Tag-Along Rights. (a) Subject to a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 2 contracts

Samples: Limited Liability Company Agreement (Ranger Energy Services, Inc.), Limited Liability Company Agreement (Ranger Energy Services, Inc.)

Tag-Along Rights. If during the three (a3) ~~Subject~~ year period commencing on the date of this Agreement: (i) either the AES Related Parties or the Siemens Related Parties (each in such capacity, an “Initiating Stockholder”) (x) desires to Transfer (as defined in the LLC Agreement) to any Person (other than their respective Affiliates or to the Corporation) (a ~~Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all~~ “Third Party”) one hundred percent (100%) of ~~the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group~~ its shares of Class A ~~Members and/or~~ Common Stock, if any, and Common Units (in the case of Common Units, together with the applicable shares of Class B ~~Members acting jointly~~ Stock) and (~~collectively,~~ y) such shares of Class A Common Stock and Common Units being sold to such Third Party (the “~~Selling Member~~Subject Securities”) ~~desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other~~ represent less than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five twenty percent (520%) of the aggregate issued and outstanding shares of Class A ~~Units~~ Common Stock (including for this purpose the Underlying Class A Shares), then (A) the Initiating Stockholder may sell such Subject Securities to the Third Party, (B) the Initiating Stockholder is not permitted to assign or transfer any of its rights under this Agreement to such Third Party and (C) the QIA Related Parties shall not have any right to participate in such sale to such Third Party pursuant to this Section 4(d)(i); (ii) either Initiating Stockholder desires to Transfer (as defined in the LLC Agreement) to a Third Party, one hundred percent (100%) of its Subject Securities and such Subject Securities represent twenty percent (20%) or more of the aggregate issued and outstanding shares of Class ~~B Units~~ A Common Stock (~~taken together as a single class) (a “Tag-Along Sale”~~including for this purpose the Underlying Class A Shares), then the ~~Selling Member must comply with the provisions of~~ Initiating Stockholder may, in its sole discretion, (1) elect to (x) Transfer its Subject Securities and (y) transfer or assign its rights under this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject Agreement to such ~~proposed Transfer (the “Tag-Along Units”)~~Third Party, ~~the identity of the proposed transferee, and the other terms and conditions of~~ provided that in connection with such ~~proposed~~ Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it Initiating Stockholders shall provide the ~~Selling Member~~ QIA Related Parties with ~~written irrevocable notice specifying~~ the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the ~~Tag-~~sale of such Subject Securities and sell one hundred percent (100%) of their shares of Class A Common Stock pursuant to Sections 4(d)(v), (vi) and (vii) (the rights of the QIA Related Parties to participate in any Transfer of Subject Securities under this Section 4(d) shall be referred to as the “Tag Along ~~Sale by providing~~ Rights”) or (2) Transfer the ~~required notice~~ Subject Securities to the ~~Selling Member within~~ Third Party without transferring or assigning its rights under this Agreement, in which case the ~~Tag-~~QIA Related Parties will not have any Tag Along ~~Notice Period~~ Rights. In respect of clause (1) herein, the applicable Initiating Stockholder shall ~~deliver~~ use its reasonable best efforts to ~~a representative~~ cause the Third Party purchaser to acquire the applicable shares of Class A Common Stock of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) QIA Related Parties pursuant to the terms of this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a4(d); provided ~~that where~~ that, if such Third Party elects not to acquire such shares of Class A Common Stock of the QIA Related Parties, (A) the applicable Initiating Stockholder shall not be permitted to transfer or assign its rights under this Agreement to such Third Party and (B) the QIA Related Parties will not have any Tag Along Rights; (iii) both Initiating Stockholders desire collectively to Transfer (as defined in the LLC Agreement) to a Third Party a number of their Subject Securities representing (x) less than one hundred percent (100%) of such Initiating Stockholder’s Subject Securities and (y) thirty percent (30%) or greater of the aggregate issued and outstanding ~~Units~~ shares of Class A Common Stock (including for this purpose the Underlying Class A Shares), then (1) the Initiating Stockholders shall not be permitted to assign their rights under this Agreement to the Third Party, and (2) the QIA Related Parties shall have the Tag Along Rights with respect to a sale of a pro rata portion of their Class A Common in the sale of such Subject Securities pursuant to the terms of this Section 4(d); (iv) both Initiating Stockholders desire collectively to Transfer (as defined in the LLC Agreement) to a Third Party one hundred percent (100%) of their Subject Securities and such Subject Securities represent thirty percent (30%) or greater of the ~~Company are being sold to the proposed Third Party transferee, the~~ aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding ~~Units~~ shares of Class A Common Stock (including for this purpose the Underlying Class A Shares), then the Initiating Stockholders (x) may Transfer their collective Subject Securities to the Third Party and (y) may assign their respective rights under this Agreement to such Third Party and (z) shall provide the QIA Related Parties with the Tag Along Rights and the ability to participate in the sale of such Subject Securities and sell one hundred percent (100%) of their shares of Class A Common Stock pursuant to the terms of this Section 4(d); (v) Prior to any proposed sale of the ~~Company based on the valuation methodology used~~ Subject Securities by the ~~proposed transferee and~~ Initiating Stockholders to a Third Party to which Tag Along Rights apply as set forth in Section 4(d)(ii) through Section 4(d)(iv), the ~~Selling Member for~~ applicable Initiating Stockholder shall provide the ~~Tag-~~QIA Related Parties with a written notice (the “Tag Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing MembersNotice”), which ~~determination~~ shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that include (i) ~~any such Tag Member shall not be liable for~~ the ~~breach~~ identity of ~~any covenant by~~ the ~~Selling Member and vice versa~~prospective purchaser (the “Prospective Purchaser”), (ii) ~~in no event shall any Tag Member~~ the number of the Subject Securities proposed to be ~~required to make representations and warranties other than (A) such Member’s valid ownership of its Units~~sold by the Initiating Stockholders, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) ~~any liability relating~~ the per share consideration and the material terms and conditions upon which the proposed sale is to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale made, and (iv) ~~no Tag Member shall be obligated to agree to indemnification obligations in excess~~ the number of the ~~proceeds received~~ Subject Securities held by the applicable Initiating Stockholders to be included in such Tag ~~Member~~ Along Transfer, expressed as a percentage of their aggregate holdings (the “Tag Percentage”); (vi) Following receipt of a Tag Along Notice hereunder, the QIA Related Parties, in their sole discretion, will have ten (10) business days to exercise, by delivery of written notice to the Initiating Stockholders (the “Tag Election”), the right to sell to the Prospective Purchaser a number of shares of Class A Common Stock up to the product of the total number of Class A Common Stock held by the QIA Related Parties multiplied by the Tag Percentage set forth in the Tag Along Notice (for clarity, in such ~~Tag-Along Sale. (f) If any Tag Member (i) does not elect before~~ a joint sale by the ~~end~~ AES Related Parties and the Siemens Related Parties where the number of the ~~Tag-Along Notice Period to have all or any part~~ Subject Securities being included in such sale by one party is different from that of the other party, the QIA Related Parties may use the greater of the two individual Tag Percentages in calculating the number of its ~~Tag-Along Portion included in~~ pro rata portion of the ~~Tag-Along Sale or~~ applicable Subject Securities) (~~ii) fails to deliver to~~ any of the ~~Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively~~QIA Related Parties exercising such right, a “~~Tag-~~Tagging Stockholder” and any such shares of Class A Common Stock designated for sale by a Tagging Stockholder, collectively, the “Tag Along ~~Failure~~Securities”). For purposes of this Section 4(d), ~~then such Tag Member~~ Subject Securities will be ~~deemed~~ counted as follows: (A) each share of Class A Common Stock will be counted as one (1) Subject Security and (B) each share of Class B Common Stock and Common Unit together will be counted as one (1) Subject Security. Any such exercise of the Tag Along Rights by a Tagging Stockholder shall be irrevocable. If the QIA Related Parties have not delivered a Tag Election within such ten (10) business day period, the Initiating Stockholders shall have the right to ~~have waived any and all rights under this Section 3.5 with respect~~ freely Transfer to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities lawsProspective Purchaser all, ~~other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (~~but not less than all) , of the ~~applicable Class A Units or Class B Units at a price not higher than contained~~ Subject Securities proposed to be sold as set forth in the ~~Tag-~~Tag Along Notice for a period not to exceed one hundred and eighty (180) days following the end of such ten (10) day period, subject to extension to allow pending applicable governmental consents and approvals; provided, that such Transfer is otherwise on ~~terms not more favorable~~ the same or substantially similar or less preferable (to the ~~Selling Member than were contained~~ Initiating Stockholders) terms and conditions as those set forth in the ~~Tag-~~Tag Along Notice~~; thereafter~~. If, ~~any proposed~~ at the end of such one hundred and eighty (180) day period (as extended to permit pending governmental consents and approvals), the Initiating Stockholders have not completed the Tag Along Transfer ~~by such Selling Member~~ in accordance with the terms and conditions of ~~Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-~~the Tag Along Notice~~. (g) Promptly after~~ , all the ~~consummation of~~ restrictions on a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything Transfer contained in this Section ~~3.5~~ 4(d) with respect to the ~~contrary, no Selling Member~~ Subject Securities owned by the Initiating Stockholders shall again be in effect; and (vii) The Tag Along Securities will be included in the relevant Transfer on the same terms and subject to the same conditions set forth in the Tag Along Notice and applicable to the Subject Securities that the Initiating Stockholders are selling (except that governmental consents and approvals shall be ~~liable to~~ obtained by each Tagging Stockholder as required under applicable law, even if different from those required from the Initiating Stockholders in connection with the Tag Along Transfer). Each Tagging Stockholder agrees that it will take such actions and execute such other agreements as the Initiating Stockholders may reasonably request in connection with the consummation of the Tag Along Transfer and the transactions contemplated thereby, including any ~~Member based on the failure~~ purchase agreement, proxies, custody agreements, powers of ~~a Tag-Along Sale to occur for any reason~~attorney, written consents in lieu of meetings or waiver of appraisal rights. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 2 contracts

Samples: Stockholders Agreement (Fluence Energy, Inc.), Stockholders Agreement (Fluence Energy, Inc.)

Tag-Along Rights. (a) ~~Subject~~ With respect to proposed Transfers after March 1, 2021, with the exception of (i) Transfers to Permitted Transferees, (ii) Transfers by either of the Pinnacle Members and (iii) Transfers in accordance with Section 9.2, at least fifteen (15) days prior to any Transfer of Common Units by a Member ~~first complying with Section 3.4 and provided~~ other than a Pinnacle Member (or a Permitted Transferee thereof) (the “Transferring Party”), the Transferring Party shall deliver a written notice (the “Transfer Notice”) to the Company and ~~the ROFR Members have not purchased all~~ each of the Pinnacle Members then holding Common Units, specifying in reasonable detail the identity of the prospective Transferee(s), the number of Units proposed to be ~~Transferred under Section 3.4~~Transferred, ~~each time a Class A Member~~and, ~~Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively~~to the extent known, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of ~~such proposed~~ the Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each ~~Tag~~ of the Pinnacle Members may elect to participate in the contemplated Transfer by delivering written notice to the Transferring Party and the Company (the “Pinnacle Transfer Notice”) within ten (10) days after delivery of the Transfer Notice to the Pinnacle Member (the “Pinnacle Members’ Election Period”). If either Pinnacle Member elects to participate in the Transfer described in the Transfer Notice and timely delivers the Pinnacle Transfer Notice, then such Pinnacle Member shall ~~have~~ be entitled to sell to the ~~right and option, exercisable as set forth below,~~ Person to ~~include~~ whom the Transferring Party desires to Transfer its Units (or to the Transferring Party in ~~the Tag-Along Sale up~~ lieu thereof pursuant to Section 9.3(c)) that ~~amount~~ number of its ~~Class A Units or Class B~~ Common Units (~~as applicable~~the “Pinnacle Transferred Units”) equal to the product of (i) the ~~aggregate~~ number of ~~Class A~~ Common Units ~~and Class B Units~~ proposed to be ~~acquired~~ sold by the ~~purchaser,~~ Transferring Party as described in the Transfer Notice multiplied by (ii) a fraction, the numerator of which is the number of ~~Class A~~ Common Units ~~or Class B Units (as applicable)~~ held by such ~~Tag Member~~ Pinnacle Member, and the denominator of which is the aggregate number of ~~Class A~~ Common Units ~~and Class B Units~~ then held by all Members. Such electing Pinnacle Members shall be entitled to sell their Pinnacle Transferred Units in the ~~Selling Member~~ contemplated Transfer, at the same price and ~~all Tag Members~~ on the same terms as the Transferring Party (~~its “Tag-Along Portion”~~including becoming party to a purchase and sale agreement related to the Transfer with such terms and conditions as the Transferring Party shall approve)~~, and the Selling Member shall not consummate the Tag-Along Sale unless such portion~~ . Each of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Pinnacle Members ~~that do~~ may elect to ~~include Class A~~ sell in any Transfer contemplated under this Section 9.3 a lesser number of Common Units ~~or Class B Units~~ than such Pinnacle Member is entitled to sell hereunder, in ~~a Tag-Along Sale~~ which case the Transferring Party shall have the ~~opportunity~~ right to ~~increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among~~ sell the ~~Tag Members making such further election) such~~ number of Common Units that the ~~percentage of Class A Units and Class B Units of Tag~~ Pinnacle Members ~~participating~~ have elected not to sell (in ~~such Tag-Along Sale is equal to up~~ addition to the ~~Tag-Along Portion~~ other Common Units which the Transferring Party is otherwise entitled to sell). Each Member Transferring Units pursuant to this Section 9.3(b) shall pay its pro rata share (allocated in inverse order of ~~all Tag Members~~the allocation of distributions set forth in Section 4.1) of the expenses incurred by the Transferring Party in connection with such Transfer. (c) If With respect to any ~~Tag Member desires~~ Transfer subject to ~~exercise~~ Section 9.3(b) the Transferring Party shall not Transfer any of its ~~rights set forth~~ Units to any prospective Transferee if such prospective Transferee declines to allow the participation of the Pinnacle Members to the extent required by this Section 9.3, unless, in ~~Sections 3.5(a) and (b) above~~lieu of such participation, ~~then it shall provide~~ the ~~Selling Member with written irrevocable notice specifying~~ Transferring Party or its Affiliates purchase the number of ~~Class A~~ Units ~~or Class B Units (as applicable)~~ from each Pinnacle Member that such ~~Tag~~ Pinnacle Member ~~wishes~~ would have been entitled to ~~include in~~ sell under Section 9.3(b), for the ~~Tag-Along Sale (which~~ price and on the terms such ~~number shall not exceed~~ Pinnacle Member would have been entitled to sell such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units ~~or Class B Units (as applicable) pursuant to this~~ under Section ~~3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor~~9.3. (d) ~~Each Member participating~~ The Transferring Party may Transfer the Units specified in the ~~Tag-Along Sale shall receive a portion~~ Transfer Notice (less the number of Common Units which the ~~Tag-Along Price equal~~ Pinnacle Members have timely elected to ~~the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company~~ sell in accordance with ~~Section 7.1(a); provided that where less than one hundred percent (100%~~the terms hereof) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not ~~higher than contained in the Tag-Along Notice~~ more favorable, and on other terms not more favorable in any material respect, to the ~~Selling Member than were contained~~ Transferee(s) thereof specified in the ~~Tag~~Transfer Notice during the 120-~~Along Notice; thereafter~~day period immediately following the Pinnacle Members’ Election Period, or any ~~proposed Transfer by~~ Transferring Party’s Units not Transferred within such ~~Selling Member of Class A Units and/or Class B Units~~ 120-day period shall be subject to the provisions of this Section ~~3.5 and shall require a Tag-Along Notice~~9.3 upon subsequent Transfer. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 2 contracts

Samples: Limited Liability Company Agreement (Pinnacle Financial Partners Inc), Limited Liability Company Agreement (Pinnacle Financial Partners Inc)

Tag-Along Rights. At least 30 days prior to any direct or indirect sale, transfer, conveyance assignment, pledge, hypothecation, gift, delivery or other transfer or disposal (~~a) Subject to~~ a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “~~Selling Member~~Transfer”) ~~desires to make any Transfer~~ of all or any portion of Units or other Equity Securities or any interest therein (the ~~Class A Units and/or Class B Units held~~ “Offered Securities”) by ~~such Member(s~~ABRY-Affiliated Partners (collectively, the “Transferring Partner”) to ~~any Third Party,~~ a Person other than to a Permitted Transferee of such ~~Member(s~~ABRY-Affiliated Partners or Grande Manager or transfers on or prior to the date that is six (6) or months from the date first written above of an aggregate number of Class A Common Units and/or Series A Preferred Units (so long as the ABRY-Affiliated Partners thereafter continue to own, in ~~accordance with Sections 3.6~~the aggregate, ~~3.7 and 3.8, such that~~ greater than 50% of each of the Class A ~~Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A~~ Common Units and ~~Class B Units~~ the Series A Preferred Units) to any member of Atlantic Broadband Group LLC or any Affiliate of any such member (~~taken together as a single class) (a “Tag~~provided that no such transferee shall constitute an ABRY-~~Along Sale”~~Affiliated Partner), ~~then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member~~ Grande Manager shall ~~inform the Board by~~ deliver a written notice ~~in writing~~ (the “~~Tag-Along~~ Sale Notice”) (to the ~~date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject~~ Partnership and to ~~such proposed Transfer (the “Tag-Along Units”),~~ each Other Partner specifying in reasonable detail the identity of the ~~proposed transferee~~prospective transferee(s), ~~and~~ the ~~other~~ terms and conditions of ~~such proposed~~ the Transfer (including the number, type and class of Offered Securities and the purchase price therefor) and the closing date and location. Each Other Partner may elect to participate in the contemplated Transfer, ~~including any consideration proposed to be received pursuant to a bona fide written agreement for~~ on the ~~Tag-Along Units (and, if~~ same terms as those set forth in the ~~proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along~~ Sale Notice ~~shall state the proposed price~~ except as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section ~~3.5. (b) Each Tag Member~~ 3(a), by delivering written notice to the Transferring Partner within 10 days following receipt of the Sale Notice; provided that a Management Partner shall have the right to so participate only with respect to Vested Incentive Units held by such Management Partner at the time of receipt of such Sale Notice. If one or more Other Partners have elected to participate in such Transfer, the Transferring Partner and ~~option, exercisable as set forth below,~~ such Other Partners shall be entitled to ~~include~~ sell in the ~~Tag-Along Sale up to~~ contemplated Transfer that ~~amount of its Class A Units or Class B Units (as applicable) equal to the product~~ number of (i) Common Units (if Common Units are being Transferred by the ~~aggregate~~ Transferring Partner) of any class (subject, in the case of a sale by any Management Partner, to the provisos in the immediately preceding sentence) as is equal to the percentage of Offered Securities determined by dividing (x) the number of ~~Class A~~ Common Units owned by such Partner by (y) the sum of (A) the total number of Common Units owned by all such Other Partners electing to participate in such Transfer and ~~Class B~~ (B) the total number of Common Units ~~to be acquired~~ owned by the ~~purchaser, multiplied by~~ Transferring Partner; and (ii) ~~a fraction,~~ Series A Preferred Units (if Series A Preferred Units are being transferred by the ~~numerator~~ Transferring Partner) as is equal to the percentage of ~~which is~~ Offered Securities determined by dividing (x) the number of ~~Class~~ Series A Preferred Units ~~or Class B Units (as applicable) held~~ owned by such ~~Tag Member~~ Partner by (y) the sum of (A) the total number of Series A Preferred Units owned by all such Other Partners electing to participate in such Transfer plus (B) the total number of Series A Preferred Units owned by the Transferring Partner; provided, in each case, that each Partner participating in such Transfer shall receive the same form of consideration and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such same portion of the ~~Class A Units or Class B Units~~ aggregate net consideration (~~as applicable)~~ net of ~~such Tag Member (or such lesser portion~~ any post-closing adjustments following the payment of the ~~Class A Units or Class B Units of~~ reasonable expenses incurred by the Partners in connection with such ~~Tag Member for which such right and option is exercised) is so included. To~~ Transfer to the extent ~~that any Tag Member elects~~ such expenses are approved by the Transferring Partner and are not ~~to include its Class A Units~~ otherwise paid by the Partnership or ~~Class B Units (~~the acquiring party) as ~~applicable)~~ such holder would have received if such aggregate net consideration had been distributed by the Partnership in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up complete liquidation pursuant to the ~~Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its~~ rights and preferences set forth in ~~Sections 3.5(a) and (b) above, then it shall provide~~ the ~~Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (~~Partnership Agreement as ~~applicable) that such Tag Member wishes to include~~ in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event effect immediately prior to the consummation of the ~~Tag-Along Sale~~Transfer (assuming that the Units included in the Transfer were all of the Equity Securities then outstanding); provided, ~~each~~ further, that the Transferring Partner shall not be required to give a Sale Notice to any Other Partner who does not hold Units of the classes and/or series that would permit such ~~Tag Member that has exercised its right~~ Other Partner to participate in such Transfer in compliance with this proviso prior to any such Transfer by the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Transferring Partner. Each Partner transferring Units ~~or Class B Units (as applicable)~~ pursuant to this Section ~~3.5 at the closing for such Tag-Along Sale against delivery~~ 3(a) shall be obligated to make customary representations and warranties as to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee Partner and the ~~Selling Member for~~ Units such Partner is transferring and join in any indemnification or other obligations that the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member Transferring Partner agrees to ~~make~~ provide in connection with such ~~Tag-Along Sale~~Transfer; provided, that each such joining Partner’s liability arising under any such indemnification or obligation with respect to such Transfer (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be ~~shared~~ several and not joint and limited to its pro rata share (based on ~~a several (but not joint) basis by~~ the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess percentage of ~~the~~ net cash proceeds received by such ~~Tag Member in~~ Partner pursuant to such ~~Tag-Along Sale. (f~~Transfer) ~~If any Tag Member (i) does not elect before the end~~ of ~~the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or~~ such liability and (ii) ~~fails to deliver to~~ shall in no event exceed the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer aggregate net cash proceeds actually received by such ~~Selling Member of Class A Units and/or Class B Units~~ holder in connection with such Transfer. This Section 3(a) shall ~~be subject~~ not apply to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed any Transfer pursuant to Section ~~3.5(d~~4 below. The Transferring Partner shall use its commercially reasonable efforts to obtain the agreement of the prospective transferee(s) to the participation of the Other Partners in any contemplated Transfer as provided in this Section 3(a), and the Transferring Partner shall ~~furnish such other evidence~~ not Transfer any of its Units to the prospective transferee(s) if the prospective transferee(s) declines to allow the participation of the ~~completion~~ Other Partners as contemplated by this Section 3(a). The transferee(s) must agree in writing to be bound by all provisions of this Agreement and ~~time of completion~~ the Partnership Agreement and otherwise comply with Section 9 below and Article XI of the ~~Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member~~Partnership Agreement. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 2 contracts

Samples: Recapitalization Agreement (Grande Communications Holdings, Inc.), Partnership Agreement (Grande Communications Holdings, Inc.)

Tag-Along Rights. In the event that a Non-Management Member proposes a Transfer of Interests (awhich, for the avoidance of doubt, shall not include Class B Units) ~~Subject to a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A~~ that is otherwise permitted by this Agreement (such transferring Member, ~~Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively~~in such capacity, the “Selling Member”~~) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party~~), other than any Transfer pursuant to ~~a Permitted Transferee of such Member(s~~Section 12.1(a)(i) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”12.1(a)(ii), then ~~the Selling Member must comply with the provisions of this Section 3.5. The~~ at least twenty days prior to effecting such Transfer, such Selling Member shall ~~inform~~ give the ~~Board by~~ Company and each other Member written notice ~~in writing~~ of such proposed Transfer. Each other Member shall then have the right (the “Tag-Along ~~Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units~~Right”), ~~the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide~~ exercisable by written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash notice to the Selling Member, to participate in such sale by selling a Pro Rata Share of such other Member’s Common Units on substantially the same terms and subject to the same conditions as the Selling Member (each such participating Member, other than the Selling Member, a “Tagging Member”). Such terms and conditions shall include, without limitation, (i) the sale consideration ~~for such Tag-Along Units~~ and (ii) the provision of information, representations, warranties, covenants and requisite indemnifications; provided, however, that (x) any representations and warranties relating specifically to any Member shall only be made by that Member; and (y) any indemnification provided by the Members (other than with respect to the representations referenced in the foregoing subsection (x)) shall be ~~deemed~~ based solely on the relative Interests being sold by each Member in the proposed sale, in all cases on a several, not joint, basis and shall apply solely with recourse to an escrow established for the benefit of the proposed purchaser (the Members’ contributions to such escrow to be on a pro-rata basis in accordance with the ~~Fair Market Value~~ proceeds received from such sale), it being understood and agreed that any such indemnification obligation of an Member shall in no event exceed the ~~Tag-Along Units. The Board shall promptly deliver a copy of~~ net proceeds to such Member from such proposed Transfer; provided, further, however, that, the ~~Tag-Along Notice to each Class A Member~~ Management Members, the Outside Members and ~~Class B Member~~ the Investor Members (other than the Selling Member) shall receive the same amount and form (~~the “Tag Members”). By giving the Tag-Along Notice,~~ or a more liquid form) of consideration as the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Salesale unless they otherwise agree. The Selling Member ~~shall have ninety~~ and each Tagging Member will be responsible for its proportionate share (~~90) days (or~~ based on the Percentage Interest of each such ~~longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to~~ Member participating in such ~~transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all~~sale) of the ~~applicable Class A Units or Class B Units at a price not higher than contained in~~ costs of the ~~Tag~~tag-~~Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer~~ along sale contemplated by ~~such Selling Member of Class A Units and/or Class B Units shall be subject to~~ this Section ~~3.5 and shall require a Tag-Along Notice. (g~~12.6(a) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent ~~such costs are incurred for~~ not paid or reimbursed by the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Membersproposed purchaser. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 2 contracts

Samples: Limited Liability Company Agreement (BankUnited, Inc.), Limited Liability Company Agreement (BankUnited, Inc.)

Tag-Along Rights. ~~(a)~~ Subject to the provisions of Section 10, in the event a Member ~~first complying with Section 3.4 and provided~~ (an "Offering Member") intends to transfer all or any part of its interest in the Company (also referred to as "Offered Interests"), such Offering Member shall notify each other Member who has a Sharing Ratio of more than 10%, in writing, of such proposed transfer and its terms and conditions, including, without limitation, (i) its bona fide intention to sell or transfer the Offered Interests, (ii) the number and class of Units of Offered Interests to be transferred, (iii) the price and terms, if any, for which it proposes to transfer the Offered Interests and (iv) the name and address of the proposed purchaser or transferee and that such purchaser or transferee is committed to acquire the stated number of Units on the stated price and terms ("Offering Member Notice"). Within ten days of the date of such notice, each Member (other than the Offering Member) shall notify the Offering Member in writing (the "Co-Sale Notice") if it elects to participate in such transfer. Each Member that so notifies the Offering Member shall have the right to sell, at the same price and on the same terms as the Offering Member, an amount of Units equal to the Units the third party proposes to purchase multiplied by a fraction, the numerator of which shall be the number of Units owned by such Member and the ~~ROFR Members~~ denominator of which shall be the aggregate number of Units owned by the Offering Member and each Member exercising its rights under this Section 11. Nothing contained in this Section 11 shall in any way limit or restrict the Offering Member's ability to amend, modify or terminate any agreement with a third party with respect to any transfer of its Units pursuant to this Section 11, and the Offering Member shall have no liability to any Member with respect to such amendment, modification or termination unless any of the foregoing breaches this Agreement. If no Co-Sale Notice is received during the ten-day period referred to above (or if the Co-Sale Notice does not ~~purchased~~ cover all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”transferred), the ~~identity~~ Offering Member shall have the right, for a sixty-day period after the expiration of the ~~proposed transferee~~ten-day period referred to above, to transfer the Units so specified in the Offering Member Notice (or the remaining Units) at the same or a lower price and ~~the~~ on other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other no more favorable than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include those stated in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Offering Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 2 contracts

Samples: Operating Agreement (Qwest Communications International Inc), Operating Agreement (Qwest Communications International Inc)

Tag-Along Rights. ~~(a)~~ Subject to Section 5(c), at least 30 days prior to any sale, transfer, assignment, pledge or other transfer or disposal (a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “~~Selling Member~~Transfer”) ~~desires~~ of Units by any ABRY Member to ~~make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party,~~ a Person other than to a Permitted Transferee of such ~~Member(s) or in accordance with Sections 3.6~~ABRY Member, ~~3.7 and 3.8, such that~~ the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling ABRY Member ~~must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing~~ (the “~~Tag-Along~~ Transferring Member”) proposing to transfer such Units shall deliver a written notice (the “Sale Notice”) (to the ~~date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject~~ Company and to ~~such proposed Transfer (the “Tag-Along Units”)~~each Other Member, specifying in reasonable detail the identity of the ~~proposed transferee,~~ prospective transferee(s) and the ~~other~~ terms and conditions of ~~such proposed~~ the Transfer. Each Other Member may elect to participate in the contemplated Transfer, ~~including any consideration proposed to be received pursuant to a bona fide written agreement for~~ on the ~~Tag-Along Units (and, if~~ same terms as those set forth in the ~~proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along~~ Sale Notice ~~shall state the proposed price~~ except as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section ~~3.5. (b) Each Tag~~ 5(b), by delivering written notice to the Transferring Member within 10 days following delivery of the Sale Notice; provided that a Management Member shall have the right to so participate only with respect to Class A Common Units and ~~option~~Vested Incentive Units held by such Management Member at the time of delivery of such Sale Notice. If one or more Other Members have elected to participate in such Transfer, ~~exercisable as set forth below~~each of the Transferring Member and such Other Member shall be entitled to sell in the contemplated Transfer a number of (i) Common Units (if Common Units are being Transferred by the Transferring Member) of any class (subject, in the case of a sale by any Management Member, to ~~include~~ the proviso in the ~~Tag-Along Sale up to that amount~~ immediately preceding sentence) representing a number of ~~its Class A Units or Class B Units (as applicable)~~ Points equal to the product of (iA) the quotient determined by dividing (x) the percentage of Points represented by the Common Units owned by such Member by (y) the aggregate percentage of Points represented by the Common Units owned by the Members participating in such Transfer, multiplied by (B) the aggregate number of ~~Class A Units and Class B~~ Points represented by the Common Units to be ~~acquired~~ sold in the contemplated Transfer and (ii) Series A Preferred Units (if Series A Preferred Units are being transferred by the ~~purchaser~~Transferring Member) representing a number of Series A Preferred Units equal to the product of (A) the quotient determined by dividing (x) the number of Series A Preferred Units owned by such Member by (y) the total number of Series A Preferred Units represented by the Series A Preferred Units owned by the Members participating in such Transfer, multiplied by (iiB) ~~a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is~~ the aggregate number of ~~Class~~ Series A Preferred Units ~~and Class B Units held by~~ to be sold in the ~~Selling~~ contemplated Transfer; provided, in each case, that each Member ~~and all Tag Members (its “Tag-Along Portion”),~~ participating in such Transfer shall receive the same form of consideration and the ~~Selling Member shall not consummate the Tag-Along Sale unless such~~ same portion of the ~~Class A Units or Class B Units~~ aggregate net consideration (~~as applicable)~~ net of ~~such Tag Member (or such lesser portion~~ any post-closing adjustments following the payment of the ~~Class A Units or Class B Units of~~ reasonable expenses incurred by the Members in connection with such ~~Tag Member for which such right and option is exercised) is so included. To~~ Transfer to the extent ~~that any Tag~~ such expenses are approved by the Transferring Member ~~elects~~ and are not ~~to include its Class A Units~~ otherwise paid by the Company or ~~Class B Units (~~the acquiring party) as ~~applicable)~~ such holder would have received if such aggregate net consideration had been distributed by the Company in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up complete liquidation pursuant to the ~~Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its~~ rights and preferences set forth in ~~Sections 3.5(a) and (b) above, then it shall provide~~ the ~~Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (~~Operating Agreement as ~~applicable) that such Tag Member wishes to include~~ in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event effect immediately prior to the consummation of the ~~Tag-Along Sale~~Transfer (assuming that the Units included in the Transfer were all of the Equity Securities then outstanding); provided, ~~each such Tag~~ further, that if the Transferring Member ~~that has exercised its right~~ is AMP, then an Other Member may elect to participate in such Transfer only if such Other Member is able to and does elect to include in such Transfer Units of each class or series of Units that AMP has proposed to include in such Transfer, in the ~~Tag-Along~~ same proportions among such classes or series (if more than one) as AMP has proposed to include in such Transfer (treating Class A Common Units as a separate “class” for purposes of this Section 5(b), and treating Class D Common Units as a separate “class” for purposes of this Section 5(b)), and AMP shall not be required to give a Sale ~~by providing the required notice~~ Notice to ~~the Selling Member within the Tag-Along Notice Period shall deliver to a representative~~ any Other Holder who does not hold Units of the ~~Selling~~ classes and/or series that would permit such Other Holder to participate in such Transfer in compliance with this proviso. Each Member ~~designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A~~ transferring Units ~~or Class B Units (as applicable)~~ pursuant to this Section ~~3.5 at the closing for such Tag-Along Sale against delivery~~ 5(b) shall be obligated to make customary representations and warranties as to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the ~~Tag Members exercising tag-along rights as to~~ Units such Member is transferring and join in any indemnification or other obligations that the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Transferring Member agrees to ~~make~~ provide in connection with such ~~Tag-Along Sale~~Transfer; ~~provided,~~ provided that each such joining Member’s liability arising under any such indemnification or other obligation with respect to such Transfer (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be ~~shared~~ several and not joint and limited to its pro rata share (based on ~~a several (but not joint) basis by~~ the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess percentage of ~~the~~ net cash proceeds received by such ~~Tag~~ Member in pursuant to such ~~Tag-Along Sale. (f~~Transfer) ~~If any Tag Member (i) does not elect before the end~~ of ~~the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or~~ such liability and (ii) ~~fails to deliver to~~ shall in no event exceed the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer aggregate net cash proceeds actually received by such ~~Selling Member of Class A Units and/or Class B Units~~ holder in connection with such Transfer. This Section 5(b) shall ~~be subject~~ not apply to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed any Transfer pursuant to Section ~~3.5(d~~6. The Transferring Member shall use its commercially reasonable efforts to obtain the agreement of the prospective Transferee(s) to the participation of the Other Members in any contemplated Transfer as provided in this Section 5(b), and the Transferring Member shall ~~furnish such other evidence~~ not Transfer any of its Units to the prospective Transferee(s) if the prospective Transferee(s) declines to allow the participation of the ~~completion and time of completion of the Tag-Along Sale and the terms thereof~~ Other Members as ~~may be reasonably requested~~ contemplated by ~~any such Tag Member. (h) Notwithstanding anything contained in~~ this Section ~~3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason~~5(b). (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Securities Purchase Agreement (Language Line Services Holdings, Inc.)

Tag-Along Rights. (aA) ~~Subject~~ Concurrently with subsections (i) through (ii) above, if any Member has not elected to ~~a Member first complying with Section 3.4 and~~ purchase Units as provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly in subsection (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”ii), then the ~~Selling Member must comply with the provisions of this Section 3.5. The Selling Member~~ Transferor Member(s) shall ~~inform the Board by~~ promptly give written notice ~~in writing~~ (the “Tag-Along Notice”) to the other Members at least thirty (30) days prior to the ~~date upon which~~ closing of such ~~notice is received being the “~~Transfer. The Tag-Along Notice ~~Date”~~shall: (1) ~~stating~~ be accompanied by a copy of any agreement or term sheet relating to the Transfer; (2) describe in reasonable detail the proposed Transfer, including, without limitation, the name of, and the number of Units ~~(or portion thereof) that are subject to such proposed Transfer~~ (the “Tag-Along Units”) to be purchased by, the proposed transferee (the “Tag-Along Purchaser”) and the purchase price of each Unit to be sold, any additional consideration, the terms and conditions of payment offered by the Tag-Along Purchaser, any other significant terms of such sale; (3) specify the date such proposed sale is expected to be consummated (the “Tag-Along Sale Date”); (4) specify the aggregate number of Units held of record by the Transferor Member(s) as of the close of business on the day immediately preceding the date of the Tag-Along Notice; and (5) confirm that the Tag-Along Purchaser has been informed of the ‘tag-along rights’ provided for herein and has agreed to purchase all designated Units from the electing Members in accordance with the terms hereof. (B) Each Member other than the Transferor Member(s) shall have the right (the “Tag-Along Rights”), exercisable by giving written notice to the ~~identity~~ Transferor Member(s) no less than ten (10) days prior to the Tag-Along Sale Date, to participate in the Transfer on the same terms and conditions as set forth in the Tag-Along Notice. Each electing Member shall indicate in such written notice to the Transferor Member(s) the number of its Units (up to one hundred percent (100%) of the ~~proposed transferee, and~~ Tag-Along Units) it desires to sell in such sale (collectively with the Units designated for purchase by the other electing Members, the “Designated Tag-Along Units”). (C) The notices given by the electing Members shall constitute their agreement to sell their respective Designated Tag-Along Units on the terms and conditions applicable to the proposed Transfer; provided, however, that in the event that there is any material change in the terms and conditions of such proposed ~~Transfer~~Transfer applicable to any electing Member after it gives such notice, ~~including~~ then, notwithstanding anything herein to the contrary, it shall have the right to withdraw from participation in the proposed Transfer with respect to all or any ~~consideration proposed~~ portion of its Designated Tag-Along Units. (D) The Tag-Along Purchaser shall have the option to either (I) increase the total number of Tag-Along Units to be ~~received pursuant~~ purchased by the Tag-Along Purchaser to ~~a bona fide written agreement for~~ accommodate the purchase of all of the Designated Tag-Along Units together with the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving set forth in the Tag-Along Notice, all on the ~~Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the~~ same terms ~~set forth in this Section 3.5. (b) Each Tag Member shall have the right~~ and ~~option, exercisable~~ conditions as set forth ~~below, to include~~ in the Tag-Along ~~Sale up~~ Notice, or (II) decline to ~~that amount of its Class A Units or Class B Units (as applicable) equal to~~ increase the ~~product of (i) the aggregate~~ total number of ~~Class A Units and Class B~~ Tag-Along Units to be ~~acquired~~ purchased by the ~~purchaser~~Tag-Along Purchaser, ~~multiplied~~ in which case the electing Members shall be entitled to substitute a number of Units determined by ~~(ii)~~ multiplying the number of Tag-Along Units by a fraction, the numerator of which is the ~~number~~ Fully Diluted Percentage Interest of ~~Class A Units or Class B Units (as applicable) held by~~ such ~~Tag Member~~ electing Member, and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the ~~Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion~~ Fully Diluted Percentage Interest of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Transferor Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating electing Members. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Limited Liability Company Agreement (Main Street Capital CORP)

Tag-Along Rights. (a) ~~Subject~~ In the event that (i) the Majority Unit Owners propose to Transfer all of their Interests, or (ii) the Board of Directors approves a ~~Member first complying with Section 3.4 and provided~~ sale of the Company that will be a Final Exit Event and such sale is structured as a sale of all the ~~ROFR Members have not purchased all~~ Interests of the ~~Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly~~ Company (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(seither (i) or ~~in accordance with Sections 3.6~~(ii), 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), ~~then~~ and in the ~~Selling Member must comply with~~ case of (i) above, the ~~provisions~~ Majority Unit Owners, and in the case of ~~this Section 3.5. The Selling Member shall inform~~ (ii) above, the Members who are Affiliates of the Members who designated the members of the Board by of Directors who voted in favor of the Tag-Along Sale (either such persons, the “Tag-Along Sellers”) do not exercise their rights under ‎Section 6.7, (x) the Tag-Along Seller shall provide to each other Member (each such Member, an “Eligible Member”) notice ~~in writing~~ of the terms and conditions of such proposed Transfer (the “Tag-Along Notice”) and offer each Eligible Member the opportunity to participate in such Transfer in accordance with this ‎Section 6.8 and (y) each Eligible Member may elect, at its option, to participate in the proposed Transfer in accordance with this ‎Section 6.8. (b) The Tag-Along Notice shall contain a true and complete copy of any and all available documents constituting the agreement to Transfer and, to the extent not set forth in the accompanying documents, shall identify the Interests proposed to be Transferred, the price offered for such Interests, all information reasonably available to the Tag-Along Seller regarding the person to whom such Interests are proposed to be Transferred, all other material terms and conditions of the proposed Transfer and, in the case of an proposed Transfer in which the consideration payable for such Interests consists in whole or in part of consideration other than cash, such information relating to such other consideration as is reasonably available to the Tag-Along Seller. (c) From the date ~~upon which such notice is received being~~ of its receipt of the Tag-Along Notice, each Eligible Member shall have the right (a “Tag-Along ~~Notice Date~~Right”~~) stating the Units (or portion thereof) that are subject to such proposed Transfer~~ ), exercisable by notice (the “Tag-Along ~~Units~~Response Notice”~~), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed~~ ) given to ~~be received pursuant to a bona fide written agreement for~~ the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy Seller within 15 Business Days after its receipt of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”~~) and shall simultaneously provide a copy of such notice~~ ), to ~~the Company. Promptly upon~~ request ~~of the Seller Member, and in any event prior to the consummation of~~ that the Tag-Along ~~Sale,~~ Sellers include in the proposed Transfer the Interests held by such Eligible Member (each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag requesting Eligible Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “~~Tag-Along Failure~~Tagging Member”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Carbon Natural Gas Co)

Tag-Along Rights. (a) ~~Subject~~ If the Sponsor desires to ~~a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all~~ Dispose of at least 20% of the ~~Units proposed to be Transferred under Section 3.4, each time a Class~~ Series A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by ~~such Member(s)~~ the Sponsor as of the date of this Agreement to any Third ~~Party~~Party (the “Tag-Along Transferee”), ~~other than~~ the Sponsor shall offer to ~~a Permitted Transferee of~~ include in such ~~Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that~~ proposed Disposition (the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”)) a number of Series A Units or Series B Units that are Vested Units (the “Eligible Units”) owned and designated by any Member, ~~then~~ in each case in accordance with the ~~Selling Member must comply~~ terms of this Section 7.6. Notwithstanding the foregoing, this Section 7.6 shall not be applicable to, and a Sponsor may Dispose of Series A Units without complying with any of the provisions of this Section ~~3.5~~7.6 in connection with, any Disposition (i) to any Affiliate of the Sponsor, (ii) made pursuant to a Drag-Along Transaction pursuant to Section 7.5 or (iii) made pursuant to an IPO Exchange. The ~~Selling Member~~ Sponsor shall ~~inform~~ cause the ~~Board by notice in writing~~ offer from such Tag-Along Transferee (the “Tag-Along ~~Notice~~Offer”) to be reduced to writing, which writing shall include (x) an offer to purchase or otherwise acquire Eligible Units from the ~~date upon which such notice is received being~~ Members as required by this Section 7.6, (y) a time and place designated for the ~~“Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”)~~NEXEO SOLUTIONS HOLDINGS, ~~the identity of the proposed transferee, and the other terms and conditions~~ LLC LIMITED LIABILITY COMPANY AGREEMENT closing of such ~~proposed Transfer, including any consideration~~ purchase and (z) the per Unit purchase price proposed to be ~~received pursuant to a bona fide written agreement for~~ paid by the Tag-Along ~~Units (and, if~~ Transferee for the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member Sponsor’s and ~~Class B Member (other than the Selling Member) (the “Tag~~ Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B ’ Eligible Units in a Tag-Along Sale ~~shall have~~ and the ~~opportunity~~ aggregate proceeds expected to ~~increase their participation~~ be payable in respect of any Series B Units included in such Tag-Along Sale ~~Pro Rata~~ (~~such increase being Pro Rata among~~ which proceeds shall be calculated in accordance with Section 7.6(g)). The per Unit purchase price proposed to be paid by the ~~Tag Members making such further election~~Tag-Along Transferee may differ to the extent necessary in order to reflect differences in (x) ~~such that~~ the ~~percentage of Class~~ Series A Preference Amounts with respect to any Series A Units that are Eligible Units and ~~Class~~ (y) the Threshold Values and Withheld Amounts, if any, with respect to the Series B Units that are Eligible Units. (b) Each of ~~Tag~~ the Members ~~participating~~ holding Eligible Units shall be entitled to request to include certain Eligible Units in such Tag-Along ~~Sale is equal to up to~~ Sale, in each case in accordance with the ~~Tag-Along Portion~~ terms of ~~all Tag Members~~this Section 7.6. (c) ~~If any Tag Member desires~~ The Sponsor shall send written notice of such Tag-Along Offer (an “Inclusion Notice”), together with the Sponsor Requested Series A Percentage, to ~~exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide~~ each of the ~~Selling Member with written irrevocable notice specifying the number of Class~~ Members holding Eligible Units that are Series A Units ~~or Class B Units~~ (~~as applicable) that such~~ each, a “Series A Tag ~~Member wishes~~ Offeree”). Each Series A Tag Offeree shall have the right (a “Series A Inclusion Right”), exercisable by delivery of written notice to ~~include~~ the Sponsor at any time within 10 days after receipt of the Inclusion Notice, to request to sell in the Tag-Along Sale a number of Eligible Units that are Series A Units up to the total number of Eligible Units held by such Series A Tag Offeree multiplied by the Sponsor Requested Series A Percentage. Promptly thereafter, the Sponsor shall send an Inclusion Notice, together with the Requested Series A Percentage, to each of the of the Members holding Eligible Units that are Series B Units (~~which such number~~ each, a “Series B Tag Offeree”). Each Series B Tag Offeree shall ~~not exceed such Tag Member’s Tag-Along Portion) within ten~~ have the right (~~10) days after the Tag-Along Notice Date (the~~ a “~~Tag-Along Notice Period~~Series B Inclusion Right”~~) and shall simultaneously provide a copy~~ ), exercisable by delivery of ~~such~~ written notice to the ~~Company. Promptly upon request~~ Sponsor at any time within 15 days after receipt of the ~~Seller Member~~Inclusion Notice, ~~and in any event prior~~ to ~~the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right~~ request to ~~participate~~ sell in the Tag-Along Sale ~~by providing the required notice~~ a number of Eligible Units that are Series B Units up to the ~~Selling Member within the Tag-Along Notice Period shall deliver to a representative~~ total number of ~~the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered~~ Eligible Units held by such Series B Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used Offeree multiplied by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class Requested Series A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determinationPercentage. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Nexeo Solutions Finance Corp)

Tag-Along Rights. (a) ~~Subject to a Member first complying with~~ In the event the Offered Units contemplated by Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five 5.3 constitute at least twenty percent (520%) of the ~~aggregate~~ issued and outstanding ~~Class A~~ Units of the Company, the Offer Notice delivered to the Offered Members in accordance with Section 5.3 shall also constitute a “Tag- Along Notice” and ~~Class B Units (taken together~~ each Offered Member shall be referred to hereinafter as a ~~single class~~“Tag-Along Member”. (b) Each Tag-Along Member which delivers a written notice of its intention to exercise its rights under this Section 5.5 to the Offering Member (such notice, a “Tag-Along Election Notice”) no later than ten (10) days following receipt of a Tag-Along Notice, which Tag-Along Election Notice shall be irrevocable once delivered (a “Tag-Along Right”), shall have the right to participate in such transaction with the Third Party Purchaser (but not in connection with the exercise of the Company’s or any Member’s right of first refusal as contemplated by Section 5.3) (a “Tag-Along ~~Sale~~Transfer”~~), then~~ ) by selling its Tag-Along Share (as defined below) of Units in such Tag-Along Transfer to the ~~Selling Member must comply with~~ Third Party Purchaser. For the ~~provisions~~ purposes of this Section ~~3.5. The Selling Member shall inform the Board by notice in writing (the~~ 5.5, a Tag-Along Member’s “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice Share” shall ~~state the proposed price as being~~ equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the ~~aggregate~~ number of ~~Class A~~ Units ~~and Class B Units to be acquired~~ then held by ~~the purchaser~~such Tag-Along Member, multiplied by (ii) a fraction, the numerator of which is shall be the number of ~~Class A~~ Units ~~or Class B Units (as applicable) held by such Tag Member~~ included in the Offered Units, and the denominator of which is shall be the ~~aggregate~~ total number of ~~Class A~~ Units ~~and Class B Units~~ then held by the ~~Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate~~ Offering Member. All Units to be sold by the Tag-Along ~~Sale unless such portion~~ Member shall be sold for the same amount and type of consideration and otherwise on the ~~Class A~~ same terms and conditions as apply to the Offered Units ~~or Class B Units (as applicable) of such Tag Member (or such lesser portion of~~ to be sold by the ~~Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included~~Offering Member. To the extent that ~~any Tag Member elects not~~ the sum of Offered Units plus the aggregate number of Units proposed to ~~include its Class A Units or Class B Units (as applicable) in a~~ be sold by all Tag-Along ~~Sale, those Tag~~ Members ~~that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation~~ in such Tag-Along ~~Sale Pro Rata~~ Transfer exceeds the total number of Units sought to be purchased by the Third Party Purchaser (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights as set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice~~; thereafter~~), ~~any proposed Transfer by such Selling~~ the respective number of Offered Units of the Offering Member and Units of ~~Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a~~ each selling Tag-Along ~~Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling~~ Member ~~shall give notice thereof~~ to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be ~~reasonably requested by any such Tag Member. (h) Notwithstanding anything contained~~ included in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along ~~Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which~~ Transfer shall be ~~borne~~ proportionately reduced so that each Member participates in such Tag-Along Transfer ratably based on the aggregate number of Offered Units requested to be included in such Tag-Along Transfer by ~~such Tag~~ the Offering Member~~) will not be considered incurred for the benefit of all participating Members~~. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Operating Agreement

Tag-Along Rights. (a) ~~Subject~~ At least 30 days prior to a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of ~~all~~ any Units or ~~any portion of~~ other interests in the ~~Class A Units and/or Class B Units held by such Member(s) to any Third Party,~~ LLC (other than to a Permitted ~~Transferee of such Member(s~~Transferee) by one or ~~in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%)~~ more of the ~~aggregate outstanding Class A Units and Class B Units~~ Unitholders (~~taken together as a single class) (~~each, a “~~Tag-Along Sale~~Transferring Unitholder”), ~~then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member~~ such Transferring Unitholders shall ~~inform the Board by~~ deliver a written notice ~~in writing~~ (the “Tag-Along Notice”) (to the ~~date upon which such notice is received~~ LLC and the other Unitholders of the same class or classes as being included in the ~~“Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed~~ Transfer (the “Tag-Along ~~Units~~Unitholders”), ) specifying in reasonable detail the identity of the ~~proposed transferee,~~ prospective transferee(s) and the ~~other~~ terms and conditions of ~~such proposed Transfer, including any consideration proposed to~~ the Transfer (which notice may be ~~received pursuant to a bona fide written agreement for~~ included in and given at the same time as the Offer Notice under Section 10.2(a)). The Tag-Along ~~Units (and, if~~ Unitholders may elect to participate in the ~~proposed~~ contemplated Transfer is by delivering written notice to ~~be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount~~ each of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value Transferring Unitholders within 30 days after delivery of the Tag-Along ~~Units~~Notice. The ~~Board shall promptly deliver a copy of the~~ Transferring Unitholder and such Tag-Along ~~Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall~~ Unitholders will be ~~deemed to have granted to the Tag Members an option~~ entitled to sell ~~their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include~~ in the ~~Tag-Along Sale up~~ contemplated Transfer, at the same price and on the same terms, a number of such class of Units proposed to ~~that amount of its Class A Units or Class B Units (as applicable)~~ be transferred equal to the product of (iA) the quotient determined by dividing the number of units of such class of Units owned by such Person by the aggregate number of ~~Class A~~ outstanding units of such class of Units owned by the Transferring Unitholder and ~~Class B~~ each such Tag-Along Unitholder participating in such sale and (B) the number of such class of Units to be ~~acquired by~~ sold in the ~~purchaser, multiplied by~~ contemplated Transfer. (iib) ~~a fraction,~~ The Transferring Unitholder will use reasonable commercially reasonable efforts to obtain the ~~numerator~~ agreement of ~~which is~~ the ~~number~~ prospective transferee(s) to the participation of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along ~~Sale~~ Unitholders in any contemplated Transfer, and the Transferring Unitholder will not transfer any of its Units to the prospective transferee(s) unless ~~such portion~~ (A) the prospective transferee(s) agrees to allow the participation of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along ~~Portion~~ Unitholders or (B) the Transferring Unitholder agree to purchase the number of ~~all Tag Members~~such class of Units from the Tag-Along Unitholders that the Tag-Along Unitholders would have been entitled to sell pursuant to this Section 10.3(b) for the consideration per unit to be paid to the Transferring Unitholder by the prospective transferee(s). (c) If Notwithstanding the foregoing, the participants, amounts and types of securities sold in any ~~Tag Member desires~~ transfer hereunder will be adjusted to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request take account of the ~~Seller Member, and in~~ rights of any ~~event prior~~ holders of Triad Holdings Inc. securities pursuant to ~~the consummation~~ Section 4(c) of the ~~Tag-Along Sale, each such Tag Member that has exercised~~ Stockholders Agreement of even date herewith between Triad Holdings Inc. and certain of its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration thereforstockholders. (d) ~~Each Member participating in~~ The provisions of this Section 10.3 will terminate upon the ~~Tag-Along Sale shall receive a portion~~ first to occur of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence Sale of the ~~completion~~ Company and ~~time of completion of~~ (ii) the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure consummation of a ~~Tag-Along Sale to occur for any reason~~Qualified IPO. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Triad Financial Corp)

Tag-Along Rights. FIRST OFFER RIGHTS; PERMITTED TRANSFERS. (a) TAG-ALONG RIGHTS. (i) Subject to Section 8.2(b) and other than in connection with an Exempt Transfer (provided that it is hereby acknowledged and agreed that the CSX Members shall have the rights set forth in this Section 8.2(a) in connection with a Permitted Transfer by a Vectura Member ~~first complying with~~ pursuant to Section ~~3.4 and provided~~ 8.2(c)(i)(E) hereof), in the event that (x) any Unitholder (other than an Investor Unitholder or a Management Unitholder) proposes to Transfer Junior Common Units or (y) a Vectura Member proposes to Transfer Junior Preferred Units, or (z) in any control transaction however structured, the Transferring Unitholder shall deliver a Transfer Notice to the Company and the ~~ROFR Members~~ Other Unitholders at least 30 days prior to any such Transfer. The Other Unitholders holding the applicable class of Units to be so Transferred may elect to participate in the contemplated Transfer by delivering written notice to the Transferring Unitholder within 15 days after delivery by the Transferring Unitholder of such Transfer Notice. If any Other Unitholders have ~~not purchased all~~ elected to participate in such Transfer (such other Unitholders so electing, the "ELECTING UNITHOLDERS"), the Transferring Unitholder and such Electing Unitholders shall be entitled to Transfer in the contemplated Transfer, on the same contract terms, the number of Junior Common Units at the price determined under (ii) below and the number of Junior Preferred Units at the price determined under (iii) below; PROVIDED, that if the applicable Transfer Notice includes a Transfer of both Junior Common Units and Junior Preferred Units, and any Other Unitholder elects to participate in such Transfer, such Electing Unitholder must sell the number of Junior Preferred Units calculated in accordance with paragraph (i) below. The restrictions on Transfer contained in this Section 8.2(a) shall apply MUTATIS MUTANDIS to transfers (other than Exempt Transfers) of the equity securities of Vectura or any other direct or indirect holding company of Vectura (but not including 399 Venture or its direct or indirect parents and wholly-owned Subsidiaries of such parents (but not 399 Venture or its Subsidiaries)) holding Units by the holders of such equity securities. This Section 8.2(a) shall survive any Initial Public Offering and terminate upon the consummation of an Approved Sale. (ii) In furtherance of Section 5.6, it is the intent of the parties that, in a transaction in which tag-along rights apply, the aggregate sale proceeds shall be divided proportionately with respect to all Electing Unitholders and the Transferring Unitholder based on each Electing Unitholder's and the Transferring Unitholder's respective shares of the liquidation proceeds that all such Electing Unitholders and the Transferring Unitholder would receive, respectively, in the event of a hypothetical liquidation of the Company at the enterprise value implied by the proposed sales price; and appropriate adjustments will be made to take account of whether Junior Preferred Units or Junior Common Units are subject to such tag-along. (b) FIRST OFFER RIGHTS. Other than an Exempt Transfer or a Transfer made pursuant to Section 8.2(a), prior to any Transfer of Units by any Unitholder, the Unitholder proposing to make such Transfer (the "OFFERING UNITHOLDER"), shall deliver a written notice to the Company and to the Other Unitholders holding Units of the same class proposed to be Transferred ~~under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly~~ by the Offering Unitholder (~~collectively~~such Other Unitholders, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8"UNITHOLDER OFFEREES"), such ~~that~~ written notice to specify in reasonable detail the ~~Class A~~ number and class of Units ~~and/or Class B Units proposed~~ to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”)so Transferred, the ~~identity of the~~ proposed ~~transferee,~~ purchase price therefor and the other terms and conditions of such proposed ~~Transfer, including any consideration proposed~~ Transfer (a "FIRST OFFER NOTICE"). Subject to ~~be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money~~Section 7.12(c)(i) hereof, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do Company may elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the ~~applicable Class A~~ Units ~~or Class B~~ to be Transferred, upon the terms and conditions as those set forth in the First Offer Notice and other reasonable and customary terms and conditions, by delivering a written notice of such election to the Offering Unitholder within 15 days after the First Offer Notice has been delivered to the Company. If the Company has not elected to purchase all of the Units to be Transferred, the Unitholder Offerees may elect to purchase all (but not less than all) of the Units to be Transferred, on a PRO RATA basis (based on the Ownership Ratio of each Unitholder Offeree calculated solely with respect to the class of Units contemplated to be Transferred) upon the same terms and conditions as those set forth in the First Offer Notice, by giving written notice of such election to the Offering Unitholder within 15 days after the First Offer Notice has been delivered to the Company; PROVIDED, that if any Unitholder Offeree elects not to purchase its PRO RATA share the Units to be Transferred, the remaining Unitholder Offerees that have so elected may purchase their PRO RATA share of such unpurchased Units (based on the Ownership Ratio of each remaining Unitholder Offeree calculated solely with respect to the class of Units contemplated to be Transferred). If neither the Company nor the Unitholder Offerees elect to purchase all of the Units specified in the First Offer Notice, then the Offering Unitholder may Transfer to any Person the Units contemplated to be Transferred at a price ~~not higher than contained in the Tag-Along Notice~~ and on terms ~~not~~ and conditions in the aggregate no more favorable to the ~~Selling Member~~ Transferee than ~~were contained~~ those specified in the ~~Tag~~First Offer Notice during the 150-~~Along Notice; thereafter~~day period immediately following the date on which the First Offer Notice has been delivered to the Company and the Unitholder Offerees. In connection with any such Transfer, the Company shall make any ~~proposed Transfer by~~ filings with Governmental Authorities necessary to consummate such ~~Selling Member of Class A~~ Transfer. Any Units ~~and/or Class B Units shall~~ not Transferred within such 150-day period will be subject to the provisions of this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d8.2(b), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (American Commercial Lines LLC)

Tag-Along Rights. Subject to Section 3.1(f): (a) ~~Subject~~ If Sun at any time proposes to Transfer any shares of Common Stock Equivalents, then, as a ~~Member first complying with Section 3.4 and provided~~ condition precedent thereto, Sun shall afford the ~~Company and~~ Minority Stockholders the ~~ROFR Members have not purchased all of the Units proposed~~ right to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any participate in such Transfer ~~of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or~~ in accordance with ~~Sections 3.6~~this Section 3.1. (b) If Sun wishes to Transfer any shares of Common Stock Equivalents, ~~3.7~~ it shall give written notice to the Minority Stockholders (a "Notice of Transfer") not less than twenty (20) nor more than thirty (30) days prior to any proposed Transfer of any such shares. Each such Notice of Transfer shall: (i) specify in reasonable detail (A) the number of shares of Common Stock Equivalents which Sun proposes to Transfer, (B) the identity of the proposed transferee or transferees of such shares, (C) the time within which, the price per share at which, and ~~3.8~~all other terms and conditions upon which, Sun proposes to Transfer such shares of Common Stock Equivalents, and (D) the percentage of the Common Stock Equivalents then owned by Sun (calculated on a fully-diluted basis) which Sun proposes to Transfer to such proposed transferee or transferees and (E) a representation that such proposed transferees have been informed of the tag-along rights provided for in this Section 3.1 and have agreed to purchase shares of Common Stock Equivalents in accordance with the terms hereof; (ii) make explicit reference to this Section 3.1 and state that the ~~Class A Units and/or Class B Units~~ right of the Minority Stockholders to participate in such Transfer under this Section 3.1 shall expire unless exercised within twenty (20) days after receipt of such Notice of Transfer; and (iii) contain an irrevocable offer by Sun to the Minority Stockholders to participate in the proposed Transfer to the extent provided in Section 3.1(c). (c) Each Minority Stockholder shall have the right to participate in the proposed Transfer by transferring to the proposed transferee or transferees up to that number of shares of Common Stock owned by such Minority Stockholders which is equal to the Applicable Percentage (as hereinafter defined) (or, if such Minority Stockholders shall elect, any lesser percentage) of the shares of Common Stock Equivalents proposed to be transferred ~~represent in~~ by Sun, at the ~~aggregate greater than five percent~~ same price per share and on the same terms and conditions as are applicable to the proposed Transfer by Sun (~~5%) of~~ and, if and to the ~~aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”)~~extent such Minority Stockholders shall exercise such right, then the ~~Selling Member~~ number of shares of Common Stock Equivalents to be sold by Sun in such transaction shall be correspondingly reduced). As used herein, the term "Applicable Percentage" as applied to a Minority Stockholder on any date shall mean a fraction (expressed as a percentage), the numerator of which is the aggregate of the number of shares of Common Stock owned by such Minority Stockholder on such date and the denominator of which is total number of shares of Common Stock Equivalents (assuming exercise of all Warrants) owned by Sun and the Minority Stockholders on such date. (d) A Minority Stockholders must notify Sun, within twenty (20) days after receipt of the Notice of Transfer, if he, she or it desires to accept such offer and to Transfer any shares of Common Stock owned by such Person in accordance with this Section 3.1. The failure of a Minority Stockholder to provide such notice within such 20-day period shall, for the purposes of this Section 3.1, be deemed to constitute a waiver by such Person of his, her or its right to sell any of his, her or its shares of Common Stock in connection with the proposed Transfer described in such Notice of Transfer. Sun will use its commercially reasonable efforts to obtain the agreement of the prospective transferee or transferees to the participation of the Minority Stockholders in such proposed Transfer, and Sun shall not Transfer any of its shares to such prospective transferee if such transferee shall not agree to the participation of the Minority Stockholders in such proposed Transfer. The Minority Stockholders shall not be obligated to sell any shares of Common Stock pursuant to this Section 3.1. Any and all sales of Common Stock by any of the Minority Stockholders pursuant to this Section 3.1 shall be made either concurrently with or prior to the sale of Common Stock Equivalents by Sun. (e) If the Transfer described in any Notice of Transfer is not consummated within ninety (90) days following the date upon which such Notice of Transfer is given or if there is any change in the terms pursuant to which such Transfer is to be consummated, then, prior to consummating such Transfer, Sun must again comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale3.1. (f) ~~If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver~~ Notwithstanding anything to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contrary contained in this Section ~~3.5 to~~ 3.1, the ~~contrary, no Selling Member~~ Minority Stockholders shall ~~be liable to~~ not have any ~~Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising~~ rights pursuant to ~~such Tag-Along Sale~~ this Section 3.1 to ~~the extent such costs are incurred for the benefit of all participating Members. Costs incurred~~ participate in any Exempt Transfer by ~~or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members~~Sun. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Stockholders' Agreement (Northland Cranberries Inc /Wi/)

Tag-Along Rights. (a) ~~Subject to~~ In the event Vistra Member and its Affiliates (in its capacity as such, a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “~~Selling Member~~Tag-Along Transferor”) ~~desires~~ proposes to ~~make any Transfer~~ Dispose of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than at least five percent (5%) of the ~~aggregate~~ then outstanding Class A Units ~~and Class B Units~~ to a Person (~~taken together as a single class) (a “~~other than an Affiliate of Vistra Member), other than pursuant to Section 7.03 or Section 7.05, such Tag-Along ~~Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member~~ Transferor shall ~~inform the Board by~~ deliver a written notice ~~in writing~~ (the “Tag-Along Notice”) to the Class B Member Representative (on behalf of each Class B Member so long as the ~~date upon which~~ Class B Members collectively hold a Percentage Interest of at least five percent (5%)) (each such ~~notice is received being~~ Class B Member, a “Tag-Along Offeree” ) at least twenty (20) days prior to consummating such Disposition (the “Tag-Along ~~Notice Date”~~Transaction” ) ~~stating~~ specifying the identity of the prospective transferee(s) (to the extent then known), the number of the Tag-Along Transferor’s Units ~~(or portion thereof) that are subject~~ to ~~such proposed Transfer~~ be Disposed (the “Tag-Along Units”), the ~~identity~~ percentage of ~~the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for~~ the Tag-Along Transferor’s aggregate Units ~~(and, if the proposed Transfer is~~ to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) Disposed (the “Tag-Along ~~Price”~~Percentage” ), and a summary of the material terms and conditions of the Disposition (if known). Each Tag-Along Offeree may elect to participate in the contemplated Disposition, at the same price per Unit and on the same terms and conditions applicable to the sale of the Class A Units by the Tag-Along Transferor in the Tag-Along Transaction as set forth in the Tag-Along Notice, by delivering written notice to the Tag-Along Transferor within fifteen (15) days after delivery of the Tag-Along Notice, which notice shall specify the number of Units that such Tag-Along Offeree desires to include in such proposed Disposition; provided that such number of Units shall not exceed the product of the Tag-Along Percentage and the total number of Units then held by such Tag-Along Offeree unless the consummation of such Disposition of Tag-Along Units by the Tag-Along Transferor would result in a Change of Control of the Company, in which case the Class B Member Representative may specify all or any portion of the Class B Units owned by each of the Tag-Along Offerees. If any Tag-Along Offeree does not give such notice prior to the expiration of the fifteen (15) day period for giving such notice, then such Tag-Along Offerees will be deemed to have elected not to participate in the Tag-Along Transaction. If no Tag-Along Offeree elects to participate in the Tag-Along Transaction (or if no Tag-Along Offeree timely delivers notice of its desire to participate in the Tag-Along Transaction), then the Tag-Along Transferor may Dispose of the applicable Tag-Along Units to any Person on the terms set forth in the Tag-Along Notice without any further obligation to the Tag-Along Offerees under this Section 7.04. If the Tag-Along ~~Units are proposed to be Transferred other than for cash to~~ Transaction is not consummated within twelve (12) months of the ~~Selling Member,~~ date of the ~~consideration for such~~ Tag-Along ~~Units shall be deemed to be~~ Notice, then the ~~Fair Market Value~~ Tag-Along Transferor must again comply with the terms of this Section 7.04 before Disposing of the Tag-Along Units; provided, that, if the consummation of such sale is subject to the receipt of any Governmental Authorizations and such Governmental Authorizations have not been received by the end of such twelve (12) month period, such twelve (12) month period shall automatically be extended for an additional thirty (30) days following receipt of such Governmental Authorizations. (b) If one or more Tag-Along Offerees exercise their right of participation pursuant to Section 7.04(a), then, at the Tag-Along Transferor’s option, (a) the number of Units that the Tag-Along Transferor and each other participating Tag-Along Offeree may sell in the Tag-Along Transaction shall be reduced on a pro rata basis (based on the relative number of Units that each such Person validly elects to sell in such Tag-Along Transaction) to a number equal to the overall number of Units to be sold to the prospective purchaser, (b) the aggregate number of Units to be sold in the Tag-Along Transaction shall be increased to accommodate the Units of those participating Tag-Along Offerees pursuant to this Section 7.04, or (c) the Tag-Along Transferor shall acquire from each such exercising Tag-Along Offeree the number of Units that such Tag-Along Offeree requested to Dispose of to such prospective purchaser on substantially the same price, terms and conditions as would be applicable in a direct sale of such Units to the prospective purchaser pursuant to Section 7.04(a). (c) In connection with any Tag-Along Transaction pursuant to this Section 7.04: (i) each participating Tag-Along Offeree shall be deemed to approve the proposed Tag-Along Transaction, (ii) to the extent any vote or consent to such Tag-Along Transaction is required, each participating Tag-Along Offeree shall vote for and consent to such transaction (including on behalf of all of its Units and on behalf of all Units with respect to which such Tag-Along Offeree has the power to direct the voting) and shall waive any dissenters’ rights, appraisal rights or similar rights which such Tag-Along Offeree may have in connection therewith, (iii) no participating Tag-Along Offeree shall raise any objections to the proposed Tag-Along Transaction, (iv) subject to clause (v) below, each participating Tag-Along Offeree shall execute all documents reasonably required to effectuate such Tag-Along Transaction, as determined by the Tag-Along Transferor, and (v) each participating Tag-Along Offeree shall be obligated to provide (A) representations and warranties as are customary for transactions of the type, provided, that no such Tag-Along Offeree shall be required to make representations and warranties in connection with such sale other than Member Representations, to the extent such Member Representations shall also be made by other participating Tag-Along Offerees and the Tag-Along Transferor, and (B) covenants as are customary for transactions of the type (but not any non-competition, non-solicitation or similar restrictive covenants other than customary confidentiality covenants). ~~The Board~~ To the extent indemnification is required of the participating Tag-Along Offerees in connection with a Tag-Along Transaction, no such Tag-Along Offeree will be required to be liable in respect of any indemnification provided in connection with such Tag-Along Transaction (x) for any amount in excess of (I) such Tag-Along Offeree’s pro rata share (based upon the relative aggregate amounts of consideration received by such Tag-Along Offeree as compared to the aggregate amounts received by all Members participating in the Tag-Along Transaction) of such indemnified amount, or (II) the consideration received by such Tag-Along Offeree in such Tag-Along Transaction, (y) for the breach of any other participating Tag-Along Offeree’s Member Representations or the Tag-Along Transferor’s Member Representations and (z) other than on a several (and not a joint and several) basis with other participating Tag-Along Offerees and the Tag-Along Transferor. Each participating Tag-Along Offeree shall ~~promptly deliver a copy~~ take all other actions reasonably necessary or desirable, as determined by the Tag-Along Transferor, to cause the consummation of such transaction on the terms proposed by the Tag-Along Transferor; provided, that, in no circumstance shall anything contained in this Agreement be deemed to require any Tag-Along Offeree to (i) pay any money to any Governmental Authority or other Person with respect to obtaining any Governmental Authorizations or third party approvals or consents (other than de minimis filing fees or similar costs) or (ii) agree to undertake any action or to provide any efforts with respect to obtaining any Governmental Authorization or other third-party approvals, consents or clearances that includes an obligation to litigate with any Governmental Authority or other body or to divest or hold separate any assets or investments of such Member or its Affiliates or the Company or its Subsidiaries or to take any other mitigating action that could negatively affect the reputation or other assets or investments of such Member or its Affiliates or the Company or its Subsidiaries. (d) Upon the consummation of the Tag-Along ~~Notice to~~ Transaction, each ~~Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the~~ participating Tag-Along ~~Notice~~Offeree shall receive, ~~the Selling Member shall be deemed to have granted~~ with respect to the ~~Tag Members an option to sell their Class A~~ Units ~~or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include~~ disposed of by it in the Tag-Along ~~Sale up to that~~ Transaction, the same form (or the same option of form) and amount of ~~its Class A Units or Class B Units (~~per Unit consideration as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag each other Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate participating in the Tag-Along ~~Sale unless such portion~~ Transaction, including the Tag-Along Transferor (less any applicable taxes or withholding obligations) and, for the avoidance of doubt, the same price per Unit as received by the Tag-Along Transferor for the Tag-Along Units; provided that, notwithstanding anything to the contrary herein, the Managing Member, at the direction of the ~~Class A Units or Class B Units (~~Tag-Along Transferor, may elect to make any distribution of non-cash property received as ~~applicable) of such Tag Member (or such lesser portion~~ part of the ~~Class A Units or Class B Units of such Tag Member~~ consideration for ~~which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in~~ a Tag-Along ~~Sale~~Transaction subject to restrictions (including the use of escrow accounts, ~~those Tag Members that~~ lock-ups, or other contractual restrictions on the beneficial rights in respect of such shares or other equity interests) so long as such restrictions do ~~elect to include Class A Units~~ not adversely affect the intended economic rights, preferences, privileges, or ~~Class B Units in a~~ powers of the Tag-Along ~~Sale~~ Transferor and the Tag-Along Offerees in respect of their Units. (e) If a proposed Tag-Along Transaction is consummated, each participating Tag-Along Offeree shall ~~have~~ bear a pro rata share (based on the ~~opportunity to increase their participation in~~ relative aggregate amounts of consideration received by such Tag-Along ~~Sale Pro Rata (such increase being Pro Rata among~~ Offeree as compared to the ~~Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag~~ aggregate amounts received by all Members participating in such Tag-Along ~~Sale is equal to up to the Tag-Along Portion~~ Transaction) of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number costs of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request sale of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along ~~Sale~~Transaction to the extent such costs are not otherwise paid by the Company or the acquiring party. The ~~Selling Member shall have ninety~~ fees, costs, and expenses (90including legal and expert fees and expenses) ~~days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after~~ incurred by the Tag-Along ~~Failure~~ Transferor and its Affiliates in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after connection with the consummation of a Tag-Along ~~Sale, the Selling Member~~ Transaction shall ~~give notice thereof~~ be deemed to ~~the participating Tag Members, shall remit to each such Tag Member the total consideration~~ be for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion benefit of the Tag-Along ~~Sale~~ Transferor and all Tag-Along Offerees for purposes of this Section 7.04(e), whether or not the ~~terms thereof as may be reasonably requested~~ Tag-Along Transaction is consummated; provided, that, if the Tag-Along Transaction is consummated, in no event shall any such Tag-Along Offeree’s pro rata share of the costs of the Tag-Along Transaction exceed the proceeds actually received by such Tag-Along Offeree in the Tag-Along Transaction. Costs incurred by any ~~such Tag Member. (h) Notwithstanding anything contained~~ participating Tag-Along Offeree in ~~this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of~~ connection with a Tag-Along ~~Sale to occur for any reason. (i) The Selling Member~~ Transaction shall ~~bear its own~~ not be considered costs of the transaction hereunder and ~~any other costs arising pursuant to~~ shall be the sole responsibility of such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating MembersOfferee. (jf) ~~No Assignee~~ The provisions of this Section 7.04 shall ~~be admitted as~~ terminate upon the earlier of (i) immediately prior to the effectiveness of the registration statement in connection with a ~~Substitute Member except as provided in Section 3.9~~Qualified IPO and (ii) a Class B Liquidity Event.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Vistra Corp.)

Tag-Along Rights. ~~(a)~~ Subject to Section 5(c) below, at least 30 days prior to any sale, transfer, assignment, pledge or other transfer or disposal (a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “~~Selling Member~~Transfer”) ~~desires~~ of Units by any ABRY Member to ~~make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party,~~ a Person other than to a Permitted Transferee of such ~~Member(s) or in accordance with Sections 3.6~~ABRY Member, ~~3.7 and 3.8, such that~~ the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling ABRY Member ~~must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing~~ (the “~~Tag-Along~~ Transferring Member”) proposing to transfer such Units shall deliver a written notice (the “Sale Notice”) (to the ~~date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject~~ Company and to ~~such proposed Transfer (the “Tag-Along Units”)~~each Other Member and each Option Holder, specifying in reasonable detail the identity of the ~~proposed transferee,~~ prospective transferee(s) and the ~~other~~ terms and conditions of ~~such proposed~~ the Transfer. Each Other Member and each Option Holder may elect to participate in the contemplated Transfer, ~~including any consideration proposed to be received pursuant to a bona fide written agreement for~~ on the ~~Tag-Along Units (and, if~~ same terms as those set forth in the ~~proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along~~ Sale Notice ~~shall state the proposed price~~ except as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section ~~3.5. (b) Each Tag~~ 5(a), by delivering written notice to the Transferring Member within 10 days following delivery of the Sale Notice; provided that a Management Member shall have the right to so participate only with respect to Class B Common Units and ~~option~~Vested Incentive Units held by such Management Member at the time of delivery of such Sale Notice; provided, ~~exercisable as set forth below~~further, that an Option Holder may exercise participation rights with respect to a Transfer pursuant to this Section 5(a) only if such Option Holder exercises all or part of such Option Holder’s Option, which exercise may be made by the Option Holder concurrently with, and contingent upon, the consummation of such Transfer. If one or more Other Members and/or Option Holders have elected to participate in such Transfer, each of the Transferring Member and such Other Member or Option Holder shall be entitled to sell in the contemplated Transfer a number of (i) Common Units (if Common Units are being Transferred by the Transferring Member) of any class (subject, in the case of a sale by any Management Member or Option Holder, to ~~include~~ the provisos in the ~~Tag-Along Sale up to that amount~~ immediately preceding sentence) representing a number of ~~its Class A Units or Class B Units (as applicable)~~ Points equal to the product of (iA) the quotient determined by dividing (x) the percentage of Points represented by the Common Units owned by such Member or Option Holder by (y) the aggregate percentage of Points represented by the Common Units owned by the Members and Option Holders participating in such Transfer, multiplied by (B) the aggregate number of ~~Class A Units and Class B~~ Points represented by the Common Units to be ~~acquired~~ sold in the contemplated Transfer and (ii) Series A Preferred Units (if Series A Preferred Units are being transferred by the ~~purchaser~~Transferring Member) representing a number of Series A Preferred Units equal to the product of (A) the quotient determined by dividing (x) the number of Series A Preferred Units owned by such Member or Option Holder by (y) the total number of Series A Preferred Units represented by the Series A Preferred Units owned by the Members and Option Holders participating in such Transfer, multiplied by (iiB) ~~a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is~~ the aggregate number of ~~Class~~ Series A Preferred Units ~~and Class B Units held by~~ to be sold in the ~~Selling~~ contemplated Transfer; provided, in each case, that each Member and ~~all Tag Members (its “Tag-Along Portion”),~~ Option Holder participating in such Transfer shall receive the same form of consideration and the ~~Selling Member shall not consummate the Tag-Along Sale unless such~~ same portion of the ~~Class A Units or Class B Units~~ aggregate net consideration (~~as applicable)~~ net of ~~such Tag Member (or such lesser portion~~ any post-closing adjustments following the payment of the ~~Class A Units or Class B Units of~~ reasonable expenses incurred by the Members and Option Holder in connection with such ~~Tag Member for which such right and option is exercised) is so included. To~~ Transfer to the extent ~~that any Tag~~ such expenses are approved by the Transferring Member ~~elects~~ and are not ~~to include its Class A Units~~ otherwise paid by the Company or ~~Class B Units (~~the acquiring party) as ~~applicable)~~ such holder would have received if such aggregate net consideration had been distributed by the Company in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up complete liquidation pursuant to the ~~Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its~~ rights and preferences set forth in ~~Sections 3.5(a) and (b) above, then it shall provide~~ the ~~Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (~~Operating Agreement as ~~applicable) that such Tag Member wishes to include~~ in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event effect immediately prior to the consummation of the ~~Tag-Along Sale~~Transfer (assuming that the Units included in the Transfer were all of the Equity Securities then outstanding); provided, ~~each such Tag~~ further, that if the Transferring Member ~~that has exercised its right~~ is AMP, then an Other Member or Option Holder may elect to participate in such Transfer only if such Other Member or Option Holder is able to and does elect to include in such Transfer Units of each class or series of Units that AMP has proposed to include in such Transfer, in the ~~Tag-Along~~ same proportions among such classes or series (if more than one) as AMP has proposed to include in such Transfer (treating Class A-1 Common Units and Class A-2 Common Units as a single “class” for purposes of this Section 5(a), and treating Class E-1 Common Units and Class E-2 Common Units as a single “class” for purposes of this Section 5(a)), and AMP shall not be required to give a Sale ~~by providing~~ Notice to any Other Holder or Option Holder who does not hold Units of the ~~required notice~~ classes and/or series that would permit such Other Holder or Option Holder to participate in such Transfer in compliance with this proviso; provided, further, that notwithstanding anything in the immediately preceding proviso to the ~~Selling Member within~~ contrary, if immediately prior to any such Transfer by AMP, AMP owns the ~~Tag-Along Notice Period shall deliver to~~ same or a ~~representative~~ greater number of ~~the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class~~ Series A Preferred Units or Class B E Common Units or both xxxx Xxxxxxx and immediately following and as a result of such Transfer AMP would own a lesser number of Series A Preferred or Class E Common Units or both xxxx Xxxxxxx, then Xxxxxxx (~~as applicable~~notwithstanding that at such time Xxxxxxx may not own Units of each of the classes and/or series that AMP proposes to Transfer) may elect to participate in such Transfer by selling in such Transfer (in the place of Units that AMP would otherwise be able to sell in such Transfer) up to the amount of Units of such class or series such that Xxxxxxx holds no more than the amount of such Units of such class or series to be owned by AMP immediately following and after giving effect to such Transfer. Each Member or Option Holder transferring Units pursuant to this Section ~~3.5 at the closing for such Tag-Along Sale against delivery~~ 5(a) shall be obligated to make customary representations and warranties as to such ~~Tag~~ Member of or Option Holder and the ~~consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount~~ Units such Member ~~would have received with respect to~~ or Option Holder is transferring and join in any indemnification or other obligations that the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Transferring Member agrees to ~~make~~ provide in connection with such ~~Tag-Along Sale~~Transfer; provided, that each such joining Member’s or Option Holder’s liability arising under any such indemnification or other obligation with respect to such Transfer (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be ~~shared~~ several and not joint and limited to its pro rata share (based on ~~a several (but not joint) basis by~~ the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess percentage of ~~the~~ net cash proceeds received by such ~~Tag~~ Member in or Option Holder pursuant to such ~~Tag-Along Sale. (f~~Transfer) ~~If any Tag Member (i) does not elect before the end~~ of ~~the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or~~ such liability and (ii) ~~fails to deliver to~~ shall in no event exceed the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer aggregate net cash proceeds actually received by such ~~Selling Member of Class A Units and/or Class B Units~~ holder in connection with such Transfer. This Section 5(a) shall ~~be subject~~ not apply to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed any Transfer pursuant to Section ~~3.5(d~~6 below. The Transferring Member shall use its commercially reasonable efforts to obtain the agreement of the prospective Transferee(s) to the participation of the Other Members and Option Holders in any contemplated Transfer as provided in this Section 5(a), and the Transferring Member shall ~~furnish such other evidence~~ not Transfer any of its Units to the prospective Transferee(s) if the prospective Transferee(s) declines to allow the participation of the ~~completion~~ Other Members and ~~time of completion of the Tag-Along Sale and the terms thereof~~ Option Holders as ~~may be reasonably requested~~ contemplated by ~~any such Tag Member. (h) Notwithstanding anything contained in~~ this Section ~~3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason~~5(a). (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Members Agreement (Atlantic Broadband Management, LLC)

Tag-Along Rights. (a) ~~Subject~~ Other than in connection with a Transfer pursuant to a ~~Member first complying with Section 3.4~~ Permitted Transfer and ~~provided~~ (if applicable) after the ~~Company and the ROFR Members have not purchased all~~ expiration of the ~~Units proposed to be Transferred under Section 3.4~~ROFO Period, ~~each time~~ if a ~~Class A Member, Class B~~ Member ~~or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”)~~ desires to ~~make any~~ proceed with a Transfer of all or any portion of ~~the Class A~~ its Units ~~and/or Class B Units held by such Member(s) to any Third Party, other than~~ to a ~~Permitted Transferee~~ Third Party and the Transfer would constitute a Transfer of ~~such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than~~ at least twenty-five percent (525%) of the ~~aggregate~~ total issued and outstanding ~~Class A~~ Units ~~and Class B Units~~ of a Series, then each other Member (~~taken together as~~ each, a ~~single class~~“Tag-along Member”) shall be permitted to participate in such sale (a “Tag-~~Along~~ along Sale”~~), then~~ ) on the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section ~~3.5~~20. The Member that desires to proceed with the Transfer shall be referred to as the “Selling Member”, and the Third Party that would receive the Units from the Selling Member under preceding clauses (i) and (ii) shall be referred to as the “Proposed Transferee”. (b) ~~Each Tag Member shall have~~ No less than the ~~right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product~~ earlier of (ix) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) ~~days~~ Business Days after ~~the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy~~ execution of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection documentation associated with such Tag-~~Along Sale; provided, that~~ along sale and (iy) ~~any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa,~~ thirty (ii30) ~~in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units~~ calendar days prior to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business date of the ~~Company in connection with~~ consummation the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along along Sale, the Selling Member shall ~~give notice thereof~~ deliver to the ~~participating Tag Members,~~ Company and each other Member a written notice (a “Sale Notice”) which Sale Notice may be provided concurrently with a ROFO Notice or Third Party Notice. The Sale Notice shall ~~remit~~ make reference to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-~~Along Sale~~ along Members’ rights hereunder and ~~the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained~~ shall describe in ~~this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason.~~reasonable detail: (i) The intention of the Selling Member ~~shall bear its own costs and any other costs arising~~ to initiate tag-along rights pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members.this Section 20; (jii) ~~No Assignee shall~~ The aggregate number of Units the Proposed Transferee has offered to purchase; (iii) The identity of the Proposed Transferee; (iv) The proposed date, time and location of the closing of the Tag- along Sale; (v) The purchase price per Unit and the other material terms and conditions of the Transfer; and (vi) A copy of any form of agreement proposed to be ~~admitted as a Substitute Member except as provided~~ executed in ~~Section 3.9~~connection therewith.

Appears in 1 contract

Samples: Limited Liability Company Agreement (OPAL Fuels Inc.)

Tag-Along Rights. (a) ~~Subject to a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all~~ If any Limited Partner that is an Affiliate of the ~~Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly~~ General Partner (~~collectively~~in such capacity, the “~~Selling Member~~Tag-Along Transferor”) desires to ~~make any~~ Transfer of all or any portion of its Common Units to an Independent Third Party (the ~~Class A Units and/or Class B Units held by~~ “Tag-Along Transferee”) in one transaction or a series of related transactions, the Tag-Along Transferor shall offer to include in such ~~Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units~~ proposed ~~to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class)~~ Transfer (a “Tag-Along Sale”)) a number of Common Units owned and designated by any other Limited Partner, ~~then~~ in each case in accordance with the ~~Selling Member must comply~~ terms of this Section 7.7. Notwithstanding the foregoing, this Section 7.7 shall not be applicable to, and a Tag-Along Transferor may Transfer Common Units without complying with any of the provisions of this Section ~~3.5~~7.7 in connection with, any Transfer: (i) made pursuant to a Drag-Along Transaction pursuant to Section 7.6; or (ii) made in connection with an IPO Exchange in accordance with Section 7.8. The ~~Selling Member~~ Tag-Along Transferor shall ~~inform~~ cause the ~~Board by notice in writing~~ offer from such Tag-Along Transferee (the “Tag-Along ~~Notice~~Offer”) to be reduced to writing, which writing shall include (w) an offer to purchase or otherwise acquire Common Units from the ~~date upon which~~ other Limited Partners as required by this Section 7.7, (x) a time and place designated for the closing of such ~~notice is received being the “Tag-Along Notice Date”~~purchase, (y) ~~stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”),~~ the identity of the ~~proposed transferee,~~ Tag-Along Transferee and (z) the ~~other terms and conditions of such proposed Transfer, including any consideration~~ per Common Unit purchase price proposed to be ~~received pursuant to a bona fide written agreement~~ paid by the Tag-Along Transferee for the Tag-Along Transferor’s and other Limited Partners’ Common Units ~~(and, if the proposed Transfer is to be wholly or partly for consideration other than money, the~~ in a Tag-Along ~~Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration)~~ Sale (the “Tag-Along Price”~~). If~~ ) and the other material terms and conditions of such proposed Tag-Along Sale being offered by the Tag-Along ~~Units are proposed~~ Transferee and, if any portion of the consideration to be ~~Transferred~~ paid is other than ~~for cash to the Selling Member~~cash, ~~the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of~~ then the Tag-Along ~~Units. The Board~~ Transferor shall ~~promptly deliver a copy of~~ make available to the other Limited Partner’s all material information provided by the acquirer to the Tag-Along ~~Notice to each Class A Member and Class B Member~~ Transferor regarding such non-cash consideration (~~other than the Selling Member~~items (w) through (z) collectively, the “~~Tag Members”). By giving the~~ Tag-Along ~~Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5~~Terms”). (b) Each ~~Tag Member~~ of the Limited Partners that is not an Affiliate of the General Partner shall ~~have the right and option, exercisable as set forth below,~~ be entitled to request to include ~~in the Tag-Along Sale up to that amount of its Class A~~ certain Common Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale., in each case in accordance with the terms of this Section 7.7 (fc) ~~If any Tag Member~~ The Tag-Along Transferor shall send a Tag-Along Offer (~~i) does not elect before~~ an “Inclusion Notice”), together with the ~~end~~ Transferor Requested Percentage and a description of the Tag-Along ~~Notice Period~~ Terms, to each of the other Limited Partners. Each Limited Partner shall have ~~all or any part~~ the right (an “Inclusion Right”), exercisable by delivery of ~~its Tag-Along Portion included in~~ written notice to the Tag-Along ~~Sale or~~ Transferor at any time within ten (ii10) ~~fails~~ Business Days after receipt of the Inclusion Notice, to ~~deliver~~ sell to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along ~~Failure in which~~ Transferee, simultaneously with, and contingent upon, the sale of Common Units by the Tag-Along Transferor, a number of Common Units up to ~~Transfer~~ the total number of Common Units held by such Limited Partner multiplied by the Transferor Requested Percentage. If no Limited Partner delivers notice of its exercise of its Inclusion Right within the required period, the Tag-Along Transferor shall thereafter, without again complying with this Section 7.7, have the right to sell all (but not less than all) of the ~~applicable Class A~~ Interests comprising the Transferor Requested Percentage within six (6) months of the date of the Inclusion Notice for a price per Common Unit not more than the Tag-Along Price and other terms and conditions that, on the whole, are not more favorable to the Tag-Along Transferor than the Tag-Along Terms offered to the other Limited Partners in the Inclusion Notice. If one or more Limited Partners duly exercises its Inclusion Right (any such Limited Partner, a “Participating Limited Partner”) by giving timely notice to the Tag-Along Transferor, then the Tag-Along Transferor shall be prohibited from selling any of the offered Common Units or ~~Class B~~ any indirect interests therein to the Tag-Along Transferee unless the Tag-Along Transferor procures that such Tag-Along Transferee (or its designee) also purchases the applicable Common Units ~~at a price not higher than contained~~ or indirect interests therein held by the participating Limited Partners who have exercised their Inclusion Right on the Tag-Along Terms with such modifications as may be agreed to by the applicable Tag-Along Transferee. (d) Promptly following the completion of the procedures described in Section 7.7(c), the following procedures shall apply: (i) first, the Tag-Along Transferor shall notify the Tag-Along Transferee of the number of Requested Common Units; and (ii) next, the Tag-Along Transferor shall determine whether the Tag-Along Transferee is willing to purchase all of the Requested Common Units and, if the Tag-Along Transferee is unwilling to purchase all of the Requested Common Units, then, the Tag-Along Transferor shall determine what percentage of the Requested Common Units that the Tag-Along Transferee is willing to purchase in the aggregate (the “Purchased Percentage”). Upon making such determination, the number of Common Units that each Limited Partner (including the Tag-Along Transferor) proposed to sell in the Tag-Along ~~Notice~~ Sale shall be reduced on a pro rata basis (based on the respective total numbers of Common Units that such holders desired to sell) so as to permit each of the Tag-Along Transferor and ~~on terms not more favorable~~ the Participating Limited Partners to sell a number of Common Units equal to (x) the total number of Common Units that such holder desired to sell multiplied by (y) the Purchased Percentage (the “Purchased Common Units”). (e) Notwithstanding anything to the ~~Selling Member than were contained~~ contrary in this Section 7.7, if the consideration proposed to be paid by the Tag-Along Transferee in a Tag-Along Sale includes securities with respect to which no registration statement covering the issuance of such securities has been declared effective under the Securities Act, then each Participating Limited Partner that is not then an Accredited Investor (without regard to Rule 501(a)(4)) may be required, at the request and election of the Tag-Along Transferor, to (i) at the cost of the Partnership, appoint a purchaser representative (as such term is defined in Rule 501 under the Securities Act) reasonably acceptable to such Tag-Along Transferor or (ii) agree to accept cash in lieu of any securities such holder would otherwise receive in an amount equal to the Fair Market Value of such securities. (f) At the time (subject to extension to the extent necessary to pursue any required regulatory or equity holder approvals, including to allow for the expiration or termination of all waiting periods under the HSR Act) and place provided for the closing in the Tag-Along ~~Notice; thereafter~~Offer, ~~any proposed Transfer by~~ or at such ~~Selling Member~~ other time and place as the Limited Partners, the Tag-Along Transferor and the Tag-Along Transferee shall agree, the Participating Limited Partners and the Tag-Along Transferor shall sell to the Tag-Along Transferee all of ~~Class A~~ the Purchased Common Units. Each sale of Purchased Common Units ~~and/or Class B Units shall be subject~~ pursuant to this Section ~~3.5~~ 7.7 shall be upon terms and ~~shall require a~~ conditions, if any, not more favorable, individually and in the aggregate, to the Tag-Along ~~Notice~~Transferee than the Tag-Along Terms and upon the consummation of such sale, each holder of Purchased Common Units shall receive the consideration specified in Section 7.7(g). (g) ~~Promptly after~~ Upon the consummation of a Tag-Along Sale, ~~the Selling Member~~ each seller of Purchased Common Units shall ~~give notice thereof~~ receive an amount of consideration equal to the ~~participating Tag Members, shall remit to each such Tag Member~~ product obtained by multiplying (A) the ~~total consideration for the Class A~~ number of Purchased Common Units ~~or Class B Units (as applicable)~~ sold by such ~~Tag Member pursuant thereto~~ holder in the Tag-Along Sale by (B) the Tag-Along Price. If a holder of Purchased Common Units receives consideration from such Tag-Along Sale in a manner other than as ~~computed pursuant to Section 3.5(d), and shall furnish such other evidence~~ contemplated by the immediately preceding sentence or in excess of the ~~completion~~ amount to which such holder is entitled in accordance with the immediately preceding sentence, then such holder shall take such action as is necessary so that such consideration shall be immediately reallocated among and ~~time~~ distributed to the holders of ~~completion~~ Purchased Common Units in accordance with the immediately preceding sentence. For the avoidance of doubt, the consideration due and owing to a Participating Limited Partner from the sale of the Purchased Common Units may be included in any escrow or holdback arrangements without such Participating Limited Partner’s consent; provided that the material terms of any such escrow or holdback was disclosed to the Participating Limited Partner prior to such Participating Limited Partner exercising its Inclusion Rights. (h) No holder of Interests shall be obligated to make any out-of-pocket expenditure prior to the consummation of the Tag-Along Sale (excluding modest expenditures for postage, copies, and the ~~terms thereof as may be reasonably requested by any such Tag Member. (h~~like) ~~Notwithstanding anything contained in this Section 3.5 to the contrary,~~ and no ~~Selling Member~~ holder of Interests shall be ~~liable~~ obligated to pay any ~~Member~~ portion (or, if paid, shall be entitled to be reimbursed by the Partnership for that portion paid) that is more than its pro rata share (based on upon the ~~failure~~ amount of consideration received by such holder in the Tag-Along Sale) of reasonable expenses incurred in connection with a consummated Tag-Along Sale ~~to occur~~ for ~~any reason~~the benefit of all holders of Interests participating in the Tag-Along Sale and are not otherwise paid by the Partnership or another Person. (i) ~~The Selling Member shall bear its own costs and any other costs arising pursuant to such~~ In each case, at the closing of the Tag-Along ~~Sale~~ Sale, no Participating Limited Partner shall be required to make any representations or warranties with respect to the Common Units or the Partnership in connection with such Transfer, other than any representations or warranties that were disclosed to the Participating Limited Partner prior to such Participating Limited Partner exercising its Inclusion Rights and the Fundamental Representations (and then only to the extent ~~such costs are incurred for~~ that each other holder of Interests provides similar representations, warranties and indemnities with respect to the ~~benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne~~ Interests held by such ~~Tag Member) will not be considered incurred for the benefit~~ holder of ~~all participating Members~~Interests). (j) No ~~Assignee~~ Participating Limited Partner shall be ~~admitted as~~ obligated in respect of any indemnity obligations in such Tag-Along Sale other than with respect to the representations and warranties on a ~~Substitute Member except as provided~~ several (and not joint) basis referred to in Section ~~3.9~~7.7(i) and any reasonable and customary covenants relating to the transfer of such Participating Limited Partner’s Common Units at the closing of the transaction. (k) No Participating Limited Partner shall be liable for any amount (in the aggregate under all transaction documents entered into with respect to such Tag-Along Sale) in excess of any consideration received by such Limited Partner for the sale of its Purchased Common Units. All liabilities among the sellers of Interests shall be several liabilities and not joint.

Appears in 1 contract

Samples: Agreement of Limited Partnership (Rice Energy Inc.)

Tag-Along Rights. ~~(a) Subject to a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all~~ 5.5.1 If any of the ~~Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly~~ Lion Parties (~~collectively,~~ the “~~Selling Member~~Tag-Along Seller”) ~~desires~~ proposes to make ~~any~~ a Transfer of ~~all or~~ any ~~portion of the Class A Units and/or Class B Units held by such Member(s)~~ Shares to any ~~Third Party,~~ person or persons (other than to any person who would be a Permitted Transferee of such ~~Member(s~~Lion Party), (the “Tag-Along Purchaser”) ~~or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%)~~ by way of ~~the aggregate outstanding Class A Units and Class B Units (taken together as~~ a ~~single class)~~ sale (a “Tag-Along Sale”) which Shares: (a) carry; or (b) together in the aggregate with any Shares previously Transferred by the Lion Parties to any person or persons (other than any person who would be a Permitted Transferee of any Lion Party), ~~then~~ carry 10% or more of the ~~Selling Member must comply~~ voting rights in the Company (and for the avoidance of doubt, the Tag-Along Right shall be triggered at the first sale which shall cause the 10% threshold to be crossed and shall be a continuing right in relation to any subsequent sale), the Seller Parties shall have the opportunity (“Tag-Along Right”) to sell (subject to Clause 5.5.5) to the Tag-Along Purchaser a number of Shares (the “Tag-Along Securities”) determined as follows. The number of Shares which the Seller Parties shall be entitled to sell pursuant to its Tag-Along Right shall be: (A/ B)×C where: A = the aggregate of the number of Shares being proposed to be sold by the Lion Parties to the Tag-Along Purchaser and, in the case only of the first sale which shall cause the 10% threshold to be crossed, any Shares Transferred by any of the Lion Parties to the same Tag-Along Purchaser or any of its Affiliates in the twelve-month period ending on the date of such proposed sale; B = the aggregate number of Shares held by the Lion Parties at the time of such proposed sale (including the Shares proposed to be sold pursuant to such sale) plus, in the case only of the first sale which shall cause the 10% threshold to be crossed, the aggregate number of Shares Transferred by any of the Lion Parties to the same Tag-Along Purchaser or any of its Affiliates in the twelve-month period ending on the date of such proposed sale; and C = the aggregate number of Shares held by the Seller Parties at the time of such proposed sale; it being specified, however, that in the event the Tag-Along Purchaser acquires Control of the Company, the Seller Parties shall have the right to sell to the Tag-Along Purchaser the entire stake of the Seller Parties in the Company or put their Shares to the Company in accordance with the provisions of Clause 6 mutatis mutandis (a “Tag-Along Control Sale”). 5.5.2 Not less than twenty (20) days prior to any proposed Tag-Along Sale pursuant to this ~~Section 3.5. The Selling Member~~ Clause 5.5, the Tag-Along Seller shall ~~inform~~ deliver to the ~~Board by~~ Seller Parties written notice ~~in writing~~ (~~the~~ a “Tag-Along Notice”) thereof, which notice shall set out: (a) the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity total number of ~~the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration~~ Shares proposed to be ~~received pursuant~~ sold to ~~a bona fide written agreement for~~ the Tag-Along ~~Units (and, if~~ Purchaser and the ~~proposed Transfer~~ number of Tag-Along Securities which each Seller Party is entitled to ~~be wholly or partly for consideration other than money,~~ sell pursuant to the Tag-Along ~~Notice shall state~~ Right; (b) the ~~proposed price as being equal to the~~ type and amount of consideration to be paid by the ~~monetary consideration~~Tag-Along Purchaser for each Share; and (c) all other material terms and conditions, if any, ~~plus the Fair Market Value~~ of ~~the other consideration~~such proposed transaction. The Seller Parties who (if any) elect (~~the~~ in such event, collectively a “Participating Shareholder”) to exercise their Tag-Along ~~Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value~~ Right and sell some or all of the Tag-Along ~~Units. The Board~~ Securities pursuant to this Clause 5.5, then the Participating Shareholder shall ~~promptly deliver a copy of~~ so notify the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth Seller by notice in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) writing within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation date of the Tag-Along ~~Sale~~Notice and, ~~each such Tag Member that has exercised its right to participate in~~ at the Tag-Along ~~Sale by providing the required notice~~ Seller’s request, not less than two (2) Business Days prior to the ~~Selling Member within~~ proposed Transfer, the Participating Shareholder shall deliver to the Tag-Along ~~Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise~~ Seller all documents (if any) required to be executed ~~or delivered by such Tag Member~~ in connection with ~~the Transfer of~~ such ~~Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor~~transaction. ~~(d) Each Member participating in~~ 5.5.3 If the Tag-Along Sale shall ~~receive a portion of~~ not have been completed within sixty (60) days after the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end date of the Tag-Along Notice ~~Period~~ (subject to ~~have~~ Clause 5.5.5), the Tag-Along Seller shall promptly return to the Participating Shareholder all documents (if any) previously delivered by the Participating Shareholder to the Tag-Along Seller in relation to the contemplated Tag-Along Sale, and all the restrictions on Transfer contained in this Agreement with respect to Shares held or ~~any part~~ owned by the Tag-Along Seller and such Participating Shareholder shall again be in effect. 5.5.4 If a Participating Shareholder properly exercises its Tag-Along Right: (a) the sale of its Tag-Along ~~Portion included in~~ Securities shall occur concurrently with the sale by the Tag-Along ~~Sale or~~ Seller of its Shares; (iib) ~~fails to deliver to the Selling Member~~ such Participating Shareholder shall receive for its ~~Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “~~Tag-Along ~~Failure”), then such Tag Member will be deemed to have waived any~~ Securities the same consideration per Share and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after CPEC that the Tag-Along ~~Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in~~ Seller receives for its Shares and CPECs from the Tag-Along ~~Notice and on terms not more favorable to the Selling Member than were contained~~ Purchaser as set out in the Tag-Along Notice~~; thereafter~~, ~~any proposed Transfer by~~ unless such ~~Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require~~ Tag-Along Sale is a Tag-Along ~~Notice.~~ Control Sale in which case the Participating Shareholder shall receive a price per Share and CPEC equal to the weighted average of (gi) ~~Promptly after~~ the ~~consummation~~ sale price per Share and CPEC in relation to the Tag-Along Control Sale, and (ii) the sale price per Share and CPEC in relation to any other previous sales of Shares and CPECs by the Lion Parties to that Tag-Along Purchaser in respect of which the Seller Parties were either (i) not entitled to exercise a Tag-Along ~~Sale~~Right, or (ii) entitled to exercise a Tag-Along Right but did not exercise such right; and (c) the ~~Selling Member~~ sale by the Participating Shareholder shall ~~give notice thereof~~ otherwise be on the same terms and conditions upon which the Tag-Along Seller is selling its Shares, provided, however, that the liability of the Participating Shareholder shall be limited to the ~~participating Tag Members, shall remit~~ amount (if any) of any consideration due to ~~each such Tag Member~~ that Participating Shareholder that: (i) is retained by the ~~total consideration~~ Tag-Along Purchaser under any retention arrangements as security for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion obligations of the Tag-Along ~~Sale and~~ Seller; (ii) is held in any escrow account or similar arrangement; (iii) represents the ~~terms thereof as may be reasonably requested~~ principal amount (plus any interest accrued thereon) of any debt owed by the Tag-Along Purchaser (or any of its Affiliates) or by any ~~such Tag Member~~member of the Group to the Participating Shareholder which debt arises in relation to the sale of the Tag-Along Securities; and/or (iv) otherwise is retained by the Tag-Along Purchaser under any arrangements pursuant to which the Tag-Along Purchaser acquires security of any kind in relation to the obligations of the Tag-Along Seller in relation to the sale of the Tag-Along Securities, in each case in relation to the sale of the Tag-Along Securities. ~~(h) Notwithstanding anything contained in this Section 3.5 to~~ 5.5.5 If the ~~contrary, no Selling Member shall be liable to any Member based on the failure of a~~ Tag-Along Sale is subject to ~~occur for~~ any ~~reason. (i~~prior regulatory approval, the sixty-(60) ~~The Selling Member shall bear its own costs and any other costs arising pursuant to such~~ day period during which the Tag-Along Sale ~~to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which~~ may be completed as set out in Clause 5.5.2 shall be ~~borne by~~ extended until the expiration of five (5) Business Days after all such ~~Tag Member) will not be considered incurred for the benefit of all participating Members~~approvals shall have been received. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Shareholders Agreement

Tag-Along Rights. ~~(a) Subject~~ If a Transferring Member elects to sell all or a portion of its Units to a third party (a “Third Party Purchaser”) and Transfer Consent has been obtained as required, the Transferring Member ~~first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all~~ shall provide written notice of the ~~Units~~ proposed sale (“Third Party Sale Notice”) to ~~be Transferred under Section 3.4,~~ the other Members (each ~~time~~ a ~~Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the~~ “~~Selling~~ Tagging Member”) ~~desires to make any Transfer of all or any portion~~ and the Company setting forth the proposed sale price, the name of the ~~Class A Units and/or Class B Units held by such Member(s) to~~ Third Party Purchaser and any ~~Third Party,~~ other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) material terms of the ~~aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5~~proposed sale. ~~The Selling~~ Each Tagging Member shall ~~inform~~ have the ~~Board by~~ right, upon written notice ~~in writing~~ to the Transferring Member (~~the~~ “Tag-Along Notice”) delivered to it within fifteen (15) days of receipt of the ~~date upon which such notice is received being~~ Third Party Sale Notice, to sell to the ~~“Tag-Along Notice Date”) stating~~ Third Party Purchaser, on the ~~Units (or portion thereof) that are subject~~ terms contained in the Third Party Sale Notice, up to such ~~proposed Transfer (the “Tag-Along Units”), the identity~~ number of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Tagging Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicabledefined) equal to the product of (i) the ~~aggregate~~ total number of ~~Class A~~ Units that the Third Party Purchaser proposes to buy as stated in the Third Party Sale Notice and ~~Class B Units to be acquired by the purchaser, multiplied by~~ (ii) a ~~fraction,~~ fraction (x) the numerator of which is equal to the number of ~~Class A~~ Units ~~or Class B Units (as applicable)~~ then held by ~~such Tag~~ the Tagging Member and (y) the denominator of which is equal to the ~~aggregate~~ sum of the number of ~~Class A~~ Units ~~and Class B Units~~ then held by the ~~Selling~~ Transferring Member and all ~~Tag~~ participating Tagging Members (such number, the “Tagging Units”). If any Tagging Member exercises its “right hereunder through the delivery of a timely Tag-Along ~~Portion”)~~Notice, ~~and~~ the ~~Selling~~ Tagging Member shall ~~not consummate~~ join in the ~~Tag-Along Sale unless such portion of~~ Transferring Member’s contract with the ~~Class A Units or Class B Units (~~Third Party Purchaser on the same terms as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice, shall receive consideration in the same amount per Unit (calculated on a deemed as-converted basis) as the Transferring Member and such consideration will be allocated among such Members and distributed in accordance with Section 12.03; ~~thereafter~~provided, that (a) such Tagging Member shall only be obligated to make individual representations and warranties with respect to its right, title and interest in and to its Units, power and authority to sell its Units, absence of encumbrances upon its Units, and other matters relating to such Tagging Member (and the liability of such Tagging Member for indemnification, if any, with respect to any such representations and warranties shall be several and not joint and shall be pro rata in proportion to and shall not exceed the amount of consideration payable to such Tagging Member), but not with respect to any of the foregoing in respect of any other Members or any other Members’ Units; (b) no Tagging Member shall be obligated to execute or otherwise agree to, or be bound by, any ~~proposed~~ restrictive covenant or exclusivity obligation other than reasonable and customary covenants with respect to confidentiality. To the extent that the Third Party Purchaser refuses to purchase Units from an exercising Tagging Member, the Transferring Member shall not Transfer by any Subject Units to such ~~Selling~~ Third Party Purchaser unless and until, simultaneously with such Transfer, the Transferring Member shall purchase the applicable number of ~~Class A~~ Units ~~and/or Class B Units shall be subject to this Section 3.5~~ from the exercising Tagging Member for the same consideration and ~~shall require~~ on the same terms and conditions as the Transferring Member receives from the Third Party Purchaser. If no Non-Transferring Member timely delivers a Tag-Along Notice~~. (g) Promptly after the consummation of a Tag~~, or if all Non-~~Along Sale~~Transferring Members waive their rights hereunder, the ~~Selling~~ Transferring Member shall ~~give notice thereof~~ have the right to consummate the sale of the Subject Units to the ~~participating Tag Members, shall remit to each such Tag Member~~ Third Party Purchaser on the ~~total consideration for~~ terms set forth in the ~~Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence~~ Third Party Sale Notice within 45 days of the ~~completion and time of completion~~ date of the Tag-Along ~~Sale and the terms thereof as may be reasonably requested by any such Tag Member~~Notice. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Chicken Soup for the Soul Entertainment, Inc.)

Tag-Along Rights. ~~(a) Subject~~ Except in the case of a Permitted Transfer, not less than 20 days prior to ~~a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units~~ any proposed ~~to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group~~ Transfer of Class A ~~Members and/or Class B Members acting jointly~~ Membership Units by a Member in an arms-length transaction pursuant to a bona fide offer from a third party (~~collectively~~which third party is not an Affiliate of the Transferring Member), the ~~“Selling Member”) desires~~ Transferring Member shall deliver to ~~make any Transfer~~ the holders of ~~all or any portion of the~~ Class A Membership Units ~~and/or Class B Units held by such Member(s) to any Third Party, other than to~~ a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by written notice ~~in writing~~ (the “~~Tag-Along~~ Sale Notice”) ~~(the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”),~~ specifying in reasonable detail the identity of the proposed ~~transferee~~Transferee(s), the number of Class A Membership Units proposed to be sold, and the ~~other~~ terms and conditions of the proposed Transfer. Each such Member holding Class A Membership Units may elect to participate in the proposed Transfer by delivering to the Transferring Member a written notice of such election within the 20-day period following delivery of the Sale Notice. If any such Members elect to participate in such Transfer, the Transferring Member and each such participating Member shall be entitled to sell in such proposed Transfer, ~~including any consideration proposed to be received pursuant to~~ at the same price and on the same terms, a ~~bona fide written agreement for the Tag-Along~~ number of Units ~~(and, if the proposed~~ included in such Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (ia) the ~~aggregate number of Class A Units and Class B Units to be acquired~~ quotient determined by ~~the purchaser, multiplied by (ii) a fraction, the numerator of which is~~ dividing the number of Class A Membership Units ~~or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units~~ proposed to be sold then held by the ~~Selling~~ Transferring Member ~~and all Tag Members~~ or such participating Member (~~its “Tag-Along Portion”~~as determined on a Fully Diluted Basis), ~~and~~ as the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Salecase may be, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying by the number of Class A Membership Units ~~or Class B Units~~ proposed to be sold then held by the Transferring Member and all participating Members (as ~~applicable~~determined on a Fully Diluted Basis), multiplied by (b) the number of Class A Membership Units to be sold in such proposed Transfer (as determined on a Fully Diluted Basis). Provided that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along SaleTransfer is consummated, each ~~such Tag~~ participating Member ~~that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period~~ shall ~~deliver to~~ (x) join, on a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units pro rata basis (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation value of the ~~Tag-Along Price among them for their respective Class A Units and Class B Units shall~~ proceeds to be ~~determined by~~ received from the ~~Accountant (or any other certified public accountant selected by all~~ sale of the ~~disputing Members)~~Units by such Member) in any representations, which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities ~~as the Selling Member agrees~~ or other obligations required to ~~make~~ be provided in connection with such ~~Tag-Along Sale; provided, that~~ Transfer (i) other than any such ~~Tag Member shall not be liable for the breach~~ obligations that relate specifically to a holder of ~~any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A)~~ such ~~Member’s valid ownership of its~~ Units, ~~(B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C)~~ such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating as indemnification with respect to representations and warranties (given by a Member regarding such Member’s title to and ~~related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business~~ ownership of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale Class A Membership Units); and (ivy) ~~no Tag Member shall be obligated to agree to indemnification obligations in excess~~ pay the Member’s pro rata share (based on the value of the proceeds to be received ~~by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before~~ from the ~~end~~ sale of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Membership Units ~~or Class B Units (as applicable) sold~~ by such ~~Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence~~ holder) of any costs of the ~~completion and time of completion of~~ transaction that are not otherwise paid by the ~~Tag-Along Sale and~~ Company or the ~~terms thereof as may be reasonably requested by any such Tag Member~~acquiring Person. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Minn Shares Inc)

Tag-Along Rights. (a) ~~Subject~~ Notwithstanding the prior written consent of the Manager pursuant to Section 7.3(a) hereof, if Dxxxx proposes to Sell to a ~~Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased~~ Third Party Purchaser any or all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held Membership Interests owned by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) Dxxxx (a “~~Tag-Along Sale~~Transaction”), then Dxxxx shall refrain from effecting a Transaction unless, prior to the ~~Selling Member must comply~~ consummation thereof: (i) Dxxxx shall provide the Minority Members with written notice (a “Transfer Notice”) at least ten (10) Business Days prior to the ~~provisions~~ closing date of the Transaction, setting forth: (A) the name and address of the proposed Third Party Purchaser; (B) the number of Membership Interests proposed to be Sold by Dxxxx (the “Dxxxx Sale Amount”); and (C) the purchase price and other terms and conditions of payment and the closing date for the proposed Sale (including, when available, a copy of any purchase agreement related thereto); and (ii) the Minority Members shall have been afforded the opportunity to join in such Sale as required by this Section ~~3.5~~7.6. ~~The Selling~~ Any purported Sale subject to this Section 7.6 not made in compliance with this Section 7.6 shall be void and of no force and effect and shall not be recorded upon the books and records of the Company. (b) If a Minority Member desires to participate in such Sale, such Minority Member shall ~~inform the Board~~ notify Dxxxx by providing Dxxxx with a written notice ~~in writing~~ (the “Tag-Along Notice”) on or before the expiration of the tenth (10th) Business Day following receipt of the ~~date upon which~~ Transfer Notice indicating that such ~~notice is received being~~ Minority Member (each a “Selling Minority Member” and collectively the “~~Tag-Along Notice Date~~Selling Minority Members”) ~~stating the~~ desires to Sell its proportionate number of Common Units (~~or portion thereof~~as calculated below) ~~that are subject to such proposed Transfer (~~on the ~~“Tag-Along Units”), the identity of the proposed transferee, and the other~~ same terms and conditions ~~of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for~~ set forth in the ~~Tag-Along Units (and, if the proposed~~ Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along UnitsNotice. The ~~Board shall promptly deliver~~ maximum number of Common Units that a ~~copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the~~ Selling ~~Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling~~ Minority Member shall be ~~deemed~~ entitled to ~~have granted~~ Sell to ~~the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth~~ a Third Party Purchaser in accordance with this Section ~~3.5.~~ 7.6 shall be determined by multiplying (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (ix) the ~~aggregate~~ total number of ~~Class A~~ Common Units ~~and Class B Units to be acquired~~ owned by a Selling Minority Member at the ~~purchaser, multiplied~~ time of receipt of the Transfer Notice by (iiy) a fraction, the numerator of which is equal to the number of ~~Class A~~ Common Units ~~or Class B Units (as applicable) held~~ proposed to be Sold to the Third Party Purchaser by ~~such Tag Member~~ Dxxxx and the denominator of which is equal to the ~~aggregate~~ total number of ~~Class A~~ Common Units ~~and Class B~~ owned by Dxxxx. The total number of Common Units ~~held by~~ that the Selling ~~Member and all Tag~~ Minority Members ~~(its~~ shall be entitled to sell to the Third Party Purchaser is referred to herein as the “Tag-Along ~~Portion”~~Amount.” If Dxxxx does not receive a Tag-Along Notice from any Minority Member within the period specified above, Dxxxx shall be free to Sell its Common Units to the Third Party Purchaser in the amount and on the same terms and conditions set forth in the Transfer Notice, subject to Section 7.6(h) below. Except as otherwise provided in Section 7.6(c), ~~and~~ if one or more Minority Members provides Dxxxx with a Tag-Along Notice within the ~~Selling Member~~ period specified above, Dxxxx may not effect such Sale unless the Third Party Purchaser shall ~~not consummate~~ have purchased the Tag-Along ~~Sale unless such portion of~~ Amount from each Selling Minority Member on the ~~Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of~~ same terms and conditions set forth in the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag MembersTransfer Notice. (c) If ~~any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide~~ the ~~Selling Member with written irrevocable notice specifying~~ sum of the number of ~~Class A~~ Common Units ~~or Class B~~ proposed to be Sold to the Third Party Purchaser by Dxxxx and the Selling Minority Members exceeds the number of Common Units ~~(as applicable)~~ that such ~~Tag Member wishes~~ Third Party Purchaser is willing to ~~include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date~~ purchase (the “~~Tag-Along Notice Period~~Purchase Amount”~~) and~~ ), then Dxxxx shall ~~simultaneously provide a copy of such notice~~ be obligated to reduce the Dxxxx Sale Amount to an amount equal to the ~~Company. Promptly upon request~~ product of (x) Dxxxx’x Participating Percentage as of the ~~Seller Member, and in any event prior to the consummation~~ date of the ~~Tag-Along Sale, each such Tag Member that has exercised its right to participate in~~ Transfer Notice multiplied by (y) the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration thereforPurchase Amount. (d) ~~Each Member participating in~~ Any indemnity required to be provided by Dxxxx and/or the ~~Tag-Along Sale shall receive a portion of the Tag-Along Price equal~~ Selling Minority Members to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party ~~transferee, the aggregate~~ Purchaser in a purchase ~~price by reference~~ agreement relating to ~~which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall~~ such Sale will be several and not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determinationjoint. (e) ~~Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations~~ Dxxxx and ~~warranties, covenants and indemnities as~~ the Selling ~~Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member~~ Minority Members shall ~~not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member~~ be required to ~~make representations and warranties other than (A)~~ bear their pro rata share, based on the number of Common Units included in such ~~Member’s valid ownership of its Units~~Sale, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess expenses of the ~~proceeds received~~ transaction payable by ~~such Tag Member in such Tag-Along Sale~~Dxxxx, including reasonable legal, accounting and investment banking fees and expenses. (f) ~~If any Tag Member (i) does not elect before~~ The Manager shall, upon request by Dxxxx or Selling Minority Members, issue to Dxxxx or the ~~end of the Tag-Along Notice Period to have all~~ Selling Minority Members one or ~~any part of its Tag-Along Portion included~~ more certificates registered in the ~~Tag-Along Sale or~~ names and in the denominations (~~ii) fails to deliver~~ aggregating in a number equal to the original denomination) requested by Dxxxx or the Selling ~~Member its Class A Units or Class B Units (as applicable) or~~ Minority Members, to facilitate any ~~required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer~~ partial sale of ~~any or all of its Class A Units or Class B~~ Common Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section ~~3.5 and shall require a Tag-Along Notice~~7.6. (g) ~~Promptly after~~ To the ~~consummation of~~ extent that a ~~Tag-Along~~ Transfer Notice has been delivered to the Minority Members and any prospective Third Party Purchaser is unwilling or otherwise refuses to purchase Common Units from any Minority Member, Dxxxx shall not Sell to such prospective Third Party Purchaser any Membership Interests, unless and until, simultaneously with such Sale, Dxxxx shall purchase such Common Units from such Minority Member on the ~~Selling Member shall give notice thereof to~~ same terms and conditions specified in the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag MemberTransfer Notice. (h) ~~Notwithstanding anything contained~~ Subject to the rights of any Minority Member to participate in the Sale of Common Units as provided in this Section ~~3.5~~ 7.6, Dxxxx may conclude a Sale of Common Units covered by the Transfer Notice on the terms and conditions described in the Transfer Notice; provided, however, that the closing of such Sale takes place no later than one hundred eighty (180) days following delivery to the ~~contrary, no Selling Member shall be liable to any Member based on the failure~~ Minority Members of a ~~Tag~~Transfer Notice. Any proposed Sale on terms and conditions more favorable to the Third Party Purchaser than those described in the Transfer Notice, as well as any proposed Sale of any Common Units by Dxxxx more than one hundred eighty (180) days following delivery to the Minority Members of a Transfer Notice, shall again be subject to the tag-~~Along Sale to occur for any reason~~along rights of the Minority Members and shall require compliance by Dxxxx with the procedures described in this Section 7.6. (i) The ~~Selling~~ exercise or non-exercise of the rights of a Minority Member under this Section 7.6 to participate in one or more Sales of Common Units shall ~~bear its own costs and~~ not limit such Minority Member’s right to participate in any ~~other costs arising~~ subsequent Sale of Common Units pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Membersthis Section 7.6. ~~(j) No Assignee shall be admitted~~ H. Section 7.7 of the Operating Agreement is hereby amended and restated in its entirety as ~~a Substitute Member except as provided in Section 3.9.~~follows:

Appears in 1 contract

Samples: Operating Agreement (Dolan Media CO)

Appears in 1 contract

Samples: Limited Liability Company Agreement (Knight-Swift Transportation Holdings Inc.)

Tag-Along Rights. (a) ~~Subject~~ If at any time Silver Wolf (a “Class C Transferor”) elects to ~~a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all~~ Transfer to any Person (other than an Affiliate of ~~the Units proposed to be Transferred under Section 3.4, each time a~~ such Class ~~A Member, Class B Member or group~~ C Transferor) any number of Class ~~A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B~~ C Units held by such ~~Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or~~ Class C Transferor on the date thereof in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single ~~class~~transaction or series of related transactions and such Class C Transferor does not (or does not have the authority to) exercise its rights under Section 8.04 (a “~~Tag-Along~~ Tag Sale”), then ~~the Selling Member must comply with the provisions of this Section 3.5. The Selling Member~~ such Class C Transferor shall ~~inform the Board by~~ provide notice ~~in writing~~ thereof (~~the~~ a “~~Tag-Along~~ Tag Sale Notice”) (to the other Members at least 20 calendar days prior to the date ~~upon~~ on which such Class C Transferor expects to consummate a Tag Sale and each Member shall be entitled to exercise the following rights by providing notice ~~is received being~~ of the ~~“Tag-Along Notice Date”) stating~~ number of Units with respect to which it wishes to exercise such rights within 20 calendar days following its receipt of a Tag Sale Notice: each Member shall be entitled to Transfer as part of such Tag Sale a percentage of its Units equal to the percentage of the Class C Transferor’s Class C Units ~~(or portion thereof)~~ that are ~~subject~~ being Transferred pursuant to such Tag Sale, for the aggregate consideration to be paid in such Tag Sale and on the terms set forth in Section 8.05(d). (b) Notwithstanding the foregoing, if the number of Units required to be transferred or sold pursuant to this Section 8.05 exceeds the number of Units that the proposed Transferee is willing to purchase pursuant to the applicable Tag Sale, then the number of Units each Member is permitted to Transfer pursuant to this Section 8.05 shall be reduced proportionately until the aggregate number of Units required to be sold does not exceed the number of Units such proposed Transferee is willing to purchase pursuant to such Tag Sale. (c) Each Tag Sale Notice and amended Tag Sale Notice shall set forth: (i) the ~~“Tag-Along Units”), the identity~~ name and address of the proposed ~~transferee~~Transferee, ~~and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units~~ (~~and, if~~ ii) the proposed ~~Transfer is to be wholly or partly for~~ amount and form of consideration ~~other than money, the Tag-Along Notice shall state~~ offered by the proposed ~~price as being equal~~ Transferee, (iii) the expected closing date of the transaction and (iv) in the case of the initial Tag Sale Notice, an offer to the ~~amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”)~~Members to participate in such Tag Sale in accordance with this Section 8.05. If the ~~Tag-Along Units~~ terms set forth in a Tag Sale Notice are ~~proposed~~ thereafter amended in any material respect, prior to ~~be Transferred other than for cash to~~ consummating a Tag Sale on such terms the ~~Selling Member, the consideration for such Tag-Along Units~~ Class C Transferor shall ~~be deemed to be the Fair Market Value~~ give notice of the ~~Tag-Along Units. The Board shall promptly deliver a copy~~ amended terms of ~~the Tag-Along Notice~~ such Tag Sale to each Member Transferring Units in such Tag Sale and each such Member shall have five Business Days following receipt of such notice to notify the Class A C Transferor of its election to (i) continue to participate in such Tag Sale on such amended terms or (ii) not participate in such Tag Sale. If any applicable Member ~~and Class B Member (other than~~ fails to elect to participate in any Tag Sale following receipt of a Tag Sale Notice or an amended Tag Sale Notice within the ~~Selling Member) (the “Tag Members”). By giving the Tag-Along Notice~~applicable time periods specified in this Section 8.05, ~~the Selling~~ such Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall elected not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration thereforSale. (d) ~~Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with~~ With respect to any Tag Sale, the ~~Class A Units or Class B Units (as applicable) Transferred by such Member~~ Board shall allocate the aggregate consideration payable in connection therewith among the ~~Tag-Along Sale upon a deemed liquidation of the Company~~ participating Members in accordance with ~~Section 7.1(a); provided that where less than one hundred percent (100%)~~ Article III of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determinationthis Agreement. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement

Tag-Along Rights. (a) ~~Subject to~~ If any holder of Series A Units (each, a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “~~Selling Member~~Tag Offeror”) desires to ~~make any Transfer~~ Dispose of all or any portion of ~~the Class~~ its Series A Units ~~and/or Class B Units held by such Member(s)~~ in a bona fide Disposition to ~~any~~ one or more Third ~~Party~~Parties (each, ~~other than to~~ a ~~Permitted Transferee of such Member(s) or in accordance with Sections 3.6~~“Tag Transferee”, ~~3.7~~ and ~~3.8~~the transaction, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along ~~Sale~~Transaction”)) pursuant to an offer from such Tag Transferee(s) (a “Third Party Tag Offer”) and such Tag Offeror is permitted to effect such proposed Disposition pursuant to Sections 7.1 and 7.3, then such Tag Offeror(s) shall offer to include a number of Series A Units held by each other holder of Series A Units (each, a “Tag Offeree”) in such proposed Disposition in accordance with this Section 7.5. A Third Party Tag Offer may not contain provisions related to any property of the ~~Selling Member must comply~~ Tag Offeror other than Series A Units held by such Tag Offeror, and the offer price set forth in such Third Party Tag Offer shall be expressed only in terms of cash (in U.S. dollars). Any proposed Disposition of Series A Units not satisfying the terms of this Section 7.5 may not be made unless otherwise expressly permitted pursuant to the provisions of this Article 7. Notwithstanding the foregoing, this Section 7.5 shall not be applicable to, and the Tag Offerors may Dispose of Series A Units without complying with any of the provisions of this Section 7.5 in connection with, any Disposition of Series A Units (i) to Permitted Transferees or (ii) made pursuant to a Drag-Along Transaction. (b) The Tag Offerors shall cause any such Third Party Tag Offer to be reduced to writing and shall send written notice of such Third Party Tag Offer (the “Inclusion Notice”) to each Tag Offeree promptly after receipt of the Third Party Tag Offer and, in any event, no later than 20 days prior to the closing date of such Tag-Along Transaction. The Inclusion Notice shall make reference to the Tag Offeror’s rights and obligations hereunder and shall describe the Tag-Along Transaction in reasonable detail. The Tag Offeror shall have 90 days following the date of the Tag-Along Notice in which to consummate the Tag-Along Transaction, on the terms set forth in the Tag-Along Notice (which such 90 day period may be extended for a reasonable time not to exceed 120 days to the extent reasonably necessary to obtain any regulatory approvals). If at the end of such period the Tag Offeror has not completed the Tag-Along Transaction, the Tag Offeror may not then effect a Tag-Along Transaction without again fully complying with the provisions of this Section ~~3.5. The Selling Member~~ 7.5. (c) Each Tag Offeree shall ~~inform~~ have the ~~Board by notice in writing~~ right (~~the~~ an “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along UnitsInclusion Right”), exercisable by delivery of notice to the ~~identity~~ Tag Offerors at any time within 10 days after receipt of the Inclusion Notice to sell pursuant to such Third Party Tag Offer and upon the terms and conditions set forth in the Inclusion Notice, that number of Series A Units requested to be included by such Tag Offeree; provided, however, that if the proposed Tag Transferee is unwilling to purchase all of the Series A Units requested to be included by all exercising Tag Offerees and Series A Units held by the Tag Offerors desiring to Dispose of Series A Units pursuant to this Section 7.5, then each Tag Offeree shall have the right to sell pursuant to such Third Party Tag Offer, at the offer price and upon the terms and conditions set forth in the Third Party Tag Offer, a number of such Tag Offeree’s Series A Units as provided in the next succeeding sentence. If any Tag Offeree has exercised its Inclusion Rights and the proposed Tag Transferee is unwilling to purchase all of the Series A Units proposed to be transferred by the Tag Offeror(s) and all exercising Tag Offerees (determined in accordance with the first sentence of this Section 7.5(c)) then the Tag Offeror(s) and each exercising Tag Offeree shall sell the number of Units equal to the total number of Units the Tag Transferee is willing to purchase multiplied by such Member’s Proportionate Fraction. (d) The Tag Offerees and such Tag Offeror(s) shall sell to the proposed Tag Transferee all, or at the option of the proposed ~~transferee~~Tag Transferee, any part of the Series A Units proposed to be Disposed of by the Tag Offerees and such Tag Offeror(s), at not less than the price and upon terms and conditions, if any, not more favorable, individually and in the aggregate, to the proposed Tag Transferee than those in the Third Party Tag Offer and the Inclusion Notice at the time (subject to extension to the extent necessary to pursue any required regulatory approvals) and place provided for the closing in the Inclusion Notice, or at such other time and place as the Tag Offerees, such Tag Offeror(s), and the ~~other terms and conditions of such~~ proposed ~~Transfer~~Tag Transferee shall agree. (e) Notwithstanding anything to the contrary in this Section 7.5, ~~including any~~ if the consideration proposed to be ~~received pursuant~~ paid to the Tag Offeror(s) and the exercising Tag Offerees includes securities with respect to which no registration statement covering the issuance of such securities has been declared effective under the Securities Act, then each Tag Offeror and exercising Tag Offeree that is not then an Accredited Investor may be required, at the request and election of the Tag Offeror(s) and exercising Tag Offerees that are Accredited Investors, to (i) appoint a ~~bona fide written agreement for~~ purchaser representative (as such term is defined in Rule 501 under the ~~Tag-Along Units~~ Securities Act) reasonably acceptable to such Tag Offeror(s) and exercising Tag Offerees or (~~and, if the proposed Transfer is to be wholly~~ ii) accept cash in lieu of any securities such Tag Offeror or ~~partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being~~ such exercising Tag Offeree would otherwise receive in an amount equal to ~~the amount of the monetary consideration, if any, plus~~ the Fair Market Value of ~~the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for~~ such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Salesecurities. (f) If The Tag Offeror(s) shall have the right in connection with any proposed transaction pursuant to this Section 7.5 (or in connection with the investigation or consideration of any such potential transaction) to require the Company to cooperate fully with potential acquirors in such prospective transaction by taking all customary and other actions reasonably requested by such Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicableOfferor(s) or ~~any required documentation (collectively~~such potential acquirors, including making the Company’s properties, books and records, and other assets reasonably available for inspection by such potential acquirors, establishing a ~~“Tag-Along Failure”)~~data room including materials customarily made available to potential acquirors in connection with such processes and making its employees reasonably available for interviews and other diligence activities, ~~then such Tag Member will be deemed~~ in each case subject to ~~have waived any~~ reasonable and ~~all rights under this Section 3.5~~ customary confidentiality provisions. The Company and each holder of Units shall provide assistance with respect to ~~the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period~~ these actions as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Noticereasonably requested. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Ashford Inc.)

Tag-Along Rights. (a) Subject to Section 8.07, following a ROFR Termination pursuant to Section 8.04(c), if an Offering Member ~~first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all~~ proposes to Transfer (in one transaction or in a series of ~~the~~ transactions) any Vested Units ~~proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly~~ (~~collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party,~~ other than (i) to a Permitted ~~Transferee of such Member(s~~Transferee, (ii) in a Public Offering or pursuant to Rule 144 or (iii) in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a ~~single class) (a “Tag~~Drag-Along ~~Sale”)~~Sale pursuant to Section 8.06) to a third party, then each Member (other than the ~~Selling Member must comply with~~ Offering Member) shall have the ~~provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing~~ right (the “Tag-Along ~~Notice~~Right”) to have included in the proposed Transfer, a number of Vested Units with an aggregate Equity Value (as defined below) equal to the ~~date upon~~ Proportionate Value (as defined below) of such Member’s Vested Units. The “Proportionate Value” of a Member’s Vested Units shall be determined by dividing (a) the Equity Value of all of such Member’s Vested Units by (b) the Total Equity Value of all Vested Units. The “Total Equity Value” of the Vested Units is the aggregate proceeds that would be received by the holders of all Vested Units if the Company’s entire business operations were sold at fair market value (assuming for this purpose that the fair market value is determined by reference to the implied value of the Vested Units to be Transferred by the Offering Member as described in the Offer Notice), the Company’s liabilities and obligations were paid in full or otherwise satisfied, assumed or provided for, and the remaining proceeds were then distributed to the holders of Vested Units in accordance with Section 10.04 hereof and the “Equity Value” of any Vested Unit is the amount that the holder of such Vested Unit would be entitled to receive in respect of such Vested Unit in connection therewith. In the event the Offering Member proposes to transfer Vested Units of more than one class held by the Offering Member, each other Member participating in such Transfer pursuant to this Section 8.05, to the extent such Member elects to participate in such Transfer, will be required to sell in the contemplated Transfer a pro rata portion of the Vested Units of such class being Transferred by the Offering Member (up to the maximum number of Vested Units of all such classes owned by each such participating Member); otherwise, such participating Member who so elects to participate in such Transfer shall sell Vested Units of the classes reasonably agreed by the Offering Member and the participating Members to most closely approximate the Proportionate Value. The participating Members will be entitled to sell such Vested Units in the contemplated Transfer on the same terms and conditions (other than price, which will be as described in this Section 8.05(a) above) as the Offering Member as specified in the Offer Notice, and for a price equal to the Equity Value of such Vested Units. (b) The Offering Member will use commercially reasonable efforts to obtain the agreement of the prospective Transferee to the participation of the participating Members in any contemplated Transfer, and the Offering Member will not effect any Transfer of any of its Vested Units to the prospective Transferee unless (i) simultaneously with such Transfer, the prospective Transferee purchases from each participating Member the Vested Units which such ~~notice~~ participating Member is ~~received being~~ entitled to and elects to sell to such prospective Transferee pursuant to Section 8.05(a) above or (B) simultaneously with such Transfer, the “Offering Member purchases (on the terms and conditions specified in this Section 8.05) the number of Vested Units of such class from each participating Member which such participating Member would have been entitled to and has elected to sell pursuant to Section 8.05(a) above. (c) The Members may exercise their Tag-Along ~~Notice Date”) stating~~ Right within 10 days following the ~~Units (or portion thereof) that are subject to such proposed Transfer~~ ROFR Termination (the “Tag-Along ~~Units~~Right Period”), ~~the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed~~ by providing written notice to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal that effect to the ~~amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”)~~Offering Member. If the Tag-Along Right has been exercised with respect to any Vested Units ~~are~~ proposed to be Transferred ~~other than for cash~~ prior to the ~~Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value~~ expiration of the Tag-Along ~~Units. The Board shall promptly deliver a copy~~ Right Period, then the Offering Member may not effect any Transfer of the ~~Tag-Along~~ Vested Units subject to the Offer Notice to ~~each Class A Member and Class B Member (other than~~ any third party except in compliance with the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in requirements of this Section ~~3.5. (b~~8.05, including Section 8.05(b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration thereforhereof. (d) ~~Each Member participating~~ Notwithstanding anything to the contrary contained in this Section 8.05, there shall be no liability on the ~~Tag-Along Sale shall receive a portion~~ part of the ~~Tag-Along Price equal~~ Offering Member to ~~the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such~~ any Member in the ~~Tag-Along Sale upon a deemed liquidation~~ event that the Transfer of Units to the ~~Company in accordance with~~ Person contemplated pursuant to this Section ~~7.1(a)~~8.05 is not completed for any reason whatsoever; provided that ~~where less than one hundred percent (100%) of~~ the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired Offering Member complies with all of the ~~issued~~ provisions of this Section 8.05, Section 8.04 and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determinationSection 8.07. (e) ~~Any Tag Member that validly elects to participate in a~~ The purchase from the other Members exercising Tag-Along ~~Sale~~ Rights pursuant to this Section 8.05 shall ~~agree to make to the proposed Third Party transferee~~ be on the same ~~representations~~ terms and conditions, including any representations, warranties, covenants and ~~indemnities~~ indemnities, and the form of consideration, and on the same date of Transfer, as ~~the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant~~ are received by the ~~Selling~~ Offering Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included stated in the ~~Tag-Along Sale or (ii~~Offer Notice, and the price specified in Section 8.05(a) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any above and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to ~~this~~ Section ~~3.5~~ 8.07. As promptly as practicable (but in no event later than 2 Business Days) after the completion of the Transfer of Vested Units of the Offering Member and ~~shall require a~~ the Members exercising Tag-Along ~~Notice. (g) Promptly after~~ Rights to the ~~consummation of a~~ third party contemplated pursuant to this Section 8.05, the Offering Member shall notify the Members exercising Tag-Along ~~Sale, the Selling Member shall give notice thereof to the participating Tag Members~~Rights thereof, shall remit to ~~each~~ such ~~Tag Member~~ Members the ~~total consideration for the Class A Units or Class B Units (as applicable) sold by~~ net transaction proceeds to which such ~~Tag Member~~ Members are entitled pursuant ~~thereto as computed pursuant to Section 3.5(d)~~thereto, and shall furnish such other evidence of the completion and time of completion of ~~the Tag-Along Sale~~ such Transfer and the terms and conditions thereof as may be reasonably requested by ~~any~~ such ~~Tag~~ Member. No Member exercising its Tag-Along Rights under this Section 8.05 shall be required, for the purpose of exercising such rights, to comply with the provisions of Section 8.04 in connection with such Transfer. (hf) ~~Notwithstanding anything contained in this Section 3.5~~ If any Member has not exercised any portion of its Tag-Along Right prior to the ~~contrary~~expiration of the Tag-Along Right Period, ~~no Selling~~ such Member shall be ~~liable~~ deemed to ~~any Member based on~~ have waived the ~~failure~~ unexercised portion of ~~a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to~~ such Tag-Along ~~Sale~~ Right with respect to the ~~extent such costs are incurred~~ Transfer of Units described in the Offer Notice and the Offering Member shall be permitted, for a period of 90 days from the ~~benefit~~ expiration of ~~all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit~~ the Tag-Along Right Period (which 90-day period shall be ~~borne~~ extended up to 180 days in the event any required approval of such sales from any governmental entity, including termination or expiration of the applicable waiting period under the HSR Act, has not then been obtained), to Transfer the Vested Units subject to the Offer Notice to the third party(s) set forth in the Offer Notice at a price not higher, and on terms and conditions in the aggregate no more favorable to the Offering Member, than offered to the Members in the Offer Notice. If, at the end of such 90-day (or up to 180-day, as applicable) period, the Offering Member has not completed the Transfer of Vested Units of the Offering Member and the Vested Units of any Member exercising its Tag-Along Rights in accordance with the terms and conditions set forth in the Offer Notice, all the restrictions on Transfer contained in this Agreement with respect to Vested Units owned by ~~such Tag Member) will not~~ the Offering Member shall again be ~~considered incurred for the benefit of all participating Members~~in effect. (jg) ~~No Assignee~~ This Section 8.05 shall ~~be admitted as~~ terminate upon the consummation of a ~~Substitute Member except as provided in Section 3.9~~Qualified Initial Public Offering.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Express Parent LLC)

Tag-Along Rights. (a) ~~Subject to a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a~~ If any Class A A-2 Member, Class B C Member or ~~group of Class A Members and/or~~ the GM Investor or its Affiliates, including in their capacity as a Class B ~~Members acting jointly~~ Member, Class F Preferred Member or Class G Preferred Member (~~collectively,~~ the “~~Selling Member~~Transferring Holder”~~) desires~~ ), proposes to ~~make any~~ Transfer ~~of all~~ Class A-2 Preferred Shares, Non-EIP Class B Common Shares, Class C Common Shares, Class F Preferred Shares, or Class G Preferred Shares (or any ~~portion of the Class A Units and/or Class B Units~~ other Equity Securities held by such ~~Member(s~~Member) to ~~any~~ an Independent Third ~~Party,~~ Party prior to an IPO (other than ~~to a Permitted Transferee of such Member(s~~any Transfer (i) as provided in Section 9.08, (ii) as provided in Section 9.09, (iii) in connection with Section 9.10 or (iv) as provided in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”Section 9.12), then the ~~Selling~~ Transferring Holder(s) shall deliver a written notice (such notice, the “Tag Notice”) to the Company, each Class D Member, each Class A-1 Preferred Member, each Class E Member, each Class F Preferred Member, and each Class G Preferred Member ~~must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing~~ (the “~~Tag-Along Notice”~~Participation Members,” provided that, for clarity, such Transferring Holder will not be a Participation Member in its capacity as a Class F Preferred Member or Class G Preferred Member, notwithstanding that such Transferring Holder may hold Class F Preferred Shares and Class G Preferred Shares) at least thirty (~~the date upon which~~ 30) days prior to making such ~~notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”)~~Transfer, specifying in reasonable detail the identity of the ~~proposed transferee~~prospective transferee(s), the number of Class A-2 Preferred Shares or Class C Common Shares (or any other Equity Securities held by such Members) to be Transferred and the price and other terms and conditions of ~~such proposed~~ the Transfer~~, including any consideration proposed~~ . Each Participation Member may elect to ~~be received pursuant to a bona fide written agreement for~~ participate in the ~~Tag-Along Units (and, if~~ contemplated Transfer in the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms manner set forth in this Section ~~3.5~~9.07 by delivering an irrevocable written notice to the Transferring Holder(s) within fifteen (15) days after delivery of the Tag Notice, which notice shall specify the number of Class A-1 Preferred Shares, Class D Common Shares, Class E Common Shares, Class F Preferred Shares, and Class G Preferred Shares (or any other Equity Securities held by such Members) that such Participation Member desires to include in such proposed Transfer. If none of the Participation Members gives such notice prior to the expiration of the fifteen (15) day period for giving such notice, then the Transferring Holder(s) may Transfer such Class A-2 Preferred Shares or Class C Common Shares (or any other Equity Securities held by such Members) to any Person at the same price and on other terms and conditions that are no more favorable, in the aggregate, to the Transferring Holder(s) than those set forth in the Tag Notice. If any Participation Members have irrevocably elected to participate in such Transfer prior to the expiration of the fifteen (15) day period for giving notice, each Participation Member shall be entitled to sell in the contemplated Transfer a total number of Class A-1 Preferred Shares with respect to Class A-1 Preferred Members, Class D Common Shares with respect to Class D Members, Class E Common Shares with respect to Class E Members, Class F Preferred Shares with respect to Class F Preferred Members, and Class G Preferred Shares with respect to Class G Preferred Members (the “Tagged Shares”) to be sold in the Transfer, to be calculated according to the following methodology: (i) First, all Non-A-1 Interests owned by the Transferring Holder are deemed converted (on a Fully Diluted Basis) to Class D Common Shares on a 1:1 basis (as adjusted, as necessary, to reflect appropriate and proportional adjustments to take into account any subdivision, reorganization, reclassification, recapitalization, stock split, reverse stock split, combination of shares or similar event), all Class A-1 Preferred Shares held by all Participation Member(s) are deemed converted to Class D Common Shares pursuant to Section 2.10(b), all Class E Common Shares held by all Participation Member(s) are deemed converted to Class D Common Shares on a 1:1 basis (as adjusted, as necessary, to reflect appropriate and proportional adjustments to take into account any subdivision, reorganization, reclassification, recapitalization, stock split, reverse stock split, combination of shares or similar event), and all Class F Preferred Shares and Class G Preferred Shares held by all Participation Member(s) are deemed converted to Class D Common Shares on a 1:1 basis (as adjusted, as necessary, to reflect appropriate and proportional adjustments to take into account any subdivision, reorganization, reclassification, recapitalization, stock split, reverse stock split, combination of shares or similar event) (collectively the number of Class D Common Shares resulting from the deemed conversion, plus the number of Class D Common Shares held by the Participation Members prior to such deemed conversion, the “Total Conversion Shares”). For clarity, such “deemed” conversion pursuant to this Section 9.07(a) shall solely be for the purposes of calculating the Tagged Shares, and no actual conversion shall occur pursuant to this Section 9.07(a). (bii) ~~Each Tag Member shall have~~ Second, the ~~right and option~~total number of Shares that are subject to Transfer is determined (the “Total Tagged Shares”). (iii) Third, ~~exercisable as set forth below, to include in~~ the ~~Tag-Along Sale up to that amount of its Class A Units or Class B Units~~ Tagged Shares will be: (~~as applicable~~A) ~~equal to the product of (i) the aggregate~~ a number of Class A-1-A ~~Units and Class B Units to be acquired by the purchaser,~~ Preferred Shares equal to: (1) Total Tagged Shares multiplied by ~~(ii)~~ a fraction, (x) the numerator of which is the number of Class D Common Shares into which the Class A-1-A ~~Units or Class B Units~~ Preferred Shares of such Participation Member were deemed converted pursuant to subsection (~~as applicable~~i) ~~held by such Tag Member~~ above, and (y) the denominator of which is the ~~aggregate~~ Total Conversion Shares divided by, (2) the A-1-A Preferred Share Conversion Ratio; (B) a number of Class ~~A Units and Class~~ A-1-B ~~Units held~~ Preferred Shares equal to: (1) Total Tagged Shares multiplied by a fraction, (x) the ~~Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion~~ numerator of ~~the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for~~ which ~~such right and option~~ is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class ~~A Units or~~ D Common Shares into which the Class A-1-B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy Preferred Shares of such ~~notice~~ Participation Member were deemed converted pursuant to subsection (i) above, and (y) the denominator of which is the Total Conversion Shares divided by, (2) A-1-B Preferred Share Conversion Ratio; (C) a number of Class D Common Shares equal to: Total Tagged Shares multiplied by a fraction, (1) the numerator of which is the number of Class D Common Shares held by such Participation Member prior to the ~~Company. Promptly upon request of the Seller Member~~deemed conversion pursuant to subsection (i) above, and ~~in any event~~ (2) the denominator of which is the Total Conversion Shares; (D) a number of Class E Common Shares equal to: Total Tagged Shares multiplied by a fraction, (1) the numerator of which is the number of Class E Common Shares held by such Participation Member prior to the deemed conversion pursuant to subsection (i) above, and (2) the denominator of which is the Total Conversion Shares; (E) a number of Class F Preferred Shares equal to: Total Tagged Shares multiplied by a fraction, (1) the numerator of which is the number of Class F Preferred Shares held by such Participation Member prior to the deemed conversion pursuant to subsection (i) above, and (2) the denominator of which is the Total Conversion Shares; and (F) a number of Class G Preferred Shares equal to: Total Tagged Shares multiplied by a fraction, (1) the numerator of which is the number of Class G Preferred Shares held by such Participation Member prior to the deemed conversion pursuant to subsection (i) above, and (2) the denominator of which is the Total Conversion Shares. (b) Immediately prior to the consummation of the ~~Tag-Along Sale~~Transfer to the Independent Third Party, the Tagged Shares (other than Class E Common Shares, Class F Preferred Shares, and Class G Preferred Shares) will be automatically, and without any further action, be actually converted into Class D Common Shares pursuant to Section 2.10(b). The Transferring Holder(s) and each participating Participation Member shall receive the same form of consideration and the aggregate net consideration (after such aggregate net consideration is adjusted for Company expenses, purchase price adjustments, escrow amounts, purchase price holdbacks, indemnity obligations and other similar items) shall be divided ratably among the Transferring Holder and each participating Participation Member based upon their respective numbers of Shares included in the Transfer. (c) Notwithstanding anything to the contrary in this Section 9.07, the Transferring Holder(s) shall not consummate the Transfer contemplated by the Tag Notice at a higher price or on other terms and conditions more favorable to them, in the aggregate, than the terms set forth in the Tag Notice (including as to price per Class A-1 Preferred Share or form of consideration to be received) unless the Transferring Holder(s) shall first have delivered a second notice setting forth such more favorable terms (the “Amended Tag Notice”) to each Participation Member ~~that has exercised its right~~ who had not elected to participate in the ~~Tag-Along Sale~~ contemplated Transfer. Each Participation Member receiving an Amended Tag Notice may elect to participate in the contemplated Transfer on such amended terms by ~~providing the required~~ delivering written notice to the ~~Selling Member within the Tag-Along Notice Period shall deliver to a representative~~ Transferring Holder(s) not later than ten (10) Business Days after delivery of the ~~Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such~~ Amended Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration thereforNotice. (d) Each Participation Member ~~participating~~ shall pay his, her or its own costs of any sale and a pro rata share (based upon the reduction in proceeds that would have been allocated to such Member if the amount of such expense were not included in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%aggregate consideration) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used expenses incurred by the ~~proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag~~ Members ~~exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant~~ (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all ~~participating Members. Costs incurred~~ of such Members and are not otherwise paid by ~~or on behalf of a Tag Member for its sole benefit (which~~ the Transferee) and the Company in connection with such Transfer and shall be ~~borne~~ obligated to provide the same customary representations, warranties, covenants, agreements, indemnities and other obligations that the Transferring Holder(s) agrees to provide in connection with such Transfer; provided, that in no event will a Participation Member be required to enter into a non-competition agreement or be subject to any similar covenant or provision. Except as contemplated by the preceding sentence, each Participation Member shall execute and deliver all documents required to be executed in connection with such ~~Tag Member) will not be considered incurred for the benefit of all participating Members~~tag-along sale transaction. (je) ~~No Assignee~~ Without limiting the generality of the other provisions of this Section 9.07, the Transferring Holder(s) shall ~~be admitted~~ decide whether or not to pursue, consummate, postpone or abandon any Transfer and, subject to the limitations set forth in this Section 9.07, the terms and conditions thereof. None of the Transferring Holder(s) nor any of their respective Affiliates shall have any liability to any Member arising from, relating to or in connection with the pursuit, consummation, postponement, abandonment or terms and conditions of any such Transfer except to the extent the Transferring Holder(s) shall have failed to comply with any of the other provisions of this Section 9.07. (f) Notwithstanding anything to the contrary herein, the provisions of this Section 9.07 shall not apply to any sale of Class B Common Shares by GM or its Affiliates in connection with providing Members with an opportunity to directly or indirectly participate in a Tender Offer (as ~~a Substitute Member except as provided~~ defined in the Liquidity Program Purchase Agreement) for Class B Common Shares in accordance with the terms of Section ~~3.9~~4.9 of the Liquidity Program Purchase Agreement.

Appears in 1 contract

Samples: Limited Liability Company Agreement (General Motors Co)

Tag-Along Rights. (a) If the number of Subject ~~to a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the~~ Units ~~proposed~~ to be Transferred ~~under Section 3.4~~in any one (1) transaction or in a series of related transactions by one (1) or more Offerors constitutes in the aggregate 40% or more of the outstanding Class A Units, each ~~time~~ Offeree who delivers to the Offeror(s), within the twenty (20) day period immediately following the receipt of the Offer Notice, a Purchase and Tag-Along Notice indicating such Offeree’s desire to sell a portion of such Offeree’s Class A ~~Member~~Units with the Offeror(s) (such Offeree, ~~Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the~~ a “~~Selling~~ Tagging Member”) ~~desires~~ shall have an irrevocable and exclusive right to ~~make any Transfer of all or any portion~~ participate in the sale of the ~~Class A~~ Subject Units ~~and/or Class B Units held~~ by ~~such Member(s~~the Offeror(s) ~~to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7~~ on the same terms and ~~3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent~~ conditions as specified in the ~~aggregate greater than five percent (5%) of the aggregate outstanding Class A Units~~ Purchase and ~~Class B Units (taken together as a single class) (a “~~Tag-Along ~~Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing~~ Notice (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along PriceRight”). ~~If the Tag-Along Units are proposed to be Transferred other than for cash~~ Each Tagging Member may sell to the ~~Selling~~ Proposed Purchaser a percentage of such Tagging Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their ’s Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i~~) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii~~) a fraction, the numerator of which is the ~~number of~~ Tagging Member’s Class ~~A Units or Class B Units (as applicable) held by such Tag~~ Member Percentage and the denominator of which is the aggregate Class Member Percentage of the Offeror(s) and all Tagging Members and (ii) the number of Subject Units to be Transferred in the transaction(s) (such Units representing such percentage of such Tagging Member’s Class A Units ~~and Class B Units held by~~ being referred to collectively as the ~~Selling Member and all Tag Members (its~~ “Tag-Along ~~Portion~~Units”), . The consideration received by the Offeror(s) and the ~~Selling Member~~ Tagging Members shall ~~not consummate~~ be allocated among such Members on a pro rata basis. (b) Failure by any Offeree to deliver to the Offeror(s) a properly completed Purchase and Tag-Along ~~Sale unless~~ Notice indicating such Offeree’s desire to sell a portion of ~~the~~ such Offeree’s Class A Units ~~or Class B Units~~ within the twenty (~~as applicable~~20) ~~of such Tag Member (or such lesser portion~~ day period immediately following the receipt of the ~~Class A Units or Class B Units of~~ Offer Notice shall be deemed an election by such ~~Tag~~ Tagging Member ~~for which such right and option is exercised) is so included. To the extent that any Tag Member elects~~ not to ~~include its Class A~~ sell such Tagging Member’s Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up pursuant to the ~~Tag-Along Portion of all Tag Members~~Offer Notice. (c) ~~If any Tag Member desires~~ The closing with respect to ~~exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number~~ a Transfer of ~~Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the~~ Tag-Along ~~Sale (which such number~~ Units to a Proposed Purchaser pursuant to this Section 11.5 shall ~~not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after~~ be held at the ~~Tag-Along~~ time and place specified in the Offer Notice ~~Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and~~ but in any event ~~prior~~ no later than the Outside Transfer Date; provided that if any such Transfer is subject to regulation by any Gaming Authority or other regulatory agency, the Outside Transfer Date shall be extended during the period in which the Proposed Purchaser diligently pursues the applicable regulatory approvals until the expiration of five (5) Business Days after all such regulatory approvals have been received; provided, further, that in no event shall the closing occur later than one hundred eighty (180) days following the date on which an Offer Notice is delivered to the Offerees unless such time period is extended by the Board based upon information received from a Gaming Authority that a longer period of time is required before such Gaming Authority will make a determination of suitability. (d) Consummation of the sale of Units by any Offeror to a Proposed Purchaser shall be conditioned upon consummation of the sale by each Tagging Member to such Proposed Purchaser of the Tag-Along ~~Sale~~Units, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration thereforif any. (de) ~~Each Member participating~~ The Offeror(s) party to a sale to a Proposed Purchaser shall arrange for payment in cash (by bank cashier’s check or certified check or by wire transfer of immediately available funds to the ~~Tag~~account(s) designated by the Tagging Member(s)) directly by the Proposed Purchaser to each Tagging Member, upon delivery of an appropriate assignment in form and substance reasonably satisfactory to the Proposed Purchaser, which assignment shall be made free and clear of all liens, claims and encumbrances except as provided by this Agreement or as otherwise agreed to by such Proposed Purchaser. (f) The exercise or non-~~Along Sale shall receive a portion~~ exercise of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined Right hereunder shall not ~~take into account~~ adversely affect the right of any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects Offeree to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member subsequent sales of Class A Units ~~and/or Class B Units shall~~ sought to be ~~subject to this Section 3.5 and shall require a Tag-Along Notice~~Transferred by any Member. (g) ~~Promptly after~~ The provisions of this Section 11.5 shall not be applicable with respect to any Member in the ~~consummation~~ event of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold an exercise by such ~~Tag~~ Member ~~pursuant thereto as computed~~ of such Member(s)’ Right of First Refusal pursuant to Section ~~3.5(d)~~11.4 or with respect to the exercise of the Drag-Along Right pursuant to Section 11.7, and Members shall ~~furnish such other evidence~~ not have any rights under this Section 11.5 with respect to Units purchased by a Qualified Holder pursuant to an exercise of the ~~completion and time~~ Right of ~~completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member~~First Refusal. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Majestic Holdco, LLC)

Tag-Along Rights. (a) ~~Subject~~ This Section 13.3 shall not apply in the event of any Transfer pursuant to ‎Section 13.2 in which the Investor Member accepts any ROFO Securities offered in a ROFO Offer. The provisions of ‎Section 13.2 (to the extent applicable) shall apply in advance of the provisions of this Section 13.3. (b) If (i) the Ryman Member proposes to Transfer any Class A Units, (ii) to the extent applicable, the Ryman Member has complied with the terms of ‎Section 13.2, and (iii) the relevant provisions of Article X have been complied with in all respects with respect to a proposed Transfer, then the Ryman Member ~~first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time~~ (a ~~Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the~~ “~~Selling Member~~Tag-Along Seller”) ~~desires to make any~~ may consummate a Transfer of all or any portion of such Units (the ~~Class A Units and/or Class B Units held by such Member(s~~“Tag-Along Interest”) to ~~any~~ the applicable third party purchaser (a “Third Party~~, other than~~ ”) to ~~a Permitted Transferee~~ the extent it complies with the provisions of ~~such Member(s) or in accordance with Sections 3.6, 3.7~~ this Section 13.3 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) Section 13.8 (a “Tag-Along Sale”). In such event, ~~then~~ the ~~Selling Member must comply with~~ Class A Holders (each, an “Other Eligible Member”) shall have the right to require the Third Party, subject to the provisions of this Section ~~3.5~~13.3 and Section 13.8, to purchase from such Other Eligible Member up to that portion of its Eligible Tag-Along Units (such Other Eligible Member’s “Maximum Amount”) (and the Tag-Along Seller shall reduce the Tag-Along Interest to be sold by it by a corresponding amount) that is equal to the product of (x) the Tag-Along Interest to be purchased by the Third Party and (y) a fraction, the numerator of which is (A) the total number of Eligible Tag-Along Units owned by such Other Eligible Member and the denominator of which is (B) the total number of Eligible Tag-Along Units owned by all of the Other Eligible Members and the Tag-Along Seller immediately prior to the transaction. For purposes hereof, “Eligible Tag-Along Units” means Class A Units. (c) The Tag-Along Seller shall notify the Other Eligible Members in writing of a proposed Transfer not less than twenty (20) days prior to the date of such proposed Transfer (the “Transferor Tag-Along Notice”). The ~~Selling~~ Transferor Tag-Along Notice shall include (i) the name and address of the Third Party, (ii) the Tag-Along Interest to be Transferred, (iii) the Maximum Amount for each Other Eligible Member (which the Company shall ~~inform~~ confirm upon request of the ~~Board~~ Tag-Along Seller prior to the delivery of such notice), (iv) the purchase price and terms and conditions of payment, (v) the other material terms and conditions of the transaction, and (vi) the proposed closing date of the transaction (collectively, the “Third Party Terms”). (d) The tag-along right provided for in this Section 13.3 may be exercised by any Other Eligible Member (each such exercising Other Eligible Member, a “Tagging Member”) by delivery of a written notice ~~in writing~~ to the Company, the Tag-Along Seller and the Third Party (the “Tag-Along Notice”) within fifteen (15) days following receipt of the ~~date upon which such notice is received being the “~~Transferor Tag-Along Notice ~~Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer~~ (the “Tag-Along ~~Units~~Period”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the . The Tag-Along Notice shall state the ~~proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “~~Eligible Tag-Along ~~Price”)~~Units that such Tagging Member wishes to include in such Transfer to the Third Party, up to the Maximum Amount. If The failure of an Other Eligible Member to deliver a Tag-Along Notice meeting the requirements of this Section 13.3(d) within the Tag-Along ~~Units are~~ Period shall constitute a waiver of such Other Eligible Member’s tag-along rights with respect to such proposed ~~to be Transferred other than for cash to~~ Transfer. (e) Upon the ~~Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value~~ giving of ~~the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the~~ its Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Tagging Member shall be obligated to ~~agree~~ sell to ~~indemnification obligations in excess~~ the Third Party the number of ~~the proceeds received by such Tag Member in such~~ its Eligible Tag-Along ~~Sale.~~ Units set forth in its Tag-Along Notice on the Third Party Terms (~~f) If any Tag Member (i) does not elect before~~ up to the ~~end of~~ Maximum Amount); provided, however, that neither the Tag-Along ~~Notice Period to have all or~~ Seller nor any ~~part~~ Tagging Member shall consummate the sale of ~~its~~ any of their respective Eligible Tag-Along ~~Portion included in~~ Units unless the Third Party purchases, on the Third Party Terms, all of the Eligible Tag-Along ~~Sale or (ii) fails to deliver to the Selling Member its Class A~~ Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along ~~Notice and on~~ Notices that the Tagging Members are entitled to sell under the terms of this Section 13.3. If the Third Party does not ~~more favorable~~ purchase Eligible Tag-Along Units entitled to be sold by any Tagging Member that has complied with the ~~Selling Member than were contained in~~ terms of this Section 13.3, then any Transfer by the Tag-Along ~~Notice; thereafter,~~ Seller and any ~~proposed~~ Other Eligible Member to such Third Party shall be null and void and of no effect whatsoever. (f) Any Eligible Tag-Along Units purchased from a Tagging Member pursuant to this Section 13.3 shall be purchased at the same price and same type of consideration and on the same terms and conditions as the Transfer by ~~such Selling Member of Class A Units and/or Class B Units~~ the Tag-Along Seller and shall be subject to ~~this~~ Section ~~3.5 and shall require a Tag-Along Notice~~13.8. (g) ~~Promptly after~~ In the ~~consummation of a~~ event that the Tag-Along ~~Sale~~Seller delivers a Transferor Tag-Along Notice in accordance with Section 13.3(c) and no Other Eligible Member exercises its tag-along right in accordance with Section 13.3(d), the ~~Selling Member~~ Tag-Along Seller shall ~~give notice thereof~~ have the right to Transfer its Tag-Along Interest to the ~~participating Tag Members~~Third Party at a price not more than the purchase price set forth in the Transferor Tag-Along Notice and otherwise in all material respects on the terms, ~~shall remit to each~~ provisions and conditions set forth in the Transferor Tag-Along Notice, so long as such ~~Tag Member~~ Transfer takes place within one hundred eighty (180) days after the ~~total consideration for~~ date on which the ~~Class A Units or Class B Units~~ Transferor Tag-Along Notice is delivered (as ~~applicable) sold by~~ such ~~Tag Member pursuant thereto as computed~~ period may be extended to the extent reasonably required pursuant to ~~Section 3.5(d~~applicable law or regulation). In the event that such Transfer shall not have taken place within such one hundred eighty (180)-day period (provided, ~~and shall furnish such other evidence of~~ further, that, if the ~~completion and time of completion~~ Transfer of the Tag-Along ~~Sale and~~ Interest is subject to any prior regulatory approval, the ~~terms thereof as~~ time period during which such Transfer may be ~~reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member~~ consummated shall be ~~liable to any Member based on~~ extended until the ~~failure~~ expiration of a five (5) Business Days after all such approvals shall have been received), the Tag-Along ~~Sale~~ Seller shall not be permitted to ~~occur for~~ Transfer all or any ~~reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to~~ portion of such Tag-Along ~~Sale~~ Interest without once again complying with the provisions of this Section 13.3. If the terms of such proposed Transfer are different in any material respect from the terms, provisions and conditions set forth in the Transferor Tag-Along Notice (in a manner that is beneficial to the ~~extent such costs are incurred for~~ Tag-Along Seller), the ~~benefit~~ Tag-Along Seller shall deliver to the Other Eligible Members a revised Transferor Tag-Along Notice, and shall again comply with all of ~~all participating Members. Costs incurred by or on behalf~~ the requirements of ~~a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members~~this Section 13.3. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Investment Agreement (Ryman Hospitality Properties, Inc.)

Tag-Along Rights. (a) Subject to ~~a Member first complying with~~ Section ~~3.4 and provided the Company and the ROFR Members have not purchased all~~ 9.8, if Nuvve or any of ~~the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly~~ its Permitted Transferees (collectively, ~~the~~ a “Nuvve Selling Member”) ~~desires~~ proposes to ~~make~~ Transfer any ~~Transfer~~ of ~~all or any portion of the~~ its Class A Common Units ~~and/or Class B Units held by such Member(s) to any Third Party, other than~~ in one transaction or a series of related transactions to a ~~Permitted Transferee of such Member(s) or~~ third party in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a ~~single class)~~ Transfer permitted by Section 9.1 (a “~~Tag~~Nuvve Proposed Third-~~Along~~ Party Sale”), then each other Common Member and any of their respective Permitted Transferees (each, a “Nuvve Tag-Along Member”) shall have a right (a “Nuvve Tag-Along Right”) to sell such Nuvve Tag-Along Member’s pro rata share of the aggregate number of Common Units (or, if applicable, indirect interests) to be Transferred in such Nuvve Proposed Third-Party Sale (the “Nuvve Offered Interests”). A Nuvve Tag-Along Member’s pro rata share of the Nuvve Offered Interests shall be determined by dividing (i) the number of Common Units held by such participating Nuvve Tag-Along Member by (ii) the number of Common Units held by all participating Nuvve Tag-Along Members and the Nuvve Selling Member ~~must comply with~~ (the number of Common Units that may be included in a Transfer by exercise of a Nuvve Tag-Along Right which, for clarity, may be a different class of Common Units as the Offered Interests, the “Nuvve Tag-Along Units”). As a result, the number of Common Units the Nuvve Selling Member shall be entitled to Transfer shall be reduced by the aggregate number of Nuvve Tag-Along Units. For the purposes of clarity, it is agreed that the provisions of this Section ~~3.5~~9.7 shall not apply with respect to any Permitted Transfer. ~~The~~ For the avoidance of doubt, if the Nuvve Offered Interests are Class A Common Units, each Nuvve Tag-Along Member who hold Class C Common Units may elect to sell its pro rata share of the aggregate number of Common Units to be Transferred. (b) Subject to Section 9.8, if one or more Class B Preferred Members (collectively, a “Class B Selling Member”) proposes to Transfer any of its Class B Preferred Units in one transaction or a series of related transactions to a third party in a Transfer permitted by Section 9.1(c) (a “Class B Proposed Third-Party Sale”), then each other Class B Preferred Member and any of their respective Permitted Transferees (each, a “Class B Tag-Along Member”) shall have a right (a “Class B Tag-Along Right”) to sell such Class B Tag-Along Member’s pro rata share of the aggregate number of Class B Preferred Units (or, if applicable, indirect interests) to be Transferred in such Class B Proposed Third-Party Sale (the “Class B Offered Interests”). A Class B Tag-Along Member’s pro rata share of the Class B Offered Interests shall be determined by dividing (i) the number of Class B Preferred Units held by such participating Class B Tag-Along Member by (ii) the number of Class B Preferred Units held by all participating Class B Tag-Along Members and the Class B Selling Member (the number of Class B Preferred Units that may be included in a Transfer by exercise of a Class B Tag-Along Right, the “Class B Tag-Along Units”). As a result, the number of Class B Preferred Units the Class B Selling Member shall ~~inform~~ be entitled to Transfer shall be reduced by the ~~Board~~ aggregate number of Class B Tag-Along Units. (c) If the Selling Member proposes to make a Proposed Third-Party Sale, the Selling Member shall notify each Tag-Along Member (such notice, a “Sale Notice”) at least ten (10) Business Days prior to the date of such Transfer. Each Sale Notice shall set forth: (i) a description of the Units to be Transferred pursuant to such Proposed Third-Party Sale; (ii) the identity of the Transferee in such Proposed Third-Party Sale; (iii) the proposed amount and form of consideration and the other material terms and conditions of such Proposed Third-Party Sale being offered by the Transferee; and (iv) if any portion of the consideration to be paid is other than cash, all material information in the Selling Member’s possession regarding such non-cash consideration (preceding clauses (i) through (iv), collectively, the “Third Party Terms”). The Third Party Terms applicable to the Transfer of any Units or indirect interests therein purchased from the Tag-Along Member pursuant to this Section 9.7 shall be the same as the terms and conditions applicable to the Transfer of the Units (or indirect interests therein) (including the amount and form of consideration per Unit to be paid therefor), as applicable, by the Selling Member in the Proposed Third-Party Sale. (d) The aggregate purchase price paid for the Units (or indirect interests therein), as applicable, in connection with such Proposed Third-Party Sale will be allocated among the Selling Member and the participating Tag-Along Members pro rata in accordance with such Selling Member’s and Tag-Along Members’ respective Units being Transferred in such Proposed Third-Party Sale. (e) A Tag-Along Right may be exercised by a Tag-Along Member by delivery of a written notice ~~in writing~~ to the Selling Member (the “Tag-Along Notice”) within ten (10) Business Days following receipt of the ~~date upon which such notice is received being~~ Sale Notice from the ~~“Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer~~ Selling Member (the “~~Tag-Along Units~~Notice Period”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the . The Tag-Along Notice shall state the ~~proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If~~ Units or indirect interests therein held by the Tag-Along ~~Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for~~ Member that such Tag-Along Member proposes to include in such Proposed Third-Party Sale and include an offer to sell such Units ~~shall be deemed to be the Fair Market Value of~~ or indirect interests therein held by the Tag-Along ~~Units~~Member on the same terms and conditions as specified in the Sale Notice. ~~The Board shall promptly~~ If one or more Tag-Along Members deliver a ~~copy of the~~ Tag-Along Notice ~~to each Class A Member and Class B Member (other than~~ within the Notice Period, then the Selling ~~Member~~Member shall be prohibited from selling any of the Offered Interests or indirect interests therein to the proposed Transferee in the Proposed Third-Party Sale unless the Selling Member procures that such Transferee (or its designee) (also purchases the ~~“Tag Members”). By giving~~ applicable Units or indirect interests therein held by the participating Tag-Along ~~Notice~~Member(s) on the Third Party Terms. If no Tag-Along Member delivers a Tag-Along Notice within the Notice Period, the Selling Member shall ~~be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in~~ thereafter, without again complying with this Section ~~3.5. (b) Each Tag Member shall~~ 9.7, have the right ~~and option, exercisable as set forth below,~~ to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer sell all (but not less than all) of the ~~applicable Class A Units or Class B Units at~~ Offered Interests to the Transferee within six (6) months after the date of the Sale Notice for a purchase price ~~not higher than contained in the Tag-Along Notice~~ and on other terms ~~not~~ and conditions that, on the whole, are no more favorable to the Selling Member than ~~were contained~~ the Third Party Terms specified in the Sale Notice. (f) At the closing of a Transfer by the Tag-Along ~~Notice; thereafter, any proposed Transfer by such Selling~~ Member ~~of Class A Units and/or Class B Units shall be subject~~ to Transferee pursuant to this Section ~~3.5~~ 9.7 (and ~~shall require a Tag-Along Notice. (g) Promptly~~ after allowing for the ~~consummation~~ expiration or termination of ~~a Tag-Along Sale~~all waiting periods under the HSR Act, ~~the Selling Member shall give notice thereof to the participating Tag Members~~if applicable), such Transferee shall remit to each ~~such Tag~~ Tag-Along Member (i) the ~~total~~ consideration for the ~~Class A~~ Units or ~~Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d)~~indirect interests therein, ~~and shall furnish such other evidence of the completion and time of completion~~ of the Tag-Along ~~Sale and~~ Member Transferred pursuant to this Section 9.7 less (ii) the ~~terms thereof~~ Tag-Along Member’s pro rata portion of any such consideration to be escrowed or otherwise held back in accordance with the Third Party Terms. The amount escrowed or held back pursuant to preceding clause (ii) shall be pro rata among all Members that are Transferring the Units or indirect interests therein in such Proposed Third-Party Sale. Additionally, in connection with any such closing of a Transfer by the Tag-Along Member to a Transferee pursuant to this Section 9.7, each Tag-Along Member must (x) deliver to the Selling Member certificates (if any) or other evidence of ownership representing such Units or indirect interests therein with instruments of transfer as may be reasonably requested by the Selling Member in such Proposed Third-Party Sale or the Company, and (y) comply with any ~~such Tag Member. (h) Notwithstanding anything contained in this Section 3.5~~ other conditions to closing applicable to the ~~contrary, no~~ Selling Member in such Proposed Third-Party Sale. In addition, the Tag-Along Member shall not be ~~liable~~ required to ~~any Member~~ bear more than its pro rata share of all liabilities of the Members Transferring Units or indirect interests therein in such transaction (based on the ~~failure~~ Units or indirect interests therein Transferred by each of a them) for the representations, warranties and other obligations incurred in connection with the transactions contemplated by the Sale Notice (other than with respect to representations and warranties relating to the ownership of the Tag-Along ~~Sale~~ Member’s Units or indirect interests therein or otherwise relating solely to ~~occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such~~ the Tag-Along ~~Sale~~ Member). The consideration paid by the Transferee to the ~~extent such costs are incurred for~~ Tag-Along Member pursuant to this Section 9.7 shall be in the ~~benefit of all participating Members~~same form and have the same rights as the consideration paid by the Transferee to the Selling Member. ~~Costs~~ All reasonable fees and expenses incurred by ~~or on behalf~~ the Selling Member (including in respect of financial advisors, accountants and counsel to the Selling Member) in connection with a ~~Tag Member for its sole benefit (which~~ Transfer pursuant to this Section 9.7 shall be ~~borne~~ shared by the Selling Member and each Tag-Along Member pro rata in proportion to the consideration received by such ~~Tag Member) will not be considered incurred for the benefit of all participating~~ Members. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Limited Liability Company Agreement (Nuvve Holding Corp.)

Tag-Along Rights. (ai) ~~Subject~~ If an AS Person(s) proposes to a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) sell to any Third ~~Party~~Party (1) during the first six months after the date hereof, ~~other~~ more than ~~to a Permitted Transferee~~ an aggregate of ~~such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five~~ twenty percent (520%) of the Units or other equity securities then held by the AS Persons in the aggregate ~~outstanding~~ and (2) at any time after the six month anniversary of the date hereof, more than ten percent (10%) of the Units or other equity securities then held by the AS Persons in the aggregate, pursuant to a transaction or series of related transactions (other than in a Public Offering, which shall be subject to Article IX), whether pursuant to a sale of Class A ~~Units and Class B Units~~ Units, merger, consolidation, a tender or exchange offer or any other transaction (~~taken together as a single class) (a~~ any such transaction, an “~~Tag-Along~~ AS Sale”), ~~then~~ the ~~Selling Member must comply with~~ AS Investor, on behalf of the ~~provisions~~ selling AS Person(s), shall give the Class A Members written notice of ~~this Section 3.5. The Selling Member~~ the AS Person(s)’ intention to sell such Class A Units which notice shall ~~inform~~ set forth the ~~Board by notice in writing~~ number of Class A Units to be so sold, the proposed sale price and any and all other terms, conditions and details regarding such sale (the “Tag-Along Notice”) ). During the 10 Business Days following the receipt of such Tag-Along Notice, each Class A Member shall have the right to deliver a reply notice (~~the date upon which such notice is received being the~~ “Tag-Along ~~Notice Date~~Acceptance”) ~~stating~~ to the ~~Units~~ AS Investor setting forth its irrevocable election to require the proposed transferee or acquiring Person to purchase from such Class A Member (~~or portion thereof~~each Class A Member who exercises such right under this Section 7.04, a “Tagging Member”): (x) ~~that are subject~~ in the case of the first such proposed sale following which AS Person(s), after giving effect to such ~~proposed Transfer~~ AS Sale, would not have the ability to elect or appoint a majority of the members of the Board, all Class A Units owned by such Tagging Member and (y) in all other cases, a number of Class A Units equal to such Tagging Member’s proportionate share of the total number of Class A Units to be purchased by the Third Party or Third Parties, as applicable (the “~~Tag-Along Units~~Proposed Transferee”), based on such Tagging Member’s Individual Class A Percentage Interest, at the ~~identity of~~ same price per Class A Unit and upon the ~~proposed transferee, and the other~~ same terms and conditions (including time of ~~such proposed Transfer, including any consideration proposed~~ payment and form of consideration) as to be ~~received~~ paid by and given to the AS Person(s). In order to be entitled to exercise its right to sell Class A Units to the Proposed Transferee pursuant to this Section 7.04, each Tagging Member must agree to make to the Proposed Transferee the same covenants, indemnities (with respect to all matters other than AS Persons’ ownership of Class A Units) and agreements as the AS Person(s) agrees to make in connection with the AS Sale and such representations and warranties (and related indemnification) as to its ownership of its Class A Units or other equity securities of the Company as are given by the AS Person(s) with respect to such party’s ownership of Class A Units or other equity securities of the Company; provided, that the liabilities thereunder (other than with respect to the ownership of each Member’s Class A Units being transferred, which shall be several obligations) shall be borne on a ~~bona fide written agreement~~ pro rata basis based on the number of Class A Units sold by each of the AS Person(s) and the Tagging Members. Each Tagging Member will be responsible, severally and not jointly, for its proportionate share of the ~~Tag~~reasonable out-~~Along~~ of-pocket costs incurred by AS Persons in connection with the AS Sale to the extent not paid or reimbursed by the Company or the Proposed Transferee. (b) In the event there has not been a timely election by one or more Class A Members to include their Class A Units ~~(and, if~~ in the proposed ~~Transfer is to be wholly or partly for consideration other~~ sale by the AS Person(s), then the AS Person(s) may, within and not later than ~~money,~~ 90 days following the ~~Tag-Along Notice shall state the proposed price as being equal to the amount~~ date of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy delivery of the Tag-Along Notice and without any further obligation to ~~each~~ the Class A ~~Member~~ Members, sell its Class A Units or other equity securities, as applicable, at the purchase price and on other terms and conditions substantially the same as those set forth in the Tag-Along Notice; provided that, promptly after the completion of the sale of such Class ~~B Member (~~A Units or other equity securities, the AS Person(s) shall provide the Class A Members with written evidence of such sale; and provided further, that, if such sale is not made within such 90 day period or is made on terms and conditions more favorable for the AS Person(s) than ~~the Selling Member) (the “Tag Members”). By giving~~ those set forth in the Tag-Along Notice, then the ~~Selling Member shall be deemed to have granted to~~ AS Person(s) may not consummate such sale without again complying with the ~~Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms~~ procedures set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members7.04. (c) If any ~~Tag~~ Tagging Member ~~desires to exercise its~~ exercises its, her or his rights ~~set forth in Sections 3.5(a) and (b) above~~under Section 7.04(a), ~~then it shall provide~~ the ~~Selling Member with written irrevocable notice specifying~~ closing of the ~~number~~ purchase of the Class A Units ~~or Class B Units (as applicable) that such Tag Member wishes~~ with respect to ~~include in the Tag-Along Sale (~~which such ~~number shall~~ rights have been exercised is subject to, and will take place concurrently with, the closing of the AS Sale. If the closing of the AS Sale does not ~~exceed such Tag Member’s Tag-Along Portion)~~ occur within ~~ten (10)~~ 120 days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation Class A Members’ receipt of the Tag-Along ~~Sale~~Notice, each Tagging Member may withdraw from such ~~Tag Member that has exercised its right to participate in the Tag-Along~~ AS Sale by providing ~~the required~~ written notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transfereeAS Investor, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of ~~all participating Members. Costs incurred by or on behalf~~ the selling AS Persons, within 10 Business Days after the expiration of ~~a Tag Member for its sole benefit (which shall be borne by~~ such ~~Tag Member) will not be considered incurred for the benefit of all participating Members~~120-day period. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Limited Liability Company Agreement (Grede Wisconsin Subsidiaries LLC)

Tag-Along Rights. ~~(a)~~ 9.2.1 Subject to Section 9.2.5, if, at any time prior to the earlier of a ~~Member first complying~~ Qualified IPO and a Change of Control (in each case other than in connection with ~~Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4~~a Initial Public Offering or Qualified IPO), ~~each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of~~ all or any ~~portion~~ of the Apollo Group (the “Tag-Along Sellers”) propose to Transfer Units held by them to any Independent Third Party (a “Tag-Along Transferee”) constituting at least 4,358,450 Class A Units ~~and/or Class B Units held by such Member(s) to any Third Party~~in a transaction or series of related transactions (including, ~~other than~~ without limitation, pursuant to a ~~Permitted Transferee~~ purchase of Units, tender offer, merger or other business combination transaction or otherwise), then, unless the Tag-Along Sellers previously elected to exercise the Drag-Along Right pursuant to Section 9.1, each other Partner (a “Tagging Partner”) shall have the right to participate in such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) Transfer (a “Tag-Along Sale”~~), then the Selling Member must comply with the provisions of~~ ) pursuant to this Section ~~3.5~~9.2 (the “Tag-Along Right”). ~~The Selling Member~~ At least twenty (20) days prior to the consummation of any such Tag-Along Sale, the transferring Tag-Along Sellers shall ~~inform~~ provide written notice of their intention to Transfer their Units to the ~~Board by notice in writing~~ other Partners (the “Tag-Along Notice”~~) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”~~), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the . The Tag-Along Notice shall ~~state~~ set forth in reasonable detail the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value terms and conditions of the Tag-Along ~~Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice~~Sale, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and optionincluding, ~~exercisable as set forth below~~without limitation, ~~to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of~~ (i) the aggregate number of ~~Class A~~ Units ~~and Class B~~ that would be Transferred (or if greater, the aggregate number of Units which the Tag-Along Transferee would be willing to purchase), (ii) the price to be ~~acquired~~ paid for such Units, and (iii) all other material terms of the proposed Tag-Along Sale. 9.2.2 If any Tagging Partner elects to exercise the Tag-Along Right, each such Tagging Partner shall provide written notice of such election (including the number of Units proposed to be Transferred in the Tag Along Sale) to the transferring Tag-Along Sellers within ten (10) days of receipt of the Tag-Along Notice (the “Tag-Along Election Period”). Should any Tagging Partner fail to provide such written notice to the transferring Tag-Along Sellers by the ~~purchaser~~end of the Tag-Along Election Period, ~~multiplied~~ then none of such Tagging Partner’s Units will be included in the Tag-Along Sale and such Tagging Partner’s Tag-Along Right with respect to such Tag-Along Sale shall terminate automatically. In the event the Tag-Along Transferee is not willing to purchase all of the Units that the Partners propose to Transfer in the Tag-Along Sale, then (a) each exercising Partner (other than the Tag-Along Sellers) shall have the right to Transfer in the Tag-Along Sale a number of Units equal to the product obtained by multiplying (i) the number of Units proposed to be purchased by or Transferred to the Tag-Along Transferee by (ii) a fraction, the numerator of which is equal to the number of ~~Class A~~ Units ~~or Class B Units (as applicable) held~~ owned by ~~such Tag Member~~ the exercising Partner and the denominator of which is the aggregate number of ~~Class A~~ Units ~~and Class B Units held~~ owned by Partners (including the ~~Selling Member and all Tag Members (its “~~Tag-Along ~~Portion”), and the Selling Member shall not consummate~~ Sellers) who propose to Transfer in the Tag-Along Sale ~~unless such portion of~~ and (b) the Tag-Along Sellers shall have the right to Transfer in the Tag-Along Sale all additional Units that the Tag-Along Transferee is willing to purchase. The only Class A B Units or Class B C Units ~~(as applicable) of such Tag Member (or such lesser portion of~~ that the ~~Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not~~ Management Limited Partners shall be entitled to ~~include its Class A Units or Class B Units (as applicable)~~ sell in a Tag-Along ~~Sale, those Tag Members that do elect~~ Sale are Vested Units. 9.2.3 The price to ~~include Class A Units or Class B Units~~ be paid for each Unit in a Tag-Along Sale shall ~~have~~ equal the ~~opportunity to increase their participation in~~ consideration for such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) Unit that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member Partner would have ~~received with respect~~ been entitled to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired receive if all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them Partnership’s assets were sold for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant Fair Market Value immediately prior to such Tag-Along Sale and ~~(iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of~~ the proceeds ~~received by~~ of such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver sale were distributed to the ~~Selling Member its Class A Units or Class B Units (~~Partners in accordance with Section 4.1.1 as ~~applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to~~ determined by the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure General Partner in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Noticegood faith. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Partnership Agreement (Cke Restaurants Inc)

Tag-Along Rights. (a) Subject to a the other provisions of this Article X, if the CLI Member ~~first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all~~ proposes to sell, exchange or otherwise dispose of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “~~Tag-Along~~ Sale”~~), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”~~) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of ~~the applicable Class A Units or Class B Units at a price not higher than contained~~ its Interest in the Company for cash, Cash Equivalents or Readily Marketable Securities or any combination thereof, to any Purchaser, and the Xxxx/SLG Member does not intend to approve such Sale in accordance with the provisions of Section 10.02(e)(i)(A) hereof or to exercise its right of first offer to purchase the Interest of the CLI Member pursuant to the provisions of Section 10.02(e)(i)(C) hereof, the Xxxx/SLG Member may, in its discretion, elect within the Transfer Response Period to require the CLI Member to sell, exchange or otherwise dispose of all of the Xxxx/SLG Member’s Interest in the Company pursuant to such Sale for the same proportionate consideration and otherwise on the same terms and conditions upon which the CLI Member proposes to sell, exchange or otherwise dispose of its Interest. The consideration received in connection with such sale shall be allocated between the CLI Member and the Xxxx/SLG Member on the same basis and in the same proportions that such consideration would be distributed pursuant to Section 6.03 hereof if it had been paid to the Company. Subject to the other provisions of this Article X, if the CLI Member proposes a Sale of less than all of its Interest in the Company for cash, Cash Equivalents or Readily Marketable Securities or any combination thereof, in one transaction, to any Purchaser, and the Xxxx/SLG Member does not intend to approve such Sale in accordance with the provisions of Section 10.02(e)(i)(A) hereof or to exercise its right of first offer to purchase the Interest of the CLI Member pursuant to the provisions of Section 10.02(e)(i)(C) hereof, the Xxxx/SLG Member may, in its discretion, elect within the Transfer Response Period to require the CLI Member to sell, exchange or otherwise dispose of the same proportionate part of the Xxxx/SLG Member’s Interest in the Company as the CLI Member is proposing to sell, for the same proportionate consideration and otherwise on the same terms and conditions upon which the CLI Member proposes to sell, exchange or otherwise dispose of a portion of its Interest. For example, if the CLI Member proposes to sell 40% of its Interest in the Company, then subject to the terms set forth above, the Xxxx/SLG Member may “tag along” and require the sale of 40% of its Interest in the Company. If the Xxxx/SLG Member shall have exercised its Tag-Along Right under this Section 10.05(a), the CLI Member shall not consummate any Sale that does not also include the Interests of the Xxxx/SLG Member. (b) In connection with any proposed Sale, the CLI Member shall include in any Transfer ROFO Notice ~~and on terms not more favorable~~ delivered pursuant to Section 10.02(e)(i) hereof (i) an offer to the ~~Selling~~ Xxxx/SLG Member ~~than were contained~~ to have the Xxxx/SLG Member’s Interest included in such Sale in accordance with Section 10.05(a) hereof (the “Tag-Along ~~Notice; thereafter~~Right”) and (ii) all documents required to be executed by the Xxxx/SLG Member in order to include the Xxxx/SLG Member’s Interest in such Sale, ~~any proposed Transfer by such Selling Member of Class A Units and/or Class B Units~~ which documents shall be ~~subject~~ on terms no less favorable than the documents to ~~this Section 3.5 and shall require a~~ be executed by the CLI Member. The Xxxx/SLG Member must exercise its Tag-Along ~~Notice~~Right by making the Transfer Election set forth in Section 10.02(e)(i)(B) hereof within the Transfer Response Period as provided in Section 10.02(e)(i) hereof. In such circumstances, the Transfer Election must include, and the Xxxx/SLG Member must execute and deliver to the CLI Member with the Transfer Election, the documents previously furnished to the Xxxx/SLG Member for execution in connection with the Sale. Delivery by the Xxxx/SLG Member of such documents shall constitute an irrevocable exercise by the Xxxx/SLG Member of its Tag-Along Rights with respect to the Sale. The failure of the Xxxx/SLG Member to timely execute the documents previously furnished to them for execution in connection with the Sale and to deliver such documents, together with the Transfer Election, in accordance with the provisions of Section 10.02(e)(i)(B) hereof shall constitute an irrevocable election by the Xxxx/SLG Member not to exercise their Tag-Along Rights with respect to the Sale. (gc) ~~Promptly after~~ In connection with any such Sale pursuant to which the ~~consummation of a~~ Xxxx/SLG Member shall have participated in accordance with its Tag-Along Rights as set forth above, the CLI Member shall, promptly after consummation of such Sale, notify the ~~Selling~~ Xxxx/SLG Member ~~shall give notice thereof~~ to ~~the participating Tag Members~~that effect, shall ~~remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall~~ furnish ~~such other~~ evidence of such Sale (including the ~~completion~~ date and the time of ~~completion~~ sale) and of ~~the Tag-Along Sale and~~ the terms thereof as the Xxxx/SLG Member may reasonably request and shall promptly (and in any event within 15 Business Days following the consummation of such Sale) cause to be ~~reasonably requested by any such Tag~~ remitted to the Xxxx/SLG Member the proceeds attributable to the sale of the Xxxx/SLG Member’s Interest. (hd) Notwithstanding anything ~~contained~~ in this Section ~~3.5~~ 10.05 to the contrary, ~~no Selling Member~~ there shall be ~~liable~~ no liability on the part of any Member to any other Member ~~based on~~ if any sale of Interest pursuant to this Section 10.05 is not consummated for whatever reason other than a failure to comply with the ~~failure of~~ foregoing provisions. It is understood that the CLI Member, in its sole discretion, shall determine whether to effect a ~~Tag-Along~~ Sale to ~~occur for~~ any ~~reason. (i) The Selling Member shall bear its own costs and any other costs arising~~ third party pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Membersthis Section 10.05. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Limited Liability Company Agreement (Mack Cali Realty Corp)

Tag-Along Rights. (a) ~~Subject~~ If Xxxxx proposes to Sell to a ~~Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased~~ Third Party Purchaser any or all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held Membership Interests owned by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) Xxxxx (a “~~Tag-Along Sale~~Transaction”), then Xxxxx shall refrain from effecting a Transaction unless, prior to the ~~Selling~~ consummation thereof: (i) Xxxxx shall provide the Minority Member ~~must comply~~ with written notice (a “Tag Transfer Notice”) at least ten (10) Business Days prior to the ~~provisions~~ closing date of the Transaction, setting forth: (A) the name and address of the proposed Third Party Purchaser; (B) the number of Membership Interests proposed to be sold by Xxxxx (the “Xxxxx Sale Amount”); and (C) the purchase price and other terms and conditions of payment and the closing date for the proposed Sale (including, when available, a copy of any purchase agreement related thereto); and (ii) the Minority Member shall have been afforded the opportunity to join in such Transaction as required by this Section ~~3.5~~7.9. ~~The Selling~~ Any purported Transaction subject to this Section 7.9 not made in compliance with this Section 7.9 shall be void and of no force and effect and shall not be recorded upon the books and records of the Company. (b) If the Minority Member desires to participate in such Transaction, the Minority Member shall ~~inform the Board~~ notify Xxxxx by providing Xxxxx with a written notice ~~in writing~~ (the “Tag-Along Notice”) on or before the expiration of the tenth (10th) Business Day following receipt of the ~~date upon which such notice is received being~~ Tag Transfer Notice indicating that the ~~“Tag-Along Notice Date”) stating the~~ Minority Member desires to Sell its proportionate number of Common Units (~~or portion thereof~~as calculated below) ~~that are subject to such proposed Transfer (~~on the ~~“Tag-Along Units”), the identity of the proposed transferee, and the other~~ same terms and conditions ~~of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for~~ set forth in the ~~Tag-Along Units (and, if the proposed~~ Tag Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along UnitsNotice. The ~~Board shall promptly deliver a copy~~ maximum number of Common Units that the ~~Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling~~ Minority Member shall be ~~deemed~~ entitled to ~~have granted~~ Sell to a Third Party Purchaser in accordance with this Section 7.9 shall be determined by multiplying (x) the total number of Common Units owned by the Minority Member at the time of receipt of the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied Transfer Notice by (iiy) a fraction, the numerator of which is equal to the number of ~~Class A~~ Common Units ~~or Class B Units (as applicable) held~~ proposed to be sold to the Third Party Purchaser by ~~such Tag Member~~ Xxxxx and the denominator of which is equal to the ~~aggregate~~ total number of ~~Class A~~ Common Units ~~and Class B~~ owned by Xxxxx. The total number of Common Units ~~held by~~ that the ~~Selling~~ Minority Member ~~and all Tag Members (its~~ shall be entitled to sell to the Third Party Purchaser is referred to herein as the “Tag-Along ~~Portion”~~Amount.” If Xxxxx does not receive a Tag-Along Notice from the Minority Member within the period specified above, the Minority Member shall be deemed to have waived its rights to participate in the Transaction and Xxxxx shall thereafter be free to sell its Common Units to the Third Party Purchaser in the amount and on the same terms and conditions set forth in the Tag Transfer Notice, subject to Section 7.9(h) below. Except as otherwise provided in Section 7.9(c), ~~and~~ if the ~~Selling~~ Minority Member provides Xxxxx with a Tag-Along Notice within the period specified above, Xxxxx may not effect such Transaction unless the Third Party Purchaser shall ~~not consummate~~ have purchased the Tag-Along ~~Sale unless such portion of~~ Amount from the ~~Class A Units or Class B Units (as applicable) of such Tag~~ Minority Member ~~(or such lesser portion of~~ on the ~~Class A Units or Class B Units of such Tag Member for which such right~~ same terms and ~~option is exercised) is so included. To~~ conditions set forth in the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag MembersTransfer Notice. (c) If ~~any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide~~ the ~~Selling Member with written irrevocable notice specifying~~ sum of the number of ~~Class A~~ Common Units ~~or Class B~~ proposed to be sold to the Third Party Purchaser by Xxxxx and the Minority Member exceeds the number of Common Units ~~(as applicable)~~ that such ~~Tag Member wishes~~ Third Party Purchaser is willing to ~~include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date~~ purchase (the “~~Tag-Along Notice Period~~Purchase Amount”~~) and~~ ), then Xxxxx shall ~~simultaneously provide a copy of such notice~~ be obligated to reduce the Xxxxx Sale Amount to an amount equal to the ~~Company. Promptly upon request~~ product of (x) Xxxxx’x Participating Percentage as of the ~~Seller Member, and in any event prior to the consummation~~ date of the ~~Tag-Along Sale, each such~~ Tag ~~Member that has exercised its right to participate in~~ Transfer Notice multiplied by (y) the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration thereforPurchase Amount. (d) ~~Each~~ Any indemnity required to be provided by Xxxxx and/or the Minority Member ~~participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal~~ to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party ~~transferee, the aggregate~~ Purchaser in a purchase ~~price by reference~~ agreement relating to ~~which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall~~ such Transaction will be several and not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determinationjoint. (e) ~~Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to~~ Xxxxx and the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Minority Member shall ~~not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member~~ be required to ~~make representations and warranties other than (A)~~ bear their pro rata share, based on the number of Common Units included in such ~~Member’s valid ownership of its Units~~Transaction, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess expenses of the ~~proceeds received~~ transaction payable by ~~such Tag Member in such Tag-Along Sale~~Xxxxx, including reasonable legal, accounting and investment banking fees and expenses. (f) ~~If any Tag~~ The Manager shall, upon request by Xxxxx or the Minority Member, issue to Xxxxx or the Minority Member ~~(i) does not elect before the end of the Tag-Along Notice Period to have all~~ one or ~~any part of its Tag-Along Portion included~~ more certificates, if applicable, registered in the ~~Tag-Along Sale or~~ names and in the denominations (~~ii) fails to deliver~~ aggregating in a number equal to the ~~Selling Member its Class A Units~~ original denomination) requested by Xxxxx or ~~Class B Units (as applicable) or~~ the Minority Member, to facilitate any ~~required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer~~ partial sale of ~~any or all of its Class A Units or Class B~~ Common Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section ~~3.5 and shall require a Tag-Along Notice~~7.9. (g) ~~Promptly after~~ To the ~~consummation of~~ extent that a ~~Tag-Along~~ Tag Transfer Notice has been delivered to the Minority Member and any prospective Third Party Purchaser is unwilling or otherwise refuses to purchase Common Units from the Minority Member, Xxxxx shall not Sell to such prospective Third Party Purchaser any Membership Interests, unless and until, simultaneously with such Sale, Xxxxx shall purchase such Common Units from the ~~Selling~~ Minority Member ~~shall give notice thereof to~~ on the ~~participating~~ same terms and conditions specified in the Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag MemberTransfer Notice. (h) ~~Notwithstanding anything contained~~ Subject to the rights of the Minority Member to participate in the Transaction as provided in this Section ~~3.5~~ 7.9, Xxxxx may conclude a Transaction covered by the Tag Transfer Notice on the terms and conditions described in the Tag Transfer Notice; provided, however, that the closing of such Transaction takes place no later than one hundred eighty (180) days following delivery to the ~~contrary, no Selling~~ Minority Member ~~shall be liable to any Member based on the failure~~ of a ~~Tag~~Tag Transfer Notice. Any proposed Transaction on terms and conditions more favorable to the Third Party Purchaser than those described in the Tag Transfer Notice, as well as any proposed sale of any Common Units by Xxxxx more than one hundred eighty (180) days following delivery to the Minority Member of a Tag Transfer Notice, shall again be subject to the tag-~~Along Sale to occur for any reason~~along rights of the Minority Member and shall require compliance by Xxxxx with the procedures described in this Section 7.9. (i) The ~~Selling~~ exercise or non-exercise of the rights of the Minority Member under this Section 7.9 to participate in one or more Transactions shall ~~bear its own costs and~~ not limit the Minority Member’s right to participate in any ~~other costs arising~~ subsequent Transaction pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Membersthis Section 7.9. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Limited Liability Company Agreement (Dolan Media CO)

Tag-Along Rights. (a) Subject to ~~a Member first complying with~~ Section ~~3.4~~ 4.4(e) and ~~provided the Company and the ROFR Members have not purchased all~~ Section 4.4(g), if one or more of the ~~Units proposed~~ H&F Investors proposes to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) sell Share Equivalents (a “Tag-Along Sale”) to another Person (other than to a Permitted Transferee), ~~then~~ such H&F Investor or H&F Investors (the “Selling H&F Investors”) shall give written notice (a “Transfer Notice”) (and prior to delivering a Transfer Notice, each H&F Investor agrees to discuss such proposed sale with each other H&F Investor sufficiently in advance so as to enable such other H&F Investors to join in the Transfer Notice and participate in such proposed sale) of such proposed transfer to each of the other Stockholders that is an Eligible Tag-Along Stockholder with respect to such Tag-Along Sale at least fifteen (15) days prior to the consummation of such proposed transfer, setting forth (i) the number of Share Equivalents proposed to be transferred, (ii) the consideration to be received for such Share Equivalents by such Selling H&F Investors, (iii) any other material terms and conditions of the proposed Transfer, (iv) the date of the proposed Transfer, (v) the fraction, expressed as a percentage, determined by dividing the number of Share Equivalents to be purchased from the Selling ~~Member must comply with~~ H&F Investors (which may be a variable number based on the ~~provisions~~ number of ~~this Section 3.5. The~~ Share Equivalents which the Eligible Tag-Along Stockholders and any other stockholders having similar rights elect to sell in the Tag-Along Sale) by the total number of Share Equivalents held by the Selling ~~Member shall inform the Board by notice in writing~~ H&F Investors (the “Tag-Along ~~Notice~~Sale Percentage”) and (vi) an invitation to each Eligible Tag-Along Stockholder to elect (Eligible Tag-Along Stockholders who make such an election being “Tagging Stockholders,” and, together with the ~~date upon which~~ Selling H&F Investors and all other Persons who otherwise are transferring, or have exercised a contractual or other right to transfer, Share Equivalents in connection with such ~~notice is received being~~ Tag-Along Sale, the “Tag-Along ~~Notice Date~~Sellers”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale Share Equivalents held by such Tagging Stockholder (not in any event to exceed the Tag-Along Sale Percentage of the total number of Share Equivalents held by such Tagging Stockholder). (b) Upon delivery of a Transfer Notice, each Eligible Tag-Along Stockholder may elect to sell Share Equivalents in such Tag-Along Sale, at the same price per Share Equivalent and pursuant to the same terms and conditions with respect to payment for the Share Equivalents as agreed to by the Selling H&F Investors, by sending an irrevocable written notice (a “Tag-Along Participation Notice”) to the Selling H&F Investors within ten (10) days of the date of the Transfer Notice, indicating its, his or her election to sell up to the number of Share Equivalents in the Tag-Along Sale specified by such Eligible Tag-Along Stockholder in such Tag-Along Participation Notice (such specified number not in any event to exceed the Tag-Along Sale Percentage of the total number of Share Equivalents held by such Eligible Tag-Along Stockholder). Following such ten-day period, each Tagging Stockholder that ~~amount~~ has delivered a Tag-Along Participation Notice shall be permitted to sell to such proposed transferee on the terms and conditions set forth in the Transfer Notice, concurrently with the Selling H&F Investors and the other Tag-Along Sellers, the number of ~~its Class A Units~~ Share Equivalents calculated pursuant to Section 4.4(d). For the avoidance of doubt, it is understood that in order to be entitled to exercise its, his or ~~Class B Units~~ her right to sell Share Equivalents in a Tag-Along Sale pursuant to this Section 4.4, each Tagging Stockholder must agree to make to the proposed transferee the same representations, warranties, covenants, indemnities and agreements, with respect to such Tagging Stockholder, as the Selling H&F Investors agree to make in connection with the Tag-Along Sale, on a several and not joint basis, pro rata in proportion to the total number of Share Equivalents included in such Tag-Along Sale; provided that any indemnification obligations of any Tagging Stockholder with respect thereto shall in no event exceed the proceeds received by such Tagging Stockholder in such Tag-Along Sale. With respect to (i) any Shares for which a Tagging Stockholder holds exercisable and vested but unexercised Options or (ii) any other Securities exercisable for, convertible into or exchangeable for Shares, to the extent that such Shares are to be sold pursuant to this Section 4.4, such Tagging Stockholder must exercise the relevant Option (which may include an exercise effected on a “net exercise” basis) or exercise, convert or exchange such other relevant Security and transfer the relevant Shares (rather than the Option or other Security). All costs and expenses incurred by the Selling H&F Investors in connection with such Tag-Along Sale shall be borne on a pro rata basis in accordance with the number of Share Equivalents being sold by each of the Tag-Along Sellers. (c) Notwithstanding the delivery of any Transfer Notice, all determinations as ~~applicable~~to whether to complete any Tag-Along Sale and as to the timing, manner, price and other terms of any such Tag-Along Sale shall be at the sole discretion of the Selling H&F Investors. (d) The Tag Along Sellers shall be entitled to sell in the Tag-Along Sale a number of Share Equivalents calculated as follows: (i) first there shall be allocated to each Tag Along Seller a number of Share Equivalents equal to the ~~product~~ lesser of (iA) the ~~aggregate~~ maximum number of ~~Class A Units~~ Share Equivalents such Tag Along Seller has elected to sell in the Tag Along Sale in its, his or her Transfer Notice or Tag Along Participation Notice and ~~Class B Units~~ (B) the number of Share Equivalents determined by multiplying (x) the number of Share Equivalents subject to ~~be acquired by~~ the ~~purchaser, multiplied~~ Tag-Along Sale by (iiy) a ~~fraction,~~ fraction the numerator of which is the number of ~~Class A Units or Class B Units (as applicable) held~~ Share Equivalents owned by such Tag ~~Member~~ Along Seller and the denominator of which is the ~~aggregate number of Class A Units and Class B Units held~~ total Share Equivalents owned by ~~the Selling Member and~~ all Tag ~~Members~~ Along Sellers (~~its~~ the “Pro Rata Tag-Along ~~Portion~~Share”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members.; and (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) ~~in no event shall~~ any ~~Tag Member be required~~ remaining Share Equivalents subject to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be ~~shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment~~ allocated to the ~~participating Members pursuant~~ Tag Along Sellers that elected to ~~such~~ sell in excess of their Pro Rata Tag-Along ~~Sale and~~ Share, pro rata to such Tag Along Sellers based upon such Tag Along Sellers’ relative Pro Rata Tag-Along Shares, or as such Tag Along Sellers may otherwise agree. (e) This Section 4.4 shall not apply to (i) any transfer to a Permitted Transferee pursuant to Section 4.2, (ii) any transfer in a public offering in accordance with ARTICLE V, (iii) any transfer pursuant to Rule 144 in accordance with Section 4.6 after an Initial Public Offering, (iv) ~~no Tag Member shall be obligated~~ except as provided in Section 4.4(f), any distribution of Share Equivalents by an H&F Investor to ~~agree~~ its partners, members or other investors or (v) any transfer by any Initial H&F Investor of Share Equivalents at a price equal to ~~indemnification obligations in excess~~ the Initial Valuation prior to the 12-month anniversary of the ~~proceeds received by~~ date of this Agreement, provided that after consummation of such ~~Tag Member~~ transfer, the Initial H&F Investors beneficially own, in ~~such Tag-Along Sale~~the aggregate, not less than $750 million in Share Equivalents, valued at the Initial Valuation. (f) If In the event that any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of H&F Investor distributes any or all of the Share Equivalents held by such H&F Investor to its ~~Class A Units~~ partners, members or ~~Class B Units pursuant~~ other investors after an Initial Public Offering but prior to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the ~~Tag-Along Failure in which to Transfer all (but not less than all)~~ expiration of the ~~applicable Class A Units or Class B Units at~~ Transfer Restriction Period, each Equity Co-Investor may transfer a ~~price not higher than contained in~~ pro rata portion of the ~~Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer~~ Share Equivalents held by such ~~Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag~~Equity Co-~~Along Notice~~Investor in open market trades on the principal stock exchange or inter-dealer quotation system on which the Shares are then traded or listed. (g) ~~Promptly after the consummation of a Tag-Along Sale, the Selling Member~~ This Section 4.4 shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based terminate on the ~~failure~~ earlier of ~~a Tag-Along Sale to occur for any reason.~~ (i) ~~The Selling Member shall bear its own costs~~ the expiration of the Transfer Restriction Period and (ii) with respect to any ~~other costs arising pursuant~~ particular Equity Co-Investor, the occurrence of an Equity Co-Investor Termination Event with respect to such ~~Tag~~Equity Co-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating MembersInvestor. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Shareholder Agreement (Goodman Sales CO)

Tag-Along Rights. ~~(a)~~ If a Transferring Member elects to sell its Subject Units to a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third ~~Party, other than to a Permitted Transferee of such Member(s) or~~ Party Purchaser in accordance with ~~Sections 3.6~~Section 9.02(b)(iii), ~~3.7 and 3.8, such that~~ the ~~Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%)~~ Transferring Member shall provide written notice of the ~~aggregate outstanding Class A Units and Class B Units~~ proposed sale (~~taken together as a single class~~“Third Party Sale Notice”) to the other Members (each eligible Member, a “~~Tag-Along Sale~~Tagging Member”), ~~then~~ provided that “Tagging Member” shall not include CSSE or its Permitted Transferees at any time following CSSE’s requirement to deliver notice of a CSSE Change of Control) and the ~~Selling Member must comply with~~ Company setting forth the ~~provisions~~ proposed sale price, the name of ~~this Section 3.5~~the Third Party Purchaser and any other material terms of the proposed sale. ~~The Selling~~ Each Tagging Member shall ~~inform~~ have the ~~Board by~~ right, upon written notice ~~in writing~~ to the Transferring Member (~~the~~ “Tag-Along Notice”) delivered to it within fifteen (15) days of receipt of the ~~date upon which such notice is received being~~ Third Party Sale Notice, to sell to the ~~“Tag-Along Notice Date”) stating~~ Third Party Purchaser, on the ~~Units (or portion thereof) that are subject~~ terms contained in the Third Party Sale Notice, up to such ~~proposed Transfer (the “Tag-Along Units”), the identity~~ number of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Tagging Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicabledefined) equal to the product of (i) the ~~aggregate~~ total number of ~~Class A~~ Units that the Third Party Purchaser proposes to buy as stated in the Third Party Sale Notice and ~~Class B Units to be acquired by the purchaser, multiplied by~~ (ii) a ~~fraction,~~ fraction (x) the numerator of which is equal to the number of ~~Class A~~ Units ~~or Class B Units (as applicable)~~ then held by ~~such Tag~~ the Tagging Member and (y) the denominator of which is equal to the ~~aggregate~~ sum of the number of ~~Class A~~ Units ~~and Class B Units~~ then held by the ~~Selling~~ Transferring Member and all ~~Tag~~ participating Tagging Members (~~its “Tag~~in each case, with (i) and (ii) calculated on a deemed as-~~Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such~~ converted basis with any portion of the ~~Class A~~ Preferred Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not included therein deemed to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up be converted to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the appropriate number of ~~Class A~~ Common Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section ~~7.1(a); provided that where less than one hundred percent~~ 9.04(e) for purposes of such calculation) (~~100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee~~such number, the ~~aggregate purchase price by reference to which~~ “Tagging Units”). If any Tagging Member exercises its right hereunder through the ~~consideration payable for~~ delivery of a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the timely Tag-Along ~~Units. Any and all disputes that may arise between~~ Notice, the ~~Selling~~ Tagging Member ~~and~~ shall join in the ~~Tag Members exercising tag-along rights as to~~ Transferring Member’s contract with the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party ~~transferee~~ Purchaser on the same ~~representations and warranties, covenants and indemnities~~ terms as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained set forth in the Tag-Along Notice, shall receive consideration in the same amount per Unit (calculated on a deemed as-converted basis) as the Transferring Member and such consideration will be allocated among such Members and distributed in accordance with Section 12.03; ~~thereafter~~provided, that (a) such Tagging Member shall only be obligated to make individual representations and warranties with respect to its right, title and interest in and to its Units, power and authority to sell its Units, absence of encumbrances upon its Units, and other matters relating to such Tagging Member (and the liability of such Tagging Member for indemnification, if any, with respect to any such representations and warranties shall be several and not joint and shall be pro rata in proportion to and shall not exceed the amount of consideration payable to such Tagging Member), but not with respect to any of the foregoing in respect of any other Members or any other Members’ Units; (b) no Tagging Member shall be obligated to execute or otherwise agree to, or be bound by, any ~~proposed~~ restrictive covenant or exclusivity obligation other than reasonable and customary covenants with respect to confidentiality. To the extent that the Third Party Purchaser refuses to purchase Units from an exercising Tagging Member, the Transferring Member shall not Transfer by any Subject Units to such ~~Selling~~ Third Party Purchaser unless and until, simultaneously with such Transfer, the Transferring Member shall purchase the applicable number of ~~Class A~~ Units ~~and/or Class B Units shall be subject to this Section 3.5~~ from the exercising Tagging Member for the same consideration and ~~shall require~~ on the same terms and conditions as the Transferring Member receives from the Third Party Purchaser. If no Non-Transferring Member timely delivers a Tag-Along Notice~~. (g) Promptly after the consummation of a Tag~~, or if all Non-~~Along Sale~~Transferring Members waive their rights hereunder, the ~~Selling~~ Transferring Member shall ~~give notice thereof~~ have the right to consummate the sale of the Subject Units to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and Third Party Purchaser on the terms ~~thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained~~ set forth in ~~this Section 3.5 to~~ the ~~contrary, no Selling Member shall be liable to any Member based on~~ Third Party Sale Notice within the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided date set forth in Section ~~3.9~~9.02(b)(iii).

Appears in 1 contract

Samples: Limited Liability Company Agreement (Chicken Soup for the Soul Entertainment, Inc.)

Tag-Along Rights. ~~(a)~~ Subject to ~~a Member first complying with~~ the other provisions of this Exhibit E (including, without limitation, the consent requirements in Section ~~3.4 and provided the Company~~ 1.2(a) of this Exhibit E above and the ~~ROFR Members have not purchased all~~ provisions of Section 1.5 of this Exhibit E, in the ~~Units proposed to be Transferred under Section 3.4, each time a Class A Member,~~ event that any Class B Member ~~or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”)~~ desires to ~~make any~~ Transfer of all or any portion of its Class B Units other than to the Class A Member or to an Affiliate of Such Class B Member, as permitted under Section 1.2(a) of this Exhibit E (a "Third Party Purchaser"), such Class B Member shall give written notice thereof (the "Triggering Notice") to the Class A Member not later than sixty (60) days prior to the consummation of the proposed Transfer. The Triggering Notice shall state the identity of the Third Party Purchaser, the consideration therefor to be paid by the Third Party Purchaser and the other material terms and conditions of the proposed Transfer. If the Class A Member approves the proposed Transfer pursuant to Section 1.2(a) of this Exhibit E and does not otherwise elect to exercise its rights under Section 1.5 of this Exhibit E, the Class A Member shall also have a period of twenty (20) days from receipt of the Triggering Notice to determine whether the Class A Member may require a number of its Class A Units ~~and/or~~ equal to the number of Class B Units ~~held by such Member(s)~~ being offered to ~~any Third Party,~~ be included in the proposed Transfer upon the same terms and conditions (other than price) as applicable to ~~a Permitted Transferee of such Member(s) or~~ and as stated in ~~accordance with Sections 3.6~~the Triggering Notice (the "Tag-Along Rights"); provided, ~~3.7 and 3.8~~however, ~~such~~ that the price to be paid per Class A Unit by the Third Party Purchaser shall not be less than the Specified Price Per Class A Unit. In the event the Class A ~~Units and/or Class B Units proposed~~ Member shall elect to ~~be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “~~exercise its Tag-Along ~~Sale”)~~Rights, ~~then~~ the ~~Selling Member must comply with the provisions of this Section 3.5. The Selling~~ Class A Member shall ~~inform the Board by~~ give written notice ~~in writing~~ thereof (the “"Tag-Along Notice”") ~~(the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject~~ to such ~~proposed Transfer (~~Class B Member(s) not later than the ~~“Tag-Along Units”), the identity~~ 20th day from receipt of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”)Triggering Notice. If the ~~Tag-Along Units are proposed~~ Class A Member shall fail to ~~be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly~~ deliver ~~a copy of~~ the Tag-Along Notice to ~~each Class A Member and~~ such Class B Member on or before expiration of such twenty (~~other than the Selling Member~~20) ~~(the “Tag Members”). By giving the Tag-Along Notice~~day period, the ~~Selling~~ Class A Member shall be deemed to have ~~granted~~ elected not to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the exercise such Tag-Along ~~Sale up~~ Rights. In the event the Third Party Purchaser fails or refuses to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion purchase any of the Class A Units or to be sold in connection with the exercise by the Class A Member of its Tag-Along Rights, then any prior approval by the Class A Member of the proposed Transfer by the Class B Member of its Class B Units ~~(as applicable)~~ to such Third Party Purchaser shall be deemed retracted and void. In addition, if the Class A Member is the holder of ~~such Tag~~ a loan to the Company or the other Member (including, without limitation, the Subordinated Note and Subordinated Debt), then in addition to the payment of the Specified Price per Class A Unit, as a condition to closing, the Third Party Purchaser shall pay the Class A Member any outstanding principal and accrued but unpaid interest (or ~~such lesser portion~~ proportionate amount thereof in the case of a Transfer of the Class A Units or which is less than all of the Class ~~B Units~~ A Member's Units) on all such loans and upon receipt of such ~~Tag Member for which such right and option is exercised) is so included. To~~ payments, the ~~extent that any Tag Member elects not to include its~~ Class A ~~Units~~ Member shall assign all (or ~~Class B Units (~~a proportionate amount, as applicable) ~~in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have~~ of the ~~opportunity to increase their participation in~~ outstanding principal (and accrued interest thereon) under any such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up loans to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determinationPurchaser. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Quest Resource Corp)

Tag-Along Rights. (a) ~~Subject to~~ In the case of a ~~Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units~~ proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-~~Along Sale~~long Transfer”) of the Series A Membership Units by the Series A Members and/or any of its Affiliates, or the Series B Membership Units by the Series B Member and/or any of its Affiliates (in each case, the “Transferring Member”), ~~then~~ the ~~Selling Member must comply~~ other Member(s) owning Membership Units may exercise tag-along rights in accordance with the following provisions ~~of this Section 3.5.~~ (any such Member exercising such rights, a “Tagging Member”). (b) The ~~Selling~~ Transferring Member shall ~~inform the Board by~~ promptly give notice ~~in writing~~ (~~the~~ a “Tag-Along Notice”) (to the ~~date upon which such notice is received being the “~~other Member(s) owning Membership Units of any Tag-Along ~~Notice Date”) stating~~ Transfer, setting forth that all of its Membership Units are proposed to be Transferred by the ~~Units (or portion thereof) that are subject to such~~ Transferring Member, the name and address of the proposed ~~Transfer~~ Transferee, the proposed purchase price for each of its Membership Unit (the “Tag-Along ~~Units~~Per Unit Consideration”), ~~the identity of the proposed transferee,~~ and ~~the~~ any other material terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along ~~Units. The Board shall promptly deliver a copy~~ Transfer; it being understood that such Tag-Along Notice may be given after the terms of the Tag-Along ~~Notice~~ Transfer have been finalized and does not accord the Tagging Member with any rights to ~~each Class A Member and Class B Member (other than~~ information as to the ~~Selling Member) (the “Tag Members”). By giving~~ Transfer not required to be included in the Tag-Along Notice, . The other Member(s) shall have a period of ten (10) days following the ~~Selling~~ expiration of the period in which it must determine whether to elect to purchase all of the Transferring Member’s Member ~~shall be deemed~~ Units pursuant to ~~have granted~~ Section 10.2(b) within which to elect to sell all of its Membership Units at a price per Membership Unit equal to the ~~Tag Members~~ Tag-Along Per Unit Consideration in connection with such Tag-Along Transfer. Any other Member may exercise such right by delivery of an ~~option~~ irrevocable written notice to ~~sell their Class A Units or Class B Units (as applicable) upon~~ the ~~terms set forth in this Section 3.5. (b) Each Tag~~ Transferring Member ~~shall have the right and option, exercisable as set forth below,~~ specifying such other Member desires to include in the Tag-Along ~~Sale up to that amount~~ Transfer all of its ~~Class A~~ Membership Units. If the Transferring Member is unable to cause the proposed Transferee to purchase all the Membership Units ~~or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units~~ proposed to be ~~acquired~~ Transferred by the ~~purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag~~ Transferring Member and the ~~denominator~~ Tagging Members, then the Transferring Member may not make such Transfer. The Transferring Member shall have a period of ~~which is~~ sixty (60) days following the ~~aggregate number~~ expiration of ~~Class A~~ the ten (10) day period mentioned above to sell all the Membership Units ~~and Class B Units held~~ agreed to be purchased by the ~~Selling Member and all Tag Members (its “Tag-Along Portion”)~~Transferee, ~~and~~ on the ~~Selling Member shall not consummate~~ payment terms specified in the Tag-Along ~~Sale unless such portion~~ Notice. The sale of the ~~Class A~~ Tagging Members’ Membership Units ~~or Class B Units (as applicable) of such Tag Member (or such lesser portion~~ shall occur simultaneously with the sale of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Transferring Members’ Membership Units. (c) ~~If any Tag~~ The Tagging Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree (i) to make ~~to the proposed Third Party transferee~~ substantially the same representations and ~~warranties, covenants~~ warranties to the Transferee with respect to itself and ~~indemnities~~ related items as the ~~Selling~~ Transferring Member ~~agrees~~ makes with respect to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (itself and related ~~indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company~~ items in connection with the Tag-Along ~~Sale shall be shared on a several~~ Transfer, (~~but not joint~~ii) ~~basis~~ to substantially the same covenants, indemnities and agreements with respect to itself and related items as agreed by the ~~participating Members as if such amount reduced the aggregate proceeds available for distribution or payment~~ Transferring Member with respect to ~~the participating Members pursuant to such Tag-Along Sale~~ themselves and ~~(iv) no Tag Member shall be obligated to agree to indemnification obligations~~ related items in ~~excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of~~ connection with the Tag-Along ~~Notice Period~~ Transfer (other than any non-competition or similar agreements or covenants that would bind such Tagging Member or its Affiliates), and (iii) to ~~have~~ substantially the same terms and conditions to the Transfer of Membership Units as the Transferring Members agree. Notwithstanding the foregoing, however, all ~~or any~~ such representations, warranties, covenants, indemnities and agreements shall be made by each Tagging Member and each Transferring Member severally and not jointly. Notwithstanding anything herein to the contrary, there shall be no liability on the part of ~~its Tag-Along Portion included~~ the Transferring Member in the event that the Tag-Along ~~Sale or (ii) fails to deliver to the Selling Member its Class A~~ Transfer shall not be consummated for whatever reason. Whether a sale of Membership Units ~~or Class B Units (as applicable) or any required documentation (collectively,~~ is effected by a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Transferring Member shall be ~~liable to any Member based on~~ in the ~~failure~~ sole discretion of ~~a Tag-Along Sale to occur for any reason~~such Transferring Member. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Operating Agreement (Globe Specialty Metals Inc)

Tag-Along Rights. (a1. Notwithstanding the prior written consent of the Manager pursuant to Section 7.3(a) ~~Subject~~ hereof, if Dxxxx proposes to Sell to a ~~Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased~~ Third Party Purchaser any or all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held Membership Interests owned by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) Dxxxx (a “~~Tag-Along Sale~~Transaction”), then Dxxxx shall refrain from effecting a Transaction unless, prior to the ~~Selling Member must comply~~ consummation thereof: (i) Dxxxx shall provide the Firm with written notice (a “Transfer Notice”) at least ten (10) Business Days prior to the ~~provisions~~ closing date of the Transaction, setting forth: (A) the name and address of the proposed Third Party Purchaser; (B) the number of Membership Interests proposed to be Sold by Dxxxx (the “Dxxxx Sale Amount”); and (C) the purchase price and other terms and conditions of payment and the closing date for the proposed Sale (including, when available, a copy of any purchase agreement related thereto); and (ii) the Firm shall have been afforded the opportunity to join in such Sale as required by this Section ~~3.5~~7.6. ~~The Selling Member~~ Any purported Sale subject to this Section 7.6 not made in compliance with this Section 7.6 shall ~~inform~~ be void and of no force and effect and shall not be recorded upon the ~~Board~~ books and records of the Company. 2. If the Firm desires to participate in such Sale, the Firm shall notify Dxxxx by providing Dxxxx with a written notice ~~in writing~~ (the “Tag-Along Notice”) on or before the expiration of the tenth (10th) Business Day following receipt of the ~~date upon which such notice is received being~~ Transfer Notice indicating that the ~~“Tag-Along Notice Date”) stating the~~ Firm desires to Sell its proportionate number of Common Units (~~or portion thereof~~as calculated below) ~~that are subject to such proposed Transfer (~~on the ~~“Tag-Along Units”), the identity of the proposed transferee, and the other~~ same terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in the Transfer Notice. The maximum number of Common Units that the Firm shall be entitled to Sell to a Third Party Purchaser in accordance with this Section ~~3.5.~~ 7.6 shall be determined by multiplying (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (ix) the ~~aggregate~~ total number of ~~Class A~~ Common Units ~~and Class B Units to be acquired~~ owned by the ~~purchaser, multiplied~~ Firm at the time of receipt of the Transfer Notice by (iiy) a fraction, the numerator of which is equal to the number of ~~Class A~~ Common Units ~~or Class B Units (as applicable) held~~ proposed to be Sold to the Third Party Purchaser by ~~such Tag Member~~ Dxxxx and the denominator of which is equal to the ~~aggregate~~ total number of ~~Class A~~ Common Units ~~and Class B~~ owned by Dxxxx. The total number of Common Units ~~held by~~ that the ~~Selling Member and all Tag Members (its~~ Firm shall be entitled to sell to the Third Party Purchaser is referred to herein as the “Tag-Along ~~Portion”~~Amount.” If Dxxxx does not receive a Tag-Along Notice from the Firm within the period specified above, Dxxxx shall be free to Sell its Common Units to the Third Party Purchaser in the amount and on the same terms and conditions set forth in the Transfer Notice, subject to Section 7.6(h) below. Except as otherwise provided in Section 7.6(c), ~~and~~ if the ~~Selling Member~~ Firm provides Dxxxx with a Tag-Along Notice within the period specified above, Dxxxx may not effect such Sale unless the Third Party Purchaser shall ~~not consummate~~ have purchased the Tag-Along ~~Sale unless such portion~~ Amount from the Firm on the same terms and conditions set forth in the Transfer Notice. 3. If the sum of the ~~Class A~~ number of Common Units ~~or Class B~~ proposed to be Sold to the Third Party Purchaser by Dxxxx and the Firm exceeds the number of Common Units that such Third Party Purchaser is willing to purchase (the “Purchase Amount”), then Dxxxx shall be obligated to reduce the Dxxxx Sale Amount to an amount equal to the product of (x) Dxxxx’x Participating Percentage as ~~applicable) of such Tag Member (or such lesser portion~~ of the ~~Class A~~ date of the Transfer Notice multiplied by (y) the Purchase Amount. 4. Any indemnity required to be provided by Dxxxx and/or the Firm to the Third Party Purchaser in a purchase agreement relating to such Sale will be several and not joint. 5. Dxxxx and the Firm shall be required to bear their pro rata share, based on the number of Common Units included in such Sale, of the expenses of the transaction payable by Dxxxx, including reasonable legal, accounting and investment banking fees and expenses. 6. The Manager shall, upon request by Dxxxx or ~~Class B~~ the Firm, issue to Dxxxx or the Firm one or more certificates registered in the names and in the denominations (aggregating in a number equal to the original denomination) requested by Dxxxx or the Firm, to facilitate any partial sale of Common Units ~~of such Tag Member for which such right and option is exercised) is so included~~pursuant to this Section 7.6. 7. To the extent that a Transfer Notice has been delivered to the Firm and any ~~Tag Member elects~~ prospective Third Party Purchaser is unwilling or otherwise refuses to purchase Common Units from the Firm, Dxxxx shall not Sell to ~~include its Class A Units or Class B Units (as applicable) in a Tag-Along~~ such prospective Third Party Purchaser any Membership Interests, unless and until, simultaneously with such Sale, ~~those Tag Members that do elect~~ Dxxxx shall purchase such Common Units from the Firm on the same terms and conditions specified in the Transfer Notice. 8. Subject to ~~include Class A~~ the rights of the Firm to participate in the Sale of Common Units ~~or Class B~~ as provided in this Section 7.6, Dxxxx may conclude a Sale of Common Units covered by the Transfer Notice on the terms and conditions described in ~~a Tag-Along Sale shall have~~ the ~~opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such~~ Transfer Notice; provided, however, that the ~~percentage~~ closing of ~~Class A Units and Class B Units of Tag Members participating in~~ such ~~Tag-Along~~ Sale ~~is equal to up~~ takes place no later than one hundred eighty (180) days following delivery to the ~~Tag~~Firm of a Transfer Notice. Any proposed Sale on terms and conditions more favorable to the Third Party Purchaser than those described in the Transfer Notice, as well as any proposed Sale of any Common Units by Dxxxx more than one hundred eighty (180) days following delivery to the Firm of a Transfer Notice, shall again be subject to the tag-~~Along Portion~~ along rights of ~~all Tag Members~~the Firm and shall require compliance by Dxxxx with the procedures described in this Section 7.6. ~~(c) If any Tag Member desires~~ 9. The exercise or non-exercise of the rights of the Firm under this Section 7.6 to ~~exercise its rights set forth~~ participate in ~~Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number~~ one or more Sales of ~~Class A~~ Common Units ~~or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number~~ shall not ~~exceed such Tag Member~~limit the Firm’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in ~~the Tag-Along~~ any subsequent Sale ~~by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative~~ of ~~the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A~~ Common Units ~~or Class B Units (as applicable)~~ pursuant to this Section ~~3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor~~7.6. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Operating Agreement (Dolan Media CO)

Tag-Along Rights. (a) ~~Subject to~~ Neither Sterling nor any of its Affiliates who is admitted as a Member ~~first complying~~ after the Effective Date (a "TRANSFEROR") may Transfer any Units, directly or indirectly, to one or more third parties unless each other Member is offered a right to sell Units (the "TAG ALONG RIGHT"), in such Transfer with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such ~~Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or~~ Transferor in accordance with ~~Sections 3.6~~this SECTION 16. (i) At least five business days prior to any such Transfer, ~~3.7 and 3.8, such that~~ the ~~Class A Units and/or Class B Units proposed~~ Transferor will deliver a sale notice to ~~be transferred represent in~~ the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), other Members specifying the identity of the ~~proposed transferee~~prospective transferee(s) and disclosing in reasonable detail the number of Units, the price and the other terms and conditions of the proposed Transfer. The Members who elect to participate in the proposed Transfer (the "TAG ALONG MEMBER") shall deliver written notice of their election to participate to the Transferor prior to the expiration of such five business day period. In the event that a Class B Member elects to become a Tag-Along Member, the Managing Member shall be entitled to participate in such sale (and receive a pro rata portion of the consideration as described in SECTION 16.6(c) below). (ii) Each Tag Along Member will be entitled to sell in such proposed Transfer, ~~including~~ on the same terms as the Transferor (except that the purchase price per each Unit shall be determined as if the total consideration payable by the third party buyer were distributed pursuant to SECTION 9.1(a), but assuming that the Units to be sold in the contemplated Transfer are the only Units outstanding as of the time of such Transfer, and any consideration ~~proposed to~~ payable per Class B Unit shall be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal allocated among and paid to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member ~~(other than~~ and the ~~Selling Member~~Managing Member as provided in SECTION 9.1(a)(iii)) ~~(the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A~~ a number of Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (x) the quotient determined by dividing the number of Units then held by such Tag Along Member by the aggregate number of Units then outstanding multiplied by (y) the number of Units to be sold in the proposed Transfer. The number of Units proposed to be Transferred by the Transferor in the current Transfer shall be reduced to the extent necessary to provide for the sale of Units by each Tag Along Member exercising its rights hereunder. (b) In the event that any entity that is an Affiliate of, and under common control with, the LLC (a "SELECT STOCK TRANSFEROR"), proposes to directly or indirectly Transfer a number of shares of common stock or other equity securities (including any securities exchangeable for or convertible into equity securities) of Select or its subsidiaries representing the lesser of (i) three percent (3%) or more of the total number of shares of Select common stock then outstanding or (ii) twenty-five percent (25%) or more of the total number of shares of Select common stock or other equity securities (including any securities exchangeable for or convertible into equity securities) held or owned by the LLC as of the Closing Date (as defined in the Purchase Agreement), in each case in a single transaction or series of related transactions, to a Person or "group" (within the meaning of Section 13(d)(3) of the Exchange Act) of Persons, then each Member (the "DIRECTING MEMBER") shall be entitled to cause the LLC to sell in such proposed Transfer a number of Select Shares equal to the product of (x) the quotient of (A) the product of the total number of Select Shares then held by the LLC multiplied by the Directing Member's Participating Percentage at such time, divided by (B) the aggregate number of ~~Class A Units~~ shares of Select common stock directly and ~~Class B Units to be acquired~~ indirectly held by the ~~purchaser~~LLC, the Select Stock Transferor and the LLC's Affiliates, multiplied by (iiy) the total number of shares of Select common stock being sold in the proposed Transfer. The LLC shall use the net proceeds received from any such sale of Select Shares pursuant to this SECTION 16.6(b) to redeem a ~~fraction~~pro rata portion of the Units then held by the Directing Member such that, following such redemption, the ~~numerator~~ Participating Percentage of ~~which is~~ the Directing Member shall be equal to the quotient of (1) (x) the product of the total number of Select Shares held by the LLC immediately prior to the sale of Select Shares pursuant to this SECTION 16.6(b) multiplied by the Directing Member's Participating Percentage at such time, minus (y) the number of ~~Class A Units or Class B Units~~ Select Shares sold by the LLC at the direction of the Directing Member, divided by (~~as applicable~~2) ~~held by such Tag Member and~~ the ~~denominator of which is the aggregate~~ total number of ~~Class A Units and Class B Units~~ Select Shares held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days LLC immediately after the ~~Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy~~ sale of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) Select Shares pursuant to this Section ~~3.5 at~~ 16.6(b); provided that, if the ~~closing~~ redeemed Units are Class B Units, the redemption price for such ~~Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale~~ Units shall ~~receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect~~ be allocated among and paid to the Class ~~A Units or Class~~ B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Managing Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in ~~Section 3.9~~SECTION 9.1(a)(iii), assuming for such purpose that the redeemed Units are the only Units outstanding as of the time of such redemption.

Appears in 1 contract

Samples: Unit Purchase Agreement (Select Comfort Corp)

Tag-Along Rights. (a) Subject to ~~a Member first complying with~~ Section ~~3.4~~ 7.4 and ~~provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under~~ Section ~~3.4~~7.2, ~~each time a Class A Member, Class B Member~~ if any Institutional Investor or ~~group of Class A Members and/or Class B Members acting jointly~~ Institutional Investors (~~collectively,~~ the “~~Selling Member~~Transferors”) ~~desires~~ desire to ~~make any Transfer~~ Dispose of all or any portion of ~~the Class A~~ their respective Preferred Units ~~and/or Class B Units held by such Member(s) to any Third Party, other than~~ to a ~~Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8~~Third Party (the “Tag-Along Transferee”), such ~~that~~ Transferors shall offer to include in such proposed Disposition (the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”)) a number of Eligible Units owned and designated by any Eligible Seller, ~~then~~ in each case in accordance with the ~~Selling Member must comply~~ terms of this Section 7.6. Notwithstanding the foregoing, this Section 7.6 shall not be applicable to, and the Transferors may Dispose of Preferred Units without complying with any of the provisions of this Section ~~3.5~~7.6 in connection with, any Disposition (i) to a Permitted Transferee, (ii) made pursuant to a Drag-Along Transaction, or (iii) made pursuant to an IPO Exchange. The ~~Selling Member~~ Transferors shall ~~inform~~ cause the ~~Board by notice in writing~~ offer from such Tag-Along Transferee (the “Tag-Along ~~Notice~~Offer”) to be reduced to writing, which writing shall include (x) an offer to purchase or otherwise acquire Eligible Units from the ~~date upon which such notice is received being~~ Eligible Sellers as required by this Section 7.6, (y) a time and place designated for the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions closing of such ~~proposed Transfer, including any consideration~~ purchase and (z) the per Unit purchase price proposed to be ~~received pursuant to a bona fide written agreement for~~ paid by the Tag-Along Transferee for the Transferors’ Preferred Units ~~(and, if~~ in a Tag-Along Sale and the ~~proposed Transfer is~~ aggregate proceeds expected to be ~~wholly or partly for consideration other than money,~~ payable in respect of any Profits Units included in such Tag-Along Sale (which proceeds shall be calculated in accordance with Section 7.6(h) below). The per Unit purchase price proposed to be paid by the Tag-Along ~~Notice shall state~~ Transferee may differ in order to reflect differences in the ~~proposed price as being equal~~ Preferred Unit Preference Amounts and Designated Values with respect to the ~~amount of the monetary consideration~~Preferred Units that are Eligible Units and differences in Designated Values, ~~if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along~~ Withheld Amounts and Retained Amounts with respect to Profits Units that are ~~proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along~~ Eligible Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the Certain capitalized terms ~~set forth~~ that are used in this Section ~~3.5~~7.6 are defined in Section 7.6(j) below. (b) Each of the Preferred Tag ~~Member~~ Offerees and Profits Series Tag Offerees shall ~~have the right and option, exercisable as set forth below,~~ be entitled to request to include certain Eligible Units in such Tag-Along Sale, in each case in accordance with the terms of this Section 7.6; provided, however, that notwithstanding anything to the contrary in this Section 7.6, for each series of Profits Units, the Profits Series Tag Offerees who hold Profits Units of such series shall not be entitled to include, and the Tag-Along Transferee shall not purchase, any Profits Units of such series that are Eligible Units in such Tag-Along Sale ~~up to~~ unless the aggregate number of the Profits Units of such series that ~~amount of its Class A~~ are Eligible Units ~~or Class B Units (as applicable)~~ so included is equal to ~~the product of~~ (i) the aggregate number of ~~Class A~~ Profits Units of such series (including Unvested and ~~Class B~~ Vested Profits Units ~~to be acquired by the purchaser,~~ of such series) then outstanding multiplied by (ii) ~~a fraction,~~ the ~~numerator~~ Purchased Preferred Percentage. (c) The Transferors shall send written notice of ~~which is the number of Class A Units or Class B Units (as applicable) held by~~ such ~~Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “~~Tag-Along ~~Portion~~Offer (the “Preferred Inclusion Notice”), ~~and~~ together with the ~~Selling Member~~ Transferor Requested Preferred Percentage, to each of the Preferred Tag Offerees. Each Preferred Tag Offeree shall ~~not consummate~~ have the right (a “Preferred Inclusion Right’), exercisable by delivery of notice to the Transferors at any time within 15 days after receipt of the Preferred Inclusion Notice, to request to sell in the Tag-Along Sale ~~unless~~ a number of Preferred Units equal to the total number of Preferred Units held by such ~~portion~~ Preferred Tag Offeree multiplied by the Transferor Requested Preferred Percentage. Promptly following such 15-day period, the Transferors shall calculate the number of Requested Preferred Units and the Requested Preferred Tag-Along Percentage. (d) Promptly following the determination of the ~~Class A Units or Class B Units (as applicable)~~ Requested Preferred Tag-Along Percentage, the Transferors shall send written notice of such Tag ~~Member~~ Along Offer (~~or such lesser portion~~ the “Profits Series Notice”), together with (i) the number of Requested Preferred Units and (ii) the Requested Preferred Tag-Along Percentage, to each of the ~~Class A Units or Class B Units~~ Profits Series Tag Offerees. The Profits Series Tag Offerees shall have the following rights: (i) Each Profits Series Tag Offeree shall have the right (a “Profits Series Inclusion Right”), exercisable by delivery of ~~such Tag Member for which such right and option is exercised~~notice (a “Profits Series Tag-Along Exercise Notice”) ~~is so included. To~~ to the ~~extent that~~ Transferors at any ~~Tag Member elects not~~ time within 15 days after receipt of the Profits Series Inclusion Notice, to ~~include its Class A Units or Class B Units (as applicable)~~ request to sell in a the Tag-Along Sale, ~~those~~ for each series of Profits Units held by such Profits Tag ~~Members~~ Offeree, a number of Profits Units of such series that ~~do elect~~ are Eligible Units equal to ~~include Class A~~ the total number of Profits Units ~~or Class B~~ of such series (including Unvested and Vested Profits Units ~~in a~~ of such series) held by such Profits Series Tag Offeree multiplied by the Requested Preferred Tag-Along ~~Sale~~ Percentage (for any series of Profits Units, the “Initial Requested Profits Series Units”). Promptly following the expiration of such 15-day period, the Transferors shall notify, for each series of Profits Units, the Profits Series Tag Offerees of the then Initial Requested Profits Series Tag-Along Percentage for such series of Profits Units and the names of each Profits Series Tag Offeree of such series of Profits Units who did not timely exercise his Profits Series Inclusion Right with respect to such series of Profits Units. If, with respect to any series of Profits Units, any Profits Series Tag Offeree does not timely exercise his Profits Series Inclusion Right with respect to such series of Profits Units by so delivering a Profits Series Tag-Along Exercise Notice prior to the expiration of such 15-day period, such that the Initial Requested Profits Tag-Along Percentage for such series of Profits Units is less than the Requested Preferred Tag-Along Percentage, the Profits Series Tag Offerees that exercised their Profits Series Inclusion Rights for such series shall have ~~the opportunity~~ an additional five days in which to ~~increase their participation~~ agree to sell in such Tag-Along Sale ~~Pro Rata (~~an aggregate number of additional Profits Units of such ~~increase being Pro Rata among~~ series that are Eligible Units that is equal to the ~~Tag Members making~~ number of Profits Units of such ~~further election) such~~ series that are Eligible Units that the ~~percentage~~ non-exercising Profits Series Tag Offerees with respect to such series of ~~Class A~~ Profits Units ~~and Class B~~ would have been entitled to request to sell had they exercised their Profits Series Inclusion Rights with respect to such series in accordance with the foregoing (the “Additional Requested Profits Series Units” and, together with the Initial Requested Profits Units of such series, the “Requested Profits Series Units”). Each such Profits Series Tag ~~Members participating~~ Offeree who so agrees to sell additional Profits Units of such series that are Eligible Units shall be required to sell such additional number of Profits Units of such series that are Eligible Units as may be agreed upon by all exercising Profits Series Tag Offerees of such series, it being understood and agreed that the Profits Series Tag Offerees shall not be entitled to sell any Profits Units of such Series in such Tag-Along Sale unless the aggregate number of Profits Units of such Series that are Eligible Units so included in such sale is equal to (i) the aggregate number of Profits Units of such series (including Unvested and Vested Profits Units of such series) then outstanding multiplied by (ii) the Purchased Preferred Percentage. If, for any series of Profits Units, the exercising Profits Series Tag Offerees hold at least 40% of the total number of outstanding Profits Units of such series, but such Profits Series Tag Offerees do not hold a sufficient number of Profits Units of such series that are Eligible Units to permit them to comply with the foregoing sentence, such exercising Profits Series Tag Offerees shall be entitled to require each non-exercising Profits Series Tag Offeree to request to be included in such Tag-Along Sale, on a pro rata basis, up to a number of Profits Units of such series that are Eligible Units that shall cause the number of Profit Units of such that are Eligible Units that are requested to be included in such Tag-Along Sale to equal (i) the aggregate number of Profits Units of such series (including Unvested and Vested Profits Units of such series) then outstanding multiplied by (ii) the Requested Preferred Tag-Along Percentage. The exercising Profit Series Tag Offerees of such series of Profits Units shall send written notice to the Transferors on or prior to the end of such additional five-day period, which notice shall specify the number of Additional Requested Profits Series Units requested to be included in such Tag-Along Sale by each exercising Profits Series Tag Offeree (including each Profits Series Tag Offeree that was required to exercise Profits Series Inclusion Rights pursuant to this Section 7.6(d)(i)). (e) Promptly following the completion of the procedures described in Section 7.6(c) and Section 7.6(d), the Transferors shall notify the Tag-Along ~~Portion~~ Transferee of ~~all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying~~ the number of ~~Class A~~ Requested Preferred Units, and the number of Requested Profits Series Units ~~or Class B~~ for each applicable series of Profits Units. If the Tag-Along Transferee is unwilling to purchase all of the Preferred Units that the Transferors propose to sell in the Tag-Along Sale, all of the Requested Preferred Units and all of the Requested Profits Units, then the Transferors shall determine what percentage of Preferred Units and Profits Units (~~as applicable~~which percentage shall be the same for each class of Units, and each series within each class of Units) such Tag-Along Transferee is willing to purchase in the aggregate (the “Purchased Percentage”). In such event, the number of Preferred Units that ~~such Tag Member wishes~~ the Transferors propose to ~~include~~ sell in the Tag-Along Sale and the number of the Requested Preferred Units and the Requested Profits Units that the Transferors and each of the exercising Preferred Tag Offerees and Profits Series Tag Offerees otherwise would have sold shall be reduced on a pro rata basis (~~which~~ based on the respective total numbers of Preferred Units and Profits Units that are Eligible Units that such holders desired to sell) so as to permit the Transferors, the exercising Preferred Tag Offerees, and the exercising Profits Series Tag Offerees to sell in the aggregate (i) a number ~~shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after~~ of Preferred Units equal to the ~~Tag-Along Notice Date~~ total number of Preferred Units multiplied by the Purchased Percentage (the “~~Tag-Along Notice Period~~Purchased Preferred Units”~~) and shall simultaneously provide a copy~~ ), and, for each series of ~~such notice~~ Profits Units that are to ~~the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate~~ be included in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versasale, (ii) ~~in no event shall any Tag Member be required~~ a number of Profits Units that are Eligible Units equal to ~~make representations and warranties other than (A)~~ the total number of Profits Units of such ~~Member’s valid ownership~~ series then outstanding multiplied by the Purchased Percentage. The total amount of ~~its Units, (B) the Transfer of those~~ Profits Units to ~~the proposed Third Party transferee free and clear~~ be sold for each series of ~~all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right~~ Profits Units to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale is referred to as the “Purchased Profits Units”. (f) Notwithstanding anything to the contrary in this Section 7.6, if the consideration proposed to be paid by the Tag-Along Transferee in a Tag-Along Sale includes securities with respect to which no registration statement covering the issuance of such securities has been declared effective under the Securities Act, then each holder of Units participating in the Tag- Along Sale that is not then an Accredited Investor (without regard to Rule 501(a)(4)) may be required, at the request and election of the Transferors, to (i) appoint a purchaser representative (as such term is defined in Rule 501 under the Securities Act) reasonably acceptable to such Transferors or (ii) ~~fails~~ agree to ~~deliver~~ accept cash in lieu of any securities such holder would otherwise receive in an amount equal to the ~~Selling Member~~ fair market value of such securities, as determined by the Board in its ~~Class A Units or Class B Units~~ reasonable judgment. (~~as applicable~~g) ~~or any required documentation (collectively~~The Preferred Tag Offerees, ~~a “Tag-Along Failure”), then such~~ the Profits Series Tag ~~Member will be deemed~~ Offerees and the Transferors shall sell to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along ~~Failure~~ Transferee all of the Purchased Preferred Units, and Purchased Profit Units proposed to be transferred by them in ~~which to Transfer all (but~~ accordance with this Section 7.6 at not less than ~~all) of~~ the ~~applicable Class A Units or Class B Units at a~~ price and upon the terms and conditions, if any, not ~~higher~~ more favorable, individually and in the aggregate, to the Tag-Along Transferee than ~~contained~~ those in the Tag-Along ~~Notice~~ Offer and ~~on terms not more favorable~~ the Preferred Inclusion Notice, at the time (subject to extension to the ~~Selling Member than were contained~~ extent necessary to pursue any required regulatory approvals, including to allow for the expiration or termination of all waiting periods under the HSR Act) and place provided for the closing in the Tag-Along ~~Notice; thereafter~~Offer, ~~any proposed Transfer by~~ or at such ~~Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5~~ other time and ~~shall require a Tag-Along Notice. (g) Promptly after~~ place as the ~~consummation of a Tag-Along Sale~~Preferred Tag Offerees, the ~~Selling Member shall give notice thereof to~~ Profits Series Tag Offerees, the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), Transferors and ~~shall furnish such other evidence of the completion and time of completion of~~ the Tag-Along ~~Sale and the terms thereof as may be reasonably requested by any such Tag Member~~Transferee shall agree. (h) ~~Notwithstanding anything contained in this Section 3.5~~ The aggregate proceeds for the Purchased Preferred Units and the Purchased Profits Units sold pursuant to ~~the contrary, no Selling Member shall be liable to any Member based on the failure of~~ a Tag-Along Sale ~~to occur for any reason~~shall be distributed first in accordance with the provisions of Section 6.1(c)(i) and Section 6.1(e), if applicable, and then in accordance with the priorities and preferences set forth in Section 6.1(c). (i) The ~~Selling Member~~ Warburg Pincus Group shall ~~bear its own costs and~~ have the right in connection with any ~~other costs arising pursuant to such~~ Tag-Along Sale (or in connection with the investigation or consideration of any potential Tag-Along Sale) to require the ~~extent~~ Company to cooperate fully with potential acquirors in such ~~costs are incurred for the benefit of~~ prospective Tag-Along Sale by taking all ~~participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne~~ customary and other actions reasonably requested by such ~~Tag Member) will not be considered incurred~~ Transferors or such potential acquirors, including making the Company’s properties, books and records, and other assets reasonably available for ~~the benefit of all participating Members~~inspection by such potential acquirors, establishing a physical or electronic data room including materials customarily made available to potential acquirors in connection with such processes and making its employees reasonably available for presentations, interviews and other diligence activities, in each case subject to reasonable and customary confidentiality provisions. The Company shall provide assistance with respect to these actions as reasonably requested. (j) ~~No Assignee~~ For purposes of this Section 7.6, the following terms shall ~~be admitted as a Substitute Member except as provided in Section 3.9.~~have the following meanings:

Appears in 1 contract

Samples: Limited Liability Company Agreement (Laredo Petroleum, Inc.)

Tag-Along Rights. In the event that (aother than in connection with a Permitted Transfer) Subject to a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B any Member or group of Members acting together proposes to voluntarily sell any of their Units representing more than 50% of the total Class A ~~Members and/or Class B Members acting jointly~~ Common Units outstanding as of such time (any such Member(s), in such capacities, being referred to as the “Selling Member(s)”), in each case to any unrelated third-party purchaser in an arm’s-length transaction (a “Selling Member Transaction”), each holder of Priority Units who is not a Selling Member(s), (each, a “Tag Along Member”) shall have the right to require the purchase of the portion of their Priority Units (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Tag Along Units”), ) on the ~~identity of the proposed transferee, and the other~~ same terms and conditions of as apply to such ~~proposed Transfer~~Selling Members in connection with such sale, ~~including any consideration proposed~~ such portion to be ~~received pursuant to a bona fide written agreement for the Tag-~~determined by multiplying such Tag Along Member’s total Tag Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by ~~the purchaser, multiplied by (ii)~~ a fraction, the numerator of which is the aggregate number of ~~Class A~~ Units ~~or Class B Units (as applicable) held~~ proposed to so be sold by such ~~Tag~~ Selling Member and the denominator of which is the aggregate number of ~~Class A Units and Class B~~ Units held by ~~the~~ such Selling Member ~~and all~~ immediately prior to such sale. In connection with such required purchase, such Tag ~~Members (its “Tag-~~Along ~~Portion”), and the Selling~~ Member shall ~~not consummate the Tag-Along Sale unless such portion~~ be entitled to receive a percentage of the ~~Class A Units or Class B Units (~~total proceeds being paid by the buyer in the transaction giving rise to the tag along rights described in this Section as ~~applicable) of~~ is determined by dividing the total proceeds such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to such portion of its Units had the ~~Class A~~ Company sold all of its assets for the “fair market value” of such assets, and then distributed such proceeds to all Members in liquidation, by the total proceeds that would have been received by all Selling Members and all Tag Along Members with respect to such Units ~~or Class B Units (as applicable) Transferred by~~ to be sold in such ~~Member~~ transaction had the Company sold all of its assets for such “fair market value” and then distributed such proceeds in liquidation. For this purpose, the ~~Tag-Along Sale upon a deemed liquidation~~ “fair market value” of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and Company’s assets shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be reasonably determined by the ~~Accountant (or any other certified public accountant selected~~ Board taking in to account the value implied by ~~all~~ the sale of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant Units by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Limited Liability Company Agreement

Tag-Along Rights. (a) ~~Subject~~ At least 30 days prior to a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of ~~all~~ any Units or ~~any portion of~~ other interests in the ~~Class A Units and/or Class B Units held by such Member(s) to any Third Party,~~ LLC (other than to a Permitted Transferee ~~of such Member(s~~or a Transfer pursuant to the THI Liquidation) by one or ~~in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%)~~ more of the ~~aggregate outstanding Class A Units and Class B Units~~ Unitholders (~~taken together as a single class) (~~each, a “~~Tag-Along Sale~~Transferring Unitholder”), ~~then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member~~ such Transferring Unitholders shall ~~inform the Board by~~ deliver a written notice ~~in writing~~ (the “Tag-Along Notice”) (to the ~~date upon which such notice is received~~ LLC and the other Unitholders of the same class or classes as being included in the ~~“Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed~~ Transfer (the “Tag-Along ~~Units~~Unitholders”), ) specifying in reasonable detail the identity of the ~~proposed transferee,~~ prospective transferee(s) and the ~~other~~ terms and conditions of ~~such proposed Transfer, including any consideration proposed to~~ the Transfer (which notice may be ~~received pursuant to a bona fide written agreement for~~ included in and given at the same time as the Offer Notice under Section 10.2(a)). The Tag-Along ~~Units (and, if~~ Unitholders may elect to participate in the ~~proposed~~ contemplated Transfer is by delivering written notice to ~~be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount~~ each of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value Transferring Unitholders within 30 days after delivery of the Tag-Along ~~Units~~Notice. The ~~Board shall promptly deliver a copy of the~~ Transferring Unitholder and such Tag-Along ~~Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall~~ Unitholders will be ~~deemed to have granted to the Tag Members an option~~ entitled to sell ~~their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include~~ in the ~~Tag-Along Sale up~~ contemplated Transfer, at the same price and on the same terms, a number of such class of Units proposed to ~~that amount of its Class A Units or Class B Units (as applicable)~~ be transferred equal to the product of (iA) the quotient determined by dividing the number of units of such class of Units owned by such Person by the aggregate number of ~~Class A~~ outstanding units of such class of Units owned by the Transferring Unitholder and ~~Class B~~ each such Tag-Along Unitholder participating in such sale and (B) the number of such class of Units to be ~~acquired by~~ sold in the ~~purchaser, multiplied by~~ contemplated Transfer. (iib) ~~a fraction,~~ The Transferring Unitholder will use reasonable commercially reasonable efforts to obtain the ~~numerator~~ agreement of ~~which is~~ the ~~number~~ prospective transferee(s) to the participation of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along ~~Sale~~ Unitholders in any contemplated Transfer, and the Transferring Unitholder will not transfer any of its Units to the prospective transferee(s) unless ~~such portion~~ (A) the prospective transferee(s) agrees to allow the participation of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along ~~Portion~~ Unitholders or (B) the Transferring Unitholder agree to purchase the number of ~~all Tag Members~~such class of Units from the Tag-Along Unitholders that the Tag-Along Unitholders would have been entitled to sell pursuant to this Section 10.3(b) for the consideration per unit to be paid to the Transferring Unitholder by the prospective transferee(s). (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor[Intentionally Omitted]. (d) ~~Each Member participating in~~ The provisions of this Section 10.3 will terminate upon the ~~Tag-Along Sale shall receive a portion~~ first to occur of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence Sale of the ~~completion~~ Company and ~~time of completion of~~ (ii) the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure consummation of a ~~Tag-Along Sale to occur for any reason~~Qualified IPO. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Triad Financial Sm LLC)

Tag-Along Rights. (a) ~~Subject to a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all~~ If CREH or any of ~~the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly~~ its Permitted Transferees (collectively, ~~the~~ a “Selling Member”) ~~desires~~ proposes to ~~make~~ Transfer any ~~Transfer~~ of ~~all or any portion of the~~ its Class A Common Units ~~and/or~~ or Class B C Common Units ~~held by such Member(s) to any Third Party, other than~~ in one transaction or a series of related transactions to a third party (a “Proposed Third-Party Sale”), then Sponsor and any of its Permitted ~~Transferee of such Member(s) or~~ Transferees, in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together their capacity as a ~~single class~~Common Member (each, a “Tag-Along Member”) shall have a right (a “Tag-Along ~~Sale~~Right”) to sell such Tag-Along Member’s pro rata share of the aggregate number of such class of Common Units (or, if applicable, indirect interests) to be Transferred in such Proposed Third-Party Sale (the “Offered Interests”)~~, then~~ . A Tag-Along Member’s pro rata share of the Offered Interests shall be shall be determined by dividing (i) the number of such class of Common Units held by such participating Tag-Along Member by (ii) the number of such class of Common Units held by all participating Tag-Along Members and the Selling Member ~~must comply with~~ (the number of Common Units that may be included in a Transfer by exercise of a Tag-Along Right which, for clarity, shall be the same class of Common Units as the Offered Interests, the “Tag-Along Units”). As a result, the number of Common Units the Selling Member shall be entitled to Transfer shall be reduced by the aggregate number of Tag-Along Units. For the purposes of clarity, it is agreed that the provisions of this Section ~~3.5. The~~ 9.8 shall not apply with respect to any Permitted Transfer. (b) If the Selling Member proposes to make a Proposed Third-Party Sale, the Selling Member shall ~~inform~~ notify each Tag-Along Member (such notice, a “Sale Notice”) at least ten Business Days prior to the ~~Board~~ date of such Transfer. Each Sale Notice shall set forth: (i) a description of the Common Units to be Transferred pursuant to such Proposed Third-Party Sale; (ii) the identity of the Transferee in such Proposed Third-Party Sale; (iii) the proposed amount and form of consideration and the other material terms and conditions of such Proposed Third-Party Sale being offered by the Transferee; and (iv) if any portion of the consideration to be paid is other than cash, all material information in the Selling Member’s possession regarding such non-cash consideration (preceding clauses (i) through (iv), collectively, the “Third Party Terms”). The Third Party Terms applicable to the Transfer of any Common Units or indirect interests therein purchased from the Tag-Along Member pursuant to this Section 9.8 shall be the same as the terms and conditions applicable to the Transfer of the Common Units (or indirect interests therein) (including the amount and form of consideration per Common Unit to be paid therefor), as applicable, by the Selling Member in the Proposed Third-Party Sale. (c) The aggregate purchase price paid for the Common Units (or indirect interests therein), as applicable, in connection with such Proposed Third-Party Sale will be allocated among the Selling Member and the participating Tag-Along Members pro rata in accordance with such Selling Member’s and Tag-Along Members’ respective Common Units being Transferred in such Proposed Third-Party Sale. (d) A Tag-Along Right may be exercised by a Tag-Along Member by delivery of a written notice ~~in writing~~ to the Selling Member (the “Tag-Along Notice”) (within ten Business Days following receipt of the ~~date upon which such notice is received being~~ Sale Notice from the ~~“Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer~~ Selling Member (the “~~Tag-Along Units~~Notice Period”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the . The Tag-Along Notice shall state the ~~proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If~~ Common Units or indirect interests therein held by the Tag-Along ~~Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for~~ Member that such Tag-Along Member proposes to include in such Proposed Third-Party Sale and include an offer to sell such Common Units ~~shall be deemed to be the Fair Market Value of~~ or indirect interests therein held by the Tag-Along ~~Units~~Member on the same terms and conditions as specified in the Sale Notice. ~~The Board shall promptly~~ If one or more Tag-Along Members deliver a ~~copy of the~~ Tag-Along Notice ~~to each Class A Member and Class B Member (other than~~ within the Notice Period, then the Selling ~~Member~~Member shall be prohibited from selling any of the Offered Interests or indirect interests therein to the proposed Transferee in the Proposed Third-Party Sale unless the Selling Member procures that such Transferee (or its designee) (also purchases the ~~“Tag Members”). By giving~~ applicable Common Units or indirect interests therein held by the participating Tag-Along ~~Notice~~Member(s) on the Third Party Terms. If no Tag-Along Member delivers a Tag-Along Notice within Notice Period, the Selling Member shall ~~be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in~~ thereafter, without again complying with this Section ~~3.5. (b) Each Tag Member shall~~ 9.8, have the right ~~and option, exercisable as set forth below,~~ to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer sell all (but not less than all) of the ~~applicable Class A Units or Class B Units at~~ Offered Interests to the Transferee within six months of the date of the Sale Notice for a purchase price ~~not higher than contained in the Tag-Along Notice~~ and on other terms ~~not~~ and conditions that, on the whole, are no more favorable to the Selling Member than ~~were contained~~ the Third Party Terms specified in the Sale Notice. (e) At the closing of a Transfer by the Tag-Along ~~Notice; thereafter, any proposed Transfer by such Selling~~ Member ~~of Class A Units and/or Class B Units shall be subject~~ to Transferee pursuant to this Section ~~3.5~~ 9.8 (and ~~shall require a Tag-Along Notice. (g) Promptly~~ after allowing for the ~~consummation~~ expiration or termination of ~~a Tag-Along Sale~~all waiting periods under the HSR Act, ~~the Selling Member shall give notice thereof to the participating Tag Members~~if applicable), such Transferee shall remit to each ~~such Tag~~ Tag-Along Member (i) the ~~total~~ consideration for the ~~Class A~~ Common Units or ~~Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d)~~indirect interests therein, ~~and shall furnish such other evidence of the completion and time of completion~~ of the Tag-Along ~~Sale and~~ Member Transferred pursuant to this Section 9.8 less (ii) any such consideration to be escrowed or otherwise held back in accordance with the ~~terms thereof~~ Third Party Terms. The amount escrowed or held back pursuant to preceding clause (ii) shall be pro rata among all Common Members that are Transferring the Common Units or indirect interests therein in such Proposed Third-Party Sale. Additionally, in connection with any such closing of a Transfer by the Tag-Along Member to Transferee pursuant to this Section 9.8, each Tag-Along Member must (x) deliver to the Selling Member certificates (if any) or other evidence of ownership representing such Common Units or indirect interests therein with instruments of transfer as may be reasonably requested by the Selling Member in such Proposed Third-Party Sale or the Company, and (y) comply with any ~~such Tag Member. (h) Notwithstanding anything contained in this Section 3.5~~ other conditions to closing applicable to the ~~contrary, no~~ Selling Member in such Proposed Third-Party Sale. In addition, the Tag-Along Member shall not be ~~liable~~ required to ~~any Member~~ bear more than its pro rata share of all liabilities of the Common Members Transferring Common Units or indirect interests therein in such transaction (based on the ~~failure~~ Common Units or indirect interests therein Transferred by each of a them) for the representations, warranties and other obligations incurred in connection with the transactions contemplated by the Sale Notice (other than with respect to representations and warranties relating to the ownership of the Tag-Along ~~Sale~~ Member’s Common Units or indirect interests therein or otherwise relating solely to ~~occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such~~ the Tag-Along ~~Sale~~ Member). The consideration paid by the Transferee to the ~~extent such costs are incurred for~~ Tag-Along Member pursuant to this Section 9.8 shall be in the ~~benefit of all participating Members~~same form and have the same rights as the consideration paid by the Transferee to the Selling Member. ~~Costs~~ All reasonable fees and expenses incurred by ~~or on behalf~~ the Selling Member (including in respect of financial advisors, accountants and counsel to the Selling Member) in connection with a ~~Tag Member for its sole benefit (which~~ Transfer pursuant to this Section 9.8 shall be ~~borne~~ shared by the Selling Member and the Tag-Along Members pro rata in proportion to the consideration received by such ~~Tag Member) will not be considered incurred for the benefit of all participating~~ Members. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Limited Liability Company Agreement (California Resources Corp)

Tag-Along Rights. ~~(a) Subject~~ 7.3.1 At any time that one or more Charter Members proposes to a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of sell all or any portion of ~~the Class A Units and/or Class B Units held by such Member(s)~~ its Membership Interests to any ~~Third Party,~~ Person other than to a ~~Permitted Transferee of such Member(s)~~ Charter Affiliate or in ~~accordance~~ connection with ~~Sections 3.6~~an internal reorganization of CCI and its Affiliates, ~~3.7 and 3.8, such that~~ the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member Manager shall ~~inform the Board by~~ provide written notice ~~in writing~~ (the “"Tag-Along Notice”") to CII and each CII Permitted Transferee (together, the "Xxxxx Members") of (a) the aggregate number and type of Units to be sold by the Charter Members (the ~~date upon which such notice is received being the “~~"Tag-~~Along Notice Date”~~Offered Interest") ~~stating~~ pursuant to the contract for the sale of Membership Interests by the Charter Members (such contract, a "Tag Contract") and the number and type of all Units then owned by all Charter Members; (~~or portion thereof~~b) ~~that are subject to such proposed Transfer (the “Tag-Along Units”),~~ the identity of the ~~proposed transferee, and~~ prospective purchaser; (c) the ~~other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement~~ aggregate purchase price for the Tag-~~Along~~ Offered Interest, the form of such purchase price, and any potential adjustments to such purchase price contained in the Tag Contract; (d) the purchase price for each Class A Preferred Unit of each Xxxxx Member electing to participate in a sale pursuant to this Section 7.3 (calculated with reasonable detail in accordance with the procedures set forth in Section 7.3.4); (e) a calculation (in accordance with Section 7.3.2) of the maximum number of Class A Preferred Units that each Xxxxx Member can elect to sell pursuant to this Section 7.3; (~~and, if~~ f) confirmation that the ~~proposed Transfer is~~ prospective purchaser has been informed of the Xxxxx Members’ rights under this Section 7.3 and has agreed to ~~be wholly or partly for consideration other than money,~~ purchase Class A Preferred Units from the Xxxxx Members in accordance with the terms of this Section 7.3; (g) a copy of the Tag Contract; and (h) an estimate of the date on which the closing of Tag Contract will occur. The Manager shall provide the Tag-Along Notice within 20 days after the signing of the Tag Contract and shall ~~state the proposed price as being equal~~ be provided at least 45 days prior to the ~~amount~~ consummation of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to sale contemplated by the Tag ~~Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5~~Contract. ~~(b)~~ 7.3.2 Each ~~Tag~~ Xxxxx Member shall have the right ~~and option, exercisable as set forth below,~~ to ~~include~~ participate in ~~the Tag-Along Sale up~~ such proposed sale with respect to ~~that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate~~ a number of Class A Preferred Units ~~and Class B Units to be acquired~~ held by ~~the purchaser, multiplied by (ii) a fraction, the numerator of which~~ such Xxxxx Member that is the ~~number~~ same percentage of all Class A Preferred Units held by such Xxxxx Member as the percentage of Class A ~~Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A~~ Preferred Units and Class B Units held by ~~the Selling Member and~~ all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Charter Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include are included in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Offered Interest. 7.3.3 An Xxxxx Member ~~that has exercised its right~~ desiring to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) sale pursuant to this Section ~~3.5 at~~ 7.3 (each, a "Participating Xxxxx Member") shall exercise the ~~closing for such Tag-Along Sale against delivery~~ rights granted pursuant to ~~such~~ this Section 7.3 by delivering written notice (the "Tag ~~Member of the consideration therefor. (d~~Acceptance Notice") ~~Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal~~ to the ~~amount such Member would have received with respect to~~ Manager within 30 days after the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end date of the Tag-Along Notice ~~Period~~ setting forth the number of Class A Preferred Units to ~~have~~ be sold by such Xxxxx Member (which shall not exceed the number of shares calculated pursuant to Section 7.3.2 hereof) (the "Tag-Along Interest"). The right of an Xxxxx Member pursuant to this Section 7.3 shall terminate with respect to the proposed sale if not exercised within such 30 day period. 7.3.4 The purchase price for any Tag-Along Interest shall equal the amount per Class A Preferred Unit that would be distributed with respect to each Class A Preferred Unit in a hypothetical dissolution of the Company, determined by calculating the total amount that the Company would need to distribute in dissolution to all Members pursuant to this Agreement to result in dissolution proceeds to the Charter Members with respect to the Tag-Offered Interest equal to the aggregate purchase price for the Tag-Offered Interest (as may be adjusted pursuant to the Tag Contract), assuming that the Company made a distribution of such total amount pursuant to Section 9.5. If all or any ~~part~~ portion of the purchase price for the Tag-Offered Interest consists of property or other noncash consideration, the purchase price for each Tag-Along Interest shall comprise the same proportion of each item of property or other noncash consideration as is paid for the Tag-Offered Interest. 7.3.5 At the closing of a sale pursuant to this Section 7.3, each Participating Xxxxx Member shall be entitled and obligated to give such consents as are customary in similar transactions and to sell to the prospective purchaser its Tag-Along ~~Portion included in~~ Interest on the same terms and conditions (other than price) as the Charter Members selling the Tag-Offered Interest (with such Participating Xxxxx Member being subject to the same holdback, and escrow provisions, if any, and any similar components of the Tag Contract to which the Charter Members selling the Tag-Offered Interest are subject), provided that each Participating Xxxxx Member shall only be required to make customary representations and warranties regarding its ownership of, and authority to sell, the Tag-Along ~~Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively~~Interest. 7.3.6 If, following delivery of a “Tag-Along ~~Failure”)~~Notice, ~~then such Tag Member will be deemed to~~ the 30 day period set forth in Section 7.3.2 shall have ~~waived any and all~~ expired without an Xxxxx Member’s exercise of its rights under this Section ~~3.5 with respect~~ 7.3, the Charter Members shall have the right to sell to the ~~Transfer of any~~ prospective purchaser or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after an Affiliate thereof the Tag-~~Along Failure~~ Offered Interest but only on terms that are no more favorable in ~~which to Transfer all~~ any material respect (~~but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained~~ and in any case, with no increase in the ~~Tag-Along Notice and on terms not more favorable to the Selling Member than were contained~~ purchase price from that specified in the Tag-Along Notice~~; thereafter~~) to the Charter Members than provided in the Tag Contract without any further obligation to such Xxxxx Member under this Section 7.3. If the Charter Members do not consummate such sale, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion subsequent sale of the Tag-~~Along Sale and~~ Offered Interest shall once again be subject to the terms ~~thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in~~ of this Section ~~3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason~~7.3. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Charter Communications Inc /Mo/)

Tag-Along Rights. (a) ~~Subject to a Member first complying with Section 3.4 and provided~~ If at any time following the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectivelyEffective Date, the ~~“Selling Member”) desires~~ Common Units Member proposes to ~~make any~~ Transfer in a transaction or series of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate related transactions greater than ~~five~~ sixty percent (560%) of the ~~aggregate~~ outstanding ~~Class A~~ Common Units ~~and Class B Units (taken together as~~ to a ~~single class)~~ Third Party purchaser (a “~~Tag-Along~~ Proposed Sale”), then the ~~Selling~~ Common Units Member ~~must comply with~~ (the ~~provisions~~ “Tag-Along Member”) shall furnish to the Class A Unit Members a written notice of ~~this Section 3.5. The Selling Member shall inform the Board by notice in writing~~ such Proposed Sale (the “Tag-Along Notice”) (and provide them the ~~date upon which~~ opportunity to participate in such ~~notice is received being~~ Proposed Sale on the “terms described in this Section 3.6. The Tag-Along Notice ~~Date~~will include: (i) the material terms and conditions of the Proposed Sale, including (A) the number of Common Units proposed to be so Transferred, (B) the name of the proposed Transferee (the “Proposed Transferee”), (C) ~~stating~~ the proposed amount and form of consideration (including the consideration payable to each Common Units Member and Class A Member assuming each Common Units Member and Class A Units Member included the maximum percentage of Membership Interests it would be entitled to sell in such Proposed Sale, such amounts calculated based on a hypothetical application of Section 5.3) and all other material terms of the Proposed Sale, (~~or portion thereof~~D) ~~that are subject to such~~ the proposed Transfer date, if known, which date shall not be less than thirty (30) Business Days after delivery of such Tag-Along Notice and (E) the fraction, expressed as a percentage, determined by dividing (I) the number of Common Units to be Transferred by the Tag-Along Member, by (II) the total number of Common Units held by the Tag-Along Member (the “Tag-Along ~~Units~~Sale Percentage”), ; and (ii) an invitation to each Class A Units Member to include a percentage of its Class A Units in the ~~identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant~~ Proposed Sale up to a ~~bona fide written agreement for~~ number equal to (A) the Tag-Along Sale Percentage multiplied by (B) the total Class A Units ~~(and, if the proposed Transfer is~~ held by such Member. The Tag-Along Member will deliver or cause to be ~~wholly or partly for consideration~~ delivered to the other ~~than money,~~ Members copies of all transaction documents relating to the Proposed Sale as promptly as practicable after they become available. (b) Each other Member must exercise the tag-along rights provided by this Section 3.6 within twenty one (21) calendar days following delivery of the Tag-Along Notice ~~shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration)~~ by delivering a notice (the “Tag-Along ~~Price~~Offer”~~). If~~ ) to the Tag-Along Member indicating its desire to exercise its rights hereunder and specifying the percentage of Class A Units ~~are proposed~~ it elects to ~~be Transferred~~ include in the Proposed Sale pursuant to Section 3.6(a)(ii). If any other ~~than for cash to the Selling Member, the consideration for such~~ Member does not make a Tag-Along ~~Units shall be deemed to be the Fair Market Value~~ Offer within twenty one (21) calendar days following delivery of ~~the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving~~ the Tag-Along Notice, ~~the Selling~~ such other Member shall be deemed to have ~~granted~~ waived its rights under this Section 3.6 with respect to such Proposed Sale, and the Tag-Along Member shall thereafter be free to Transfer the Common Units to the ~~Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon~~ Proposed Transferee without the ~~terms~~ participation of such other Member, in the same amount and for the same form of consideration set forth ~~in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include~~ in the Tag-Along ~~Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to~~ Notice, at a price no greater than the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights price set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice ~~or otherwise all documents required~~ and on other terms and conditions which are not more favorable to ~~be executed or delivered by such Tag Member in connection with~~ the ~~Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such~~ Tag-Along ~~Sale against delivery to such Tag~~ Member ~~of the consideration therefor. (d) Each Member participating~~ than those set forth in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along UnitsNotice. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or If any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member ~~that validly~~ elects to participate in ~~a Tag-Along~~ the Proposed Sale pursuant to this Section 3.6, such other Member shall agree to make to the ~~proposed Third Party transferee~~ Proposed Transferee the same representations and warranties, covenants and indemnities as the ~~Selling~~ Tag-Along Member agrees to make in connection with ~~such Tag-Along~~ the Proposed Sale; provided, that (iw) ~~any~~ such ~~Tag~~ other Member shall not be liable for the breach of any covenant by the ~~Selling~~ Tag-Along Member (or any other Member) and vice versa, (iix) in no event shall any ~~Tag~~ Member be required to make representations and warranties or provide indemnities as to any other ~~than~~ Member or to make representations or warranties or covenants (Aincluding indemnities) ~~such~~ not required by each other Member~~’s valid ownership of its Units~~, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iiiy) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations ~~(including escrow/holdback arrangements)~~ regarding the business of the Company in connection with the ~~Tag-Along~~ Proposed Sale shall be shared by the Members pro rata on a several (but not ~~joint)~~ joint basis ~~by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment~~ in proportion to the ~~participating Members pursuant~~ consideration to ~~such~~ be received in the Proposed Sale by each Member and (z) in no event shall any Member other than the Tag-Along Member be responsible for any liabilities or indemnities in connection with such Proposed Sale ~~and (iv) no Tag Member shall be obligated to agree to indemnification obligations~~ in excess of the proceeds received by such ~~Tag~~ Member in ~~such Tag-Along~~ the Proposed Sale. (fc) ~~If any Tag Member (i) does~~ In the event that the consideration received in connection with a Proposed Sale consists of securities that are not ~~elect before~~ registered under the ~~end of~~ Securities Act, and one or more Members exercise their tag-along rights hereunder in connection with such Proposed Sale, if the Tag-Along ~~Notice Period~~ Member is entitled to registration rights in respect of such securities, the Tag-Along Member shall ensure that such Members will receive piggy-back registration rights on any registration in which the Tag-Along Member is entitled to register such securities (including any demand registrations exercised by the Tag-Along Member). (d) The offer of any Member contained in such Member’s Tag-Along Offer shall be irrevocable, and, to the extent such offer is accepted, such Member shall be bound and obligated to Transfer in the Proposed Sale on the same terms and conditions (other than, for the avoidance of doubt, inside tax basis associated with such interests), with respect to all of the Class A Units Transferred, as the Tag-Along Member, up to such percentage of Class A Units as such Member shall have ~~all or any part of~~ specified in its Tag-Along ~~Portion included in~~ Offer; provided, however, that if the ~~Tag-Along~~ material terms of the Proposed Sale ~~or (ii) fails to deliver~~ change with the result that the price applicable to the ~~Selling Member its~~ Class A Units ~~or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will~~ shall be ~~deemed to have waived any and all rights under this Section 3.5 with respect~~ less than the price applicable to the ~~Transfer of any or all of its~~ Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained set forth in the Tag-Along Notice~~; thereafter~~, ~~any proposed Transfer by such Selling Member~~ the form of ~~Class A Units and/or Class B Units~~ consideration shall be ~~subject~~ different or the other terms and conditions shall be less favorable to ~~this Section 3.5 and shall require a~~ such Member than those set forth in the Tag-Along Notice, such Member shall be permitted to withdraw the offer contained in the applicable Tag-Along Offer by written notice to the Tag-Along Member and upon such withdrawal shall be released from such holder’s obligations. (ge) ~~Promptly~~ If a Member exercises its rights under this Section 3.6, the closing of the sale of each Member’s Membership Interest in the Proposed Sale will take place concurrently. If the closing with the Proposed Transferee (whether or not a Member has exercised its rights under this Section 3.6) shall not have occurred by 5:00 p.m. Eastern Time on the date that is ninety (90) days after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion date of the Tag-Along ~~Sale and the terms thereof~~ Notice, as such period may be ~~reasonably requested by~~ extended to obtain any required regulatory approvals or any other required consent (but in no event later than one hundred eighty (180) days after the date of the Tag-Along Notice), and on terms and conditions not more favorable to the Tag-Along Member than those set forth in the Tag-Along Notice, all the restrictions on Transfer contained herein shall again be in effect with respect to such ~~Tag Member~~Common Units and proposed Transfer. (hf) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Each Member shall bear its own costs ~~and~~ in connection with the transactions contemplated by this Section 3.6. (g) The aggregate consideration to be paid in connection with any ~~other costs arising~~ sale consummated pursuant to ~~such~~ this Section 3.6 (a “Tag-Along ~~Sale to the extent~~ Sale”) shall be allocated among each Membership Interest included therein on a proportionate basis based on such ~~costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (~~Membership Interest’s Pro Rata Share, which shall be ~~borne~~ determined based on the Total Equity Value implied by ~~such Tag Member) will not be considered incurred for~~ the ~~benefit of all participating Members~~price offered in the Tag-Along Sale. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Limited Liability Company Agreement (Sanchez Energy Corp)

Tag-Along Rights. (a) ~~Subject~~ Prior to ~~a Member first complying with Section 3.4~~ the consummation of an Initial Public Offering and provided that the ~~Company and the ROFR~~ Steering Committee Members have not ~~purchased~~ exercised their rights in full under Section 9.4 to purchase all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Offered Units (~~taken together as a single class)~~ if applicable), if any Member (a “Tag-Along ~~Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice~~Member”) intends to Transfer more than twenty five percent (25%) of the ~~date upon which such notice is received being the~~ then outstanding Units (“~~Tag-Along Notice Date~~Tag Securities”) ~~stating the Units~~ in any single transaction or series of related transactions (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than ~~money~~in a Permitted Transfer), the Tag-Along ~~Notice shall state~~ Member has the obligation, and each other Member has the right, to cause the intended buyer to purchase from such other Members, on the same terms that apply to such proposed ~~price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If~~ sale by the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (except as ~~applicable) upon the terms~~ set forth in ~~this~~ Section ~~3.5. (b) Each~~ 9.5(c)), a number of Tag ~~Member shall have the right and option, exercisable as set forth below, to include~~ Securities in the ~~Tag-Along Sale~~ aggregate up ~~to that amount of its Class A Units or Class B Units (as applicable) equal~~ to the product (rounded to the nearest whole number) of (i) the aggregate number of ~~Class A Units and Class B Units to be acquired~~ Tag Securities held by ~~the purchaser,~~ such Member multiplied by a fraction (iix) ~~a fraction,~~ the numerator of which is the number of ~~Class A Units or Class B Units~~ Tag Securities proposed to be sold to the buyer in the contemplated transaction by the Tag-Along Member, and (~~as applicable~~y) ~~held by such Tag Member and~~ the denominator of which is the aggregate number of ~~Class A Units and Class B Units~~ Tag Securities held by the ~~Selling~~ Tag-Along Member ~~and all Tag Members~~ (~~its~~ the “Tag-Along ~~Portion~~Sale”). (b) The Tag-Along Member will give the Company and each other Member (including Members holding Restricted Units) at least fifteen (15) Business Days prior written notice of each such proposed sale (the “Tag-Along Notice”). Such Tag-Along Notice must specify the number of Units to be sold, the name of the proposed buyer, the proposed amount and form of consideration and the other material terms and conditions of the transaction, including, if available, a copy of the relevant definitive purchase and sale agreement, and all information reasonably available to the ~~Selling~~ Tag-Along Member ~~shall not consummate~~ regarding proposed buyer; provided, that terms and conditions of the proposed sale must provide that: (i) the proposed amount and form of consideration to be received by the Tag-Along Member pursuant to the Tag-Along Sale ~~unless such portion of~~ and (ii) if the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along ~~Sale~~Member is given an option as to the form and amount of consideration to be received, ~~those Tag Members that do elect~~ the same option shall be given to ~~include Class A Units or Class B Units in a Tag~~the other Members. In order to exercise its tag-~~Along Sale shall have the opportunity to increase their participation in~~ along rights, no later than ten (10) Business Days following receipt of such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up Notice, any other Member must deliver written notice to the Tag-Along ~~Portion~~ Member indicating the desire of ~~all Tag Members. (c) If any Tag~~ such other Member ~~desires~~ to exercise its tag-along rights ~~set forth in Sections 3.5(a)~~ and ~~(b) above, then it shall provide the Selling Member with written irrevocable notice~~ specifying the number of ~~Class A~~ Units ~~or Class B Units (as applicable) that such Tag Member wishes~~ it desires to ~~include~~ sell in the Tag-Along Sale (~~which such number~~ up to the limit described in Section 9.5(a)). (c) Each other Member that has elected to exercise its tag-along rights pursuant to this Section 9.5, shall ~~not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after~~ make or provide the same representations, warranties, covenants, agreements and indemnities as the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member ~~that~~ has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice made or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along ~~Sale~~Sale so long as (i) such representations, warranties, covenants, agreements and indemnities are made severally and not jointly (other than to the extent of any shared escrow), (ii) no Member will be required to make any representations and warranties regarding the Company or its Subsidiaries or their assets, liabilities and businesses and this clause (ii) will not limit any Tag-Along Member or any other Member exercising its tag-along rights from being subject to indemnification obligations with respect to representations and warranties with respect to the Company and its Subsidiaries or any escrow obligations; provided, that ~~(i) any such Tag~~ no other Member shall ~~not~~ be ~~liable for~~ required to agree to non-competition, non-solicitation, or other similar restrictive covenants that are more restrictive than those agreed to in writing by such other Member with the ~~breach~~ Company; provided further that the aggregate liability of each other Member with respect to any ~~covenant~~ indemnification obligations in connection with such sale shall be limited to the net proceeds received by ~~the Selling~~ such other Member in connection with such sale and ~~vice versa,~~ (iiiii) ~~in no event~~ each Member shall ~~any Tag Member~~ be required to make only representations and warranties with respect to its unencumbered title to its Membership Interests, its due organization and good standing in its jurisdiction of organization and its power, authority and legal right to sell its Membership Interests. Each other ~~than (A)~~ Member that has elected to exercise its tag-along right pursuant to this Section 9.5 shall receive the same consideration per class or series of Tag Securities, after deduction of such Member’s ~~valid ownership~~ proportionate share of the related expenses in accordance with Section 9.5(d). (d) The fees and expenses of the Tag-Along Members incurred in connection with a Transfer subject to this Section 9.5, to the extent not paid or reimbursed by the Company or the proposed transferee, shall be shared by the Members that have elected to exercise their tag- along rights pursuant to this Section 9.5, on a pro rata basis, based on the consideration received by each such Member in connection with such Transfer. (e) Each other Member that has elected to exercise its ~~Units, (B)~~ tag-along rights shall respond to the ~~Transfer~~ Tag-Along Notice in writing with wire instructions for the payment of ~~those~~ the purchase price for the Units to be sold in the ~~proposed Third Party transferee free and clear of~~ Tag-Along Sale. Each participating Member shall deliver to the Tag-Along Member all ~~Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right~~ documents to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company be executed in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If ~~any Tag Member~~ a Transfer subject to this Section 9.5 is not consummated within one hundred twenty (i120) ~~does not elect before~~ days following the ~~end~~ date of the Tag-Along Notice ~~Period to have all or any part of its Tag-Along Portion included in~~ on substantially the ~~Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (~~same terms and conditions as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained set forth in the Tag-Along Notice~~; thereafter~~, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of then the Tag-Along ~~Sale and the terms thereof as~~ Member may ~~be reasonably requested~~ not sell any Membership Interest held by ~~any such Tag Member.~~ them (hother than in a Permitted Transfer) ~~Notwithstanding anything contained in~~ without again complying with this Section ~~3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason~~9.5. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement

Tag-Along Rights. (ai) ~~Subject~~ If TPG or any of its affiliates proposes to transfer any of their Membership Interests to a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, purchaser other than to a Permitted Transferee of TPG, TPG or any of its affiliates (hereinafter referred to as "Selling TPG Members") shall give written notice (a "Transfer Notice") of such ~~Member(s~~proposed transfer to the Members other than the Selling TPG Members (the "Other Members") ~~or in accordance with Sections 3.6~~at least thirty (30) days prior to the consummation of such proposed transfer, ~~3.7 and 3.8~~setting forth (i) the percentage of its Membership Interest offered, ~~such that~~ (ii) the ~~Class A Units and/or Class B Units proposed~~ consideration to be ~~transferred represent in~~ received by the ~~aggregate greater than five percent~~ Members, (5%iii) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the purchaser, (iv) the date of the proposed ~~transferee~~transfer, ~~and the~~ (v) any other ~~terms~~ material items and conditions of ~~such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if~~ the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other considerationtransfer and (vi) ~~(the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for~~ that each such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Other Member shall have the right to elect to sell up to the Pro Rata Portion of its Membership Interest. (ii) Upon delivery of a Transfer Notice, each Other Member may elect to sell up to the Pro Rata Portion of its Membership Interest pursuant to the same terms and ~~option~~conditions with respect to payment for the Membership Interest as agreed to by the Selling TPG Members, ~~exercisable as~~ by sending written notice to the Selling TPG Members within thirty (30) days after receipt of the Transfer Notice, indicating its election to sell up to the Pro Rata Portion of its Membership Interest in the same transaction, in which case the portion of Membership Interests to be sold by the Selling TPG Members shall be reduced by such amount (with the result that each Selling TPG Member and each such electing Other Member shall sell to the purchaser the same percentage of their respective Membership Interests). Following such thirty (30) day period, each such Other Member, concurrently with the Selling TPG Members, shall be permitted to sell to the purchaser, at any time up to ninety (90) days after the delivery of the Transfer Notice, on the terms and conditions set forth ~~below, to include~~ in the ~~Tag-Along Sale up to that amount~~ Transfer Notice the Pro Rata Portion of its ~~Class A Units or Class B Units (as applicable) equal~~ Membership Interest; provided, however, that no Selling TPG Member shall be permitted to sell to the ~~product~~ purchaser unless, simultaneously with the consummation of such sale, the sale by the Other Members who have elected to sell pursuant to this paragraph (iii) of the Pro Rata Portion of their Membership Interests is also consummated. (iii) For purposes of this Agreement, "Pro Rata Portion" shall mean, with respect to Membership Interests held by a Member, the portion attained by multiplying (A) the aggregate ~~number of Class A Units and Class B Units to be acquired~~ Membership Interests then owned by ~~the purchaser, multiplied~~ such Member by (iiB) a fraction, the numerator of which is shall be the ~~number of Class A Units or Class B Units (~~aggregate Membership Interests proposed to be sold by the Selling TPG Members to the purchaser as ~~applicable) held by such Tag Member~~ set forth in the Transfer Notice, and the denominator of which is shall be the aggregate ~~number of Class A Units and Class B Units held~~ Membership Interests then outstanding (including such Membership Interests proposed to be sold by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing TPG Members)~~, which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination~~. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Members' Agreement (Memc Electronic Materials Inc)

Tag-Along Rights. A Member (athe “Offeror”) ~~Subject~~ who proposes to Transfer all or a ~~Member~~ part of its Units (the Units or part thereof proposed to be Transferred being called the “Offered Units”) may not do so without first ~~complying with Section 3.4 and provided~~ giving the Company and the ~~ROFR~~ other Members (the “Offeree Members”) notice (the “Offer Notice”) of the proposed Transfer within five (5) days of receiving a bona fide offer from a third party to purchase Units from such Member, which notice must include the identity of the Person to whom the Transfer is proposed to be made and the terms and conditions of the proposed Transfer, including a copy of any agreement, letter of intent, offer or other writing that relates thereto. Each Offeree Member shall have ~~not purchased all~~ the right to cause the purchaser to acquire a portion of such Offeree Member’s Units equal to its Proportionate Percentage of the Units ~~proposed~~ being purchased. Each Offeree Member that so elects to ~~be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A~~ participate in any such sale (such Offeree Members ~~and/or Class B Members acting jointly (collectively,~~ and the Offeror being collectively referred to as the “Selling ~~Member~~Members”) ~~desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held~~ shall do so by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) providing written notice thereof (a ~~“Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the~~ “Tag-Along Notice”) to the Offeror and each other Offeree Member within fifteen (15) days after the date ~~upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity~~ of the ~~proposed transferee~~Offer Notice, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the which Tag-Along Notice shall ~~state~~ specify the ~~proposed price as being equal~~ maximum Units that such Offeree Member wishes to ~~the amount of the monetary consideration~~sell (with respect to each Selling Member, ~~if any, plus the Fair Market Value of the other consideration) (the~~ its “Maximum Tag-Along ~~Price”). If~~ Number,” it being understood that the Maximum Tag-Along Number of the Offeror is the number of Offered Units). The right to sell Units ~~are proposed~~ will be assigned among the Selling Members, with each Selling Member to be ~~Transferred other than for cash to~~ assigned the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product lesser of (i) such Selling Member’s Proportionate Percentage (based on the Units owned by such Selling Member relative to the aggregate number of ~~Class A~~ Units owned by all Selling Members) and ~~Class B Units to be acquired by the purchaser, multiplied by~~ (ii) ~~a fraction~~such Selling Member’s Maximum Tag-Along Number. If, ~~the numerator of which is~~ after such assignment, the number of ~~Class A~~ Units ~~or Class B Units (as applicable) held by such Tag Member and~~ assigned is less than the ~~denominator of which is the aggregate~~ number of ~~Class A Units and Class B Units held by~~ Offered Units, a similar assignment shall be made among the Selling ~~Member and all Tag~~ Members ~~(its “~~who have not yet been assigned their Maximum Tag-Along ~~Portion”), and the Selling Member~~ Number. Such procedure shall ~~not consummate the Tag-Along Sale unless such portion of the Class A~~ be continued until Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of ~~Class A~~ Offered Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Memberhave been assigned, and ~~in any event prior to the consummation of the Tag-Along Sale,~~ each ~~such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the~~ Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have ~~waived any and all rights under this Section 3.5 with respect~~ offered to the ~~Transfer of any or all of its Class A~~ purchaser the Units ~~or Class B Units pursuant~~ that have been so assigned to such ~~Tag-Along Sale~~Selling Member. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject Any sale pursuant to this Section ~~3.5~~ 11.2(a) shall be on the same terms and conditions as those set forth in the Offer Notice; provided that the purchase price shall ~~require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale,~~ be allocated among the Selling ~~Member~~ Members in the same proportion as the proceeds, if any, such Members would have received if all of the assets of the Company were sold for the Company Value. If the purchaser refuses to purchase Units from the Offeree Members who exercise their tag along rights herein, then the Offeror shall ~~give notice thereof~~ purchase the assigned Units from the Selling Members (other than the Offeror) in conjunction with the sale of the Offered Units to the ~~participating Tag Members, shall remit to each such Tag Member~~ purchaser with the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale closing to occur ~~for any reason~~simultaneously. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Atlas Energy Solutions Inc.)

Tag-Along Rights. (a) ~~Subject to~~ In the event a Member ~~first complying with~~ is permitted, pursuant to Section ~~3.4~~ 10.1(b) and ~~provided the Company and the ROFR Members have not purchased~~ Section 10.1(d), as applicable, to Transfer any or all of ~~the~~ its Units ~~proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member~~ (or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Partyinterests therein), other than pursuant to a ~~Permitted Transferee of such Member(s) or~~ Transfer in ~~accordance with Sections 3.6, 3.7 and 3.8, such that~~ which all the ~~Class A~~ Units ~~and/or Class B Units proposed~~ to be transferred ~~represent in~~ are being purchased by the ~~aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”)~~Members pursuant to Section 10.4, ~~then the Selling Member must comply with the provisions of this Section 3.5. The Selling~~ such Member shall ~~inform the Board by~~ deliver a written notice ~~in writing~~ (the “~~Tag-Along~~ Sale Notice”) (to each other Member and the ~~date upon which such notice is received being~~ Company. Such Sale Notice shall contain a complete description of the ~~“Tag-Along Notice Date”) stating~~ terms of the proposed Transfer, including without limitation the number of Units ~~(or portion thereof) that are subject~~ to ~~such proposed Transfer (the “Tag-Along Units”)~~be transferred, ~~the~~ identity of the proposed transferee, purchase price offered, terms of payment and ~~the other terms and conditions~~ time for performance, as well as copies of any document, including, if applicable, any letter of intent relating to such proposed Transfer~~, including any consideration proposed~~ . Each Member may elect to ~~be received pursuant to a bona fide~~ participate in the contemplated Transfer by delivering written ~~agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal~~ notice to the ~~amount of~~ Member(s) initiating the ~~monetary consideration, if any, plus the Fair Market Value of the other consideration)~~ Sale Notice (the “~~Tag-Along Price~~Selling Member(s)”) and the Company within fifteen (15) days after receipt by the Members of the Sale Notice, which notice shall indicate the number of Units to be sold by such electing Member (the “Participating Member”). If Each Participating Member will be entitled to sell in the ~~Tag-Along Units are proposed to be Transferred other than for cash to~~ contemplated sale, at the ~~Selling Member,~~ same price and on the ~~consideration for such Tag-Along Units shall be deemed to be~~ same terms (including the ~~Fair Market Value~~ making of the ~~Tag-Along Units. The Board shall promptly deliver~~ same representations and warranties), at such Participating Member’s election, a ~~copy~~ number of ~~the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling~~ such Participating Member~~) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A~~ ’s Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (ia) the quotient “x” divided by “y”, where “x” equals the aggregate number of ~~Class A~~ Units described in the Sale Notice, and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is where “y” equals the aggregate number of ~~Class A~~ Units ~~and Class B Units held~~ owned by the Selling Member(s) times (b) the number of Units owned by such Participating Member. Each Selling Member ~~and all Tag~~ agrees to use commercially reasonable efforts to obtain the agreement of the prospective transferee(s) to the participation of the Participating Members ~~(its “Tag-Along Portion”)~~in the contemplated Transfer, and ~~the~~ each Selling Member ~~shall~~ agrees not ~~consummate~~ to Transfer any Units to the ~~Tag-Along Sale unless~~ prospective transferee(s) if any such ~~portion~~ transferee declines to allow the participation of the ~~Class A Units or Class B Units (as applicable)~~ Participating Members in accordance with the terms of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Membersthis Section 10.5. (~~c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (~~b) ~~above, then it shall provide~~ In the ~~Selling Member with written irrevocable notice specifying~~ event that the ~~number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall~~ Members have not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right elected to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Salecontemplated Transfer, the Selling Member ~~shall give notice thereof~~ may, subject to the ~~participating Tag Members~~provisions of this Article 10, ~~shall remit to each such Tag Member~~ Transfer the ~~total consideration for the Class A~~ Units ~~or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed~~ pursuant to ~~Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and~~ the terms ~~thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained~~ set forth in ~~this Section 3.5 to~~ the ~~contrary, no Selling Member shall be liable to any Member based on~~ Sale Notice during the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.ninety

Appears in 1 contract

Samples: Joint Venture Formation and Limited Liability Company Investment Agreement (American Well Corp)

Tag-Along Rights. (a) ~~Subject~~ Excluding any Transfer to a ~~Member first~~ Permitted Transferee, if, after complying with Section ~~3.4~~ 9.3, (i) the Dominion Member proposes to Transfer all (but not less than all) of its Class A Units to a Third Party (the “Tag-Along Transferee”) and ~~provided~~ (ii) the ~~Company and the ROFR Members have~~ Dominion Member does not ~~purchased all of the Units proposed to be Transferred~~ (or is not entitled to) exercise its rights under Section ~~3.4~~9.4 (a “Tag Sale” and, ~~each time a Class A Member~~the Dominion Member in such capacity the “Tag Seller”), ~~Class B Member or group of Class A Members and/or~~ then the Class B Members ~~acting jointly (collectively,~~ shall have the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) right (a “Tag-Along Right”) but not the obligation to require such Third Party to purchase from such Class B Member its Tag Eligible Units. At least thirty (30) days prior to the anticipated closing date of such Tag Sale, the Tag Seller shall make a written offer (the “Participation Offer”~~), then~~ ) to the ~~Selling Member must comply with the provisions~~ Class B Members (who shall act together for purposes of this Section ~~3.5. The Selling Member shall inform~~ 9.5) to include in the ~~Board by notice in writing (~~proposed Tag Sale up to the ~~“Tag-Along Notice”) (~~number of Units that equals the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity product of the ~~proposed transferee~~total number of Units, ~~and~~ multiplied by the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Requested Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5Seller Percentage. (b) ~~Each~~ The Participation Offer shall describe the terms and conditions of the proposed Tag ~~Member shall have the right and option~~Sale, ~~exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of~~ including (i) the aggregate number of ~~Class A~~ Units ~~and Class B Units~~ proposed to be ~~acquired~~ sold by the ~~purchaser~~Tag Seller in the Tag Sale, ~~multiplied by~~ (ii) ~~a fraction,~~ the ~~numerator~~ percentage such number represents of ~~which is~~ the total number of ~~Class A~~ outstanding Units ~~or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units~~ then held by the ~~Selling Member and all~~ Tag ~~Members~~ Seller (~~its~~ the “~~Tag-Along Portion~~Requested Tag Seller Percentage”), ~~and~~ (iii) the ~~Selling Member shall not consummate~~ per Unit purchase price proposed to be paid by the Tag-Along ~~Sale unless~~ Transferee for such ~~portion~~ Units, (iv) the maximum number of ~~the Class A~~ Units or that each Class B ~~Units (as applicable) of such Tag~~ Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes will be permitted to include in the ~~Tag-Along Sale~~ Tag Sale, which shall be calculated by multiplying (~~which~~ A) the Requested Tag Seller Percentage by (B) the number of Units held by such ~~number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date~~ Class B Member (the “~~Tag-Along Notice Period~~Tag Eligible Units”), on the same terms and conditions as the Tag Seller’s Units and (v) ~~and shall simultaneously provide a copy of such notice to~~ the ~~Company. Promptly upon request of the Seller Member, and in any event prior to the consummation~~ name of the Tag-Along ~~Sale, each~~ Transferee and the proposed amount and form of consideration to be received in such Tag ~~Member that has exercised its right to participate~~ Sale. The Participation Offer shall be conditioned upon (A) the consummation of the transactions contemplated in the Participation Offer with the Tag-Along ~~Sale by providing~~ Transferee named therein and (B) the ~~required notice to~~ Class B Members’ execution and delivery of all agreements and other documents as the ~~Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents~~ Tag Seller is required to ~~be executed or delivered by~~ execute and deliver in connection with such Tag Sale. Each participating Class B Member shall make the same customary representations and warranties as the Tag Seller, including representations and warranties regarding such Class B Member’s title to and ownership of its Units and its authority to Transfer, free and clear of all Encumbrances, its Units, and shall take all actions reasonably requested by the Tag Seller in connection with the ~~Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member~~ consummation of the ~~consideration therefor. (d) Each Member~~ Tag Sale including tendering its Units free and clear of all Encumbrances and consenting to, voting for and waiving any dissenters rights, appraisal rights or similar rights and participating in ~~the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units~~ any exchange or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make transaction required in connection with such ~~Tag-Along~~ Tag Sale; provided, however, that (i) ~~any~~ no such ~~Tag~~ Class B Member shall ~~not~~ be liable for ~~the~~ any breach of any covenant or representation and warranties by ~~the Selling~~ any other Member and vice versa, (ii) in no event shall any ~~Tag~~ such Class B Member be required to make representations and warranties or provide indemnities that relate specifically to any other ~~than (A)~~ Member, such as indemnification with respect to representations and warranties given by a Member regarding such Member’s ~~valid~~ title to and ownership of its ~~Units~~Units and its authority to Transfer, ~~(B) the Transfer of those Units to the proposed Third Party transferee~~ free and clear of all ~~Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization~~Encumbrances, ~~authority~~its Units), power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or or, other indemnification obligations ~~(including escrow/holdback arrangements)~~ regarding the business of the Company and its Subsidiaries in connection with the ~~Tag-Along~~ Tag Sale or other liabilities assumed pursuant to this Section 9.5 shall be shared by the Members pro rata on a several (but not joint) basis ~~by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment~~ in proportion to the ~~participating Members pursuant~~ consideration to ~~such Tag-Along~~ be received in the Tag Sale ~~and~~ by each Member (provided, that in no event shall a Member be required to deliver a guaranty or other form of credit support in respect of indemnification or other obligations under the definitive documents); (iv) in no event shall a Member be responsible for any liabilities or indemnities in connection with such Tag ~~Member shall be obligated to agree to indemnification obligations~~ Sale in excess of the proceeds received by such ~~Tag~~ Member in the Tag Sale, except with respect to fraud by such Member and (v) in no event shall a Member be required to enter into any non-compete, non-solicit or similar restrictive covenants in connection with such Tag Sale. (c) The Class B Members shall have the right, exercisable by delivery of a written notice to the Tag Seller at any time within fifteen (15) days after delivery of the Participation Offer, to request to include in such Tag Sale the maximum number of their aggregate Tag Eligible Units, which notice shall constitute such Class B Members’ binding agreement to sell such Tag Eligible Units on the terms and subject to the conditions applicable to the Tag Sale (a “Participation Notice”). Without limitation to the other requirements of this Section 9.5 with respect to such Tag Sale, Tag Seller shall only consummate such Tag Sale if the Tag-Along Transferee agrees to purchase all, but not less than all, of the Tag Eligible Units requested to be included in any Participation Notice delivered to the Tag Seller in accordance with this Section 9.5(c). At the request of the Class B Members, any such Tag Sale shall be structured in a manner that results in a disposition of the securities of each Blocker Corporation, rather than a disposition of the interests in the Company owned, directly or indirectly, by such Blocker Corporation. (d) In connection with distributions or payments to Members pursuant to a Tag Sale, each Member (i) shall be proportionately allocated each form of consideration received, and (ii) shall receive the same proportion of the aggregate consideration from such Tag Sale that such Member would have received if such aggregate consideration were Distributable Cash (and such aggregate consideration shall be deemed Distributable Cash for all purposes of this Section 9.5, except that such proceeds must be distributed promptly after receipt by the Company) that was being distributed by the Company pursuant to Article V. (e) The Class B Units sold in any Tag Sale shall entitle the Class B Members to receive their respective Class B Percentage Interest of the amount (if any) that the Class B Members would have received in respect of such Class B Units if the Tag Sale value had been distributed by the Company in a complete liquidation pursuant to the rights and preferences set forth in Article V in effect immediately prior to such Tag Sale. If any Class B Member receives consideration from such Tag Sale in a manner other than as contemplated by such rights and preferences or in excess of the amount to which such Member is entitled in accordance with such rights and preferences, then such Member shall take such action as is necessary so that such consideration shall be immediately reallocated among and distributed to the Members in accordance with such rights and preferences. (f) If the Tag Seller or its Affiliate(s) are subject to any ~~Tag Member~~ indemnification holdback (iincluding by means of an escrow) ~~does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included~~ in the ~~Tag-Along Sale or (ii) fails~~ consideration paid to ~~deliver to the Selling Member its~~ it for Class A Units or sold pursuant to this Section 9.5, each Class B ~~Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag~~ Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to ~~this Section 3.5~~ the same indemnification holdback (including by means of an escrow) as the Tag Seller or its Affiliate(s), in accordance with its Class B Percentage Interest of the consideration that is Distributable Cash (as determined by Article V ) paid by the acquiring party; provided, however, that the amount of Distributable Cash, and the recipients thereof, shall ~~require a Tag-Along Notice~~be determined by application of Article V at the time of each distribution, and each such determination shall only take into account Distributable Cash actually distributed at such time or prior to such time. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence Each of the ~~completion and time~~ Members shall bear his, her or its pro rata share (based upon the allocation set forth in Section 9.5(d)(ii) by treating the costs as reducing the amount of ~~completion~~ Distributable Cash) of the ~~Tag-Along Sale~~ fees and expenses incurred in the ~~terms thereof as may be reasonably requested by any such~~ Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all ~~participating Members~~Members and are not otherwise paid by the Company or the acquiring party. ~~Costs~~ Other fees, costs and expenses incurred by or the Members on their own behalf ~~of a Tag Member for its sole benefit (which shall be borne by such Tag Member)~~ will not be considered costs of the transaction hereunder or as being incurred for the benefit of all ~~participating Members~~the Members and shall be the responsibility of each applicable Member. (jh) ~~No Assignee~~ The closing of the purchase of the Membership Interests of any Class B Member that delivers a Participation Notice will take place concurrently with the closing of the sale of the Tag Seller’s Membership Interests to the proposed Tag-Along Transferee. In the event that no Class B Member exercises its Tag-Along Right, the Tag Seller shall have one hundred eighty (180) days after the date of the Participation Offer to sell to the proposed Tag-Along Transferee identified therein the Membership Interests set forth in such Participation Offer at a price that is not higher than the price set forth in such Participation Offer, and if such Tag Sale is not consummated on or before such date, the Tag Seller shall again be required to comply with the terms set forth in this Section 9.5 with respect to such Tag Sale; provided, that if a definitive agreement providing for the consummation of such Tag Sale is executed within such one hundred eighty (180)-day period but such Tag Sale has not been consummated at the expiration of such one hundred eighty (180)-day period because such transaction remains subject only to conditions relating to any Governmental Approval (whether or not also subject to other ministerial conditions), such deadline shall be ~~admitted~~ extended for so long as ~~a Substitute Member except as provided~~ the Tag Seller is diligently pursuing the receipt of, and using commercially reasonable efforts to obtain, such Governmental Approval but in ~~Section 3.9~~no event shall such extension be more than six (6) months.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Virginia Electric & Power Co)

Tag-Along Rights. (a) Subject to ~~a Member first complying with~~ Section ~~3.4 and provided~~ 8.04(j), if (x) prior to the ~~Company and the ROFR Members have not purchased all~~ fifth anniversary of the ~~Units~~ Closing, a proposed Transfer is approved by the Majority Investors pursuant to ~~be Transferred under~~ Section ~~3.4~~8.01(a)(ii), ~~each time a Class A~~ any Member, ~~Class B Member~~ or ~~group of Class A Members and/or Class B Members acting jointly~~ (~~collectively~~y) a Majority Investor or its Permitted Transferee (as applicable, the “~~Selling Member~~Tag-Along Seller”) ~~desires~~ proposes to ~~make~~ Transfer any ~~Transfer of all or any portion of the Class A~~ Units ~~and/or Class B Units held by such Member(s)~~ to any Third ~~Party, other than to~~ Party or Third Parties including for the purposes of this Section 8.04 the Company or any of its Subsidiaries) (the “Tag-Along Purchaser”) in a ~~Permitted Transferee of such Member(s)~~ single transaction or in ~~accordance with Sections 3.6, 3.7 and 3.8, such that~~ a series of related transaction (the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the ~~Selling Member must comply~~ Tag-Along Seller shall first, by written notice to the Company, which shall provide each of the Qualifying Members with ~~the provisions~~ a copy of ~~this Section 3.5. The Selling Member shall inform the Board by~~ such notice ~~in writing~~ (the “Tag-Along Notice”~~) (~~), offer the ~~date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer~~ Qualifying Members (the “Tag-Along ~~Units~~Offer”), ) the ~~identity~~ opportunity to participate in such Transfer in accordance with this Section 8.04. (b) The Tag-Along Notice shall identify (i) the class or classes of ~~the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration~~ Units proposed to be ~~received pursuant to a bona fide written agreement for~~ sold by the Tag-Along Seller (the “Offered Securities”), (ii) the fraction expressed as a percentage, determined by dividing the number of units of the specified class of Units to be purchased from the Tag-Along Seller in such Tag-Along Sale by the number of units of such specified class or classes of Units held by such Tag-Along Seller (~~and,~~ the “Tag-Along Sale Percentage”) (it being understood that (x) if the ~~proposed Transfer is to be wholly or partly for consideration other than money~~Tag-Along Seller owns any Vested Class B Units, the Tag-Along ~~Notice~~ Sale Percentage shall ~~state~~ be calculated on a post-conversion basis after giving effect to Section 8.04(e), and (y) the ~~proposed price as being equal to~~ Company shall reasonably cooperate with the ~~amount~~ Tag-Along Seller in respect of the ~~monetary consideration, if any, plus the Fair Market Value~~ determination of the ~~other consideration~~Tag-Along Sale Percentage), (iii) the purchase price for the Offered Securities (the “Tag-Along Price”~~). If~~ ) and the form of consideration for which the Tag-Along ~~Units are~~ Price is proposed to be ~~Transferred~~ paid, (iv) the name and address of each proposed Third Party transferee, (v) the proposed Transfer date and (vi) all other ~~than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value~~ material terms and conditions of the Tag-Along ~~Units. The Board shall promptly deliver~~ Offer, including a ~~copy~~ firm offer by each proposed Third Party transferee to purchase units of the ~~Tag-Along Notice to each Class A Member and Class B Member~~ specified class of Offered Securities. (~~other than~~ c) From the ~~Selling Member) (the “Tag Members”). By giving~~ date of its receipt of the Tag-Along Notice, ~~the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag~~ each Qualifying Member shall have the right ~~and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units~~ (~~as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii)~~ a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along ~~Portion~~Right”), ~~and the Selling Member shall not consummate the~~ exercisable by written notice (“Tag-Along ~~Sale unless such portion of the Class A Units or Class B Units (as applicable~~Response Notice”) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up given to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) Seller within ten (10) days after receipt of the Tag-Along Notice ~~Date~~ (such time period, the “Tag-Along Notice Period”~~) and shall simultaneously provide a copy of such notice~~ ), to ~~the Company. Promptly upon~~ request ~~of the Seller Member, and in any event prior to the consummation of~~ that the Tag-Along ~~Sale~~Seller include in the proposed Transfer a number of Class A Units (on a post-conversion basis, ~~each~~ as described in clause (e) below) held by such ~~Tag~~ Qualifying Member ~~that has exercised its right to participate~~ (such number of units shall not in any event exceed the Tag-Along Sale Percentage of the total number of units of the specified class of Offered Securities held by ~~providing the required notice to the Selling~~ such Qualifying Member ~~within~~ on a post-conversion basis, as described in clause (e) below); provided, however, that the Tag-Along Notice Period shall ~~deliver to a representative of the Selling Member designated~~ be five (5) days in the ~~Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer~~ event of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale ~~shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such~~ involving a Regulatory Transfer. The Qualifying Members that exercise their Tag-Along ~~Sale; provided~~Rights hereunder (the “Tagging Persons”) shall, ~~that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa~~upon request, ~~(ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units~~ deliver to the ~~proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization~~Tag-Along Seller, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along ~~Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available~~ Response Notice, wire transfer instructions for ~~distribution or~~ payment ~~to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess~~ of the ~~proceeds received by~~ purchase price for such ~~Tag Member in~~ Units of such ~~Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period~~ Tagging Persons to ~~have all or any part of its Tag-Along Portion~~ be included in the Tag-Along ~~Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively~~Sale, together with, in respect of Management Members, a ~~“Tag~~limited power-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tagof-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after attorney authorizing the Tag-Along ~~Failure in which~~ Seller to Transfer ~~all (but not less than all) of~~ such Units on the ~~applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on~~ terms ~~not more favorable to the Selling Member than were contained~~ set forth in the Tag-Along Notice~~; thereafter, any proposed Transfer by such Selling Member of~~ . The price per Class A ~~Units and/or Class B Units shall~~ Unit (on a post-conversion basis, as described in clause (e) below) to be ~~subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after~~ received by each Member will be determined as if the ~~consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration~~ Company had been sold for the ~~Class A Units or Class B Units (as applicable) sold~~ valuation implied by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along ~~Sale~~ Price (by extrapolating such valuation to a sale of all of the Units) and the proceeds of such sale had been distributed by the Company in complete liquidation pursuant to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided rights and preferences set forth in Section ~~3.9~~5.02.

Appears in 1 contract

Samples: Limited Liability Company Agreement (PSAV, Inc.)

Tag-Along Rights. (a) ~~Subject~~ In the event at any time after the Stockholders, collectively, Transfer at least an aggregate of 20% of the shares of Common Stock owned by them as of the date of the Securities Purchase Agreement and prior to the earliest to occur of (i) the date the Purchaser and its Affiliates are no longer bound by the provisions of Section 2.1 or (ii) the date the Purchaser and its Affiliates no longer Beneficially Own in excess of 5% of the then outstanding shares of Common Stock for a period of 90 consecutive days, any Stockholder (each a "Selling Stockholder") proposes to Transfer any shares of Common Stock as of the date hereof owned by such Stockholder to a ~~Member first complying with Section 3.4 and provided~~ non-Affiliated third party, the ~~Company~~ Selling Stockholder(s) shall have the obligation, and the ~~ROFR Members~~ Purchaser shall have ~~not purchased all~~ the right (the "Tag-Along Right"), to require the proposed transferee (the "Transferee") to purchase (the "Tag-Along Transfer") from the Purchaser or any of ~~the Units proposed to be Transferred under Section 3.4, each time~~ its Affiliates a ~~Class A Member, Class B Member or group~~ number of shares of Class A ~~Members and/or Class B Members acting jointly~~ Common Stock up to or equal to the product (~~collectively,~~ rounded up to the ~~“Selling Member”~~nearest integer) ~~desires to make any Transfer~~ of ~~all or any portion~~ (i) the quotient determined by dividing the number of shares of the Class A ~~Units and/or Class B Units~~ Common Stock held by the Purchaser and its Affiliates by the aggregate number of shares of Common Stock owned by the Selling Stockholder(s) and the Purchaser and its Affiliates (calculated with respect to the Purchaser to include any shares of Class A Common Stock that may be received upon conversion of outstanding Notes, only if such ~~Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or~~ Notes may then be immediately converted in accordance with ~~Sections 3.6, 3.7~~ their terms prior to or upon such Transfer and ~~3.8, such~~ the Purchaser irrevocably notifies the Company that it intends to convert Notes prior to or concurrently with the Tag-Along Transfer and Transfer the shares of Class A ~~Units and/or~~ Common Stock into which they convert to the Transferee of part of the exercise of its Tag-Along Right and it subsequently converts such Notes, in which case only such shares of Class ~~B Units~~ A Common Stock obtained upon conversion of Notes prior to or concurrently with the Tag-Along Transfer shall be included for purposes of calculating the number of shares owned by the Purchaser and its Affiliates), and (ii) the number of shares of the Common Stock proposed to be transferred ~~represent~~ in the ~~aggregate greater than five percent (5%)~~ contemplated sale, and at the same price per share and upon the same terms and conditions offered to the Selling Stockholder(s). The number of shares of Common Stock to be sold by the ~~aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “~~Selling Stockholders in such Tag-Along ~~Sale”)~~Transfer shall be reduced by the number of shares of Common Stock that the Purchaser elects to require the Transferee to purchase in such Tag-Along Transfer pursuant to the Purchaser's right contained in the preceding sentence. By way of example only, if Stockholders intend to sell 1,000 shares of Common Stock to a third party, and at such time such Stockholders own 75,000 shares of Class A Common Stock and the Purchaser owns 20,000 shares of Class A Common Stock and has notified the Company that it intends to convert Notes to obtain an additional 5,000 shares of Class A Common Stock (although it has Notes convertible into more shares of Class A Common Stock) and sell such shares in connection with the exercise of its Tag-Along Right, then the Purchaser, if it gives irrevocable notice of such conversion and intention to sell, shall be entitled to Transfer 250 shares of Class A Common Stock exercising its Tag-Along Right in such sale (calculated by solving for: (25,000 / (25,000 + 75,000)) x 1,000) and the Selling ~~Member must comply~~ Stockholder shall be entitled to Transfer the remaining 750 shares of Class A Common Stock in such tag-along sale. (b) The provisions of Section 3.2(a) shall not apply to any Transfer by any Stockholder in connection with a Transfer that is (i) an underwritten offering of securities registered under the ~~provisions~~ Securities Act, (ii) a sale of securities (including Derivative Securities) that constitutes a Rule 144A/Reg S Transaction, (iii) exempt from registration under the Securities Act as a result of the applicability of Rule 144 promulgated thereunder; provided that, from (I) the First Closing Date to ______, 2000,(7/) the Stockholders may not, directly or indirectly, Transfer any shares of Common Stock pursuant to this Section 3.2(b), if after giving effect to such -------- (7/) Six months from First Closing Date. Transfer, the Stockholders would collectively no longer Beneficially Own at least 80% of the number of shares of Common Stock owned by them on the date of the Securities Purchase Agreement and (II) from _________, 2000(8/) to _________, 2001,(9/) the Stockholders may not, directly or indirectly, Transfer any shares of Common Stock pursuant to this Section 3.2(b), if after giving effect to such Transfer, the Stockholders would collectively no longer Beneficially Own a number of shares of Common Stock equal to the difference between (x) 60% of the number of shares of Common Stock owned by them on the date of the Securities Purchase Agreement minus (y) the shares of Common Stock Transferred pursuant to clause (I) of this Section ~~3.5.~~ 3.2(b). (c) The Selling ~~Member~~ Stockholder(s) shall ~~inform the Board by~~ give written notice ~~in writing~~ (the “"Tag-Along Notice”") (to the ~~date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such~~ Purchaser of each proposed Transfer ~~(the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed~~ giving rise to ~~be received pursuant to a bona fide written agreement for~~ the Tag-Along ~~Units~~ Right which shall state (~~and~~i) the maximum number of shares of Class A Common Stock proposed to be Transferred, if (ii) the proposed ~~Transfer is to~~ purchase price per share of Class A Common Stock, (iii) the name of the transferee, and (iv) the proposed closing date for the Transfer, which date shall be ~~wholly or partly for consideration other~~ no sooner than ~~money,~~ 30 days from the date the Tag-Along Notice ~~shall state~~ is received (as determined under Section 4.6 hereof) by the ~~proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “~~Purchaser. The Tag-Along ~~Price”~~Notice shall also state any other material terms and conditions of the proposed Transfer, and shall include copies of the contemplated definitive agreements for the offer (to the extent available and, if not available, drafts thereof that are the most recent versions thereof) and all writings between the Selling Stockholder(s) and the transferee necessary to establish the terms and conditions of the offer. The Tag-Along Notice shall not be effective unless and until (A) the Tag- Along Notice shall be accompanied with a certificate of the Selling Stockholder(s) to the Purchaser stating that the offer has been approved by the board of directors (or the equivalent if the offeror is not a corporation) of the offeror (if required by such offeror and solely to the Selling Stockholder's knowledge based on representations and warranties of the offeror)~~. If~~ , and that such Selling Stockholder(s) have made the offeror aware of the rights of the Purchaser contained in, and that any Transfer by the Selling Stockholders is subject to this, Section 3.2(b), (B) the consideration to be received by the Purchaser in the Tag-Along ~~Units~~ Transfer consists entirely of cash and/or securities of a Person, which securities are ~~proposed to be Transferred other than for cash~~ registered under the Exchange Act and are traded on the New York Stock Exchange, the American Stock Exchange, The Nasdaq National Market or any successor or equivalent securities exchange, and (C) the offeror shall furnish evidence satisfactory to the ~~Selling Member,~~ Purchaser in its reasonable judgment as to the ~~consideration for~~ financial ability or resources of such offeror to consummate the proposed purchase if it is a cash offer. -------- (8/) Six month anniversary of First Closing Date. (9/) 18 month anniversary of First Closing Date. (d) The Tag-Along ~~Units shall~~ Right provided by this Section 3.2 must be ~~deemed to be~~ exercised by the ~~Fair Market Value of~~ Purchaser within the ~~Tag~~30-~~Along Units. The Board shall promptly deliver a copy~~ day period following the receipt (as determined under Section 4.6 hereof) of the Tag-Along Notice by delivery prior to ~~each Class A Member and Class B Member~~ the end of such 30-day period of a written notice (~~other than~~ the "Acceptance Notice") to the Selling ~~Member~~Stockholder(s) (stating the ~~“Tag Members”). By giving the~~ Purchaser's desire to exercise its Tag-Along ~~Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in~~ Right under this Section ~~3.5. (b) Each Tag Member shall have the right~~ 3.2 and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of shares of Class A ~~Units or Class B Units (as applicable) that such Tag Member wishes~~ Common Stock it desires to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Companysell. ~~Promptly upon request~~ The tender of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Acceptance Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units Purchaser shall ~~be determined~~ constitute agreement by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects Purchaser to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company sell in connection with the Tag-Along ~~Sale shall be shared~~ Transfer the amount of securities specified and at the price specified in the Acceptance Notice and otherwise on ~~a several (but not joint) basis~~ the terms and conditions set forth in the notice provided by the ~~participating Members as if such amount reduced the aggregate proceeds available for distribution or payment~~ Selling Stockholder to the ~~participating Members pursuant~~ Purchaser. Failure to ~~such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of~~ deliver the ~~proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end~~ Acceptance Notice within 30 days after delivery of the Tag-Along Notice ~~Period~~ shall be deemed a determination by the Purchaser not to ~~have all or any part of~~ exercise its Tag-Along ~~Portion included in~~ Right and a waiver of such right. If the sale contemplated by the Tag-Along ~~Sale or (ii) fails to deliver to~~ Notice is not consummated on the ~~Selling Member its Class A Units or Class B Units (~~same terms and conditions as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than those contained in the Tag-Along Notice for any reason, then the restrictions provided for herein shall again become effective, and ~~on terms not more favorable to~~ the Selling ~~Member than were contained in the Tag-Along Notice; thereafter,~~ Stockholders may not Transfer any ~~proposed Transfer by such Selling Member~~ shares of Class A ~~Units and/or Class B Units shall be subject to~~ Common Stock without complying with the provisions of this Section ~~3.5 and shall require a Tag-Along Notice~~3.2. (ge) ~~Promptly~~ The closing of the purchase by the Transferee of the shares of Class A Common Stock owned by the Purchaser shall be held (i) at the principal office of the Company on the same day as the closing of the sale from the Selling Stockholder(s) to the Transferee, or (ii) at such other time and place as the parties to the applicable transaction may agree; provided that the date of such closing shall be extended to a later date not to exceed 60 days after ~~the consummation~~ such date of such closing if such closing has not been consummated by such date of closing as a result solely of a ~~Tag-Along Sale~~failure to obtain a required consent or approval of any Governmental Entity and the parties are using reasonable commercial efforts to obtain such required consent or approval; provided, further, that such closing shall be extended until such required regulatory consents and approvals are obtained if the delay in obtaining such required regulatory consents and approvals is a result of the failure of the Company to cooperate in a commercially reasonable manner with the Purchaser in obtaining such required consents and approvals. At such closing, the Selling ~~Member~~ Stockholder(s) and the Purchaser shall ~~give notice thereof~~ each deliver certificates representing the shares of Class A Common Stock being sold, duly authenticated by another officer of the corporation, for transfer and accompanied by all requisite transfer taxes, if any, and such shares of Class A Common Stock shall be free and clear of any Liens other than those arising hereunder. The Purchaser shall further represent and warrant that it Beneficially Owns such shares of Class A Common Stock, that it or its designee is the record holder of such shares and that the delivery of such shares shall convey good and marketable title to such shares. At such closing, the ~~participating Tag Members,~~ Transferee shall ~~remit to each such Tag Member the total consideration~~ deliver payment in full in immediately available funds for the Class A ~~Units or Class B Units (as applicable) sold~~ Common Stock purchased by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag MemberTransferee. (hf) ~~Notwithstanding anything contained~~ From the date hereof until this Agreement is no longer in ~~this Section 3.5 to~~ effect, the ~~contrary~~Stockholders will not amend, ~~no Selling Member shall be liable to~~ modify or supplement in any ~~Member based on~~ manner or grant any consent under the ~~failure~~ letter dated the date of ~~a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs~~ the Securities Purchase Agreement among the Stockholders and ~~any other costs arising pursuant to such Tag-Along Sale to~~ Xxxxxxx Xxxxxxxx without the ~~extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (~~Purchaser's prior consent, which ~~shall be borne by such Tag Member)~~ will not be ~~considered incurred for the benefit of all participating Members~~unreasonably withheld, delayed or conditioned. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Stockholders Agreement (Metromedia Fiber Network Inc)

Tag-Along Rights. (ai) ~~Subject~~ If American Capital, Laminar, USRG or any of their successors or assigns (collectively, the “Controlling Member(s)”) desires to sell, or otherwise dispose of any Units owned by such Controlling Member to any Persons (collectively, the “Purchaser”) other than to an Affiliate of such Controlling Member, each other Member shall have the right to require, as a condition to such sale or disposition, that the Purchaser purchase from such Member ~~first complying with Section 3.4~~ (each, a “Tag Along Member”) on the same terms and ~~provided~~ conditions as involved in such sale or disposition by the selling Controlling Member, such number of Units held by the Tag Along Member which is equal to the product of the total number of Units owned by the Tag Along Member times a fraction, the numerator of which is the total number of Units to be purchased by the Purchaser and the denominator of which is the aggregate number of Units held by the selling Controlling Member and all of the Tag Along Members (a “Tag Along Sale”). The purchase price paid to the Tag Along Member shall be the same percentage of the aggregate consideration such Member would have received if the aggregate consideration payable to the Members in the Tag Along Sale had been received and distributed by the Company in complete liquidation pursuant to Section 14.2(d) of this Agreement (without reduction or offset for debts or liabilities of the Company or its Subsidiaries that have been agreed to be assumed, or taken subject to, by the Purchaser, and as a result, have already been taken into account in the calculation of the purchase consideration), provided if a Tag Along Sale is executed with respect to less than all of the outstanding Units, then for purposes of determining the consideration payable to each Tag Along Member, the distributions that each Member would receive pursuant to Section 14.2(d) shall be calculated after reducing the distributions payable to the Members pursuant to each of Sections 13.1(a), 13.1(b), 13.1(c) and 13.1(d) to equal the distributions payable to each Member pursuant to such Sections that are allocable to the Units being sold in the Tag Along Sale (provided (A) the Class A Preferred Return and Undistributed Investment Amount allocable to the Class A Units being sold in the Tag Along Sale shall equal (1) the aggregate unpaid Class A Preferred Return and aggregate Undistributed Investment Amount of all Class A Members, divided by (2) the number of outstanding Class A Units held by all Class A Members, multiplied by (3) the number of Class A Units being sold in the Tag Along Sale; (B) the Undistributed Investment Amount allocable to the Class B Units sold in the Tag Along Sale by Members other than the Controlling Members shall equal (1) the aggregate Undistributed Investment Amount of all Class B Members other than the Controlling Members, divided by (2) the number of outstanding Class B Units held by all Class B Members other than the Controlling Members, multiplied by (3) the number of Class B Units being sold in the Tag Along Sale by Class B Members other than the Controlling Members; and (C) the portion of the amounts payable to the Controlling Members pursuant to Section 13.1(d) allocable to the Class B Units sold by the Controlling Members in the Tag Along Sale shall equal (1) the portion of the $3,713,000 that remains to be distributed to the Controlling Members pursuant to Section 13.1(d), divided by (2) the number of outstanding Class B Units held by the Controlling Members, multiplied by (3) the number of Class B Units being sold in the Tag Along Sale by the Controlling Members). If the Tag Along Member wishes to so participate in any such sale or disposition, it shall notify the selling Controlling Member of such intention as soon as practicable after receipt of notice from the selling Controlling Member of such Controlling Member’s intention on selling its Units, and in all events within thirty days after receipt thereof. In the event that the Tag Along Member shall elect to participate in such sale or disposition, the Tag Along Member shall individually communicate such election to the selling Controlling Member. The selling Controlling Member and the ~~ROFR~~ Tag Along Members ~~have not purchased all~~ shall sell to the Purchaser all, or at the option of the Purchaser, any part of the Units proposed to be ~~Transferred under Section 3.4, each time~~ sold by them on the same date at a ~~Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively,~~ price not less than the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 price and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary considerationconditions, if any, ~~plus~~ not more favorable to the ~~Fair Market Value~~ Purchaser than those originally offered; provided, however, that any purchase of less than all of such Units by the Purchaser shall be made from each of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A selling Controlling Member and ~~Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to~~ the Tag Along Members ~~an option to sell their Class A Units or Class B Units (as applicable)~~ based upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of ~~Class A~~ Units then owned by the selling Controlling Member or ~~Class B Units (~~a Tag Along Member, as ~~applicable) held by such Tag Member~~ the case may be, and the denominator of which is the aggregate number of ~~Class A Units and Class B~~ Units held by the ~~Selling~~ selling Controlling Member and all Tag ~~Members (~~Along Members. The selling Controlling Member shall use its ~~“Tag-~~best efforts to obtain the agreement of the Purchaser to the participation of each Tag Along ~~Portion”)~~Member in the contemplated sale, and ~~the Selling Member~~ shall not ~~consummate the Tag-Along Sale unless~~ sell any Units to such ~~portion of the Class A Units or Class B Units (as applicable) of~~ Purchaser if such ~~Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not~~ Purchaser declines to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among permit the Tag Along Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section ~~3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor~~9.5(a). (dii) Each Member ~~participating~~ that participates in ~~the Tag-~~a Tag Along Sale including any Controlling Member (each a “Participating Member”) shall ~~receive a portion~~ be obligated to pay such Participating Member’s pro rata share of the ~~Tag-Along Price equal to~~ expenses incurred by the ~~amount such Member would have received~~ Participating Members in connection with respect to the ~~Class A Units or Class B Units~~ Tag Along Sale (as ~~applicable) Transferred~~ determined based upon the consideration to be received by such Participating Member in the ~~Tag-~~Tag Along Sale ~~upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold~~ as compared to the ~~proposed Third Party transferee, the~~ aggregate ~~purchase price by reference to which the~~ consideration ~~payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed~~ to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected received by all ~~of the disputing Members), which determination shall be final and binding on~~ Participating Members in such ~~disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any~~ Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale~~; provided, that (i~~) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all ~~participating Members~~of the Participating Members and are not otherwise paid by the Company or the Purchaser. Costs incurred for the benefit of all Participating Members shall include, but not be limited to, the reasonable fees and expenses of one counsel for such Participating Members as a group, which counsel shall be selected by the Controlling Member(s). No Participating Member shall be obligated to pay more than such Participating Member’s pro rata share (excluding modest expenditures for such Participating Member’s own postage, copies, etc.) of reasonable expenses incurred in connection with the Tag Along Sale (as determined based upon the consideration to be received by such Participating Member in the Tag Along Sale as compared to the aggregate consideration to be received by all Participating Members in such Tag Along Sale) to the extent such costs are incurred for the benefit of all Participating Members and are not otherwise paid by the Company or the Purchaser, it being understood that costs incurred by or on behalf of a ~~Tag~~ Participating Member for ~~its~~ such Participating Member’s sole benefit ~~(which shall be borne by such Tag Member)~~ will not be considered ~~incurred~~ costs of the transaction hereunder, and provided that a Participating Member’s liability for its pro rata share of such allocated expenses shall be limited to the ~~benefit of all participating Members~~total purchase price received in cash by that Participating Member for that Participating Member’s Units. (jiii) ~~No Assignee~~ Each Participating Member shall be ~~admitted~~ obligated to join on a pro rata and several (but not joint) basis (based upon the consideration to be received by the Participating Member in the Tag Along Sale as compared to the aggregate consideration to be received by all Participating Members in such Tag Along Sale) in any indemnification or other obligations that the Controlling Member(s) agree to provide in connection with such Tag Along Sale (other than any such obligations that relate specifically to a ~~Substitute~~ holder of such Units); provided that no Participating Member ~~except~~ shall be obligated to indemnify or hold harmless the transferees with respect to an amount in excess of the net cash proceeds and an amount equal to the fair market value (determined at the time of such Tag Along Sale) of the non-cash proceeds received by such Participating Member in respect of such Tag Along Sale. (iv) For purposes hereof, any offer from a Purchaser to acquire the equity securities of a Controlling Member (and this section shall apply to the acquisition of equity securities in an Affiliate of a Member effected primarily with the intent of avoiding the provisions hereof) shall be treated in the same manner as ~~provided in Section 3.9~~an offer by such Purchaser to purchase the Units held by such Controlling Member.

Appears in 1 contract

Samples: Limited Liability Company Agreement (ASAlliances Biofuels, LLC)

Tag-Along Rights. (a) ~~Subject to a Member first complying with Section 3.4 and provided~~ At any time after the ~~Company and the ROFR Members have not purchased all~~ date of ~~the Units proposed to be Transferred under Section 3.4~~this Agreement, ~~each time a Class A Member~~if Cannae, ~~Class B Member~~ THL or ~~group of Class A Members and/or Class B Members acting jointly~~ Parent (~~collectively,~~ the “Selling ~~Member~~Holder”) ~~desires~~ proposes to ~~make~~ Transfer any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (~~taken together as a single class) (a~~ the “Tag-Along Sale”) in accordance with this Agreement, the Selling Holder shall, before such Transfer deliver to the Company and to the other Members (the “Other Unit Holders”) at least thirty (30) days prior written notice of such proposed Transfer (the “Sale Notice”) and the terms of such Transfer, including (A) the number of Units to which the Transfer relates (the “Offered Class A Units”), ~~then~~ (B) the fraction expressed as a percentage, determined by dividing the number of units of Class A Units to be purchased from the Selling ~~Member must comply~~ Holder in such Transfer by the total number of Class A Units held by such Selling Holder (the “Tag-Along Sale Percentage”) (it being understood that (i) if the Selling Holder owns any vested Class B Units, the Tag-Along Sale Percentage shall be calculated on a post-conversion basis after giving effect to clause (c) below, and (ii) the Company shall reasonably cooperate with the ~~provisions~~ Selling Holder in respect of ~~this Section 3.5. The~~ the determination of the Tag-Along Sale Percentage), (C) the name and address of the proposed Transferee and (D) the proposed amount and type of consideration (including, if the consideration consists in whole or in part of non-cash consideration, such information available to the Selling ~~Member shall inform~~ Holder as may be reasonably necessary for the ~~Board~~ other Members to properly analyze the economic value and investment risk of such non-cash consideration) and the terms and conditions of payment proposed by the Selling Holder. (b) Any of the Other Unit Holders may, within twenty-five (25) days of the receipt of the Sale Notice, give written notice ~~in writing~~ (~~the~~ each, a “Tag-Along Notice”) (to the ~~date upon which~~ Selling Holder that such ~~notice is received being~~ Other Unit Holder requests that the ~~“Tag-Along Notice Date”) stating~~ Selling Holder include in the proposed Transfer a number of Units (~~or portion thereof~~on a post-conversion basis as described in clause (c) ~~that are subject to~~ below) held by such ~~proposed Transfer~~ Other Unit Holder (~~the “Tag-Along Units”), the identity~~ such number of ~~the proposed transferee, and the other terms and conditions of such proposed Transfer, including~~ Units shall not in any ~~consideration proposed to be received pursuant to a bona fide written agreement for~~ event exceed the Tag-Along ~~Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount~~ Sale Percentage of the ~~monetary consideration, if any, plus the Fair Market Value~~ total number of Units of the ~~other consideration~~specified class of Units held by such Other Unit Holder on a post-conversion basis, as described in clause (c) below). The Other Unit Holders that exercise their tag-along rights hereunder (the “~~Tag-Along Price~~Tagging Persons”~~). If the Tag-Along Units are proposed to be Transferred other than for cash~~ ) shall, upon request, deliver to the Selling ~~Member~~Holder, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving with the Tag-Along Notice, wire transfer instructions for payment of the purchase price for such Units of such Tagging Persons to be included in the Tag-Along Sale, together with a limited power-of-attorney authorizing the Selling Holder to Transfer such Units on the terms and conditions set forth in the Sale Notice. The price per Unit (on a post-conversion basis, as described in clause (c) below) to be received by each Member ~~shall~~ will be ~~deemed to have granted to~~ determined as if the ~~Tag Members an option to sell their~~ Company had been sold for the valuation implied by the price of the Offered Class A Units ~~or Class B Units~~ in such Tag-Along Sale (~~as applicable~~by extrapolating such valuation to a sale of all of the Units) ~~upon~~ and the ~~terms~~ proceeds of such sale had been distributed by the Company in complete liquidation pursuant to the priorities set forth in ~~this~~ Section ~~3.5~~5.2. (bc) ~~Each Tag Member shall have the right and option, exercisable as set forth below,~~ Any election by any Other Unit Holder to include in the Tag-Along Sale ~~up to that amount of its Class A Units or~~ any vested Class B Units (~~as applicable~~it being understood that no such election can be made in connection with a Tag-Along Sale with respect to unvested Class B Units) ~~equal to~~ shall automatically result in the ~~product~~ conversion of ~~(i)~~ the ~~aggregate~~ applicable number of such Other Unit Holder’s vested Class B Units into a number of Class A Units ~~and~~ equal to the quotient obtained by dividing (x) the sum of the Class B ~~Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator~~ Participation Prices of ~~which is the number of Class A Units or~~ such applicable vested Class B Units (~~as applicable) held by such Tag Member and~~ i.e. the ~~denominator of which is the aggregate number of Class A Units and~~ Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along ~~Sale is equal to up to~~ Sale), and (y) the Class A Participation Price (with a corresponding reduction in the number of authorized Class B Units provided in Section 3.3(c)); provided, that such conversion shall be conditioned upon, and shall occur immediately prior to, the closing of the Tag-Along ~~Portion~~ Sale (it being understood, for the avoidance of ~~all Tag Members~~doubt, that any vested Class B Units shall not be converted into Class A Units to the extent such Units are not included in the Tag- Along Sale, whether pursuant to Section 8.2(d), the failure of the Tag-Along Sale to be consummated, or otherwise). (cd) ~~If any Tag Member desires~~ The Selling Holder shall ask to ~~exercise its rights set forth~~ obtain the inclusion in ~~Sections 3.5(a) and (b) above, then it shall provide~~ the ~~Selling Member with written irrevocable notice specifying~~ proposed Tag-Along Sale of the entire number of ~~Class A~~ Units ~~or Class B Units (as applicable) that such Tag Member wishes~~ which each of the Tagging Persons requested to ~~include~~ have included in the Tag-Along Sale (~~which~~ as evidenced in the case of the Selling Holder by the Sale Notice and in the case of each Tagging Person by such ~~number shall not exceed such Tag Member~~Tagging Person’s Tag-Along ~~Portion) within ten (10) days after~~ Notice). In the ~~Tag-Along Notice Date (~~event the ~~“Tag-Along Notice Period”) and~~ Selling Holder shall ~~simultaneously provide a copy~~ be unable to obtain the inclusion of such ~~notice to~~ entire number of Units in the ~~Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the~~ proposed Tag-Along Sale, ~~each such Tag Member that has exercised its right~~ the number of Units to ~~participate~~ be sold in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be ~~shared on~~ allocated among the Selling Holder and each Tagging Person, in proportion, as nearly as practicable, as follows: (i) there shall be first allocated to each Selling Holder and each Tagging Person, a ~~several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment~~ number of Units equal to the ~~participating Members pursuant~~ lesser of (x) the number of Units offered to be included by such Tagging Person (or proposed, in the case of the Selling Holder) in the proposed Tag-Along Sale pursuant to this Section 8.2, and (ivy) ~~no Tag Member shall be obligated~~ a number of Units equal to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along ~~Portion included in the Tag-Along Sale or~~ Portion; and (ii) ~~fails to deliver to~~ the ~~Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively~~balance, ~~a “Tag-Along Failure”)~~if any, ~~then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units~~ not allocated pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. clause (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which above shall be ~~borne~~ allocated pro rata based on Percentage Interest to each Selling Holder and each Tagging Person; provided, that in no case shall any Selling Holder or Tagging Person be allocated an aggregate amount of Units exceeding the amount of Units elected to be included by such ~~Tag Member) will not be considered incurred for~~ Tagging Person (or proposed, in the ~~benefit~~ case of ~~all participating Members~~the Selling Holder). ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Limited Liability Company Agreement (Black Knight, Inc.)

Tag-Along Rights. ~~(a) Subject~~ 17.1.1 If at any time Lakes intends to sell or exchange a ~~Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all~~ percentage of its Units to any Person or group of Persons, which sale or exchange will result in Lakes owning less than a majority of the Company's Units, then Lakes shall refrain from effecting such transaction unless, prior to the consummation thereof, each other Member shall have been afforded the opportunity to join in such sale or exchange as hereinafter provided in this Section 17.1. 17.1.2 Prior to consummation of any sale or exchange of Units described in Section 17.1.1, Lakes shall cause the Person or group that proposes to acquire such Units (the "Proposed Purchaser") to offer in writing ("Purchase Offer") to each other Member to purchase Units, including any Units that are acquired by the Member pursuant to the exercise of Unit Options before accepting the Purchase Offer, such that the number of Units so offered to be purchased from such Member shall be equal to the product obtained by multiplying the aggregate number of Units proposed to be ~~Transferred under Section 3.4, each time~~ purchased by the Proposed Purchaser by such Member's Pro Rata Share. The Purchase Offer shall set forth such terms and conditions and identify the Proposed Purchaser and any Person known by Lakes to control the Proposed Purchaser and shall include a ~~Class A Member, Class B~~ copy of any purchase offer or agreement. Each Member ~~or group~~ shall have 20 calendar days from the date of ~~Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion~~ receipt of the ~~Class A Units and/or Class B Units held~~ Purchase Offer in which to accept such Purchase Offer, and such acceptance shall be binding and irrevocable. If the Purchase Offer is accepted by ~~such Member(s) to any Third Party, other than to a Permitted Transferee~~ one or more of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”)Members, then the ~~Selling Member must comply with the provisions~~ number of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal sold to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units Proposed Purchaser by Lakes shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) reduced by the aggregate number of ~~Class A Units and Class B~~ Units to be ~~acquired~~ purchased by the ~~purchaser, multiplied~~ Proposed Purchaser from such other Members pursuant thereto. Such purchase shall be made at the same price and on the same terms and conditions as the Proposed Purchaser shall have offered to purchase Units to be sold by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) Lakes. The closing of such ~~Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects~~ purchase shall occur not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) later than 30 days after such acceptance. In the ~~Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide~~ event that a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) sale or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be transfer subject to this Section ~~3.5~~ 17.1 is to be made to a Proposed Purchaser who is not a Member, Lakes shall notify the Proposed Purchaser that the sale or other transfer is subject to Sections 14.1.3 and 14.5 and this Section 17.1 and shall ~~require a Tag-Along Notice. (g) Promptly after~~ ensure that no sale or other transfer is consummated without the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), Proposed Purchaser first complying with Sections 14.1.3 and ~~shall furnish such other evidence of the completion~~ 14.5 and ~~time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in~~ this Section ~~3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason~~17.1. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (WPT Enterprises Inc)

Tag-Along Rights. (a) ~~Subject~~ At least twenty (20) days prior to any Transfer of Units by any Member or group of Members (other than in connection with an IPO) of more than twenty-five percent (25%) of the outstanding Units, each Member making such Transfer (the “Transferring Member”) shall deliver a ~~Member first complying with Section 3.4 and provided~~ written notice (the “TagAlong Notice”) to the Company and the ~~ROFR~~ other Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “~~Tag-Along Notice~~TagAlong Members”) ~~(the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”),~~ specifying in reasonable detail the identity of the ~~proposed transferee,~~ prospective transferee(s) and the ~~other~~ terms and conditions of ~~such proposed~~ the Transfer~~, including any consideration proposed~~ . The TagAlong Members may elect to ~~be received pursuant to a bona fide~~ participate in the contemplated Transfer by delivering written ~~agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal~~ notice to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Transferring Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after delivery of the TagAlong Notice. If any TagAlong Members have elected to par- ticipate in such Transfer, the Transferring Member and each such TagAlong Member will be enti- tled to sell in the contemplated Transfer, at the same price and on the same terms: a number of Units equal to the product of (A) the quotient determined by dividing the number of Units owned by the Transferring Member or such Tag-Along ~~Notice Date (~~Member, as applicable, by the “aggregate number of outstanding Units owned by the Transferring Member and all Tag-Along ~~Notice Period”~~Members participat- ing in such sale, and (B) ~~and shall simultaneously provide a copy~~ the number of ~~such notice~~ Units to be sold in the contemplated Transfer. (b) Each Transferring Member will use commercially reasonable efforts to obtain the agreement of the prospective Transferee(s) to the ~~Company. Promptly upon request~~ participation of the ~~Seller Member~~TagAlong Members in any contemplated Transfer, and in the Transferring Member will not Transfer any ~~event prior~~ of its Units to the ~~consummation~~ prospective Transferee(s) unless (i) the prospective Transferee(s) agrees to allow the participation of the ~~Tag-Along Sale~~TagAlong Members, ~~each such Tag Member~~ or (ii) the Transferring Member(s) agree to purchase the number of Units from the TagAlong Members that ~~has exercised its right~~ the TagAlong Members would have been entitled to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) sell pursuant to this Section ~~3.5 at~~ 6.2(b) for the ~~closing for~~ consideration per Unit to be paid to the Transferring Mem- ber(s) by the prospective Transferee(s). Each Member Transferring Units pursuant to this Section curred by the Members in connection with such ~~Tag-Along Sale against delivery~~ Transfer and shall be obligated to join on a pro rata basis in any representations, warranties, indemnification or other obligations that the Trans- ferring Member agrees to provide in connection with such ~~Tag~~ Transfer, other than any such obliga- tions that relate specifically to a particular Member, such as indemnification with respect to rep- resentations and warranties given by a Member regarding such Member’s title to and ownership of Units. (c) The provisions of this Section 6.2 shall terminate upon the first to occur of the ~~consideration therefor~~consummation of (i) a Sale of the Company, and (ii) an IPO. (d) ~~Each Member participating in the Tag-Along Sale shall receive a portion~~ Notwithstanding any provision of ~~the Tag-Along Price equal~~ this Agreement to the ~~amount such Member would have received with respect~~ contrary, the provisions of this Section 6.2 shall not apply to ~~the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon~~ a ~~deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%~~Transfer(s) of ~~the issued and outstanding~~ Units ~~of the Company are being sold~~ by a Member (i) to ~~the proposed Third Party transferee, the aggregate purchase price by reference~~ a Permitted Transfer- ee; or (ii) to ~~which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed~~ Transfers otherwise required to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (made under Section 6.1 or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination6.3. (e) ~~Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations~~ The rights and ~~warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach~~ obligations of any ~~covenant~~ Member under this Section 6.2 with respect to any Class B Units held by ~~the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A)~~ such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be ~~obligated to agree to indemnification obligations in excess of~~ governed by the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included applicable Incentive Plan and Class B Unit Agreement, which shall control in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer event of any conflict or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Noticeinconsistency. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Subscription Agreement

Tag-Along Rights. (a) ~~Subject~~ If any Member(s) desires to ~~a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all~~ sell ten percent (10%) or more of ~~the~~ its Membership Units ~~proposed~~ to ~~be Transferred under Section 3.4, each time a Class A Member, Class B Member~~ any Person or group of ~~Class A Members and/or Class B Members~~ Persons acting ~~jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party,~~ in concert in a bona fide transaction for valid consideration other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) Transfer (a “~~Tag-Along~~ Sale”), ~~then~~ the ~~Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice~~ Members participating in ~~writing~~ such Sale (the “Transferors”) must give written notice of such Sale (the “Co-Sale Notice”) to the other Members not less than thirty (30) days prior to the Sale, which Co-Sale Notice must include all terms and conditions of such proposed sale, including the identity of and reasonable background information regarding the proposed transferor(s). (b) Any other Member may, within fifteen (15) days of the receipt of a Co-Sale Notice, give written notice (each a “Tag-Along Notice”) ~~(the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject~~ to such ~~proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the~~ Transferor stating that such other ~~terms and conditions of~~ members wish to participate in such proposed ~~Transfer, including any consideration~~ transaction and specifying the number of Membership Units such Members desire to include in such proposed ~~to be received pursuant to a bona fide written agreement for the Tag-Along~~ transaction. Such other Members shall only include Membership Units ~~(and, if the proposed Transfer is to be wholly or partly for consideration other than money,~~ in the Tag-Along Notice ~~shall state the proposed price as being equal to the amount~~ of the ~~monetary consideration, if any, plus~~ same class or type (and in the ~~Fair Market Value~~ same proportion) of the ~~other consideration) (the “Tag-Along Price”). If the Tag-Along~~ Membership Units ~~are proposed to be Transferred other than for cash to the Selling Member~~being sold, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units transferred or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held assigned by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag MembersTransferors. (c) If ~~any Tag~~ no other Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that gives such ~~Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the~~ Transferors a timely Tag-Along Notice ~~Date~~ with respect to the transaction proposed in the Co-Sale Notice, such Transferors may thereafter consummate the transaction specified in the Co-Sale Notice on terms and conditions set forth therein. If one or more other Members give such Transferors a timely Tag-Along Notice, then such Transferors shall use all reasonable efforts, but shall have no obligation, to cause the proposed transferee(s) to agree to acquire all applicable Membership Units validly identified in accordance with this Section 9.10 in all Tag-Along Notices that are timely given to such Transferor, upon the same terms and conditions as applicable to such Transferor Membership Units. If the proposed transferee(s) are unwilling or unable to acquire all Membership Units proposed to be included in such sale then, the Member who provided the applicable Co-Sale Notice, at its sole election, may either (i) cancel such Sale, or (ii) proceed to consummate such Sale with the “Member who provided the applicable Co-Sale Notice and each Member that timely delivered a Tag-Along Notice ~~Period”) and shall simultaneously provide~~ each participating therein by a ~~copy~~ pro-rata sale of ~~such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale,~~ each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B parties Membership Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with ~~Section 7.1(a); provided that where less than one hundred percent (100%~~Percentage Interests) of the ~~issued and outstanding~~ total amount of Membership Units ~~of the Company are being sold~~ such transferee is willing to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determinationacquire. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Badlands Power Fuels, LLC)

Tag-Along Rights. (a) ~~Subject~~ Notwithstanding anything to a the contrary in this Agreement, neither Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (~~collectively, the~~ “Selling Member”) ~~desires~~ may Transfer any or all of its Units to ~~make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party,~~ a Person other than to a Permitted Transferee ~~of such Member(s) or in accordance with Sections 3.6~~unless the other Member has the right to sell, ~~3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent~~ in the ~~aggregate greater than five percent (5%~~same transaction, its Units to such Person, on a pro rata basis based on each Member’s Profit Interest, for a purchase price determined in the identical manner, after giving effect to any adjustments made pursuant to Section 3.5(b) hereof to the Profit Interest corresponding to such Member’s Units, to the Profit Interest attach, as the purchase price of the ~~aggregate outstanding Class A~~ Selling Member’s Units shall have been determined (and ~~Class B Units~~ subject to identical method of payment and other terms). (~~taken together~~ b) As soon as ~~a single class) (a “Tag-Along Sale”), then~~ practicable after the Selling Member ~~must comply with~~ decides or proposes to sell any or all of its Units, but at least ninety (90) days before the ~~provisions~~ proposed date of ~~this Section 3.5. The~~ a sale of the Selling Member’s Units, the Selling Member shall ~~inform the Board by~~ give a written notice ~~in writing~~ (the “Tag-Along Notice”) (to the ~~date upon which such notice is received being~~ other Member at each Member’s address as shown on the “Company’s records. The Tag-Along Notice ~~Date”) stating~~ shall describe in detail the ~~Units (~~proposed sale, including the proposed price or ~~portion thereof) that are subject~~ consideration to ~~such proposed Transfer (the “Tag-Along Units”)~~be paid, the ~~identity~~ name and address of the proposed ~~transferee~~Transferee, and if the ~~other terms and conditions~~ Selling Member is proposing to sell less than all of its Units, the proportion of their total Units that they intend to sell. The non- Selling Member (“Tagging Member”) shall have the right to sell to the proposed Transferee the same proportion, based on such Member’s Profit Interest, of such ~~proposed Transfer~~Member’s Units on the terms, ~~including~~ subject to adjustments in the price based on any ~~consideration proposed~~ adjustments to ~~be received~~ each Member’s Profit Interest previously made pursuant to ~~a bona fide written agreement for~~ this Section 3.5(b) hereof, set forth in the Tag-Along ~~Units (and~~Notice. Other than as set forth herein, if the ~~proposed Transfer is to be wholly or partly for consideration other than money,~~ terms of the Tag-Along Notice shall ~~state the proposed price as being equal~~ not be more burdensome to the ~~amount~~ Tagging Member than the terms applicable to the Selling Member in the purchase transaction with the Transferee. (c) The Tagging Member shall exercise the rights under this Section 11.8 by delivering a notice of ~~the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash~~ exercise to the Selling Member, ~~the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver~~ with a copy to the Company, within thirty (30) days after the delivery of the Tag-Along Notice to ~~each Class A Member and Class B Member (other than~~ the ~~Selling~~ Tagging Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less No later than one hundred ~~percent~~ eighty (~~100%~~180) days following delivery of the ~~issued and outstanding Units of the Company are being sold~~ Tag Along Notice to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along SaleCompany, the Selling Members shall conclude the sale of its Units on the terms and conditions described in the Tag Along Notice, and the Tagging Member shall ~~give notice thereof~~ simultaneously sell its Units on the terms and conditions described in the Tag Along Notice (subject to adjustments in the ~~participating Tag Members, shall remit~~ price based on any adjustments to each ~~such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed~~ Member’s Profit Interest previously made pursuant to Section ~~3.5(d~~3.5(b) hereof)~~, and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member~~. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (MGM Resorts International)

Tag-Along Rights. (a) ~~Subject~~ With respect to any proposed Transfer of LLC Interests by a CNET Holder or a NBC Holder pursuant to clause (iii) or (iv) of Section 7.1(c) or clause (iii) of Section 7.1(d) prior to an Initial Public Offering, the Member ~~first complying with Section 3.4~~ proposing such Transfer (the "TRANSFERRING MEMBER") shall have the obligation, and ~~provided~~ each CNET Holder, if the ~~Company~~ Transferring Member is a NBC Holder, or each NBC Holder if the Transferring Member is a CNET Holder (the "OTHER MEMBERS"), who is not then in breach of this Agreement, shall have the right, to require the proposed transferee to purchase from each such Other Members number of Units equal to the product (rounded to the nearest whole number) of (x) the Adjusted Percentage Interest of such Other Member and (y) the ~~ROFR Members have not purchased all~~ number of ~~the~~ Units proposed to be ~~Transferred under~~ sold in the contemplated sale, and at the same price per Unit and upon the same terms and conditions as to be paid and given to the Transferring Members, PROVIDED that in order to be entitled to exercise their right to sell Unit to the proposed transferee pursuant to this Section ~~3.4~~7.6, the Other Members must agree to make substantially the same representations, warranties, covenants and indemnities and other similar agreements as the Transferring Members agree to make in connection with the proposed transfer of Units of the Transferring Members. Each Transferring Member shall give notice to the Other Members of each ~~time a Class A~~ proposed Transfer giving rise to the rights of the Other Members set forth in the first sentence of this Section 7.6 at least 20 days prior to the proposed consummation of such Transfer, setting forth the name of the Transferring Member, ~~Class B Member or group~~ the number of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”)so transferred, the ~~identity~~ name and address of the proposed transferee, the proposed amount of consideration therefor and ~~the other~~ terms and conditions agreed to by the proposed transferee, the number of Units each Other Member may sell to such proposed ~~Transfer~~transferee (in accordance with the first sentence of this Section 7.6), ~~including any consideration~~ and a representation that the proposed transferee has been informed of the "tag-along" rights provided for in this Section 7.6 and has agreed to purchase Units in accordance with the terms hereof. The tag-along rights provided by this Section 7.6 must be exercised by an Other Member within 15 days following receipt of the notice required by the preceding sentence, by delivery of a written irrevocable notice to the Transferring Members indicating such other Member's exercise of its rights and specifying the amount of Units (up to the maximum amount of Units owned by such Other Member required to be ~~received~~ purchased by the proposed transferee pursuant to ~~a bona fide written agreement for~~ the ~~Tag-Along Units (and, if~~ first sentence of this Section 7.6) it desires to sell. The Transferring Members shall be entitled under this Section 7.6 to transfer to the proposed ~~Transfer is to be wholly or partly for consideration other than money,~~ transferee the ~~Tag-Along Notice shall state the proposed price as being~~ amount of Units equal to the difference between the number referred to in clause (b) above and the aggregate amount of Units set forth in the ~~monetary consideration~~written notices, if any, ~~plus~~ delivered by the ~~Fair Market Value of~~ Other Members pursuant to the ~~other consideration) (the “Tag-Along Price”)~~preceding sentence. If the ~~Tag~~proposed transferee fails to purchase Units from any Other Member that has properly exercised its tag-~~Along Units are~~ along rights, then the Transferring Members shall not be permitted to make the proposed ~~to be Transferred other than for cash to the Selling Member~~Transfer, ~~the consideration for~~ and any such ~~Tag-Along Units~~ attempted Transfer shall be ~~deemed to be the Fair Market Value~~ void and of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5no effect. (b) ~~Each Tag Member shall have~~ If the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fractionOther Members exercise their rights under Section 7.7(a), the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion closing of the ~~Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion~~ purchase of the ~~Class A~~ Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to which such rights have been exercised shall take place concurrently with the ~~Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation~~ closing of the ~~Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%)~~ sale of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determinationTransferring Member's LLC Interests. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Cnet Inc /De)

Tag-Along Rights. At least thirty-five (a35) ~~Subject~~ days prior to ~~a Member first complying with Section 3.4 and provided~~ the ~~Company and the ROFR Members have not purchased all~~ sale by one or more of the ~~Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of~~ Class A Members ~~and/or Class B Members acting jointly~~ (individually or collectively, the “Selling Member”) ~~desires to make any Transfer~~ of ~~all or any portion~~ Units constituting greater than fifty percent (50%) of the fully diluted Class A Units ~~and/or~~ then outstanding to any Person or group of Persons in a single transaction or a series of related transactions, excluding transfers (i) permitted pursuant to Section 8.9, (ii) to another Class A Member, or (iii) to such Member’s spouse, children or grandchildren or a trust created for the primary benefit of such Member or his or her spouse, children or grandchildren (a “Third-Party Purchaser”) (each, a “Tag Sale”) (collectively, the “Buyer”), such Selling Member shall provide to the Company, which shall provide to each Class A and Class B Member (each, a “Tag Seller”) a notice (a “Tag Along Notice”) setting forth in reasonable detail the terms of such sale (including, without limitation, the price offered per Class A Unit), the number of Class A and Class B Units such Buyer wishes to purchase (the “Tag Along Units”) and identifying the name of the Buyer. Upon the written request of any Tag Seller received by the Selling Member prior to the 30th day after the day the Tag Along Notice was sent by such Tag Seller, the Selling Member proposing to make the sale shall cause the Buyer to purchase from such Tag Seller the number of Class A and Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being Tag Seller equal to the ~~amount~~ lesser of (x) the ~~monetary consideration, if any, plus the Fair Market Value~~ number of ~~the other consideration) (the “Tag-Along Price”). If the Tag-Along~~ Units ~~are proposed~~ requested to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to included in the Tag ~~Members an option to sell their Class A Units or Class B Units~~ Sale by such Tag Seller and (~~as applicable~~y) ~~upon the terms set forth in this Section 3.5.~~ a number determined by multiplying (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (iiA) a fraction, the numerator of which is the total number of Class A ~~Units or~~ and Class B Units ~~(as applicable)~~ then held by such Tag ~~Member~~ Seller, and the denominator of which is the ~~aggregate~~ total number of Class A ~~Units~~ and Class B Units then held by all of the ~~Selling Member and all~~ Tag ~~Members (its “Tag-Along Portion”),~~ Sellers and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the ~~Transfer~~ number of ~~those~~ Tag Along Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company be sold in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag ~~Member in such Tag-Along~~ Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Merger Agreement (Global Partner Acquisition Corp.)

Tag-Along Rights. ~~(a) Subject~~ 4.1 If at any time PrefCo receives a bona fide written offer to ~~a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased~~ sell any or all of its Common Units which it intends to accept (the Units and interests proposed for sale being the “Tag-Along Units”) to ~~be Transferred under Section 3.4~~an unaffiliated Person (the “Purchaser”), ~~each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly~~ PrefCo (~~collectively,~~ the “Selling Member”) ~~desires to make any Transfer of all or any portion of~~ shall give the ~~Class A Units and/or Class B Units held by such Member(s) to any Third Party,~~ other ~~than to~~ Members a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by written notice ~~in writing~~ (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member~~, the consideration for such Tag-Along Units shall be deemed~~ ’s intent to ~~be the Fair Market Value of~~ sell the Tag-Along Units. The ~~Board~~ Tag-Along Notice shall ~~promptly deliver a copy~~ disclose the identity of the Purchaser, the Tag-Along Units proposed to be sold, the terms and conditions, including price, of the proposed sale, and any other material terms and facts relating to the proposed sale. The Tag-Along Notice shall further state that such other Members may participate in such sale on the terms and conditions applicable to the sale of the Tag-Along Units in accordance with the provisions of this Section 4. 4.2 If any other Member wishes to so participate in any sale under this Section 4, it shall notify the Selling Member in writing of such intention as soon as practicable after, and in any event within ten (10) days after, the date of the Tag-Along Notice and shall have the right to ~~each Class A Member~~ sell to the Purchaser, on the same terms and ~~Class B Member (other than~~ conditions as are involved in such sale of Tag-Along Units by the Selling Member) , the number of such Member’s Common Units equal to the number of Common Units owned by such Member multiplied such Member’s Percentage Interest (such aggregate number of Common Units together with the Tag-Along Units, the “~~Tag Members~~Offered Units”). ~~By giving~~ The Selling Member and, if participating, any other Member, shall sell to the Purchaser all, or at the option of the Purchaser, any part of the Offered Units proposed to be sold as described in the Tag-Along Notice at not less than the price and upon other terms and conditions, if any, not more favorable to the Purchaser than those described in the Tag-Along Notice; provided, however, that any purchase of Offered Units by the Purchaser shall be made from the Selling Member and, if participating, any other Member on a pro rata basis based upon number of Tag Along Units and the number of Common Units requested to be included in such transaction by the Purchaser. 4.3 The obligations of the parties pursuant to this Section 4 are subject to the satisfaction of the following conditions: (a) in connection with any Transfer pursuant to this Section 4, (i) PLC shall not be required to make any representations or warranties in connection therewith other than with respect to title and ownership to the Units being conveyed by PLC and its authority; (ii) PLC’s indemnification obligations shall be limited to the lesser of (x) the amount of consideration received by PLC in such Transfer and (y) PLC’s pro rata portion of such indemnification obligation; (iii) PLC shall only be responsible for any indemnification obligation on a several (and not joint and several) basis; (iv) PLC’s indemnification obligations shall be limited to representations and warranties it makes regarding ownership of its equity in the Company; and (v) PLC shall not be required to enter into or be bound by any restrictive covenants (including non-competition and non-solicitation provisions) in connection with such Transfer pursuant to this Section 4; and (b) if within ninety (90) days after the delivery of the Tag-Along Notice, the ~~Selling Member shall be deemed to have granted~~ sale giving rise to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice ~~Date (~~has not been consummated, all the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the restrictions on Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this ~~Section 3.5 to the contrary, no Selling Member~~ Agreement at such time shall again be ~~liable to any Member based on the failure of a Tag-Along Sale to occur for any reason~~in effect. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Investors' Rights Agreement (Capital Park Holdings Corp.)

Tag-Along Rights. (a) ~~Subject~~ Following the Lock-Up Period and subject to ~~a Member first complying with~~ Section ~~3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4~~5.03, ~~each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly~~ if any Shareholder (~~collectively,~~ the “~~Selling Member~~Tag-Along Seller”) ~~desires~~ proposes to ~~make~~ Transfer shares of any ~~Transfer~~ class of ~~all or any portion of the Class A Units and/or Class B Units held by such Member(s)~~ Offered Securities to any Third ~~Party~~Party or Third Parties in a single transaction or in a series of related transactions and such Offered Securities have been offered to, ~~other than to a Permitted Transferee of such Member(s) or~~ but not purchased by, the Offerees in accordance with ~~Sections 3.6, 3.7 and 3.8, such that~~ the ~~Class A Units and/or Class B Units proposed to be transferred represent~~ provisions set forth in ~~the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class)~~ Section 4.04 (a “Tag-Along Sale”), ~~then~~ the ~~Selling Member must comply~~ Tag-Along Seller shall first, by written notice to the Company (with respect to Common Shares) or to Warner II (with respect to Preferred Shares) which shall provide the ~~provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing~~ other Shareholders (the “Tag-Along ~~Notice~~Offerees”) ~~(the date upon which~~ with a copy of such notice ~~is received being the~~ (“Tag-Along ~~Notice Date~~Notice”), offer the Tag-Along Offerees (“Tag-Along Offer”) ~~stating~~ the ~~Units~~ opportunity to participate in such Transfer in accordance with this Section 5.01. (~~or portion thereof~~b) ~~that are subject~~ The Tag-Along Notice shall identify (i) the class and number of shares of Offered Securities proposed to be sold by the Tag-Along Seller, (ii) the fraction expressed as a percentage, determined by dividing the number of shares of the specified class to be purchased from the Tag-Along Seller in such ~~proposed Transfer~~ Tag-Along Sale by the Aggregate Ownership of the Tag-Along Seller of the specified class (the “Tag-Along ~~Units~~Sale Percentage”), ) (it being understood that the ~~identity of the proposed transferee,~~ Company and ~~the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for~~ Warner II shall reasonably cooperate with the Tag-Along ~~Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount~~ Seller in respect of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value determination of the Tag-Along ~~Units. The Board~~ Sale Percentage), (iii) the consideration for which the Transfer is proposed to be made, (iv) the name and address of each proposed Third Party transferee, (v) the proposed Transfer date and (vi) all other material terms and conditions of the Tag-Along Offer, including the form of the proposed agreement, if any, and a firm offer by each proposed Third Party transferee to purchase shares of the specified class of Offered Securities. (c) From the date of its receipt of the Tag-Along Notice, each Tag-Along Offeree shall ~~promptly deliver~~ have the right (a ~~copy~~ “Tag-Along Right”), exercisable by written notice (“Tag-Along Response Notice”) given to the Tag-Along Seller within 10 days after receipt of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”~~) and shall simultaneously provide~~ ), to request that the Tag-Along Seller include in the proposed Transfer a ~~copy~~ number of ~~such notice to the Company. Promptly upon request~~ shares of the ~~Seller Member, and~~ specified class of Offered Securities held by such Tag-Along Offeree (such number of shares shall not in any event ~~prior~~ exceed the Tag-Along Sale Percentage of the total number of shares of the specified class of Offered Securities held by such Tag-Along Offeree). The Tag-Along Response Notice shall include wire transfer instructions for payment of the purchase price for the Offered Securities to be sold in such Tag-Along Sale. The Tag-Along Offerees that exercise their Tag-Along Rights hereunder (the “Tagging Persons”) shall, upon request, deliver to the ~~consummation~~ Tag-Along Seller, with the Tag-Along Response Notice, the certificate or certificates representing the Group Equity Securities of such Tagging Persons to be included in the Tag-Along Sale, ~~each~~ together with a limited power-of-attorney authorizing the Tag-Along Seller to Transfer such ~~Tag Member that has exercised its right to participate~~ Group Equity Securities on the terms set forth in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion Notice. Delivery of the Tag-Along ~~Price equal to the amount~~ Response Notice with such ~~Member would have received with respect to the Class A Units~~ certificate or ~~Class B Units (as applicable) Transferred by such Member in the Tag~~certificates and limited power-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined of-attorney shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation constitute an irrevocable acceptance of the Tag-Along ~~Price among them for their respective Class A Units and Class B Units shall be determined~~ Offer by the ~~Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members~~Tagging Persons. ~~The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects~~ In order to participate in a Tag-Along ~~Sale shall~~ Sale, subject to Section 5.03(b), the Tagging Persons must agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations execute substantially identical agreements and ~~warranties (~~documents as the Tag-Along Seller enters into and ~~related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company~~ executes in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Shareholder Agreement (Warner Chilcott CORP)

Tag-Along Rights. (a) Subject to Section 13.02(c), if SW desires to effect a ~~Member first complying with~~ Transfer of any Units (a “Tag Sale”) and it does not elect to exercise its rights under Section ~~3.4 and provided the Company and the ROFR Members have not purchased~~ 13.01 hereof to require each Co-Seller to Transfer all of their Units or a portion of their Units, then at least ten (10) Business Days prior to the ~~Units proposed~~ closing of such Tag Sale, SW shall make a written offer (the “Participation Offer”) to ~~be Transferred under Section 3.4,~~ each ~~time a~~ Co-Seller holding Class A ~~Member,~~ Units to include in the proposed Tag Sale a portion of each Co-Seller’s Class ~~B Member or group~~ A Units that represents the same percentage of such Co-Seller’s total number of Class A ~~Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of~~ Units as the Class A Units ~~and/or~~ being sold by SW represents of SW’s total number of Class ~~B Units held~~ A Units; provided, however, that, if the consideration to be received by SW includes any securities, then, unless SW and the transferee both reasonably determine in good faith that an exemption is otherwise available under the Securities Act and all applicable state securities laws for such ~~Member(s~~transaction, each Co-Seller that does not qualify as an Accredited Investor (without regard to Rule 501(a)(4)) may be required, at the request of the SW Group, to ~~any Third Party, other than to~~ (i) appoint a ~~Permitted Transferee of such Member(s) or~~ Purchaser Representative in accordance with ~~Sections 3.6, 3.7 and 3.8,~~ the terms of Section 11.03(c) in order to participate in such ~~that the Class A Units and/or Class B Units proposed to be transferred represent~~ Transfer or (ii) accept cash in ~~the aggregate greater than five percent (5%)~~ lieu of ~~the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag~~any securities such non-~~Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice~~ Accredited Investor would otherwise receive in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being an amount equal to ~~the amount of the monetary consideration, if any, plus~~ the Fair Market Value of ~~the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for~~ such ~~Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units~~securities. The ~~Board shall promptly deliver a copy of the Tag-Along Notice to each~~ Class A ~~Member and Class B Member (other than~~ Units of any Co-Seller sold in any Tag Sale shall entitle such Co-Seller to receive the ~~Selling Member) (the “Tag Members”). By giving the Tag~~amount which such Co-~~Along Notice, the Selling Member shall be deemed to have granted~~ Seller would receive if Section 9.01 of this Agreement were applied to the Tag ~~Members an option~~ Sale Value for a particular Tag Sale, and, as a result of such application, amounts would be distributed to ~~sell their Class A~~ the holders of Units ~~or Class B Units (as applicable) upon the terms set forth in~~ pursuant to Section 9.01 of this ~~Section 3.5~~Agreement. (b) ~~Each~~ The Participation Offer shall describe the terms and conditions of the proposed Tag ~~Member~~ Sale (including the number of Units to be sold) and shall ~~have~~ be conditioned upon (i) the ~~right and option, exercisable as set forth below, to include~~ consummation of the transactions contemplated in the ~~Tag~~Participation Offer with the transferee named therein, (ii) each Co-~~Along Sale up~~ Seller’s execution and delivery of all agreements and other documents as SW is required to execute and deliver in connection with such Tag Sale, (iii) SW and each Co-Seller making such representations, warranties and covenants (including related indemnity provisions) and entering into such definitive agreements as are customary for transactions of the nature of the proposed Tag Sale; provided that ~~amount~~ (A) any such indemnification or similar obligations will be apportioned pro rata among SW and the Co-Sellers (based on the aggregate consideration to be received in respect of its Units included in the Tag Sale), other than with respect to representations and indemnities concerning SW’s and each Co-Seller’s title to its Class A Units ~~or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units~~ and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate ~~such transaction~~ the Transfer without ~~violating~~ contravention of any law or ~~breaching such Member’s charter or constitutional documents~~agreement, ~~any agreement to~~ which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be ~~shared~~ given by SW and each Co-Seller solely with respect to itself and on a several basis and (~~but not joint~~B) ~~basis~~ no Member in its capacity as such shall be required to provide representations or warranties that are broader than those provided by ~~the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and~~ SW, (iv) each Co-Seller benefiting from all of the same provisions of the definitive agreements as SW and being required to bear its proportionate share of any escrows, holdbacks, earnouts and adjustments in purchase price and (v) no ~~Tag Member shall be obligated~~ Co-Seller being required to ~~agree to indemnification obligations~~ assume or incur any liability in excess of the proceeds ~~received by~~ to be distributed to such Co-Seller in connection with such Tag ~~Member~~ Sale. If any Co-Seller shall accept the Participation Offer by written notice to SW within five (5) Business Days after the date on which such Co-Seller receives the Participation Offer, SW shall reduce, to the extent necessary, the number of Class A Units it otherwise would have sold in the proposed Transfer so as to permit those Co-Sellers who have accepted the Participation Offer to sell the percentage of their Units that they are entitled to sell under Section 13.02(a) and SW and such ~~Tag~~Co-~~Along Sale~~Sellers shall Transfer the number of Units specified in the Participation Offer to the proposed transferee in accordance with the terms of such Transfer as set forth in the Participation Offer. (fc) ~~If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included~~ Notwithstanding anything in the ~~Tag-Along Sale or (ii) fails to deliver~~ foregoing to the ~~Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively~~contrary, if Section 9.01 were applied to a ~~“Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect~~ Distributable Property amount equal to the ~~Transfer~~ Tag Sale Value for a particular Tag Sale, and, as a result of ~~any or all~~ such application, amounts would be distributed to the holders of ~~its Class A Units or~~ Class B Units pursuant to Section 9.01 (such ~~Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may~~ amount that would be ~~required~~ distributed pursuant to ~~obtain any approval necessary under applicable securities laws, other federal law applicable~~ Section 9.01 with respect to ~~such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer~~ all ~~(but not less than all)~~ of the ~~applicable~~ Class ~~A Units or~~ B Units, the “Class B Tag Sale Value”), then holders of Class B Units ~~at a price not higher than contained~~ may participate in any Tag Sale with respect to such Class B Units in accordance with this Section 13.02(c). In the ~~Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter,~~ event any ~~proposed Transfer by such Selling Member~~ holder of Class A B Units ~~and/or~~ shall elect to transfer its applicable Units in connection with any Participation Offer, for purposes of Section 13.02(a), such holder of Class B Units shall be ~~subject~~ entitled to ~~this Section 3.5 and shall require~~ include a ~~Tag-Along Notice. (g) Promptly after~~ portion of such holder’s Class B Units that represents the ~~consummation~~ same percentage of ~~a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each~~ such ~~Tag Member the~~ holder’s total ~~consideration for~~ Class B Units as the Class A Units or being sold by SW represents of SW’s total number of Class A Units (provided that the proviso in Section 13.02(a) shall apply), and Sections 13.02(a) and 13.02(b) shall apply to the holder of the Class B Units, with such holder being a “Co-Seller.” The holder of Class B Units ~~(as applicable)~~ shall be entitled to receive, in exchange for the Transfer of such portion of its Class B Units in the Tag Sale, an amount equal to its proportionate share of the Class B Tag Sale Value based on a fraction, the numerator of which is equal to the number of Class B Units being sold by such Class B Member in the Tag ~~Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along~~ Sale and the ~~terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5~~ denominator of which is equal to the ~~contrary, no Selling Member shall be liable to any Member based on~~ total number of Class B Units outstanding at the ~~failure~~ time of ~~a Tag-Along Sale to occur for any reason~~the Tag Sale. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Pinnacle Gas Resources, Inc.)

Tag-Along Rights. (a) ~~Subject~~ This Section 13.3 shall not apply in the event of any Transfer pursuant to Section 13.2 in which the Investor Member accepts any ROFO Securities offered in a ROFO Offer. The provisions of Section 13.2 (to the extent applicable) shall apply in advance of the provisions of this Section 13.3. (b) If (i) the Ryman Member proposes to Transfer any Class A Units, (ii) to the extent applicable, the Ryman Member has complied with the terms of Section 13.2, and (iii) the relevant provisions of Article X have been complied with in all respects with respect to a proposed Transfer, then the Ryman Member ~~first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time~~ (a ~~Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the~~ “~~Selling Member~~Tag-Along Seller”) ~~desires to make any~~ may consummate a Transfer of all or any portion of such Units (the ~~Class A Units and/or Class B Units held by such Member(s~~“Tag-Along Interest”) to ~~any~~ the applicable third party purchaser (a “Third Party~~, other than~~ ”) to ~~a Permitted Transferee~~ the extent it complies with the provisions of ~~such Member(s) or in accordance with Sections 3.6, 3.7~~ this Section 13.3 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) Section 13.8 (a “Tag-Along Sale”). In such event, ~~then~~ the ~~Selling Member must comply with~~ Class A Holders (each, an “Other Eligible Member”) shall have the right to require the Third Party, subject to the provisions of this Section ~~3.5~~13.3 and Section 13.8, to purchase from such Other Eligible Member up to that portion of its Eligible Tag-Along Units (such Other Eligible Member’s “Maximum Amount”) (and the Tag-Along Seller shall reduce the Tag-Along Interest to be sold by it by a corresponding amount) that is equal to the product of (x) the Tag-Along Interest to be purchased by the Third Party and (y) a fraction, the numerator of which is (A) the total number of Eligible Tag-Along Units owned by such Other Eligible Member and the denominator of which is (B) the total number of Eligible Tag-Along Units owned by all of the Other Eligible Members and the Tag-Along Seller immediately prior to the transaction. For purposes hereof, “Eligible Tag-Along Units” means Class A Units. (c) The Tag-Along Seller shall notify the Other Eligible Members in writing of a proposed Transfer not less than twenty (20) days prior to the date of such proposed Transfer (the “Transferor Tag-Along Notice”). The ~~Selling~~ Transferor Tag-Along Notice shall include (i) the name and address of the Third Party, (ii) the Tag-Along Interest to be Transferred, (iii) the Maximum Amount for each Other Eligible Member (which the Company shall ~~inform~~ confirm upon request of the ~~Board~~ Tag-Along Seller prior to the delivery of such notice), (iv) the purchase price and terms and conditions of payment, (v) the other material terms and conditions of the transaction, and (vi) the proposed closing date of the transaction (collectively, the “Third Party Terms”). (d) The tag-along right provided for in this Section 13.3 may be exercised by any Other Eligible Member (each such exercising Other Eligible Member, a “Tagging Member”) by delivery of a written notice ~~in writing~~ to the Company, the Tag-Along Seller and the Third Party (the “Tag-Along Notice”) within fifteen (15) days following receipt of the ~~date upon which such notice is received being the “~~Transferor Tag-Along Notice ~~Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer~~ (the “Tag-Along ~~Units~~Period”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the . The Tag-Along Notice shall state the ~~proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “~~Eligible Tag-Along ~~Price”)~~Units that such Tagging Member wishes to include in such Transfer to the Third Party, up to the Maximum Amount. If The failure of an Other Eligible Member to deliver a Tag-Along Notice meeting the requirements of this Section 13.3(d) within the Tag-Along ~~Units are~~ Period shall constitute a waiver of such Other Eligible Member’s tag-along rights with respect to such proposed ~~to be Transferred other than for cash to~~ Transfer. (e) Upon the ~~Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value~~ giving of ~~the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the~~ its Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Tagging Member shall be obligated to ~~agree~~ sell to ~~indemnification obligations in excess~~ the Third Party the number of ~~the proceeds received by such Tag Member in such~~ its Eligible Tag-Along ~~Sale.~~ Units set forth in its Tag-Along Notice on the Third Party Terms (~~f) If any Tag Member (i) does not elect before~~ up to the ~~end of~~ Maximum Amount); provided, however, that neither the Tag-Along ~~Notice Period to have all or~~ Seller nor any ~~part~~ Tagging Member shall consummate the sale of ~~its~~ any of their respective Eligible Tag-Along ~~Portion included in~~ Units unless the Third Party purchases, on the Third Party Terms, all of the Eligible Tag-Along ~~Sale or (ii) fails to deliver to the Selling Member its Class A~~ Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along ~~Notice and on~~ Notices that the Tagging Members are entitled to sell under the terms of this Section 13.3. If the Third Party does not ~~more favorable~~ purchase Eligible Tag-Along Units entitled to be sold by any Tagging Member that has complied with the ~~Selling Member than were contained in~~ terms of this Section 13.3, then any Transfer by the Tag-Along ~~Notice; thereafter,~~ Seller and any ~~proposed~~ Other Eligible Member to such Third Party shall be null and void and of no effect whatsoever. (f) Any Eligible Tag-Along Units purchased from a Tagging Member pursuant to this Section 13.3 shall be purchased at the same price and same type of consideration and on the same terms and conditions as the Transfer by ~~such Selling Member of Class A Units and/or Class B Units~~ the Tag-Along Seller and shall be subject to ~~this~~ Section ~~3.5 and shall require a Tag-Along Notice~~13.8. (g) ~~Promptly after~~ In the ~~consummation of a~~ event that the Tag-Along ~~Sale~~Seller delivers a Transferor Tag-Along Notice in accordance with Section 13.3(c) and no Other Eligible Member exercises its tag-along right in accordance with Section 13.3(d), the ~~Selling Member~~ Tag-Along Seller shall ~~give notice thereof~~ have the right to Transfer its Tag-Along Interest to the ~~participating Tag Members~~Third Party at a price not more than the purchase price set forth in the Transferor Tag-Along Notice and otherwise in all material respects on the terms, ~~shall remit to each~~ provisions and conditions set forth in the Transferor Tag-Along Notice, so long as such ~~Tag Member~~ Transfer takes place within one hundred eighty (180) days after the ~~total consideration for~~ date on which the ~~Class A Units or Class B Units~~ Transferor Tag-Along Notice is delivered (as ~~applicable) sold by~~ such ~~Tag Member pursuant thereto as computed~~ period may be extended to the extent reasonably required pursuant to ~~Section 3.5(d~~applicable law or regulation). In the event that such Transfer shall not have taken place within such one hundred eighty (180)-day period (provided, ~~and shall furnish such other evidence of~~ further, that, if the ~~completion and time of completion~~ Transfer of the Tag-Along ~~Sale and~~ Interest is subject to any prior regulatory approval, the ~~terms thereof as~~ time period during which such Transfer may be ~~reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member~~ consummated shall be ~~liable to any Member based on~~ extended until the ~~failure~~ expiration of a five (5) Business Days after all such approvals shall have been received), the Tag-Along ~~Sale~~ Seller shall not be permitted to ~~occur for~~ Transfer all or any ~~reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to~~ portion of such Tag-Along ~~Sale~~ Interest without once again complying with the provisions of this Section 13.3. If the terms of such proposed Transfer are different in any material respect from the terms, provisions and conditions set forth in the Transferor Tag-Along Notice (in a manner that is beneficial to the ~~extent such costs are incurred for~~ Tag-Along Seller), the ~~benefit~~ Tag-Along Seller shall deliver to the Other Eligible Members a revised Transferor Tag-Along Notice, and shall again comply with all of ~~all participating Members. Costs incurred by or on behalf~~ the requirements of ~~a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members~~this Section 13.3. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Limited Liability Company Agreement (Ryman Hospitality Properties, Inc.)

Tag-Along Rights. (ai) Subject to ~~a Member first complying~~ prior compliance with Section ~~3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4~~3.2(b), ~~each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly~~ at least thirty (~~collectively, the “Selling Member”~~30) ~~desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than~~ calendar days prior to a ~~Permitted Transferee~~ transfer by the Blackstone Member of ~~such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater~~ more than ~~five~~ fifty percent (550%) of its Interests in the ~~aggregate outstanding Class A Units and Class B Units~~ Company (~~taken together as~~ in one or a ~~single class~~series of related transactions) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along UnitsTag Eligible Transfer”), the ~~identity~~ Blackstone Member (the “Transferring Member”) shall deliver a written notice (the “Sale Notice”) to the HGV Member, which Sale Notice shall include the material terms and conditions of the proposed Tag Eligible Transfer, including (A) the name and address of the proposed transferee, (B) the proposed amount and form of consideration (and if such consideration consists in part or in whole of property other than cash, the ~~other terms~~ Transferring Member will provide with the Sale Notice such information relating to such non-cash consideration as the HGV Member may reasonably request in order to evaluate such non-cash consideration), (C) the proposed Tag Eligible Transfer date, if known, and ~~conditions~~ (D) the proportion of ~~such proposed Transfer, including any consideration proposed~~ Interests to be ~~received pursuant to a bona fide written agreement for~~ sold in the ~~Tag-Along Units (and, if the proposed~~ Tag Eligible Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “~~Tag-Along Price~~Pro Rata Share”). If The HGV Member may elect to participate in the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) contemplated Tag Eligible Transfer (the “~~Tag Members~~Electing Member”)) by delivering irrevocable written notice to the Transferring Member within fifteen (15) calendar days after HGV Member’s receipt of such Sale Notice. ~~By giving~~ The applicable time period described in the ~~Tag-Along Notice,~~ immediately preceding sentence is hereinafter referred to as the ~~Selling~~ “Response Period”. The Transferring Member and the Electing Member shall be ~~deemed to have granted to the Tag Members an option~~ entitled to sell ~~their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include~~ in the ~~Tag-Along Sale up to that amount~~ contemplated Tag Eligible Transfer, at the same price and on the same terms, a proportion of ~~its Class A Units or Class B Units (as applicable)~~ Interests equal to the product of (i1) the ~~aggregate number~~ total Interests owned by such Person and (2) its Pro Rata Share. The failure of ~~Class A Units~~ the HGV Member to elect to participate in the contemplated Tag Eligible Transfer within the applicable Response Period, shall be deemed to constitute an irrevocable waiver of all of such Member’s rights under this Section 3.2(d) with respect to such proposed Tag Eligible Transfer. The Electing Member and ~~Class B Units~~ the Transferring Member shall sell to the proposed third party transferee the Interests, in their respective Pro Rata Shares, proposed to be ~~acquired~~ transferred by the ~~purchaser~~proposed third party transferee in accordance with this Section 3.2(d) at the time and place provided for the closing in the Sale Notice, ~~multiplied by~~ or at such other time and place as the Blackstone Member and the proposed third party transferee shall agree. If the HGV Member has elected not to participate in the contemplated Tag Eligible Transfer (through notice to such effect or expiration of the appropriate Response Period, after delivery of the Sale Notice), then the Transferring Member may transfer the Interests specified in the Sale Notice at a price not more than the price set forth in the Sale Notice and on other terms and conditions not, in the aggregate, substantially more favorable to the Transferring Member than specified in the Sale Notice. (ii) ~~a fraction~~The Transferring Member shall use commercially reasonable efforts to obtain the agreement of the prospective transferee to the participation of the Electing Member, and the Transferring Member shall not transfer any of its Interests to any prospective transferee if such prospective transferee declines to allow the participation of the Electing Member to the extent required by this Section 3.2(d), unless simultaneously with such Tag Eligible Transfer, the ~~numerator of which is~~ Transferring Member purchases (at the same price and on the same terms and conditions) the number of ~~Class A Units~~ Interests from the Electing Member that the Electing Member is entitled to transfer pursuant to this Section 3.2(d) (a “Member Tag Acquisition”). The Transferring Member shall, in its sole discretion, decide whether or ~~Class B Units (as applicable~~not to pursue, consummate, postpone or abandon any proposed Tag Eligible Transfer pursuant to this Section 3.2(d) ~~held by such Tag Member~~ and the ~~denominator~~ terms and conditions thereof. No Member nor any Affiliate of ~~which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling~~ any such Member shall ~~not consummate~~ have any liability to any other Member or the ~~Tag-Along Sale unless~~ Company arising from, relating to or in connection with the pursuit, consummation, postponement, abandonment or terms and conditions of any such ~~portion of the Class A Units or Class B Units (as applicable) of such~~ proposed Tag ~~Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included~~Eligible Transfer. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires In order to exercise ~~its~~ the rights set forth in ~~Sections 3.5(a) and (b) above~~this Section 3.2(d), ~~then it shall provide~~ the ~~Selling~~ Electing Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) Transferring Interests pursuant to this Section ~~3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d~~3.2(d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall must agree to make ~~to the proposed Third Party transferee~~ the same ~~representations and~~ representations, warranties, covenants and indemnities as the ~~Selling~~ Transferring Member; provided that (x) unless otherwise agreed by such Electing Member ~~agrees to make~~ in connection with ~~such Tag-Along Sale; provided~~a Member Tag Acquisition in its sole discretion, ~~that (i) any such Tag~~ an Electing Member shall not be required to make representations and warranties or provide indemnities as to any other Member and an Electing Member shall not be required to make any representations and warranties about the business of the Company or its Subsidiaries, (y) neither the Transferring Member nor the Electing Member shall be liable for the breach of any covenant by ~~the Selling~~ any other Member and ~~vice versa,~~ (iiz) notwithstanding anything in ~~no event shall any Tag Member be required to make representations and warranties other than (A~~this Section 3.2(d)(ii) ~~such Member’s valid ownership of its Units, (B) the Transfer of those Units~~ to the ~~proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization~~contrary, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (~~and~~ including related indemnities) or and other indemnification obligations ~~(including escrow/holdback arrangements)~~ regarding the business of the Company or its Subsidiaries arising in connection with such Tag Eligible Transfer shall be shared severally and not jointly by the Transferring Member and the Electing Member pro rata based on their respective Interests being sold in the sale and in any event shall not exceed the proceeds received by the Transferring Member or the Electing Member in the sale, as the case may be. For the avoidance of doubt, the Company shall make all representations, warranties and related indemnities with respect to the business of the Company and its Subsidiaries in connection with a Tag Eligible Transfer. Notwithstanding the foregoing, in connection with a Tag Eligible Transfer, each Member (“Tag Indemnifying Member”) shall indemnify, defend and hold harmless the other Members from any loss, claim, damage or liability (including reasonable attorney’s fees) arising out of any breach by the Tag Indemnifying Member of any of its representations and warranties with respect to due authority, execution and delivery and lien-free title to such Member’s Interests made to any third party in connection with the ~~Tag-Along Sale~~ Tag Eligible Transfer. (iii) Each party shall be ~~shared on~~ responsible for any fees and expenses, including legal fees, incurred by such party in connection with a ~~several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members~~ Tag Eligible Transfer pursuant ~~to such Tag-Along Sale and~~ this Section 3.2(d). (iv) ~~no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member~~ If, (i) ~~does not elect before~~ prior to consummation, the ~~end~~ terms of the ~~Tag-Along Notice Period~~ proposed Tag Eligible Transfer shall change with the result that the purchase price to ~~have all or any part of its Tag-Along Portion included~~ be paid in such proposed Tag Eligible Transfer shall be less than the purchase price set forth in the ~~Tag-Along~~ Sale Notice or the other terms of such proposed Tag Eligible Transfer shall be materially less favorable to the Transferring Member than those set forth in the Sale Notice, or (ii) ~~fails to deliver to~~ the ~~Selling Member its Class A Units or Class B Units~~ proposed Tag Eligible Transfer is not consummated within one hundred twenty (~~as applicable~~120) ~~or any required documentation (collectively, a “Tag-Along Failure”~~calendar days after the expiration of the applicable Response Period contemplated by Section 3.2(d)(i), then ~~such Tag Member will~~ the Sale Notice shall be ~~deemed~~ null and void, and it shall be necessary for a separate Sale Notice to ~~have waived any~~ be delivered, and ~~all rights under~~ the terms and provisions of this Section ~~3.5 with respect~~ 3.2(d) separately complied with, in order to ~~the~~ consummate such proposed Tag Eligible Transfer ~~of any or all of its Class A Units or Class B Units~~ pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section ~~3.5 and shall require~~ 3.2(d); provided, however, that in the case of such a ~~Tag-Along~~ separate Sale Notice~~. (g) Promptly after the consummation of a Tag-Along Sale~~, the ~~Selling~~ applicable period to which reference is made in Section 3.2(d)(i) for delivery of notice by an Electing Member ~~shall give notice thereof~~ to the ~~participating~~ Transferring Member of participation in the Tag ~~Members~~Eligible Transfer shall be five (5) calendar days if, ~~shall remit to each such Tag Member~~ but only if, the ~~total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d),~~ amount and ~~shall furnish such other evidence~~ nature of the ~~completion and time~~ consideration to be received is not changed from the original Sale Notice, otherwise the applicable period for delivery of ~~completion of the Tag-Along Sale and the terms thereof as may be reasonably requested~~ notice by ~~any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5~~ an Electing Member to the ~~contrary, no Selling~~ Transferring Member of participation in the Tag Eligible Transfer shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as ~~a Substitute Member except as provided~~ set forth in Section ~~3.9~~3.2(d)(i).

Appears in 1 contract

Samples: Limited Liability Company Agreement (Hilton Grand Vacations Inc.)

Tag-Along Rights. (ai) ~~Subject~~ With respect to any proposed Transfer (other than a ~~Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed~~ Transfer pursuant to ~~be Transferred under Section 3.4, each time~~ Sections 9.2 or 9.3) by a Class A ~~Member, Class B~~ Member or ~~group of~~ Class A Members ~~and/or Class B Members acting jointly~~ (collectively, the “Selling ~~Member~~Members”) ~~desires to make any Transfer~~ of ~~all or any portion of the Class A Units and/or Class B Units held by such Member(s)~~ Company Interests to any ~~Third Party, other than to~~ Person who is not a Permitted Transferee thereof and which Transfer has been approved by the prior written consent of ~~such Member(s) or in accordance with Sections 3.6, 3.7~~ both WCAS and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) SEM (a “~~Tag-Along~~ Proposed Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A ~~Member and Class B~~ Member (other than the Selling ~~Member~~Members) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in who exercises its rights under this Section ~~3.5.~~ 9.1 (beach a “Tagging Member”) ~~Each Tag Member~~ shall have the right ~~and option, exercisable as set forth below,~~ to include in the ~~Tag-Along~~ Proposed Sale up to ~~that amount~~ the proposed transferee of ~~its~~ such Class A ~~Units or~~ Interests (the “Proposed Transferee”) a number of Class ~~B Units (as applicable) equal~~ A Interests up to the product (rounded down to the nearest whole number) of (i) the quotient determined by dividing (A) the aggregate number of Class A ~~Units and Class B Units to be acquired~~ Interests owned by ~~the purchaser, multiplied~~ such Tagging Member by (iiB) ~~a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is~~ the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) Interests then outstanding and (bii) ~~above, then it shall provide~~ the ~~Selling Member with written irrevocable notice specifying the~~ total number of Class A ~~Units or Class B Units (as applicable) that such Tag Member wishes~~ Interests proposed to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice be Transferred to the ~~Company. Promptly~~ Proposed Transferee, at the same price per Company Interest and upon ~~request~~ the same terms and conditions (including time of payment, amount, form and choice of consideration and adjustments to purchase price) as the Selling Members; provided that to the extent one or more Members elect not to sell his, her or its entire allotment, then the allotment of the ~~Seller Member,~~ Tagging Members who have elected to sell their entire allotment (and ~~in any event prior~~ who elect to sell additional Class A Interests) shall be increased proportionately among such electing Members who wish to sell additional Class A Interests based on their relative holdings up to the ~~consummation~~ full amount of Class A Interests which the ~~Tag~~non-~~Along Sale~~electing Members were entitled to sell pursuant to this Section 9.1; provided, ~~each such Tag Member~~ further that ~~has exercised~~ in order to be entitled to exercise its right to ~~participate in~~ sell the ~~Tag-Along Sale by providing the required notice~~ Company Interests to the ~~Selling Member within the Tag-Along Notice Period shall deliver~~ Proposed Transferee pursuant to ~~a representative of~~ this Section 9.1, each Tagging Member, if requested by the Selling Members or the Proposed Transferee, (x) shall agree to the same covenants as the Selling Members agree to in connection with the Proposed Sale (provided that no Tagging Member ~~designated in the Tag-Along Notice or otherwise all documents~~ shall be required to agree to any covenant not to compete or any covenant that would bind or restrict any Affiliate of a Tagging Member that is not itself a Member), (y) shall be ~~executed or delivered~~ obligated to join individually and ratably (and not jointly and severally) on a pro rata basis (based on the proceeds to be received by such ~~Tag~~ Tagging Member in connection with the ~~Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along~~ Proposed Sale ~~against delivery to such Tag Member of the consideration therefor. (d) Each Member participating~~ but that in ~~the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to~~ no event exceeds the amount ~~such Member would have~~ of consideration otherwise received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the ~~proposed transferee and the Selling~~ Tagging Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such ~~Tag~~Proposed Sale) in any pro rata indemnification that the Selling Members agree to provide in connection with the Proposed Sale (provided that no Tagging Member shall be required to share in any indemnification obligations relating to a breach of a representation, warranty or covenant relating solely to another Member or such other Member’s Company Interests, such as with respect to title to Company Interests or authorization of a Member to enter into transaction agreements (such obligations to be borne solely by the other Member)) and (z) shall make such representations and warranties concerning itself and the Company Interests to be sold by it in connection with such Transfer as each Selling Member makes with respect to itself and its Company Interests (and provide sole indemnity with respect thereto consistent with any indemnification provided by each Selling Member with respect to its representations and warranties); provided, further, that, payment of cash consideration to any Tagging Member entitled to receive less than $100,000 in connection with any such Transfer may be made by check regardless of whether other participating Members receive payment by check or wire transfer of immediately available funds. (ii) Each Tagging Member will be responsible for funding its proportionate share (based on the proceeds to be received by each Tagging Member in connection with the Proposed Sale) of any adjustment in purchase price or escrow arrangements in connection with the Proposed Sale and for its proportionate share of any withdrawals from any such escrow, including any such withdrawals that are made with respect to claims arising out of such Tagging Member’s agreements, covenants, representations, warranties or other provisions relating to the Proposed Sale and shall receive its proportionate share of any upward adjustment in purchase price or release of funds to the Members from any escrow arrangement in connection with the Proposed Sale. (iii) Each Tagging Member will be responsible for its proportionate share (based on the proceeds to be received by each Tagging Member in connection with the Proposed Sale) of the fees, commissions and other out-~~Along~~ of-pocket expenses (collectively, “Costs”) of the Proposed Sale. The Selling Members shall be entitled to estimate in its reasonable, good faith judgment each Tagging Member’s proportionate share of such Costs and to withhold such amounts from payments to be made to each Tagging Member at the time of closing of such Proposed Sale; provided, that (i) ~~any~~ such ~~Tag Member~~ estimate shall not ~~be liable for the breach of any covenant by~~ preclude the Selling ~~Member~~ Members from recovering additional amounts from the Tagging Members in respect of each such Tagging Member’s proportionate share of such Costs and ~~vice versa,~~ (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Members shall reimburse each Tagging Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent ~~such costs~~ actual amounts are ~~incurred for~~ ultimately less than the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Membersestimated amounts. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Limited Liability Company Agreement (Select Medical Corp)

Tag-Along Rights. (a) Subject to ~~a Member first complying~~ prior compliance with Section ~~3.4 and provided~~ 2, the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly Partnership (~~collectively,~~ the “Selling ~~Member~~Holder”) ~~desires to make any~~ shall not sell or otherwise effect a sale or other Transfer of all or any ~~portion~~ number of ~~the Class A Units and/or Class B Units held by such Member(s) to any Third Party,~~ its Holdings Shares (other than to a Permitted Transferee ~~of such Member(s)~~ or in ~~accordance with Sections 3.6, 3.7 and 3.8, such that~~ a transaction pursuant to Section 5) unless the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such ~~proposed Transfer~~Transfer include an offer, ~~including any consideration proposed to be received pursuant to a bona fide written agreement for~~ on the ~~Tag-Along Units (and~~same terms and conditions, if in the same proportion and with the same economic terms, as the offer by the proposed ~~Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal~~ third party transferee to the ~~amount of the monetary consideration~~Selling Holder, ~~if any, plus the Fair Market Value~~ to each of the other ~~consideration~~Holders who is not the Selling Holder or the proposed third party transferee (if such purchaser is a Holder) (~~the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member~~collectively, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag ~~Members~~Offerees”)~~. By giving~~ , to include at the ~~Tag-Along Notice~~option of each Tag Offeree, in the ~~Selling Member shall be deemed to have granted~~ sale or other Transfer to the ~~Tag Members an option to sell their Class A Units or~~ third party, a number of Class B ~~Units~~ Common Shares (~~as applicable~~or Common Shares from the conversion of such Class B Common Shares) ~~upon the terms set forth~~ owned by each Tag Offeree determined in accordance with this Section ~~3.5~~4. (b) The Selling Holder shall cause the third party transferee offer to be reduced to writing (which writing shall include an offer to purchase or otherwise acquire Class B Common Shares (or Common Shares from the conversion of such Class B Common Shares) from the Tag Offerees as required by this Section 4 and a time and place designated for the closing of such purchase, which time shall not be less than twenty (20) Business Days after delivery of such notice) and shall send written notice of such third party offer (the “Inclusion Notice”) to each of the Tag Offerees and Holdings in the manner specified herein. (c) Each Tag ~~Member~~ Offeree shall have the right ~~and option~~(an “Inclusion Right”), exercisable as by delivery of a notice to the Selling Holder at any time within ten (10) Business Days after receipt of the Inclusion Notice, to sell pursuant to such third party offer, and upon the terms and conditions set forth ~~below, to include~~ in the ~~Tag-Along Sale up to~~ Inclusion Notice, that ~~amount~~ number of ~~its Class A Units or~~ Class B ~~Units~~ Common Shares (~~as applicable~~or Common Shares from the conversion of such Class B Common Shares) requested to be included by such Tag Offeree (which number shall not exceed, but may be less than, a number of such Tag Offeree’s Class B Common Shares (or Common Shares from the conversion of such Class B Common Shares) equal to the product of (ix) ~~the aggregate number of Class A Units and~~ such Tag Offeree’s Class B ~~Units to be acquired by~~ Common Shares (or Common Shares from the ~~purchaser,~~ conversion of such Class B Common Shares) multiplied by (iiy) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along ~~Sale unless~~ Pro Rata Share) (it being understood that the failure to exercise such ~~portion~~ right within such time period specified above shall be deemed to constitute a waiver of ~~the Class A Units or Class B Units (as applicable)~~ all of such Tag ~~Member (or~~ Offeree’s rights with respect to such ~~lesser portion~~ proposed Transfer and any such exercise of the ~~Class A Units or Class B Units~~ Inclusion Right shall be irrevocable). If the proposed third party transferee is unwilling to purchase all of ~~such~~ the Holdings Shares proposed to be Transferred by the Selling Holder and all exercising Tag ~~Member for which such right~~ Offerees (determined in accordance with the first sentence of this Section 4(c)), then the Selling Holder and ~~option is exercised) is so included. To~~ each exercising Tag Offeree shall reduce, on a pro rata basis based on their respective Valuation Percentages of the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among Holdings Shares held by the Tag ~~Members making such further election) such that~~ Offerees and the ~~percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to~~ Selling Holder, the Tag-Along ~~Portion~~ Pro Rata Share of ~~all Tag Members. (c) If any Tag Member desires~~ the Holdings Shares that each otherwise would have sold so as to ~~exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide~~ permit the Selling ~~Member with written irrevocable notice specifying~~ Holder and each exercising Tag Offeree to sell the number of ~~Class A Units~~ Holdings Shares that the proposed third party transferee is willing to purchase. The Tag Offerees and the Selling Holder shall sell to the proposed third party transferee the Holdings Shares proposed to be Transferred by them in accordance with this Section 4 at the time and place provided for the closing in the Inclusion Notice, or at such other time and place as the holders of a majority of the Class B ~~Units~~ Common Shares (~~as applicable) that such Tag Member wishes to include in~~ or Common Shares from the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy conversion of such ~~notice~~ Class B Common Shares) to be Transferred by exercising Tag Offerees, the ~~Company. Promptly upon request of the Seller Member~~Selling Holder, and ~~in any event prior~~ the proposed third party transferee shall agree. Notwithstanding the foregoing, no Tag Offeree shall be entitled to Transfer Class B Common Shares (or Common Shares from the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer conversion of such ~~Tag Member’s Class A Units or~~ Class B ~~Units (as applicable~~Common Shares) pursuant to an Inclusion Right conferred pursuant to this Section ~~3.5 at~~ 4 in the ~~closing for such Tag-Along Sale against~~ event that, notwithstanding delivery of an Inclusion Notice pursuant to this Section 4, the Selling Holder fails to consummate the Transfer of Holdings Shares which gave rise to such ~~Tag Member of the consideration therefor~~Inclusion Right. (d) ~~Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal~~ Notwithstanding anything herein to the ~~amount~~ contrary, no Tag Offeree shall have an Inclusion Right in connection with any Transfer in which the consideration to be received by the Selling Holder includes securities if extending such ~~Member would have received with respect~~ Inclusion Right to such Tag Offeree is not possible without registering such securities under the ~~Class A Units or Class B Units (as applicable) Transferred by~~ Securities Act and the proposed third party transferee is unable to register such ~~Member in~~ securities despite its and the ~~Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a)~~Selling Holder’s commercially reasonable efforts; provided that ~~where less than one hundred percent~~ in such event, the Selling Holder shall require the proposed third party transferee to purchase the Class B Common Shares (~~100%~~or Common Shares from the conversion of such Class B Common Shares) of any such Tag Offerees who are unable to participate as a result of this Section 4(d) for cash at the ~~issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate~~ purchase price ~~by reference to which the consideration payable~~ as is implied for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determinationHolder. (e) ~~Any~~ In connection with any such Transfer, each Tag ~~Member that validly elects to participate in a Tag-Along Sale shall~~ Offeree must agree to make ~~to the proposed Third Party transferee~~ the same ~~representations and~~ representations, warranties, covenants (other than standstill, non-compete and non-solicitation provisions and licenses, employment or consulting agreements, or any other covenant that would require a Holder to restrict or limit its or its Affiliates’ business activities in any material respect) and indemnities as the Selling ~~Member agrees~~ Holder; provided that (x) no such Tag Offeree shall be required to make ~~in connection with such Tag-Along Sale; provided, that (i)~~ representations and warranties or covenants or provide indemnities as to any other Holder and no such Tag ~~Member~~ Offeree shall be required to make any representations and warranties (but, subject to clause (z), shall be required to provide several but not joint indemnities with respect to breaches of representations and warranties made by Holdings or its Subsidiaries) about the business of Holdings or its Subsidiaries, (y) no Tag Offeree shall be liable for the breach of any covenant by ~~the~~ any other Tag Offeree or Selling ~~Member~~ Holder and ~~vice versa,~~ (iiz) notwithstanding anything in ~~no event shall any Tag Member be required to make representations and warranties other than (A~~this Section 4(e) ~~such Member’s valid ownership of its Units, (B) the Transfer of those Units~~ to the ~~proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization~~contrary, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) ), covenants or other indemnification obligations ~~(including escrow/holdback arrangements)~~ regarding the business of ~~the Company~~ Holdings assumed in connection with the ~~Tag-Along Sale~~ Transfer shall be shared ~~on a several (but not joint) basis~~ by all exercising Tag Offerees electing to sell and the ~~participating Members as if~~ Selling Holder pro rata in proportion to the proceeds actually received by such ~~amount reduced~~ Holder to the aggregate amount of proceeds ~~available for distribution or payment to~~ received by all of the ~~participating Members pursuant to such Tag-Along Sale~~ Holders and ~~(iv) no Tag Member~~ in any event shall ~~be obligated to agree to indemnification obligations in excess of~~ not exceed the proceeds received by such ~~Tag Member~~ Holder in ~~such Tag-Along Sale~~the proposed Transfer. (f) ~~If any Tag Member (i) does not elect before the end~~ The provisions of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws4 shall, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent ~~such costs are incurred for~~ Holdings is then in existence, terminate upon the ~~benefit of all participating Members. Costs incurred by or on behalf~~ completion of a ~~Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members~~Qualified IPO. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Stockholders Agreement (First Data Corp)

Tag-Along Rights. (a) ~~Subject~~ If at any time prior to an Initial Public Offering, (i) one or more of the Members propose to Transfer to a ~~Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all~~ Person (other than to one or more Permitted Transferees) a majority of the LLC Interests or (ii) Parent proposes to make a direct sale of a majority of the capital stock of NBC (the sellers in the case of (i) or (ii) above being hereinafter referred to as the "TRANSFERRING MEMBERS"), the Transferring Members shall have the obligation, and each NBC Internet Holder, if the Transferring Members are NBC Holders, or each NBC Holder if the Transferring Members are NBC Internet Holders (the "OTHER MEMBER"), who is not then in breach of this Agreement, shall have the right, to require the proposed transferee to purchase from each such Other Member the number of Units equal to the product (rounded to the nearest whole number) of (x) the Percentage Interest of such Other Member and (y) the number of Units or shares of capital stock proposed to be sold in the contemplated sale, and at the same price per Unit or per share and upon the same terms and conditions as to be paid and given to the Transferring Member, provided that in order to be entitled to exercise their right to sell Units to the proposed transferee pursuant to this Section 7.6, the Other Member must agree to make substantially the same representations, warranties, covenants and indemnities and other similar agreements as the Transferring Members agree to make in connection with the proposed transfer of Units of the Transferring Member (other than with respect to representations, warranties, covenants and indemnities relating to the conduct of the XXXX.xxx Business). Each Transferring Member shall give notice to the Other Member of each proposed Transfer giving rise to the rights of the Other Member set forth in the first sentence of this Section 7.3 at least 20 days prior to the proposed consummation of such Transfer, setting forth the name of the Transferring Member, the number of Units proposed to be ~~Transferred~~ so transferred, the name and address of the proposed transferee, the proposed amount of consideration therefor and terms and conditions agreed to by the proposed transferee, the number of Units the Other Member may sell to such proposed transferee (in accordance with the first sentence of this Section 7.3), and a representation that the proposed transferee has been informed of the "tag-along" rights provided for in this Section 7.3 and has agreed to purchase Units in accordance with the terms hereof. (b) The tag-along rights provided by this Section 7.3 must be exercised by the Other Member within 15 days following receipt of the notice required by the preceding sentence, by delivery of a written irrevocable notice to the Transferring Member indicating the Other Member's exercise of its rights and specifying the amount of Units (up to the maximum amount of Units owned by the Other Member required to be purchased by the proposed transferee pursuant to the first sentence of this Section 7.3) it desires to sell. The Transferring Members shall be entitled under this Section 7.3 to transfer to the proposed transferee the amount of Units equal to the difference between the number referred to in this subsection (b) and the aggregate amount of Units set forth in the written notices, if any, delivered by the Other Member pursuant to the preceding sentence. If the proposed transferee fails to purchase Units from the Other Member that has properly exercised its tag-along rights, then the Transferring Member shall not be permitted to make the proposed Transfer, and any such attempted Transfer shall be void and of no effect. (c) If the Other Member exercises its rights under Section ~~3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively~~7.3(a), the ~~“Selling~~ closing of the purchase of the Units with respect to which such rights have been exercised shall take place concurrently with the closing of the sale of the Transferring Member”'s LLC Interests. (d) ~~desires~~ If Parent is the Transferring Member pursuant to ~~make any Transfer~~ Section 7.3(a)(ii) hereof and Parent fails to offer tag-along rights to the NBC Internet Holders in accordance with the terms of this Section 7.3, the NBC Internet Holders shall have the right to put to NBC, and NBC shall be obligated to purchase, all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) Interests of the ~~aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then~~ NBC Internet Holders on the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other same terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the ~~percentage of Class A Units and Class B Units of Tag Members participating in such Tag~~NBC Internet Holders would have obtained if they had been afforded tag-~~Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its~~ along rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section ~~3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor~~7. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Liability Company Agreement (NBC Internet Inc)

Tag-Along Rights. (a) ~~Subject to a Member first complying with Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a~~ If any Class ~~A Member, Class B~~ A-2 Member or ~~group of~~ Class ~~A Members and/or Class B Members acting jointly~~ C Member (~~collectively,~~ the “~~Selling Member~~Transferring Holder”) ~~desires~~ proposes to ~~make any~~ Transfer ~~of all~~ Class A-2 Preferred Shares or Class C Common Shares (or any ~~portion of the Class A Units and/or Class B Units~~ other Equity Securities held by such ~~Member(s~~Member) to ~~any~~ an Independent Third ~~Party,~~ Party prior to an IPO (other than ~~to a Permitted Transferee of such Member(s~~any Transfer (i) as provided in Section 9.08, (ii) as provided in Section 9.09, (iii) in connection with Section 9.10 or (iv) as provided in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”Section 9.12), then the ~~Selling~~ Transferring Holder(s) shall deliver a written notice (such notice, the “Tag Notice”) to the Company, each Class D Member, each Class A-1 Preferred Member ~~must comply with the provisions of this Section 3.5. The Selling~~ and each Class E Member ~~shall inform the Board by notice in writing~~ (the “~~Tag-Along Notice~~Participation Members”) at least thirty (~~the date upon which~~ 30) days prior to making such ~~notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”)~~Transfer, specifying in reasonable detail the identity of the ~~proposed transferee~~prospective transferee(s), the number of Class A-2 Preferred Shares or Class C Common Shares (or any other Equity Securities held by such Members) to be Transferred and the price and other terms and conditions of ~~such proposed~~ the Transfer~~, including any consideration proposed~~ . Each Participation Member may elect to ~~be received pursuant to a bona fide written agreement for~~ participate in the ~~Tag-Along Units (and, if~~ contemplated Transfer in the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms manner set forth in this Section ~~3.5~~9.07 by delivering an irrevocable written notice to the Transferring Holder(s) within fifteen (15) days after delivery of the Tag Notice, which notice shall specify the number of Class A-1 Preferred Shares, Class D Common Shares and Class E Common Shares (or any other Equity Securities held by such Members) that such Participation Member desires to include in such proposed Transfer. If none of the Participation Members gives such notice prior to the expiration of the fifteen (15) day period for giving such notice, then the Transferring Holder(s) may Transfer such Class A-2 Preferred Shares or Class C Common Shares (or any other Equity Securities held by such Members) to any Person at the same price and on other terms and conditions that are no more favorable, in the aggregate, to the Transferring Holder(s) than those set forth in the Tag Notice. If any Participation Members have irrevocably elected to participate in such Transfer prior to the expiration of the fifteen (15) day period for giving notice, each Participation Member shall be entitled to sell in the contemplated Transfer a total number of Class A-1 Preferred Shares with respect to Class A-1 Preferred Members or Class E Common Shares with respect to Class E Members (the “Tagged Shares”) to be sold in the Transfer, to be calculated according to the following methodology: (i) First, all Junior Interests owned by the Transferring Holder are deemed converted (on a Fully Diluted Basis) to Class D Common Shares on a 1:1 basis (as adjusted, as necessary, to reflect appropriate and proportional adjustments to take into account any subdivision, reorganization, reclassification, recapitalization, stock split, reverse stock split, combination of shares or similar event) and all Class A-1 Preferred Shares held by all Participation Member(s) are deemed converted to Class D Common Shares pursuant to Section 2.10(b) (collectively the number of Class D Common Shares resulting from the deemed conversion, plus the number of Class D Common Shares held by the Participating Members prior to such deemed conversion, the “Total Conversion Shares”). For clarity, such “deemed” conversion pursuant to this Section 9.07(a) shall solely be for the purposes of calculating the Tagged Shares, and no actual conversion shall occur pursuant to this Section 9.07(a). (bii) ~~Each Tag Member shall have~~ Second, the ~~right and option~~total number of Shares that are subject to Transfer is determined (the “Total Tagged Shares”). (iii) Third, ~~exercisable as set forth below, to include in~~ the ~~Tag-Along Sale up to that amount of its Class A Units or Class B Units~~ Tagged Shares will be: (~~as applicable~~A) ~~equal to the product of (i) the aggregate~~ a number of Class A-1-A ~~Units and Class B Units to be acquired by the purchaser,~~ Preferred Shares equal to: (1) Total Tagged Shares multiplied by ~~(ii)~~ a fraction, (x) the numerator of which is the number of Class D Common Shares into which the Class A-1-A ~~Units or Class B Units~~ Preferred Shares of such Participation Member were deemed converted pursuant to subsection (~~as applicable~~i) ~~held by such Tag Member~~ above, and (y) the denominator of which is the ~~aggregate~~ Total Conversion Shares divided by, (2) the A-1-A Preferred Share Conversion Ratio; (B) a number of Class ~~A Units and Class~~ A-1-B ~~Units held~~ Preferred Shares equal to: (1) Total Tagged Shares multiplied by a fraction, (x) the ~~Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion~~ numerator of ~~the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for~~ which ~~such right and option~~ is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class ~~A Units or~~ D Common Shares into which the Class A-1-B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy Preferred Shares of such ~~notice~~ Participation Member were deemed converted pursuant to subsection (i) above, and (y) the denominator of which is the Total Conversion Shares divided by, (2) A-1-B Preferred Share Conversion Ratio; and (C) a number of Class D Common Shares equal to: Total Tagged Shares multiplied by a fraction, (1) the numerator of which is the number of Class D Common Shares held by the Participating Member prior to the ~~Company. Promptly upon request of the Seller Member~~deemed conversion pursuant to subsection (i) above, and ~~in any event~~ (2) the denominator of which is the Total Conversion Shares. (D) a number of Class E Common Shares equal to: Total Tagged Shares multiplied by a fraction, (1) the numerator of which is the number of Class E Common Shares held by the Participating Member prior to the deemed conversion pursuant to subsection (i) above, and (2) the denominator of which is the Total Conversion Shares. (b) Immediately prior to the consummation of the ~~Tag-Along Sale~~Transfer to the Independent Third Party, the Tagged Shares (other than Class E Common Shares) will be automatically, and without any further action, be actually converted into Class D Common Shares pursuant to Section 2.10(b). The Transferring Holder(s) and each participating Participation Member shall receive the same form of consideration and the aggregate net consideration (after such aggregate net consideration is adjusted for Company expenses, purchase price adjustments, escrow amounts, purchase price holdbacks, indemnity obligations and other similar items) shall be divided ratably among the Transferring Holder and each participating Participation Member based upon their respective numbers of Shares included in the Transfer. (c) Notwithstanding anything to the contrary in this Section 9.07, the Transferring Holder(s) shall not consummate the Transfer contemplated by the Tag Notice at a higher price or on other terms and conditions more favorable to them, in the aggregate, than the terms set forth in the Tag Notice (including as to price per Class A-1 Preferred Share or form of consideration to be received) unless the Transferring Holder(s) shall first have delivered a second notice setting forth such more favorable terms (the “Amended Tag Notice”) to each Participation Member ~~that has exercised its right~~ who had not elected to participate in the ~~Tag-Along Sale~~ contemplated Transfer. Each Participation Member receiving an Amended Tag Notice may elect to participate in the contemplated Transfer on such amended terms by ~~providing the required~~ delivering written notice to the ~~Selling Member within the Tag-Along Notice Period shall deliver to a representative~~ Transferring Holder(s) not later than ten (10) Business Days after delivery of the ~~Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such~~ Amended Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration thereforNotice. (d) Each Participation Member ~~participating~~ shall pay his, her or its own costs of any sale and a pro rata share (based upon the reduction in proceeds that would have been allocated to such Member if the amount of such expense were not included in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%aggregate consideration) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used expenses incurred by the ~~proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag~~ Members ~~exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant~~ (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all ~~participating Members. Costs incurred~~ of such Members and are not otherwise paid by ~~or on behalf of a Tag Member for its sole benefit (which~~ the Transferee) and the Company in connection with such Transfer and shall be ~~borne~~ obligated to provide the same customary representations, warranties, covenants, agreements, indemnities and other obligations that the Transferring Holder(s) agrees to provide in connection with such Transfer; provided, that in no event will a Participation Member be required to enter into a non-competition agreement or be subject to any similar covenant or provision. Except as contemplated by the preceding sentence, each Participation Member shall execute and deliver all documents required to be executed in connection with such ~~Tag Member) will not be considered incurred for the benefit of all participating Members~~tag-along sale transaction. (je) ~~No Assignee~~ Without limiting the generality of the other provisions of this Section 9.07, the Transferring Holder(s) shall ~~be admitted as a Substitute~~ decide whether or not to pursue, consummate, postpone or abandon any Transfer and, subject to the limitations set forth in this Section 9.07, the terms and conditions thereof. None of the Transferring Holder(s) nor any of their respective Affiliates shall have any liability to any Member arising from, relating to or in connection with the pursuit, consummation, postponement, abandonment or terms and conditions of any such Transfer except ~~as provided in~~ to the extent the Transferring Holder(s) shall have failed to comply with any of the other provisions of this Section ~~3.9~~9.07.

Appears in 1 contract

Samples: Limited Liability Company Agreement (General Motors Co)

Tag-Along Rights. ~~(a)~~ Subject to ~~a Member first complying with~~ Section ~~3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed~~ 2(a) hereof, at least 30 days prior to ~~be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make~~ any Transfer of ~~all~~ any type of Units by a Unitholder (other than pursuant to an Approved Sale, a Public Sale, a Transfer to the LLC and/or the Other Unitholders in accordance with Section 2(a) hereof or ~~any portion~~ a Transfer to a Permitted Transferee in accordance with Section 2(c) hereof) that would result in such Unitholder having transferred after the date hereof pursuant to this Section 2(b) more than 5% of the ~~Class A Units and/or Class B~~ aggregate number of such type of Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) Unitholder as of the ~~aggregate outstanding Class A Units and Class B Units (taken together as~~ date hereof, the Unitholder making such a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “~~Tag-Along Units~~Transferring Unitholder”) shall deliver a written notice (the “Sale Notice”) to the LLC and the Other Unitholders (other than the Executives), specifying in reasonable detail the identity of the ~~proposed transferee~~prospective transferee(s), the number and type of Units to be transferred, and the ~~other~~ terms and conditions of ~~such proposed~~ the Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member Each Other Unitholder (other than the ~~Selling Member~~Executives) may elect to participate in the contemplated Transfer by delivering written notice to the Transferring Unitholder within 15 days after delivery of the Sale Notice. If any Other Unitholder(s) has elected to participate in such Transfer, each of the Transferring Unitholder and such Other Unitholder(s) (other than the ~~“Tag Members”). By giving the Tag-Along Notice, the Selling Member~~ Executives) shall be ~~deemed to have granted to the Tag Members an option~~ entitled to sell ~~their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include~~ in the ~~Tag-Along Sale up~~ contemplated Transfer, at the same price and on the same terms and conditions, a number of the type of Units to ~~that amount of its Class A Units or Class B Units (as applicable)~~ be transferred equal to the product of (i) the ~~aggregate number~~ quotient determined by dividing the percentage of ~~Class A~~ such type of Units ~~and Class B Units to be acquired~~ owned by such Person by the ~~purchaser, multiplied~~ aggregate percentage of such type of Units owned by the Transferring Unitholder and all Other Unitholders participating in such Transfer and (ii) ~~a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is~~ the aggregate number of ~~Class A~~ such type of Units ~~and Class B Units held by~~ to be sold in the ~~Selling Member and all Tag Members~~ contemplated Transfer; provided, that, for purposes of determining the quotient under subclause (~~its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable~~i) of this sentence, if any such ~~Tag Member (or such lesser portion~~ type of ~~the Class A~~ Units ~~or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that~~ owned by any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members Person participating in such ~~Tag-Along Sale is equal~~ Transfer are subject to up vesting pursuant to the ~~Tag-Along Portion~~ terms of ~~all Tag Members. (c) If~~ any ~~Tag Member desires~~ Executive Subscription Agreement or any other agreement between the LLC or any of its Subsidiaries and any Unitholder, such Units shall be taken into account as Units owned by such Person only if, and only to ~~exercise its rights set forth in Sections 3.5(a) and (b) above~~the extent that, ~~then it shall provide~~ they have vested pursuant to the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy terms of such ~~notice to~~ agreement; provided, further, that, notwithstanding the ~~Company. Promptly upon request of the Seller Member~~foregoing, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member (y) in connection with ~~the~~ any Transfer (or series of ~~such Tag Member’s Class A Units or Class B Units (as applicable~~related Transfers) pursuant to this Section ~~3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member~~ 2(b) that would result in a Transfer of all or substantially all of the ~~consideration therefor.~~ Common Units (dother than the Common Units held by the Executives), the Executives shall be entitled to participate in such Transfer as “Other Unitholders” pursuant to the terms and conditions of this Section 2(b) ~~Each Member~~ and (z) no Transfer pursuant to this Section 2(b) that would result in a Change in Control may be effected unless Xxxx Atlantic is given the opportunity to sell all its Warrants and/or Warrant Units on the same terms and conditions as the Other Unitholders participating in such Transfer and, to the ~~Tag-Along Sale shall receive a portion~~ extent Xxxx Atlantic elects to sell Warrants and/or Warrant Units pursuant to this subclause (z), the number of the ~~Tag-Along Price equal~~ type of Units to be transferred by the ~~amount~~ Transferring Unitholder and the Other Unitholders participating in such ~~Member~~ Transfer (other than Xxxx Atlantic) shall be reduced on a pro rata basis (based on the number of such type of Units the Transferring Unitholder and such Other Unitholders would have ~~received with respect~~ been entitled to Transfer pursuant to this Section 2(b) if this subclause (z) did not apply). Each Unitholder transferring Units pursuant to this Section 2(b) shall pay its pro rata share (based on the ~~Class A~~ number of each type of Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%to be sold) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used expenses incurred by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make Unitholders in connection with such ~~Tag-Along Sale; provided,~~ Transfer and shall be obligated to join on a pro rata basis (based on the number of each type of Units to be sold) in any indemnification or other obligations that the Transferring Unitholder agrees to provide in connection with such Transfer (i) other than any such ~~Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa~~obligations that relate specifically to a particular Unitholder, ~~(ii) in no event shall any Tag Member be required to make representations and warranties other than (A)~~ such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating as indemnification with respect to representations and warranties (given by a Unitholder regarding such Unitholder’s title to and ~~related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business~~ ownership of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along SaleUnits). (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Members Agreement (McCormick & Schmick Holdings, L.L.C.)

Tag-Along Rights. (a) ~~Subject~~ If at any time after the Restricted Period, and subject to ~~a Member first complying with~~ Section ~~3.4~~ 3.03, if an Equityholder and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”), then the Selling Member must comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing its Affiliates (the “Tag-~~Along Notice~~along Transferor”) proposes to Transfer Equity Inter- ests to any Person (~~the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed~~ other than a Transfer ~~(the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received~~ contemplated pursuant to ~~a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is~~ Section 3.01(b) or pursuant to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other considerationSection 3.03) (the “Tag-~~Along Price~~along Transferee”), the other Equityholder and/or its Affiliates (a “Tag- along Rightholder”) shall be permitted to participate in such Transfer (a “Tag-along Sale”) on the terms and conditions set forth in this Section 3.04. (b) The Offering Holder Notice, when delivered by the Tag-along Transferor pursuant to Section 3.03(b), shall also constitute the Tag-along Transferor’s offer for the Tag- along Rightholder to participate in a Tag-along Sale. (c) Upon receipt of an Offering Holder Notice, each Tag-along Rightholder may exercise its right to participate in a Transfer of Equity Interests by the Tag-along Transferor subject to this Section 3.04 by delivering to the Tag-along Transferor a written notice (a “Tag- along Notice”) stating its election to do so and specifying the number of shares of Equity Inter- ests to be Transferred by it no later than twenty (20) Business Days after receipt of the Offering Holder Notice (the “Tag-along Period”). If Each Tag-along Rightholder shall have the right to Transfer in a sale subject to this Section 3.04 the number of shares of Equity Interests equal to the product obtained by multiplying (x) the number of shares of Equity Interests held by the Tag- along Rightholder by (y) a fraction (A) the numerator of which is equal to the number of shares of Equity Interests the Tag-~~Along Units are~~ along Transferor proposes to Transfer to the Tag-along Transferee and (B) the denominator of which is equal to the number of shares of Equity Interests then owned by such Tag-along Transferor. (d) Each Person participating in a Transfer pursuant to this Section 3.04 shall receive the same consideration per share (including the same mixture of cash and non-cash con- sideration) after deduction of such Person’s proportionate share of the related expenses in accor- dance with subsection (g) below. The Tag-along Transferor shall use its reasonable best efforts to include in the proposed Transfer to the Tag-along Transferee all of the shares of Equity Inter- ests that the Tag-along Rightholders have requested to have included pursuant to the applicable Tag-along Notices. In the event the Tag-along Transferee elects to purchase less than all of the shares of Equity Interests sought to be Transferred ~~other than for cash~~ by the Tag-along Rightholders, the number of shares to be Transferred to the ~~Selling Member,~~ Tag-along Transferee by the ~~consideration for~~ Tag-along Transferor and each Tag- along Rightholder shall be reduced so that each such Person is entitled to Transfer its pro rata portion of the number of shares of Equity Interests the Tag-along Transferee elects to purchase (which in no event may be less than the number of shares of Equity Interests set forth in the Of- fering Holder Notice). (e) Each Tag-along Rightholder who does not deliver a Tag-along Notice in compliance with subsection (d) above shall be deemed to have waived all of such Tag-~~Along Units~~ along Rightholder’s rights to participate in such Transfer, and the Tag-along Transferor shall (subject to the rights of any participating Tag-along Rightholder) thereafter be free to Transfer to the Tag- along Transferee its shares of Equity Interests at a per share price that is no greater than the per share price set forth in the Offering Holder Notice and on the same terms and conditions which are not more favorable to the Tag-along Transferor than those set forth in the Offering Holder Notice, without any further obligation to the non-accepting Tag-along Rightholders. The Tag- along Transferor shall have the remainder of the period specified in Section 3.03(b)(iv) to con- summate such Transfer. If such Transfer is not consummated within such period, the rights pro- vided hereunder shall be deemed to be revived and the ~~Fair Market Value~~ Equity Interests shall not be Transferred to such purchaser or any other Person unless the Tag-along Transferor sends a new Offering Holder Notice in accordance with, and otherwise complies anew with, this Section 3.04. (f) Each Tag-along Rightholder shall make or provide the same representa- tions, warranties, covenants, indemnities and agreements as the Tag-along Transferor makes or provides in connection with the Tag-along Sale (except that in the case of representations, war- ranties, covenants, indemnities and agreements pertaining specifically to the Tag-along Trans- feror, the Tag-along Rightholder shall make the comparable representations, warranties, cove- nants, indemnities and agreements pertaining specifically to itself); provided, that all representa- tions, warranties, covenants and indemnities shall be made by the Tag-along Transferor and each other Tag-along Rightholder severally and not jointly and any indemnification obligation in re- spect of breaches of representations and warranties that do not relate to such Tag-along Rightholder shall be in an amount not to exceed the aggregate proceeds received by such Tag- along Rightholder in connection with any sale consummated pursuant to this Section 3.04. (g) The fees and expenses of the Tag-~~Along Units. The Board shall promptly deliver~~ along Transferor incurred in connection with a ~~copy~~ sale under this Section 3.04 and for the benefit of all transferring Persons (it being under- stood that costs incurred by or on behalf of the Tag-~~Along Notice~~ along Transferor for its sole benefit will not be considered to ~~each Class A Member and Class B Member (other than~~ be for the ~~Selling Member) (~~benefit of all transferring Persons), to the ~~“Tag Members”). By giving~~ extent not paid or xxxx- bursed by the Company or the Tag-~~Along Notice~~along Transferee, ~~the Selling Member~~ shall be ~~deemed to have granted to~~ shared by all the ~~Tag Members an option to sell their Class A Units or Class B Units~~ transferring Per- sons (~~as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in~~ including the Tag-~~Along Sale up to~~ along Transferor) on a pro rata basis, based on the consideration re- ceived by each transferring Person; provided, that ~~amount of its Class A Units or Class B Units~~ no transferring Person (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate except the Tag-~~Along Sale unless such portion of the Class A Units or Class B Units (as applicable~~along Transferor) ~~of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that~~ shall be obligated to make any ~~Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag~~out-~~Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag~~of-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event pocket expenditure prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) transaction consummated pursuant to this Section ~~3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor~~3.04. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Subscription Agreement

Tag-Along Rights. (a) ~~Subject to a Member first complying with Section 3.4 and provided~~ At any time after the ~~Company and the ROFR Members have not purchased all~~ date of ~~the Units proposed to be Transferred under Section 3.4~~this Agreement, ~~each time a Class A Member~~if Cannae, ~~Class B Member~~ THL or ~~group of Class A Members and/or Class B Members acting jointly~~ Parent (~~collectively,~~ the “Selling ~~Member~~Holder”) ~~desires~~ proposes to ~~make~~ Transfer any Transfer of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (~~taken together as a single class) (a~~ the “Tag-Along Sale”) in accordance with this Agreement, the Selling Holder shall, before such Transfer deliver to the Company and to the other Members (the “Other Unit Holders”) at least thirty (30) days prior written notice of such proposed Transfer (the “Sale Notice”) and the terms of such Transfer, including (A) the number of Units to which the Transfer relates (the “Offered Class A Units”), ~~then~~ (B) the fraction expressed as a percentage, determined by dividing the number of units of Class A Units to be purchased from the Selling ~~Member must comply~~ Holder in such Transfer by the total number of Class A Units held by such Selling Holder (the “Tag-Along Sale Percentage”) (it being understood that (i) if the Selling Holder owns any vested Class B Units, the Tag-Along Sale Percentage shall be calculated on a post-conversion basis after giving effect to clause (c) below, and (ii) the Company shall reasonably cooperate with the ~~provisions~~ Selling Holder in respect of ~~this Section 3.5. The~~ the determination of the Tag-Along Sale Percentage), (C) the name and address of the proposed Transferee and (D) the proposed amount and type of consideration (including, if the consideration consists in whole or in part of non-cash consideration, such information available to the Selling ~~Member shall inform~~ Holder as may be reasonably necessary for the ~~Board~~ other Members to properly analyze the economic value and investment risk of such non-cash consideration) and the terms and conditions of payment proposed by the Selling Holder. (b) Any of the Other Unit Holders may, within twenty-five (25) days of the receipt of the Sale Notice, give written notice ~~in writing~~ (~~the~~ each, a “Tag-Along Notice”) (to the ~~date upon which~~ Selling Holder that such ~~notice is received being~~ Other Unit Holder requests that the ~~“Tag-Along Notice Date”) stating~~ Selling Holder include in the proposed Transfer a number of Units (~~or portion thereof~~on a post-conversion basis as described in clause (c) ~~that are subject to~~ below) held by such ~~proposed Transfer~~ Other Unit Holder (~~the “Tag-Along Units”), the identity~~ such number of ~~the proposed transferee, and the other terms and conditions of such proposed Transfer, including~~ Units shall not in any ~~consideration proposed to be received pursuant to a bona fide written agreement for~~ event exceed the Tag-Along ~~Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount~~ Sale Percentage of the ~~monetary consideration, if any, plus the Fair Market Value~~ total number of Units of the ~~other consideration~~specified class of Units held by such Other Unit Holder on a post-conversion basis, as described in clause (c) below). The Other Unit Holders that exercise their tag-along rights hereunder (the “~~Tag-Along Price~~Tagging Persons”~~). If the Tag-Along Units are proposed to be Transferred other than for cash~~ ) shall, upon request, deliver to the Selling ~~Member~~Holder, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving with the Tag-Along Notice, wire transfer instructions for payment of the purchase price for such Units of such Tagging Persons to be included in the Tag-Along Sale, together with a limited power-of-attorney authorizing the Selling Holder to Transfer such Units on the terms and conditions set forth in the Sale Notice. The price per Unit (on a post-conversion basis, as described in clause (c) below) to be received by each Member ~~shall~~ will be ~~deemed to have granted to~~ determined as if the ~~Tag Members an option to sell their~~ Company had been sold for the valuation implied by the price of the Offered Class A Units ~~or Class B Units~~ in such Tag-Along Sale (~~as applicable~~by extrapolating such valuation to a sale of all of the Units) ~~upon~~ and the ~~terms~~ proceeds of such sale had been distributed by the Company in complete liquidation pursuant to the priorities set forth in ~~this~~ Section ~~3.5~~5.2. (bc) ~~Each Tag Member shall have the right and option, exercisable as set forth below,~~ Any election by any Other Unit Holder to include in the Tag-Along Sale ~~up to that amount of its Class A Units or~~ any vested Class B Units (~~as applicable~~it being understood that no such election can be made in connection with a Tag-Along Sale with respect to unvested Class B Units) ~~equal to~~ shall automatically result in the ~~product~~ conversion of ~~(i)~~ the ~~aggregate~~ applicable number of such Other Unit Holder’s vested Class B Units into a number of Class A Units ~~and~~ equal to the quotient obtained by dividing (x) the sum of the Class B ~~Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator~~ Participation Prices of ~~which is the number of Class A Units or~~ such applicable vested Class B Units (~~as applicable) held by such Tag Member and~~ i.e. the ~~denominator of which is the aggregate number of Class A Units and~~ Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along ~~Sale is equal to up to~~ Sale), and (y) the Class A Participation Price (with a corresponding reduction in the number of authorized Class B Units provided in Section 3.3(c)); provided, that such conversion shall be conditioned upon, and shall occur immediately prior to, the closing of the Tag-Along ~~Portion~~ Sale (it being understood, for the avoidance of ~~all Tag Members~~doubt, that any vested Class B Units shall not be converted into Class A Units to the extent such Units are not included in the Tag-Along Sale, whether pursuant to Section 8.2(d), the failure of the Tag-Along Sale to be consummated, or otherwise). (cd) ~~If any Tag Member desires~~ The Selling Holder shall ask to ~~exercise its rights set forth~~ obtain the inclusion in ~~Sections 3.5(a) and (b) above, then it shall provide~~ the ~~Selling Member with written irrevocable notice specifying~~ proposed Tag-Along Sale of the entire number of ~~Class A~~ Units ~~or Class B Units (as applicable) that such Tag Member wishes~~ which each of the Tagging Persons requested to ~~include~~ have included in the Tag-Along Sale (~~which~~ as evidenced in the case of the Selling Holder by the Sale Notice and in the case of each Tagging Person by such ~~number shall not exceed such Tag Member~~Tagging Person’s Tag-Along ~~Portion) within ten (10) days after~~ Notice). In the ~~Tag-Along Notice Date (~~event the ~~“Tag-Along Notice Period”) and~~ Selling Holder shall ~~simultaneously provide a copy~~ be unable to obtain the inclusion of such ~~notice to~~ entire number of Units in the ~~Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the~~ proposed Tag-Along Sale, ~~each such Tag Member that has exercised its right~~ the number of Units to ~~participate~~ be sold in the proposed Tag-Along Sale ~~by providing~~ shall be allocated among the ~~required notice~~ Selling Holder and each Tagging Person, in proportion, as nearly as practicable, as follows: (i) there shall be first allocated to each Selling Holder and each Tagging Person, a number of Units equal to the lesser of (x) the number of Units offered to be included by such Tagging Person (or proposed, in the case of the Selling ~~Member within~~ Holder) in the proposed Tag-Along ~~Notice Period~~ Sale pursuant to this Section 8.2, and (y) a number of Units equal to its Tag-Along Portion; and (ii) the balance, if any, not allocated pursuant to clause (i) above shall ~~deliver~~ be allocated pro rata based on Percentage Interest to ~~a representative~~ each Selling Holder and each Tagging Person; provided, that in no case shall any Selling Holder or Tagging Person be allocated an aggregate amount of Units exceeding the amount of Units elected to be included by such Tagging Person (or proposed, in the case of the Selling ~~Member designated in~~ Holder). (e) To exercise its tag-along rights hereunder, each Other Unit Holder must agree to make to the ~~Tag-Along Notice or otherwise all documents required~~ Transferee on behalf of itself the same representations, warranties, covenants, indemnities and agreements as the Selling Holder agrees to ~~be executed or delivered by such Tag Member~~ make in connection with the Transfer of ~~such Tag Member’s Class A Units or Class B~~ the Offered Units (except that in the case of representations and warranties pertaining specifically to, or covenants made specifically by, the Selling Holder, the Other Unit Holders shall make comparable representations and warranties pertaining specifically to (and, as applicable, covenants by) ~~pursuant~~ themselves), and must agree to ~~this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor.~~ bear its ratable share (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which ~~the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and~~ shall be ~~deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company~~ proportionate based on the ~~valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and~~ amount of Units that are Transferred) of all ~~disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as~~ liabilities to the ~~allocation~~ Transferees arising out of ~~the Tag-Along Price among them for their respective Class A Units~~ representations, warranties (other than those representations, warranties and ~~Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members~~covenants that pertain specifically to a given Member), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warrantiescovenants, ~~covenants and~~ indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other ~~indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company~~ agreements made in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along SaleTransfer. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Each Member will ~~be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer~~ bear (x) its own costs of any ~~or all~~ sale of ~~its Class A Units or Class B~~ Units pursuant to ~~such Tag~~this Section 8.2 and (y) its pro-~~Along Sale. The Selling Member shall have ninety~~ rata share (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after based upon the ~~Tag-Along Failure in which to Transfer all (but not less than all~~relative amount of Units sold) of any of the ~~applicable Class A~~ other costs of any reasonable and customary sale of Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject pursuant to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale 8.2 to the extent such costs are incurred for the benefit of all Members and are not otherwise paid by the Transferee. Notwithstanding anything herein to the contrary, upon the consummation of the sale or Public Offering of Units pursuant to this Section 8.2, all of the holders of vested Class B Units participating ~~Members. Costs incurred by~~ in such sale or ~~on behalf~~ Public Offering shall participate in such sale or Public Offering of ~~a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for~~ Units in the ~~benefit of all participating Members~~manner set forth in this Section 8.2. (jg) ~~No Assignee~~ If none of the Other Unit Holders gives the Selling Holder a Tag-Along Notice prior to the expiration of the 25-day period provided pursuant to Section 8.2(a) for giving Tag-Along Notices with respect to the Transfer proposed in the Sale Notice, then (notwithstanding Section 8.2(a)) the Selling Holder may Transfer such Offered Units on the terms and conditions set forth, and to or among any of the Transferees identified (or Affiliates of Transferees identified), in the Sale Notice at any time within ninety (90) days after expiration of the 25-day period provided pursuant to Section 8.2(b) for giving Tag-Along Notices with respect to such Transfer. Any such Offered Units not Transferred by the Selling Holder during such 90-day period will again be subject to the provisions of this Section 8.2 upon any proposed subsequent Transfer. If one or more Other Unit Holders give the Selling Holder a timely Tag-Along Notice, then the Selling Holder shall use all reasonable efforts to obtain the agreement of the prospective Transferee(s) to the participation of the Other Unit Holders in any contemplated Transfer, on the same terms and conditions as are applicable to the Offered Units, and no Selling Holder shall transfer any of its Units to any prospective Transferee if such prospective Transferee(s) declines to allow the participation of any of the Other Unit Holders. For the avoidance of doubt, this Section 8.2 shall apply to the Transfer by THL of THL Holding Company Interests and a Transfer by Black Knight of a direct or indirect interest in Parent or the Company as if such Transfer were of the number of Units indirectly disposed of by reason of such Transfer. (h) The rights and restrictions contained in this Section 8.2 shall not apply with respect to any Exempt Transfer, other than Transfers pursuant to clauses (a) or (b) of the definition of Exempt Transfer. (i) For purposes of this Section 8.2, Section 9.1, Section 9.4, Section 10.1 Section 11.1 and in connection with a Significant Transaction pursuant to Section 9.3, notwithstanding anything to the contrary in this Agreement, (i) a THL Seller shall be ~~admitted~~ entitled to Transfer THL Holding Company Interests to the same extent as ~~a Substitute Member except~~ THL is entitled to Transfer THL Units thereunder, provided that such right shall be exercisable only if the applicable THL Holding Company or THL Holding Companies (x) has no material assets other than their interests in Units and other assets arising by reason of or in connection with their direct or indirect ownership of the Units (including cash), and (y) represent that they have no material liabilities other than liabilities (including tax liabilities) arising by reason of the ownership of the foregoing and any indebtedness owed to their respective shareholders, (ii) such THL Seller shall be entitled to sell such THL Holding Company Interests at the same price as ~~provided~~ the underlying Units, without any discount but exclusive of any cash then held by the applicable THL Holding Company or THL Holding Companies and (iii) the provisions of Section 8.2, Section 9.1, Section 9.3, Section 9.4, Section 10.1 and Section 11.1 shall apply to the Transfer of THL Holding Company Interests by such THL Seller mutatis mutandis and references to “THL” or “THL Holder” in ~~Section 3.9~~such Sections shall be deemed to include reference to such THL Seller.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Black Knight, Inc.)

Tag-Along Rights. Subject to Section 3.1(f): (a) ~~Subject~~ If Sun at any time proposes to Transfer any shares of Common Stock Equivalents, then, as a ~~Member first complying with Section 3.4 and provided~~ condition precedent thereto, Sun shall afford the ~~Company and~~ Minority Shareholders the ~~ROFR Members have not purchased all of the Units proposed~~ right to be Transferred under Section 3.4, each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any participate in such Transfer ~~of all or any portion of the Class A Units and/or Class B Units held by such Member(s) to any Third Party, other than to a Permitted Transferee of such Member(s) or~~ in accordance with ~~Sections 3.6~~this Section 3.1. (b) If Sun wishes to Transfer any shares of Common Stock Equivalents, ~~3.7~~ it shall give written notice to the Minority Shareholders (a “Notice of Transfer”) not less than twenty (20) nor more than thirty (30) days prior to any proposed Transfer of any such shares. Each such Notice of Transfer shall: (i) specify in reasonable detail (A) the number of shares of Common Stock Equivalents which Sun proposes to Transfer, (B) the identity of the proposed transferee or transferees of such shares, (C) the time within which, the price per share at which, and ~~3.8~~all other terms and conditions upon which, Sun proposes to Transfer such shares of Common Stock Equivalents, and (D) the percentage of the Common Stock Equivalents then owned by Sun (calculated on a fully-diluted basis) which Sun proposes to Transfer to such proposed transferee or transferees and (E) a representation that such proposed transferees have been informed of the tag-along rights provided for in this Section 3.1 and have agreed to purchase shares of Common Stock Equivalents in accordance with the terms hereof; (ii) make explicit reference to this Section 3.1 and state that the ~~Class A Units and/or Class B Units~~ right of the Minority Shareholders to participate in such Transfer under this Section 3.1 shall expire unless exercised within twenty (20) days after receipt of such Notice of Transfer; and (iii) contain an irrevocable offer by Sun to the Minority Shareholders to participate in the proposed Transfer to the extent provided in Section 3.1(c). (c) Each Minority Shareholder shall have the right to participate in the proposed Transfer by transferring to the proposed transferee or transferees up to that number of shares of Common Stock owned by such Minority Shareholders which is equal to the Applicable Percentage (as hereinafter defined) (or, if such Minority Shareholders shall elect, any lesser percentage) of the shares of Common Stock Equivalents proposed to be transferred ~~represent in~~ by Sun, at the ~~aggregate greater than five percent~~ same price per share and on the same terms and conditions as are applicable to the proposed Transfer by Sun (~~5%) of~~ and, if and to the ~~aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”)~~extent such Minority Shareholders shall exercise such right, then the ~~Selling Member~~ number of shares of Common Stock Equivalents to be sold by Sun in such transaction shall be correspondingly reduced). As used herein, the term “Applicable Percentage” as applied to a Minority Shareholder on any date shall mean a fraction (expressed as a percentage), the numerator of which is the aggregate of the number of shares of Common Stock owned by such Minority Shareholder on such date and the denominator of which is total number of shares of Common Stock Equivalents (assuming exercise of all Warrants) owned by Sun and the Minority Shareholders on such date. (d) A Minority Shareholder must notify Sun, within twenty (20) days after receipt of the Notice of Transfer, if he, she or it desires to accept such offer and to Transfer any shares of Common Stock owned by such Person in accordance with this Section 3.1. The failure of a Minority Shareholder to provide such notice within such 20-day period shall, for the purposes of this Section 3.1, be deemed to constitute a waiver by such Person of his, her or its right to sell any of his, her or its shares of Common Stock in connection with the proposed Transfer described in such Notice of Transfer. Sun will use its commercially reasonable efforts to obtain the agreement of the prospective transferee or transferees to the participation of the Minority Shareholders in such proposed Transfer, and Sun shall not Transfer any of its shares to such prospective transferee if such transferee shall not agree to the participation of the Minority Shareholders in such proposed Transfer. The Minority Shareholders shall not be obligated to sell any shares of Common Stock pursuant to this Section 3.1. Any and all sales of Common Stock by any of the Minority Shareholders pursuant to this Section 3.1 shall be made either concurrently with or prior to the sale of Common Stock Equivalents by Sun. (e) If the Transfer described in any Notice of Transfer is not consummated within ninety (90) days following the date upon which such Notice of Transfer is given or if there is any change in the terms pursuant to which such Transfer is to be consummated, then, prior to consummating such Transfer, Sun must again comply with the provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing (the “Tag-Along Notice”) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the Tag-Along Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale3.1. (f) ~~If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver~~ Notwithstanding anything to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contrary contained in this Section ~~3.5 to~~ 3.1, the ~~contrary, no Selling Member~~ Minority Shareholders shall ~~be liable to~~ not have any ~~Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising~~ rights pursuant to ~~such Tag-Along Sale~~ this Section 3.1 to ~~the extent such costs are incurred for the benefit of all participating Members. Costs incurred~~ participate in any Exempt Transfer by ~~or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members~~Sun. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Shareholder Agreement (New Harvest, Inc.)

Tag-Along Rights. ~~(a)~~ 9.2.1 Subject to Section 9.2.5, if, at any time prior to the earlier of a ~~Member first complying~~ Qualified IPO and a Change of Control (in each case other than in connection with ~~Section 3.4 and provided the Company and the ROFR Members have not purchased all of the Units proposed to be Transferred under Section 3.4~~a Initial Public Offering or Qualified IPO), ~~each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of~~ all or any ~~portion~~ of the Apollo Group (the “Tag-Along Sellers”) propose to Transfer Units held by them to any Independent Third Party (a “Tag-Along Transferee”) constituting at least 4,358,450 Class A Units ~~and/or Class B Units held by such Member(s) to any Third Party~~in a transaction or series of related transactions (including, ~~other than~~ without limitation, pursuant to a ~~Permitted Transferee~~ purchase of Units, tender offer, merger or other business combination transaction or otherwise), then, unless the Tag-Along Sellers previously elected to exercise the Drag-Along Right pursuant to Section 9.1, each other Partner (a “Tagging Partner”) shall have the right to participate in such Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) Transfer (a “Tag-Along Sale”~~), then the Selling Member must comply with the provisions of~~ ) pursuant to this Section ~~3.5~~9.2 (the “Tag-Along Right”). ~~The Selling Member~~ At least twenty (20) days prior to the consummation of any such Tag-Along Sale, the transferring Tag-Along Sellers shall ~~inform~~ provide written notice of their intention to Transfer their Units to the ~~Board by notice in writing~~ other Partners (the “Tag-Along Notice”~~) (the date upon which such notice is received being the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”~~), the identity of the proposed transferee, and the other terms and conditions of such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for the Tag-Along Units (and, if the proposed Transfer is to be wholly or partly for consideration other than money, the . The Tag-Along Notice shall ~~state~~ set forth in reasonable detail the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units shall be deemed to be the Fair Market Value terms and conditions of the Tag-Along ~~Units. The Board shall promptly deliver a copy of the Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice~~Sale, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and optionincluding, ~~exercisable as set forth below~~without limitation, ~~to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of~~ (i) the aggregate number of ~~Class A~~ Units ~~and Class B~~ that would be Transferred (or if greater, the aggregate number of Units which the Tag-Along Transferee would be willing to purchase), (ii) the price to be ~~acquired~~ paid for such Units, and (iii) all other material terms of the proposed Tag-Along Sale. 9.2.2 If any Tagging Partner elects to exercise the Tag-Along Right, each such Tagging Partner shall provide written notice of such election (including the number of Units proposed to be Transferred in the Tag Along Sale) to the transferring Tag-Along Sellers within ten (10) days of receipt of the Tag-Along Notice (the “Tag-Along Election Period”). Should any Tagging Partner fail to provide such written notice to the transferring Tag-Along Sellers by the ~~purchaser~~end of the Tag-Along Election Period, ~~multiplied~~ then none of such Tagging Partner’s Units will be included in the Tag-Along Sale and such Tagging Partner’s Tag-Along Right with respect to such Tag-Along Sale shall terminate automatically. In the event the Tag-Along Transferee is not willing to purchase all of the Units that the Partners propose to Transfer in the Tag-Along Sale, then (a) each exercising Partner (other than the Tag-Along Sellers) shall have the right to Transfer in the Tag-Along Sale a number of Units equal to the product obtained by multiplying (i) the number of Units proposed to be purchased by or Transferred to the Tag-Along Transferee by (ii) a fraction, the numerator of which is equal to the number of ~~Class A~~ Units ~~or Class B Units (as applicable) held~~ owned by ~~such Tag Member~~ the exercising Partner and the denominator of which is the aggregate number of ~~Class A~~ Units ~~and Class B Units held~~ owned by Partners (including the ~~Selling Member and all Tag Members (its “~~Tag-Along ~~Portion”), and the Selling Member shall not consummate~~ Sellers) who propose to Transfer in the Tag-Along Sale ~~unless such portion of~~ and (b) the ~~Class A~~ Tag-Along Sellers shall have the right to Transfer in the Tag-Along Sale all additional Units or that the Tag-Along Transferee is willing to purchase. The only Class B Units ~~(as applicable) of such Tag Member (or such lesser portion of~~ that the ~~Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not~~ Management Limited Partners shall be entitled to ~~include its Class A Units or Class B Units (as applicable)~~ sell in a Tag-Along ~~Sale, those Tag Members that do elect~~ Sale are Vested Units. 9.2.3 The price to ~~include Class A Units or Class B Units~~ be paid for each Unit in a Tag-Along Sale shall ~~have~~ equal the ~~opportunity to increase their participation in~~ consideration for such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) Unit that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer of such Tag Member’s Class A Units or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member Partner would have ~~received with respect~~ been entitled to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired receive if all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them Partnership’s assets were sold for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A) such Member’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant Fair Market Value immediately prior to such Tag-Along Sale and ~~(iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of~~ the proceeds ~~received by~~ of such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver sale were distributed to the ~~Selling Member its Class A Units or Class B Units (~~Partners in accordance with Section 4.1.1 as ~~applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to~~ determined by the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure General Partner in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Noticegood faith. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Limited Partnership Agreement (Aeroways, LLC)

Tag-Along Rights. (a) Subject to Section 11.2, in the event that a ~~Member first complying with Section 3.4 and provided~~ Partner (the ~~Company and the ROFR Members have not purchased~~ “Seller”) proposes to Dispose of any Units represent at least 1% of all outstanding Units of the ~~Units proposed to be Transferred under Section 3.4~~Company, ~~each time a Class A Member~~including all sales by the Seller made during the preceding twelve (12) months, Class B Member or group of Class A Members and/or Class B Members acting jointly (collectively, the “Selling Member”) desires to make any Transfer of all or any portion of the Class A Units and/or Class B Units on an as-converted basis held by ~~such Member(s) to any Third Party~~it and its Affiliates, other than to ~~a Permitted Transferee of such Member(s) or~~ an Affiliate in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units proposed to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class) (a “Tag-Along Sale”)Section 11.3, then the ~~Selling Member must comply with~~ other Partner shall have the ~~provisions of this Section 3.5. The Selling Member shall inform the Board by notice in writing~~ right (the “Tag-~~Along Notice~~along Right”) (to require the ~~date upon~~ proposed purchaser to purchase from such other Partner up to the number of whole Units not to exceed the number derived from the following formula: N x TS = Tag S where N = total number of Units owned by such other Partner TS = total number of Units proposed to be Disposed of by the Seller S = total number of Units owned by the Seller immediately prior to the Disposition Tag = number of Units in respect of which such ~~notice is received being the “~~other Partner may exercise Tag-Along ~~Notice Date”) stating~~ Rights. Any Units purchased from the other Partners pursuant to this Section 11.10 shall be paid for in the same consideration received by the Seller at the same price per Unit and upon the same terms and conditions as the proposed Disposition by the Seller; provided, however, that in no event shall such other Partner be required to make any representations or provide any indemnities with respect to matters relating solely to the Seller and; provided further, that on a sale of Units representing 10% or more of the total outstanding Units of the Company, the purchase price of the Units being sold by the Seller shall not be less than the fair market value of the Units determined by an Independent Appraiser in accordance with Article 14. (~~or portion thereof~~b) ~~that are subject~~ The Tag-Along Right may be exercised by the other Partners by delivery of a written notice to ~~such proposed Transfer~~ the Seller (the “Tag-along Notice”) within thirty (30) days following delivery of the Notice of Proposed Sale by the Seller, extended to allow for valuation of the Units under Article 14 unless a valuation performed within the preceding six (6) months is readily available. The Tag-Along ~~Units”~~Notice shall state the amount of Units that such other Partner proposes to include in such Disposition to the proposed purchaser (not to exceed the number determined as aforesaid). If a Partner has not so delivered a Tag-Along Notice as set forth above it shall be deemed to have waived all of its rights with respect to participating in the Transfer, and the Seller shall thereafter be free (subject to Section 11.9(d)) to sell to the proposed purchaser, at a price no greater than the price for such Shares set forth in the Tag-along Notice and on other principal terms which are not more favorable to the Seller than those set forth in the Notice of Proposed Sale, without any further obligation to such other Partner. If, prior to consummation, the ~~identity~~ terms of such proposed Disposition shall change with the result that the price shall be greater than the Unit price for such Units set forth in the Notice of Proposed Sale or the other principal terms shall be substantially more favorable to the Seller than those set forth in the Notice of Proposed Sale, it shall be necessary for a separate Notice of Proposed Sale to be furnished, and the terms and provisions of this Section 11.10 separately complied with, in order to consummate such proposed Disposition pursuant to this Section 11.10. (c) The acceptance of any other Partners shall be irrevocable except as hereinafter provided, and each accepting Partners shall be severally bound and obligated to sell in the Disposition on the same terms and conditions with respect to each Unit sold as the Seller, such number of Units as such other Partners shall have specified in such Tag-Along Notice; provided, however, that in the event there is any change in the price or terms of the proposed ~~transferee~~Disposition, the Seller shall notify the other Partners of such changes and such other Partner have the right to withdraw its Tag-Along Notice, in whole or in part. In the event the Seller shall be unable to obtain the inclusion in the Disposition of the entire number of Units which the Seller and the other ~~terms and conditions~~ Partners desire to have included in the Disposition (as evidenced in the case of ~~such proposed Transfer, including any consideration proposed to be received pursuant to a bona fide written agreement for~~ the Seller by the Tag-Along Notice and in the case of the other Partners by the Tag-Along Notice), the number of Units ~~(and, if the proposed Transfer is~~ to be ~~wholly or partly for consideration~~ sold in the Disposition by each of the Seller and the Other Partners shall be reduced on a pro rata basis in accordance with their respective Agreed Proportions. (d) If at the end of the 90th day following the date of the delivery of the Sale Notice the Seller has not completed the Disposition (other than ~~money~~as a result of a breach of this Agreement by such other Partners), such other Partners shall be released from their obligations under their Tag- along Notice, the Tag-Along Notice shall ~~state the proposed price as being equal to the amount of the monetary consideration~~be null and void, if any, plus the Fair Market Value of the other consideration) (the “Tag-Along Price”). If the Tag-Along Units are proposed to be Transferred other than for cash to the Selling Member, the consideration for such Tag-Along Units and it shall be ~~deemed to be the Fair Market Value of the Tag-Along Units. The Board shall promptly deliver~~ necessary for a ~~copy of the~~ separate Tag-Along Notice to ~~each Class A Member and Class B Member (other than the Selling Member) (the “Tag Members”). By giving the Tag-Along Notice, the Selling Member shall~~ be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag Member shall have the right and option, exercisable as set forth below, to include in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a fraction, the numerator of which is the number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”)furnished, and the ~~Selling Member shall not~~ terms and provisions of this Section 11.10 separately complied with, in order to consummate ~~the Tag-Along Sale unless~~ such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the number of Class A Units or Class B Units (as applicable) that such Tag Member wishes to include in the Tag-Along Sale (which such number shall not exceed such Tag Member’s Tag-Along Portion) within ten (10) days after the Tag-Along Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale by providing the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer ~~of such Tag Member’s Class A Units or Class B Units (as applicable)~~ pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member participating in the Tag-Along Sale shall receive a portion of the Tag-Along Price equal to the amount such Member would have received with respect to the Class A Units or Class B Units (as applicable) Transferred by such Member in the Tag-Along Sale upon a deemed liquidation of the Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along Units. Any and all disputes that may arise between the Selling Member and the Tag Members exercising tag-along rights as to the allocation of the Tag-Along Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by all of the disputing Members), which determination shall be final and binding on such disputing Members. The disputing Members shall bear equally all fees and expenses of the determination11.10. (e) ~~Any Tag Member that validly elects~~ The exercise or non-exercise of the rights of any Partner to participate in a Tag-Along Sale shall agree to make to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member one or more Dispositions of Units shall not ~~be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other than (A)~~ adversely affect such ~~Member~~Partner’s valid ownership of its Units, (B) the Transfer of those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business participate in subsequent Dispositions of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along SaleUnits. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along Sale or (ii) fails to deliver to the Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively, a “Tag-Along Failure”), then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Units shall be subject to this Section 3.5 and shall require a Tag-Along Notice. (g) Promptly after the consummation of a Tag-Along Sale, the Selling Member shall give notice thereof to the participating Tag Members, shall remit to each such Tag Member the total consideration for the Class A Units or Class B Units (as applicable) sold by such Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of the Tag-Along Sale and the terms thereof as may be reasonably requested by any such Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a Tag-Along Sale to occur for any reason. (i) The Selling Member shall bear its own costs and any other costs arising pursuant to such Tag-Along Sale to the extent such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Members. (j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.

Appears in 1 contract

Samples: Joint Venture Agreement (Pacific Entertainment Corp)

Tag-Along Rights. (a) ~~Subject to a Member first complying with Section 3.4 and provided the Company and the ROFR~~ If any one or more Members ~~have not purchased all of the Units proposed to be Transferred under Section 3.4~~(in such capacity, ~~each time a Class A Member, Class B Member or group of Class A Members and/or Class B Members acting jointly (~~collectively, the “~~Selling~~ Tag Subject Member”) ~~desires~~ desire to ~~make any~~ Transfer a number of Units (other than Class B Units) that represent, in the aggregate, at least 50% of the total economic value of all ~~or any portion of the Class A~~ Units ~~and/or~~ (other than Class B ~~Units held by such Member(s~~Units) to ~~any~~ a Third ~~Party~~Party (the “Tag-Along Transferee”), other than through an Excluded Transfer, then the Tag Subject Member shall offer to ~~a Permitted Transferee of~~ include in such ~~Member(s) or in accordance with Sections 3.6, 3.7 and 3.8, such that the Class A Units and/or Class B Units~~ proposed ~~to be transferred represent in the aggregate greater than five percent (5%) of the aggregate outstanding Class A Units and Class B Units (taken together as a single class)~~ Transfer (a “Tag-Along Sale”)) a number of Units owned and designated by any Tag Eligible Seller, ~~then the Selling Member must comply~~ in each case in accordance with the ~~provisions~~ terms of this Section ~~3.5.~~ 9.8. (b) The ~~Selling~~ Tag Subject Member shall ~~inform~~ cause the ~~Board by notice in writing~~ offer from such Tag-Along Transferee (the “Tag-Along ~~Notice~~Offer”) to be reduced to writing, which writing shall include: (i) an offer to purchase or otherwise acquire Units from the ~~date upon which such notice is received being~~ Tag Eligible Sellers as required by this Section 9.8; (ii) a time and place designated for the “Tag-Along Notice Date”) stating the Units (or portion thereof) that are subject to such proposed Transfer (the “Tag-Along Units”), the identity of the proposed transferee, and the other terms and conditions closing of such ~~proposed Transfer, including any consideration~~ purchase; and (iii) the per-Unit purchase price proposed to be ~~received pursuant to a bona fide written agreement for~~ paid by the Tag-Along Transferee for the Tag Subject Member’s and Tag Eligible Sellers’ Units ~~(and, if the proposed Transfer is to be wholly or partly for consideration other than money, the~~ in such Tag-Along ~~Notice shall state the proposed price as being equal to the amount of the monetary consideration, if any, plus the Fair Market Value of the other consideration)~~ Sale (the “Tag-Along Price”)~~. If~~ . (c) Each of the ~~Tag-Along~~ Tag Eligible Sellers shall be entitled to request to include certain Units ~~are proposed to be Transferred other than for cash to the Selling Member, the consideration for~~ in such Tag-Along ~~Units~~ Sale, in each case in accordance with the terms of this Section 9.8. (d) The Tag Subject Member shall ~~be deemed to be the Fair Market Value~~ send written notice of ~~the~~ such Tag-Along ~~Units. The Board shall promptly deliver~~ Offer (a ~~copy~~ “Tag Inclusion Notice”), together with the Tag Subject Member Requested Class A Percentage, to each of the ~~Tag-Along Notice to each Class A Member and Class B Member (other than the Selling Member) (the “~~Tag ~~Members”)~~Eligible Sellers. By giving the Tag-Along Notice, the Selling Member shall be deemed to have granted to the Tag Members an option to sell their Class A Units or Class B Units (as applicable) upon the terms set forth in this Section 3.5. (b) Each Tag ~~Member~~ Eligible Seller shall have the right ~~and option~~(a “Tag Inclusion Right”), exercisable ~~as set forth below~~by delivery of written notice to the Tag Subject Member at any time within 10 Business Days after receipt of the Tag Inclusion Notice, to ~~include~~ request to sell in the Tag-Along Sale up to that amount of its Class A Units or Class B Units (as applicable) equal to the product of (i) the aggregate number of Class A Units and Class B Units to be acquired by the purchaser, multiplied by (ii) a ~~fraction, the numerator of which is the~~ number of Class A Units or Class B Units (as applicable) held by such Tag Member and the denominator of which is the aggregate number of Class A Units and Class B Units held by the Selling Member and all Tag Members (its “Tag-Along Portion”), and the Selling Member shall not consummate the Tag-Along Sale unless such portion of the Class A Units or Class B Units (as applicable) of such Tag Member (or such lesser portion of the Class A Units or Class B Units of such Tag Member for which such right and option is exercised) is so included. To the extent that any Tag Member elects not to include its Class A Units or Class B Units (as applicable) in a Tag-Along Sale, those Tag Members that do elect to include Class A Units or Class B Units in a Tag-Along Sale shall have the opportunity to increase their participation in such Tag-Along Sale Pro Rata (such increase being Pro Rata among the Tag Members making such further election) such that the percentage of Class A Units and Class B Units of Tag Members participating in such Tag-Along Sale is equal to up to the Tag-Along Portion of all Tag Members. (c) If any Tag Member desires to exercise its rights set forth in Sections 3.5(a) and (b) above, then it shall provide the Selling Member with written irrevocable notice specifying the total number of Class A Units or Class B ~~Units (~~Units, as applicable~~) that~~ , held by such Tag Eligible Seller multiplied by the Tag Subject Member ~~wishes~~ Requested Class A Percentage. (e) Promptly following the completion of the procedures described in Section 9.8(d), the following procedures shall apply: (i) first, the Tag Subject Member shall notify the Tag-Along Transferee of the number of Requested Units; and (ii) next, the Tag Subject Member shall determine whether the Tag-Along Transferee is willing to ~~include~~ purchase all of the Requested Units. If the Tag-Along Transferee is unwilling to purchase all such Units, then the Tag Subject Member shall determine what percentage of Requested Units such Tag-Along Transferee is willing to purchase in the aggregate (the “Purchased Percentage”). In such event, the number of Requested Units that the Tag Subject Member and each of the exercising Tag Eligible Sellers otherwise would have sold in the Tag-Along Sale shall be reduced on a pro rata basis so as to permit the Tag Subject Member and the exercising Tag Eligible Sellers to sell in the aggregate a number of Units equal to the total number of Requested Units multiplied by the Purchased Percentage (~~which such number shall not exceed such Tag Member’s Tag-Along Portion~~the “Purchased Units”). (f) ~~within ten (10) days after~~ Notwithstanding anything to the contrary in this Section 9.8, if the consideration proposed to be paid by the Tag-Along ~~Notice Date (the “Tag-Along Notice Period”) and shall simultaneously provide~~ Transferee in a copy of such notice to the Company. Promptly upon request of the Seller Member, and in any event prior to the consummation of the Tag-Along Sale, each such Tag Member that has exercised its right to participate in the Tag-Along Sale ~~by providing~~ includes securities with respect to which no registration statement covering the required notice to the Selling Member within the Tag-Along Notice Period shall deliver to a representative of the Selling Member designated in the Tag-Along Notice or otherwise all documents required to be executed or delivered by such Tag Member in connection with the Transfer issuance of such ~~Tag Member’s Class A~~ securities has been declared effective under the Securities Act, then each holder of Units ~~or Class B Units (as applicable) pursuant to this Section 3.5 at the closing for such Tag-Along Sale against delivery to such Tag Member of the consideration therefor. (d) Each Member~~ participating in the Tag-Along Sale ~~shall receive a portion~~ that is not then an Accredited Investor (without regard to Rule 501(a)(4) under the Securities Act) may be required, at the request and election of the ~~Tag-Along Price~~ Tag Subject Member, to: (i) at the cost of the Company, appoint a purchaser representative (as such term is defined in Rule 501 under the Securities Act) reasonably acceptable to such Tag Subject Member; or (ii) agree to accept cash in lieu of any securities such holder would otherwise receive in an amount equal to the ~~amount~~ Fair Market Value of such ~~Member would have received with respect~~ securities; provided, however, that upon written request the Board shall provide any holder of Units all information reasonably related to its determination of Fair Market Value. (g) At the time (subject to extension to the ~~Class A Units~~ extent necessary to pursue any required regulatory or ~~Class B Units (as applicable~~equityholder approvals, including to allow for the expiration or termination of all waiting periods under the HSR Act) ~~Transferred by such Member~~ and place provided for the closing in the Tag-Along ~~Sale upon a deemed liquidation of~~ Offer, or at such other time and place as the ~~Company in accordance with Section 7.1(a); provided that where less than one hundred percent (100%) of the issued~~ Tag Subject Member, and outstanding Units of the Company are being sold to the proposed Third Party transferee, the aggregate purchase price by reference to which the consideration payable for a Class A Unit or Class B Units (as applicable) is determined shall not take into account any control premium or minority discount and shall be deemed to be the amount the proposed transferee would have paid were it to have acquired all of the issued and outstanding Units of the Company based on the valuation methodology used by the proposed transferee and the Selling Member for the Tag-Along ~~Units. Any and all disputes that may arise between~~ Transferee shall agree, the ~~Selling~~ Tag Subject Member and the exercising Tag ~~Members exercising tag-along rights as~~ Eligible Sellers shall sell to ~~the allocation of~~ the Tag-Along ~~Price among them for their respective Class A Units and Class B Units shall be determined by the Accountant (or any other certified public accountant selected by~~ Transferee all of the ~~disputing Members), which determination~~ Purchased Units. Each sale of Purchased Units pursuant to this Section 9.8(g) shall be ~~final~~ upon terms and ~~binding on such disputing Members. The disputing Members shall bear equally all fees~~ conditions, if any, not more favorable individually and ~~expenses of~~ in the ~~determination. (e) Any Tag Member that validly elects to participate in a Tag-Along Sale shall agree to make~~ aggregate to the proposed Third Party transferee the same representations and warranties, covenants and indemnities as the Selling Member agrees to make in connection with such Tag-Along Sale; provided, that (i) any such Tag Member shall not be liable for the breach of any covenant by the Selling Member and vice versa, (ii) in no event shall any Tag Member be required to make representations and warranties other purchaser than ~~(A) such Member’s valid ownership of its Units, (B) the Transfer of~~ those Units to the proposed Third Party transferee free and clear of all Encumbrances (excluding those arising under applicable securities laws) and (C) such Member’s organization, authority, power and right to enter into and consummate such transaction without violating or breaching such Member’s charter or constitutional documents, any agreement to which such Member is a party or by which its assets are bound, or any applicable law, rule, regulation or order; (iii) any liability relating to representations and warranties (and related indemnities) or other indemnification obligations (including escrow/holdback arrangements) regarding the business of the Company in connection with the Tag-Along Sale shall be shared on a several (but not joint) basis by the participating Members as if such amount reduced the aggregate proceeds available for distribution or payment to the participating Members pursuant to such Tag-Along Sale and (iv) no Tag Member shall be obligated to agree to indemnification obligations in excess of the proceeds received by such Tag Member in such Tag-Along Sale. (f) If any Tag Member (i) does not elect before the end of the Tag-Along Notice Period to have all or any part of its Tag-Along Portion included in the Tag-Along ~~Sale or (ii) fails to deliver to~~ Offer and the ~~Selling Member its Class A Units or Class B Units (as applicable) or any required documentation (collectively~~Tag Inclusion Notice, ~~a “Tag-Along Failure”)~~and upon the consummation of such sale, ~~then such Tag Member will be deemed to have waived any and all rights under this Section 3.5 with respect to the Transfer~~ each transferor of any or all of its Class A Units or Class B Units pursuant to such Tag-Along Sale. The Selling Member shall have ninety (90) days (or such longer period as may be required to obtain any approval necessary under applicable securities laws, other federal law applicable to such transaction or similar state or local laws) after the Tag-Along Failure in which to Transfer all (but not less than all) of the applicable Class A Units or Class B Units at a price not higher than contained in the Tag-Along Notice and on terms not more favorable to the Selling Member than were contained in the Tag-Along Notice; thereafter, any proposed Transfer by such Selling Member of Class A Units and/or Class B Purchased Units shall ~~be subject to this~~ receive the consideration specified in Section ~~3.5 and shall require a Tag-Along Notice~~9.8(h). (gh) ~~Promptly after~~ Upon the consummation of a Tag-Along Sale, ~~the Selling Member~~ each transferor of Purchased Units shall ~~give notice thereof~~ receive an amount of consideration equal to the ~~participating Tag Members, shall remit to each such Tag Member~~ product obtained by multiplying (i) the ~~total consideration for the Class A~~ number of Purchased Units ~~or Class B Units (as applicable)~~ sold by such ~~Tag Member pursuant thereto as computed pursuant to Section 3.5(d), and shall furnish such other evidence of the completion and time of completion of~~ transferor in the Tag-Along Sale ~~and~~ by (ii) the ~~terms thereof as may be reasonably requested by any~~ Tag-Along Price. If a transferor of Purchased Units receives consideration from such ~~Tag Member. (h) Notwithstanding anything contained in this Section 3.5 to the contrary, no Selling Member shall be liable to any Member based on the failure of a~~ Tag-Along Sale in a manner other than as contemplated by the immediately preceding sentence or in excess of the amount to ~~occur for any reason~~which such transferor is entitled in accordance with the immediately preceding sentence, then such transferor shall take such action as is necessary so that such consideration shall be immediately reallocated among and distributed to the transferors of Purchased Units in accordance with the immediately preceding sentence. (i) The ~~Selling Member~~ Class A Members shall ~~bear~~ have the right in connection with any Tag-Along Sale (or in connection with the investigation or consideration of any potential Tag-Along Sale) to require the Company to cooperate fully with potential acquirors in such prospective Tag-Along Sale by taking all customary and other actions reasonably requested by the Class A Members, acting with Requisite Investor Approval, or such potential acquirors, including making the Company’s properties, books and records, and other assets reasonably available for inspection by such potential acquirors, establishing a physical or electronic data room including materials customarily made available to potential acquirors in connection with such processes and making its ~~own costs~~ employees reasonably available for presentations, interviews and other diligence activities, in each case subject to reasonable and customary confidentiality provisions. The Company shall provide assistance with respect to these actions as reasonably requested by the Class A Members, acting with Requisite Investor Approval. (j) No holder of Units shall be obligated in respect of any ~~other costs arising pursuant~~ noncompetition, non-solicitation or similar restrictive covenants in such Tag-Along Sale, in each case that are more restrictive than any such restrictive covenants by which such holder is bound to the Company or any of its Affiliates at the time of such Tag-Along Sale. (k) Notwithstanding anything to the contrary in this Agreement, at any time after the six-month anniversary of the date of the delivery of the Tag Inclusion Notice with respect to each proposed Tag-Along Sale, the Board, with Requisite Investor Approval, shall be entitled to waive, on behalf of each Tag Eligible Seller, each former Tag Eligible Seller and each of their respective Affiliates, successors and assigns and the members, partners, stockholders, directors, managers, officers, liquidators and employees of each of the foregoing (collectively, the “Tag Eligible Seller Persons”), any and all claims such Tag Eligible Seller Persons have, had, may have, or may have had with respect to any non-compliance with or violation of this Section 9.8 by any Person with respect to such Tag-Along Sale (whether or not any Units were transferred pursuant to this Section 9.8), other than any such claim that has been made in writing and delivered to the ~~extent~~ Company prior to the expiration of such costs are incurred for the benefit of all participating Members. Costs incurred by or on behalf of a Tag Member for its sole benefit (which shall be borne by such Tag Member) will not be considered incurred for the benefit of all participating Memberssix-month anniversary. ~~(j) No Assignee shall be admitted as a Substitute Member except as provided in Section 3.9.~~

Appears in 1 contract

Samples: Limited Liability Company Operating Agreement (Riviera Resources, Inc.)

Common use of Tag-Along Rights Clause in Contracts