall be entitled to include in such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed Transfer its pro rata portion (calculated excluding such difference from the denominator of the total liability for which fraction referred to above) of such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in difference until no such transfer that are represented by the Notes or Conversion Shares owned by such difference remains.
(b) The Tag-Along Stockholder. In additionRights of the Parties shall not pertain or apply to (a) any offering of Common Stock by the Parties or their transferees (i) pursuant to a registration statement filed with the Securities and Exchange Commission or any similar authority outside the United States, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance or (ii) pursuant to the Majority Stockholders volume and manner of sale limitations set forth in connection with Rule 144 under the preparation Securities Act of disclosure schedules relating 1933, as amended, as in effect on the date thereof, (b) pledges of Common Stock which create a mere security interest pursuant to representations and warranties to be made a bona fide loan transaction, or to the Proposed Transferee in connection with such Sale acquisition (by virtue of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of the security interest created by such pledge in accordance with its terms) or subsequent sale of such Common Stock by the pledgee, (c) (i) any exercisable securities)transaction for which neither the Transferring Party nor its Affiliates or Associates receives any consideration, directly or indirectly or (ii) any Transfers permitted by the terms of Section 3 hereof.
Appears in 1 contract
Samples: Stockholders' Agreement (WPG Corporate Development Associates Iv L P Et Al)
Tag-Along Rights. (a) If a majority any of the holders Shareholders desire to consummate an Equity Sale, then at least twelve (12) Business Days prior to the closing of the Company’s outstanding voting equity such Equity Sale (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Equity Sale of Control (a “Sale of Control TransactionClosing”), then the Majority Stockholder(s) each such Shareholder shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof make an offer (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along StockholderEquity Participation Offer”) may cause to the Company or Holders to include in the proposed Equity Sale, solely to the extent consummated, a portion of the Warrants and Warrant Shares representing the same percentage of total number of Warrant Shares held by all Holders (assuming full exercise of the Warrants) as the shares of Common Stock and Common Stock Equivalents (assuming full exercise and conversion of all Common Stock Equivalents) proposed to be Transferred by such Majority Stockholders Shareholder represents to effect a Transfer 670,000 shares in the case of such other Stockholder’s Stock; Xxxxx Xxxxxxxxxx and 3,838,000 shares in the case of Xxxx Xxxxxxxxx (in each case, only pursuant subject to equitable adjustment for stock splits, stock dividends and in accordance similar events), with pro rata cutbacks to the following extent the transferee is unwilling to acquire all such securities. Notwithstanding the foregoing, the provisions of this Section 3:2.1(a) shall not apply to the first 33,500 shares in the case of Xxxxx Xxxxxxxxxx and 191,900 shares in the case of Xxxx Xxxxxxxxx transferred in an Equity Sale from and after the date hereof.
(ab) The Tag-Along Stockholders shall have the right, but not the obligation, If any Holder desires to participate exercise its right to Transfer Warrants and Warrant Shares in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”)Equity Participation Offer, which right it shall be exercisable upon written deliver notice (the “Acceptance Notice”) to the applicable Shareholder(s) and the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of Business Days after its receipt of the Sale Notice. Each Acceptance Notice shall indicate applicable Equity Participation Offer (such period, the “Initial Exercise Period”) specifying the Warrants and Warrant Shares (up to the maximum amount of Notes or number of Conversion Shares permissible number) that the Tag-Along Stockholder wishes such Holder desires to sell on the terms and conditions stated Transfer in the Sale NoticeEquity Participation Offer, as applicable.
(bc) Each Tag-Along Stockholder If any Holder elects to Transfer fewer Warrants and Warrant Shares than it would otherwise be permitted to Transfer in the Equity Participation Offer (each such Holder, an “Opting Out Holder”), then during the period immediately following the Initial Exercise Period through the date of the Equity Sale Closing, each other Holder who has opted to Transfer all of its Warrants and Warrant Shares (up to the maximum permissible number) shall have the right option to require Transfer its pro rata share of the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares Warrant Shares (assuming full exercise of Common Stock up the Warrant) that the Opting Out Holder had the right but did not elect to the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject transfer, with such pro rata share equal to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially Warrant Shares owned on a fully diluted basis by such Tag-Along Stockholder Holder as of the date of the Equity Participation Offer (assuming full exercise of the Warrant) and the denominator of which shall be the aggregate is total number of shares Warrants and Warrant Shares owned by all Holders as of Common Stock beneficially owned on a fully diluted basis the date of the Equity Participation Offer (assuming full exercise of the Warrant). The allocation of any Opting Out Holders’ portion of Warrants and Warrant Shares among the other Holders shall continue for subsequent rounds until the earliest to occur of (i) the time at which all the Warrants and Warrant Shares the Opting Out Holder had the right to but did not transfer have been exhausted by the Majority Stockholders and all Tag-Along Stockholdersother Holders, (ii) the time at which the other Holders decline to Transfer any remaining Warrants or Warrant Shares, and at (iii) the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within date that is ten (10) days Business Days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder Holders’ receipt of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if anyapplicable Equity Participation Offer.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, The Holders’ option to Transfer their Warrants and as part of its participation in the Sale of Control Transaction Warrant Shares pursuant to a duly exercised Tag-Along OptionSection 2.1(c), shall deliver be exercisable by delivering written notice to such effect, on or prior to the Proposed Transferee at date that is ten (10) Business Days after the Holders’ receipt of the applicable Equity Participation Offer, to the applicable Shareholders, the Company and the other Holders. The failure of a closing Holder to deliver such written notice of exercise under this Section 2.1(d) within the applicable periods shall be deemed to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned an election by such Tag-Along Stockholder which is Holder not to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes Transfer any additional Warrants or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Warrant Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities).
Appears in 1 contract
Tag-Along Rights. (a) If a majority the members of the holders TW Stockholder Group (the "TW Selling Stockholders") propose to sell to an unaffiliated third party (the "Tag Offeror") (i) all but not less than all of the Company’s shares of Class B Common Stock and (ii) shares of Class A Common Stock beneficially owned by them which collectively represent greater than 33% of the issued and outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale shares of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof Common Stock (the “Sale Notice’). Thereafter, each other Investor "TW Shares) or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a an Indirect Transfer of such other Stockholder’s Stock; shares (in each casewhich case the "TW Shares" shall be all the shares of Common Stock owned by the TW Selling Stockholders) (such proposed sale being a "Tag Offer"), only pursuant then, as a condition to and in accordance with effecting such sale or Indirect Transfer, the following provisions of this Section 3:
(a) The Tag-Along TW Selling Stockholders shall have the rightcause proper provisions to be made so that each other Principal Stockholder (each, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”a "Tag Stockholder") to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require participate in such Tag Offer and sell to the proposed transferee to purchase from each such Tag-Along Stockholder Tag Offeror a number of shares of Common Stock up owned by it equal to the product obtained by multiplying of (ix) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction owned by such Tag Stockholder multiplied by (iiy) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder TW Shares and the denominator of which shall be is the aggregate number of issued and outstanding shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and TW Stockholder Group (collectively, with respect to all Tag-Along Tag Stockholders, and at the same price per share "Tag Shares"); provided, however, that if a Tag Stockholder owns both shares of Class B Common Stock and upon Class A Common Stock, the shares of Class B Common Stock owned by such Tag Stockholder shall be included in the Tag Shares prior to the inclusion of any shares of Class A Common Stock owned by such Tag Stockholder. In connection with a Tag Offer, the TW Selling Stockholders shall cause the Tag Offeror to deliver to each Tag Stockholder a notice (a "Tag Notice of Sale") containing a copy of the Tag Offer, the identity of the Tag Offeror and an offer to purchase all of the Tag Shares owned by such Tag Stockholder on the same terms and conditions (including without limitation time of payment as to price and form of consideration) as the terms and conditions contained in the Tag Offer. The Tag Notice of Sale shall specify the price at which the Tag Shares are to be paid and given purchased, as provided in the preceding sentence. If the Tag Offer also constitutes a Third Party Offer pursuant to Section 3.4, the TW Selling Stockholders shall deliver the Tag Notice of Sale at the same time that the First Refusal Notice of Sale is delivered. The Tag Stockholders shall enter into an appropriate confidentiality agreement relating to the Majority StockholdersTag Offer on customary terms if reasonably requested by the TW Selling Stockholders with respect to the Tag Offer. If the Tag Offer contemplates an Indirect Transfer, the Tag Offeror shall offer the Tag Stockholders the option of selling the Tag Shares pursuant to an Indirect Transfer.
(b) If a Tag Stockholder desires to accept the offer set forth in a Tag Notice of Sale as to all of the Tag Shares beneficially owned by such Tag Stockholder, such Tag Stockholder shall, within 45 days of receipt of such Tag Notice of Sale, notify the Tag Offeror and the TW Selling Stockholders of its intention to sell all but not less than all of its Tag Shares to the Tag Offeror, and deliver a copy of such notice to each other Tag Stockholder. If a Tag Stockholder desires to sell its Tag Shares, then the Tag Offeror shall purchase all of such Tag Shares together with the TW Shares pursuant to Section 3.5(c).
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority The TW Selling Stockholders shall notify such Taghave the right, at any time during the 90-Along Stockholder day period beginning on the day following the end of the amount of Notes and number of Conversion Shares held by such Tag45-Along Stockholder that will be included day period referred to in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agreeSection 3.5(b), one or more Notes or certificates, properly endorsed for transfer, which represent to enter into a binding agreement to sell all but not less than all of the Notes TW Shares to the Tag Offeror, or Conversion to effect the Indirect Transfer contemplated by the Tag Offer, as applicable, in either case on terms and conditions no less favorable in the aggregate to the TW Selling Stockholders (and, in the case of an Indirect Transfer, the Person receiving the consideration) than those set forth in the Tag Offer. The Tag Stockholders electing to sell their Tag Shares owned by pursuant to Section 3.5(b) shall become party to such Tag-Along agreement and agree to sell all but not less than all of their Tag Shares to the Tag Offeror (or to effect an Indirect Transfer, as applicable) pursuant thereto on the terms and conditions set forth therein. In connection with such agreement, each Tag Stockholder which is a member of a Principal Stockholder Group which has the right to designate Agreed Nominees pursuant to Section 2.1(c) at such time shall be transferred in connection with required to make the Sale of Control Transactionsame representations, warranties and agreements, including as to indemnification, as the TW Selling Stockholders and each Tag-Along Tag Stockholder which is a member of a Principal Stockholder Group which does not have the right to designate Agreed Nominees pursuant to Section 2.1(c) at such time shall not be required to make such any representations or warranties and warranties, and shall enter into such agreements, including as are customary and reasonable in the context of the proposed Sale of Control Transactionto indemnification, including, without limitation, other than representations and warranties (and indemnities with respect theretorelated indemnification) that as to title to the Proposed Transferee Tag Shares to be transferred and as to organization and due execution and delivery and enforceability of the Notes or Conversion Shares transfer agreements (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein)and, free and clear in the case of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares)an Indirect Transfer, such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made regarding the entity the equity of which is being sold as are comparable to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)foregoing
Appears in 1 contract
Samples: Limited Liability Company Agreement (Time Warner Telecom LLC)
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectivelyi) Except as otherwise provided in Section 2.3(a)(iii) below, the no “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control Seller” (a “Sale of Control Transaction”), then the Majority Stockholder(sas hereinafter defined) shall notify the other Investors sell any shares of such proposed Sale Common Stock in any transaction or series of Control Transaction by a date which shall be not later than fifteen related transactions unless all “Holders” (15as hereinafter defined) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, are offered an equal opportunity to participate in such transaction or transactions (on identical terms as the Proposed Sale Seller including amount and type of Control Transaction consideration paid) on a pro rata basis based on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up then owned by such Holder, calculated on a fully diluted basis. For the avoidance of doubt, such participation on a pro rata basis shall mean that such Holder shall be entitled to sell the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject proposed to be sold by the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction Seller, multiplied by (ii) a fraction, the numerator of which is equals the aggregate number of shares of Common Stock beneficially then owned by such Holder, calculated on a fully diluted basis, and the denominator of which equals the total number of outstanding shares of Common Stock calculated on a fully diluted basis by (such Tag-Along Stockholder and calculation for each Holder resulting in such Holder’s “Pro Rata Share”). For purposes of calculating ownership of Common Stock “on a fully diluted basis”, Options that are not “in the denominator money” shall not be counted. If any Holder elects not to sell all or any portion of which shall be its Pro Rata Share, then each other Holder (each such Holder, a “Participating Holder”) may increase the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis and Additional Stock sold by it by up to its Pro Rata Share of the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share number of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as shares each Holder elects not to be paid and given include pursuant to the Majority Stockholders.
terms hereof (c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by calculation for each Participating Holder resulting in such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agreeParticipating Holder’s “Participating Pro Rata Share”), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect if any Participating Holder elects not to sell all or any matter as portion of its Participating Pro Rata Share, then the Seller may increase the number of shares sold by it by the number of shares any such Participating Holder elects not to which include pursuant to the terms hereof. As used in this Section 2.3, a Tag-Along Stockholder “Seller” shall agree to provide indemnification mean the Sponsor or any of its Permitted Transferees (other than its own title to such Notes Permitted Transferees by virtue of Section 1.1 (b)(iv)); “Holders” shall mean any Investor or Conversion Sharesany of their Permitted Transferees (other than a Seller or a Permitted Transferee by virtue of Section 1.1(b)(iv), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities).
Appears in 1 contract
Samples: Securities Holders Agreement (New Century Transportation, Inc.)
Tag-Along Rights. If a majority (a) Notwithstanding the provisions of Section 2.01 and without first offering its Shares to TPG as contemplated by Section 2.03(c), in the event that at any time prior to the completion of an initial public offering of any of the holders Shares (the "Initial Public Offering"') TPG reaches a binding agreement with a Person to sell all or a portion of its Shares that would result in any Person (together with its Affiliates) unaffiliated with TPG holding 40% or more of the voting power of the Company’s outstanding voting equity , TPG shall cause the prospective purchaser (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”"Prospective Purchaser"), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior subject to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) set forth in this Section 2.04 and subject further to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated set forth in Section 2.05, which terms and conditions shall control in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right event that TPG is proposing to require the proposed transferee sell all of its shares of Common Stock, to purchase from each such Tag-Along the Electing Stockholder a (in lieu of purchasing from TPG) that number of shares of Common Stock up to then owned by the Electing Stockholder that equals the product obtained by multiplying of (i1) the aggregate number of shares of Common Stock subject to then owned by the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction Electing Stockholder multiplied by (ii2) a fraction, the numerator of which is equals the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis to be purchased by such Tag-Along Stockholder the Prospective Purchaser from TPG and the denominator of which equals the total number of Shares of Common Stock then owned by TPG (the "Applicable Amount"). TPG shall notify Crawford promptly in writing of any such binding agreement indicaxxxx xxx price and other material terms and conditions of the proposed sale, the identity of the Prospective Purchaser, the intended closing date of such sale, the percentage of issued and outstanding shares of Common Stock being sold by TPG and the Applicable Amount of shares of Common, Stock of Crawford that may be sold by Crawford pursuant: to this Section 2.00(x) (the aggregate number "Tag-Along Notice") xxx xhall provide a copy of such binding agreement to Crawford. Any purchase, by the Prospective Purchaser of the Applixxxxx Xxount of shares of Common Stock beneficially owned on a fully diluted basis by of the Majority Stockholders and all Tag-Along Stockholders, and Electing Stockholder shall be at the same price consideration per share of Common Stock and upon on the same terms and conditions (including without limitation time as are applicable to TPG in such transaction. Crawford will have 20 days from receipt of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company Notice (xx xxx xmendment or the Majority Stockholders shall supplement thereto) to notify such TPG in writing of its election to exercise its Tag-Along Stockholder of the amount of Notes Rights (an "Election Notice") and number of Conversion Shares held by such to exercise its Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction Rights pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)this Section 2.
Appears in 1 contract
Samples: Employment Agreement (Zilog Inc)
Tag-Along Rights. If a majority of (a) Until the holders of the Company’s outstanding voting equity Put/Call Effective Date (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”as defined in Section 11), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to any proposed sale by the Company or (except as set forth in Section 3(b)) by the Principal Stockholder or any such Majority Stockholder(sPermitted Principal Stockholder Transferee (as defined in this Section 3(a)) entering into any definitive binding agreement (a "Prospective Seller") of shares of Common Stock or securities representing the right to acquire Common Stock, other than Excluded Transfers (as defined in respect thereof Section 11), the Prospective Seller shall cause each Securityholder to be given notice of the proposed transaction (the “Sale Notice’"Notice of Proposed Issuance"). Thereafter, The Notice of Proposed Issuance shall constitute a right on behalf of each other Investor or Stockholder Securityholder to sell to the proposed purchaser (each a “Tag-Along Stockholder”) may and the Prospective Seller shall cause the Company or such Majority Stockholders proposed purchaser to effect a Transfer of such other Stockholder’s Stock; in each casehonor and fulfill that right), only pursuant to at the same time as the Prospective Seller and in accordance with (except as set forth below) upon the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the same terms and conditions herein stated (as the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) Prospective Seller is selling shares of Common Stock to the Company and/or purchaser, the Majority Stockholders, as the case may be, within ten Warrant (10or portion thereof) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or a number of Conversion Shares that Warrant Shares, or any combination thereof, then owned by the Tag-Along Stockholder wishes to sell on the terms and conditions stated Securityholder, representing in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder aggregate a number of shares of Common Stock up (or the right under the Warrant to purchase shares of Common Stock, as applicable) in the aggregate equal to the product obtained by multiplying of (i) the number of shares proposed to be sold by the Prospective Seller and (ii) a fraction, of which the numerator is the sum of the number of Warrant Shares then beneficially owned by the Securityholder and the number of Warrant Shares then purchasable by the Securityholder pursuant to the unexercised portion of the Warrant owned by the Securityholder and the denominator is the sum of (A) the number of all shares of Common Stock then outstanding and (B) the sum of the number of Warrant Shares then beneficially owned by the Securityholder and the number of Warrant Shares then purchasable by the Securityholder. The purchaser shall be entitled to make an appropriate reduction for the aggregate exercise price of any Warrant or portion thereof sold by a Securityholder pursuant to this Section 3(a).
(b) The foregoing notwithstanding, the Principal Stockholder shall not be required to give a Notice of Proposed Issuance with respect to, and this Section 3 shall not apply to, the Transfer (in one or more transactions) of shares of Common Stock by the Principal Stockholder representing in the aggregate not more than 10% of the number of shares of Common Stock subject to owned by the Majority Stockholders Transfer Principal Stockholder on the date hereof (adjusted appropriately for stock splits, stock dividends and other changes in the Sale capital stock of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fractionCompany). In addition, the numerator Principal Stockholder may Transfer (inter vivos or testamentary) all or part of which is the aggregate number of his shares of Common Stock beneficially owned on to the Company, to his spouse, children, parents, brothers or sisters, nieces and nephews, the spouse of any of his children, or a fully diluted basis by trust for the sole benefit of the Principal Stockholder or any of such Tag-Along persons, to any Affiliate, or to a guardian for the Principal Stockholder if he becomes disabled (a "Permitted Principal Stockholder Transferee"); provided that in each of the foregoing cases such shares shall remain subject to this Agreement and the denominator of which transferee shall execute and deliver a undertaking to be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis bound by the Majority Stockholders and all Tag-Along Stockholders, and at terms of this Agreement to the same price per share of Common Stock and upon extent as the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority StockholdersPrincipal Stockholder.
(c) Within ten Each Securityholder's option under Section 3(a) shall be exercisable by written notice given by the Securityholder to the Prospective Seller within fifteen (1015) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder delivery of the amount Notice of Notes and Proposed Issuance. The notice shall specify the number of Conversion Warrant Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which number of Warrant Shares purchasable pursuant to the Sale of Control Transaction will Warrant proposed to be consummated, which shall be no later than sold to the later of purchaser by the Securityholder that the Securityholder desires to sell. The Prospective Seller may consummate the proposed Transfer (iincluding any Transfers by electing Securityholders pursuant to this Section 3) twenty at any time within one hundred eighty (20180) days after delivery of the date by which each Holder was required Notice of Proposed Issuance, at a price and on other material terms and conditions no less favorable to notify the Company or Prospective Seller than as set forth in the Majority Stockholders Notice of its intent Proposed Issuance. If the Transfer is not consummated within that one hundred eighty (180) -day period, such proposed Transfer shall again be subject to exercise the Tag-Along Option restrictions and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if anyprocedures set forth in this Section 3.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in In connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context consummation of the proposed Sale of Control TransactionTransfer pursuant to this Section 3, each Securityholder participating in such Transfer shall execute and deliver all documents, instruments and certificates (including, without limitation, representations and warranties (and indemnities with respect thereto) that certificates representing the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities Warrants or the exercise of any exercisable securities)Warrant Shares and duly executed stock powers, if applicable) as the Prospective Seller may reasonably request.
Appears in 1 contract
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have To the rightextent Xxxxxxx does not exercise his right of first refusal as to the Disposition of the Offered Shares pursuant to Section 5, but not the obligation, then Xxxxxxx may elect to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and Disposition at the same price per share of Common Stock Share as that offered to and upon subject to the same material terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agreegroup of Stockholders), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that Xxxxxxx may not elect to participate in such Disposition if the purchaser is willing to purchase Shares of Preferred Stock only.
(b) The election pursuant to Subsection 6(a) above shall be exercised by giving written notice to the Stockholder (or group of Stockholders) within the Exclusive Period. If Xxxxxxx gives notice of his election to sell, he shall be obligated to sell the number of Shares specified in his notice upon the terms and subject to the conditions specified in Subsection 6(a) above to the proposed purchaser, conditional upon the closing of the Disposition.
(c) If the purchaser pursuant to the Disposition has a specified limited number of (i) Shares of Common Stock that it is willing to purchase in the aggregate, Xxxxxxx shall have the right to sell to the purchaser up to that number of Shares of Common Stock owned by Xxxxxxx which is in the same proportion to his total ownership of Shares of Common Stock as the number of Shares being sold by the Stockholder (or group of Stockholders) is to the total number of Shares of Common Stock owned by the Stockholder (or group of Stockholders); and (ii) Shares of Common Stock and Preferred Stock that it is willing to purchase, Xxxxxxx shall have the right to sell to the purchaser up to that number of Shares of Common Stock owned by Xxxxxxx which is in the same proportion to his total ownership of Shares of Common Stock as the number of Shares of Common Stock into which the Shares of Preferred Stock being sold by the Stockholder (or group of Stockholders) is convertible at the time of such Disposition is to the number of Shares of Common Stock into which the total number of Shares of Preferred Stock owned by the Stockholder (or group of Stockholders) is convertible at the time of such Disposition.
(d) If Xxxxxxx gives notice during the Exclusive Period of his election to participate in the Disposition, then Xxxxxxx will use his best efforts to cooperate in the Disposition and will take all necessary and desirable actions in connection with respect the consummation of the Disposition, including, but not limited to, (i) the provision of reasonable and customary representations and warranties; provided, however, that Xxxxxxx shall not be required to incur more than his pro rata portion of any matter as to out-of-pocket expenses in connection with such Disposition which a Tag-Along are not reimbursed by the Stockholder (or group of Stockholders); and provided further that Xxxxxxx shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event not be required to provide different representations and warranties or indemnification than any other selling participant in an amount that would exceed its pro rata portion the Disposition and (ii) the closing of such Disposition within twenty (20) days of such notice or on such other date as is provided in the total liability for which such indemnification is soughtDisposition Notice.
(e) If Xxxxxxx fails to notify the Stockholder (or group of Stockholders) during the Exclusive Period, which pro rata portion then Xxxxxxx shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such deemed to have waived his Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Right.
Appears in 1 contract
Tag-Along Rights. If (a) Prior to an Initial Public Offering, with respect to any proposed Transfer by BLUM and its Affiliates of shares of Common Stock to any Xxxson other than BLUM and its Affiliates (each a majority of the holders of the Company’s outstanding voting equity "Third Party") (collectivelyother thxx xn a Public Offering, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior subject to the Company Article III), whether pursuant to a stock sale, merger, consolidation, a tender or exchange offer or any other transaction (any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (transaction, a "BLUM Sale"), BLUM and its Affiliates will have the “Sale Notice’). Thereafterobligxxxxn, each other Investor or Stockholder (each a “Tagand eaxx xf the Non-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall BLUM Parties will have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee proposex xxansferee or acquiring Person (a "Proposed Transferee") to purchase from each such Tagof the Non-Along Stockholder BLUM Parties who exercises its rights under Section 2.4(x) (a "Tagging Securityholder") a number of shares of Common Stock up to the product obtained by multiplying (rounded to the nearest whole number of shares) of (i) the quotient determined by dividing (A) the aggregate number of outstanding shares of Common Stock owned by such Tagging Securityholder by (B) the aggregate number of outstanding shares of Common Stock and (ii) the total number of shares of Common Stock subject proposed to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior be directly or indirectly Transferred to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and Transferee at the same price per share of Common Stock and upon the same terms and conditions (including including, without limitation limitation, time of payment and form of consideration) as to be paid by and given to BLUM and/or its Affiliates (as applicable). In order to xx xntitled to exercise its right to sell shares of Common Stock to the Majority StockholdersProposed Transferee pursuant to this Section 2.4, each Tagging Securityholder must agree to make to the Proposed Transferee the same covenants, indemnities (with respect to all matters other than BLUM's and/or its Affiliates' Ownership of Common Stock) xxx xgreements as BLUM and/or its Affiliate (as applicable) agrees to make xx connection with the BLUM Sale and such representations and warranties (and rxxxxed indemnification) as to its Ownership of its Common Stock as are given by BLUM and/or its Affiliate (as applicable) with respect tx xxch party's Ownership of Common Stock; provided, that all such covenants, indemnities and agreements shall be made by each Tagging Securityholder, severally and not jointly, and that the liabilities thereunder (other than with respect to Ownership, which shall be several obligations) shall be borne on a pro rata basis based on the number of shares Transferred by each of BLUM, and its Affiliates and the Tagging Securityholders. Xach Tagging Securityholder will be responsible for its proportionate share of the reasonable out-of-pocket costs incurred by BLUM and its Affiliates in connection with the BLUM Sale xx the extent not paid or reimbursed by the Coxxxxy or the Proposed Transferee.
(b) BLUM will give notice to each Tagging Securityholder of xxxx proposed BLUM Sale at least 15 business days prior to the proposex xxnsummation of such BLUM Sale, setting forth the number of shares of Common Xxxxk proposed to be so Transferred, the name and address of the Proposed Transferee, the proposed amount and form of consideration (and if such consideration consists in part or in whole of property other than cash, BLUM will provide such information, to the extent reasonxxxx available to BLUM, relating to such consideration as the Tagging Secuxxxxholder may reasonably request in order to evaluate such non-cash consideration) and other terms and conditions of payment offered by the Proposed Transferee. The tag-along rights provided by this Section 2.4 must be exercised by each Tagging Securityholder within 10 business days following receipt of the notice required by the preceding sentence by delivery of an irrevocable written notice to BLUM indicating such Tagging Securityholder's exercise ox xxs, her or his rights and specifying the number of shares of Common Stock it, she or he desires to sell. The Tagging Securityholder will be entitled under this Section 2.4 to Transfer to the Proposed Transferee the number of shares of Common Stock determined in accordance with Section 2.4(a).
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company If any Tagging Securityholder exercises its, her or the Majority Stockholders of its intent to exercise the Tag-Along Optionhis rights under Section 2.4(a), the Company or the Majority Stockholders shall notify such Tag-Along Stockholder closing of the amount purchase of Notes the Common Stock with respect to which such rights have been exercised is subject to, and number will take place concurrently with, the closing of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company BLUM's or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver Affiliate's Common Stock to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Txxxxxxree.
Appears in 1 contract
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The TagSo long as this Agreement shall remain in effect, unless (x) a Public Offering of Common Stock shall have occurred or (y) Vestar and its Affiliates, but not any other Permitted Transferee of any thereof, beneficially own on a fully diluted basis an aggregate number of shares of Common Stock less than one-Along Stockholders third (1/3) of the number of shares of Common Stock beneficially owned on a fully diluted basis by Vestar on the date of its execution and delivery of this Agreement, with respect to any proposed Transfer by any of Vestar and its Affiliates (but not any other Permitted Transferee of any thereof) (in such capacity, a "TRANSFERRING STOCKHOLDER") of Common Stock, other than as provided in Sections 3.2 and 3.6, the Transferring Stockholder shall have the obligation, and each other Stockholder and its Permitted Transferees shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each Stockholder and its Permitted Transferees having and exercising such Tag-Along Stockholder right (a "TAGGING STOCKHOLDER") a number of shares of Common Stock up to the product obtained by multiplying (rounded up to the nearest whole number) of (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction quotient determined by (ii) a fraction, the numerator of which is dividing the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Tagging Stockholder and sought by the denominator of which shall Tagging Stockholder to be included in the contemplated Transfer by the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Transferring Stockholder plus the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by all Tagging Stockholders and sought by all Tag-Along StockholdersTagging Stockholders to be included in the contemplated Transfer and (ii) the total number of shares of Common Stock proposed to be directly or indirectly Transferred to the Transferee in the contemplated Transfer, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Transferring Stockholder, PROVIDED that in order to be entitled to exercise its right to sell shares of Common Stock to the proposed transferee pursuant to this Section 3.5, a Tagging Stockholder must agree to make to the Transferee the same representations, warranties, covenants, indemnities and agreements as the Transferring Stockholder agrees to make in connection with the proposed transfer of the shares of Common Stock of the Transferring Stockholder (except that in the case of representations and warranties pertaining specifically to the Transferring Stockholder, a Tagging Stockholder shall make the comparable representations and warranties pertaining specifically to itself, and except that in the case of covenants or agreements capable of performance only by certain Stockholders, such covenants or agreements shall be made only by such certain Stockholders) and PROVIDED FURTHER that all representations, warranties, covenants, agreements and indemnities made by the Transferring Stockholder and the Tagging Stockholders pertaining specifically to themselves shall be made by each of them severally and not jointly and PROVIDED FURTHER that each of the Transferring Stockholder and each Tagging Stockholder shall be severally (but not jointly) liable for breaches of representations, warranties, covenants and agreements of or (in the case of representations and warranties) pertaining to the Company and its Subsidiaries, and for indemnification obligations arising out of or relating to any such breach or otherwise pertaining to the Company and its Subsidiaries, on a pro rata basis, such liability of each such Stockholder not to exceed such Stockholder's pro rata portion of the gross proceeds of the sale. Any Tagging Stockholder that is a holder of Common Stock Equivalents and wishes to participate in a sale of Common Stock pursuant to this Section 3.5(a) shall convert into or exercise or exchange such number of Common Stock Equivalents for Common Stock as may be required therefor on or prior to the closing date of such Transfer.
(b) So long as this Agreement shall remain in effect, unless (x) a Public Offering of Common Stock shall have occurred or (y) Vestar and its Affiliates, but not any other Permitted Transferee of any thereof, beneficially own on a fully diluted basis an aggregate number of shares of Common Stock less than one-third (1/3) of the number of shares of Common Stock beneficially owned on a fully diluted basis by Vestar on the date of its execution and delivery of this Agreement, with respect to any proposed Transfer by any of Vestar and its Affiliates (but not any other Permitted Transferee of any thereof) (in such capacity, a "TRANSFERRING PREFERRED STOCKHOLDER"), of Junior Preferred Stock, other than as provided in Sections 3.2 and 3.6, the Transferring Preferred Stockholder shall have the obligation, and each other Stockholder and its Permitted Transferees which holds Junior Preferred Stock shall have the right, to require the proposed transferee to purchase from each such Stockholder and its Permitted Transferees having and exercising such right (a "TAGGING PREFERRED STOCKHOLDER") a number of shares of Junior Preferred Stock up to the product (rounded up to the nearest whole number) of (i) the quotient determined by dividing the aggregate liquidation preference of all shares of Junior Preferred Stock owned by such Tagging Preferred Stockholder and sought by the Tagging Preferred Stockholder to be included in the contemplated Transfer by the aggregate liquidation preference of all shares of Junior Preferred Stock owned by the Transferring Preferred Stockholder plus the aggregate number of shares of Junior Preferred Stock beneficially owned on a fully diluted basis by all Tagging Preferred Stockholders and sought by all Tagging Preferred Stockholders to be included in the contemplated Transfer and (ii) the total number of shares of Junior Preferred Stock proposed to be directly or indirectly Transferred to the Transferee in the contemplated Transfer, and at the same price per share of Junior Preferred Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) to be given to the Transferring Preferred Stockholder, PROVIDED that in order to be entitled to exercise its right to sell shares of Junior Preferred Stock to the proposed transferee pursuant to this Section 3.5, a Tagging Preferred Stockholder must agree to make to the Transferee the same representations, warranties, covenants, indemnities and agreements as the Transferring Preferred Stockholder agrees to make in connection with the proposed transfer of Junior Preferred Stock of the Transferring Stockholder (except that in the case of representations and warranties pertaining specifically to the Transferring Preferred Stockholder, a Tagging Preferred Stockholder shall make the comparable representations and warranties pertaining specifically to itself, and except that in the case of covenants or agreements capable of performance only by certain Stockholders, such covenants or agreements shall be made only by such certain Stockholders) and PROVIDED FURTHER that all representations, warranties, covenants, agreements and indemnities made by the Transferring Preferred Stockholder and the Tagging Preferred Stockholders pertaining specifically to themselves shall be made by each of them severally and not jointly and PROVIDED FURTHER that each of the Transferring Preferred Stockholder and each Tagging Preferred Stockholder shall be severally (but not jointly) liable for breaches of representations, warranties, covenants and agreements of or (in the case of representations and warranties) pertaining to the Company and its Subsidiaries, and for indemnification obligations arising out of or relating to any such breach or otherwise pertaining to the Company and its Subsidiaries, on a pro rata basis, such liability of each such Stockholder not to exceed such Stockholder's pro rata portion of the gross proceeds of the sale.
(c) Within ten The Transferring Stockholder or Transferring Preferred Stockholder, as the case may be, shall give notice to all relevant Stockholders and their Permitted Transferees of each proposed Transfer giving rise to the rights of the Tagging Stockholders or Tagging Preferred Stockholders set forth in the first sentence of Section 3.5(a) or (10) b), as the case may be, at least 30 days after prior to the date proposed consummation of such Transfer, setting forth the name of the Transferring Stockholder or Transferring Preferred Stockholder, the number of shares of Common Stock and/or Junior Preferred Stock proposed to be so Transferred, the name and address of the proposed transferee, the proposed amount and form of consideration and other terms and conditions offered by which the proposed transferee, and a Tagrepresentation that the proposed transferee has been informed of the tag-Along along rights provided for in this Section 3.5 and has agreed to purchase shares of Common Stock and/or Junior Preferred Stock in accordance with the terms hereof. The tag-along rights provided by this Section 3.5 must be exercised by each Tagging Stockholder notifies or Tagging Preferred Stockholder within 15 days following receipt of the Company notice required by the preceding sentence, by delivery of a written notice to the Transferring Stockholder or Transferring Preferred Stockholder, as the Majority Stockholders of its intent case may be, indicating such Tagging Stockholder's or Tagging Preferred Stockholder's desire to exercise its rights and specifying the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along shares of Common Stock and/or Junior Preferred Stock it desires to sell. The Transferring Stockholder that will be included in or Transferring Preferred Stockholder, as the sale and the date on which the Sale of Control Transaction will be consummatedcase may be, which shall be no later than entitled under this Section 3.5 to Transfer to the later proposed transferee the number of (i) twenty (20) days after Securities equal to the date by which each Holder was required difference between the number referred to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and in clause (ii) five of paragraph (5a) days after or (b) above and the satisfaction aggregate number of any governmental approval or filing requirementsshares of Common Stock and/or Junior Preferred Stock set forth in the written notices, if any, delivered by the Tagging Stockholders or Tagging Preferred Stockholders pursuant to the preceding sentence (up to the maximum number of shares of Common Stock and/or Junior Preferred Stock beneficially owned by such Tagging Stockholder or Tagging Preferred Stockholder required to be purchased by the proposed transferee pursuant to the first sentence of Section 3.5(a) or (b)). If the proposed transferee fails to purchase shares of Common Stock or, as the case may be, Junior Preferred Stock from any Tagging Stockholder or Tagging Preferred Stockholder that has properly exercised its tag-along rights, then the Transferring Stockholder or Transferring Preferred Stockholder, as the case may be, shall not be permitted to make the proposed Transfer, and any such attempted Transfer shall be void and of no effect, as provided in Section 3.3 hereof.
(d) Each Tag-Along Stockholder may effect its participation in If any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company Tagging Stockholders and Tagging Preferred Stockholders exercise their rights under Section 3.5(a) or (or such other place b), the closing of the purchase of the Common Stock or, as the parties agree)case may be, one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that Junior Preferred Stock with respect to any matter which such rights have been exercised shall take place concurrently with the closing of the sale of the Transferring Stockholder's or, as the case may be, Transferring Preferred Stockholder's Common Stock and/or Junior Preferred Stock. No Transfer shall occur pursuant to which a Tag-Along Stockholder this Section 3.5 unless the transferee shall agree to provide indemnification (other than become a party to, and be bound to the same extent as its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented transferor by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In additionterms of, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance this Agreement pursuant to the Majority Stockholders in connection with the preparation provisions of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Section 5.6.
Appears in 1 contract
Samples: Stockholders' Agreement (Cluett Peabody & Co Inc /De)
Tag-Along Rights. If a majority Notwithstanding the provisions of Section 2.01 and without first offering its Shares to TPG as contemplated by Section 2.03(c), in the event that at any time after the date hereof and prior to the completion of an initial public offering of any of the holders Shares (the "Initial Public Offering"), TPG reaches a binding agreement with a Person to sell all or a portion of its Shares that would result in any Person (together with its Affiliates) unaffiliated with TPG holding 40% or more of the voting power of the Company’s outstanding voting equity , TPG shall cause the prospective purchaser (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”"Prospective Purchaser"), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior subject to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) set forth in this Section 2.04 and subject further to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated set forth in Section 2.05, which terms and conditions shall control in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right event that TPG is proposing to require the proposed transferee sell all of its shares of Common Stock, to purchase from each such Tag-Along Electing Stockholder a (in lieu of purchasing from TPG) that number of shares of Common Stock up to then owned by such Electing Stockholder that equals the product obtained by multiplying of (i1) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction then owned by such Electing Stockholder multiplied by (ii2) a fraction, the numerator of which is equals the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis to be purchased by such Tag-Along Stockholder the Prospective Purchaser from TPG and the denominator of which shall be equals the aggregate total number of shares of Common Stock beneficially then owned on a fully diluted basis by TPG (the Majority "Applicable Amount"). TPG shall notify promptly each of the New Stockholders in writing of any such binding agreement, indicating the price and all other material terms and conditions of the proposed sale, the identity of the Prospective Purchaser, the intended closing date of such sale, the percentage of issued and outstanding shares of Common Stock being sold by TPG and the Applicable Amount of shares of Common Stock of each New Stockholder that may be sold by such New Stockholder pursuant to this Section 2.04(a) (the "Tag-Along Notice") and shall provide a copy of such binding agreement to each of the New Stockholders, and . Any purchase by the Prospective Purchaser of the Applicable Amount of shares of Common Stock of any Electing Stockholder shall be at the same price consideration per share of Common Stock and upon on the same terms and conditions as are applicable to TPG in such transaction. Each of the New Stockholders will have 20 days from receipt of the Tag-Along Notice (including without limitation time or any amendment or supplement thereto) to notify TPG in writing of payment its election to exercise its Tag-Along Rights (an "Election Notice") and form to exercise its Tag-Along Rights pursuant to this Section 2.04. In the event that a New Stockholder notifies TPG in writing of consideration) as its election to be paid and given to exercise Tag-Along Rights within 20 days of the Majority Stockholders.
(c) Within ten (10) days after the date by which receipt of a Tag-Along Notice and such New Stockholder notifies the Company subsequently receives an amendment or the Majority Stockholders of supplement to such Tag-Along Notice from TPG, such New Stockholder shall be able to withdraw its intent previously given election to exercise Tag-Along Rights by giving written notice to TPG within 20 days of the receipt of such amendment or supplement. In the event TPG does not receive an Election Notice from any of the New Stockholders within 20 days of receipt of the Tag-Along OptionNotice (or any amendment or supplement thereto), the Company or the Majority Stockholders such Person shall notify such be deemed to have elected not to exercise its Tag-Along Stockholder of Rights hereunder. Notwithstanding anything to the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummatedcontrary contained herein, which shall be no later than the later of (i) twenty TPG shall not be obligated to cause a Prospective Purchaser to purchase any New Stockholders' shares of Common Stock hereunder if at the time of such sale (20but prior to giving effect thereto) days after TPG beneficially owns less than 40% of the date by which each Holder was required to notify voting power of the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after TPG shall not be obligated to consummate the satisfaction transfer of any governmental approval or filing requirementsshares of Common Stock contemplated by an agreement between TPG and a Prospective Purchaser if, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale pursuant to the terms and conditions of Control Transactionsuch agreement, and as part of its participation TPG is not obligated to do so and, in the Sale of Control Transaction pursuant event TPG elects not to consummate a duly exercised Tag-Along Option, shall deliver transfer which it is not obligated to the Proposed Transferee at a closing to be held at the offices of the Company consummate as provided in this clause (or such other place as the parties agreeii), one or more Notes or certificates, properly endorsed for transfer, TPG shall have no liability to any New Stockholder (which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, includingterm includes, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests thereinany Electing Stockholder), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion The closing of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due TPG's shares of Common Stock to the conversion Prospective Purchaser hereunder shall be conditioned on the simultaneous purchase by the Prospective Purchaser of the Applicable Amount of shares of Common Stock from each Electing Stockholder. Notwithstanding the foregoing, in the event any Electing Stockholder breaches any obligation it may have under this Section 2.04 or, in the event that any representation and warranty of any convertible securities Electing Stockholder contained in the purchase agreement with the Prospective Purchaser is not true and correct as of the date made or as of the proposed closing date or the exercise Electing Stockholder shall fail to perform any covenant or agreement contained in such agreement or the Electing Stockholder shall otherwise breach its obligations under such agreement and, in each case, such misrepresentation, breach or failure to perform such covenant or agreement results in the nonsatisfaction of a condition precedent to such agreement (and the Prospective Purchaser does not waive such condition precedent), TPG shall be free to sell its Shares to the Prospective Purchaser without liability to the Electing Stockholder under this Agreement and such sale shall not limit or waive in any exercisable securities)respect any claim, right or cause of action that TPG may have against such Electing Stockholder in respect of such breach.
Appears in 1 contract
Samples: Stockholders' Agreement (Zilog Inc)
Tag-Along Rights. If a majority (i) The Company hereby agrees to obtain the following tag-along rights for the benefit of the holders Optionee: Prior to the consummation of an Initial Public Offering, if (i) either Cerberus Capital Management, L.P. and its affiliates (“Cerberus”) or General Atlantic Partners 76, L.P. and its affiliates (“GA”) propose to sell its shares of common stock of the Company (or securities convertible into shares of common stock of the Company’s ), representing at least 15% of all of the then outstanding voting equity shares of common stock of the Company, on a fully-diluted basis, to a third-party purchaser or acquirer (collectively, the “Majority Stockholders”other than Cerberus or GA) want to consummate a transaction that constitutes a Sale of Control (a “Sale Third Party Buyer”), in a single transaction or series of Control related transactions (a “Tag-along Transaction”), then the Majority Stockholder(sand (ii) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company extent that either Cerberus or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “TagGA is entitled to exercise its drag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only along right pursuant to and the terms of Section 10(a) hereof in accordance with connection therewith, it does not elect to do so, the following Optionee shall have the right (subject to the provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”10(b), which right shall be exercisable upon written notice (the “Acceptance Notice”) to require the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that Third Party Buyer in the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee along Transaction to purchase from each such the Optionee, on the same terms and subject to the same conditions and at the same price at which Cerberus or GA (as applicable, the “Initiating Seller”) is selling its shares in the Tag-Along Stockholder along Transaction, a number of shares of Common Stock up equal to the product obtained by multiplying (i) the aggregate total number of shares of Common Stock subject to common stock being purchased by the Majority Stockholders Transfer Third Party Buyer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction Tag-along Transaction, multiplied by (ii) a fraction, (A) the numerator of which is the aggregate number of shares of Common Stock beneficially common stock owned on a fully diluted basis by such Tag-Along Stockholder the Optionee and/or subject to vested Options held by the Optionee and (B) the denominator of which shall be is the aggregate total number of shares of Common Stock beneficially owned on a fully fully-diluted basis basis, by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along OptionInitiating Sellers, the Company Optionee and any other persons entitled to assert tag-along or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee analogous rights in connection with such Sale of Control Transaction Tag-along Transaction; provided that the Optionee shall execute such agreements or other documents and to take such other actions as may be reasonably necessary to effect such sale. Notwithstanding any provision contained herein to the contrary, the tag-along right set forth in this Section 10(b) shall not be exercisable in the determination of event that the appropriate scope ofTag-along Transaction results in a Change in Control. In such event, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee Section 5 hereof shall remit directly apply to each such Tag-Along Stockholder that portion along Transaction.
(ii) Optionee shall be entitled to receive at least 15 days notice prior to any Tag-along Transaction, setting forth the proposed amount and form of consideration and any other material terms and conditions of the sale proceeds proposed sale, including the terms and conditions of payment offered by the Third Party Buyer and the number of shares which Optionee is entitled to which sell in such Tag-Along Stockholder is entitled along Transaction (based on the books and records of the Company) (the “Maximum”). The Optionee must exercise his rights under this Section 10(b) within 10 days following receipt of the foregoing notice by reason delivery of its participation therein (less any adjustments due a written notice to the conversion Company and the Initiating Seller(s) specifying the number of any convertible securities or shares that Optionee wishes to sell in such Tag-along Transaction (up to the exercise Maximum) and agreeing to be bound by the terms specified in the foregoing notice; provided that Optionee may waive his rights under this Section 10(b) prior to the expiration of any exercisable securitiessuch 10 day period by giving written notice to the Company and the Initiating Seller(s).
Appears in 1 contract
Samples: Employment Agreement (Ssa Global Technologies, Inc)
Tag-Along Rights. If a majority (a) No member of the holders Lehman Group shall sell or otherwise dispose of shares of Common Xxxxx to any Person or Persons (other than a Permitted Transferee of the Company’s outstanding voting equity Lehman Group) (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”"Third Parties"), then unless the Majority Stockholder(s) terms and conditixxx xx such sale or other disposition to such Third Parties shall notify the other Investors include an offer to each Holder who at such time owns any shares of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior Common Stock subject to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof this Agreement (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “"Tag-Along Stockholder”Offerees") may cause to include, at the Company option of each Tag-Along Offeree, in the sale or other disposition to the Third Parties such Majority Stockholders number of shares of Common Stock owned by such Tag-Along Offeree determined in accordance with this Section 3.01. The members of the Lehman Group proposing to effect such sale or other disposition (xxx "Xransferors") shall send a Transfer written notice (the "Tag- Along Notice") to each Tag-Along Offeree setting forth the maximum number of shares of Common Stock the Third Party is willing to purchase or otherwise acquire, along with the price and the other terms and conditions of the Third Party offer. At any time within 30 days after the date the Tag-Along Notice is received by each Tag-Along Offeree, such other Stockholder’s Stock; in each case, only pursuant Tag-Along Offeree may exercise its option to and sell a number of shares of Common Stock owned by such Tag-Along Offeree determined in accordance with the following provisions of this Section 3:
3.01 by furnishing written notice of such acceptance (a) The the "Tag-Along Stockholders Acceptance Notice") to the Transferors (which Tag- Along Acceptance Notice shall have set forth the right, but not the obligation, to participate in the Proposed Sale maximum number of Control Transaction on the terms and conditions herein stated (the “shares of Common Stock that such Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) Offeree wishes to sell or otherwise dispose of to the Company and/or Third Party) and delivering to the Majority Stockholders, as Transferors the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate certificate or certificates representing the maximum amount of Notes or number of Conversion Shares that the shares of Common Stock to be sold or otherwise disposed of pursuant to such offer by such Tag-Along Stockholder wishes Offeree, together with a limited power-of-attorney authorizing the Transferors to sell on or otherwise dispose of such shares of Common Stock to the terms Third Parties as part of such proposed sale or other disposition, all in a form reasonably satisfactory to the Transferor and conditions stated the Third Parties. Notwithstanding anything to the contrary, Section 3.01 shall not apply to any sale of shares of Common Stock by Lehman Brothers Merchant Banking Partners or its Affiliates pursuxxx xx a syndication of its equity interest in the Sale NoticeCompany during the six-month period commencing from and after the Effective Time, provided that the aggregate amount of such sales do not exceed $100 million.
(b) Each If the proposed sale or other disposition to the Third Parties by the Transferors is consummated, each Tag-Along Stockholder Offeree shall have the right to require sell to the Third Party as part of such proposed transferee to purchase from each such Tag-Along Stockholder sale or other disposition a number of shares of Common Stock up to the product obtained by multiplying (rounded up to the nearest whole number) of (i) the quotient determined by dividing (A) the aggregate number of shares of Common Stock subject to owned by such Tag-Along Offeree by (B) the Majority Stockholders Transfer in aggregate number of shares owned by the Sale Lehman Group, the Holders and all other Persons who have "tag-aloxx" xxghts of Control Transaction immediately prior to the Proposed Sale of Control Transaction by a similar nature under this Agreement and (ii) a fraction, the numerator of which is the aggregate total number of shares of Common Stock beneficially owned on a fully diluted basis proposed to be acquired by such Tag-Along Stockholder and the denominator of which shall Third Party; provided that, in order to be the aggregate number of entitled to exercise its right to sell shares of Common Stock beneficially owned on a fully diluted basis by to the Majority Stockholders and all Third Party pursuant to this Section 3.01, each Tag-Along Stockholders, and at Offeree (x) shall agree to the same price per share covenants as Transferors agree to in connection with the proposed sale and (y) shall make such representations and warranties concerning title to the shares of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given sold in connection with the proposed sale as Transferors make, all in a form reasonably satisfactory to the Majority StockholdersTransferor and the Third Party.
(c) Within ten (10) days after Each of the date Transferors and the Third Party shall have the right, in its sole discretion, at all times prior to consummation of the proposed sale or other disposition giving rise to the tag-along right granted by which a Tag-Along Stockholder notifies the Company this Section 3.01, to abandon or the Majority Stockholders otherwise terminate such sale or other disposition, whereupon all rights of its intent to exercise the Tag-Along OptionOfferees under this Section 3.01 in respect of such sale or other disposition shall become null and void, and neither the Company Transferors nor the Third Party shall have any liability or the Majority Stockholders shall notify such obligation to any Tag-Along Stockholder Offeree with respect thereto by virtue of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company abandonment or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if anytermination.
(d) Each The purchase from the Tag-Along Stockholder may effect its participation in any Sale Offerees pursuant to this Section 3.01 shall be on the same terms and conditions, including the per share price and the date of Control Transactionsale or other disposition, and as part of its participation are applicable to the Transferors, which shall be not less favorable than as stated in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver Notice provided to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with Offerees by the Sale Transferors.
(e) If within 30 days after the date of Control Transaction, and each the Tag-Along Stockholder shall make such representations and warrantiesNotice is received by the Tag-Along Offerees, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which Tag-Along Offeree has not delivered a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares)Acceptance Notice, such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion Offeree shall be determined on the basis deemed to have waived any and all of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Offeree's rights with respect to the sale or other disposition of Common Stock described in the Tag-Along Stockholder and Notice.
(f) The provisions of this Section 3.01 shall not be applicable to any bona fide public offering of Common Stock made pursuant to a registration statement under the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Securities Act.
Appears in 1 contract
Samples: Employee Stockholder Agreement (Blount International Inc)
Tag-Along Rights. If In the event that Birch intends to Transfer all or a majority portion of the holders shares of the Company’s outstanding voting equity (collectivelySeries B Preferred Stock then held by it to any Person or Persons, the “Majority Stockholders”) want other than to consummate a transaction that constitutes a Sale an Affiliate of Control Birch, (a “Sale of Control "Birch Transaction”"), then except in the Majority Stockholder(s) case where a Drag- Along Right has been exercised by Birch, Birch shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be each Purchaser, not later less than fifteen (15) 30 days nor more than 45 days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof proposed Transfer, of such Transfer and its terms and conditions (the “"Sale Notice’"). ThereafterSuch Sale Notice shall set forth: (i) the number of shares of Series B Preferred Stock proposed to be Transferred by Birch, each other Investor or Stockholder (each a “Tagii) the name and address of the proposed Birch Transferee, (iii) the proposed amount and form of consideration and terms and conditions of payment offered by such proposed Birch Transferee and (iv) that the proposed Birch Transferee has been informed of the Purchasers' tag-Along Stockholder”) may cause the Company or such Majority Stockholders along right provided for in this Section 7.4 and has agreed to effect a Transfer purchase shares of such other Stockholder’s Stock; in each case, only pursuant to and Series A Preferred Stock in accordance with the following provisions terms hereof. Within 15 days of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days date of receipt of the Sale Notice. Each Acceptance Notice , each Purchaser shall indicate the maximum amount of Notes or number of Conversion Shares that the notify Birch in writing (a "Tag-Along Stockholder wishes Notice") whether it elects to sell on the terms and conditions stated participate in the Sale Notice.
(b) Each Tag-Along Stockholder such Transfer. If either Purchaser shall so notify Birch in writing of its election to participate in such Transfer, such Purchaser shall have the right to require sell to the proposed transferee to purchase from each Proposed Transferee, at the same price and the same terms, such Tag-Along Stockholder a number of shares of Common Series A Preferred Stock up to beneficially owned by such Purchaser at such time as shall equal the product obtained same percentage of the shares then beneficially owned by multiplying (i) such Purchaser as the aggregate number percentage of shares of Common Series B Preferred Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock then beneficially owned on a fully diluted basis by Birch which are proposed to be sold by Birch in such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and Transfer at the same price per share of Common Stock and upon on the same terms as Birch. In the event that the proposed Birch Transferee does not purchase shares from any Purchaser on the same terms and conditions (including without limitation time as specified in the Sale Notice, then Birch shall not be permitted to sell any shares of payment and form of consideration) as to be paid and given Series B Preferred Stock to the Majority Stockholders.
(c) Within ten (10) days after proposed Birch Transferee in the date by which a proposed Transfer. If no Tag-Along Stockholder notifies Notice is received during the Company or 15-day period referred to above, Birch shall have the Majority Stockholders right, for a 45-day period after the expiration of its intent the 15-day period referred to exercise above, to transfer the shares of Series B Preferred Stock specified in the Sale Notice on terms and conditions no more favorable than those stated in the Tag-Along Option, Notice and without regard to the Company or tag-along rights described in this Section 7.4. The rights and obligations provided by this Section 7.4 shall terminate on the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later earliest to occur of (i) twenty (20) days after such date as Birch shall hold less than 10% of the date by which each Holder was required to notify the Company or the Majority Stockholders then outstanding shares of its intent to exercise the Tag-Along Option Common Stock and (ii) five (such date as the Purchasers and their Affiliates shall hold less than 5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices % of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all then outstanding shares of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Common Stock.
Appears in 1 contract
Tag-Along Rights. If a majority Carlyle, SRK or any of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control SRK Related Parties (a “Sale Section 2 Seller”) desires to Transfer any shares of Control Transaction”Non-Voting Preferred Stock or of Company Common Stock pursuant to (and in conformity with) Sections 1(d), 1(e), or 1(g), then such Section 2 Seller shall give notice (the Majority Stockholder(s“Notice of Offer”) shall notify in writing to the Board and the other Investors Securityholders (i) designating the number of shares of each series of Non-Voting Preferred Stock or of Company Common Stock that such proposed Sale of Control Transaction by a date which shall be not later than fifteen Section 2 Seller proposes to sell, (15ii) days prior to naming the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect prospective purchaser thereof (the “Sale Notice’)Designated Purchaser”) and (iii) specifying the price (the “Offer Price”) and terms (the “Offer Terms”) upon which such Section 2 Seller desires to sell the same. ThereafterDuring the 20 Business Day period following receipt of such Notice of Offer by the Company, each the other Investor Securityholders that hold Non-Voting Preferred Stock, Eligible Series E Common Stock or Stockholder Company Common Stock, as the case may be, shall have the right (each a “Tag-Along StockholderRight”) may cause ), exercised by delivering a written notice to the Company or Section 2 Seller and the Company, to require the Designated Purchaser to purchase from such Majority Stockholders Securityholders (an “Accepting Securityholder”), at the Offer Price and on the Offer Terms (subject to effect reducing the Offer Price by the amount of the unsatisfied Participation Level for each share of Eligible Series E Common Stock), a Transfer percentage of such other StockholderAccepting Securityholder’s shares of Non-Voting Preferred Stock; , Eligible Series E Common Stock or shares of Company Common Stock, as the case may be, that is less than or equal to the percentage of the Section 2 Seller’s shares of Non-Voting Preferred Stock or shares of Company Common Stock, as the case may be, that the Designated Purchaser ultimately purchases from the Section 2 Seller in each casethe transaction, only provided, Holdco shall have the right to require the Designated Purchaser to purchase from Holdco the aggregate number of shares of Non-Voting Preferred Stock or shares of Company Common Stock, as the case may be, that the Holdco Continuing Investors elect and are entitled to sell in accordance with Section 8.9 of the Holdco LLC Agreement in connection with the exercise of their tag-along rights. It shall be a condition to any Transfer by the Section 2 Seller that the Designated Purchaser shall purchase such shares from the Accepting Securityholders pursuant to and in accordance with the following applicable provisions of this Section 3:
(a) The Tag-Along Stockholders shall have 2, and, for the rightavoidance of doubt, but not the obligation, to participate Transfers by Accepting Securityholders in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right conformity with this Section 2 shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Noticepermitted for all purposes under this Agreement.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)
Appears in 1 contract
Samples: Securityholders Agreement (Insight Communications Co Inc)
Tag-Along Rights. If a majority of third-party ("Intended Transferee") presents a bona fide written offer (the "Offer") to purchase fifty percent (50%) or more the Company's Subject Common Stock from any holder or holders of the Company’s outstanding voting equity 's common stock other than the Investors (collectivelythe shares to be purchased are referred to herein as the "Subject Shares"), and if the holder of the Subject Shares (the "Intended Transferor") desires to accept the Offer, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, entitled to participate in the Proposed Sale transaction with the Intended Transferee, in the same capacity as the Intended Transferor, such that each of Control Transaction the Investors shall be entitled to transfer, on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer manner set forth in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, howeverOffer, that with respect percentage of his or her Shares equal to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes Subject Common Stock that the Subject Shares represent. "Subject Common Stock" means all common stock of the Company including all stock that have been or Conversion Shares involved in such transfer that are represented may be converted into common stock of the Company. In order to exercise his or her rights under the Section, an Investor shall so notify the Intended Transferor, the Intended Transferee and the Board of Directors of the Company on or before the twentieth (20th) business day after the Offer is received by the Notes or Conversion Shares owned by such Tag-Along StockholderIntended Transferees. In additionNOTWITHSTANDING ANY PROVISION IN THIS AGREEMENT TO THE CONTRARY, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control TransactionTHE PROVISIONS OF THIS SECTION 5 SHALL ONLY BE BINDING UPON AND ENFORCEABLE AGAINST HOLDERS OF THE COMPANY'S COMMON STOCK WHO HAVE DULY APPROVED THIS INVESTORS AGREEMENT AND SECTION 5 HEREOF BY THE REQUISITE VOTE, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)CONSENT OR AGREEMENT.
Appears in 1 contract
Tag-Along Rights. If a majority (a) If, at any time prior to when the SK Holders collectively own 30% or less of the holders Common Stock owned collectively by the SK Holders as of the Company’s Effective Date, any Designated Management Stockholder (a "Selling Management Stockholder") proposes to Transfer (other than pursuant to a Public Offering or a Rule 144 Transfer or pursuant to Section 2.7 or to a Management Stockholder Permitted Transferee) any of its Common Stock (other than shares acquired upon exercise of stock options) representing more than 1% of the outstanding voting equity Common Stock either to (collectivelyi) any Third Party pursuant to a bona fide offer to purchase or (ii) the Company (in the case of clause (i) and (ii), a "Tag-Along Offer"), the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors Selling Management Stockholder will provide written notice of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior Tag-Along Offer to the Company and each of the SK Holders in the manner set forth in this Section 2.3; provided, however, that nothing in this Section 2.3 will affect the restrictions on Transfers by the Management Stockholders contained in Section 2.1. Such written notice will identify the proposed purchaser, the number of shares of Common Stock proposed to be purchased from the Selling Management Stockholder (or any if greater, the number of shares of Common Stock such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof Person is willing to purchase (the “Sale Notice’"Desired Shares"). Thereafter), each other Investor or Stockholder (each a “the Tag-Along Stockholder”Ratio (as defined in Section 2.3(d)) may cause that would apply if all the Company or such Majority SK Holders become Co-Selling Stockholders to effect a Transfer (as defined below), the consideration offered and all other material terms and conditions of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall Offer. If the offer price consists in part or in whole of consideration other than cash, the Selling Management Stockholder will provide such information, to the extent reasonably available
(b) The SK Holders will have the right, but not the obligationexercisable as set forth below, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that accept the Tag-Along Offer for up to the number of shares of Common Stock determined pursuant to Section 2.3(d). The SK Holders will, within ten Business Days after receipt of the written notice from the Selling Management Stockholder, provide the Selling Management Stockholder wishes with an irrevocable written notice specifying the number of shares of Common Stock the SK Holders wish to sell on Transfer, not to exceed the terms number of Desired Shares, and conditions stated the allocation of such shares among the SK Holders and will simultaneously provide a copy of such notice to the Company. If the SK Holders do not accept the Tag-Along Offer within ten Business Days following receipt of written notice from the Selling Management Stockholder, the SK Holders will be deemed to have waived any and all rights under this Section 2.3 with respect to the Transfer of Common Stock pursuant to such Tag-Along Offer but nothing herein will affect the SK Holders' rights in the Sale Noticerespect of any other transaction or proposed transaction.
(bc) Each Not less than seven Business Days prior to the proposed date of any sale pursuant to a Tag-Along Offer, the Selling Management Stockholders will notify the SK Holders which have accepted the Tag-Along Offer (each, a "Co-Selling Stockholder") of such proposed date. Not less than two Business Days prior to such proposed date of sale, the Co-Selling Stockholders will deliver to an Escrow Agent (the costs of which Escrow Agent will be borne by the Selling Management Stockholder shall and the Co-Selling Stockholders in proportion to the shares of Common Stock Transferred by such Selling Management Stockholder and Co-Selling Stockholders in connection with such Tag-Along Offer) the Duly Endorsed certificate or certificates representing the Common Stock to be Transferred by the Co-Selling Stockholders and all other documents reasonably required to be executed in connection with such Tag-Along Offer.
(d) Each Co-Selling Stockholder will have the right to require Transfer (and the proposed transferee Selling Management Stockholder will, to purchase from each such the extent necessary, reduce the amount or number of shares of Common Stock to be Transferred by the Selling Management Stockholder by a corresponding amount), pursuant to the Tag-Along Stockholder Offer, a number of shares of Common Stock up equal to the product obtained of the Desired Shares multiplied by multiplying a fraction (i) the "Tag-Along Ratio"), the numerator of which will be the aggregate amount or number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such TagCo-Along Selling Stockholder and the denominator of which shall will be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders Selling Management Stockholder and all TagCo-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Selling Stockholders.
(ce) Within The Selling Management Stockholder will have 90 Business Days from the end of the ten Business Day period referred to in paragraph (10b) days after above in which to consummate the date Transfer of Common Stock owned by which a Tagsuch Selling Management Stockholder and the Co-Along Stockholder notifies the Company or the Majority Selling Stockholders of its intent to exercise as contemplated by the Tag-Along OptionOffer at the price and on the terms contained in such notice. If, at the end of such 90 Business Day period, the Company or Selling Management Stockholder has not completed such Transfer, the Majority Stockholders shall notify such Tag-Along Stockholder right of the amount of Notes and number of Conversion Shares held by Selling Management Stockholder to effect such Tag-Along Stockholder that Transfer will be included in the sale terminate, and the date Common Stock of the Selling Management Stockholders subject to such proposed Transfer will to the Selling Management to all the restrictions on which the Sale of Control Transaction will be consummated, which shall be no later than the later of sale or other disposition and other provisions contained in this Agreement.
(if) twenty (20) days Immediately after the date by which each Holder was required consummation of the Transfer of Common Stock pursuant to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option Offer, the Escrow Agent will notify the Co-Selling Stockholders thereof and (ii) five (5) days after will remit to each Co-Selling Stockholder the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver total sales price attributable to the Proposed Transferee at Common Stock of such Co-Selling Stockholder sold pursuant thereto less a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee expenses incurred in connection with such Sale of Control Transaction and sale.
(g) Notwithstanding anything contained in this Section 2.3, there will be no liability on the determination part of the appropriate scope ofSelling Management Stockholders to any Stockholder (including any Co-Selling Stockholder) if the Transfer of Common Stock by the Selling Management Stockholder and any Co-Selling Stockholder pursuant to Section 2.3 is not consummated for whatever reason. The Management Stockholders, or limitations or exceptions toin their sole discretion, such representations and warranties. At will determine whether to effect a sale of Common Stock to any Person pursuant to this Section 2.3.
(h) In connection with any Transfer of Common Stock as to which the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such SK Holders have Tag-Along Stockholder that portion rights pursuant to this Section 2.3, the Transferee of the sale proceeds such Common Stock will not be required to which such execute a counterpart of this Agreement or become subject to this Agreement.
(i) No failure to exercise any rights or take any other action in respect of any Tag-Along Stockholder is entitled by reason of its participation therein (less Offer will affect any adjustments due to the conversion XX Xxxxxx'x rights in respect of any convertible securities subsequent Tag-Along Offer or the exercise of any exercisable securities)other rights hereunder.
Appears in 1 contract
Samples: Stockholders Agreement (Childrens Place Retail Stores Inc)
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale In connection with any proposed transfer by NEC permitted under Section 3 of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholdersall or a portion of its shares of Common Stock or Preferred Stock, as the case may be, within ten (10) days to any Third Party Purchaser, KEMET shall have the right to participate in such proposed transfer of receipt of Shares at a purchase price equal to the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell Offer Price and on the terms and conditions stated set forth in the Sale Notice.
Offering Notice by delivering written notice to NEC within twenty five (b25) Each Tag-Along Stockholder days after receipt of the Offering Notice required to be delivered by NEC pursuant to Section 4.1(a). If KEMET elects to participate in such transfer, KEMET shall have the right be entitled to require sell in the proposed transferee to purchase from each such Tag-Along Stockholder a transfer the number of shares of Common Stock up held by KEMET equal to the product obtained percentage of the Offered Securities (irrespective of whether such Offered Securities are shares of Common Stock or Preferred Stock) determined by multiplying dividing (iA) the aggregate total number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction then owned by KEMET by (iiB) a fraction, the numerator sum of which is (x) the aggregate total number of shares of Common Stock beneficially then owned on a fully diluted basis by such Tag-Along Stockholder KEMET and (y) the denominator of which shall be the aggregate total number of shares of Common Stock beneficially and Preferred Stock then owned on by NEC.
(b) In connection with any proposed transfer by KEMET permitted under Section 3 of all or a fully diluted basis by portion of its shares of Common Stock to any Third Party Purchaser, NEC shall have the Majority Stockholders and all Tag-Along Stockholders, and right to participate in such proposed transfer at a purchase price equal to the same proposed purchase price per share of Common Stock Stock, of such shares (the “Transfer Price”) and upon on the same terms and conditions set forth in a written notice (including without limitation time of payment and form of considerationthe “Transfer Notice) as delivered by KEMET to be paid and given NEC by delivering written notice to the Majority Stockholders.
KEMET within twenty five (c) Within ten (1025) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder receipt of the amount of Notes and Transfer Notice. If NEC elects to participate in such transfer, NEC shall be entitled to sell in the proposed transfer the number of Conversion Shares shares of Common Stock held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required NEC equal to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the shares of Common Stock proposed to be transferred by KEMET in the Transfer Notice (the “Transferred Shares”) determined by dividing (A) the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares number of shares of Common Stock owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder NEC by (B) the sum of (x) the total number of shares of Common Stock owned by NEC and (y) the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale total number of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation shares of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled Common Stock owned by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)KEMET.
Appears in 1 contract
Samples: Stockholders' Agreement (Kemet Corp)
Tag-Along Rights. If a majority (a) Subject to Section 2.1, if any member of the holders Dedman Stockholder Group (each x "Xxansferring Stockholder") shall desire to Transfer any shares of Common Stock in one transaction or a series of related transactions to any Person (including any Group), other than pursuant to a Permitted Transfer, and such Person (together with its Affiliates) beneficially owns, or such transaction or series of transactions will result in such Person (together with its Affiliates) beneficially owning more than 10% of the Company’s outstanding voting equity Equity Securities (collectivelyeither such transaction or series of related transactions, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”"Tag-Along Sale"), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated right (the “"Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”Right") to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt participate on a pro rata basis with such member of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Dedman Stockholder wishes to sell on the terms and conditions stated Group in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right xxxx Transfer and, in connection therewith, to require the proposed transferee to purchase from each such the Investor Stockholders, a number of the Investor Stockholders' shares of Common Stock (the "Tag-Along Stockholder Shares") equal to the product of (i) a fraction, the numerator of which is the number of shares of Common Stock up proposed to be sold by the product obtained by multiplying (i) Transferring Stockholder and the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator denominator of which is the aggregate number of shares of Common Stock beneficially owned as of such date by the Dedman Stockholder Group, muxxxxxxed by (ii) the number of shares of Common Stock beneficially owned by the Investor Stockholder Group as of such date. In the event that the proposed transferee is unwilling to purchase all of the shares of Common Stock that the Transferring Stockholder and Investor Stockholders propose to Transfer hereunder, the number of shares of Common Stock that a Stockholder, including the Transferring Stockholder, may sell pursuant to this Section 2.2(a) shall be determined, on a fully diluted basis pro rata basis, by such multiplying the maximum number of shares of Common Stock that the proposed transferee of the Tag-Along Shares is willing to purchase on the terms set forth in the Tag-Along Notice (as defined below) by a fraction, the numerator of which is the number of shares of Common Stock that such Stockholder proposes to sell hereunder (subject to the maximum amount for each Stockholder calculated pursuant to the preceding sentence) and the denominator of which shall be is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by that all Stockholders exercising rights under this Section 2.2, including the Majority Stockholders and all Tag-Along StockholdersTransferring Stockholder, and at the same price per share propose to sell hereunder. Any shares of Common Stock sold by the Investor Stockholders pursuant to this Section 2.2 shall be sold by the Investor Stockholders for the same consideration per share and upon the same terms and conditions as such proposed Transfer by any Transferring Stockholder (or no less favorable terms and conditions than those received by the Transferring Stockholder in any series of related transactions, taking such transactions as a whole).
(b) The Transferring Stockholder shall give prior written notice of such intended Tag-Along Sale to the Investor Stockholders at least 20 Business Days prior to the proposed consummation of such Tag-Along Sale. Such notice (the "Tag-Along Notice") shall set forth the terms and conditions of such proposed Tag-Along Sale, including the name of the proposed transferee, the number of shares of Common Stock proposed to be Transferred (including without limitation time the number of payment and form shares of consideration) as Common Stock previously or proposed to be Transferred to the applicable transferee or its Affiliates in a related transaction), the purchase price per share of Common Stock proposed to be paid therefor, the form of consideration (and given if such consideration consists in whole or in part of property other than cash, the Transferring Stockholder will provide such information, to the Majority Stockholdersextent reasonably available to such Transferring Stockholder, relating to such consideration as the Investor Stockholders may reasonably request in order to evaluate such non-cash consideration). The Tag-Along Right may be exercised by the Investor Stockholders upon delivery of a written notice to the Transferring Stockholder within 10 Business Days after the receipt of the Tag-Along Notice. Such written notice shall state the aggregate number of shares of Common Stock that the Investor Stockholders propose to include in such Transfer (provided that the aggregate number of shares of Common Stock the Investor Stockholders propose to include shall not exceed the number of Tag-Along Shares).
(c) Within ten (10) days after The closing of the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders purchase of its intent to exercise the Tag-Along Option, Shares shall take place concurrently with and at the Company or the Majority Stockholders shall notify such Tag-Along Stockholder location of the amount closing of Notes and number the Transfer of Conversion Shares held the shares by such Tag-Along the Transferring Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days within 20 Business Days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option Notice or within such other time as shall be agreed upon by the Transferring Stockholder and the Investor Stockholders selling Tag-Along Shares. At such closing, the purchaser thereof shall deliver the consideration to be paid to the Investor Stockholders (iiif such consideration includes cash, by wire transfer of federal or other immediately available funds in the appropriate amount to an account designated by the Investor Stockholders) five (5) days after against delivery of the satisfaction of any governmental approval certificates representing the Tag-Along Shares so purchased, duly endorsed in blank by the person or filing requirements, if anypersons in whose name a stock certificate is registered or accompanied by a duly executed assignment separate from certificate.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices The exercise or nonexercise of the Company (or such other place as rights of the parties agree), Investor Stockholders in this Section 2.2 to participate in one or more Notes or certificates, properly endorsed for transfer, which represent all Transfers by members of the Notes or Conversion Shares owned Dedman Stockholder Group shall xxx xdversely affect the Investor Stockholders' rights to participate in subsequent Transfers by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context members of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Dedman Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Group.
Appears in 1 contract
Tag-Along Rights. If a majority NantWorks and/or any of the holders of its Affiliates (other than the Company’s outstanding voting equity ) or Permitted Transferees (collectively, the an “Majority StockholdersInitiating Holder”) want proposes to consummate a transaction that constitutes a Sale sell any shares of Control Common Stock to an unaffiliated third party (a “Sale of Control TransactionTag Along Sale”), then the Majority Stockholder(sInitiating Holder shall deliver a notice (a “Tag Along Sale Notice”) shall notify to Verizon, Celgene, BlackBerry, NHealth, KHealth, Blackstone, Allscripts and each of the other Investors 3BE Members stating that the Initiating Holder proposes to effect a Tag Along Sale and providing the terms of the Tag Along Sale, and Verizon, Celgene, BlackBerry, NHealth, KHealth, Blackstone, Allscripts and each of the 3BE Members may each elect, by written notice to such proposed Sale of Control Transaction by a date which shall be not later than Initiating Holder given within fifteen (15) days prior from the date of the Tag Along Sale Notice, to sell on the same terms and conditions (on a per share basis) as the sale by such Initiating Holder up to the same percentage (the percentage so elected by Verizon, Celgene, BlackBerry, NHealth, KHealth, Blackstone, Allscripts and each of the 3BE Members is herein referred to as the “Elected Percentage”) of Verizon’s shares of Common Stock, Celgene’s shares of Common Stock, BlackBerry’s shares of Common Stock, NHealth’s shares of Common Stock, KHealth’s shares of Common Stock, Blackstone’s shares of Common Stock, Allscripts’ shares of Common Stock and each of the 3BE Members’ shares of Common Stock, respectively, as the percentage of the Initiating Holder’s Common Stock that such Initiating Holder proposes to sell. If Verizon, Celgene, BlackBerry NHealth, KHealth, Blackstone, Allscripts and/or any of the 3BE Members elects to sell the Elected Percentage of its Common Stock pursuant to this Section 4.4, then the Initiating Holder shall cause the proposed purchaser to purchase from Verizon, Celgene, BlackBerry, NHealth, KHealth, Blackstone, Allscripts, and each of the 3BE Members as applicable, and Verizon, Celgene, BlackBerry, NHealth, KHealth, Blackstone, Allscripts and each of the 3BE Members shall sell to the proposed purchaser, simultaneously with the sale by such Initiating Holder and on substantially the same terms and conditions (on a per share basis) as the sale by such Initiating Holder, the Elected Percentage of Verizon’s Common Stock, the Elected Percentage of Celgene’s Common Stock, the Elected Percentage of BlackBerry’s Common Stock, the Elected Percentage of NHealth’s Common Stock, the Elected Percentage of KHealth’s Common Stock, the Elected Percentage of Blackstone’s Common Stock, the Elected Percentage of Allscripts’ Common Stock and the Elected Percentage of the 3BE Members’ Common Stock; provided, that in connection with any Tag-Along Sale, (x) neither Verizon, Celgene, BlackBerry, NHealth, KHealth, Blackstone, Allscripts or any of the 3BE Members shall be required to agree to any non-competition covenant or other agreement restricting the business operations of Verizon, Celgene, BlackBerry, NHealth, KHealth, Blackstone, Allscripts or the 3BE Members or their respective Affiliates, (y) neither Verizon, Celgene, BlackBerry, NHealth, KHealth, Blackstone, Allscripts nor the 3BE Members shall be required to make or become liable in respect of any representations and warranties relating to the Company or specifically to any such Majority Stockholder(sHolder other than their self; and (z) entering into any definitive binding agreement indemnification provided by Verizon, Celgene, BlackBerry, NHealth, KHealth, Blackstone, Allscripts or any of the 3BE Members (other than with respect to the representations regarding their self-referenced in respect thereof the foregoing clause (y)) shall not exceed and shall be based on, the “Sale Notice’). Thereafterrelative purchase price being received by the Initiating Holder, each other Investor or Stockholder (each a “Verizon, Celgene, BlackBerry, NHealth, KHealth, Blackstone, Allscripts and the 3BE Members, respectively, in the Tag-Along Stockholder”) may cause Sale, on a several, not joint, basis, or solely with recourse to an escrow established for the Company or benefit of the proposed purchaser (the Initiating Holder’s, Verizon’s, Celgene’s, BlackBerry’s, NHealth’s, KHealth’s, Blackstone’s, Allscripts’ and the 3BE Members’ contribution to such Majority Stockholders escrow to effect be on a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and pro rata basis in accordance with the following provisions of this Section 3:
(a) The proceeds received from such Tag-Along Stockholders shall have Sale). The proceeds from the right, but not the obligation, to participate in the Proposed Tag Along Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) distributed to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that Initiating Holder and if participating in the Tag-Along Stockholder wishes to sell Sale, Verizon, Celgene, BlackBerry, NHealth, KHealth, Blackstone, Allscripts, and the 3BE Members pro rata based on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained sold by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer them in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Tag Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority StockholdersSale.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)
Appears in 1 contract
Tag-Along Rights. (a) If RSA proposes to Transfer (a majority "Tag-Along Sale") in any transaction or series of related transactions, other than a Market Transfer, Securities representing, in the aggregate, either (i) 25% or more in the aggregate of the holders outstanding Class A Common Stock (including for this purpose all Class A Common Stock issuable upon exercise of outstanding Warrants) and Class B Common Stock of the Company’s Company or (ii) 25% or more of the outstanding voting equity rights of capital stock of the Company (collectivelythe "RSA Threshold"), the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control one or more third parties who are not RSA Permitted Transferees (a “Sale of Control Transaction”"Proposed Purchaser"), then the Majority Stockholder(s) RSA shall notify (in the other Investors manner set forth in Section 2.02(b)) the Stockholders and the Company that the Stockholders have the right to sell to the Proposed Purchaser as part of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes Securities (or such lesser number as the Stockholders may elect pursuant to sell on Section 2.02(c)) at the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each closing of such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of Common Stock Transfer subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time conditions, on a pro rata basis, of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date proposed Transfer by which a RSA. The consideration per Tag-Along Stockholder notifies Security to be received by the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of be equal to the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later higher of (iA) twenty (20) days after the date proposed purchase price offered by which each Holder was required to notify the Company or the Majority Stockholders Proposed Purchaser for shares of its intent to exercise the Tag-Along Option Class A Common Stock and (iiB) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to proposed purchase price offered by the Proposed Transferee at a closing to be held at the offices Purchaser for shares of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liensClass B Common Stock; provided, however, that if the Tag-Along Sale includes a sale by RSA of any shares of Class B Preferred Stock or Warrants, if the purchase price for (x) a share of Class B Preferred Stock exceeds the lower of (1) the liquidation value of such share and (2) the fair market value of such share at the time the Proposed Purchaser made its proposal, or (y) a Warrant exceeds the fair market value of such Warrant at the time the Proposed Purchaser made its proposal, as applicable, such excess shall be shared pro rata with the Stockholders based on the number of Tag-Along Securities Transferred in such Tag-Along Sale. For the avoidance of doubt, the (i) Transfers by RSA Permitted Transferees shall be aggregated with any Transfers by RSA for purposes of determining whether such Transfers equal or exceed the RSA Threshold, (ii) RSA Permitted Transferees shall have the same rights and obligations as RSA under this Agreement and (iii) any transferee of any Stockholder (and any subsequent transferee) shall have the same rights and obligations as the Stockholders under this Agreement.
(b) RSA shall provide the Stockholders written notice (a "Tag-Along Sale Notice") by delivering such Tag-Along Sale Notice to the Stockholders not less than 15 days prior to the proposed date of consummation of the Tag-Along Sale (the "Tag-Along Sale Date"). Each Tag-Along Sale Notice shall be accompanied by a copy of any agreement relating to the Tag-Along Sale (if available and, if the provision thereof to the Stockholders shall be subject to an obligation of confidentiality, then the Stockholders shall provide in writing such undertaking of confidentiality as shall be reasonably required by RSA and/or the Proposed Purchaser) and, to the extent not set forth in such agreement, shall set forth: (i) the name and address of the Proposed Purchaser in the Tag-Along Sale; (ii) the class and the number of Securities proposed to be Transferred by RSA; (iii) the proposed material terms of such Transfer, including of any oral agreements, the proposed amount and form of consideration to be paid for such Securities expressed on a per Security basis for each class or type of Security included therein and the terms and conditions of payment offered by the Proposed Purchaser; (iv) the anticipated or approximate Tag-Along Sale Date; and (v) if the proposed Tag-Along Sale provides for any non-cash consideration, a description of such non-cash consideration adequate to allow valuation thereof. Upon request, RSA shall provide such additional information directly related to the Transfer of Tag-Along Securities in the Tag-Along Sale, including additional information with respect to the information set forth in clauses (i) through (v), as the Stockholders may reasonably request. RSA shall not enter into any confidentiality agreement in connection with a proposed Tag-Along Sale which would prohibit RSA from complying with this Section 2.02(b).
(c) If any of the Stockholders wishes to participate in the Tag-Along Sale then it shall provide written notice (a "Tag-Along Notice") to RSA no less than three business days prior to the Tag-Along Sale Date. The Tag-Along Notice shall set forth the number of Tag-Along Securities that such Stockholder desires to include in the Tag-Along Sale, but in no event shall such number, together with all Tag-Along Securities proposed to be included by all other Stockholders, exceed the maximum number of Tag-Along Securities permitted under the definition of such term. To the extent that the aggregate number of Tag-Along Securities specified in the Tag-Along Notices of all Stockholders exceeds the maximum number of Tag-Along Securities permitted under the definition of such term, the number of Tag-Along Securities of each Stockholder to be included in the Tag-Along Sale shall be determined on a pro rata basis according to the number of Tag-Along Securities proposed to be included in the Tag-Along Sale by each Stockholder. The Tag-Along Notice given by a Stockholder shall constitute such Stockholder's binding agreement to sell the Tag-Along Securities specified in the Tag-Along Notice on the terms and subject to the conditions, on a pro rata basis with RSA, described in the Tag-Along Sale Notice. Anything contained herein to the contrary notwithstanding, no Stockholder shall be required to incur any liability or make any representation or warranty or any covenant or indemnity unless RSA is required to incur substantially the same economic liability on a pro rata (or greater) basis and make substantially the same representation, warranty and indemnity on a pro rata (or greater) basis.
(d) If the Proposed Purchaser does not, through no fault of any Stockholder, consummate the purchase of all of the Tag-Along Securities offered for sale in accordance with the foregoing terms (or terms more favorable to the Stockholders) and procedures, then RSA shall not consummate the Tag-Along Sale of any of its Securities that equal or exceed the RSA Threshold to the Proposed Purchaser. If a Tag-Along Notice is not received by RSA prior to the three business day period specified above, RSA shall have the right to consummate the Tag-Along Sale without the participation of the Stockholders, but only on terms and conditions which are no more favorable to RSA (and in any event, at no greater a purchase price) than as stated in the Tag-Along Sale Notice and only if such Tag-Along Sale occurs on a date within 90 days of the Tag-Along Sale Date, or 120 days if the sole reason such Tag-Along Sale does not occur within 90 days is due to the failure to obtain regulatory approval. If such Tag-Along Sale does not occur within such 90 day period, or such 120 day period, if applicable, the Securities that were to be subject to such Tag-Along Sale thereafter shall again become subject to all of the conditions contained in Article II of this Agreement.
(e) Prior to the Tag-Along Sale Date, the participating Stockholder shall deliver its Tag-Along Securities to the Company, or at the Company's request, to its transfer agent, duly endorsed for transfer and all fully executed documents reasonably required in connection with such Tag-Along Sale or, if held in book-entry form through an account at The Depository Trust Company, shall make such other reasonably satisfactory arrangements to allow for the Transfer of such Tag-Along Securities. On the Tag-Along Sale Date, the Company or its transfer agent shall deliver the Tag-Along Securities to be sold in connection with the Tag-Along Sale to the Proposed Purchaser by delivering Tag-Along Securities against delivery of the consideration for the Tag-Along Securities described in the Tag-Along Sale Notice in the amount of the aggregate purchase price for such Tag-Along Securities, if and to the extent that such purchase price shall, in accordance with the terms of such Tag-Along Sale, be payable at the closing thereof. The Company or its transfer agent shall immediately remit such consideration to the relevant Stockholder. If the Tag-Along Sale does not occur as set forth above, the Company or its transfer agent shall immediately return such Tag-Along Securities to the relevant Stockholder.
(f) Any election in any instance by a Stockholder not to exercise its right to participate in a Tag-Along Sale under this Section 2.02 shall not constitute a waiver of such right with respect to any matter as to other subsequent proposed Transfer of Securities which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to would trigger such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)right.
Appears in 1 contract
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Each of the Stockholders agrees that from and after the date hereof, he shall have not Transfer, whether in a single transaction or in a series of linked transactions, more than fifty percent (50%), when aggregated with all such other Transfers made by such shareholder, of the rightCommon Stock then Beneficially Owned by him, but not the obligation, to participate in the Proposed Sale of Control Transaction on unless the terms and conditions herein stated of such Transfer shall include an offer to the Purchaser to include in the transfer to the proposed transferee (the “Tag-Along Option”), which right shall be exercisable upon written notice ("Third Party") at the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell Purchaser's Option and on the same price and on the same terms and conditions stated as apply to the Stockholder, an amount of Common Stock determined in the Sale Notice.
(b) Each Tag-Along Stockholder accordance with this Section 5.1. The Third Party shall have the right to require the proposed transferee be required to purchase from each the Purchaser, if the Purchaser desires to participate in such Tag-Along Stockholder a transaction, the number of shares of Common Stock up to Beneficially Owned by the product obtained Purchaser equaling the lesser of (x) the number derived by multiplying (i) the aggregate total number of shares of Common Stock subject which the Third Party proposes to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction purchase by (ii) a fraction, the numerator of which is shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis Beneficially Owned by such Tag-Along Stockholder the Purchaser and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis Beneficially Owned by the Majority Stockholders Purchaser and all the applicable Selling Shareholder or (y) such lesser number of shares as the Purchaser shall designate in the Tag-Along StockholdersNotice (defined below). If the Tag-Along Right results in the Purchaser including more shares of Common Stock Beneficially Owned by him in any Tag-Along Notice, than will, on the date of transfer by the Purchaser to the Third Party, have been converted into Common Stock, the Purchaser and the Company shall take such steps as are reasonably required to convert to Common Stock any Class AAA Preferred Stock and Supplemental Warrants to be purchased by the Third Party (at the Conversion Price for the Class AAA Preferred Stock being sold, and at the same price per share of Common Stock and upon prevailing Exercise Price for the same terms and conditions (including without limitation time of payment and form of considerationSupplemental Warrants being sold, by the Purchaser) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions Purchaser desires to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)
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Samples: Restructuring Agreement (Prometheus Homebuilders LLC)
Tag-Along Rights. (a) If a majority Wynn is the Transferor required to provide the Notice of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”Offer under Section 9(a), then the Majority Stockholder(sAruze and Baron shall each have a right (in addition to its rights under Section 9) shall notify the other Investors of to participate in such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior Transfer pursuant to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag10(a). During the fifteen-Along Stockholders shall have the rightday Refusal Period described in Section 9(a), but not the obligationeach of Aruze and Baron may, by written notice to Wynn, elect to participate in such Transfer and to sell that percentage of the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority StockholdersTotal Shares owned by Aruze or Baron, as the case may be, within ten (10) days of receipt of which is equal to the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Total Shares that will be sold by Wynn in such Transfer divided by the Tag-Along Stockholder wishes to sell on the Total Shares owned by Wynn. The terms and conditions stated of such Transfer (including the purchase price per Share sold in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fractionTransfer, the numerator identity of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder buyer(s), and the denominator consequences resulting from the other Stockholders' exercise of which shall be the aggregate number any rights of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of considerationfirst refusal) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required less favorable to notify the Company Aruze or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirementsBaron, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree)case may be, one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is than to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liensWynn; provided, however, that Wynn may enter into service, noncompetition, or similar agreements with respect to any matter as to the buyer and receive appropriate consideration thereunder in which a Tag-Along Stockholder shall agree to provide indemnification other Stockholders do not share.
(other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be b) If Aruze is the Transferor required to provide indemnification the Notice of Offer under Section 9(a), then Wynn and Xxxxx shall each have a right (in an amount addition to his or its rights under Section 9) to participate in such Transfer pursuant to the provisions of this Section 10(b). During the fifteen-day Refusal Period described in Section 9(a), each of Wynn and Baron may, by written notice to Aruze, elect to participate in such Transfer and to sell that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Total Shares owned by Wynn or Xxxxx, as the case may be, which is equal to the Total Shares that will be sold by Aruze in such Tag-Along StockholderTransfer divided by the Total Shares owned by Aruze. In additionThe terms and conditions of such Transfer (including the purchase price per Share sold in such Transfer, each Tag-Along Stockholder the identity of the buyer(s), and the Majority Stockholders shall reasonably cooperate and consult with each consequences resulting from the other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the Stockholders' exercise of any exercisable securities)rights of first refusal) shall be no less favorable to Wynn or Baron, as the case may be, than to Aruze; provided, however, that Aruze may enter into service, noncompetition, or similar agreements with the buyer and receive appropriate consideration thereunder in which other Stockholders do not share.
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Tag-Along Rights. If (a) In the event that, in connection with a majority proposed Sale of Shares by Wxxx or any of his Permitted Transferees during the Purchaser Tag-along Period (any such proposed Sale by Wxxx or any of his Permitted Transferees, a “Purchaser Tag-along Sale”), Purchasers will be afforded a tag-along right to participate in such proposed Sale in accordance with this Section 2.1. Wxxx agrees to use his commercially reasonable efforts to structure any such Sale in such a manner so as to afford each Purchaser that desires to Sell on the terms provided herein the right to Sell the same percentage of the holders total number of Shares owned by such Purchaser as the Company’s outstanding voting equity percentage that the Shares proposed to be sold by Wxxx and his Permitted Transferees represent of their aggregate beneficial Share ownership. In the event that the full number of Shares cannot be sold by Purchasers due to the exercise of prior tag-along rights under the Existing Agreements or otherwise, then Wxxx shall, and he shall cause his Permitted Transferees to, reduce the number of Shares they propose to Sell to a number of Shares such that the percentage of their aggregate beneficial Share ownership to be sold by Wxxx and his Permitted Transferees is equal to the highest percentage of Shares that may be sold by a Purchaser who has elected to Sell Shares (collectivelyallocating the Company Equity Securities available to be Sold by the Purchasers based on the relative numbers of Shares sought to be sold by each such Purchaser in their Purchaser Tag-along Notice). In the event no Shares can be sold by Purchasers electing to Sell Shares, the “Majority Stockholders”) want to Wxxx shall not, and he shall not permit his Permitted Transferees to, consummate a transaction that constitutes any such Purchaser Tag-along Sale. If Wxxx or any of his Permitted Transferees proposes a Sale of Control Shares during the Purchaser Tag-along Period, Wxxx shall deliver to each of the Purchasers a written notice (a “Purchaser Sale of Control TransactionNotice”), then which notice shall state (i) the Majority Stockholder(sname of the proposed Transferee, (ii) shall notify the number of shares to be sold (“Taggable Shares”) and the percentage of aggregate beneficial ownership proposed to be sold in such Sale by Wxxx and his Permitted Transferees, (iii) the proposed purchase price therefor, including a description of any non-cash consideration (along with any reports and other material documents (and summaries of any other material oral information) relevant to the valuation of such non-cash consideration which Wxxx or its Permitted Transferees has, so long as the Purchaser agrees to keep such reports, documents and information confidential), and (iv) the other Investors material terms and conditions of such the proposed Sale of Control Transaction by a Sale, including the proposed closing date (which shall date may not be not later less than fifteen (15) days prior Business Days after delivery of the Purchaser Sale Notice). Each Purchaser desiring to the Company or participate in any such Majority Stockholder(sSale shall deliver to Wxxx, within fifteen (15) entering into any definitive binding agreement in respect thereof Business Days after the delivery to all Purchasers of the Purchaser Sale Notice (the “Sale Notice’Response Period”). Thereafter, each other Investor or Stockholder a written notice (each a “Purchaser Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Optionalong Notice”), which right notice shall be exercisable upon written notice (the “Acceptance Notice”) state that such Purchaser elects to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice exercise its tag-along rights under this Section 2.1 and shall indicate state the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes sought to sell on the terms and conditions stated in the Sale Noticebe sold by such Purchaser.
(b) Each TagPurchaser, if it has elected to exercise its tag-Along Stockholder along rights provided under this Section 2.1, shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer participate in the Sale by delivering to Wxxx at the closing of Control Transaction immediately prior the Sale of the Shares of Wxxx and/or his Permitted Transferees to the Proposed Sale Transferee certificates representing the Shares to be sold by the Tagging Shareholder, duly endorsed for transfer, against payment of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same purchase price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholderstherefor.
(c) Within ten (10) days after Transfers by Wxxx to his Permitted Transferees or by one of his Permitted Transferees to him or another of his Permitted Transferees shall not be subject to the date by which a Tagtag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if anyalong rights provided under this Section 2.1.
(d) Each Tag-Along Stockholder may effect its participation in any Sale Notwithstanding the other provisions of Control Transactionthis Section 2.1, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter Block Trade of a Substantial Block (both as defined in the Existing Shareholders Agreement) under a registration statement pursuant to which Article IV of the Existing Shareholders Agreement, (i) the fifteen (15) Business Day period referred to in Section 2.1(a) shall be reduced to a three (3) Business Day period and (ii) the Purchaser Sale Notice may omit the name of the proposed Transferee and may specify the proposed minimum purchase price (in lieu of the purchase price).
(e) This Section 2.1 shall terminate without any further force and effect upon expiration of the Purchaser Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)along Period.
Appears in 1 contract
Tag-Along Rights. (i) If (A) a majority Selling Shareholder is Transferring Ordinary Shares or Series A-1 Preferred Shares to a Third Party Purchaser pursuant to Section 3.1(d), or (B) any Baidu Shareholder is Transferring Series Preferred Shares to a Third Party Purchaser prior to an Initial Public Offering, upon the consummation of which (1) the Baidu Shareholders collectively cease to hold the largest shareholding in the Company or (2) all Baidu Shareholders’ aggregate shareholding in the Company is below (x) 35% of the holders then outstanding Capital Stock of the Company’s outstanding voting equity Company on a fully-diluted and as-converted basis in the case of a Transfer to a strategic investor (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be determined in good faith by the Board of Directors and for the avoidance of doubt shall not later than fifteen include any investment fund or similar financial institution) or (15y) days prior to 50% of the then outstanding Capital Stock of the Company or on a fully-diluted and as-converted basis in the case of any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafterother Transfer, then each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause Rightholder shall have the Company or right to sell to such Majority Stockholders to effect a Transfer Third Party Purchaser, upon the terms set forth in the Tag Notice (as defined below), that number of Shares held by such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have Rightholder that is equal to the right, but not percentage of the obligation, Offered Securities proposed to participate in be sold by the Proposed Sale Selling Shareholder as determined by dividing (A) the total number of Control Transaction on Series Preferred Shares (as the terms and conditions herein stated (the “case may be) then owned by such Tag-Along Option”Rightholder exercising its right pursuant to this Section 3.1(e) by (B) the sum of (1) the total number of Series Preferred Shares then owned by all such Tag-Along Rightholders exercising their rights pursuant to this Section 3.1(e) and (2) the total number of Shares then owned by the Selling Shareholders (each determined on an as-converted basis). For purposes of Sections 3.1(e)(ii) to 3.1(e)(iv), which right “Selling Shareholders” shall include any Baidu Shareholder that proposes to Transfer any Series Preferred Shares pursuant to Section 3.1(e)(i) and “Offered Securities” shall include such Series Preferred Shares.
(ii) The Selling Shareholder and the Tag-Along Rightholder(s) exercising their rights pursuant to this Section 3.1(e) shall effect the sale of the Offered Securities and such Tag-Along Rightholder(s) shall sell the number of Offered Securities elected to be sold by such Tag-Along Rightholder(s) pursuant to this Section 3.1(e), and the number of Offered Securities to be sold to such Third Party Purchaser by the Selling Shareholder shall be exercisable upon reduced accordingly.
(iii) The Selling Shareholder shall give written notice (the “Acceptance Tag Notice”) to each Tag-Along Rightholder of each proposed sale by it of Offered Securities which gives rise to the Company and/or rights of the Majority StockholdersTag-Along Rightholders set forth in this Section 3.1(e), at least fifteen (15) Business Days prior to the proposed consummation of such sale, setting forth the name of such Selling Shareholder, the number of Offered Securities to be Transferred to the Third Party Purchaser, the total number of Shares held by such Selling Shareholder, the name and address of the proposed Third Party Purchaser, the proposed amount and form of consideration and any other material terms and conditions of payment offered by such Third Party Purchaser, the number of Shares that such Tag-Along Rightholder may sell to such Third Party Purchaser (determined in accordance with Section 3.1(e)(i)), and a representation that such Third Party Purchaser has been informed of the “tag-along” rights provided for in this Section 3.1(e) and has agreed to purchase Shares in accordance with the terms hereof. The tag-along rights provided by this Section 3.1(e) must be exercised by any Tag-Along Rightholder wishing to sell its Shares within ten (10) Business Days following receipt of the notice required by the preceding sentence, by delivery of a written notice to the Selling Shareholder indicating such Tag-Along Rightholder’s wish to exercise its rights and specifying the number of Shares (up to the maximum number of Shares owned by such Tag-Along Rightholder required to be purchased by such Third Party Purchaser) it wishes to sell, provided that any Tag-Along Rightholder may waive its rights under this Section 3.1(e) prior to the expiration of such ten (10) Business Day period by giving written notice to the Selling Shareholder, with a copy to the Company. The failure of a Tag-Along Rightholder to respond within such ten (10) Business Day period shall be deemed to be a waiver of such Tag-Along Rightholder’s rights under this Section 3.1(e). If a Third Party Purchaser fails to purchase Shares from any Tag-Along Rightholder that has properly exercised its tag-along rights pursuant to this Section 3.1(e), then the Selling Shareholder shall not be permitted to consummate the proposed sale of the Offered Securities, and any such attempted sale shall be null and void ab initio.
(iv) The closing of any sale of Shares under this Section 3.1(e) shall take place at the same time and place as the closing of the sale of Shares by the Selling Shareholder to the Third Party Purchaser pursuant to Section 3.1(d) or at such other time and place as the parties to the transaction may agree in writing. At such closing, if required by the definitive agreements governing such sale, the Tag-Along Rightholder shall deliver a duly executed share transfer form together with the share certificates representing the Shares being sold, and such Shares shall be free and clear of any Liens (other than those arising hereunder and those attributable to actions by the Third Party Purchaser) and the Tag-Along Rightholder shall so represent and warrant, and shall further represent and warrant that it is the sole beneficial and legal owner of such Shares. At the closing, the Third Party Purchaser or a paying agent (if so provided in the definitive agreements governing such sale) shall deliver to the Tag-Along Rightholder payment in full in immediately available funds for the Shares purchased by the Third Party Purchaser. In order to be entitled to exercise its rights pursuant to this Section 3.1(e), each electing Tag-Along Rightholder shall make substantially the same representations, warranties and indemnities as the Selling Shareholder makes in connection with its Transfer of Offered Securities; provided, however, that no Tag-Along Rightholder exercising its rights pursuant to this Section 3.1(e) shall become obligated or liable to any Person in connection with such Transfer, in excess of the lesser of (x) its pro rata share of such liability (vis-a-vis the Selling Shareholder) and (y) the gross proceeds realized by such Tag-Along Rightholder in such sale. The consideration paid to the Tag-Along Rightholder shall be in the same form, proportion (if the consideration is a combination of both cash and securities) and amount per Share and have the same rights as the consideration paid by the Third Party Purchaser to the Selling Shareholder, unless such sale of Shares is pursuant to a Sale Transaction, in which case, (A) the consideration paid with respect to any Series Preferred Shares, as the case may be, within ten (10) days shall be in the form and amount per Share determined and calculated based upon the rights and preferences of receipt such Series Preferred Shares in the event of a Sale Transaction as set forth in the Seventh Restated Articles, and nothing in this Agreement shall in any way limit or derogate from the rights and preferences of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Series Preferred Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with a Sale Transaction and (B) as a result of rights and preferences of the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable Series Preferred Shares in the context event of a Sale Transaction as set forth in the proposed Sale of Control TransactionSeventh Restated Articles, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that consideration paid with respect to any matter as such Series Preferred Shares, may have rights superior to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion the rights of the total liability for which such indemnification is sought, which pro rata portion shall be determined on consideration paid by the basis Third Party Purchaser with respect to other Capital Stock of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Company.
Appears in 1 contract
Samples: Shareholder Agreement (iQIYI, Inc.)
Tag-Along Rights. If (a) Notwithstanding anything in this Agreement to the contrary, except in the case of (i) transfers by the Stockholders to a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want Third Party Transferee referred to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”in Section 3.2(b), then (c), (d) and (e) hereof, (ii) transactions where rights are exercised pursuant to Section 4.2 hereof and (iii) sales pursuant to Article 5 hereof or in connection with a sale pursuant to Rule 144 under the Majority Stockholder(s) Securities Act of 1933, each Stockholder shall notify the other Investors refrain from effecting any transfer of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days Shares, Series A Preferred Stock or Class B Common Stock unless, prior to the Company or any consummation thereof, the other Stockholders shall have been afforded the opportunity to join in such Majority Stockholder(s) entering into any definitive binding agreement transfer on a pro rata basis, as --- ---- provided in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder this Section 4.1 (each such Stockholder, a “"Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”Person"), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Prior to consummation of such proposed transfer, the Stockholder proposing a transfer shall cause the person or group that proposes to acquire such shares (the "Proposed Purchaser") to offer in writing (the "Tag-Along Stockholder shall have the right to require the proposed transferee Offer") to purchase from each such Shares, Series A Preferred Stock or Class B Common Stock owned by the Tag-Along Stockholder a Person, such that the number of shares of Shares, Series A Preferred Stock or Class B Common Stock up so offered to be purchased from the Tag- Along Person shall be equal to the product obtained by multiplying (i) the aggregate number of shares of Shares, Series A Preferred Stock or Class B Common Stock subject proposed to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to be purchased by the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis Purchaser by such Tag-Along Person's Pro Rata Portion. If the Purchase Offer is accepted by any Tag-Along Person, then the number of Shares, Series A Preferred Stock or Class B Common Stock to be sold to the Proposed Purchaser by the Stockholder and proposing the denominator of which transfer, shall be reduced by the aggregate number of shares of Shares, Series A Preferred Stock or Class B Common Stock beneficially owned on a fully diluted basis to be purchased by the Majority Stockholders and all Proposed Purchaser from such Tag-Along Stockholders, and at the same price per share of Common Stock and upon Person pursuant thereto. Such purchase shall be made on the same terms and conditions (including without limitation time timing of payment and form receipt of consideration) as the Proposed Purchaser shall have offered to purchase Shares, Series A Preferred Stock or Class B Common Stock to be sold by the Stockholder who proposed the transfer (net, in the case of any options, warrants or rights, of any amounts required to be paid and given to by the Majority Stockholders.
(c) Within ten (10) days after the date by which a holder upon exercise thereof). The Tag-Along Stockholder notifies Person shall have 20 days from the Company date of receipt of the Pur chase Offer during which to accept such Purchase Offer, and the closing of such purchase shall occur within 30 days after such acceptance or the Majority Stockholders of its intent to exercise at such other time as the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale Person and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if anyProposed Purchaser may agree.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)
Appears in 1 contract
Tag-Along Rights. If (a) LJH may not and shall cause its Affiliates not to, transfer any Company Shares other than to a majority Permitted Transferee if such transactions, together with all Company Shares previously transferred by LJH to one or more third parties, would, if consummated, result in LJH transferring more than 25% of the holders aggregate number of Company Shares held by LJH (without giving effect to any previous transfers pursuant to Section 4.2(b) or (c) or this Section 4.4), unless each of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want Owl Creek Investors are offered a right to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof sell (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Tag Along StockholderRight”) may cause the their Company or Shares in such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only transfer with LJH. Any sale pursuant to and in accordance this Section 4.4 shall be made after compliance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”4.3(a), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have At least 20 days prior to any such transfer, LJH will deliver a sale notice to the right to require Owl Creek Investors specifying the proposed transferee to purchase from each such Tag-Along Stockholder a identity of the prospective transferee(s) and disclosing in reasonable detail the number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fractionCompany Shares, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummatedprice, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation payable solely in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held cash at the offices closing of the Company (transaction or such other place as the parties agree)in installments over time, one or more Notes or certificates, properly endorsed for transfer, which represent all a good faith estimate of the Notes or Conversion Shares owned by costs for such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, transfer and each Tag-Along Stockholder shall make such representations other terms and warranties, and shall enter into such agreements, as are customary and reasonable in the context conditions of the proposed Sale of Control Transactiontransfer, including, without limitation, representations the expected aggregate holdings (in terms of dollars and warranties (and indemnities with respect theretopercentage) that the Proposed Transferee by LJH of the Notes or Conversion Company Shares immediately after consummation of such proposed transfer. The Owl Creek Investors who elect to participate in the proposed transfer (or interests thereinthe “Tag Along Investors”) is receiving good shall deliver written notice of their election to participate to LJH prior to the expiration of such 20-day period.
(c) Each Tag Along Investor will be entitled to sell in such proposed transfer, at the same price and marketable title on the same terms as LJH, a number of Company Shares equal to the product of (x) the quotient determined by dividing the number of Company Shares then held by such Notes or Conversion Tag Along Investor by the aggregate number of Company Shares held by LJH and all Tag Along Investors multiplied by (or interests therein), free and clear y) the number of all pledges, security interests, or other liens; provided, however, that with respect Company Shares to any matter as be sold in such proposed transfer. The number of Company Shares proposed to which a Tag-Along Stockholder be transferred by LJH in the current transfer shall agree be reduced to the extent necessary to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-of Company Shares by each Tag Along Stockholder is entitled by reason of Investor exercising its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)rights hereunder.
Appears in 1 contract
Samples: Transaction Agreement (Timco Aviation Services Inc)
Tag-Along Rights. If a majority of the holders (a) So long as this Agreement shall remain in effect and an initial public offering of the Company’s outstanding voting equity 's capital stock shall not have occurred, if SFC or a Stockholder or Stockholders holding in the aggregate more than 50% of the shares of Common Stock or Debentureholder Common Stock, respectively (collectivelythe "Controlling Shareholder") wishes to transfer all or any portion of its or their shares of Common Stock to another person or business entity (the "Third Party Purchaser"), the “Majority Stockholders”Controlling Shareholder shall send written notice (the "Offering Notice") want to consummate a transaction that constitutes a Sale each holder of Control shares of Debentureholder Common Stock (a “Sale of Control Transaction”), then each an "Other Holder" and collectively the Majority Stockholder(s"Other Holders") shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen at least thirty (1530) business days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer proposed consummation of such other Stockholder’s Stock; in each casesale, only pursuant to and in accordance with setting forth the following provisions name of this Section 3:
(a) The Tag-Along Stockholders shall have such Third Party Purchaser, the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up proposed to be transferred by the Controlling Shareholder (for purposes of this section, the "Offered Shares"), the proposed amount and form of consideration and terms and conditions of payment offered by such Third Party Purchaser, the percent of Debentureholder Common Stock that such Other Holder may sell to such Third Party Purchaser (determined as set forth below) and a representation that such Third Party Purchaser has been informed of the "tag-along" rights (provided for in this Section 1.3) and has agreed to purchase shares of Debentureholder Common Stock in accordance with the terms thereof.
(b) Upon receipt of the Offering Notice, the Other Holders shall have the right to sell to such Third Party Purchaser, upon the terms and subject to the conditions set forth in the Offering Notice, that number of shares of Debentureholder Common Stock equal to the product obtained by multiplying of (ix) the aggregate number of Offered Shares and (y) a fraction with a numerator equal to the number of shares of Debentureholder Common Stock that such Other Holders own and a denominator equal to the number of shares of Common Stock subject to then owned by the Majority Stockholders Transfer in Controlling Shareholder plus the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate total number of shares of Debentureholder Common Stock beneficially then owned on a fully diluted basis by all Other Holders. If such TagThird Party Purchaser fails to purchase shares of Debentureholder Common Stock from any Other Holder that has properly exercised its tag-Along Stockholder along rights, then the Controlling Shareholder shall not be permitted to consummate the proposed sale of the Offered Shares, and any such attempted sale shall be null and void. The Controlling Shareholder shall effect the sale of the Offered Shares and the denominator number of which Offered Shares to be sold to such Third Party Purchaser by the Controlling Shareholder shall be reduced accordingly. The tag-along rights provided herein must be exercised by each Other Holder within fifteen (15) business days following its receipt of the aggregate Offering Notice, by delivery of a written notice to the Controlling Shareholder indicating such Other Holder's intention to exercise its rights and specifying the number of shares of Debentureholder Common Stock beneficially owned on a fully diluted basis by (up to the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share maximum number of shares of Debentureholder Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as owned by such Other Holder required to be paid and given purchased by such Third Party Purchaser) it wishes to the Majority Stockholderssell.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent In order to exercise its right to sell shares of Debentureholder Common Stock to the Tag-Along OptionThird Party Purchaser, each Other Holder must agree to make substantially the Company same representations, warranties, covenants, indemnities and other similar agreements, with respect to its title to the shares of Debentureholder Common Stock and such Other Holder's capacity, authority or the Majority Stockholders shall notify power to consummate or participate in such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the proposed sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along OptionThird Party Purchaser, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred Controlling Shareholder makes in connection with the Sale proposed sale by it of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in Offered Shares to the context of the proposed Sale of Control Transaction, including, without limitation, Third Party Purchaser; provided that all representations and warranties (shall be made several and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good not jointly, and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, provided further that with respect to any matter as to which a Tag-Along Stockholder such representations, warranties and agreements of Other Holders, the aggregate amount of such liability arising therefrom shall agree to provide indemnification (other than its own title to not exceed such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved Other Holder's net proceeds from participating in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)sale.
Appears in 1 contract
Tag-Along Rights. If (i) Except pursuant to (A) an Exempt Transfer, (B) a majority Public Sale or (C) Section 4 hereof, any holder of the holders Preferred Securities may elect to participate in any sale of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction Offered Securities by a date which shall be not later holder of Restricted Securities (other than fifteen (15Cisco Common Stock) days prior to the Company one or more third parties or to any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder Shareholder (each a “Tag-Along StockholderPurchaser”) may cause at the same price and on the same other terms and conditions applicable to the Transferring Shareholder by giving written notice of such election to the Transferring Shareholder within 30 days after delivery of the Offer Notice. In the event that the number of Offered Securities proposed to be Transferred as described in the Offer Notice (or, if such transaction is part of a group of related transactions, the aggregate number of Offered Securities to be Transferred to one or more Purchasers in all such related transactions) is equal to at least 30% of the aggregate number of the Common Stock then outstanding (on an as converted basis) and the price for the Offered Securities specified in the Offer Notice is greater than the sum of the aggregate purchase price paid to the Company or for such Majority Stockholders to effect Offered Securities at their initial issuance plus the accrued and unpaid dividends thereon, if any (such a Transfer being a “Common-Eligible Transfer”), then, (A) the Offer Notice shall promptly be delivered to the holders of Common Securities, and (B) each holder of Common Securities may elect to participate in such sale of Offered Securities to one or more Purchasers by giving written notice of such other Stockholder’s Stock; election to the Transferring Shareholder within 30 days after such delivery of the Offer Notice. In any such sale to one or more Purchasers, each holder of Restricted Securities shall receive in each case, only pursuant consideration of the Restricted Securities to be sold to such Purchaser(s) by such holder the same portion of the aggregate consideration from such transaction that such holder of Restricted Securities would have received in respect of such Restricted Securities if such aggregate consideration had been distributed in a dissolution and liquidation of the Company in accordance with the following provisions Certificate of this Section 3:Incorporation.
(aii) The TagIn any Common-Along Stockholders shall have Eligible Transfer, “Eligible Securities” means all Preferred Securities and all Common Securities then outstanding on an as converted basis and in the rightcase of Common Securities subject to an Executive Purchase Agreement, then fully vested, and in any other sale pursuant to Section 2(c)(i), “Eligible Securities” means all Preferred Securities then outstanding on an as converted basis. In any contemplated sale pursuant to Section 2(c)(i), the Transferring Shareholder and any holder that elects to participate in such sale will be entitled to include in such sale that number of Eligible Securities equal to the product of (x) the quotient determined by dividing the percentage of Eligible Securities held by such Shareholder by the aggregate percentage of Eligible Securities held by all participating Shareholders (including the Transferring Shareholder) times (y) the number of Offered Securities to be sold in such sale; provided that if any holder of Eligible Securities elects to include part, but not all, of such holder’s pro rata share, then the obligationnumber of Eligible Securities that any electing holder is eligible to include, but does not elect to include, in such sale may be sold in such sale by the Transferring Shareholder. For example, if the Offer Notice contemplated a sale of 1,000 shares of Preferred Stock by the Transferring Shareholder, and if the Transferring Shareholder at such time owns 55% of all Eligible Securities and if one other holder elects to participate and such holder owns 20% of all Eligible Securities, the Transferring Shareholder would be entitled to sell 733 Eligible Securities (55% divided by 75% (i.e., .55 ÷ .75) x 1,000 securities) and the other holder would be entitled to sell 267 Eligible Securities (20% divided by 75% (i.e., .20 ÷ .75) x 1,000 securities). If a Shareholder holds both Preferred Securities and Common Securities and elects to participate in a Common-Eligible Transfer, then the Proposed Sale ratio of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) number of Common Securities included in such sale by such holder to the Company and/or number of Preferred Securities included in such sale by such holder may not exceed the Majority Stockholders, as the case may be, within ten (10) days of receipt ratio of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or total number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares Securities held by such Tagholder to the total number of Preferred Securities on an as converted basis held by such holder. For example, if such holder holds 500 Preferred Securities and 250 Common Securities, then no more than one-Along Stockholder that will third (1/3) of the Eligible Securities to be included in the such sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to holder may be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Common Securities.
Appears in 1 contract
Tag-Along Rights. If (a) Except in the case of transfers to a majority of Permitted Transferee or which are otherwise permitted by Section 3.2, if the holders of the Company’s outstanding voting equity KPS Funds acting individually or in concert (collectively, the “Majority StockholdersSelling Funds”) want sells or otherwise transfers Capital Stock (other than transfers to consummate a Permitted Transferee pursuant to Section 3.2) in an amount equal to or greater than $2,000,000, in any one transaction that constitutes a Sale or series of Control (a “Sale of Control Transaction”)related transactions, then the Majority Stockholder(s) Selling Funds shall notify the other Investors of refrain from effecting such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days transaction unless, prior to the Company or consummation thereof, each other Shareholder shall have been afforded the opportunity to join in such sale as hereinafter provided in this Section 4.5.
(b) Prior to consummation of any such Majority Stockholder(s) entering into any definitive binding agreement sale, disposition or transfer of shares of Capital Stock described in respect thereof Section 4.5(a), the Selling Funds shall cause the Person or group that proposes to acquire such shares (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance NoticePurchaser”) to the Company and/or the Majority Stockholdersoffer in writing (“Purchase Offer”) to each other Shareholder to purchase shares of Common Stock or Preferred Stock, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares owned by such Shareholder, such that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up or Preferred Stock, as the case may be, so offered to be purchased from such Shareholder shall be equal to the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject or Preferred Stock, as the case may be, proposed to be purchased by the Majority Stockholders Transfer in Proposed Purchaser by such Shareholder’s applicable Pro Rata Share. If the Sale Purchase Offer is accepted by one or more of Control Transaction immediately prior such Shareholders, then the number of shares of Common Stock or Preferred Stock, as the case may be, to be sold to the Proposed Sale of Control Transaction Purchaser by (ii) a fraction, the numerator of which is Selling Funds shall be reduced by the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis or Preferred Stock, as the case may be, to be purchased by the Proposed Purchaser from such Tag-Along Stockholder and the denominator of which other Shareholders pursuant thereto. Such purchase shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and made at the same highest price per share of Common Stock and upon otherwise on the same terms and conditions (including without limitation time as the Proposed Purchaser shall have offered to purchase shares of payment and form of consideration) Common Stock or Preferred Stock, as the case may be, to be paid sold by the Selling Funds. The Purchase Offer shall set forth such terms and given conditions and identify the Proposed Purchaser and any Person that controls the Proposed Purchaser. Each Shareholder shall have 15 calendar days from the date of receipt of the Purchase Offer in which to accept such Purchase Offer (and, in the Majority Stockholders.
(c) Within ten (10) case of any such Shareholder holding Contingent Rights, to exercise such Contingent Rights and receive the shares of Common Stock which it is entitled to purchase upon such exercise, in order to participate in such Purchase Offer), and such acceptance shall be binding and irrevocable. The closing of such purchase shall occur not later than 30 days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liensacceptance; provided, however, that such 30 calendar day period may be extended for a reasonable time not to exceed 60 days to the extent reasonably necessary to comply with respect any filing requirements under the HSR Act or to obtain any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholdernecessary consents. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each event that a sale or other in order transfer subject to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties this Section 4.5 is to be made to a Proposed Purchaser who is not a Shareholder, the Selling Funds shall notify the Proposed Transferee in connection with such Sale of Control Transaction Purchaser that the sale or other transfer is subject to Section 3.3 and in the determination of the appropriate scope of, this Section 4.5 and shall ensure that no sale or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, other transfer is consummated without the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Purchaser first complying with this Section 4.5.
Appears in 1 contract
Samples: Shareholder Agreement (BRPP LLC)
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The TagSo long as this Agreement shall remain in effect, unless (x) a Public Offering of Common Stock shall have occurred or (y) Vestar and its Affiliates, but not any other Permitted Transferee of any thereof, beneficially own on a fully diluted basis an aggregate number of shares of Common Stock less than one-Along Stockholders third (1/3) of the number of shares of Common Stock beneficially owned on a fully diluted basis by Vestar on the date of its execution and delivery of this Agreement, with respect to any proposed Transfer by any of Vestar and its Affiliates (but not any other Permitted Transferee of any thereof) (in such capacity, a "Transferring Stockholder") of Common Stock, other than as provided in Sections 3.2 and 3.6, the Transferring Stockholder shall have the obligation, and each other Stockholder and its Permitted Transferees shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each Stockholder and its Permitted Transferees having and exercising such Tag-Along Stockholder right (a "TAGGING STOCKHOLDER") a number of shares of Common Stock up to the product obtained by multiplying (rounded up to the nearest whole number) of (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction quotient determined by (ii) a fraction, the numerator of which is dividing the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Tagging Stockholder and sought by the denominator of which shall Tagging Stockholder to be included in the contemplated Transfer by the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Transferring Stockholder plus the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by all Tagging Stockholders and sought by all Tag-Along StockholdersTagging Stockholders to be included in the contemplated Transfer and (ii) the total number of shares of Common Stock proposed to be directly or indirectly Transferred to the Transferee in the contemplated Transfer, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Transferring Stockholder, PROVIDED that in order to be entitled to exercise its right to sell shares of Common Stock to the proposed transferee pursuant to this Section 3.5, a Tagging Stockholder must agree to make to the Transferee the same representations, warranties, covenants, indemnities and agreements as the Transferring Stockholder agrees to make in connection with the proposed transfer of the shares of Common Stock of the Transferring Stockholder (except that in the case of representations and warranties pertaining specifically to the Transferring Stockholder, a Tagging Stockholder shall make the comparable representations and warranties pertaining specifically to itself, and except that in the case of covenants or agreements capable of performance only by certain Stockholders, such covenants or agreements shall be made only by such certain Stockholders) and PROVIDED FURTHER that all representations, warranties, covenants, agreements and indemnities made by the Transferring Stockholder and the Tagging Stockholders pertaining specifically to themselves shall be made by each of them severally and not jointly and PROVIDED FURTHER that each of the Transferring Stockholder and each Tagging Stockholder shall be severally (but not jointly) liable for breaches of representations, warranties, covenants and agreements of or (in the case of representations and warranties) pertaining to the Company and its Subsidiaries, and for indemnification obligations arising out of or relating to any such breach or otherwise pertaining to the Company and its Subsidiaries, on a pro rata basis, such liability of each such Stockholder not to exceed such Stockholder's pro rata portion of the gross proceeds of the sale. Any Tagging Stockholder that is a holder of Common Stock Equivalents and wishes to participate in a sale of Common Stock pursuant to this Section 3.5(a) shall convert into or exercise or exchange such number of Common Stock Equivalents for Common Stock as may be required therefor on or prior to the closing date of such Transfer.
(b) So long as this Agreement shall remain in effect, unless (x) a Public Offering of Common Stock shall have occurred or (y) Vestar and its Affiliates, but not any other Permitted Transferee of any thereof, beneficially own on a fully diluted basis an aggregate number of shares of Common Stock less than one-third (1/3) of the number of shares of Common Stock beneficially owned on a fully diluted basis by Vestar on the date of its execution and delivery of this Agreement, with respect to any proposed Transfer by any of Vestar and its Affiliates (but not any other Permitted Transferee of any thereof) (in such capacity, a "Transferring Preferred Stockholder"), of Junior Preferred Stock, other than as provided in Sections 3.2 and 3.6, the Transferring Preferred Stockholder shall have the obligation, and each other Stockholder and its Permitted Transferees which holds Junior Preferred Stock shall have the right, to require the proposed transferee to purchase from each such Stockholder and its Permitted Transferees having and exercising such right (a "Tagging Preferred Stockholder") a number of shares of Junior Preferred Stock up to the product (rounded up to the nearest whole number) of (i) the quotient determined by dividing the aggregate liquidation preference of all shares of Junior Preferred Stock owned by such Tagging Preferred Stockholder and sought by the Tagging Preferred Stockholder to be included in the contemplated Transfer by the aggregate liquidation preference of all shares of Junior Preferred Stock owned by the Transferring Preferred Stockholder plus the aggregate number of shares of Junior Preferred Stock beneficially owned on a fully diluted basis by all Tagging Preferred Stockholders and sought by all Tagging Preferred Stockholders to be included in the contemplated Transfer and (ii) the total number of shares of Junior Preferred Stock proposed to be directly or indirectly Transferred to the Transferee in the contemplated Transfer, and at the same price per share of Junior Preferred Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) to be given to the Transferring Preferred Stockholder, PROVIDED that in order to be entitled to exercise its right to sell shares of Junior Preferred Stock to the proposed transferee pursuant to this Section 3.5, a Tagging Preferred Stockholder must agree to make to the Transferee the same representations, warranties, covenants, indemnities and agreements as the Transferring Preferred Stockholder agrees to make in connection with the proposed transfer of Junior Preferred Stock of the Transferring Stockholder (except that in the case of representations and warranties pertaining specifically to the Transferring Preferred Stockholder, a Tagging Preferred Stockholder shall make the comparable representations and warranties pertaining specifically to itself, and except that in the case of covenants or agreements capable of performance only by certain Stockholders, such covenants or agreements shall be made only by such certain Stockholders) and PROVIDED FURTHER that all representations, warranties, covenants, agreements and indemnities made by the Transferring Preferred Stockholder and the Tagging Preferred Stockholders pertaining specifically to themselves shall be made by each of them severally and not jointly and PROVIDED FURTHER that each of the Transferring Preferred Stockholder and each Tagging Preferred Stockholder shall be severally (but not jointly) liable for breaches of representations, warranties, covenants and agreements of or (in the case of representations and warranties) pertaining to the Company and its Subsidiaries, and for indemnification obligations arising out of or relating to any such breach or otherwise pertaining to the Company and its Subsidiaries, on a pro rata basis, such liability of each such Stockholder not to exceed such Stockholder's pro rata portion of the gross proceeds of the sale.
(c) Within ten The Transferring Stockholder or Transferring Preferred Stockholder, as the case may be, shall give notice to all relevant Stockholders and their Permitted Transferees of each proposed Transfer giving rise to the rights of the Tagging Stockholders or Tagging Preferred Stockholders set forth in the first sentence of Section 3.5(a) or (10) b), as the case may be, at least 30 days after prior to the date proposed consummation of such Transfer, setting forth the name of the Transferring Stockholder or Transferring Preferred Stockholder, the number of shares of Common Stock and/or Junior Preferred Stock proposed to be so Transferred, the name and address of the proposed transferee, the proposed amount and form of consideration and other terms and conditions offered by which the proposed transferee, and a Tagrepresentation that the proposed transferee has been informed of the tag-Along along rights provided for in this Section 3.5 and has agreed to purchase shares of Common Stock and/or Junior Preferred Stock in accordance with the terms hereof. The tag-along rights provided by this Section 3.5 must be exercised by each Tagging Stockholder notifies or Tagging Preferred Stockholder within 15 days following receipt of the Company notice required by the preceding sentence, by delivery of a written notice to the Transferring Stockholder or Transferring Preferred Stockholder, as the Majority Stockholders of its intent case may be, indicating such Tagging Stockholder's or Tagging Preferred Stockholder's desire to exercise its rights and specifying the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along shares of Common Stock and/or Junior Preferred Stock it desires to sell. The Transferring Stockholder that will be included in or Transferring Preferred Stockholder, as the sale and the date on which the Sale of Control Transaction will be consummatedcase may be, which shall be no later than entitled under this Section 3.5 to Transfer to the later proposed transferee the number of (i) twenty (20) days after Securities equal to the date by which each Holder was required difference between the number referred to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and in clause (ii) five of paragraph (5a) days after or (b) above and the satisfaction aggregate number of any governmental approval or filing requirementsshares of Common Stock and/or Junior Preferred Stock set forth in the written notices, if any, delivered by the Tagging Stockholders or Tagging Preferred Stockholders pursuant to the preceding sentence (up to the maximum number of shares of Common Stock and/or Junior Preferred Stock beneficially owned by such Tagging Stockholder or Tagging Preferred Stockholder required to be purchased by the proposed transferee pursuant to the first sentence of Section 3.5(a) or (b)). If the proposed transferee fails to purchase shares of Common Stock or, as the case may be, Junior Preferred Stock from any Tagging Stockholder or Tagging Preferred Stockholder that has properly exercised its tag-along rights, then the Transferring Stockholder or Transferring Preferred Stockholder, as the case may be, shall not be permitted to make the proposed Transfer, and any such attempted Transfer shall be void and of no effect, as provided in Section 3.3 hereof.
(d) Each Tag-Along Stockholder may effect its participation in If any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company Tagging Stockholders and Tagging Preferred Stockholders exercise their rights under Section 3.5(a) or (or such other place b), the closing of the purchase of the Common Stock or, as the parties agree)case may be, one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that Junior Preferred Stock with respect to any matter which such rights have been exercised shall take place concurrently with the closing of the sale of the Transferring Stockholder's or, as the case may be, Transferring Preferred Stockholder's Common Stock and/or Junior Preferred Stock. No Transfer shall occur pursuant to which a Tag-Along Stockholder this Section 3.5 unless the transferee shall agree to provide indemnification (other than become a party to, and be bound to the same extent as its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented transferor by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In additionterms of, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance this Agreement pursuant to the Majority Stockholders in connection with the preparation provisions of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Section 5.6.
Appears in 1 contract
Samples: Subscription Agreement (Cluett Peabody & Co Inc /De)
Tag-Along Rights. If a majority On the date of the holders this Agreement, Xxxxxx X. Xxxxxxx owns 3,870,169 shares of Common Stock of the Company’s outstanding voting equity . If Xx. Xxxxxxx (collectively, the “Majority Stockholders”"Selling Investor") want shall receive and determine to consummate a transaction that constitutes a Sale of Control accept any bona fide written offer (a “Sale "Notice of Control Transaction”), then the Majority Stockholder(sOffer") shall notify the other Investors of such proposed Sale of Control Transaction by from a date buyer (which shall be not later include any person and its affiliates) to purchase or otherwise transfer for value, in one transaction or a series of related transactions, a number of shares equal to or greater than fifteen (15) days prior to 5% of the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (Common Stock owned by him as of the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions date of this Section 3:
(a) The Tag-Along Stockholders shall have the rightAgreement, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder eLot shall have the right to require participate in such transaction in the proposed transferee manner set forth in this Section; provided that this section shall not apply if all sales of Common Stock by the Selling Investor on or after the date of this Agreement amount in the aggregate to less than 1,000,000 shares of Common Stock (adjusted for stock dividends, stock splits, reverse stock splits, combinations, recapitalizations and reclassifications and other similar events affecting the Common Stock). The Selling Investor shall, promptly after its receipt of a Notice of Offer, send a copy thereof to the Company and eLot. eLot shall have the right to cause the Selling Investor to condition its sale to the buyer of any Common Stock owned by the Selling Investor on the simultaneous purchase from each by the buyer of such Tag-Along Stockholder a number of shares of Common Stock up owned by eLot as eLot may designate by written notice delivered to the product obtained Selling Investor within 5 days following the date on which the Notice of Offer is received; provided, however, that eLot may not so designate for purchase a number of shares of the Company's Common Stock greater than that number owned by multiplying it (i) giving effect to conversion of Series B Preferred Stock and the aggregate exercise of the Warrant as of such date), multiplied by a fraction the numerator of which is the number of shares of the Company's Common Stock owned by the Selling Investor which are subject to the offer of the Buyer and the denominator of which is the total number of shares of the Company's Common Stock then owned by the Selling Investor as of the date of this Agreement. The purchase price for each share of the Company's Common Stock subject to the Notice of Offer and the terms of such purchase shall be the same as are applicable to the Selling Investor's sale and shall be set forth in such Notice of Offer. No seller shall receive in connection with sales pursuant to this section any material consideration which is not shared with each other seller in proportion to the number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction sold by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholderseach.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)
Appears in 1 contract
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Section Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:Rights.
(a) The Tag-Along Stockholders Each of the Executive Shareholders ---------------- agrees that (i) from the date hereof through the third anniversary of the date hereof he shall have not Transfer, whether in a single transaction or in a series of linked transactions, more than ten percent (10%) per year, when aggregated with all such other Transfers made by such shareholder in such year, of the rightCommon Stock Beneficially Owned by him on the date hereof and (ii) from the third anniversary of the date hereof through the fourth anniversary of the date hereof he shall not Transfer, but not whether in a single transaction or in a series of linked transactions, more than five percent (5%), when aggregated with all such other Transfers made by such shareholder during such period, of the obligationCommon Stock Beneficially Owned by him on the date hereof, to participate in the Proposed Sale of Control Transaction on unless, the terms and conditions herein stated of such Transfer shall include an offer to the Purchaser to include in the transfer to the proposed transferee (the “Tag-Along Option”"Third Party"), which right shall be exercisable upon written notice (at the “Acceptance Notice”) Purchaser's option and on the same price and on the same terms and conditions as apply to the Company and/or Executive Shareholder, an amount of Preferred Stock and Common Stock held by the Majority Stockholders, as the case may be, within ten (10) days of receipt Purchaser determined in accordance with this Section 5.1. Each of the Sale Notice. Each Acceptance Notice Homebuilder Shareholders agrees that from and after the date hereof, he shall indicate not Transfer, whether in a single transaction or in a series of linked transactions, more than fifty percent (50%), when aggregated with all such other Transfers made by such shareholder, of the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on Common Stock then Beneficially Owned by him, unless the terms and conditions stated of such Transfer shall include an offer to the Purchaser to include in the Sale Notice.
(b) Each Tag-Along Stockholder transfer to the Third Party at the Purchaser's Option and on the same price and on the same terms and conditions as apply to the Homebuilder Shareholder, an amount of Preferred Stock and Common Stock determined in accordance with this Section 5.1. The Third Party shall have the right to require the proposed transferee be required to purchase from each the Purchaser, if the Purchaser desires to participate in such Tag-Along Stockholder a transaction, the number of shares of Common Stock up to Beneficially Owned by the product obtained Purchaser equaling the lesser of (x) the number derived by multiplying (i) the aggregate total number of shares of Common Stock subject which the Third Party proposes to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction purchase by (ii) a fraction, the numerator of which is shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis Beneficially Owned by such Tag-Along Stockholder the Purchaser and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis Beneficially Owned by the Majority Stockholders Purchaser and all the applicable Selling Shareholder or (y) such lesser number of shares as the Purchaser shall designate in the Tag-Along Stockholders, and at Notice (defined below). If the same price per share Tag-Along Right results in the Purchaser including more shares of Common Stock Beneficially Owned by him in any Tag-Along Notice, than will, on the date of transfer by the Purchaser to the Third Party, have been converted into Common Stock, the Purchaser and the Company shall take such steps as are reasonably required to convert to Common Stock any Preferred Stock to be purchased by the Third Party (at the prevailing Conversion Price(s) for the Preferred Stock being sold by the Selling Shareholder) which the Purchaser desires to transfer immediately prior to such transfer and contingent upon such transfer occurring, it being the same parties' intention that only Common Stock will be transferred to the Third Party pursuant to this Section 5.1. The Selling Shareholder shall notify the Company and the Purchaser of any proposed Transfer to which the provisions of this Section 5.1 apply. Each such notice shall set forth: (i) the name of the Third Party and the number of shares of Common Stock proposed to be transferred, (ii) the address of the Third Party, (iii) the proposed amount and form of consideration and terms and conditions (including without limitation time of payment offered by the Third Party, and form of consideration) as to be paid and given any other material terms pertaining to the Majority Stockholders.
Transfer (cthe "Third Party Terms") Within ten and (10iv) that the Third Party has been informed of the "Tag-Along Rights" provided for in this Section 5.1 and has agreed to purchase shares of Common Stock in accordance with the terms hereof. The Tag-Along Rights set forth above in this Section 5.1 may be exercised by the Purchaser by delivery of a written notice to the Company and the Selling Shareholder (the "Tag-Along Notice") within thirty (30) days after following receipt of the date by which notice specified in the preceding paragraph. The Tag- Along Notice shall state the number of shares of Common Stock that the Purchaser wishes to include in such transfer to the Third Party. Upon the giving of a Tag-Along Stockholder notifies Notice, the Company Purchaser shall be entitled and obligated to sell the number of shares of Common Stock set forth in the Tag- Along Notice to the Third Party on the Third Party Terms; provided, however, -------- ------- that neither the Selling Shareholder nor the Purchaser shall consummate the sale of any shares offered by it if the Third Party does not purchase all shares which the Selling Shareholder and the Purchaser are entitled and desire to sell pursuant hereto. After expiration of the thirty-day period referred to above, if the provisions of this Section have been complied with in all respects, the Selling Shareholder shall have the right for a sixty (60)-day period to transfer the shares of Common Stock to the Third Party on the Third Party Terms (or on other terms no more favorable to the Majority Stockholders Selling Shareholder) without further notice to the Purchaser, but after such sixty (60)-day period no such transfer may be made without again giving notice to the Purchaser of its intent the proposed transfer and complying with the requirements of this Section 5.1.
(b) At the closing of the transfer to any Third Party (of which the Selling Shareholder shall give the Purchaser who has elected to exercise the Tag-Along OptionRight provided by this Section 5.1 at least five (5) Business Days' prior written notice), the Company or Third Party shall remit to the Majority Stockholders shall notify such Tag-Along Stockholder Purchaser the consideration for the total sales price of the amount Common Stock of Notes the Purchaser sold pursuant thereto, against delivery by the Purchaser of certificates for such Common Stock, duly endorsed or with duly executed stock powers and number of Conversion Shares held the compliance by such Tag-Along Stockholder that will be included Shareholder with any other conditions to closing generally applicable to the Selling Shareholder and all Other Shareholders selling shares in such transaction.
(c) Notwithstanding the sale and the date on which the Sale of Control Transaction will be consummatedforegoing, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if anyRights provided by this Section 5.1 shall terminate upon a Termination Event.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)
Appears in 1 contract
Samples: Stockholders Agreement (Prometheus Homebuilders Funding Corp)
Tag-Along Rights. (a) If at any time the Sponsor Group proposes to enter into an agreement to sell or otherwise dispose of (directly or indirectly) for value any Company Securities, other than (i) a majority sale or disposition that would trigger piggy-back registration rights under Section 7 hereof, (ii) any direct or indirect Transfer of Stock to another member of the holders Sponsor Group or an Affiliate thereof, (iii) any Repurchase effected in compliance with Section 8 below or (iv) any customary syndications of up to 25% of the Company’s outstanding voting equity Company Securities directly or indirectly owned by the Sponsor Group (collectively, the “Majority Stockholders”) want such sale or other disposition for value being referred to consummate a transaction that constitutes a Sale of Control (as a “Sale of Control TransactionTag-Along Sale”), then then, except as provided in Section 4(g), the Majority Stockholder(sSponsor Group shall afford each member of each Management Stockholder Group whose Management Stockholder Group holds, in the aggregate, more than 100 Shares and/or vested Stock Equivalents that are exercisable (or would become vested and exercisable as a result of the Tag-Along Sale) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereaftereach, each other Investor or Stockholder (each individually, a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case” and, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the rightcollectively, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along OptionStockholders”), which right ) the opportunity to participate proportionately in such Tag-Along Sale in accordance with this Section 4. The maximum number of Shares that each Tag-Along Stockholder will be entitled to include in such Tag-Along Sale (such Tag-Along Stockholder’s “Tag-Along Allotment”) shall be exercisable upon written notice (the “Acceptance Notice”) equal to the Company and/or product (rounded up to the Majority Stockholders, as nearest whole number) of (x) the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares owned, or issuable upon exercise of any vested Stock Equivalents that are exercisable (or would become vested and exercisable as a result of the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each Sale), by such Tag-Along Stockholder a number as of shares the close of Common Stock up to business on the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction day immediately prior to the Proposed Sale of Control Transaction by Tag-Along Notice Date (iias defined in Section 4(b) hereof) and (y) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis Company Securities proposed by such the Sponsor Group to be Transferred directly or indirectly pursuant to the Tag-Along Stockholder Sale and the denominator of which is the total number of Company Securities directly or indirectly owned by the Sponsor Group as of the close of business on the day immediately prior to the Tag-Along Notice Date.
(b) The Sponsor Group shall provide each Tag-Along Stockholder with written notice (the “Tag-Along Sale Notice”) prior to the proposed date of the consummation of the Tag-Along Sale (the “Tag-Along Sale Date”). Each Tag-Along Sale Notice shall set forth: (i) the name and address of each proposed transferee in the Tag-Along Sale; (ii) the number of Company Securities that are proposed to be Transferred directly or indirectly by the Sponsor Group pursuant to the Tag-Along Sale; (iii) the proposed amount and form of consideration to be paid for such securities and the terms and conditions of payment offered by each proposed transferee; (iv) the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis Company Securities directly or indirectly held by the Majority Stockholders and all Sponsor Group as of the close of business on the day immediately prior to the date of the Tag-Along StockholdersSale Notice (the “Tag-Along Notice Date”); (v) the Tag-Along Stockholder’s Tag-Along Allotment, assuming the Tag-Along Stockholder elected to sell the maximum number of Shares permissible; and (vi) the anticipated Tag-Along Sale Date. For the avoidance of doubt, a Tag-Along Stockholder shall participate in the Tag-Along Sale at the same price per share of Common Stock and upon the same terms and conditions of the offer so accepted by the Sponsor Group, including representations, warranties, covenants, indemnities and agreements substantially similar to those to be made by the Sponsor Group (except that, (A) the only representations, warranties or covenants that any Management Stockholder would be required to make are with respect to his, her or its own ownership of the Shares to be sold by him, her or it (including without limitation time his, her or its ability to convey title free and clear of payment liens, encumbrances or adverse claims and form of reasonable covenants regarding confidentiality, publicity and similar matters) and (B) if the Tag-Along Sale involves any non-cash consideration) as to be paid and given , any rights or restrictions with respect to the Majority Stockholdersnon-cash consideration payable to each such member may be proportionate to the relative size of ownership of such non-cash consideration, such as entitlements to board seats or demand registration rights; provided, that (x) all representations, warranties and indemnities shall be made by the Sponsor Group and such members of a Management Stockholder Group transferring Shares pursuant to this Section 4 severally and not jointly, and (y) the liability of any member of a Management Stockholder Group would be limited to the lesser of such member’s pro rata share and the aggregate proceeds received by such member; provided, further that any such liability of such member shall be satisfied first by the return of any cash proceeds received by such member (including the cash proceeds from the sale of any securities or other non-cash consideration received by such member) and second by the return of any non-cash consideration (including securities) received by such member.
(c) Within Any Tag-Along Stockholder wishing to participate in the Tag-Along Sale shall provide written notice (the “Tag-Along Notice”) to the Sponsor Group and the Company no less than fifteen (15) Business Days after receipt of the Tag-Along Notice irrevocably electing to participate in such Tag-Along Sale. The Tag-Along Notice shall set forth the number of Shares that such Tag-Along Stockholder elects to include in the Tag-Along Sale, which may be less than or equal to, but which shall not exceed, such Tag-Along Stockholder’s Tag-Along Allotment. The Tag-Along Notice given by any Tag-Along Stockholder shall constitute such Tag-Along Stockholder’s irrevocable and binding agreement to sell the Shares specified in the Tag-Along Notice on the terms and conditions applicable to the Tag-Along Sale; provided, that in the event that there is any material adverse change in the terms and conditions of such Tag-Along Sale applicable to the Tag-Along Stockholder (including any material decrease in the purchase price that occurs other than pursuant to an adjustment mechanism set forth in the agreement relating to the Tag-Along Sale) after such Tag-Along Stockholder gives its Tag-Along Notice, then the Tag-Along Stockholder shall have the right to withdraw from participation in the Tag-Along Sale with respect to all of its Shares affected thereby. If the proposed transferee does not agree to consummate the acquisition of all of the Shares requested to be included in the Tag-Along Sale by any Tag-Along Stockholder on substantially identical material terms and conditions as are applicable to the Sponsor Group (and, in any event, at a per share price not less than that received by the Sponsor Group, except as the purchase price may be adjusted pursuant to any agreement relating to the relevant Tag-Along Sale), then the Sponsor Group shall not consummate the Tag-Along Sale of any of its shares of Stock to such transferee unless the shares of Stock of the Sponsor Group and the Tag-Along Stockholders to be Transferred are reduced or limited pro rata in proportion to the respective number of shares of Stock actually held, directly or indirectly, by the Sponsor Group and the Tag-Along Stockholders and all other material terms and conditions of the Tag-Along Sale are substantially identical for the Sponsor Group and the Tag-Along Stockholders (including the same price per share received by both the Sponsor Group and the Tag-Along Stockholders).
(d) If a Tag-Along Notice from any Tag-Along Stockholder is not received by the Sponsor Group prior to the lapse of the ten Business Day (1010 Business Day) period specified above, the Sponsor Group shall have the right to consummate the Tag-Along Sale without the participation of such Tag-Along Stockholder, who shall be deemed to have waived his or her rights hereunder, but only on terms and conditions which are no more favorable in any material respect to the Sponsor Group (and, in any event, at no greater a per share purchase price, except as the purchase price may be adjusted pursuant to any agreement relating to the relevant Tag-Along Sale) than as stated in the Tag-Along Sale Notice, and only if such Tag-Along Sale is consummated on a date within ninety (90) days after the date proposed Tag-Along Sale Date. If such Tag-Along Sale is not consummated within such ninety-day (90-day) period, the shares or interests that were to be subject to such Tag-Along Sale thereafter shall continue to be subject to all of the restrictions contained in this Section 4.
(e) On the Tag-Along Sale Date, each Tag-Along Stockholder shall deliver a certificate or certificates (if certificated) for the Shares to be sold by which such Tag-Along Stockholder in connection with the Tag-Along Sale, with undated stock powers duly endorsed in blank for Transfer by the registered owner or owners thereof, to the transferee free and clear of all liens, encumbrances and restrictions, in the manner and at the address indicated in the Tag-Along Sale Notice, against delivery of the purchase price for such Shares. Each Tag-Along Stockholder shall reimburse the Sponsor Group for its proportionate share (based on the consideration received) of the reasonable out-of-pocket costs and expenses incurred by the Sponsor Group in connection with any such Tag-Along Sale.
(f) The provisions of this Section 4 shall apply regardless of the form of consideration received in the Tag-Along Sale; provided, that, in the event the consideration to be paid in exchange for shares of Stock in a proposed Tag-Along Sale includes any securities, and the receipt thereof by a Tag-Along Stockholder notifies would require (as determined by the Company Sponsor Group in good faith upon the advice of its counsel) under applicable law (x) the registration or qualification of such securities or of any Person as a broker or dealer or agent with respect to such securities where such registration or qualification is not otherwise required by the receipt of such securities by the Sponsor Group or (y) the provision to any such Tag-Along Stockholder of any specified information regarding such securities or the Majority Stockholders of its intent issuer thereof that is not otherwise required to exercise be provided for in connection with the Tag-Along OptionSale, then, in either case of (x) or (y), in lieu of receiving such securities (as may be required by the Sponsor Group, in its sole discretion), the member of such Management Stockholder Group may, at the Sponsor Group’s direction, receive cash consideration equal to the fair market value of such securities.
(g) In lieu of the Sponsor Group providing to any Tag-Along Stockholder the opportunity to participate proportionately in such Tag-Along Sale in accordance with this Section 4, at the election of the Sponsor Group, the Company may instead afford to such Tag-Along Stockholder the right to cause the Company to redeem for cash a number of Shares up to such Tag-Along Stockholder’s Tag-Along Allotment at the same price per Share received by the Sponsor Group in such Tag-Along Sale (or, if the Sponsor Group received securities in connection with such Tag-Along Sale, cash per Share equal to the fair market value of such securities (plus cash, if any) per Share received by the Sponsor Group, as such value is determined by the Sponsor Group in its sole discretion). The Sponsor Group and the Company shall provide such Tag-Along Stockholder with written notice of such redemption right (a “Redemption Notice”), which Redemption Notice may be provided either prior to or within one (1) month after the Majority Stockholders consummation of the applicable Tag-Along Sale and shall notify include the anticipated date of such redemption, which date shall be no later than ninety (90) days after the consummation of the Tag-Along Sale. Any such Tag-Along Stockholder wishing to participate in such redemption shall provide written notice to the Sponsor Group and the Company, no less than fifteen (15) Business Days after receipt of by such Tag-Along Stockholder of the amount Redemption Notice, irrevocably electing to participate in such redemption. For the avoidance of Notes and number of Conversion Shares held by doubt, in the event the Sponsor Group elects to provide any such Tag-Along Stockholder that will be included the redemption rights set forth in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Sharesthis Section 4(g), such Tag-Along Stockholder shall not be entitled to receive a Tag-Along Sale Notice or otherwise participate in no the Tag-Along Sale as provided pursuant to the other provisions of this Section 4. Furthermore, in the event be required a Redemption Notice is provided prior to provide indemnification in an amount that would exceed its pro rata portion the consummation of the total liability for which such indemnification is soughtapplicable Tag-Along Sale, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by and such Tag-Along Stockholder. In additionSale is not consummated by the Sponsor Group, each Tag-Along Stockholder the redemption right provided in such Redemption Notice shall automatically expire and be of no force and effect.
(h) The rights set forth in this Section 4 shall terminate immediately prior to the earlier to occur of a Change in Control and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Initial Public Offering.
Appears in 1 contract
Tag-Along Rights. (a) If Xxxxxxxx or any of his Permitted Transferees (the "TAG-ALONG TRANSFEROR") wishes to transfer Securities owned by such Person (in a majority transaction in which, if subject to the provisions of Section 2.3, such Person shall not have accepted the offer, if any, by the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”Whitney Securities to purchase such Securities) want to consummate any Person other than a transaction that constitutes a Sale of Control Permitted Transferee (a “Sale of Control Transaction”"TAG-ALONG TRANSFEREE"), then each Party other than the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”Transferor and his Permitted Transferees (each such Party, a "TAG-ALONG PARTY") may cause shall have the Company or right (the "TAG-ALONG RIGHT") to require, as a condition to such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with by the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the rightTransferor of such Securities, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to Transferee purchase from each such Tag-Along Stockholder a Party, at the same price and on the same terms and conditions as involved in the Transfer by the Tag-Along Transferor, up to that number of shares of Outstanding Common Stock up to Shares owned by such Tag-Along Party equaling the product obtained number derived by multiplying (i) the aggregate total number of shares of Outstanding Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction Shares owned by such Tag-Along Party by (ii) a fraction (A) the numerator of which is the actual number of Outstanding Common Shares to be Transferred to the Tag-Along Transferee by the Tag-Along Transferor as set forth in the Tag-Along Offer Notice and (B) the denominator of which is the aggregate number of Outstanding Common Shares owned by Xxxxxxxx and his Permitted Transferees immediately prior to such Transfer. Notwithstanding the foregoing, in the event the Tag-Along Transferee is unwilling to purchase the sum of the aggregate number of Securities that the Tag-Along Transferor and the Tag-Along Parties (and each of them) desire to Transfer to the Tag-Along Transferee pursuant hereto, the Tag-Along Transferor and each Tag-Along Party who desires to Transfer Securities to the Tag-Along Transferee shall be entitled to Transfer only that number of Outstanding Common Shares equal to the number of Outstanding Common Shares which such Party desires to Transfer to such Tag-Along Transferee, as set forth in its Tag-Along Notice or, in the case of the Tag-Along Transferor, in the Tag-Along Offer Notice, multiplied by a fraction, the numerator of which is the aggregate total number of Outstanding Common Shares which the Tag-Along Transferee is willing to acquire and the denominator of which is the total number of Outstanding Common Shares which the Tag-Along Transferor and all of the Tag-Along Parties wish to Transfer to such Tag-Along Transferee (all as set forth, as applicable, in the Tag-Along Offer Notice and the Tag-Along Notices).
(b) Unless the Tag-Along Transferee shall agree to the contrary, prior to any Transfer to the Tag-Along Transferee, the Tag-Along Transferor and the Tag-Along Parties shall exercise, convert or exchange such number of their Derivative Securities as may be necessary so that only shares of Common Stock beneficially are Transferred.
(c) If a Tag-Along Transferor proposes to Transfer any Securities in a transaction subject to this Section 2.4, it shall notify the Whitney Notice Parties in writing of such proposed Transfer (a "TAG-ALONG OFFER Notice"). Such Tag-Along Offer Notice shall set forth: (i) the name of the Tag-Along Transferee, (ii) the number and nature of the Securities proposed to be Transferred, (iii) the proposed amount and form of consideration and all other material terms and conditions of such offer, including the date of the proposed Transfer and all applicable representations, indemnities and other contract provisions required by the Tag-Along Transferee (the "TAG-ALONG TRANSFEREE TERMS"), (iv) the total number and nature of Securities owned by the Tag-Along Transferor and Xxxxxxxx and his Permitted Transferees and (v) that the Tag-Along Transferee has been informed of the Tag-Along Right provided for in this Section 2.4 and has agreed to purchase Securities subject hereto in the manner set forth in Subsections 2.4(a) and (b). The Tag-Along Right may be exercised by any Tag-Along Party by delivery of a written notice to the Tag-Along Transferor (the "TAG-ALONG NOTICE") within ten (10) days following delivery of the Tag-Along Offer Notice (the "TAG-ALONG NOTICE DEADLINE") setting forth the number of Securities the Tag-Along Party wishes to sell to the Tag-Along Transferee. The failure by any Tag-Along Party to provide the Tag-Along Notice on a fully diluted basis or before the Tag-Along Notice Deadline shall be deemed to be an election by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent Party not to exercise the Tag-Along OptionRight with respect to the transaction described in the Tag-Along Offer Notice.
(d) Upon delivery of a Tag-Along Notice, each participating Tag-Along Party shall be obligated to sell to the Company or Tag-Along Transferee the Majority Stockholders number of Securities set forth in its Tag-Along Notice (but not to exceed the number determined in accordance with subparagraph (a) of this Section 2.4) subject to the Tag-Along Transfer Terms (including the same representations, indemnities and the like made by the Tag-Along Transferor). Notwithstanding the foregoing, no participating Tag-Along Party shall notify be required to provide indemnification to the Tag-Along Transferee (i) other than on a several (and not joint and several) basis and (ii) in excess of the proceeds actually received by such participating Tag-Along Party. The Tag-Along Transferor and each of the Tag-Along Parties shall bear their own costs and expenses related to the Tag-Along Transfer.
(e) The Tag-Along Parties electing to participate in the sale of Securities to the Tag-Along Transferee (and each of them) shall execute and deliver to Holdings within fifteen (15) business days after delivery to such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held Parties for such execution, all documents required to be executed by each such Tag-Along Stockholder Party in order to consummate the sale, subject to the limitations on liability contained in Section 2.4(d) above.
(f) In the event that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option Transfer Terms are at any time changed in any material respect (including any decrease in the applicable purchase price) prior to the consummation of the Tag-Along Transfer, the Tag-Along Transferor shall notify each of the Tag-Along Parties, and (ii) each of the Tag-Along Parties shall have the right, exercisable at any time within five (5) days after the satisfaction of any governmental approval or filing requirementsfollowing delivery thereof, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of to withdraw its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along-Transfer by so notifying the Tag-Along Option, shall deliver to Transferor and Holdings.
(g) To the Proposed Transferee at a closing to be held at extent that the offices of the Company Tag-Along Parties (or such other place as any of them) elect not to participate in the parties agree)Transfer described in the Tag-Along Offer Notice, one the Tag-Along Transferor shall have the right at any time within ninety (90) days following the Tag-Along Notice Deadline to Transfer all or more Notes or certificates, properly endorsed for transfer, which represent substantially all of the Notes or Conversion Shares owned by such Securities proposed to be Transferred, as set forth in the Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, Transfer Notice (and each that are not being sold by participating Tag-Along Stockholder shall make such representations and warrantiesParties) to the Tag-Along Transferee; provided that the terms of the Transfer, and shall enter into such agreementstaken as a whole, as are customary and reasonable substantially similar to those set forth in the context Tag-Along Notice.
(h) At the closing of the proposed Sale Transfer of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title Securities to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification Transferee (other than its own title to such Notes or Conversion Shares), such of which the Tag-Along Stockholder Transferor shall give each participating Tag-Along Party at least five (5) days' prior written notice), the Tag-Along Transferee shall remit to Holdings the consideration for the total sales price of Securities of such Parties sold pursuant hereto, against delivery by such Parties of such evidence of ownership of such Parties' Securities as may be requested by the Tag-Along Transferee, and the compliance by such Parties with any other conditions to closing generally applicable to the Tag-Along Transferor and all participating Tag-Along Parties. Holdings shall, as soon as practicable but in no event be required later than the business day next following the closing, remit to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, Transferor and each participating Tag-Along Stockholder Party its portion of such consideration.
(i) If any proposed Transfer contemplated by Sections 2.4(e) and (g) above is terminated or is otherwise not consummated for any reason (in the Majority Stockholders shall reasonably cooperate and consult with each other case of Transfers contemplated by Section 2.4(g) within the ninety (90) day period in order to effect which such Transfer may be made), the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance Transferor shall, without prejudice to the Majority Stockholders in connection with the preparation of disclosure schedules relating its rights hereunder to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such deliver a subsequent Tag-Along Stockholder that portion Notice, provide written notice of such termination to the sale proceeds other Parties and shall promptly return to all Tag-Along Parties who elected to participate in such Transfer all documentation which such Tag-Along Stockholder is entitled by reason of its participation therein Parties had previously delivered to Holdings in connection with such Transfer.
(less any adjustments due j) Notwithstanding anything contained herein to the conversion of any convertible securities or contrary, this Section 2.4 shall not apply to: (i) Transfers to Permitted Transferees and (ii) Transfers with respect to which the exercise of any exercisable securities)Xxxxxxxx Transferors have exercised a right to compel sale pursuant to Section 2.5.
Appears in 1 contract
Samples: Stockholders' Agreement (Roller Bearing Co of America Inc)
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have To the rightextent Xxxxxxx does not exercise his right of first refusal as to the Disposition of the Offered Shares pursuant to Section 5, but not the obligation, then Xxxxxxx may elect to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and Disposition at the same price per share of Common Stock Share as that offered to and upon subject to the same material terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agreegroup of Stockholders), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that Xxxxxxx may not -------- ------- elect to participate in such Disposition if the purchaser is willing to purchase Shares of Preferred Stock only.
(b) The election pursuant to Subsection 6(a) above shall be exercised by giving written notice to the Stockholder (or group of Stockholders) within the Exclusive Period. If Xxxxxxx gives notice of his election to sell, he shall be obligated to sell the number of Shares specified in his notice upon the terms and subject to the conditions specified in Subsection 6(a) above to the proposed purchaser, conditional upon the closing of the Disposition.
(c) If the purchaser pursuant to the Disposition has a specified limited number of (i) Shares of Common Stock that it is willing to purchase in the aggregate, Xxxxxxx shall have the right to sell to the purchaser up to that number of Shares of Common Stock owned by Xxxxxxx which is in the same proportion to his total ownership of Shares of Common Stock as the number of Shares being sold by the Stockholder (or group of Stockholders) is to the total number of Shares of Common Stock owned by the Stockholder (or group of Stockholders); and (ii) Shares of Common Stock and Preferred Stock that it is willing to purchase, Xxxxxxx shall have the right to sell to the purchaser up to that number of Shares of Common Stock owned by Xxxxxxx which is in the same proportion to his total ownership of Shares of Common Stock as the number of Shares of Common Stock into which the Shares of Preferred Stock being sold by the Stockholder (or group of Stockholders) is convertible at the time of such Disposition is to the number of Shares of Common Stock into which the total number of Shares of Preferred Stock owned by the Stockholder (or group of Stockholders) is convertible at the time of such Disposition.
(d) If Xxxxxxx gives notice during the Exclusive Period of his election to participate in the Disposition, then Xxxxxxx will use his best efforts to cooperate in the Disposition and will take all necessary and desirable actions in connection with respect to any matter as to which a Tag-Along Stockholder the consummation of the Disposition, including, but not limited to, (i) the provision of reasonable and customary representations and warranties; provided, however, that Xxxxxxx shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event not be -------- ------- required to provide indemnification in an amount that would exceed its incur more than his pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tagany out-Along Stockholder. In addition, each Tagof-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee pocket expenses in connection with such Sale Disposition which are not reimbursed by the Stockholder (or group of Control Transaction Stockholders); and provided further that Xxxxxxx shall not be -------- ------- required to provide different representations and warranties or indemnification than any other selling participant in the determination Disposition and (ii) the closing of such Disposition within twenty (20) days of such notice or on such other date as is provided in the appropriate scope ofDisposition Notice.
(e) If Xxxxxxx fails to notify the Stockholder (or group of Stockholders) during the Exclusive Period, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee then Xxxxxxx shall remit directly be deemed to each such have waived his Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Right.
Appears in 1 contract
Tag-Along Rights. If a majority (i) Except in the case of (i) any transfer of Shares by any Clarion Stockholder on the Closing Date to any manager or employee of the holders of the Company’s outstanding voting equity Company or to any Additional Stockholder or (collectivelyii) a transfer pursuant to Section 3.1(g), the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control if any Clarion Stockholder (a “Sale Tag-Along Selling Stockholder”) seeks to transfer Shares to one or more third parties other than a Permitted Transferee (a “Tag-Along Purchaser”) in any one transaction or series of Control Transactionrelated transactions, representing more than five percent (5%) of the Shares (determined based on the applicable class of Shares being transferred) then held by such Tag-Along Selling Stockholder, then each Regions Stockholder and each Additional Stockholder (each, a “Tag-Along Rightholder”) shall have the right to sell to such Tag-Along Purchaser, upon the terms set forth in the Tag-Along Notice (except that the purchase price payable to the Tag-Along Rightholders and the Tag-Along Selling Stockholder in respect of any Common Stock Equivalents and/or Preferred Stock Equivalents sold in such transaction shall be net of the exercise price thereof, if any) that number of Shares specified by the Tag-Along Rightholder of each class of Shares proposed to be transferred by such Clarion Stockholder, up to that number equal to the percentage of the number of Shares of such class proposed to be transferred by the Tag-Along Selling Stockholder (the “Tag-Along Offered Securities”) determined by dividing (A) the total number of Common Shares (other than Common Stock Equivalents granted under any Company Option Plan) or Preferred Shares (other than Preferred Stock Equivalents granted under any Company Option Plan), as applicable, then owned by such Tag-Along Rightholder by (B) the Majority Stockholder(ssum of (x) the total number of Common Shares (other than Common Stock Equivalents granted under any Company Option Plan) or Preferred Stock (other than Preferred Stock Equivalents granted under any Company Option Plan), as applicable, then owned by all such Tag-Along Rightholders exercising their rights pursuant to this Section 3.1(f)(i), (y) the total number of Common Shares then owned by any other Person that is entitled to participate in such sale, and (z) the total number of Common Shares or Preferred Shares, as applicable, then owned by the Clarion Stockholders. The Tag-Along Selling Stockholder shall effect the sale of the Tag-Along Offered Securities and the Tag-Along Rightholder(s) shall notify sell the other Investors number and class of Shares to be sold by such proposed Sale Tag-Along Rightholder(s) pursuant to this Section 3.1(f)(i), and the number and class of Control Transaction Shares to be sold to such Tag-Along Purchaser by a date which the Tag-Along Selling Stockholder shall be not later than reduced accordingly.
(ii) The Tag-Along Selling Stockholder intending to transfer Shares to a Tag-Along Purchaser shall give written notice to each Tag-Along Rightholder of each proposed transfer by it of Shares which gives rise to the rights of the Tag-Along Rightholders set forth in this Section 3.1(f), at least fifteen (15) days prior to the Company or any proposed consummation of such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (transfer, setting forth the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “name of such Tag-Along Selling Stockholder”) , the number of Tag-Along Offered Securities, the class of Shares represented by the Tag-Along Offered Securities, the name and address of the proposed Tag-Along Purchaser, the proposed amount and form of consideration and terms and conditions of payment offered by such Tag-Along Purchaser and the percentage of each class of Shares that such Tag-Along Rightholder may cause the Company or sell to such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and Tag-Along Purchaser (determined in accordance with the following provisions of this Section 3:
(a3.1(f)(i)) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along OptionNotice”), which right shall . The tag-along rights provided by this Section 3.1(f) must be exercisable upon written notice exercised by any Tag-Along Rightholder wishing to sell its Shares within fifteen (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (1015) days of following receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes Notice, by delivery of a written notice to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Selling Stockholder shall have the right to require the proposed transferee to purchase from each indicating such Tag-Along Stockholder a Rightholder’s wish to exercise its, her or his rights and specifying the number of shares of Common Stock Tag-Along Offered Securities (up to the product obtained by multiplying (i) the aggregate maximum number of shares of Common Stock subject Tag-Along Offered Securities as determined in accordance with Section 3.1(f)(i)) it wishes to the Majority Stockholders Transfer in the Sale of Control Transaction immediately sell, provided that any Tag-Along Rightholder may waive its rights under this Section 3.1(f) prior to the Proposed Sale expiration of Control Transaction such 15-day period by (ii) giving written notice to the Tag-Along Selling Stockholder, with a fraction, copy to the numerator Company. The failure of which is the aggregate number a Tag-Along Rightholder to respond within such 15-day period shall be deemed to be a waiver of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder Rightholder’s rights under this Section 3.1(f), and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, Selling Stockholder may effect the sale of Shares to the Tag-Along Purchaser within a period of ninety (90) days after the date of the Tag-Along Notice without the participation of such non-participating Tag-Along Rightholder. Any such sale shall be made only to Tag-Along Purchaser identified in the Tag-Along Notice and at the same price per share of Common Stock and upon the same such other terms and conditions that are not more favorable (including without limitation time of payment and form of considerationtaken as a whole) as to be paid and given to the Majority StockholdersTag-Along Selling Stockholder than those set forth in the Tag-Along Notice. In the event the Tag-Along Selling Stockholder has not sold the Tag-Along Offered Securities within such ninety (90) day period, the Tag-Along Selling Stockholder shall not thereafter sell any Shares without again complying with Section 2 and this Section 3.1(f).
(ciii) Within ten (10) days after In the date by which event a Tag-Along Stockholder notifies the Company or the Majority Stockholders of Rightholder exercises its intent to exercise tag-along rights hereunder, the Tag-Along Option, the Company or the Majority Stockholders Selling Stockholder shall notify such Tag-Along Stockholder assign so much of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included its interest in the proposed sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise transaction as the Tag-Along Option Rightholder shall be entitled to and (ii) five (5) days after shall request hereunder, and the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as Rightholder shall assume such part of its participation in the Sale obligations of Control Transaction pursuant to a duly exercised the Tag-Along Option, Selling Stockholder with respect to such sale transaction as shall deliver relate to the Proposed Transferee at a closing to be held at the offices sale of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with Offered Securities by the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warrantiesRightholder. In addition to the foregoing, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder Rightholder shall agree to provide indemnification (other than its own title to such Notes pay his, her or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion share of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection all costs associated with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)transaction.
Appears in 1 contract
Tag-Along Rights. If (a) Subject to Section 4.2(e), no Stockholder ("Selling Stockholder") shall, directly or indirectly, Transfer, in any single transaction or series or related transactions to one or more Persons who are not Affiliated Successors of such Stockholder (each such Person a majority "Tag-Along Event Purchaser") shares of the holders of the Company’s outstanding voting equity Preferred Stock or Common Stock (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “"Tag-Along Stock") constituting 5% or more of such Stockholder”) may cause 's investment in the Company or such Majority Stockholders to effect (a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The "Tag-Along Stockholders shall have the rightEvent"), but not the obligation, to participate in the Proposed Sale of Control Transaction on unless the terms and conditions herein stated (the “of such sale to such Tag-Along Option”), which right Event Purchaser shall be exercisable upon written notice include an offer to each Stockholder (including the “Acceptance Notice”Selling Stockholder) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Transfer to such Tag-Along Stockholder wishes Event Purchasers up to sell on the terms and conditions stated in the Sale Notice.that number of shares determined as follows:
(bi) Each Tag-Along each JWC Group Stockholder shall have the right to require the proposed transferee Transfer to purchase from each such Tag-Along Stockholder a Event Purchaser up to that number of shares of Common Tag-Along Stock up then Beneficially Owned by such JWC Group Stockholder (without duplication) as are equal in value to the product obtained by multiplying (ix) the aggregate number value of the shares of Common Tag-Along Stock subject that such Tag-Along Event Purchaser has offered to purchase (the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by "Total Tag-Along Value"), times (iiy) a fraction, the numerator of which is the aggregate number value of the shares of Class A Common Stock beneficially owned on a fully diluted basis and Class E Preferred Stock (valued at its Liquidation Preference) at that time Beneficially Owned (without duplication) by such Tag-Along Stockholder JWC Group Stockholder, and the denominator of which shall be is the value of all then outstanding Class A Common Stock (the aggregate value of all of the shares of Tag-Along Stock that may be purchased by the JWC Group Stockholders is hereinafter referred to as the "JWC Group Value", and the Total Tag-Along Value minus the JWC Group Value is hereinafter referred to as the "Remaining Value");
(ii) each Stockholder that is not a JWC Group Stockholder (together with the Selling Stockholders, the "Remaining Offerees") shall have the right to Transfer to such Tag-Along Event Purchaser up to that number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along StockholdersStock then Beneficially Owned by such Remaining Offeree (without duplication) as are equal in value to (x) the Remaining Value, and at times (y) a fraction, the same price per share numerator of which is the value of shares of Class A Common Stock and upon Class E Preferred Stock (other than such stock held by Xxxxxx Partnership) (valued at its Liquidation Preference) at that time Beneficially Owned (without duplication) by such Remaining Offeree, and the denominator of which is the value of all then outstanding Class A Common Stock. If the Selling Stockholders receive a bona fide offer from a Tag-Along Event Purchaser to purchase shares of Tag-Along Stock in circumstances in which would result in a Tag-Along Event, and which offer such Selling Stockholders wish to accept, the Selling Stockholders shall then cause the Tag-Along Event Purchaser's offer to be reduced to writing (which writing shall include an offer to purchase shares of Tag-Along Stock from each Stockholder according to the terms and conditions set forth in this Section 4.2) and the Selling Stockholders shall send written notice of the Tag-Along Event Purchaser's offer (the "Tag-Along Notice") to each Stockholder, which Tag-Along Notice shall specify (i) the names of the Selling Stockholders, (ii) the names and addresses of the proposed acquiring Person, (iii) the amount of shares proposed to be Transferred and the price, form of consideration and other terms and conditions of such Transfer (including, if in a series of related transactions, such information with respect to shares of Tag-Along Stock theretofore Transferred), (iv) that the acquiring Person has been informed of the rights provided for in this Section 4.2 and has agreed to purchase shares of Tag-Along Stock in accordance with the terms hereof, and (v) the date by which each other Selling Stockholder may exercise its respective rights contained in this Section 4.2, which date shall not be less than thirty (30) days after the giving of the Tag-Along Notice. The Tag-Along Notice shall be accompanied by a true and correct copy of the Tag-Along Event Purchaser's offer. At any time within thirty (30) days after receipt of the Tag-Along Notice, each Stockholder may accept the offer included in the Tag-Along Notice for up to such number of shares of Tag-Along Stock as is determined in accordance with this Section 4.2, by furnishing written notice of such acceptance to each Selling Stockholder, and delivering, to an escrow agent (which shall be a bank or a law or accounting firm designated by the Company), on behalf of the Selling Stockholders, the certificate or certificates representing the shares of Tag-Along Stock to be sold pursuant to such offer by each Stockholder, duly endorsed in blank, together with a limited power-of-attorney authorizing the escrow agent, on behalf of the Stockholder, to sell the shares to be sold pursuant to the terms of such Tag-Along Event Purchaser's offer. If any Stockholder desires to sell less than its proportionate amount of shares of Tag-Along Stock that it is entitled to sell pursuant to this Section 4.2, then each of the other Stockholders shall have the right to sell to the Tag-Along Event Purchaser an additional amount of shares of Tag-Along Stock as shall be calculated in accordance with the allocations and procedures set forth in the immediately preceding paragraph. Such process shall be repeated in series until all of the remaining Stockholders agree to sell their remaining proportionate number of shares of Tag-Along Stock. Schedule IV sets forth an illustrative example for this Section 4.2, PROVIDED, HOWEVER that in the event of any conflict between such illustration and this Section 4.2, Section 4.2 shall govern.
(b) The purchase from each Tag-Along Event Offeree pursuant to this Section 4.2 shall be on the same terms and conditions conditions, including the price per share received by the Selling Stockholders and stated in the Tag-Along Notice provided to each Stockholder. In the event that the Tag-Along Stock is Common Stock, all Stockholders shall be required, as a condition of participating in such transaction (including without limitation time in cases where the Preferred Stock is convertible into Common Stock), to convert the required amount of payment its Preferred Stock into Common Stock and form of consideration) as to be paid and given Transfer Common Stock to the Majority StockholdersTag-Along Event Purchaser.
(c) Within ten (10) days after Simultaneously with the date by which a consummation of the sale of the shares of Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent Stock to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required Event Purchaser pursuant to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option Event Purchaser's offer, the Selling Stockholders shall notify each Stockholder and (ii) five (5) days after shall cause the satisfaction Tag-Along Event Purchaser to remit to each Stockholder the total sales price of any governmental approval or filing requirements, if anythe shares of Tag-Along Stock held by each Stockholder sold pursuant thereto and shall furnish such other evidence of the completion and time of completion of such sale and the terms thereof as may be reasonably requested by each Stockholder.
(d) Each If within thirty (30) days after receipt of the Tag-Along Notice, a Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation has not accepted the offer contained in the Sale of Control Transaction pursuant to a duly exercised Tag-Along OptionNotice, such Stockholder shall deliver be deemed to have waived any and all rights with respect to the Proposed Transferee at a closing to be held at sale described in the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties Notice (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that but not with respect to any matter as subsequent sale, to which a the extent this Section 4.2 is applicable to such subsequent sale) and the Selling Stockholders shall have sixty (60) days from the initial delivery of the last Tag-Along Stockholder shall agree Notice in which to provide indemnification (other sell not more than its own title to such Notes or Conversion Shares), such the number of shares of Tag-Along Stockholder shall Stock described in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In additionNotice, each on terms not more favorable to the Selling Stockholders than were set forth in the Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control TransactionNotice; PROVIDED, and each Tag-Along Stockholder shall provide reasonable assistance HOWEVER, that if such purchase is subject to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination consent of the appropriate scope of, FCC or limitations any public service or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transactionpublic utilities commission, the Proposed Transferee purchase of such shares shall remit directly to each be closed on the first business day after all such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled consents shall have been obtained by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Final Order.
Appears in 1 contract
Samples: Stockholder and Investor Rights Agreement (Dobson Communications Corp)
Tag-Along Rights. If (a) If, after complying with Section 3.5 above (in the case of a majority of the holders of the Company’s outstanding voting equity (collectivelySelling Stockholder), any one or more 15% Owners, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control Xxxxxxxxx Funds or Xxxxxxx X. Xxxxx (a “Sale of Control Transaction”)each, then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along StockholderRight Holder”) may cause (each, a “Selling Party”) proposes to transfer any Stock, Common Share Equivalents or an interest therein (including, without limitation, any equity-linked securities) to a Third-Party Transferee, then such Selling Parties shall refrain from effecting such transfer unless, prior to the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in consummation thereof, each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders Right Holder shall have been afforded the right, but not the obligation, opportunity to participate join in the Proposed Sale of Control Transaction such transfer on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholdersa pro rata basis, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Noticehereinafter provided.
(b) Each Prior to the consummation of any transfer, the Selling Parties shall cause each Third-Party Transferee to offer (the “Purchase Offer”) in writing to each Tag-Along Stockholder shall have the right to require the proposed transferee Right Holder to purchase that number of Stock or Common Share Equivalents (the type of which shall be chosen by the Tag-Along Right Holder) from each such Tag-Along Stockholder a number Right Holder that constitutes the same percentage of shares of the aggregate Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of and Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis Share Equivalents held by such Tag-Along Stockholder and Right Holder as the denominator percentage determined by dividing the number of which shall Stock or Common Share Equivalents to be purchased from the Selling Parties by the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis and Common Share Equivalents held by the Majority Stockholders and all Tag-Along StockholdersSelling Parties, and at the same price per share of Common Stock (the “Joining Price”), and upon the same on such other terms and conditions (the “Joining Terms”), as the Third-Party Transferee has offered to purchase Offered Shares to be sold by the Selling Parties. Notwithstanding the foregoing, if the Third-Party Transferees are acquiring Offered Shares in a series of related transactions, or in a single transaction or series of related transactions from multiple Selling Parties, (i) the Joining Price shall be the highest of the prices offered by the Third-Party Transferees to any Selling Party in any one of such transactions, and (ii) the Joining Terms shall be those terms offered by any Third-Party Transferee to any Selling Party in any one of such transactions which are most favorable to the offeree. Each Tag-Along Right Holder shall have 10 days from the receipt of the Purchase Offer in which to accept the Purchase Offer and, to the extent any such Tag-Along Right Holder accepts such Purchase Offer in accordance with the terms hereof and the Third-Party Transferees are unwilling to purchase all shares requested to be purchased, the number of Offered Shares to be sold by the Selling Parties shall be reduced pro rata based upon the number of shares each Tag-Along Right Holder electing to sell is entitled to include in such sale pursuant to this Section 3.6. If a Tag-Along Right Holder elects to sell any class of Stock which is different from the class of Stock specified in the Purchase Offer, then the Selling Party will use commercially reasonable efforts to cause the Third-Party Transferee to permit the inclusion of such different class of Stock on the terms specified herein (including without limitation time of payment and the Equivalent Price). The form of consideration) as to consideration paid in respect of such different classes of stock shall be paid and given to the Majority Stockholdersidentical.
(c) Within ten The provisions of Sections 3.5 and 3.6 shall not apply (10A) days after to transfers to Permitted Transferees in accordance with Section 3.4 or (B) to the date repurchase of Common Stock or Common Share Equivalents by which a Tag-Along Stockholder notifies the Company from a terminated employee or consultant which purchase has been approved by the Board of Directors, including the approval of the Series A Director and shall terminate (i) upon the closing of a registered public offering of the Common Stock, (ii) in the event of a Liquidation Event or (iii) upon the termination of this Agreement as provided in Section 9.7 below. In the event that a transfer subject to Sections 3.5 and 3.6 is proposed to be made to a Person other than a Stockholder or the Majority Stockholders of its intent to exercise the Tag-Along OptionCompany, the Company Selling Stockholders or Selling Parties, as the Majority Stockholders case may be, shall notify such Tag-Along Stockholder of Person that the amount of Notes transfer is subject to this Agreement and number of Conversion Shares held by such Tag-Along Stockholder shall ensure that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if anytransfer is consummated without compliance with this Section 3.
(d) Each Tag-Along Stockholder may effect its participation Any purported transfer subject to this Section 3.6 not made in any Sale of Control Transaction, compliance with this Section 3.6 shall be void and as part of its participation in shall not be consummated upon the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices books and records of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Company.
Appears in 1 contract
Samples: Stockholders' Agreement (Total Gas & Electricity (PA) Inc)
Tag-Along Rights. If (a) No Stockholder shall, directly or indirectly, Transfer, in any single transaction or series or related transactions to one or more Persons who are not Affiliated Successors of such Stockholder (a majority "CEI Inclusion Event Purchaser") ----------------------------- shares of Inclusion Stock in circumstances in which, after giving effect to such Transfer, whether acting alone or in concert with any other Stockholder (such parties referred to herein as "Selling Stockholders") would result in such Selling Stockholder(s) -------------------- Transferring, (x) ten (10%) or more of the holders outstanding shares of Inclusion Stock Beneficially Owned by such Selling Stockholder to a Person who is a party, or an Affiliated Successor of a party, to the Company Stockholder Agreement or (y) 10% -- or more of the Company’s outstanding voting equity (collectively, shares of Inclusion Stock outstanding on the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors date of such proposed Sale of Control Transaction by Transfer on a date which shall be fully diluted basis to a Person who is not later than fifteen (15) days prior a party, or an Affiliated Successor to a party, to the Company or Stockholder Agreement, but, in either case, not more than twenty-five percent (25%) of the outstanding shares of Inclusion Stock outstanding on the date of such proposed Transfer on a fully diluted basis (a "Tag Along Event"), unless the terms and conditions of --------------- such sale to such CEI Inclusion Event Purchaser shall include an offer to the Cash Equity Investors and the Management Stockholders other than the Selling Stockholder (each, a "Tag Along Offeree") to Transfer to such CEI Inclusion ----------------- Event Purchasers up to that number of shares of any class of Inclusion Stock then Beneficially Owned by each Tag Along Offeree that bears the same proportion to the total number of shares of Inclusion Stock at that time Beneficially Owned (without duplication) by each such Majority Stockholder(sTag Along Offeree as the number of shares of Inclusion Stock being Transferred by the Selling Stockholders (including shares of Inclusion Stock theretofore Transferred if in any applicable series of related transactions) entering into bears to the total number of shares of Inclusion Stock at the time Beneficially Owned (without duplication) by the Selling Stockholders (including shares of Inclusion Stock theretofore Transferred if in any definitive binding agreement applicable series of related transactions). If the Selling Stockholders receive a bona fide offer from an Inclusion Event Purchaser to purchase shares of Inclusion Stock in respect thereof circumstances in which, after giving effect to such sale would result in a Tag Along Event, and which offer such Selling Stockholders wish to accept, the Selling Stockholders shall then cause the Inclusion Event Purchaser's offer to be reduced to writing (which writing shall include an offer to purchase shares of Inclusion Stock from each Tag Along Offeree according to the terms and conditions set forth in this Section 3.3) and the Selling ----------- Stockholders shall send written notice of the CEI Inclusion Event Purchaser's offer (the “Sale "Tag Along Notice’). Thereafter") to each Tag Along Offeree, each which Tag Along Notice ---------------- shall specify (i) the names of the Selling Stockholders, (ii) the names and addresses of the proposed acquiring Person, (iii) the amount of shares proposed to be Transferred and the price, form of consideration and other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer terms and conditions of such other Stockholder’s Stock; Transfer (including, if in each casea series of related transactions, only pursuant such information with respect to shares of Inclusion Stock theretofore Transferred), (iv) that the acquiring Person has been informed of the rights provided for in this Section 3.3 and has agreed to purchase shares of Inclusion ----------- Stock in accordance with the following provisions of terms hereof, and (v) the date by which each other Selling Stockholder may exercise its respective rights contained in this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”)3.3, which right date shall not be less than thirty (30) days after the giving ----------- of the Tag Along Notice. The Tag Along Notice shall be exercisable upon written notice accompanied by a true and correct copy of the CEI Inclusion Event Purchaser's offer. At any time within thirty (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (1030) days of after receipt of the Sale Tag Along Notice. Each Acceptance , each Tag Along Offeree may accept the offer included in the Tag Along Notice shall indicate the maximum amount of Notes or for up to such number of Conversion Shares shares of Inclusion Stock as is determined in accordance with this Section 3.3, ----------- by furnishing written notice of such acceptance to each Selling Stockholder, and delivering, to an escrow agent (which shall be a bank or a law or accounting firm designated by the Company), on behalf of the Selling Stockholders, the certificate or certificates representing the shares of Inclusion Stock to be sold pursuant to such offer by each Tag Along Offeree, duly endorsed in blank, together with a limited power-of-attorney authorizing the escrow agent, on behalf of the Tag Along Offeree, to sell the shares to be sold pursuant to the terms of such CEI Inclusion Event Purchaser's offer. In the event that the Tag-CEI Inclusion Event Purchaser does not agree to purchase all of the shares of Inclusion Stock proposed to be sold by the Selling Stockholders and the Tag Along Offerees, then each Selling Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Tag Along Stockholder Offeree shall have the right to require sell to the proposed transferee to purchase from each such Tag-Along Stockholder a CEI Inclusion Event Purchaser that number of shares of Common Inclusion Stock up as shall be equal to the product obtained by multiplying (ix) the aggregate number of shares of Common Inclusion Stock subject which the Inclusion Event Purchaser has agreed to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by purchase times (iiy) a fraction, the numerator of which is the aggregate number of shares of Common Inclusion Stock beneficially owned on a fully diluted basis Beneficially Owned (without duplication) by such Tag-Selling Stockholder or Tag Along Stockholder Offeree and the denominator of which shall be is the aggregate number of shares of Common Inclusion Stock beneficially owned on a fully diluted basis Beneficially Owned (without duplication) by the Majority all Selling Stockholders and Tag Along Offerees. If any Tag Along Offeree desires to sell less than its proportionate amount of shares of Inclusion Stock that it is entitled to sell pursuant to this Section 3.3, then the Selling ----------- Stockholders and the remaining Tag Along Offerees shall have the right to sell to the CEI Inclusion Event Purchaser an additional amount of shares of Inclusion Stock as shall be equal to (x) the number of shares of Inclusion Stock not being sold by any such Inclusion Event Purchasers times (y) a fraction, the numerator of which is the number of shares of Inclusion Stock owned such Selling Stockholder or remaining Tag Along Offeree and the denominator of which is the aggregate number of shares of Inclusion Stock Beneficially Owned (without duplication) by all Tag-Selling Stockholders and remaining Tag Along Stockholders, and at Offerees. Such process shall be repeated in series until all of the same price per share remaining Tag Along Offerees agree to sell their remaining proportionate number of Common Stock and upon shares of Inclusion Stock.
(b) The purchase from each Tag Along Offeree pursuant to this Section 3.3 ----------- shall be on the same terms and conditions (conditions, including without limitation time the price per share received by the Selling Stockholders and stated in the Tag Along Notice provided to each Tag Along Offeree. In the event that the Inclusion Stock is Common Stock, all Tag Along Offerees shall be required, as a condition of payment and form of consideration) as participating in such transaction, to be paid and given Transfer Common Stock to the Majority StockholdersCEI Inclusion Event Purchaser. In the event that the Tag Along Offerees elect to sell their pro rata share of Series C Preferred Stock or Common Stock pursuant to this Section 3.3 ----------- the CEI Inclusion Event Purchaser shall be required to purchase both Series C Preferred Stock and Common Stock, the purchase price allocable to holders of Series C Preferred Stock, on the one hand, and to holders of Common Stock, on the other hand, shall be determined by an independent committee of the Board of Directors selected from along those directors who were not designated by any Selling Stockholders or Tag Along Offerees, it being understood that the directors selected pursuant to Section 2.1(c) shall be deemed independent for -------------- such purposes.
(c) Within ten (10) days after Simultaneously with the date by which a Tag-consummation of the sale of the shares of Inclusion Stock of the Selling Stockholders and each Tag Along Stockholder notifies Offeree to the Company or CEI Inclusion Event Purchaser pursuant to the Majority Stockholders of its intent to exercise the Tag-Along OptionInclusion Event Purchaser's offer, the Company or the Majority Selling Stockholders shall notify such Tag-each Tag Along Stockholder Offeree and shall cause the Inclusion Event Purchaser to remit to each Tag Along Offeree the total sales price of the amount shares of Notes Inclusion Stock by each Tag Along Offeree sold pursuant thereto and number shall furnish such other evidence of Conversion Shares held by the completion and time of completion of such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will terms thereof as may be consummated, which shall be no later than the later of (i) twenty (20) days after the date reasonably requested by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Tag Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if anyOfferee.
(d) Each Tag-If within thirty (30) days after receipt of the Tag Along Stockholder may effect its participation in any Sale of Control TransactionNotice, and as part of its participation Tag Along Offeree has not accepted the offer contained in the Sale of Control Transaction pursuant Tag Along Notice, such Tag Along Offeree shall be deemed to a duly exercised Tag-Along Option, shall deliver have waived any and all rights with respect to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable sale described in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties Tag Along Notice (and indemnities but not with respect thereto) that to any subsequent sale, to the Proposed Transferee of the Notes or Conversion Shares (or interests therein) extent this Section 3.3 is receiving good and marketable title applicable to such Notes or Conversion Shares subsequent ----------- sale) and the Selling Stockholders shall have sixty (or interests therein)60) days in which to sell not more than the number of shares of Inclusion Stock described in the Tag Along Notice, free and clear of all pledges, security interests, or other lienson terms not more favorable to the Selling Stockholders than were set forth in the Tag Along Notice; provided, however, that with respect if such purchase is -------- ------- subject to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion the consent of the total liability for which such indemnification is soughtFCC or any public service or public utilities commission, which pro rata portion the purchase of the Offered Shares shall be determined closed on the basis of the percentage of the total Notes or Conversion Shares involved in first business day after all such transfer that are represented consents shall have been obtained by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Final Order.
Appears in 1 contract
Tag-Along Rights. (a) If a majority the members of the holders TW Stockholder Group (the "TW Selling Stockholders") propose to sell to an unaffiliated third party (the "Tag Offeror") (i) all but not less than all of the Company’s shares of Class B Common Stock and (ii) shares of Class A Common Stock beneficially owned by them which collectively represent greater than 33% of the issued and outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale shares of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof Common Stock (the “Sale Notice’). Thereafter, each other Investor "TW Shares) or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a an Indirect Transfer of such other Stockholder’s Stock; shares (in each casewhich case the "TW Shares" shall be all the shares of Common Stock owned by the TW Selling Stockholders) (such proposed sale being a "Tag Offer"), only pursuant then, as a condition to and in accordance with effecting such sale or Indirect Transfer, the following provisions of this Section 3:
(a) The Tag-Along TW Selling Stockholders shall have the rightcause proper provisions to be made so that each other Principal Stockholder (each, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”a "Tag Stockholder") to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require participate in such Tag Offer and sell to the proposed transferee to purchase from each such Tag-Along Stockholder Tag Offeror a number of shares of Common Stock up owned by it equal to the product obtained by multiplying of (ix) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction owned by such Tag Stockholder multiplied by (iiy) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder TW Shares and the denominator of which shall be is the aggregate number of issued and outstanding shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and TW Stockholder Group (collectively, with respect to all Tag-Along Tag Stockholders, and at the same price per share "Tag Shares"); provided, however, that if a Tag Stockholder owns both shares of Class B Common Stock and upon Class A Common Stock, the shares of Class B Common Stock owned by such Tag Stockholder shall be included in the Tag Shares prior to the inclusion of any shares of Class A Common Stock owned by such Tag Stockholder. In connection with a Tag Offer, the TW Selling Stockholders shall cause the Tag Offeror to deliver to each Tag Stockholder a notice (a "Tag Notice of Sale") containing a copy of the Tag Offer, the identity of the Tag Offeror and an offer to purchase all of the Tag Shares owned by such Tag Stockholder on the same terms and conditions (including without limitation time of payment as to price and form of consideration) as the terms and conditions contained in the Tag Offer. The Tag Notice of Sale shall specify the price at which the Tag Shares are to be paid and given purchased, as provided in the preceding sentence. If the Tag Offer also constitutes a Third Party Offer pursuant to Section 3.4, the TW Selling Stockholders shall deliver the Tag Notice of Sale at the same time that the First Refusal Notice of Sale is delivered. The Tag Stockholders shall enter into an appropriate confidentiality agreement relating to the Majority StockholdersTag Offer on customary terms if reasonably requested by the TW Selling Stockholders with respect to the Tag Offer. If the Tag Offer contemplates an Indirect Transfer, the Tag Offeror shall offer the Tag Stockholders the option of selling the Tag Shares pursuant to an Indirect Transfer.
(b) If a Tag Stockholder desires to accept the offer set forth in a Tag Notice of Sale as to all of the Tag Shares beneficially owned by such Tag Stockholder, such Tag Stockholder shall, within 45 days of receipt of such Tag Notice of Sale, notify the Tag Offeror and the TW Selling Stockholders of its intention to sell all but not less than all of its Tag Shares to the Tag Offeror, and deliver a copy of such notice to each other Tag Stockholder. If a Tag Stockholder desires to sell its Tag Shares, then the Tag Offeror shall purchase all of such Tag Shares together with the TW Shares pursuant to Section 3.5(c).
(c) Within ten The TW Selling Stockholders shall have the right, at any time during the 90-day period beginning on the day following the end of the 45-day period referred to in Section 3.5(b), to enter into a binding agreement to sell all but not less than all of the TW Shares to the Tag Offeror, or to effect the Indirect Transfer contemplated by the Tag Offer, as applicable, in either case on terms and conditions no less favorable in the aggregate to the TW Selling Stockholders (10and, in the case of an Indirect Transfer, the Person receiving the consideration) than those set forth in the Tag Offer. The Tag Stockholders electing to sell their Tag Shares pursuant to Section 3.5(b) shall become party to such agreement and agree to sell all but not less than all of their Tag Shares to the Tag Offeror (or to effect an Indirect Transfer, as applicable) pursuant thereto on the terms and conditions set forth therein. In connection with such agreement, each Tag Stockholder which is a member of a Principal Stockholder Group which has the right to designate Agreed Nominees pursuant to Section 2.1(c) at such time shall be required to make the same representations, warranties and agreements, including as to indemnification, as the TW Selling Stockholders and each Tag Stockholder which is a member of a Principal Stockholder Group which does not have the right to designate Agreed Nominees pursuant to Section 2.1(c) at such time shall not be required to make any representations or warranties and agreements, including as to indemnification, other than representations and warranties (and related indemnification) as to title to the Tag Shares to be transferred and as to organization and due execution and delivery and enforceability of the transfer agreements (and, in the case of an Indirect Transfer, such other representations and warranties regarding the entity the equity of which is being sold as are comparable to the foregoing representations). The TW Stockholders and Tag Stockholders shall thereafter have the right to sell such TW Shares and Tag Shares to the Tag Offeror and/or effect the Indirect Transfers, as applicable, pursuant to such agreement. If the TW Selling Stockholders do not enter into such an agreement during such 90-day period, or do not close the sale thereunder within sixty days after the date execution of such agreement (subject to extension for delays caused by which actions by the Tag Stockholders and to extension for a Tag-Along Stockholder notifies maximum of one hundred eighty additional days to the Company or the Majority Stockholders of its intent extent required to exercise the Tag-Along Optionobtain all required governmental, regulatory and other third party consents and approvals), the Company or procedure set forth above with respect to the Majority Stockholders shall notify such Tag-Along Stockholder Tag Notice of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than repeated with respect to the later Tag Offer or any subsequent proposed transfer of (i) twenty (20) days after Common Stock by the date by TW Selling Stockholders which each Holder was required is subject to notify the Company or the Majority Stockholders provisions of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if anythis Section 3.5.
(d) Each Tag-Along Stockholder may effect its participation in any Sale In connection with a sale or Indirect Transfers of Control Transaction, and as part shares of its participation in the Sale of Control Transaction Class B Common Stock to a Tag Offeror pursuant to a duly exercised Tag-Along OptionSection 3.5(d), (i) the TW Selling Stockholders and the Tag Stockholders shall deliver have the right to sell to the Proposed Transferee at a closing Tag Offeror all but not less than all of their shares of Class B Common Stock or permit the Indirect Transfers, as applicable, without converting such shares to be held at Class A Common Stock, (ii) (A) when the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent TW Selling Stockholders sell all of the Notes or Conversion Shares shares of Class B Common Stock owned by them to the Tag Offeror, the TW Selling Stockholders shall have the right to transfer to the Tag Offeror their rights to designate Agreed Nominees pursuant to Section 2.1(c)(i) and (B) when all of the members of any Principal Stockholder Group other than the TW Stockholder Group sell all of the shares of Class B Common Stock owned by them to the Tag Offeror, such Tag-Along Stockholder which is Tag Stockholders shall have the right to be transferred in connection with transfer to the Sale of Control Transaction, Tag Offeror their rights to designate Agreed Nominees pursuant to Section 2.1(c)(i) and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable (iii) (A) in the context case of a sale of the proposed Sale of Control TransactionTW Shares or Tag Shares, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee Third Party Offeror shall be required to assume the obligations of the Notes or Conversion Shares (or interests therein) is receiving good TW Selling Stockholders and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that the Tag Stockholders under this Agreement with respect to any matter such shares and become a party to this Agreement and (B) in the case of an Indirect Transfer, the Tag Offeror, upon taking control of the TW Selling Stockholders or Tag Stockholders, as to which a Tag-Along Stockholder applicable, shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification cause the TW Selling Stockholders or Tag Stockholders to confirm in an amount that would exceed its pro rata portion writing the continuing validity and effectiveness of their obligations under this Agreement.
(e) In furtherance of the total liability for which such indemnification is soughtrights set forth in this Section 3.5, which pro rata portion shall be determined the Company agrees that, on reasonable notice following the basis delivery of a Tag Notice of Sale, at reasonable times and without interfering with the business or operations of the percentage Company, it will assist the TW Selling Stockholders and the Tag Stockholders in obtaining all necessary consents to any disposition of the total Notes or Conversion shares to be sold. In the event the TW Selling Stockholders transfer the TW Shares involved in such to the Tag Offeror, the provisions of this Section 3.5 shall apply to any subsequent transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale Tag Offeror and/or any of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation its future transferees of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale shares of Control Transaction and in the determination Class B Common Stock which represent greater than 33% of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation voting power of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each outstanding Common Stock as if any such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)transferors were TW Selling Stockholders.
Appears in 1 contract
Tag-Along Rights. (a) If a majority of the holders of the Company’s outstanding voting equity MIH or its Controlled Affiliates (collectivelyincluding, but not limited to, OTVH, the “Majority Stockholders”"MIH Group") want proposes to consummate enter into an agreement with an --------- unaffiliated third party to Transfer Shares (including by merger, consolidation or other business combination) owned by MIH or its Controlled Affiliates in one transaction or a transaction that constitutes series of related transactions which result in a Sale Change of Control (a “Sale of Control Transaction”"Tag-Along Sale"), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each -------------- participate in such Tag-Along Stockholder a number of shares of Common Stock Sale by selling up to the number of Shares (the "Maximum Tag-Along Shares") equal to the product obtained by multiplying of (i) the aggregate total number of shares of Common Stock subject ------------------------- Shares proposed to be Transferred by the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction MIH Group, multiplied by (ii) a fraction, the numerator of which is shall equal the aggregate number of shares of Common Stock beneficially Shares owned on a fully diluted basis by such Investor immediately prior to the Tag-Along Stockholder Sale and the denominator of which shall be equal the sum of (A) the aggregate number of shares of Common Stock beneficially Shares owned on a fully diluted basis by the Majority Stockholders and all Investors who are eligible to participate in such Tag-Along StockholdersSale as provided in Section 22(i), and at plus (B) the same price per share aggregate number of Common Stock and upon Shares owned by the same terms and conditions (including without limitation time of payment and form of consideration) as MIH Group immediately prior to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along OptionSale. Any such sale by any Investor shall be on the same economic terms and conditions as the proposed Tag- Along Sale by the MIH Group. Without limiting the foregoing, and by way of example all Selling Holders shall share pro rata, based upon the Company or the Majority Stockholders shall notify such Tag-Along Stockholder number of Shares being sold by each (x) in all transaction expenses, (y) in any joint indemnity liabilities of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included sellers to the proposed transferee or purchaser in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option Sale relating to representations concerning the OpenTV business, and (iiz) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale escrow for the purpose of Control Transactionsatisfying any such indemnity liabilities. If required by the purchaser, and each Investor shall, as part of a condition to its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along OptionSale, shall deliver agree to the Proposed Transferee at become a closing party to each agreement proposed to be held at the offices executed by any member of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred MIH Group in connection with the Sale sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liensShares; provided, however, that notwithstanding the -------- ------- foregoing, it is understood and agreed that no participating Investor shall be required to agree to be bound by any covenant, agreement or restriction which survives the execution and delivery of such agreement or the closing of such Tag-Along Sale which restricts or limits the right of the participating Investor to conduct its business (including investments by such Investor) as determined in good faith by such participating Investor or prohibits such participating Investor from entering into or engaging in any business or which would require it to sell or dispose of any of its assets or business including, but not limited to, non-competition agreements, exclusivity agreements, agreements relating to carriage or distribution, and other agreements and arrangements similar to the foregoing; provided, however, that the foregoing shall not -------- ------- include, by way of example, and a participating Investor shall be obligated to perform any covenant obligating it to keep confidential and not disclose confidential information relating to the Company. No party to any such agreement shall be liable for the breach of any representation, warranty or covenant made by another party as to itself. If the Tag-Along Sale constitutes a series of transactions which result in a Change of Control, then the price per Share to be paid in connection with such Tag-Along Sale shall equal the weighted average purchase price per Share with respect to those sales of Shares sold in such transaction or series of transactions. MIH shall not and shall cause its Controlled Affiliates not to take any matter actions or enter into any agreements other than as specified herein in order to avoid or seek to avoid the performance of their obligations under this Section 22 but will at all times act in good faith in connection with any Tag- Along Sale. MIH shall not and shall cause its Controlled Affiliates not to engage in any Transfer subject to this Section 22 unless each Investor which is then an Eligible Investor is permitted to participate in such Tag-Along Sale in accordance with the terms hereof.
(b) MIH shall provide each Investor with written notice (the "Sale ---- Notice") not less than ten (10) days prior to executing any agreement with ------ respect to a Change or Control. Each Sale Notice shall set forth (i) the name and address of each proposed transferee or purchaser of Shares and, if known, such transferee's or purchaser's equity interest in the Company; (ii) the number of Shares proposed to be transferred or sold by the MIH Group; (iii) the proposed amount and form of consideration to be paid for such Shares and the terms and conditions of payment offered by each proposed transferee or purchaser; (iv) the aggregate number of Shares held of record as of the date of the Sale Notice by the MIH Group; (v) the maximum number of Shares that the Investor to whom the notice is sent is entitled to include in the proposed sale if it constitutes a Tag-Along Stockholder shall agree to provide indemnification Sale; (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of vi) the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time proposed date of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)proposed sale; and
Appears in 1 contract
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’”). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Tag- Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities).
Appears in 1 contract
Samples: Investor Rights and Lock Up Agreement (Unifoil Holdings, Inc.)
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along So long as this Agreement shall remain in effect and the Blackstone Investors, their respective Affiliates and the Partnerships beneficially own, collectively, on a fully diluted basis an aggregate number of shares of Common Stock not less than 25% of the Common Stock then outstanding, with respect to any proposed Transfer by a Blackstone Investor (in such capacity, a "Transferring Stockholder") of Common Stock permitted hereunder (with respect to Common Stock held directly or as a Class B Asset of a Partnership), other than (i) as provided in Section 3.2 (transfers to Affiliates), (ii) in a Public Offering or (iii) pursuant to Rule 144, the Transferring Stockholder shall have the obligation, and the Partnerships (with respect to Common Stock held as a Class A Asset), the Veritas Investors, the Trustee, each of the Management Stockholders and their respective Permitted Transferees (the "Tagging Stockholders") shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each of such Tag-Along Stockholder Tagging Stockholders a number of shares of Common Stock up to the product obtained by multiplying (rounded up to the nearest whole number) of (i) the quotient determined by dividing (A) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction owned by such Tagging Stockholder by (iiB) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along the Transferring Stockholder and the denominator of which shall be Tagging Stockholders, and (ii) the aggregate total number of shares of Common Stock beneficially owned on a fully diluted basis by proposed to be directly or indirectly Transferred to the Majority Stockholders and all Tag-Along Stockholderstransferee in the contemplated Transfer, and at the same price per share of Common Stock and upon the same terms and conditions (including including, without limitation limitation, time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent Transferring Stockholder; PROVIDED, that in order to be entitled to exercise his or its right to sell shares of Common Stock to the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction proposed transferee pursuant to a duly exercised Tag-Along Optionthis Section 3.5, shall deliver each Tagging Stockholder must agree to make to the Proposed Transferee at a closing to be held at substantially the offices of the Company (or such other place same representations, warranties, covenants, indemnities and agreements as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Transferring Stockholder which is agrees to be transferred make in connection with the Sale proposed Transfer of Control Transactionthe shares of Common Stock of the Transferring Stockholder; and PROVIDED FURTHER that the tag-along rights and obligations set forth in this Section 3.5 shall not be applicable unless prior to the proposed Transfer by the Transferring Stockholder, and each Tag-Along Stockholder the Blackstone Investors shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable have previously realized not less than $60 million net cash proceeds in the context aggregate from one or more sales or other dispositions of the proposed Sale of Control TransactionCommon Stock; and PROVIDED, includingFURTHER that, without limitation, representations and warranties if (and indemnities with respect theretox) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title prior to such Notes proposed Transfer the Blackstone Investors shall have previously realized less than $60 million of net cash proceeds in the aggregate from one or Conversion Shares (or interests therein), free and clear of all pledges, security interests, more sales or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification dispositions of Common Stock and (other than its own title to such Notes or Conversion Sharesy), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)
Appears in 1 contract
Tag-Along Rights. If Upon receipt of a majority Transfer Notice, any Other Shareholder(s) may elect to participate in the proposed Transfer by delivering written notice to the Corporation and Transferring Shareholder within the Acceptance Period. Each of the holders Other Shareholders so electing will be entitled to sell in the contemplated Transfer, the same proportion (on an as-if-converted to Common Shares basis) of the Company’s outstanding voting equity Shares and Convertible Securities held by each such Other Shareholder, respectively, as the proportion of the Transferring Shareholder's total holdings which the Transferring Shareholder proposes to sell pursuant to the Transfer Notice (collectively, the “Majority Stockholders”) want on an as-if-converted to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”Common Shares basis), then on the Majority Stockholder(ssame terms (other than price) shall notify set forth in the other Investors of such proposed Sale of Control Transaction by Transfer Notice, and at a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3price determined as follows:
(a) The Tag-Along Stockholders shall have if the right, but not the obligation, Transferring Shareholder is proposing to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated sell Common Shares within two (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”2) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt years of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.date hereof:
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of any Common Stock subject Shares to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction be sold by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which an Other Shareholder shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and sold at the same price per share as the Common Shares proposed to be sold by the Transferring Shareholder, as set forth in the Transfer Notice;
(ii) any Preferred Shares to be sold by an Other Shareholder shall be sold at a price per share calculated as follows:
(A) if the sale price per Share of the Common Shares is at least two (2) times the Issue Price, any Preferred Shares shall be sold at the same sale price per Common Share, multiplied by the number of Common Stock and upon Shares into which the Preferred Shares are then convertible;
(B) if the sale price per Share of the Common Shares is less than two (2) times the Issue Price, any Preferred Shares shall be sold at the same terms sale price per Common Share plus the lesser of (i) an amount equal to the Issue Price; and conditions (including without limitation time ii) the difference between the sale price per Share of payment the Common Shares and form of considerationtwo (2) as times the Issue Price, such result to be paid and given multiplied by the number of Common Shares into which the Preferred Shares are then convertible;
(iii) any Convertible Securities to be sold by an Other Shareholder shall be sold at a price per Convertible Security equal to: (A.) the value of the Common Shares underlying such Convertible Securities, where such Common Shares are valued at the same price per share as the Common Shares proposed to be sold by the Transferring Shareholder, as set forth in the Transfer Notice, less (B.) any amount payable by the holder of the Convertible Securities on the exercise or conversion thereof;
(b) if the Transferring Shareholder is proposing to sell Common Shares on or after two (2) years from the date hereof:
(i) any Common Shares to be sold by an Other Shareholder shall be sold at the same price per share as the Common Shares proposed to be sold by the Transferring Shareholder, as set forth in the Transfer Notice;
(ii) any Preferred Shares to be sold by an Other Shareholder shall be sold at a price per share equal to the Majority Stockholders.sum of (A) an amount for each Common Share (other than Additional Common Shares) then issuable on the conversion of the Preferred Shares equal to the same price per share as the Common Shares proposed to be sold by the Transferring Shareholder; and (B) the Issue Price;
(iii) any Convertible Securities to be sold by an Other Shareholder shall be sold at a price per Convertible Security equal to: (A.) the value of the Common Shares underlying such Convertible Securities, where such Common Shares are valued at the same price per share as the Common Shares proposed to be sold by the Transferring Shareholder, as set forth in the Transfer Notice, less (B.) any amount payable by the holder of the Convertible Securities on the exercise or conversion thereof;
(c) Within ten (10) days after if the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent Transferring Shareholder is proposing to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of sell Preferred Shares:
(i) twenty any Common Shares to be sold by an Other Shareholder shall be valued at a price per share equal to X minus Y (20subject to appropriate adjustment to reflect changes in the Conversion Value) days after (the date "Notional Common Share Value"), where X is equal to the same price per share as the Preferred Shares proposed to be sold by which each Holder was required the Transferring Shareholder, as set forth in the Transfer Notice, and Y is equal to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and Issue Price;
(ii) five any Preferred Shares to be sold by an Other Shareholder shall be sold at the same price per share as the Preferred Shares proposed to be sold by the Transferring Shareholder, as set forth in the Transfer Notice; and
(5iii) days after any Convertible Securities (other than Preferred Shares) to be sold by an Other Shareholder shall be sold at a price per Convertible Security equal to: (A.) the satisfaction Notional Common Share Value of the Common Shares underlying such Convertible Securities, less (B.) any governmental approval amount payable by the holder of the Convertible Securities on the exercise or filing requirements, if anyconversion thereof.
(d) Each if the Transferring Shareholder is proposing to sell Convertible Securities (other than Preferred Shares), only Shareholders holding the same type of Convertible Securities with identical provisions (other than the number of underlying securities in respect of which the Convertible Securities are exercisable) as the Convertible Securities which are the subject of the Transfer Notice may exercise Tag-Along Stockholder may effect its participation in any Sale of Control TransactionRights, and any such Convertible Securities shall be sold at the same price for each of the Convertible Securities (based on a unit basis) proposed to be sold by the Transferring Shareholder, as part of its participation set forth in the Sale of Control Transaction pursuant Transfer Notice. The Shareholders shall have no right to a duly exercised exercise Tag-Along OptionRights pursuant to this Section 6.3 in respect of Common Shares, shall deliver Preferred Shares or other Convertible Securities which are not identical to the Proposed Transferee at a closing to be held at Convertible Securities which are the offices subject of the Company (or such other place Transfer Notice. For greater certainty, no rights shall arise under this Section 6.3 as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all a result of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred any purchases in connection accordance with the Sale exercise of rights of first refusal under Section 6.2 nor shall the provisions of Sections 6.1 and 6.3 apply to the Transfer of any Shares to which the provisions of Section 6.4 or Article 7 apply and which are exercised in accordance with the terms thereof. Notwithstanding the foregoing:
(i) if any transaction or series of transactions contemplated by this Section 6.3 would result in a Change of Control TransactionEvent, and each Tag-Along Stockholder the Shareholders shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of not complete the proposed Sale transaction unless the aggregate consideration payable by the Third Party Offeror pursuant to this Section 6.3 is allocated in accordance with the Articles of Amendment as if it were a "Change of Control TransactionEvent" thereunder;
(ii) if any transaction or series of transactions contemplated by this Section 6.3 would constitute a Partial Sale Event, including, without limitation, representations and warranties (and indemnities with the Transferring Shareholder shall not complete the proposed transaction unless the Corporation has fulfilled its obligations under the Articles to redeem all Preferred Shares in respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree redemption request has been made pursuant to provide indemnification the Articles of Amendment upon the happening of a Partial Sale Event. Any purchase and sale agreement entered into in conjunction with this Section 6.3 shall:
(other than its own title a) contain only several (not joint and several) representations, warranties and covenants from any holder of Shares with recourse limited to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its Shareholder's pro rata portion of the total aggregate purchase price to all Shareholders;
(b) contain a limitation on the liability for which such indemnification is soughteach Shareholder assumes, which with respect to all indemnities, if any, provided to the Offeree, to that Shareholder's pro rata portion of the aggregate purchase price to all Shareholders;
(c) not require the Shareholders that participate in the transaction pursuant to this Section 6.3 to provide representations or warranties or covenants related to the Corporation but shall require them to provide typical title, ownership and authority to sell representations. Notwithstanding the foregoing, the Shareholders shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order subject to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance indemnity obligations to the Majority Stockholders in connection with the preparation Transferring Shareholder by reason of disclosure schedules relating to any breach of representations and warranties to be made relating to the Proposed Transferee Corporation subject to the limitations set forth in connection clause (b) above;
(d) not provide a Collateral Benefit to any Shareholder or any Affiliate or Related Party thereof (other than the right to receive the purchase price calculated in accordance with such Sale the provisions above); and
(e) be conditional upon completion of Control Transaction the purchase by the Third Party Offeror of the Shares held by the Transferring Shareholder which are subject to the Transfer Notice. Any Shareholder not giving notice within the Acceptance Period under this Section 6.3 shall be deemed to have declined to exercise its tag-along rights under this Section 6.3 If any of the Other Shareholders exercises its rights hereunder, the purchase and sale of the Shares and Convertible Securities of the Corporation to the Third Party Offeror pursuant to the Transfer Notice shall be completed at the same time as the purchase and sale of the Offeror's Securities and as part of the same closing. To the extent that the Other Shareholders do not exercise their rights hereunder, the Transferring Shareholder shall be entitled to sell the Shares specified in the determination Transfer Notice in accordance with the terms thereof for a period of 60 Business Days after the expiry of the appropriate scope of, or limitations or exceptions to, Acceptance Period. If the sale is not completed within such representations and warranties. At the time of consummation of the Sale of Control Transaction60 Business Day period, the Proposed Transferee provisions of Article 6 shall remit directly again apply to each such Tag-Along Stockholder that portion any proposed sale of the sale proceeds Shares and so on from time to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)time.
Appears in 1 contract
Tag-Along Rights. If In the event that Birch intends to Transfer all or a majority portion of the holders shares of the Company’s outstanding voting equity (collectivelySeries B Preferred Stock then held by it to any Person or Persons, the “Majority Stockholders”) want other than to consummate a transaction that constitutes a Sale an Affiliate of Control Birch (a “Sale of Control "Birch Transaction”"), then except in the Majority Stockholder(s) case where a Drag-Along Right has been exercised by Birch, Birch shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be each Purchaser, not later less than fifteen (15) 30 days nor more than 45 days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof proposed Transfer, of such Transfer and its terms and conditions (the “"Sale Notice’"). ThereafterSuch Sale Notice shall set forth: (i) the number of shares of Series B Preferred Stock proposed to be Transferred by Birch, each other Investor or Stockholder (each a “Tagii) the name and address of the proposed Birch Transferee, (iii) the proposed amount and form of consideration and terms and conditions of payment offered by such proposed Birch Transferee and (iv) that the proposed Birch Transferee has been informed of the Purchasers' tag-Along Stockholder”) may cause the Company or such Majority Stockholders along right provided for in this Section 7.4 and has agreed to effect a Transfer purchase shares of such other Stockholder’s Stock; in each case, only pursuant to and Series B Preferred Stock in accordance with the following provisions terms hereof. Within 15 days of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days date of receipt of the Sale Notice. Each Acceptance Notice , each Purchaser shall indicate the maximum amount of Notes or number of Conversion Shares that the notify Birch in writing (a "Tag-Along Stockholder wishes Notice") whether it elects to sell on the terms and conditions stated participate in the Sale Notice.
(b) Each Tag-Along Stockholder such Transfer. If either Purchaser shall so notify Birch in writing of its election to participate in such Transfer, such Purchaser shall have the right to require sell to the proposed transferee to purchase from each Proposed Transferee, at the same price and the same terms, such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Series B Preferred Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and Purchaser at such time as shall equal the denominator same percentage of which shall be the aggregate number shares then beneficially owned by such Purchaser as the percentage of shares of Common Stock then beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and Birch which are proposed to be sold by Birch in such Transfer at the same price per share of Common Stock and upon on the same terms as Birch. In the event that the proposed Birch Transferee does not purchase shares from any Purchaser on the same terms and conditions (including without limitation time as specified in the Sale Notice, then Birch shall not be permitted to sell any shares of payment and form of consideration) as to be paid and given Series B Preferred Stock to the Majority Stockholders.
(c) Within ten (10) days after proposed Birch Transferee in the date by which a proposed Transfer. If no Tag-Along Stockholder notifies Notice is received during the Company or 15-day period referred to above, Birch shall have the Majority Stockholders right, for a 45-day period after the expiration of its intent the 15-day period referred to exercise above, to transfer the shares of Series B Preferred Stock specified in the Sale Notice on terms and conditions no more favorable than those stated in the Tag-Along Option, Notice and without regard to the Company or tag-along rights described in this Section 7.4. The rights and obligations provided by this Section 7.4 shall terminate on the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later earliest to occur of (i) twenty (20) days after such date as Birch shall hold less than 10% of the date by which each Holder was required to notify then outstanding shares of Common Stock originally issued on the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option Closing Date and (ii) five (such date as the Purchasers and their Affiliates shall hold less than 5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices % of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all then outstanding shares of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Common Stock.
Appears in 1 contract
Tag-Along Rights. (a) If QUALCOMM shall enter into an agreement to effect, or propose to effect, a majority sale, transfer or other disposition of Ordinary Shares (provided, that with respect to the BCI Parties, such sale, transfer or other disposition must be in excess of 51% of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”Ordinary Shares then owned by QUALCOMM) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “"Tag-Along Stockholder”Sale"), each of the Vendors and the BCI Parties (as applicable) may cause shall have the Company or such Majority Stockholders to effect right (a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The "Tag-Along Stockholders shall have the rightRight"), but not the obligation, to participate in such Tag-Along Sale by selling up to the Proposed number of Ordinary Shares equal to the number of Ordinary Shares subject to the Tag-Along Sale multiplied by its respective Percentage Interest immediately prior to the consummation of Control Transaction the Tag-Along Sale. For purposes of this Section 6.4 only, Percentage Interest shall be calculated as follows:
(i) if QUALCOMM enters into an agreement for a Tag-Along Sale prior to the earlier of the date which is 42 months after the Closing Date or the Positive EPS Date, then the number of Ordinary Shares owned by VeloCom shall be excluded from the aggregate number of Ordinary Shares issued and outstanding (denominator in the Percentage Interest definition), (ii) if QUALCOMM enters into an agreement for a Tag-Along Sale after the earlier of the date which is 42 months after the Closing Date or the Positive EPS Date, then the number of Ordinary Shares owned by VeloCom shall be included in the aggregate number of Ordinary Shares issued and outstanding (denominator in the Percentage Interest definition), and (iii) in either case, if any Vendor intends to exercise a Warrant to obtain Ordinary Shares to sell in the Tag-Along Sale, the number of Ordinary Shares to be so obtained by any such Vendor shall be included in the number of Ordinary Shares held by such Vendor (numerator in the Percentage Interest definition) and the aggregate number of Ordinary Shares to be so obtained by all such Vendors shall be included in the aggregate number of Ordinary Shares issued and outstanding (denominator in the Percentage Interest definition). The number of Ordinary Shares which QUALCOMM is entitled to Transfer in the Tag-Along Sale shall be reduced to the extent of the participation of any Vendor or BCI Party (as applicable) pursuant to this Section 6.4. Any such sale by a Vendor or BCI Party (as applicable) exercising a Tag-Along Right shall be for the same price and on the same terms and conditions herein stated (as the “proposed Tag-Along Option”Sale by QUALCOMM. If in the Tag-Along Sale QUALCOMM intends to sell any QUALCOMM Commitment Shares along with the corresponding portion of the QUALCOMM Commitment (as permitted under Section 3.4(a)) and the per share sale price applicable to the Tag-Along Sale does not take into account the value of the QUALCOMM Commitment being so assumed, which right then the per share price applicable to each Vendor's and each BCI Party's Tag-Along Right shall be exercisable upon increased to include such value. None of the Vendors or BCI Parties (as applicable) shall be obligated to pay any portion of the transaction costs associated with a Tag-Along Sale or the sale, transfer or delivery of securities pursuant thereto, other than such Vendor's or BCI Party's costs.
(b) Notwithstanding the foregoing, the provisions of Section 6.4(a) shall not apply to (i) any bona fide public sale of Ordinary Shares sold, or to the securities so sold or to holders thereof, pursuant to an effective registration statement under the Securities Act in which the Shareholders may participate, (ii) any sale of Ordinary Shares on the New York Stock Exchange, over Nasdaq or on any other internationally recognized securities exchange on which the Ordinary Shares are listed following the initial Public Offering, or (iii) any Transfer of Ordinary Shares as permitted by Section 6.3.
(c) QUALCOMM shall provide each of the Vendors and the BCI Parties (as applicable) with 30 days' prior written notice of such proposed Tag-Along Sale, setting forth in reasonable detail the consideration per share to be paid by the transferee, the number of shares to be sold and the other terms and conditions of the Tag-Along Sale, along with a copy of the agreement(s) providing for the Tag-Along Sale. If any Vendor or BCI Party (as applicable) wishes to participate in the “Acceptance Notice”Tag-Along Sale, it shall provide written notice of its participation to QUALCOMM within 15 days of its receipt of the notice specified in the preceding sentence. Such notice shall set forth the number (on an aggregate basis) to the Company and/or the Majority Stockholdersof Ordinary Shares such Vendor or BCI Party (as applicable), as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that elects to include in the Tag-Along Stockholder wishes Sale. If such notice is not received by QUALCOMM within the 15-day period specified above, QUALCOMM shall have the right to sell or otherwise transfer the Ordinary Shares to the proposed transferee without any participation by such Shareholder, but only (i) for the price and on the terms and conditions stated in the notice, and (ii) if the Tag-Along Sale Noticeis consummated not later than 60 days after the end of such 15-day period specified above.
(bd) Each In the event that a Vendor exercising a Tag-Along Stockholder Right does not own at the time of such notice some or all of the Ordinary Shares which it has elected to sell but intends to obtain such shares by means of exercising some or all of its Warrants, then such Vendor shall have deliver a Purchase Form (as such term is defined in the right Warrants) to require the proposed transferee Company simultaneously with its delivering the tag-along notice to purchase from each QUALCOMM pursuant to paragraph (c) above. Along with the Purchase Form, such Vendor shall also deliver to the Company payment for the exercise price for such Ordinary Shares as required by the Warrant. The Company shall issue such Ordinary Shares to such Vendor in accordance with the Warrant as near the scheduled closing date of such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer Sale as is reasonably practicable but in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be any event no later less than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if anyprior to such scheduled closing date.
(de) Each Vendor or BCI Party (as applicable) exercising a Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, Right (i) shall deliver be responsible for delivering to the Proposed Transferee at a closing transferee the certificate or certificates representing all Ordinary Shares that it is selling and collecting directly from the transferee the consideration to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred paid in connection with the Sale sale of Control Transaction, such Ordinary Shares and each Tag-Along Stockholder (ii) shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable cooperate in good faith to effect the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title sale to such Notes or Conversion Shares transferee hereunder.
(or interests therein), free and clear f) If (i) any Vendor exercises a Warrant in anticipation of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification Sale as described in paragraph (other than its own title d) above and (ii) after the Company issues Ordinary Shares to such Notes or Conversion Shares)Vendor as a result of such exercise, such the Tag-Along Stockholder shall Sale is not consummated or the purchaser in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In additionSale fails to purchase all of such Ordinary Shares from such Vendor, each Tag-Along Stockholder and such Vendor may elect to have (x) the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination exercise of the appropriate scope of, or limitations or exceptions to, Warrant rescinded with respect to those Ordinary Shares which were not purchased by such representations purchaser and warranties. At (y) the time Warrant correspondingly adjusted such that the number of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds Ordinary Shares as to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any Warrant will be exercisable securities)includes such unpurchased Ordinary Shares.
Appears in 1 contract
Tag-Along Rights. (a) If an OptiMark Stockholder is transferring Offered Securities to a majority Third Party Purchaser pursuant to Section 3.1.5, then each Rightholder shall have the right to sell to such Third Party Purchaser, upon the terms set forth in the Offering Notice, that number of Shares held by such Rightholder equal to that percentage of the holders Offered Securities determined by dividing (x) the total number of Shares then owned by such Rightholder, by (y) (i) the total number of Shares then owned by all Rightholders plus (ii) the total number of Shares then owned by the OptiMark Stockholder who is exercising his rights pursuant to Section 3.1.5. Such OptiMark Stockholder and the Rightholder(s) shall effect the sale of the Company’s outstanding voting equity Offered Securities and such Rightholder(s) shall sell the number of Offered Securities required to be sold pursuant to this Section 3.1.6(a), and the number of Offered Securities to be sold to the Third Party Purchaser by the OptiMark Stockholder shall be reduced accordingly.
(collectivelyb) In order to exercise its right to sell Shares to a Third Party Purchaser pursuant to this Section 3.1.6, a Rightholder must agree to make substantially the same representations, warranties, covenants and indemnities and other similar agreements as the OptiMark Stockholder agrees to make in connection with the proposed sale by him of Offered Securities to the Third Party Purchaser. The OptiMark Stockholder who is exercising his rights pursuant to Section 3.1.5 shall give notice to each Rightholder of each proposed sale by it of Offered Securities which gives rise to the rights of the Rightholders set forth in this Section 3.1.6, at least thirty (30) days prior to the proposed consummation of such sale, setting forth the name of such OptiMark Stockholder, the “Majority Stockholders”) want number of Offered Securities, the name and address of the proposed Third Party Purchaser, the proposed amount and form of consideration and terms and conditions of payment offered by such Third Party Purchaser, the percent of Shares that such Rightholder may sell to consummate a transaction that constitutes a Sale of Control such Third Party Purchaser (a “Sale of Control Transaction”determined in accordance with this Section 3.1.6), then and a representation that such Third Party Purchaser has been informed of the Majority Stockholder(s) shall notify "tag-along" rights provided for in this Section 3.1.6 and has agreed to purchase Shares in accordance with the other Investors of such proposed Sale of Control Transaction terms hereof. The tag-along rights provided by a date which shall this Section 3.1.6 must be not later than exercised by each Rightholder wishing to sell Shares within fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate notice required by the maximum amount preceding sentence, by delivery of Notes or a written notice to such OptiMark Stockholder indicating such Rightholder's wish to exercise its rights and specifying the number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate maximum number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is Rightholder required to be transferred in connection with purchased by such Third Party Purchaser) it wishes to sell. If such Third Party Purchaser fails to purchase Shares from any Rightholder that has properly exercised its tag-along rights pursuant to this Section 3.1.6, then such OptiMark Stockholder shall not be permitted to consummate the Sale proposed sale of Control Transactionthe Offered Securities, and each Tag-Along Stockholder shall make any such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion attempted sale shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder null and void and the Majority Stockholders Company shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with not register any such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)transfer.
Appears in 1 contract
Tag-Along Rights. If (a) For purposes of this Agreement, the following shall constitute a majority "Triggering Event": The receipt by Xxxx X. Xxxxxxxx, Xxxxxxxxx X. Xxxxxxx or SCF (the "Potential Sellers") from any person or entity of a bona fide written offer to purchase or otherwise acquire for a valuable consideration any Common Stock held by Xxxx X. Xxxxxxxx, Xxxxxxxxx X. Xxxxxxx or SCF, respectively, that such person desires to accept (a "Purchase Offer"). Upon the occurrence of a Triggering Event, the recipient of a Purchase Offer shall promptly give notice to the other Potential Sellers of the holders occurrence of the Company’s outstanding voting equity (collectively, Triggering Event together with a copy of the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control offer executed by the offeror (a “Sale "Trigger Notice").
(b) Upon the occurrence of Control Transaction”)a Triggering Event, then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:shall apply.
(ai) The Tag-Along Stockholders If Xxxx X. Xxxxxxxx and/or Xxxxxxxxx X. Xxxxxxx is the recipient of a Purchase Offer, SCF shall have the right, but not the obligation, right and option to participate along with either or both of Xx. Xxxxxxxx or Xx. Xxxxxxx, as sellers, in the Proposed Sale sale of Control Transaction Common Stock pursuant to a Purchase Offer received by Xx. Xxxxxxxx or Xx. Xxxxxxx or both, which right and option shall be exercised by delivering written notice to such effect to the Potential Seller(s) that provided the Trigger Notice within 15 days after the date of the Trigger Notice. SCF and each of the Potential Sellers that provided the Trigger Notice shall be entitled to sell shares of Common Stock pursuant to the Purchase Offer on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell set forth on the terms Purchase Offer and conditions stated in a quantity calculated by multiplying (X) the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a total number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of Common Stock that are subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction Purchase Offer by (iiY) a fraction, the numerator of which is equal to the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder Potential Seller and the denominator of which shall be is equal to the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by all the Majority Stockholders and all Tag-Along StockholdersPotential Sellers desiring to sell in the Purchase Offer. In such circumstances, and at the same price per share Potential Seller(s) providing the Trigger Notice shall not sell any of the Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given which it owns pursuant to the Majority StockholdersPurchase Offer unless SCF is permitted to participate in the sale as provided herein.
(cii) Within ten If SCF, in compliance with its other contractual obligations hereunder, including restrictions on the transfer of its Common Stock, is the recipient of a Purchase Offer, Xxxx X. Xxxxxxxx and Xxxxxxxxx X. Xxxxxxx shall have the right and option to participate along with SCF in the sale of the Common Stock pursuant to the Purchase Offer, which right and option shall be exercised by delivering written notice to such effect to SCF within fifteen (1015) days after the date of the Trigger Notice. In such event, SCF and each of the other Potential Sellers that elects to participate in such sale shall be entitled to sell shares of Common Stock pursuant to the Purchase Offer on the terms and conditions set forth in the Purchase Offer and in a quantity calculated by which multiplying (X) the total number of shares of Common Stock that are subject to the Purchase Offer by (Y) a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Optionfraction, the Company or numerator of which is equal to the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale shares of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares Common Stock owned by such Tag-Along Stockholder Potential Seller and the denominator of which is equal to be transferred in connection with the Sale number of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable shares of Common Stock owned by all the Potential Sellers desiring to sell in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liensPurchase Offer; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion for the purposes of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder this subsection 6(b)(ii) and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope ofapplicable percentage interests, or limitations or exceptions to, such representations each of Xx. Xxxxxxxx and warrantiesXx. At the time of consummation Xxxxxxx shall be deemed to own only 35% of the Sale shares that they own on the date of Control Transactionsuch calculation, including shares deemed owned pursuant to clause (iii) below. SCF shall not be entitled to sell any of its Common Stock pursuant to the Proposed Transferee Purchase Offer unless each electing Potential Seller is permitted to participate in the sale as provided herein.
(iii) For purposes of this Section 6, Xx. Xxxxxxx shall remit directly be deemed to each such Tag-Along Stockholder that portion own 1/3 of the sale proceeds shares owned by Xxxx Investment Company in addition to which such Tagthose shares owned by him directly. Xx. Xxxxxxx agrees to cause Xxxx Investment Company to comply with this Section to allow Potential Sellers to tag-Along Stockholder is entitled along with sales of shares of Common Stock by reason of its participation therein (less any adjustments due Xxxx Investment Company to the conversion of any convertible securities or extent such shares to be sold by Xxxx Investment Company are attributable to Xx. Xxxxxxx'x 1/3 interest in Xxxx Investment Company.
(iv) The rights and obligations set forth in this Section 6 shall terminate upon the exercise of any exercisable securities)Company's Initial Public Offering.
Appears in 1 contract
Samples: Stockholders Agreement (Hornbeck Offshore Services Inc /La)
Tag-Along Rights. (i) If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want Selling Shareholder is transferring Offered Securities to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”Third Party Purchaser pursuant to Section 3.1(e), then the Majority Stockholder(s) shall notify each of the other Investors of Shareholders (each, in such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereaftercapacity, each other Investor or Stockholder (each a “Tag-Along StockholderRightholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The Tag-Along Stockholders shall have the right, but not the obligation, to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within ten (10) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee sell to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fractionThird Party Purchaser, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along OptionSelling Shareholder, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and that number of Conversion Shares held by such Tag-Along Stockholder Rightholder equal to that will be included in percentage of the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of Offered Securities determined by dividing (i) twenty the total number of Shares then owned by such Tag-Along Rightholder by (20ii) days after the date sum of (x) the total number of Shares then owned by which each Holder was required all such Tag-Along Rightholders exercising their rights pursuant to notify this Section 3.1(f) and (y) the Company or total number of Shares then owned by the Majority Stockholders of its intent to exercise Selling Shareholder. The Selling Shareholder and the Tag-Along Option Rightholder(s) exercising their rights pursuant to this Section 3.1(f) shall effect the sale of the Offered Securities and such Tag-Along Rightholder(s) shall sell the number of Offered Securities required to be sold by such Tag-Along Rightholder(s) pursuant to this Section 3.1(f)(i), and the number of Offered Securities to be sold to such Third Party Purchaser by the Selling Shareholder shall be reduced accordingly.
(ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each The Selling Shareholder shall give notice to each Tag-Along Stockholder may effect its participation in any Sale Rightholder of Control Transaction, and as part each proposed sale by it of its participation in Offered Securities which gives rise to the Sale rights of Control Transaction pursuant to a duly exercised the Tag-Along OptionRightholders set forth in this Section 3.1(f), shall deliver at least ten (10) days prior to the Proposed Transferee at a closing to be held at proposed consummation of such sale, setting forth the offices name of such Selling Shareholder, the number of Offered Securities, the name and address of the Company proposed Third Party Purchaser (or such other place as subject to the parties agreeTag-Along Rightholder entering into confidentiality agreement in form and substance satisfactory to the Selling Shareholder), one or more Notes or certificates, properly endorsed for transfer, which represent all the proposed price and form of consideration and other terms and conditions offered by such Third Party Purchaser and the percentage of Shares that such Tag-Along Rightholder may sell to such Third Party Purchaser (determined in accordance with Section 3.1(f)(i)). The tag-along rights provided by this Section 3.1(f) must be exercised by any Tag-Along Rightholder wishing to sell its Shares within ten (10) days following receipt of the Notes or Conversion notice required by the preceding sentence, by delivery of a written notice to the Selling Shareholder indicating such Tag-Along Rightholder’s wish to exercise its rights and specifying the number of Shares (up to the maximum number of Shares owned by such Tag-Along Stockholder which is Rightholder required to be transferred in connection with the Sale of Control Transactionpurchased by such Third Party Purchaser) it wishes to sell, and each provided that any Tag-Along Stockholder shall make Rightholder may waive its rights under this Section 3.1(f) prior to the expiration of such representations and warranties10-day period by giving written notice to the Selling Shareholder, and shall enter into such agreements, as are customary and reasonable in with a copy to the context Company. The failure of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder Rightholder to respond within such 10-day period shall agree be deemed to provide indemnification (other than its own title to such Notes or Conversion Shares), be a waiver of such Tag-Along Stockholder shall in no event be required Rightholder’s rights under this Section 3.1(f). If a Third Party Purchaser fails to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion purchase Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such from any Tag-Along Stockholder. In additionRightholder that has properly exercised its tag-along rights pursuant to this Section 3.1(f)(ii), each Tag-Along Stockholder and then the Majority Stockholders Selling Shareholder shall reasonably cooperate and consult with each other in order not be permitted to effect consummate the Sale proposed sale of Control Transactionthe Offered Securities, and each Tag-Along Stockholder any such attempted sale shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations be null and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)void ab initio.
Appears in 1 contract
Tag-Along Rights. If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”), then the Majority Stockholder(s) shall notify the other Investors of such proposed Sale of Control Transaction by a date which shall be not later than fifteen (15) days prior to the Company or any such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (the “Sale Notice’). Thereafter, each other Investor or Stockholder (each a “Tag-Along Stockholder”) may cause the Company or such Majority Stockholders to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and in accordance with the following provisions of this Section 3:
(a) The TagNo Stockholder (for purposes of this ----------------
Section 2.1 the "Offering Stockholder") may sell any shares of Stock to any -------------------- non-Along Stockholders shall have the rightAffiliated third party (except through a sale pursuant to a registered underwritten public offering) if such shares, but not the obligation, together with all shares of Stock previously sold by such Offering Stockholder to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated third parties (the “Tag-Along Option”except through a sale pursuant to an underwritten registered public offering), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, within would represent more than ten percent (10%) days of receipt of the Sale Notice. Each Acceptance Notice shall indicate the maximum amount sum of Notes or number of Conversion Shares that the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each such Tag-Along Stockholder a number of shares of Common Stock up to the product obtained by multiplying (i) the aggregate number of shares of - Common Stock subject to held by the Majority Stockholders Transfer in Offering Stockholder as of the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by date hereof plus (ii) a fraction, the numerator of which is -- the aggregate number of shares of Common Stock beneficially owned into which the shares of Preferred Stock, if any, held by the Offering Stockholder as of the date thereof would be ultimately convertible, unless each of the other Stockholders, other ------ than the Management Stockholders, is offered the right, on a fully diluted pro rata (except as otherwise provided in Sections 1(c) and 2(c) of the Investors Agreement) basis by such Tag-Along Stockholder and (based on the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Stockholder including the Majority Stockholders and all Tagnumber of shares of Common Stock into which the Preferred Stock would then be convertible) to participate in any such sale by selling to such non-Along StockholdersAffiliated third party its pro rata portion of Common Stock, in the event the Offering Stockholder is selling Common Stock, and at Preferred Stock in the same event the Offering Stockholder is selling Preferred Stock, for a purchase price per share of Common Stock or Preferred Stock, as the case may be, and upon the same on other terms and conditions (including without limitation time of payment and form of consideration) as conditions, not less favorable to be paid and given such Stockholder than those applicable to the Majority StockholdersOffering Stockholder.
(b) This Section 2.1 shall not apply to (i) sales of Common Stock by - any Management Stockholder holding less than one per cent (1%) of the aggregate number of outstanding shares of Common Stock at such time, calculated on a fully diluted basis, so long as the aggregate purchase price of such Common Stock is less than $500,000, or (ii) sales of Stock by an Outside Investor pursuant to -- Section 2.1, 2.2 or 2.3 hereof or Section 1(c) or 2(c) of the Investors Agreement.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes The GE Investors' rights under this Section 2.1 are modified and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is to be transferred in connection with the Sale of Control Transaction, and each Tag-Along Stockholder shall make such representations and warranties, and shall enter into such agreements, as are customary and reasonable in the context of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder shall agree to provide indemnification (other than its own title to such Notes or Conversion Shares), such Tag-Along Stockholder shall in no event be required to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion Shares involved in such transfer that are represented supplemented by the Notes or Conversion Shares owned by such Tag-Along Stockholder. In addition, each Tag-Along Stockholder and the Majority Stockholders shall reasonably cooperate and consult with each other in order to effect the Sale of Control Transaction, and each Tag-Along Stockholder shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)Investors Agreement.
Appears in 1 contract
Tag-Along Rights. (i) If a majority of the holders of the Company’s outstanding voting equity (collectively, the “Majority Stockholders”) want Major Shareholder is directly or indirectly transferring Offered Securities to consummate a transaction that constitutes a Sale of Control (a “Sale of Control Transaction”Third Party Purchaser pursuant to Section 3.1(e), then the Majority Stockholder(sGeneral Atlantic Shareholders and the Additional Purchaser Shareholders (each, a “Tag-Along Rightholder”) shall notify have the other Investors right to sell to such Third Party Purchaser, upon the terms set forth in the Offering Notice, that number of Shares held by such proposed Sale Tag-Along Rightholder equal to that percentage of Control Transaction the Offered Securities determined by a date which dividing (i) the total number of Shares then owned by such Tag-Along Rightholder by (ii) the sum of (x) the total number of Shares then owned by all such Tag-Along Rightholders exercising their rights pursuant to this Section 3.1(f) and (y) the total number of Shares then owned by the Selling Shareholder. The Selling Shareholder and the Tag-Along Rightholder(s) exercising their rights pursuant to this Section 3.1(f) shall effect the sale of the Offered Securities and such Tag-Along Rightholder(s) shall sell the number of Offered Securities required to be sold by such Tag-Along Rightholder(s) pursuant to this Section 3.1(f)(i), and the number of Offered Securities to be sold to such Third Party Purchaser by the Selling Shareholder shall be not later than reduced accordingly.
(ii) The Selling Shareholder shall give notice to each Tag-Along Rightholder of each proposed sale by it of Offered Securities which gives rise to the rights of the Tag-Along Rightholders set forth in this Section 3.1(f), at least fifteen (15) days prior to the Company or any proposed consummation of such Majority Stockholder(s) entering into any definitive binding agreement in respect thereof (sale, setting forth the “Sale Notice’). Thereaftername of such Selling Shareholder, each other Investor or Stockholder (each a “the number of Offered Securities, the name and address of the proposed Third Party Purchaser, the proposed amount and form of consideration and terms and conditions of payment offered by such Third Party Purchaser, the percentage of Shares that such Tag-Along Stockholder”Rightholder may sell to such Third Party Purchaser (determined in accordance with Section 3.1(f)(i)), and a representation that such Third Party Purchaser has been informed of the “tag-along” rights provided for in this Section 3.1(f) may cause the Company or such Majority Stockholders and has agreed to effect a Transfer of such other Stockholder’s Stock; in each case, only pursuant to and purchase Shares in accordance with the following provisions of terms hereof. The tag-along rights provided by this Section 3:
(a3.1(f) The must be exercised by any Tag-Along Stockholders shall have the right, but not the obligation, Rightholder wishing to participate in the Proposed Sale of Control Transaction on the terms and conditions herein stated (the “Tag-Along Option”), which right shall be exercisable upon written notice (the “Acceptance Notice”) to the Company and/or the Majority Stockholders, as the case may be, sell its Shares within ten (10) days of following receipt of the Sale Notice. Each Acceptance Notice shall indicate notice required by the maximum amount preceding sentence, by delivery of Notes or number of Conversion Shares that a written notice to the Tag-Along Stockholder wishes to sell on the terms and conditions stated in the Sale Notice.
(b) Each Tag-Along Stockholder shall have the right to require the proposed transferee to purchase from each Selling Shareholder indicating such Tag-Along Stockholder a Rightholder’s wish to exercise its rights and specifying the number of shares of Common Stock Shares (up to the product obtained by multiplying (i) the aggregate maximum number of shares of Common Stock subject to the Majority Stockholders Transfer in the Sale of Control Transaction immediately prior to the Proposed Sale of Control Transaction by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by such Tag-Along Stockholder and the denominator of which shall be the aggregate number of shares of Common Stock beneficially owned on a fully diluted basis by the Majority Stockholders and all Tag-Along Stockholders, and at the same price per share of Common Stock and upon the same terms and conditions (including without limitation time of payment and form of consideration) as to be paid and given to the Majority Stockholders.
(c) Within ten (10) days after the date by which a Tag-Along Stockholder notifies the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option, the Company or the Majority Stockholders shall notify such Tag-Along Stockholder of the amount of Notes and number of Conversion Shares held by such Tag-Along Stockholder that will be included in the sale and the date on which the Sale of Control Transaction will be consummated, which shall be no later than the later of (i) twenty (20) days after the date by which each Holder was required to notify the Company or the Majority Stockholders of its intent to exercise the Tag-Along Option and (ii) five (5) days after the satisfaction of any governmental approval or filing requirements, if any.
(d) Each Tag-Along Stockholder may effect its participation in any Sale of Control Transaction, and as part of its participation in the Sale of Control Transaction pursuant to a duly exercised Tag-Along Option, shall deliver to the Proposed Transferee at a closing to be held at the offices of the Company (or such other place as the parties agree), one or more Notes or certificates, properly endorsed for transfer, which represent all of the Notes or Conversion Shares owned by such Tag-Along Stockholder which is Rightholder required to be transferred in connection with the Sale of Control Transactionpurchased by such Third Party Purchaser) it wishes to sell, and each provided that any Tag-Along Stockholder shall make Rightholder may waive its rights under this Section 3.1(f) prior to the expiration of such representations and warranties10-day period by giving written notice to the Selling Shareholder, and shall enter into such agreements, as are customary and reasonable in with a copy to the context Company. The failure of the proposed Sale of Control Transaction, including, without limitation, representations and warranties (and indemnities with respect thereto) that the Proposed Transferee of the Notes or Conversion Shares (or interests therein) is receiving good and marketable title to such Notes or Conversion Shares (or interests therein), free and clear of all pledges, security interests, or other liens; provided, however, that with respect to any matter as to which a Tag-Along Stockholder Rightholder to respond within such 10-day period shall agree be deemed to provide indemnification (other than its own title to such Notes or Conversion Shares), be a waiver of such Tag-Along Stockholder shall in no event be required Rightholder’s rights under this Section 3.1(f). If a Third Party Purchaser fails to provide indemnification in an amount that would exceed its pro rata portion of the total liability for which such indemnification is sought, which pro rata portion shall be determined on the basis of the percentage of the total Notes or Conversion purchase Shares involved in such transfer that are represented by the Notes or Conversion Shares owned by such from any Tag-Along Stockholder. In additionRightholder that has properly exercised its tag-along rights pursuant to this Section 3.1(f)(ii), each Tag-Along Stockholder and then the Majority Stockholders Selling Shareholder shall reasonably cooperate and consult with each other in order not be permitted to effect consummate the Sale proposed sale of Control Transactionthe Offered Securities, and each Tag-Along Stockholder any such attempted sale shall provide reasonable assistance to the Majority Stockholders in connection with the preparation of disclosure schedules relating to representations be null and warranties to be made to the Proposed Transferee in connection with such Sale of Control Transaction and in the determination of the appropriate scope of, or limitations or exceptions to, such representations and warranties. At the time of consummation of the Sale of Control Transaction, the Proposed Transferee shall remit directly to each such Tag-Along Stockholder that portion of the sale proceeds to which such Tag-Along Stockholder is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities)void ab initio.
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