Common use of Drag Along and Tag Along Rights Clause in Contracts

Drag Along and Tag Along Rights. If the Class A Members propose to Transfer all or a portion of their Class A Membership Interests such that, following such Transfer, the Class A Members, together with their Affiliates and family members, would beneficially own less than 50% of the outstanding Class A Membership Interests (an “Eligible Transfer”), then the Class A Members shall have the right (a “Drag Right”) to require that the Class B Member join in such sale by selling a pro rata portion of such Class B Member’s Class B Membership Interest at the same time; provided that if the Class A Members elect not to exercise their Drag Right, the Class A Members must allow the Class B Member to elect to participate (a “Tag Right”) in such sale by selling a pro rata portion of such Class B Member’s Class B Membership Interest at the same time. The Class B Member shall provide written notice (a “Transfer Notice”) to the Class B Member not less than 30 days prior to the proposed closing of any Eligible Transfer, which Transfer Notice shall state either (a) that the Class A Members are exercising their Drag Right or (b) that the Class A Members are not exercising their Drag Right, but that the Class B Member may exercise his Tag Right. To exercise his Tag Right, the Class B Member must provide written notice to the Class A Members at the address specified in the Transfer Notice within 10 days of the Class B Member’s receipt of such Transfer Notice. The Class B Member shall forfeit his Tag Right upon failure to provide timely notice in the manner set forth in the immediately preceding sentence. Upon exercise by the Class A Members of their Drag Right or by the Class B Member of his Tag Right, in connection with an Eligible Transfer, the terms and conditions of the sale of the Class B Membership Interest shall be no less favorable to the Class B Member as those of the sale of the Class A Interests by the Class A Members; provided that the consideration to be received by the Class B Member in respect of the Class B Interest, or portion thereof, sold shall be in the same form as received by the Class A Members, whether cash or other property, but in the amount specified in Section 5.1(b)(ii); and provided, further, (x) all representations, warranties, covenants and indemnities provided by the Class B Member, if any, shall be several and not joint with the Class A Members, (y) the Class B Member shall not be liable for the breach of any representation, warranty or covenant by a Class A Member and (z) the Class B Member’s liability shall not exceed the proceeds received by the Class B Member in connection with the closing of the Eligible Transfer.