Control Block Sale and Drag Along Tag Along Rights and Obligations Clause Samples

Control Block Sale and Drag Along Tag Along Rights and Obligations 

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• Tag-Along Rights (a) In the event of a proposed Transfer of Shares by a Stockholder (a “Transferring Stockholder”) other than (x) to a Permitted Transferee or (y) in connection with a Public Offering (including a shelf takedown) in accordance with the Registration Rights Agreement (with respect to which each Stockholder’s right to participate in such Public Offering will be governed by the terms thereof), each Stockholder (other than the Transferring Stockholder) shall have the right to participate on the same terms and conditions and for the same per Share consideration as the Transferring Stockholder in the Transfer in the manner set forth in this Section 3.3. Prior to any such Transfer, the Transferring Stockholder shall deliver to the Company prompt written notice (the “Transfer Notice”), which the Company will forward to the Stockholders (other than the Transferring Stockholder, the “Tag-Along Participants”) within 5 days of receipt thereof, which notice shall state (i) the name of the proposed Transferee, (ii) the number of Shares proposed to be Transferred (the “Transferred Securities”) and the percentage (the “Tag Percentage”) that such number of Shares constitute of the total number of Shares owned by such Transferring Stockholder, (iii) the proposed purchase price therefore, including a description of any non-cash consideration sufficiently detailed to permit the determination of the Fair Market Value thereof, and (iv) the other material terms and conditions of the proposed Transfer, including the proposed Transfer date (which date may not be less than 35 days after delivery to the Tag-Along Participants of the Transfer Notice). Such notice shall be accompanied by a written offer from the proposed Transferee to purchase the Transferred Securities, which offer may be conditioned upon the consummation of the sale by the Transferring Stockholder, or the most recent drafts of the purchase and sale documentation between the Transferring Stockholder and the Transferee which shall make provision for the participation of the Tag-Along Participants in such sale consistent with this Section 3.3. (b) Each Tag-Along Participant may elect to participate in the proposed Transfer to the proposed Transferee identified in the Transfer Notice by giving written notice to the Company and to the Transferring Stockholder within the 15 day period after the delivery of the Transfer Notice to such Tag-Along Participant, which notice shall state that such Tag-Along Participant elects to exercise its rights of tag-along under this Section 3.3 and shall state the maximum number of shares sought to be Transferred (which number may not exceed the product of (i) all such Shares owned by such Tag-Along Participant plus the number of Shares owned by any Affiliate Tag-Along Assignor of such Tag-Along Participant, multiplied by (ii) the Tag Percentage). As used in this Agreement, the term “Affiliate Tag-Along Assignor” with respect to any Stockholder shall mean an Affiliate of such Stockholder or, in the case of any member of a Principal Investor Group, any other member of such Principal Investor Group that, in each case, shall have waived, by means of written notice to the Company and the Transferring Stockholder, its tag-along rights pursuant to this Section 3.3 with respect to the applicable Transfer in favor of such Stockholder. Each Tag-Along Participant shall be deemed to have waived its right of tag-along with respect to the Transferred Securities hereunder if it fails to give notice within the prescribed time period. The proposed Transferee of Transferred Securities will not be obligated to purchase a number of Shares exceeding that set forth in the Transfer Notice, and in the event such Transferee elects to purchase less than all of the additional Shares sought to be Transferred by the Tag-Along Participants, the number of Shares to be Transferred by the Transferring Stockholder and each such Tag-Along Participant shall be reduced so that each such Stockholder is entitled to sell its Pro Rata Portion of the number of Shares the proposed Transferee elects to purchase (which in no event may be less than the number of Transferred Securities set forth in the Transfer Notice).

• Tag-Along Right (a) If, at any time prior to a Qualified IPO, one or more Sponsor Members propose to Transfer, in a single transaction or a series of related transactions, a number of Units representing at least 30% of the Sponsor Members' aggregate Initial Equity Stakes (as defined in the LLC Agreement) to any Person (other than a Transfer to a Permitted Transferee (as defined in the LLC Agreement) of any such Sponsor Member and other than a Transfer in accordance with the Registration Rights Agreement and other than to another Sponsor Member) (a "Tag-Along Purchaser"), then, unless such transferring Sponsor Member(s) are entitled to give and do give a Drag-Along Sale Notice (as defined in the LLC Agreement) and no other Sponsor Member(s) has elected to purchase its pro rata share of such Units pursuant to Section 2.04(a) of the Sponsor Agreement, the Company shall first provide written notice to each of the Management Members, which notice (the "Tag-Along Notice") shall state: (i) the maximum number of Units proposed to be Transferred (the "Tag-Along Securities"); (ii) the purchase price per Unit (the "Tag-Along Price") for the Tag-Along Securities and (iii) any other material terms and conditions of such sale, including the proposed transfer date (which date will be within 60 business days after the termination of the Election Period (defined below), subject to extension for any required regulatory approvals). Each of the Management Members that has been provided with the Tag-Along Notice (each, a "Tag-Along Manager") shall have the right to sell to such Tag-Along Purchaser, upon the terms set forth in the Tag-Along Notice, up to the aggregate number of Units which are held by such Tag-Along Manager multiplied by a fraction, the numerator of which is the aggregate number of Units proposed to be sold by the transferring Sponsor Member as reflected in the Tag-Along Notice and the denominator of which is the total number of Units which are held by the transferring Sponsor Member. If the number of Units elected to be sold by the Tag-Along Managers and any other individuals identified from time to time on Exhibit A to the LLC Agreement, the transferring Sponsor Member and any other Sponsor Members electing to participate in such sale is greater than the number of Tag-Along Securities specified in the Tag-Along Notice, the number of Units being sold by each such seller shall be reduced such that the applicable seller shall be entitled to (and obligated to) sell only their pro rata share of Units (based on the aggregate number of Units held by such seller to the total number of Units held by all of such electing sellers). The transferring Sponsor Member(s), the Sponsor Members electing to participate in such sale and the Tag-Along Manager(s) exercising their rights pursuant to this Section 2.04 shall effect the sale of the Tag-Along Securities, and such Tag-Along Manager(s) shall sell the number of Tag-Along Securities required to be sold by such Tag-Along Manager(s) pursuant to this Section 2.04(a) within 60 business days after the expiration of the Election Period, subject to extension for any required regulatory approvals. (b) The tag-along rights provided by this Section 2.04 must be exercised by any Tag-Along Manager wishing to sell its Units within 10 business days following the date of delivery of the Tag-Along Notice (the "Election Period"), by delivery of a written notice to the Company indicating such Tag-Along Manager's wish to irrevocably exercise its rights and specifying the number of Units (up to the maximum number of Units owned by such Tag-Along Manager requested to be purchased by such Tag-Along Purchaser) it wishes to sell; provided that any Tag-Along Manager may waive its rights under this Section 2.04 prior to the expiration of such 10-business day period by giving written notice to the Company, which will be distributed by the Company to the transferring Sponsor Member(s). The failure of a Tag-Along Manager to respond within such 10-business day period shall be deemed to be a waiver of such Tag-Along Manager's rights under this Section 2.04. (c) In connection with any sale pursuant to this Section 2.04, each Tag-Along Manager shall make to the Tag-Along Purchaser the same representations, warranties, covenants, indemnities and agreements as the transferring Sponsor Member(s) makes in connection with the proposed transfer (except that in the case of representations, warranties, covenants, indemnities and agreements pertaining specifically to the transferring Sponsor Member(s), a Tag-Along Manager shall make the comparable representations, warranties, covenants, indemnities and agreements); provided that all representations, warranties and indemnities shall be made by the transferring Sponsor Member(s) and such Tag-Along Manager severally and not jointly and that the liability of the transferring Sponsor Member(s) and such Tag-Along Manager thereunder shall be borne by each of them on a pro rata basis. The Tag-Along Managers shall receive the same type and amount of consideration (and rights) per Unit as is paid or delivered to the transferring Sponsor Member(s) in the sale pursuant to Section 2.04(a). (d) No Transfer of any Unit pursuant to this Section 2.04 shall be effective unless and until the applicable transferee agrees to be bound by all of the terms and conditions of the LLC Agreement.

• Drag-Along Rights (a) If, prior to a Qualified Public Offering, the Company’s Board of Directors or group of Shareholders that, in the aggregate, owns a majority of the voting power of the Company, receives an offer in a transaction or series of transactions pursuant to which a third party (which, for the avoidance of doubt, shall not include Parent or any of its Affiliates, or any other Person in which Parent or any of its Affiliates invests or has agreed to make an investment) proposes to acquire all of the Equity Securities of the Company, and, at the closing of such transaction, the holders of the Senior Preferred Shares and any Common Shares that were issued upon the prior conversion of the Senior Preferred Shares shall, in the aggregate, receive cash consideration at the closing of such transaction (not including any cash subject to a holdback or escrow arrangement on the closing date) equal to or greater than 1.5x the Original Purchase Price with respect to all Senior Preferred Shares that are then issued (as adjusted for any stock splits, dividends, combinations, subdivisions, recapitalizations and the like) (a “Drag-Along Transaction”), then such Shareholder or group of Shareholders that, in the aggregate, owns a majority of the voting power of the Company (collectively, the “Drag-Along Shareholder”) shall have the right, at its option, to require all of the other Shareholders (each such other Shareholder, a “Dragged Shareholder,” and collectively with any other Dragged Shareholder, the “Dragged Shareholders”), and each Dragged Shareholder hereby agrees, whether such Drag-Along Transaction is structured as a Transfer of Equity Securities, merger, consolidation, combination, reorganization, recapitalization, reclassification or otherwise, to Transfer all of such Dragged Shareholder’s Equity Securities on substantially the same terms and conditions as are applicable to the Drag-Along Shareholder; provided that (i) the terms of any Drag-Along Transaction may not contemplate any agreement or arrangement in which the Drag-Along Shareholder or any of its Affiliates will receive any consideration, payment or any other thing of value apart from the consideration to be paid to all selling Shareholders in the sale (including all Dragged Shareholders) other than repayment of indebtedness, reimbursement of customary expenses, payments related to services previously provided and ordinary course arrangements for services from Management Shareholders consistent with market terms or prior practices, and (ii) the price per share for each Equity Security to be sold in such Drag-Along Transaction shall be determined by allocating consideration pursuant to the terms of the Articles of Incorporation. (b) Each Dragged Shareholder shall reasonably cooperate in, and shall take all actions requested by the Drag-Along Shareholder that are reasonably necessary or desirable to consummate, the Drag-Along Transaction, including: (i) to the extent applicable, voting its Equity Securities (or executing and delivering any written consents in lieu thereof) in favor of the Drag-Along Transaction and against all competing transactions, and all actions deemed reasonably necessary by the Drag- Along Shareholder in connection with the Drag-Along Transaction; (ii) if applicable, taking all actions necessary to cause the Board to approve the Drag-Along Transaction; and (iii) entering into all definitive and ancillary agreements with respect to the proposed Drag-Along Transaction, and using commercially reasonable efforts to cause the transactions contemplated by such definitive agreements and ancillary agreements to be consummated; provided that (A) such definitive agreements shall contain representations and warranties and indemnity obligations of such Dragged Shareholder only if the Drag-Along Shareholder has also made such representations and warranties, (B) any representations and warranties or indemnities given by each of the Dragging Shareholder and the Dragged Shareholders shall be several and not joint, (C) the indemnity obligations thereunder are (x) apportioned pro rata among each of the Drag-Along Shareholder and the Dragged Shareholders based on the relative proportion of Common Shares being sold in such Drag-Along Transaction (with Equity Securities convertible or exchangeable into Common Shares considered on an as-converted basis), (y) limited to breaches of fundamental representations and warranties regarding matters such as ownership, capacity and authorization (but under no circumstances will the Shareholders have any post-closing liability for operational matters or Company liabilities other than their pro rata share of any indemnity, escrow or holdback) and (z) limited in respect of each Shareholder to the proceeds received by such Shareholder in such Drag-Along Transaction (except in connection with claims relating to such Shareholder’s fraud), (D) no Dragged Shareholder that is not otherwise an employee of the Company shall be required to agree to any restrictive post-closing covenants (such as non-competition or non-solicitation) other than a customary confidentiality covenant, and (E) each of the Dragging Shareholder and the Dragged Shareholders that are not otherwise employees of the Company will receive the same form of consideration and the same portion of the aggregate consideration that such Shareholders would have received if such aggregate consideration had been distributed by the Company as a Deemed Liquidation Event pursuant to the rights and preferences set forth in the Articles of Incorporation as in effect immediately prior to such Drag-Along Transaction. (c) Without limitation of the foregoing, each Shareholder waives any dissenters, appraisal or other similar rights it may have in connection with any sale of the Company under applicable law that is approved or instituted pursuant to this Section 3.03 and agrees not to assert any claims challenging the validity of such sale of the Company that is approved or instituted pursuant to this Section 3.03. (d) The Drag-Along Shareholder shall provide written notice of such Drag-Along Transaction to each Dragged Shareholder (a “Drag-Along Transaction Notice”) not later than ten (10) days prior to the proposed Drag-Along Transaction. The Drag-Along Transaction Notice shall identify the proposed Transferee, the consideration for which a Transfer is proposed to be made and all other material terms and conditions of the Drag-Along Transaction. Except as otherwise set forth herein, such Dragged Shareholder shall be required to participate in the Drag-Along Transaction on the terms and conditions set forth in the Drag-Along Transaction Notice. (e) The Drag-Along Shareholder shall have a period of thirty (30) days from the date of delivery of the Drag-Along Transaction Notice to enter into definitive transaction agreements with respect to, and six (6) months from the date of delivery of the Drag-Along Transaction Notice to consummate, the Drag-Along Transaction on the terms and conditions set forth in such Drag-Along Transaction Notice; provided, however, that such six (6) month period shall be extended by the time necessary (but in no event to exceed three hundred sixty-five (365) days from the date of delivery of the Drag- Along Transaction Notice) to obtain any required approvals of any Regulatory Agency under any applicable laws (the “Drag-Along Transaction Period”). If the Drag-Along Transaction shall not have been consummated during the Drag-Along Transaction Period, the Drag-Along Shareholder shall promptly return any documents in the possession of the Drag-Along Shareholder executed by the Dragged Shareholders in connection with the Drag-Along Transaction, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to any Equity Securities owned by each of the Shareholders shall continue to be in effect. (f) Notwithstanding anything to the contrary in this Section 3.03, there shall be no liability on the part of the Drag-Along Shareholder to the Company or the Dragged Shareholders if the Drag-Along Transaction is not consummated for whatever reason, regardless of whether the Drag-Along Shareholder has delivered a Drag-Along Transaction Notice, except as may be agreed between the applicable parties in a separate written agreement. The decision to effect a Drag-Along Transaction is in the sole and absolute discretion of the Drag-Along Shareholder. (g) Notwithstanding anything to the contrary herein, no Dragged Shareholder may Transfer any of its Equity Securities (except in connection with the Drag-Along Transaction) during the period beginning on the date of receipt of the Drag-Along Transaction Notice and ending at such earlier time as the Drag-Along Transaction (x) is consummated, (y) is abandoned or terminated (with notice of such abandonment or termination having been provided by the Drag-Along Shareholder), or (z) fails to be consummated within the Drag-Along Transaction Period.

• Drag Along Right Notwithstanding any other provision hereof, if any Holder has not exercised its Tag-Along Right with respect to the maximum number of Holder’s Shares for which such Holder is permitted (pursuant to Section 2(b)(ii)(B) above) to exercise such Tag-Along Right in respect of a Third Party Sale, then, upon the demand of any Selling Fortress Entity participating in such Third Party Sale (in each such entity’s sole discretion), such Holder shall sell to the respective Third Party the number of whole Holder’s Shares (rounded upwards or downwards, as applicable), whether or not the restrictions on Transfer of Common Stock have lapsed, equal to the product of (x) the total number of Holder’s Shares held by such Holder on the date of the Drag-Along Notice (as defined below) and (y) the Third Party Sale Percentage, at the same price and on the same terms and conditions as such Selling Fortress Entity has agreed to with such Third Party; provided, however, that each such Holder shall not be permitted to sell any unvested Holder’s Shares (provided that the Company may, in its sole discretion, accelerate the vesting of any unvested Holder’s Shares); provided further that such Selling Fortress Entity shall use its reasonable, good faith efforts to provide that (A) the only representation and warranty which such Holder shall be required to make in connection with the Third Party Sale is a representation and warranty with respect to such Holder’s own ownership of the Holder’s Shares to be sold by it and its ability to convey title thereto free and clear of liens, encumbrances and adverse claims and (B) the liability of such Holder with respect to any representation and warranty made in connection with the Third Party Sale is the several liability of such Holder (and not joint with any other person) and that such liability is limited to the amount of proceeds actually received by such Holder in the Third Party Sale; provided further, that a Holder shall not be obligated to participate in any Third Party Sale pursuant to this Section 2(b)(iii) unless such Holder is provided an opinion of counsel to the effect that the Third Party Sale is not in violation of applicable federal and state securities or other laws or, if such Holder is not provided with an opinion with respect to the matters contemplated by this proviso, each Selling Fortress Entity who has delivered a Drag-Along Notice to such Holder shall indemnify such Holder for any such violation. If the Third Party Sale is in the form of a merger transaction, each Holder agrees to vote its Holder’s Shares in favor of such merger and not to exercise any rights of appraisal or dissent afforded under applicable law.

• Continuing Rights and Obligations After the satisfaction and discharge of this Indenture, this Indenture will continue for (i) rights of registration of transfer and exchange, (ii) replacement of mutilated, destroyed, lost or stolen Notes, (iii) the rights of the Noteholders to receive payments of principal of and interest on the Notes, (iv) the obligations of the Indenture Trustee and any Note Paying Agent under Section 3.3, (v) the rights, obligations and immunities of the Indenture Trustee under this Indenture and (vi) the rights of the Secured Parties as beneficiaries of this Indenture in the property deposited with the Indenture Trustee payable to them for a period of two years after the satisfaction and discharge.