Drag Along Right. In the event that you become a Participating Stockholder Seller pursuant to Section 4.5 of the Stockholders Agreement, all Shares issuable in respect of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreement.
Appears in 2 contracts
Sources: Stockholders Agreement (PPD, Inc.), Stockholders Agreement (PPD, Inc.)
Drag Along Right. In (a) If a Non-Selling Party shall not have fully exercised its right to purchase the event that you become a Participating Stockholder Seller Right of Offer Shares pursuant to Section 4.5 of 2.4, the Stockholders Agreement, all Shares issuable in respect of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, Selling Party shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, (but not the obligation, ) to cause to be paid to you, in your capacity as a require all or any of the Non-Selling Parties (the “Drag-Along Seller, in lieu Sellers”) to Transfer the number of Drag-Along Securities held by such securities described in Drag-Along Seller to a purchaser (the preceding sentence, an amount in cash equal “Drag Along Transferee”) contemporaneously with the Transfer of Equity Securities by the Selling Party by delivery of a written notice (a “Drag-Along Notice”) to the Fair Market Value of such Shares as of Drag-Along Sellers no later than thirty (30) days prior to the date such securities otherwise would have been issued in exchange for such Sharesclosing thereof. The Drag-Along Right Notice shall set forth: (1) the material terms and conditions of such offer, including the Sponsors shall terminate upon name and address of and the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The per Drag-Along Right Security purchase price offered by the Drag-Along Transferee and (2) the anticipated time, date and place of the Sponsors closing of such Transfer to the Drag-Along Transferee. The number of “Drag-Along Securities” for each Drag-Along Seller shall not include equal that number determined by multiplying the number of Equity Securities then held by such Drag-Along Seller by the quotient equal to the number of Equity Securities to be Transferred to the Drag-Along Transferee by the Selling Party divided by the number of Equity Securities then held by the Selling Party. At the closing each Drag-Along Seller shall Transfer its Drag-Along Securities on the same terms and conditions applicable to the Equity Securities proposed to be sold by the Selling Party.
(b) Each Drag-Along Seller shall, if requested by the Selling Party, execute and deliver a right custody agreement and power of attorney in form and substance satisfactory to require you the Selling Party with respect to sign the Equity Securities that are to be included in the Drag-Along Transfer. The custody agreement and power of attorney will provide, among other things, that such Drag-Along Seller shall deliver to and deposit in custody with the custodian and attorney-in-fact, named therein, a noncertificate or certificates representing such Equity Securities (duly endorsed in blank by the registered owner or owners thereof or accompanied by duly endorsed stock powers in blank) and irrevocably appoint the custodian and attorney-compete in-fact as such Drag-Along Seller’s agent and attorney-in-fact with full power to act under a custody agreement (and power of attorney on behalf of such Drag-Along Seller with respect to the matters specified therein. Each Drag-Along Seller agrees that it being understood that any existing nonwill execute such other agreements as the Selling Party may reasonably request in connection with the consummation of a Drag-compete agreement then in effect between you Along Transfer and Drag-Along Notice and the Company transactions contemplated thereby, including, without limitation, any purchase agreement, proxies, written consents in lieu of meetings or one waiver of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementappraisal rights.
Appears in 2 contracts
Sources: Shareholder Agreement (China Medicine Corp), Shareholder Agreement (OEP CHME Holdings, LLC)
Drag Along Right. In (a) If a Stockholder proposes to Transfer to any Purchaser a number of shares of Stock which represents at least a majority of the event outstanding shares of Common Stock on a fully-diluted basis (the "Transferred Shares") then, at the election of such holder or holders (a "Drag Along Seller"), each other Stockholder (each, a "Drag Along Stockholder") shall be required to sell to such Purchaser (a "Drag Along Sale") a number of shares of Stock determined by the Drag Along Seller up to the total number of shares of Stock then held by such Drag Along Stockholder (the "Drag Along Shares"). If the percentage of any Drag Along Stockholder's Stock required to be sold as Drag Along Shares exceeds the percentage of the Drag Along Seller's Stock to be sold to Purchaser in a Drag Along Sale, Drag Along Seller, shall, at its sole expense, arrange for the delivery of a fairness opinion by an investment banking firm of nationally recognized standing acceptable to such Drag Along Stockholder (which acceptance shall not be unreasonably withheld or delayed). Such fairness opinion shall confirm that you become the terms of the Drag Along Sale are fair to the Drag Along Stockholders from a Participating financial point of view.
(b) The Drag Along Seller shall deliver to each Drag Along Stockholder Seller written notice (the "Drag Along Notice") of any sale to be made pursuant to Section 4.5 6.2(a) above, which notice shall set forth the consideration to be paid by the Purchaser for each Transferred Share, the number of Transferred Shares to be sold by the Drag Along Seller, the number of shares to be sold by each Drag Along Stockholder, and the other terms and conditions, if any, of such transaction. Pending consummation of the Stockholders AgreementDrag Along Sale, all Shares issuable in respect the Drag Along Seller shall promptly notify each Drag Along Stockholder of vested “any changes in the money” Options held proposed timing for the Drag Along Sale and any other material developments in connection therewith. The Drag Along Sale shall be on the same terms and conditions as the sale of the Transferred Shares by you whether the Drag Along Seller. The Drag Along Stockholder shall only be required to give representations and warranties as to its due organization, its due authorization and title to the Drag Along Shares and shall only be required to indemnify for breach of its own representations and warranties.
(c) If, within 15 days after the Drag Along Seller provides the Drag Along Notice, no sale of the Transferred Shares owned by the Drag Along Seller or not exercised the Drag Along Stockholder in accordance with the provisions of this Section 6 shall have been completed, the Drag Along Sale shall be terminated for purposes hereof.
(including any Options that would vest as a result of d) Simultaneously with the consummation of the Change of Control Transaction described in Section 4.5 sale of the Stockholders Agreement) Transferred Shares pursuant to this Section 6 the Drag Along Seller shall constitute Shares held by you for purposes of cause the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything Purchaser to remit directly to the contrary in Section 4.5 of Drag Along Stockholder the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options consideration with respect to the Drag Along Shares and shall furnish such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 other evidence of the Stockholders Agreement includes securities completion and time of completion of such sale and terms and conditions, if any, thereof as may reasonably be requested by the Drag Along Stockholder.
(ye) applicable law would require the provision to youThe provisions of this Section 6, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicablehowever, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then remain in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementfor any subsequent proposed sale.
Appears in 2 contracts
Sources: Amended and Restated Agreement (Conseco Inc), Amended and Restated Agreement (Conseco Inc)
Drag Along Right. (a) In the event that you become a Participating RN Stockholder Seller pursuant to Section 4.5 (for so long as such Stockholder owns at least twenty-five percent (25%) of the Stockholders Agreement, all Shares issuable in respect then outstanding shares of vested “in the money” Options held by you whether or not exercised Voting Stock) and MTVN Stockholder (including any Options that would vest for so long as a result such Stockholder owns at least twenty-five percent (25%) of the consummation then outstanding shares of the Change of Control Transaction described in Section 4.5 of the Stockholders AgreementVoting Stock) shall constitute Shares held by you (for purposes of this Section 3.06, each, an “Original Stockholder”) shall have jointly entered into an agreement with any Person (such Person, a “Drag-Along Purchaser”) regarding the calculation set forth in the first sentence Transfer of Section 4.5(aall of their Voting Stock, an Original Stockholder shall be entitled, at its option, to require each Stockholder holding less than fifteen percent (15%) of the Stockholders Agreement then outstanding shares of Voting Stock (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any Party”) to include all of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares Voting Stock in such proposed Transfer pursuant to Section 4.5 of sale (the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a “Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such SharesRight”). The Drag-Along Right shall be exercised by written notice (the “Drag-Along Notice”) to the Drag-Along Party, at least thirty (30) days prior to closing of the Sponsors shall terminate upon proposed Transfer, of the earlier to occur identity of the Drag-Along Purchaser, the consideration offered for the transferring Stockholder’s Voting Stock (i) an IPO the “Drag-Along Price”), the terms of the Drag-Along Purchaser’s financing (if any and if known), the anticipated date of closing of the proposed Transfer and any other material terms and conditions of the proposed Transfer (ii) a Liquidity Eventthe “Drag-Along Terms”). The Drag-Along Right Party shall be obligated to sell all of its Voting Stock to the Drag-Along Purchaser on the Drag-Along Terms at a price equal to the product of (x) the ratio of the Sponsors percentage of ownership of Voting Stock then outstanding of the Drag-Along Party over the percentage of ownership of Voting Stock then outstanding of the transferring Stockholder and (y) the Drag-Along Price; provided, however, that the holders of shares of Preferred Stock shall be entitled to be paid the amount determined pursuant to Section 3(c) of Article IV of the Charter to the extent applicable. At the closing of such Transfer (which anticipated date, place and time shall be designated in the Drag-Along Terms), the Drag-Along Party shall deliver an assignment agreement transferring all of its Voting Stock, duly executed, free and clear of any Liens, against delivery of the purchase price therefor. Each party shall bear its own expenses in connection with a Transfer pursuant to this Section 3.06.
(b) Notwithstanding the foregoing, a Drag Along Party will not be required to comply with Section 3.06(a) above in connection with any proposed Transfer of Voting Stock (the “Proposed Sale”) unless (i) the Drag Along Party shall not include a right to require you to sign a non-compete agreement (it being understood that be liable for the inaccuracy of any existing non-compete agreement then representation or warranty made by any other Person in effect between you and connection with the Proposed Sale, other than the Company or one of its parents or subsidiaries shall not terminate solely as a result and (ii) the liability for indemnification, if any, of such Transfer). Any unvested or “out-of-Drag Along Party in the money” vested Options shall be treated Proposed Sale and for the inaccuracy of any representations and warranties made by the Company in accordance connection with such Proposed Sale, is several and not joint with any other Person, and is pro rata in proportion to the applicable award agreementamount of consideration paid to the Original Stockholders and any other Drag Along Parties in the Proposed Sale.
Appears in 2 contracts
Sources: Stockholder Agreement, Stockholder Agreement (Realnetworks Inc)
Drag Along Right. 11.1 In the event that you become a Participating Stockholder Seller pursuant to Section 4.5 Parties holding greater than 50% of the Stockholders Agreementoutstanding Shares desire to Transfer, in any single transaction or series of related transactions, all Shares issuable in respect of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result of the consummation Shares owned by such Parties, or to otherwise effect a sale of such Shares, whether through merger, consolidation, share exchange, business combination or otherwise (in such context, the Change “Drag Along Sellers”) to any third party (in such context, a “Drag Along Purchaser”), then such Drag Along Sellers shall, in each case subject to any Applicable Regulatory Approval, have the right (a “Drag Along Right”) to require all Recipients holding Shares (such Recipients subject to the Drag Along Sale, the “Dragged Shareholders”) to Transfer all of Control Transaction described their respective Shares (the “Drag Shares”) to the Drag Along Purchaser in Section 4.5 of accordance with the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation procedures set forth in this Clause 11 (such Transfer that complies with the first sentence requirements of Section 4.5(athis Clause 11, a “Drag Along Sale”) at the price per Share (which shall be payable in cash or Listed Securities (but which may include deferred or contingent consideration in the form of cash or Listed Securities)) and otherwise on the same material terms and conditions as the Transfer of Shares by the Drag Along Sellers to the Drag Along Purchaser.
11.2 The Drag Along Sellers may exercise their Drag Along Right pursuant to this Clause 11 by providing written notice of their election to do so to each Dragged Shareholder (a “Drag Along Notice”), which notice shall identify the Drag Along Purchaser and specify the proposed price per Share and all other material terms and conditions of the Stockholders Drag Along Sale, including the anticipated closing date of the Drag Along Sale.
11.3 No Recipient shall Transfer or agree to or consummate a Transfer of any Shares to any Person other than the Drag Along Purchaser during the period between the date it receives a Drag Along Notice and the conclusion or termination of such Drag Along Sale, including where a ROFO Notice has been delivered under Clause 10.1 or any sale pursuant to Clause 10 is pending. If the Drag Along Sale shall not have been consummated, all the restrictions on Transfer contained in this Agreement (provided, notwithstanding anything or otherwise applicable at such time with respect to the contrary Shares owned by the Parties shall again be in Section 4.5 effect.
11.4 In the event that the Drag Along Sellers exercise their Drag Along Right pursuant to this Clause 11, the Dragged Shareholders shall take all Necessary Action to consummate the Drag Along Sale, including making such representations, warranties and covenants and entering into such definitive agreements as are customary for transactions of the Stockholders Agreementnature of the proposed Transfer; provided that (1) any indemnification obligation of a Dragged Shareholder in connection with such Transfer shall be pro rata (based on their relative proceeds), you several, and not joint and several, (2) each Dragged Shareholder shall not be required to exercise only make any representations or warranties other than with respect to such Dragged Shareholder’s existence, good standing, due authorization, ownership of, and ability to Transfer, such Dragged Shareholder’s Shares, the applicable “in the money” Options absence of any adverse claim with respect to such Shares and the non-contravention of other agreements to which it is a party resulting from such Transfer and (3) no Dragged Shareholder shall be required to agree to any non-compete, non- solicit, non-disparagement, non-investment, lock-up or similar restrictive covenant.
11.5 The Parties shall cooperate with, and provide reasonable assistance to, the Drag Along Sellers in accordance therewith)connection with obtaining or making any necessary consents, approvals, filings and notices from Governmental Bodies to consummate a Drag Along Sale. In Further, the event that Parties shall – without prejudice to the Investor Shareholders’ rights under this Agreement – take all Necessary Action to (x1) the consideration payable for Shares to be sold pursuant to Section 4.5 vote in favor of the Stockholders Agreement includes securities transaction or transactions with the Drag Along Purchaser and (y2) applicable law would require the provision take all actions to youwaive any dissenters, appraisal or other similar rights with respect thereto, in your capacity as a Participating Stockholder Seller or Drag-Along Sellereach case, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 .
11.6 Completion of the Stockholders Agreement, then notwithstanding Section 4.5(f) sale and purchase of Drag Shares to the Drag Along Purchaser under this Clause 11 shall be conditional on completion of the Stockholders Agreement, you, in your capacity Drag Along Sale and shall take place at the same time as a Participating Stockholder Seller or Drag- the Drag Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO Sale and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementClause 17 (Completion of Share Transfers).
Appears in 2 contracts
Sources: Recipient Shareholders’ Agreement, Recipient Shareholders’ Agreement
Drag Along Right. (a) In the event that you become a Participating Stockholder Seller pursuant Talecris LLC proposes to Section 4.5 Sell (the “Drag-Along Sale”) all or any portion of the Stockholders AgreementShares held by it to a Third Party in a single transaction or series of related transactions that would result in such Third Party and its Affiliates becoming the beneficial owner, directly or indirectly, of 50% or more of the Fully Diluted Common Shares of the Company, Talecris LLC may require each Bayer Party to participate in such Drag-Along Sale and Sell the same percentage of its Common Shares, as the Fully Diluted Common Shares that would be Sold by Talecris LLC, assuming the conversion, exercise or exchange of all Equity Interests of the Company, represent to the total number of Fully Diluted Common Shares issuable that would be held by Talecris LLC, assuming the conversion, exercise or exchange of all Equity Interests of the Company, on the same terms and conditions and at the same time or times as applicable to Talecris LLC.
(b) Talecris LLC shall, promptly upon determining the terms of the Drag-Along Sale, deliver to each Bayer Party written notice (the “Drag-Along Notice”) specifying the material terms of the Drag-Along Sale, including the identity of the purchaser to which the Drag-Along Sale is proposed to be made, the terms per Fully Diluted Common Share of such Sale and the costs expected to be incurred by Talecris LLC in respect connection with such Sale. In connection with any such Sale, each Bayer Party will agree (i) to make or agree to any customary representations, covenants, indemnities and agreements as Talecris LLC so long as they are made severally and not jointly and the liabilities thereunder are borne on a pro rata basis based on the numbers of vested “Fully Diluted Common Shares into which Shares sold by each Stockholder are convertible, exercisable or exchangeable and (ii) to pay their proportionate share of the reasonable and documented costs (including, without limitation, reasonable legal fees and expenses) incurred by each of Talecris LLC and the Bayer Parties in connection with such Drag-Along Sale to the extent not paid or reimbursed by the Company or the Third Party.
(c) Each Bayer Party agrees that it will deliver at the closing of the Drag-Along Sale certificates evidencing the Common Shares to be sold by such Bayer Party in the money” Options held Drag-Along Sale duly endorsed in blank or accompanied by you whether or not exercised written instruments of transfer in form reasonably satisfactory to Talecris LLC executed by such Bayer Party, and each Bayer Party shall execute such other documents of transfer that Talecris LLC may reasonably request in order to consummate the Drag-Along Sale at the time specified by Talecris LLC.
(including any Options that would vest as a result d) On the date of the consummation of the Change of Control Transaction described in Section 4.5 Drag-Along Sale, Talecris LLC shall remit or cause to be remitted to each Bayer Party its portion of the Stockholders Agreement) shall constitute consideration for the Common Shares held by you for purposes sold pursuant thereto less its proportionate share of the calculation reasonable and documented costs (including, without limitation, reasonable legal fees and expenses) incurred in connection with such Drag-Along Sale, including costs incurred by the Bayer Parties, to the extent not paid or reimbursed by the Company or the Third Party.
(e) Anything herein to the contrary notwithstanding, Talecris LLC shall have no obligation to any Bayer Party to Sell any Shares pursuant to this Section 3.04 as a result of any decision by Talecris LLC not to accept or consummate any Drag-Along Sale (it being understood that any and all such decisions shall be made by Talecris LLC in its sole discretion). The Bayer Parties shall not be entitled to make any Sale of Common Shares directly to any Third Party pursuant to a Drag-Along Sale (it being understood that all such Sales shall be made only on the terms and pursuant to the procedures set forth in the first sentence of this Section 4.5(a3.04).
(f) of the Stockholders Agreement (provided, notwithstanding Notwithstanding anything to the contrary in Section 4.5 3.04, Talecris LLC may not require any Bayer Party to participate in any Drag-Along Sale during the period after Bayer has given a Notice of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold Election pursuant to Section 4.5 2.01(a) and before the earlier of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 payment of the Stockholders Agreement, then notwithstanding Section 4.5(f) Put Price and withdrawal by Bayer of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, Notice of Election.
(g) This Section 3.04 shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal terminate immediately prior to the Fair Market Value consummation of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementIPO.
Appears in 1 contract
Sources: Shareholder Agreements (Talecris Biotherapeutics Holdings Corp.)
Drag Along Right. In the event that you become If a Participating Stockholder Seller pursuant to Section 4.5 Shareholders holding not less than 66.67% of the Stockholders Agreementoutstanding Common Shares (hereinafter in this Section 4.3 referred to as the “Selling Shareholder(s)”) propose to sell one hundred percent (100%) of their Common Shares to a person dealing at Arm’s Length to them (the “Drag Purchaser”) for all cash consideration, all the such Selling Shareholder(s) may, by written notice delivered to the other Shareholders, (each a “Drag-Along Offeree”) accompanied by an irrevocable offer (the “Drag-Along Offer”) from the Drag Purchaser to each Drag-Along Offeree to purchase one hundred percent (100%) of the Shares issuable owned by such Drag-Along Offeree (the “Dragged Securities”), require the Drag-Along Offeree to sell to the Drag Purchaser the Dragged Securities at a purchase price (and on the same terms and conditions) in respect of vested “in Shares which is the money” Options held by you whether or not exercised (including any Options that would vest as a result of same purchase price per Share at which the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders AgreementSelling Shareholder(s) shall constitute propose to sell their Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such SharesDrag Purchaser. The Drag-Along Right Offer shall also include an irrevocable offer to purchase, to the extent then outstanding, the Shareholder Debt of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The each Drag-Along Right Offeree. The delivery by the Selling Shareholder(s) of an irrevocable Drag-Along Offer to a Drag-Along Offeree shall bind the Sponsors shall not include a right Drag-Along Offeree to require you sell its Dragged Securities and Shareholder Debt. The date on which the sale is to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you close and the Company other closing arrangements (which shall be the same, mutatis mutandis, as those for the purchase and sale between the Drag Purchaser and the Selling Shareholder(s)) shall be as specified in the Drag-Along Offer. The Drag Purchaser shall be deemed to warrant to the Drag-Along Offeree, and the Drag Purchaser shall be required to make in writing in its Drag-Along Offer a representation and warranty that, no direct or one indirect collateral benefit or supplementary consideration (whether or not in the nature of its parents a tangible or subsidiaries shall intangible asset, money, property, security or other benefits or opportunities) has been or is to be paid or received by the Selling Shareholder(s), or any other Person not terminate solely at Arm's Length with it, in connection with such Drag-Along Offer and that such Drag-Along Offer is not made as a result part of such Transfer)or in connection with any other transaction. Any unvested or “out-of-the money” vested Options purchase and sale of Shares and Shareholder Debt pursuant to a transaction contemplated in this Section 4.3 shall be treated effected in accordance with the applicable award agreementterms of this Agreement.
Appears in 1 contract
Sources: Unanimous Shareholder Agreement (Sagebrush Gold Ltd.)
Drag Along Right. In (a) At any time after the event that you become eighth anniversary of the date hereof:
(i) At any time thereafter, Onex Partners may (A) elect to sell or exchange, in one or a Participating Stockholder Seller series of related transactions (including, without limitation, pursuant to Section 4.5 a stock sale, asset sale, recapitalization, tender offer, merger, share exchange or other business combination or similar transaction), all of the Stockholders Agreementoutstanding capital stock of the Company (or, with respect to an asset sale or similar transaction, all Shares issuable or substantially all of the assets of the Company) in respect a bona fide sale to a third party purchaser (a “Drag-Along Sale”) and (B) exercise the right (the “Drag-Along Right”) to require each other Investor (the “Drag-Along Shareholders”) to transfer at the closing of vested “in such Drag-Along Sale to the money” Options proposed transferee all of the shares of capital stock of the Company then held by you whether every Drag-Along Shareholder (or, with respect to an asset sale or other similar transaction, agree to, vote in favor of and participate in such transaction as requested by Onex Partners), with the consideration paid in connection with any such Drag-Along Sale to be allocated in accordance with Section C of Article IV of the Articles of Incorporation.
(ii) In order to exercise the Drag-Along Right, Onex Partners shall deliver to the Drag-Along Shareholders (at the addresses last shown on the records of the Company for such holders) and the Company a written notice of exercise (a “Drag-Along Notice”) not exercised later than ten (including any Options that would vest as a result of 10) days prior to the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or proposed Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 Sale which shall include reasonable details and all material terms of the Stockholders Agreementproposed sale, then notwithstanding Section 4.5(f) exchange or other transaction, including the proposed time and place of closing and the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 form and amount of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Sharesconsideration. The Drag-Along Right Shareholders shall use their best efforts to cooperate in the Drag-Along Sale and shall take all necessary and desirable actions in connection with the consummation of the Sponsors shall terminate upon Drag-Along Sale as are reasonably requested by Onex Partners (other than actions requiring the earlier payment of money), including, but not limited to, entry into agreements and provision of representations, warranties and indemnification, subject to occur of subsection (iiii) an IPO and (ii) a Liquidity Eventbelow. The Drag-Along Right Shareholders shall be obligated to participate in the Drag-Along Sale on the terms and conditions set forth in the Drag-Along Notice and, if applicable, tender their shares of capital stock of the Sponsors shall not include a right to require you to sign a non-compete agreement Company as set forth below (it being understood that each Drag-Along Shareholder shall receive consideration as paid in connection with such a transaction in accordance with Section IV(C) of the Articles of Incorporation, except that the Drag-Along Sale may provide for payment in securities, or a combination of cash and securities, to all Investors that are accredited investors within the meaning of Regulation D under the Securities Act of 1933 and in cash to Investors that are not accredited investors or may provide Investors that are accredited investors with the option to receive securities, or a combination of cash and securities, or cash while Investors that are not accredited investors receive cash).
(iii) At or prior to the closing of a Drag-Along Sale, each Drag-Along Shareholder shall deliver or cause to be delivered to Onex Partners (i) wire transfer instructions for payment of the purchase price or other consideration for which payment will be made to such Drag-Along Shareholder pursuant to such Drag-Along Sale, (ii) if applicable, the certificate or certificates representing the shares of capital stock of the Company of such Drag-Along Shareholder to be included in the Drag-Along Sale, together with a limited power of attorney authorizing Onex Partners to transfer such shares of capital stock, if applicable, of such Drag-Along Shareholder on the terms set forth in the Drag-Along Notice, and (iii) if applicable, an executed counterpart of the sale and purchase agreement and such other definitive documents distributed with the Drag-Along Notice. Such purchase agreement and any existing nonother definitive documents delivered in connection with the Drag-compete agreement then Along Sale may require the Drag-Along Shareholders to make such representations, warranties and covenants as Onex Partners requires to be made by all Investors in effect between you connection with the Drag-Along Sale and to join in any indemnification that is to be provided by the Investors in connection with such Drag-Along Sale; provided, however that:
(1) each Drag-Along Shareholder shall have sole liability, whether for indemnification or otherwise, with respect to representations and warranties related to such Drag-Along Shareholder and its authority, ownership and the ability to convey title to the shares of capital stock of the Company such Drag-Along Shareholder purports to own, including but not limited to representations and warranties that (A) such Drag-Along Shareholder holds all right, title and interest in and to the shares of capital stock such Drag-Along Shareholder purports to hold, free and clear of all liens and encumbrances, (B) such Drag-Along Sale and the obligations of such Drag-Along Shareholder in connection with the Drag-Along Sale have been duly authorized and approved by all necessary corporate or other entity action, if applicable, (C) the documents to be entered into by such Drag-Along Shareholder have been duly executed by such Drag-Along Shareholder and delivered to the acquirer and are enforceable against such Drag-Along Shareholder in accordance with their respective terms and (D) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of such Drag-Along Shareholder’s obligations thereunder, will cause a breach or violation of the terms of such Drag-Along Shareholder’s organizational documents or any agreement, law or judgment, order or decree of any court or governmental agency;
(2) except as provided in subparagraph (1), the representations and warranties of each Drag-Along Shareholder shall be identical and made on a several basis;
(3) except as provided in subparagraph (1), liability, whether for indemnification or otherwise, for representations, warranties, covenants and agreements for indemnification made or given by the Company or one Investors in connection with such Drag-Along Sale, is several and not joint with any other Person (except to the extent that funds may be paid out of an escrow), and is pro rata in proportion to the amount of consideration paid to such Drag-Along Shareholder in connection with such Drag-Along Sale; and
(4) except as provided in subparagraph (1), liability shall be limited to such Drag-Along Shareholder’s applicable share (determined based on the respective proceeds payable to each shareholder in connection with such Drag-Along Sale) of an aggregate indemnification amount that applies equally to all shareholders but that in no event exceeds the amount of consideration otherwise payable to such Drag-Along Shareholder in connection with such Drag-Along Sale, except with respect to claims related to fraud or willful misconduct by such Drag-Along Shareholder, the liability for which need not be limited as to such Drag-Along Shareholder; and
(5) no Drag-Along Shareholder shall be required to enter into a covenant not to compete or other material restriction on its parents or subsidiaries business activities following the closing in connection with the Drag-Along Sale.
(iv) Promptly after the consummation of the Drag-Along Sale, Onex Partners shall not terminate solely as a result (A) so notify each Drag-Along Shareholder, (B) cause to be remitted to each Drag-Along Shareholder the total consideration payable to such holder in connection with the Drag-Along Sale, with the cash portion of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated consideration paid by wire transfer of immediately available funds in accordance with the wire transfer instructions provided by each such holder, and (C) furnish such other evidence of the completion and the date of completion of the Drag-Along Sale and the terms thereof as may be reasonably requested by each such holder.
(v) Each Drag-Along Shareholder does hereby waive, and shall refrain from exercising any dissenters’ rights or rights of appraisal under applicable award agreementlaw with respect to any valid Drag-Along Sale, and no Drag-Along Shareholder shall bring any claim or action seeking to enjoin any Drag-Along Sale or seeking damages in respect of any such Drag-Along Sale effected in accordance with the terms of this Section 1. The Drag-Along Shareholders shall each (A) vote in favor of the Drag-Along Sale, (B) provide, as requested by Onex Partners, written consents approving the Drag-Along Sale, and (C), subject to subsection (iii) above, execute and deliver any other documents requested by Onex Partners or the Company for purposes of effecting the Drag-Along Sale.
(vi) Notwithstanding anything to the contrary herein, subject to compliance with the provisions of this Section 1, nothing herein shall be deemed or construed to restrict the ability of Onex Partners to determine in its sole and absolute discretion at any time whether to consummate or decline to proceed with the Drag-Along Sale. If Onex Partners delivers a Drag-Along Notice, at any time before the closing of the related Drag-Along Sale, Onex Partners shall be entitled, in its sole and absolute discretion, to give written notice to the Drag-Along Shareholders of Onex Partners’ election to withdraw the Drag-Along Notice and not to proceed with the proposed Drag-Along Sale. If Onex Partners delivers such withdrawal notice, any previously delivered Drag-Along Notice shall automatically be deemed to be null and void, and any documentation delivered by any Drag-Along Shareholder in connection with such withdrawn Drag-Along Sale will be returned to such holder.
Appears in 1 contract
Drag Along Right. In (a) Notwithstanding Clause 8.3, if the event that you become Shareholders who have an aggregate Shareholding Proportion of at least 86% (the "Drag-Along Transferors") propose to Transfer (whether as a Participating Stockholder Seller pursuant to Section 4.5 single transaction or a series of related transactions) at least 86% of the Stockholders AgreementShares in a bona fide sale to a third party (the "Drag-Along Transferee') on arm's length terms, all the Drag-Along Transferors shall have the right (but not an obligation) to require the other Shareholder(s) (the "Drag-Along Shareholders") to sell up to a pro-rata proportion of their Shares issuable in respect of vested “in (the money” Options held by you whether or not exercised (including any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement"Drag-Along Shares") shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary Drag-Along Transferee in Section 4.5 accordance with the provisions of this Clause 8.5 with the Stockholders Agreement, you shall intention that the Drag-Along Shareholders may only be required to sell an equal proportion of their shares to the Drag-Along Transferee (as compared against the Drag-Along Transferor proposing to transfer the smallest proportion of their shares among all the Drag-Along Transferors as a group).
(b) If the Drag-Along Transferors choose to exercise only the applicable “drag-along right under Clause 8.5(a), they shall provide notice in writing of such intention to the Drag-Along Shareholders and the Company (the "Drag-Along Notice') which specifies:
(i) that the Drag-Along Shareholders are required to transfer all of the Drag-Along Shares pursuant to this Clause 8.5;
(ii) the identity and particulars of the Drag-Along Transferee;
(iii) the price per Drag-Along Share, which must be the same as the price per Share agreed between the Drag-Along Transferors and the Drag-Along Transferee;
(iv) the terms of such Transfer, which must be the same as the terms agreed between the Drag-Along Transferors and the Drag-Along Transferee; and
(v) the proposed date of the Transfer.
(c) Upon receiving the Drag-Along Notice and subject to Clause 8.5(d), the Drag-Along Shareholders shall be obliged to Transfer the Drag-Along Shares to the Drag-Along Transferee at the price and on the terms set out in the money” Options with respect Drag-Along Notice.
(d) The obligation of the Drag-Along Shareholders to such Transfer the Drag-Along Shares to the Drag-Along Transferee in accordance therewith). In with Clause 8.5(c) shall be conditional on:
(i) the event that price per Drag-Along Share being the same as the price per Share agreed between the Drag-Along Transferors and the Drag Along Transferee; and
(xii) such Transfer being on the same terms as those agreed between the Drag-Along Transferors and the Drag-Along Transferee.
(e) If any of the Shareholders defaults in Transferring the Shares to be Transferred by it pursuant to the drag-along process set out in this Clause 8.5, such defaulting Shareholder shall be deemed to have irrevocably appointed any one Director or the secretary of the Company to be its agent to execute all necessary Transfer(s) of its Shares on its behalf and against receipt of the consideration payable for such Shares (which shall be held on trust for the defaulting Shareholder), the Company shall deliver such Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities Third Party Purchaser and (y) applicable law would require the provision to you, in your capacity Directors shall forthwith register the Third Party Purchaser as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or holder thereof and the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu validity of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors proceedings shall not include a right to require you to sign a non-compete agreement (it being understood that be questioned or challenged by any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementperson.
Appears in 1 contract
Sources: Shareholders’ Agreement (Society Pass Incorporated.)
Drag Along Right. In the event that you become a Participating Stockholder Seller pursuant to Section 4.5 If one or more Shareholders holding together more than 50% (fifty percent) plus 1 (one) of the Stockholders Agreementthen issued Shares (the “Dragging Shareholder(s)”) intend to dispose of all their Shares to a bona fide third party (the “Proposed Dragged Purchaser”), all Shares issuable in respect of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders AgreementDragging Shareholder(s) shall constitute have a right to require all other Shareholders (the “Dragged Shareholder(s)”) to dispose of all their Shares held by you for purposes of (the calculation “Dragged Shares”) to the Proposed Dragged Purchaser on substantially the same terms and conditions as the Dragging Shareholder as set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding Notice (the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a “Drag-Along SellerRight”), in lieu of such securities described in as long as the preceding sentence, an amount in cash price per Share offered by the Proposed Dragged Purchaser is equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Sharesor above PLN 180,000.00 (one hundred eighty thousand zlotys). The Dragging Shareholder(s) may exercise the Drag-Along Right by delivering a written notice to each of the Sponsors Dragged Shareholder(s) at any time before the transfer of Shares to the Proposed Dragged Purchaser. Such written notice (the “Drag-Along Notice”) shall terminate upon specify: name of the earlier Proposed Dragged Purchaser; address and registration number thereof; price per one Share and aggregate price for all Shares, including Dragged Shares; detailed terms and conditions, including but not limited to occur the price and other additional payments, terms of (i) an IPO and (ii) a Liquidity Eventpayment of the price, conditions precedent, other relevant terms. The sale of the Dragged Shares shall be completed on the date proposed for completion of the sale of the Shares of the Dragging Shareholder(s), unless selling Shareholders agree otherwise. The Dragged Shareholders shall execute and perform all such documents and acts as required by the applicable law in order to effectively transfer the Dragged Shares to the Proposed Dragged Purchaser, in particular shall execute a share sale agreement. The Dragged Shareholders shall not be required to transfer the Dragged Shares prior to the date on which the Shares of the Dragging Shareholders are transferred to the Proposed Dragged Purchaser. The transfer of title to the Dragged Shares to the relevant purchaser shall take place upon crediting the bank account of the Dragged Shareholder with the amount of a price for their Dragged Shares. If the sale under the Drag-Along Right has not been consummated within 12 (twelve) months following delivery of the Sponsors shall not include a right to require you to sign a nonDrag-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options Along Notice, all Dragged Shareholders shall be treated in accordance with released from the applicable award agreementobligation under the Drag-Along Right.
Appears in 1 contract
Sources: Investment Agreement
Drag Along Right. (i) In the event case that you become a Participating Stockholder Seller pursuant to Section 4.5 of the Stockholders Agreement, all Shares issuable in respect of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company Dolphin or any of its parents Affiliates do not pay the Put Option (as such term is defined below) within 90 days of its exercise by EDFI, or subsidiaries, (ii) in case EDENOR defaults in the payment of any fees due under the Technical Assistance Agreement and any such securities or default under the issuer thereof that Technical Assistance Agreement is not otherwise remedied within 45 days of EDENOR and Dolphin having received a written default notice from EDFI, EDFI shall have, for a period of 12 months from the last date in which Dolphin could have paid the Put Option in case (i), and for a period of 12 months from the date of such payment default in case (ii), a right to sell to a bona fide third party all of NEV’s Shares, Dolphin Energia’s shares in EASA, and IEASA’s shares in EASA (the “Drag-Along Right”). Dolphin hereby agrees and Dolphin shall cause EASA to agree (and by executing this Shareholders Agreement irrevocably grants to EDFI the required powers of attorney, in the form attached hereto as Exhibit B, Exhibit C and Exhibit D respectively) that, if requested by EDFI pursuant to this Section 6.02(a), Dolphin and EASA will transfer to such bona fide third party, all of NEV’s Shares, Dolphin Energy’s shares in EASA and IEASA’s shares in EASA receiving the same terms and conditions (including time of payment and form of consideration) as to be paid and given to EDFI, provided for that the price of Dolphin’s EASA shares shall be adjusted if applicable based on any net debt that EASA may have. Upon completion of such Transfer pursuant to Section 4.5 transfer all rights and obligations of the Stockholders Agreementparties under the Put Option shall be extinguished.
(b) In connection with the Drag-Along Right, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, EDFI shall have the right to sell cause EDENOR, EASA and NEV to provide EDFI’s legal and financial advisors and any potential buyers with reasonable access subject to a Confidentiality Agreement; to EDENOR’s, EASA’s and NEV’s officers, advisors, auditors, legal counsel, operations and books and records of the companies in order to consummate a sale process of its Shares subject to the Drag-Along Right.
(c) EDFI will give notice (the “Drag-Along Notice”) to Dolphin Energia and/or EASA and/or NEV and/or IEASA as the case may be, of any proposed transfer giving rise to the tights of EDFI set forth in Section 6.02(a). The Drag-Along Notice will set forth, the name and address of the third party and the proposed amount and form of consideration. EDFI will notify Dolphin at least 30 days in advance of entering into a definitive agreement in connection with such proposed Transfer offer. In any such agreement, Dolphin will be required to pay its proportionate share of the costs incurred in connection with such transfer to the extent not paid or reimbursed by the third party. Such Drag-Along Notice may be amended at any time by EDFI and shall remain valid for the 12-month time-period contemplated in Section 6.02(a), subject to Section 6.02(d).
(d) Notwithstanding the above, in case that the Drag-Along Right is exercised pursuant to Section 4.5 of 6.02(a) above and the Stockholders Agreement; providedconsideration for the Shares offered by the third party were less than the Put Option Exercise Price (as such term is defined below), that then the Sponsor Investor Sellers Drag-Along Notice shall also constitute an irrevocable offer to sell EDFI’s Shares (the “Offered Equity”) for the same consideration and on the same terms and conditions set forth by the third party. In such case, Dolphin shall have the right, but not for a period of 25 days after the obligation, to cause to be paid to you, in your capacity as a Drag-Along SellerNotice is given (the “Response Period”) to purchase, in lieu of such securities described in the preceding sentence, an amount in cash equal pursuant to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of Notice, in whole but not in part, the Sponsors shall terminate upon the earlier to occur of Offered Equity, exercisable by delivering (i) an IPO a written notice to EDFI, within the Response Period, stating therein that all of the Offered Equity will be purchased and (ii) a Liquidity EventStand-By Letter of Credit supporting the obligation of Dolphin to pay in full the purchase price for the Offered Equity. The Drag-If Dolphin exercises such a right, the Drag Along Right right will no longer be exercised and all right and obligations of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and parties under the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options Put Option shall be treated in accordance with the applicable award agreementextinguished.
Appears in 1 contract
Sources: Shareholders Agreement (Edenor)
Drag Along Right. (a) In the event that you become a Participating Stockholder Seller pursuant Talecris LLC proposes to Section 4.5 Sell (the “Drag-Along Sale”) all or any portion of the Stockholders AgreementShares held by it to a Third Party in a single transaction or series of related transactions that would result in such Third Party and its Affiliates becoming the beneficial owner, directly or indirectly, of 50% or more of the Fully Diluted Common Shares of the Company, Talecris LLC may require each IBR Party to participate in such Drag-Along Sale and Sell the same percentage of its Common Shares, as the Fully Diluted Common Shares that would be Sold by Talecris LLC, assuming the conversion, exercise or exchange of all Equity Interests of the Company, represent to the total number of Fully Diluted Common Shares issuable that would be held by Talecris LLC, assuming the conversion, exercise or exchange of all Equity Interests of the Company, on the same terms and conditions and at the same time or times as applicable to Talecris LLC.
(b) Talecris LLC shall, promptly upon determining the terms of the Drag-Along Sale, deliver to IBR Parties written notice (the “Drag-Along Notice”) specifying the material terms of the Drag-Along Sale, including the identity of the purchaser to which the Drag-Along Sale is proposed to be made, the terms per Fully Diluted Common Share of such Sale and the costs expected to be incurred by Talecris LLC in respect connection with such Sale. In connection with any such Sale, each IBR Party will agree to make or agree to any customary representations, covenants, indemnities and agreements as Talecris LLC so long as they are made severally and not jointly and the liabilities thereunder are borne on a pro rata basis based on the numbers of vested “Fully Diluted Common Shares into which Shares sold by each Stockholder are convertible, exercisable or exchangeable.
(c) Each IBR Party agrees that it will deliver at the closing of the Drag-Along Sale certificates evidencing the Common Shares to be sold by such IBR Party in the money” Options held Drag-Along Sale duly endorsed in blank or accompanied by you whether or not exercised written instruments of transfer in form reasonably satisfactory to Talecris LLC executed by such IBR Party, and each IBR Party shall execute such other documents of transfer that Talecris LLC may reasonably request in order to consummate the Drag-Along Sale at the time specified by Talecris LLC.
(including any Options that would vest as a result d) On the date of the consummation of the Change of Control Transaction described in Section 4.5 Drag-Along Sale, Talecris LLC shall remit or cause to be remitted to each IBR Party its portion of the Stockholders Agreement) shall constitute consideration for the Common Shares held by you for purposes sold pursuant thereto less its proportionate share of the calculation set forth reasonable and documented costs (including, without limitation, reasonable legal fees and expenses) incurred in connection with such Drag-Along Sale, including costs incurred by the first sentence of Section 4.5(aIBR Parties, to the extent not paid or reimbursed by the Company or the Third Party.
(e) of the Stockholders Agreement (provided, notwithstanding anything Anything herein to the contrary in Section 4.5 of the Stockholders Agreementnotwithstanding, you Talecris LLC shall be required have no obligation to exercise only the applicable “in the money” Options with respect any IBR Party to such Sell any Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to this Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity 3.04 as a Participating Stockholder Seller result of any decision by Talecris LLC not to accept or consummate any Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement Sale (it being understood that any existing non-compete agreement then and all such decisions shall be made by Talecris LLC in effect between you and the Company or one of its parents or subsidiaries sole discretion). The IBR Parties shall not terminate solely as be entitled to make any Sale of Common Shares directly to any Third Party pursuant to a result of Drag-Along Sale (it being understood that all such Transfer). Any unvested or “out-of-the money” vested Options Sales shall be treated made only on the terms and pursuant to the procedures set forth in accordance with this Section 3.04).
(f) This Section 3.04 shall terminate immediately prior to the applicable award agreementconsummation of an IPO.
Appears in 1 contract
Sources: Stockholders Agreement (Talecris Biotherapeutics Holdings Corp.)
Drag Along Right. (a) In the event that you become at any time prior to the date on which the Company's equity is Actively Publicly Traded, (i) Odyssey or any Odyssey Holder designated in writing by Odyssey propose to initiate a Participating Stockholder Seller Company Sale pursuant to the Company Sale Right contained in Section 16 hereof or (ii) there is a sale, lease, transfer, conveyance or other disposition (including, without limitation, any merger or consolidation), in single transaction, of all or substantially all of the equity interests or assets of the Company and its Subsidiaries taken as a whole, which is approved by the Board pursuant to Section 4.5 4 hereof, Odyssey or any Odyssey Holder designated in writing by Odyssey, in the case of a transaction pursuant to clause (i) hereof or the Stockholders AgreementCompany, in the case of a transaction pursuant to clause (ii) hereof (each, a "DRAG-ALONG INITIATOR"), may require (a "DRAG-ALONG RIGHT") all Stockholders, all Shares issuable Lucent Holders and all Finance Warrant Holders (collectively, "DRAG-ALONG HOLDERS") to participate in respect of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares transaction in accordance therewith). In with the event that terms of this Section 9 (x) any transaction involving the consideration payable for Shares to be sold pursuant to Section 4.5 exercise of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or such Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required Right shall be referred to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag"DRAG-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such SharesALONG SALE"). The Drag-Along Right Initiator shall provide the Stockholders, the Lucent Holders and the Finance Warrant Holders written notice (a "DRAG-ALONG NOTICE") of such Drag-Along Sale and the material terms thereof not less than 25 days prior to the proposed date of the Sponsors Drag-Along Sale (the "DRAG-ALONG SALE DATE") and each of the Drag-Along Holders hereby agrees to sell to such Proposed Purchaser all Securities, Lucent Securities, Options or Convertible Securities held by such Drag-Along Holder. No Drag-Along Holder shall terminate upon exercise any dissenter's rights with respect to the earlier consummation of any such Drag-Along Sale.
(b) On the Drag-Along Sale Date, each Drag-Along Holder shall deliver a certificate or certificates for its Securities, duly endorsed for transfer with signatures guaranteed, to occur such Proposed Purchaser in the manner and at the address indicated in the Drag-Along Notice against delivery of the purchase price for such Securities, Options or Convertible Securities. The provisions of this Section 9 shall apply regardless of the form of consideration in the Drag-Along Sale.
(c) Securities, Options or Convertible Securities subject to a Drag-Along Right will be included in a Drag-Along Sale pursuant hereto and to any agreements with the Proposed Purchaser relating thereto, on the same terms and subject to the same conditions applicable to holders of the same type of securities included in the Drag-Along Sale. Such terms and conditions shall include, without limitation, the consideration; the payment of fees, commissions and expenses; the provision of, and representation and warranty as to, information requested of the Drag-Along Initiators; and the provision of requisite indemnifications; PROVIDED, HOWEVER, that any indemnification provided by the Drag-Along Holders shall (i) an IPO be determined pro rata in proportion with the aggregate number of Securities to be sold in the Drag-Along Sale and (ii) not be structured in a Liquidity Event. The way so as to require additional contributions from the Drag-Along Right Holders.
(d) Each of the Sponsors Drag-Along Holders will, if requested by the Drag-Along Initiators, execute and deliver a Custody Agreement and Power of Attorney in form and substance satisfactory to Drag-Along Initiators with respect to the Securities, Options or Convertible Securities which are to be included in the Drag-Along Sale pursuant hereto. The Custody Agreement and Power of Attorney will provide that the Drag-Along Holder will deliver to and deposit in custody with the custodian and attorney-in-fact named therein a certificate or certificates representing such Securities, Options or Convertible Securities (duly endorsed in blank by the registered owner or owners thereof or accompanied by duly executed stock powers in blank) and irrevocably appoint said custodian and attorney-in-fact as such Drag-Along Holders's agent and attorney-in-fact with full power and authority to act under a custody agreement and power of attorney on behalf of the such Drag-Along Holder with respect to the matters specified herein.
(e) Each Drag-Along Holder agrees that he or she will execute such other agreements as Drag-Along Initiators or the Proposed Purchaser may reasonably request in connection with the consummation of a Drag-Along Sale and the transactions contemplated thereby; provided, however, that ▇▇▇▇ shall not include be required to make any modification to the ▇▇▇▇ Agreements.
(f) In order to effect the provisions of this Section 9, each Drag-Along Holder hereby irrevocably constitutes and appoints: Odyssey, in the case of a right transaction specified in Section 9(a)(i); or the Board, in case of a transaction specified in Section 9(a)(ii), as attorney and proxy, with, subject to require you the consent of Odyssey or the Company, as applicable, full power of substitution, to sign a nonreceive all notices, and to represent, vote and consent, with respect to all Securities, Options or Convertible Securities held by such Drag-compete agreement Along Holder, in such manner as said proxies may, in the exercise of their sole and absolute discretion, determine, and without any prior notice to such Drag-Along Holder (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result provision of such Transfernotice concurrently or promptly after the taking of any such action being deemed sufficient for all purposes and any requirement for prior notice being expressly waived by such Drag-Along Holder). Any unvested , whether or “out-of-not said representation, vote or consent benefits the money” vested Options shall be treated interests of any of said proxies, but only with respect to any and all of the matters specified in accordance with the applicable award agreementthis Section 9.
Appears in 1 contract
Drag Along Right. In the event that you become a Participating Stockholder Seller pursuant If one or more Partners ("Drag-Along Sellers") ---------------- ------------------ propose to Section 4.5 of the Stockholders Agreement, all Shares issuable in respect of vested “in the money” Options held by you whether or not exercised Transfer (including any Options that would vest and as a result of the consummation such Transfer, a change in beneficial ownership of the Change Interests would result) in a sale consummated in a single Transfer or a series of Control Transaction described in Section 4.5 related Transfers to a single purchaser or a group of the Stockholders Agreementpurchasers (which may include a Partner) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or "Drag-Along SellerBuyer") all but not less than all of ---------------- the Interests held by such Sellers, as applicableand such Interests, of any specified information regarding together with all other Interests owned by the Company Drag-Along Buyer and the Drag-Along Buyer's Affiliates (on a fully diluted basis) represent 65% or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 more of the Stockholders Agreementthen outstanding Interests, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- such Drag-Along Seller, as applicable, Sellers shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right("Drag-Along ---------- Right"), but not the obligation, to cause each of the other Partners ("Other ----- ----- Partners") to be paid tender to you, in your capacity as a Drag-Along SellerBuyer for purchase, in lieu at the same price and on -------- the same terms and conditions as apply to such Drag-Along Sellers (including, without limitation, indemnification obligations and escrow requirements, if any), all of the Interests held by such securities described in Other Partners; provided, however, that the preceding sentenceDrag-Along Sellers shall have the Drag- Along Right if and only if Advanta Partners LP has consented thereto if Advanta Partners LP is an Eligible Partner and RMH Teleservices, Inc. has consented thereto if RMH Teleservices, Inc. is an amount in cash equal Eligible Partner. A determination by the Drag-Along Sellers to exercise the Drag-Along Rights shall be made based upon a written notice to do so ("Drag-Along Notice") executed by the Drag-Along Sellers ----------------- and delivered to the Fair Market Value of such Shares as Board and all Partners. Each Drag-Along Notice shall set forth (i) the name of the date such securities otherwise would have Drag-Along Buyer to which the Drag-Along Sellers propose to Transfer Interests, (ii) the address of the Drag-Along Buyer, (iii) the proposed amount and form of consideration and terms and conditions of payment offered by the Drag-Along Buyer, and any other material terms pertaining to the Transfer ("Drag-Along Buyer Terms") and (iv) that the Drag-Along Buyer ---------------------- has been issued informed of the rights provided in exchange for such Sharesthis Section 7.4 and has agreed to purchase Interests in accordance with the terms hereof. The Drag-Along Right Notice shall be given at least thirty (30) days before settlement of the Sponsors shall terminate upon proposed Transfer. Upon the earlier to occur giving of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options Notice, each Other Partner shall be treated in accordance with entitled and obligated to sell all of their Interests to Drag-Along Buyer on the applicable award agreementBuyer Terms; neither the Sellers nor any Other Partner shall be obligated to consumate the sale of any Interests if the Buyer does not purchase all Interests which the Partners are entitled to sell pursuant thereto.
Appears in 1 contract
Sources: Limited Partnership Agreement (RMH Teleservices Inc)
Drag Along Right. In At any time prior to the event that you become fifth anniversary of the Effective Time, so long as any group of Investors and their Permitted Transferees (as contemplated by clause (ii) of the definition of Permitted Transfer) hold in the aggregate at least fifty percent (50%) of the outstanding shares of the Stock, such group (collectively, the “Drag-Along Sellers”) may require each other Investor (the “Required Sellers”) to participate in any Major Sale to an Independent Third Party (a Participating Stockholder Seller “Drag-Along Transferee”) in a bona fide arm’s length transaction or series of transactions (including pursuant to Section 4.5 a stock sale, asset sale, recapitalization, tender offer, merger or other business combination transaction or otherwise) (such transaction or series of transactions, an “Exit Sale”) at the purchase price and upon the terms and subject to the conditions of the Stockholders Agreement, Exit Sale (all Shares issuable in respect of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) which shall constitute Shares held by you for purposes of the calculation be set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything Drag-Along Notice and which may not be less favorable to the contrary Required Sellers than the terms applicable to the Drag-Along Sellers). In connection with an Exit Sale, the Company may also require each Required Seller to vote in Section 4.5 favor of such Exit Sale or act by written consent approving the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options same with respect to all Shares owned by such Shares Required Seller, as necessary or desirable to authorize, approve and adopt the Exit Sale. Without limiting the foregoing, if an Exit Sale requires the approval of the Company’s stockholders, each Investor shall waive any dissenters’ rights, appraisal rights or similar rights in accordance therewith)connection with such Exit Sale. In the event that (x) the consideration payable for Shares to be sold an Exit Sale is proposed pursuant to this Section 4.5 3, all outstanding proposals to Transfer Shares outside of such Exit Sale shall immediately be withdrawn and no Transfer of Shares outside of such Exit Sale shall be consummated until the expiration of the Stockholders Agreement includes securities and (y) applicable law would require time period provided for in Section 3(d). The consummation of an Exit Sale by the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding Sellers shall be subject to the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 sole discretion of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along SellerSellers, who shall have no liability or obligation whatsoever (other than compliance with this Section 3) to any Required Sellers participating therein in lieu connection with such Required Sellers’ Transfer of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreement.
Appears in 1 contract
Sources: Stockholders Agreement (Noble Environmental Power LLC)
Drag Along Right. (1) In the event that you become a Participating Stockholder Seller pursuant the New Shareholder intends to Section 4.5 transfer all or part of the Stockholders AgreementCompany’s issued shares that it owns to a third party (the “Proposed Purchaser”), the New Shareholder may demand the Existing Shareholders to sell all Shares issuable in respect of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result part of the consummation of Company’s issued shares that they own (the Change of Control Transaction described in Section 4.5 of “Drag-along Shares”) together with the Stockholders Agreement) shall constitute Shares held by you for purposes of shares that the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything New Shareholder intends to transfer to the contrary in Section 4.5 of Proposed Purchaser at the Stockholders Agreement, you shall be required to exercise only same per-share price (the applicable “in the money” Options with respect to such Shares in accordance therewithDrag-along Right”). .
(2) In the event that the New Shareholder intends to exercise the Drag-along Right, the New Shareholder must provide prior written notice to the Existing Shareholders (xthe “Drag-along Exercise Notice”). For the avoidance of doubt, it is not required that the Drag-along Exercise Notice specify specific and definite terms and conditions of the Drag-along sale.
(3) In the consideration payable for event that the New Shareholder intends to exercise the Drag-along Right, the Existing Shareholders shall be deemed to have delegated all rights regarding the transfer of the Drag-along Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to youNew Shareholder, in your capacity as a Participating Stockholder Seller or Drag-Along Sellerincluding, as applicablewithout limitation, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of execute a share purchase agreement, modify the Stockholders Agreementshare registry, deliver the share certificate, and receive the share transfer consideration; provided, however, the New Shareholder shall exercise such delegated rights in accordance with the principles of good faith.
(4) In the event that the Sponsor Investor Sellers shall have New Shareholder has exercised the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Selleralong Right, in lieu upon the execution of such securities described in a share purchase agreement between the preceding sentenceNew Shareholder and the Proposed Purchaser, an amount in cash equal the Existing Shareholders shall also be deemed to have entered into a share purchase agreement regarding the Drag-along Shares with the Proposed Purchaser on the terms substantially similar to those of the share purchase agreement executed between to the Fair Market Value of such Shares as New Shareholder and the Proposed Purchaser. At the closing of the date such securities otherwise would have been issued share purchase agreement entered into in exchange for such Shares. The Drag-Along Right of accordance with this Section 3.4(4), between the Sponsors Existing Shareholders and the Proposed Purchaser, the Existing Shareholders shall terminate upon the earlier to occur of carry out any procedures reasonably and customarily required (i) an IPO to effectuate the valid transfer of ownership of the Drag-along Shares to the Proposed Purchaser, and (ii) a Liquidity Event. The for the Proposed Purchaser to exercise its rights as the shareholder of the Drag-Along Right along Shares, including, without limitation, the delivery of the Sponsors shall not include a right share certificates of the Drag-along Shares (if exists), modification of the share registry, and making any registration or filing to require you to sign a nonand obtaining Permits from the relevant Government Authorities.
(5) In the event that the Drag-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company along Right conflicts or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance competes with the applicable award agreementTag-along Right, the Drag-along Right shall take precedence.
Appears in 1 contract
Drag Along Right. In the event that you become a Participating Stockholder Seller pursuant the Members holding at least 85% of Voting Interests (the “Drag Along Holders”) determine to Section 4.5 sell or otherwise dispose of all or substantially all of the Stockholders Agreement, all Shares issuable in respect of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result assets of the consummation Company or all or fifty percent (50%) or more of the Change of Control Transaction described Voting Interests, in Section 4.5 each case in a transaction constituting a change in control of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(aCompany, to any non-Affiliate(s) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents the Drag Along Holders, or subsidiaries, such securities to cause the Company to merge with or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(finto or consolidate with any non-Affiliate(s) of the Stockholders AgreementCompany or any of the Drag Along Holders (in each case, youthe “Drag Along Buyer”) in a bona fide negotiated transaction (a “Drag Along Sale”), each of the Members, including any of its successors as contemplated herein, shall be obligated to and shall upon the written request of the Drag Along Holders:
(a) sell, transfer and deliver, or cause to be sold, transferred and delivered, to the Drag Along Buyer, its Interests on substantially the same terms applicable to the Drag Along Holders; and
(b) execute and deliver such instruments of conveyance and transfer and take such other action, including voting such Interests, if applicable, in your capacity as a Participating Stockholder Seller favor of any Drag Along Sale proposed by the Drag Along Holders and executing any purchase agreements, merger agreements, indemnity agreements, escrow agreements or Drag- Along Sellerrelated documents, as applicablethe Drag Along Holders or the Drag Along Buyer may reasonably require in order to carry out the terms and provisions of this Section 12.3, provided that NAV CANADA US Subsidiary shall have the right to sell Shares elect that NAV CANADA US Subsidiary Stockholder participate in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, Sale by selling its NAV CANADA US Subsidiary stock (and/or the equity of any direct or indirect corporate parent of NAV CANADA US Subsidiary whose only asset is ownership of NAV CANADA US Subsidiary) to the prospective buyer in lieu of a transfer of NAV CANADA US Subsidiary’s Interests thereto, and the purchase price payable by the prospective buyer for such securities described in the preceding sentence, an amount in cash NAV CANADA US Subsidiary stock shall be equal to the Fair Market Value of such Shares as of the date such securities otherwise price that would have been issued payable in exchange for such Sharesthe Drag Along Sale with respect to NAV CANADA US Subsidiary’s Interests. The Drag-Along Right of the Sponsors obligations under this Section 12.3 shall terminate upon the earlier to occur occurrence of (i) an a Qualified IPO and (ii) a Liquidity Event. The Drag-Along Right or the consolidation, liquidation, winding up or Dissolution of the Sponsors shall not include a right Company pursuant to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementArticle 10.
Appears in 1 contract
Sources: Limited Liability Company Agreement (Iridium Communications Inc.)
Drag Along Right. In the event that you become a Participating Stockholder Seller pursuant to Section 4.5 (A) If (i) all of the Stockholders Agreement, all Shares issuable Investors and (ii) the Founders that hold a majority in respect of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result interest of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute aggregate Shares held by you for purposes the Founders, (the "DRAGGING PARTIES") agree to Transfer all the Shares of the calculation set forth in the first sentence of Section 4.5(a) Company held by them to, or vote for a merger or consolidation of the Stockholders Agreement Company into, or a sale of all or substantially all assets of the Company to, a purchaser that is not an Affiliate of the Company (provideda "DRAG-ALONG SALE"), notwithstanding anything then all of the Six Shareholders (the "DRAGGED PARTIES") shall agree to, and shall vote in favour of, such Drag-Along Sale and shall Transfer the same pro rata amount of their respective outstanding Shares in such Drag-Along Sale as the Dragging Parties propose to Transfer in such Drag-Along Sale.
(B) Any such sale or disposition by the Dragged Parties shall be on the same terms and conditions, including (without limitation) as to the contrary in Section 4.5 form of consideration, as the Stockholders Agreement, you proposed Drag-Along Sale by the Dragging Parties. Such Dragged Parties shall be required to exercise only make such representations, warranties and indemnities in connection with the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, Sale as applicable, of made by the Dragging Parties.
(C) Prior to making any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along SellerSale in which the Dragging Parties wish to exercise their rights under this Clause 8, in lieu of such securities described in the preceding sentence, an amount in cash equal Dragging Parties shall provide the Company and all the Dragged Parties with written notice (the "DRAG-ALONG NOTICE") not less than five (5) Business Days prior to the Fair Market Value of such Shares as proposed closing date of the date such securities otherwise would have been issued in exchange for such SharesDrag-Along Sale (the "DRAG-ALONG SALE DATE"). The Drag-Along Right of the Sponsors Notice shall terminate upon the earlier to occur of set forth: (i) an IPO the name and address of the third party purchasers; (ii) a Liquidity Event. The the proposed amount and form of consideration to be paid per share, and the terms and conditions of payment offered by each of the third party purchasers; (iii) the Drag-Along Right Sale Date; (iv) the number of Shares held of record by the Dragging Parties on the date of the Sponsors shall not include a right Drag-Along Notice; (v) the number of Shares to require you be transferred, sold or otherwise disposed of by the Dragging Parties; and (vi) the number of Shares of the Dragged Parties to sign a nonbe included in the Drag-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementAlong Sale.
Appears in 1 contract
Sources: Note Subscription and Rights Agreement (China Techfaith Wireless Communication Technology LTD)
Drag Along Right. In 8.7.1 If the event that you become a Participating Stockholder Seller pursuant Company and the Promoters have failed to Section 4.5 provide an Exit to the Principal Investors during the Exit Period (“Drag Event”), the Non- Quickroutes Principal Investor Majority through Non- Quickroutes Principal Investor Consent (“Dragging Investors”) will be entitled to exercise (a) its Drag Along Right for sale of the Stockholders Agreement, all Shares issuable in respect but not less than all of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes Dragging Investors (“Dragging Investors’ Shares”) along with or without Drag Along Shares to any third party (“Third Party Buyer(s)”) subject to meeting all the Exit Conditions or (b) its Trade Sale Right to compel and cause the Dragged Shareholders (defined below) and the Principal Investors to participate in a merger or consolidation of the calculation set forth in Company with any Third Party Buyer on the first sentence of Section 4.5(a) terms and conditions determined by the Non- Quickroutes Principal Investor Majority through Non- Quickroutes Principal Investor Consent, or sell all or substantially all of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 Assets or Proprietary Rights of the Stockholders AgreementCompany to a Third Party Buyer, you shall be required on the terms and conditions determined by Non-Quickroutes Principal Investor Majority through Non- Quickroutes Principal Investor Consent, and subject to exercise only meeting all the applicable Exit Conditions (“in Trade Sale”).
8.7.2 If the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along SellerRight is exercised, as applicable, each of any specified information regarding the Company Non- Quickroutes Principal Investors who have not elected to exercise the Drag Along Right or any of its parents or subsidiaries, such securities or who have not been considered while determining whether the issuer thereof that is not otherwise required to be provided for such Transfer Non-Quickroutes Principal Investor Consent has been obtained pursuant to Section 4.5 of Clause 11.3.3(i)(e) below and Quickroutes (collectively, the Stockholders Agreement, then notwithstanding Section 4.5(f“Non-Dragging Investors”) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the rightto, but not the obligationobligation to require Third Party Buyer (s) to purchase from the Non- Dragging Investors, to cause all the Shares held by the Non-Dragging Investors (“Non- Dragging Investors’ Shares”) for the same consideration per Share and upon the same terms and conditions, as to be paid to you, in your capacity as a Drag-respect of the Dragging Investors’ Shares.
8.7.3 For the purposes of Clause 8.7 (Drag Along Seller, in lieu Right) of such securities described in the preceding sentence, an amount in cash equal this Agreement: (a) “Drag Along Right” shall mean and refer to the Fair Market Value of such Shares as right of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right Dragging Investors to compel any or all of the Sponsors Promoters, the Other Investors and Mieone (the “Dragged Shareholders”) to sell up to 100% (One Hundred per cent) of their Shares (“Drag Along Shares”) to any Person; (b) “Drag Sale” shall terminate upon mean and refer to the earlier sale of the Dragging Investors’ Shares and the Non-Dragging Investors’ Shares (in case such Non-Dragging Investors’ elects to occur of (iexercise its/ their co- sale right) an IPO and/ or the Drag Along Shares to the Third Party Buyer(s); and (iic) a Liquidity Event. The Drag-Along Right “Trade Sale Right” shall mean and refer to the right of the Sponsors shall not include Dragging Investors to compel and cause a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementTrade Sale under Clause 8.7.1.
Appears in 1 contract
Sources: Shareholders Agreement
Drag Along Right. In the event that you become a Participating Stockholder Seller pursuant (a) Subject to Section 4.5 9.05, in connection with the proposed Transfer (by merger, consolidation, sale or otherwise and whether in one transaction or a series of related transactions) that would result in a Deemed Liquidation Event (a “Drag-Along Sale”), the Majority Member (the “Drag-Along Seller”) may at its option (the “Drag-Along Rights”) require each other Member to: (i) Transfer a pro rata portion of its Membership Interests in such Drag -Along Sale on the same terms and conditions applicable and for the same type of consideration payable as the Drag-Along Seller and (ii) agree to vote to approve such transaction, waive all dissenters’ rights and otherwise take all other actions necessary or desirable to consummate the Drag-Along Sale as requested by the Drag-Along Seller.
(b) If the Drag-Along Seller elects to exercise its Drag-Along Rights, the Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Members (a “Drag-Along Sale Notice”) not later than 15 Business Days prior to the proposed Drag-Along Sale. The Drag-Along Sale Notice shall identify the purchaser in the Drag-Along Sale, the number and class of Membership Interests subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”) and all other material terms and conditions of the Stockholders Agreement, all Shares issuable in respect of vested “Drag-Along Sale. Each other Member shall be required to participate in the money” Options held by you whether or not exercised (including any Options that would vest as a result of Drag-Along Sale on the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation terms and conditions set forth in the first sentence Drag-Along Sale Notice and to tender a pro rata portion of Section 4.5(aits Membership Interests as set forth below.
(c) of If requested by the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicablenot later than 10 Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each other Member shall deliver to a representative of any specified information regarding the Company Drag-Along Seller designated in the Drag-Along Sale Notice (i) the certificates and other applicable instruments representing the Membership Interests of such other Member to be included in the Drag-Along Sale, together with a notarized, limited power-of-attorney authorizing the Drag-Along Seller or any its representative to Transfer such Membership Interests on the terms set forth in the Drag-Along Sale Notice and wire transfer or other instructions for payment of its parents or subsidiaries, the consideration for the Membership Interests being Transferred in such securities or the issuer thereof that is not otherwise Drag-Along Sale and/or (ii) all other documents required to be provided for executed in connection with the Drag-Along Sale. If a Member should fail to deliver such Transfer pursuant certificates or other applicable instruments to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu the Company (subject to Section 9.04(d)) shall cause the books and records of the Company to show that such securities described in Membership Interests are bound by the preceding sentence, an amount in cash equal provisions of this Section 9.04 and that such Membership Interests shall be Transferred to the Fair Market Value of such Shares as of Drag-Along Transferee immediately upon surrender for Transfer by the date such securities otherwise would have been issued in exchange for such Shares. holder thereof.
(d) The Drag-Along Right Seller shall have a period of 120 days from the date of delivery of the Sponsors Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice; provided, that, if such Drag-Along Sale is subject to regulatory approval, such 120-day period shall be extended until the expiration of five Business Days after all such approvals have been received, but in no event later than 240 days following the date of delivery of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag -Along Seller shall return to each of the other Members the limited power-of-attorney and all certificates and other applicable instruments representing Membership Interests that such other Members delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Members in connection with the proposed Drag-Along Sale, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Membership Interests owned by the other Members shall again be in effect.
(e) Promptly after the consummation of the Drag-Along Sale pursuant to this Section 9.04, the Drag-Along Seller shall (i) notify the other Members thereof, (ii) if not remitted directly to the other Members, remit to each other Member the total consideration for the Membership Interests of such other Member Transferred pursuant thereto less the other Member’s pro rata share of any escrows, holdbacks or adjustments in purchase price and any transaction expenses as determined in accordance with Section 9.05, with the cash portion of the purchase price paid by wire transfer of immediately available funds in accordance with the wire transfer instructions provided by such Members and (iii) furnish such other evidence of the completion and the date of completion of such transfer and the terms thereof as may be reasonably requested by the other Members. If not remitted directly to the other Members, the Drag-Along Seller shall promptly remit to the other Members any additional consideration payable upon the release of any escrows, holdbacks or adjustments in purchase price.
(f) Notwithstanding anything contained in this Section 9.04, there shall be no liability on the part of the Drag-Along Seller to the other Members (other than the obligation to return the limited power-of-attorney and the certificates and other applicable instruments representing Membership Interests received by the Drag-Along Seller) or any other Person if the Transfer of Membership Interests pursuant to this Section 9.04 is not consummated for whatever reason, regardless of whether the Drag-Along Seller has delivered a Drag-Along Sale Notice. Whether to effect a Transfer of Membership Interests pursuant to this Section 9.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller.
(g) The provisions of this Section 9.04 shall terminate upon the earlier to occur consummation of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementIPO.
Appears in 1 contract
Drag Along Right. In (a) If at any time one or more Stockholder(s) propose to transfer Shares representing over 50% of all then-outstanding shares of Common Stock (on a non-fully diluted basis) to any Person, and, such Stockholder(s) (the event that you become "DRAG-ALONG RIGHTHOLDERS") have received a Participating Stockholder Seller pursuant bona fide, arm's length offer from an Offeror to Section 4.5 purchase (including a purchase by merger, consolidation or similar transaction) all of the outstanding Shares or all or substantially all of the assets of Parent, the Drag-Along Rightholders may send written notice (the "DRAG-ALONG NOTICE") to Parent and the other Stockholders Agreement(such other Stockholders, collectively, the "DRAG-ALONG SELLERS") notifying them they will be required to sell all (but not less than all) of their Shares issuable in respect such sale. Upon receipt of vested “a Drag-Along Notice, each Drag-Along Seller receiving such notice shall be obligated to (i) sell all of its Shares in the money” Options held by you whether or not exercised transaction (including a sale or merger, consolidation or similar transaction) contemplated by the Drag-Along Notice on the same terms and conditions as the Drag-Along Rightholders (including payment of its pro rata share of all costs associated with such transaction) and (ii) otherwise take all action (or refrain from taking certain actions) necessary to cause the consummation of such transaction, including not exercising any Options that would vest as a result of appraisal rights in connection therewith. Each Drag-Along Seller further agrees to take all actions (including executing documents) in connection with the consummation of the Change proposed transaction as may reasonably be requested of Control Transaction described in Section 4.5 of it by the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of Rightholders.
(b) In connection with any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer sale pursuant to this Section 4.5 3.3(a), the Drag-Along Seller shall make to the Offeror the same representations, warranties, covenants, indemnities and agreements as the Drag-Along Rightholders make in connection with the proposed transfer (except that in the case of representations, warranties, covenants, indemnities and agreements pertaining specifically to the Stockholders AgreementDrag-Along Rightholders, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along SellerSeller shall make the comparable representations, in lieu of warranties, covenants, indemnities and agreements pertaining specifically to itself); provided that all representations, warranties and indemnities shall be made by the transferring Drag-Along Rightholders and such securities described in Drag-Along Seller severally and not jointly and that the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as liability of the date transferring Drag-Along Rightholders and such securities otherwise would have been issued in exchange for such SharesDrag-Along Seller thereunder shall be borne by each of them on a pro rata basis. The Drag-Along Right Seller shall receive the same type and amount of consideration (and rights) per Share for the Sponsors shall terminate upon corresponding class or series of stock (on an as converted basis, if applicable) and the earlier same type and amount of consideration (and rights) for each type of Common Stock Equivalent, in each case, as is paid or delivered to occur of (i) an IPO and (ii) a Liquidity Event. The the Drag-Along Right of Rightholders in the Sponsors shall not include a right sale pursuant to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such TransferSection 3.3(a). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreement.
Appears in 1 contract
Sources: Stockholders Agreement (TRW Automotive Holdings Corp)
Drag Along Right. (a) In the event that you become that, at any time, Solera proposes to sell shares of Common Stock owned by it to a Participating Stockholder Seller pursuant Proposed Purchaser, and the shares proposed to Section 4.5 be sold, together with all shares of the Stockholders AgreementCommon Stock previously sold by Solera, all Shares issuable in respect of vested “in the money” Options held by you whether or not exercised would represent either (including any Options that would vest as a result x) more than 66% of the consummation aggregate number of shares of Common Stock, on an as-converted basis, that Solera owned as of the Change of Control Transaction described in Section 4.5 date hereof, or (y) more than 51% of the Stockholders Agreement) shall constitute Shares held by you for purposes outstanding shares of Common Stock of the calculation Company, on an as-converted basis, at the time of such proposed transaction, then Solera at its election may provide each Continuing Stockholder written notice (a “Drag-Along Sale Notice”) of such proposed sale (a “Proposed Drag-Along Sale”) and the material terms of the Proposed Drag-Along Sale as of the date of such Drag-Along Sale Notice. Each Continuing Stockholder shall be obligated to, and shall, sell, transfer and deliver, or cause to be sold, transferred and delivered to such Proposed Purchaser as set forth in the first sentence below.
(b) The number of Section 4.5(a) shares of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you Common Stock that each Continuing Stockholder shall be required to exercise only the applicable “include in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Proposed Drag-Along Seller, as applicable, of any specified information regarding Sale will be the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur product of (i) an IPO the number of shares of Common Stock then held by such Continuing Stockholder and (ii) a Liquidity Event. The fraction, the numerator of which shall be the number of shares of Common Stock which Solera proposes to sell in the Proposed Drag-Along Right Sale and the denominator of which shall be the number of shares of Common Stock, on an as-converted basis, then held by Solera.
(c) Shares of Common Stock will be included in a Proposed Drag-Along Sale pursuant hereto and pursuant to any agreement with the Proposed Purchaser relating thereto, on the same terms and subject to the same conditions applicable to the shares of the Sponsors Common Stock which Solera proposes to sell in the Proposed Drag-Along Sale. Such terms and conditions shall not include a right to require you to sign a non-compete agreement include, without limitation, (it being understood that any existing non-compete agreement then in effect between you i) the sale consideration (which shall be reduced by the fees and expenses incurred by Solera and the Company in connection with the Proposed Drag-Along Sale), and (ii) the provision of information, representations, warranties, covenants and requisite indemnifications; provided, however, that any representations and warranties relating specifically to any Stockholder shall only be made by that Stockholder and any indemnification provided by the Stockholders shall be based on the number of shares of Common Stock being sold by each Stockholder in the Proposed Drag-Along Sale, either on a several, not joint, basis, or one solely with recourse to an escrow established for the benefit of its parents the Proposed Purchaser, contributions to which escrow shall be proportionate to the number of shares of Common Stock being sold by each Stockholder in the Proposed Drag-Along Sale.
(d) Upon receiving a Drag-Along Sale Notice, each Continuing Stockholder will, if requested by Solera, execute and deliver a custody agreement and power of attorney in form and substance customary for such transactions (a “Custody Agreement and Power of Attorney”) with respect to the shares of the Common Stock which are to be included in the Proposed Drag-Along Sale pursuant to this Section 4.1. The Custody Agreement and Power of Attorney will provide, among other things, that the Continuing Stockholders executing such Custody Agreement and Power of Attorney will deliver to and deposit in custody with the custodian and attorney-in-fact named therein a certificate or subsidiaries certificates representing such shares of Common Stock (duly endorsed in blank by the registered owner or owners thereof or accompanied by duly executed stock powers in blank) and irrevocably appoint said custodian and attorney-in-fact as such Continuing Stockholder’s agent and attorney-in-fact with full power and authority to act under a custody agreement and power of attorney on behalf of such Continuing Stockholders with respect to the matters specified therein.
(e) Each Continuing Stockholder agrees that he or she will execute such other agreements as Solera may reasonably request in connection with the consummation of a Proposed Drag-Along Sale and the transactions contemplated thereby, including, without limitation, any purchase agreement, proxies, written consents in lieu of meetings or waiver of appraisal rights.
(f) For the avoidance of doubt, the provisions of this Article IV shall not terminate solely as a result apply to any sales by Solera of such Transfer). Any unvested or “out-of-the money” vested Options any shares of Preferred Stock, which sales shall instead be treated in accordance with the applicable award agreementgoverned by Section 4.2 hereof.
Appears in 1 contract
Drag Along Right. (a) With respect to any proposed transfer of shares of Common Stock representing not less than a majority of the voting power of the Fully-Diluted Common Stock (determined pursuant to Article VIII, Section 3(a) of the Company's Amended and Restated Certificate of Incorporation) in an arm's length transaction to a proposed purchaser that is not an Affiliate of the Company or of the holder of Common Stock proposing to transfer shares of Common Stock (such proposed transfer being a "Proposed Drag-Along Transfer") the Common Stockholders requesting such transfer shall have the right (the "Drag-Along Right") so long as such Common Stockholders are transferring all of their shares of Common Stock, to require the Series A Preferred Stockholders to sell all (but not less than all) of their Shares in the Proposed Drag-Along Transfer to the proposed purchaser at the greater of such price being paid by the proposed purchaser in such Proposed Drag-Along Transfer or twelve dollars and fifty cents ($12.50) per share of Series A Preferred Stock (subject to equitable adjustments for stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof), together with all declared and unpaid dividends thereon and all accrued and unpaid Redemption Dividends (as defined in Article VIII, Section 5(f) of the Amended and Restated Certificate of Incorporation of the Company) thereon, and, otherwise, upon the same terms and conditions as the transferring Common Stockholders in the Proposed Drag-Along Transfer. If the transfer includes Class B Common Stock, such price, terms and conditions shall be determined for all Shares by reference to the price being paid by the proposed purchaser in such Proposed Drag-Along Transfer, terms and conditions applicable to the Class B Common Stock. Such transferring holders of Common Stock shall provide a notice (the "Drag-Along Notice") to each Series A Preferred Stockholder and the Company setting forth: (i) the name of the proposed purchaser, (ii) the proposed amount and form of consideration and terms and conditions of payment offered by the proposed purchaser and (iii) the proposed date of consummation of the proposed Drag-Along Transfer.
(b) At the closing of the transfer of all Shares to the proposed purchaser on the terms described above, each Common Stockholder and Series A Preferred Stockholder shall (i) execute any documents or instruments, including, without limitation, representations and warranties, reasonably requested by the proposed purchaser and (ii) deliver certificates for the Shares being sold, duly endorsed and accompanied by duly executed stock assignments separate from certificate, free and clear of all claims and encumbrances, against delivery to each Common Stockholder and Series A Preferred Stockholder of the consideration for the Shares of such holder being sold pursuant to this Section 5.4. Notwithstanding the foregoing, no Series A Preferred Stockholder shall be required (A) to make any representation or warranty with respect to the Company (as opposed to representations and warranties with respect to such Series A Preferred Stockholder or the Shares being sold by such Series A Preferred Stockholder), or otherwise have liability in connection with any representations or warranties with respect to the Company, such that the Series A Preferred Stockholder would have liability in connection with such representations or warranties with respect to the Company in a proportion greater than such Series A Preferred Stockholder's pro rata portion of the aggregate sale proceeds received by all Stockholders party to the sale or (B) to give any indemnities in an amount greater than the aggregate sale proceeds to be received by such Series A Preferred Stockholder.
(c) In the event that you become a Participating sale by a Stockholder Seller pursuant is subject to Section 4.5 of the Stockholders Agreement, all Shares issuable in respect of vested “in the money” Options held by you whether one or not exercised (including any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur more of (i) an IPO and the right of first refusal in Section 2 above, (ii) a Liquidity Event. The Dragthe tag-Along Right along right in Section 5.3 above or (iii) the drag-along right in this Section 5.4, then the priority for the application of such rights shall, to the extent applicable to such transfer, be as follows: the first refusal procedures in Section 2 shall be first applied and completed, followed by the application and completion of the Sponsors shall not include a tag-along right to require you to sign a nonin Section 5.3 and then the application and completion of the drag-compete agreement (it being understood that any existing non-compete agreement then along right in effect between you and this Section 5.4. Notwithstanding the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options foregoing, nothing in this Section 5.4(c) shall be treated in accordance with deemed to imply that the applicable award agreementprovisions of Article 2 apply to the Series A Preferred Stockholders.
(d) The rights provided under this Section 5.4 (including the notice requirement set forth herein) shall automatically terminate and be of no further force or effect upon a public offering of any class of the Company's Common Stock under the Securities Act.
Appears in 1 contract
Drag Along Right. (a) In the event that you become at any time prior to the APT Date, there is a Participating Stockholder Seller pursuant sale, lease, transfer, conveyance or other disposition (including, without limitation, any merger or consolidation), in a single transaction, of all or substantially all of the equity interests or assets of the Company and its Subsidiaries taken as a whole, which is approved by the Board (and, if applicable, Phronesis in accordance with the provisions of §10 hereof), the Company may require (a “Drag-Along Right”) all Stockholders to Section 4.5 participate in such transaction in accordance with the terms of this §6 (any transaction involving the exercise of such Drag-Along Right shall be referred to as a “Drag-Along Sale”). The Company shall provide the Stockholders written notice (a “Drag-Along Notice”) of such Drag-Along Sale, the identity of the proposed purchaser in such sale (the “Proposed Purchaser”) and the material terms thereof not less than twenty-five (25) business days prior to the proposed date of the Drag-Along Sale (the “Drag-Along Sale Date”) and each of the Stockholders Agreement, hereby agrees to sell to such Proposed Purchaser all Shares issuable in respect shares of vested “in the money” Options Common Stock held by you whether or not exercised (including such Stockholder. No Stockholder shall exercise any Options that would vest as a result of dissenter’s rights with respect to the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to any such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along SellerSale.
(b) On the Drag-Along Sale Date, as applicable, of any specified information regarding the Company each Stockholder shall deliver a certificate or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided certificates for such Transfer pursuant Stockholder’s shares of Common Stock, duly endorsed for transfer with signatures guaranteed, to Section 4.5 such Proposed Purchaser in the manner and at the address indicated in the Drag-Along Notice against delivery of the Stockholders Agreement, then notwithstanding Section 4.5(f) purchase price for such shares of Common Stock. The provisions of this §6 shall apply regardless of the Stockholders Agreement, you, form of consideration in your capacity as a Participating Stockholder Seller or Drag- the Drag-Along Seller, as applicable, shall have the right Sale.
(c) Shares of Common Stock subject to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, Right shall be included in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The a Drag-Along Right Sale pursuant hereto and to any agreements with the Proposed Purchaser relating thereto, on the same terms and subject to the same conditions applicable to shares of Common Stock included in the Sponsors Drag-Along Sale. Such terms and conditions shall terminate upon the earlier to occur of include, without limitation, (i) an IPO the consideration (including, without limitation, any consideration payable under employment, consulting, non-competition, confidentiality and other similar agreements and arrangements), (ii) the payment of fees, commissions and expenses, (iii) the provision of, and representation and warranty as to, information requested of the Company, and (iv) the provision of reasonable indemnification, as determined by the Board; provided, however, that any indemnification provided by the Stockholders shall (i) be determined pro rata in proportion with the aggregate number of shares of Common Stock to be sold in the Drag-Along Sale and (ii) not be structured in a Liquidity Event. The way so as to require additional contributions from any Stockholder.
(d) Each of the Stockholders shall, if requested by the Company, execute and deliver a Custody Agreement and Power of Attorney in form and substance satisfactory to the Company with respect to the shares of Common Stock which are to be included in the Drag-Along Right Sale pursuant hereto. The Custody Agreement and Power of Attorney shall provide that the Stockholder will deliver to and deposit in custody with the custodian and attorney-in-fact named therein a certificate or certificates representing such shares of Common Stock (duly endorsed in blank by the registered owner or owners thereof or accompanied by duly executed stock powers in blank) and irrevocably appoint said custodian and attorney-in-fact as such Stockholder’s agent and attorney-in-fact with full power and authority to act under a custody agreement and power of attorney on behalf of the Sponsors shall not include a right such Stockholder with respect to require you to sign a non-compete agreement the matters specified herein.
(it being understood e) Each Stockholder agrees that any existing non-compete agreement then in effect between you and such Stockholder will execute such other agreements as the Company or one the Proposed Purchaser may reasonably request in connection with the consummation of its parents or subsidiaries shall not terminate solely a Drag-Along Sale and the transactions contemplated thereby.
(f) In order to effect the provisions of this §6, each Stockholder hereby irrevocably constitutes and appoints each of the Chairman of the Board of Directors and the President of the Company (as a result the holders of such Transferoffices may change from time to time). Any unvested , as attorney and proxy, with, subject to the consent of the Management Stockholders and Phronesis, full power of substitution, to receive all notices, and to represent, vote and consent, with respect to all shares of Common Stock held by such Stockholder, in such manner as said proxies may, in the exercise of their sole and absolute discretion, determine, and without any prior notice to such Stockholder (provision of such notice concurrently or “out-of-promptly after the money” vested Options shall be treated taking of any such action being deemed sufficient for all purposes and any requirement for prior notice being expressly waived by such Stockholder), whether or not said representation, vote or consent benefits the interests of any of said proxies, but only with respect to any and all of the matters specified in accordance with the applicable award agreementthis §6.
Appears in 1 contract
Sources: Stockholders Agreement (Quick Med Technologies Inc)
Drag Along Right. In (a) If at any time and from time to time after the event that you become date of this Agreement, the holder or holders of a Participating Stockholder Seller pursuant to Section 4.5 majority of the Stockholders Agreement, all Shares issuable in respect outstanding shares of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result voting capital stock of the consummation Company (the "Proposed Transferors") wish to Transfer in a bona fide arms' length sale all shares of Common Stock then owned by them to any Person or Persons who are not Affiliates of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you Proposed Transferors (for purposes of this Section 3(a), the calculation set forth in "Proposed Transferee"), the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, Proposed Transferors shall have the right (the "Drag-Along Right") to require each Management Stockholder to sell Shares to the Proposed Transferee all Securities (for the same per share consideration received by the Proposed Transferor for each such class of capital stock, and with respect to unexercised Options, less any exercise price payable with respect thereto) then held by the Management Stockholders, subject to purchase by the Proposed Transferee. Each Management Stockholders, agrees to take all steps necessary to enable him or it to comply with the provisions of this Section 3(a), including, if necessary, voting any Securities in such proposed Transfer pursuant to Section 4.5 favor of the Stockholders Agreement; provided, that transaction with the Sponsor Investor Sellers shall have Proposed Transferee (whether effected as a merger or otherwise) to facilitate the right, but not the obligation, to cause to be paid to you, in your capacity as Proposed Transferors' exercise of a Drag-Along SellerRight.
(b) To exercise a Drag-Along Right, the Proposed Transferors shall give each Management Stockholder a written notice (for purposes of this Section 3, a "Drag-Along Notice") containing (i) the number of Securities that the Proposed Transferee proposes to acquire from the Proposed Transferors, (ii) the name and address of the Proposed Transferee, and (iii) the proposed purchase price, terms of payment and other material terms and conditions of the Proposed Transferee's offer. Each Management Stockholder shall thereafter be obligated to sell the Securities subject to such Drag-Along Notice, provided -------- that the sale to the Proposed Transferee is consummated within 120 days of delivery of the Drag-Along Notice. If the sale is not consummated within such 120-day period, then each Management Stockholder shall no longer be obligated to sell such Management Stockholder's Securities pursuant to that specific Drag-Along Right but shall remain subject to the provisions of this Section 3.
(c) Notwithstanding anything contained in this Section 3, in the event that all or a portion of the purchase price consists of securities and the sale of such securities to the Management Stockholders would require either a registration under the Securities Act or the preparation of a disclosure document pursuant to Regulation D under the Securities Act (or any successor regulation) or a similar provision of any applicable state securities law, then, at the option of the Proposed Transferors, the Management Stockholders may receive, in lieu of such securities described in securities, the preceding sentence, an amount in cash equal to the Fair Market Value fair market value of such Shares securities in cash, as determined in good faith by the Board, unless, at the request of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right Management Stockholders holding a majority of the Sponsors shall terminate upon Shares, the earlier to occur of (iappraisal procedure set forth in Section 3(d) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementbelow is invoked.
Appears in 1 contract
Sources: Stockholders Agreement (Knoll Inc)
Drag Along Right. Notwithstanding any other provision of this Section 2:
(a) In the event that you become Acorn Energy owns more than fifty percent (50%) of the Company's issued and outstanding capital stock and Acorn Energy desires to accept a Participating Stockholder Seller bona fide offer (a “Purchase Offer”) from any person or persons, other than an Affiliate or another Stockholder, to purchase all (a “Divestiture”) the shares of Stock then held by Acorn Energy, then Acorn Energy shall promptly deliver to each of the other Stockholders a written notice (the “Purchase Offer Notice”) stating Acorn Energy's intention to sell such shares pursuant to Section 4.5 such Purchase Offer and setting forth the terms and conditions of such Purchase Offer, including, without limitation, the identity of the Stockholders Agreementproposed purchaser and the amount and type of consideration to be paid therefor. The Purchase Offer Notice shall include a copy of any written offer, all Shares issuable in respect letter of vested “in intent, term sheet or contract of sale pertaining to the money” Options held by you whether or not exercised Purchase Offer.
(including any Options that would vest as b) In connection with a result Divestiture, if Acorn Energy owns more than fifty percent (50%) of the consummation Company's issued and outstanding capital stock, it shall have the right (“Drag Along Right”) to require each other Stockholder to participate in such sale of Common Stock by Acorn Energy on the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation terms and conditions set forth in the first sentence Purchase Offer Notice (which shall be the same terms and conditions (on a per share basis) as are applicable to Acorn Energy's sale of Section 4.5(ashares of Common Stock to the proposed purchaser). Such Drag Along Right shall be exercisable by Acorn Energy including in its Purchase Offer Notice a statement to the effect that Acorn Energy elects to exercise its Drag Along Right in connection with the proposed sale. At any time prior to the closing of such sale, Acorn Energy may withdraw its election to exercise its Drag Along Right upon written notice to the Stockholders.
(c) The closing of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 purchase and sale of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares any shares of Stock to be sold pursuant to Section 4.5 the Drag Along Right shall occur concurrently with the closing of the sale of the shares of the Stock by Acorn Energy, which shall be a date not less than sixty (60) days after the giving of the Purchase Offer Notice. At any such closing, each Stockholder shall deliver to the purchaser a certificate or certificates representing the number of shares of Stock to be sold by such Stockholder, duly endorsed in blank or accompanied by a duly executed stock power in blank, with signatures duly guaranteed and all requisite stock transfer stamps affixed thereto. All Stockholders Agreement includes securities shall be treated equally under this Section 2.5. It shall be a condition of the obligation to sell under this Section 2.5 that all facts and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, circumstances and all material aspects of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to transaction under this Section 2.5 shall be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Sharesdisclosed. The Drag-Along Right provisions of the Sponsors this Section 2.5 shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementIPO.
Appears in 1 contract
Drag Along Right. In (a) If at any time the event that you become a Participating Stockholder Seller pursuant to Section 4.5 Enstar Shareholder (together with its Permitted Transferees) holds no less than 55% of the Stockholders Agreement, all aggregate number of outstanding Common Shares issuable in respect of vested “in the money” Options Company held by you whether the Initial Shareholders at such time and receives a bona fide offer from a Third Party Purchaser to consummate, in one transaction, or not exercised (including any Options that would vest as a result series of the consummation of the related transactions, a Change of Control Transaction described (a “Drag-along Sale”), the Enstar Shareholder shall have the right to require that each other Shareholder (each, a “Drag-along Shareholder”) participate in Section 4.5 of such Transfer in the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation manner set forth in the first sentence of this Section 4.5(a) of the Stockholders Agreement (3.3, provided, notwithstanding however, that no Drag-along Shareholder shall be required to participate in the Drag-along Sale if the consideration for the Drag-along Sale is anything other than cash or registered securities listed on an established U.S. or foreign securities exchange. Notwithstanding anything to the contrary in Section 4.5 this Agreement, each Drag-along Shareholder shall vote in favor of the Stockholders Agreementtransaction and take all actions to waive any dissenters, you appraisal or other similar rights.
(b) The Enstar Shareholder shall exercise its rights pursuant to this Section 3.3 by delivering a written notice (the “Drag-along Notice”) to the Company and each Drag-along Shareholder no later than 20 days prior to the closing date of such Drag-along Sale. The Drag-along Notice shall make reference to the Enstar Shareholder’s rights and obligations hereunder and shall describe in reasonable detail:
(i) the number of Common Shares to be required sold by the Enstar Shareholder, if the Drag-along Sale is structured as a Transfer of Common Shares;
(ii) the identity of the Third Party Purchaser;
(iii) the proposed date, time and location of the closing of the Drag-along Sale;
(iv) the per share purchase price and the other material terms and conditions of the Transfer, including a description of any non-cash consideration in sufficient detail to exercise only permit the applicable “valuation thereof; and
(v) a copy of any form of agreement proposed to be executed in connection therewith.
(c) If the money” Options with respect Drag-along Sale is structured as a Transfer of Common Shares, then, subject to such Shares in accordance therewithSection 3.3(d). In , each Drag-along Shareholder shall Transfer the event that number of shares equal to the product of (x) the consideration payable for number of Common Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities held by such Drag-along Shareholder and (y) applicable law would require a fraction (A) the provision numerator of which is equal to you, the number of Common Shares the Enstar Shareholder proposes to sell or transfer in your capacity as a Participating Stockholder Seller or the Drag-Along Seller, as applicable, along Sale and (B) the denominator of any specified information regarding which is equal to the Company or any number of its parents or subsidiaries, such securities or Common Shares then held by the issuer thereof that is not otherwise required Enstar Shareholder.
(d) The consideration to be provided for received by a Drag-along Shareholder shall be the same form and amount of consideration per share of Common Shares to be received by the Enstar Shareholder (or, if the Enstar Shareholder is given an option as to the form and amount of consideration to be received, the same option shall be given) and the terms and conditions of such Transfer pursuant shall, except as otherwise provided in the immediately succeeding sentence, be the same as those upon which the Enstar Shareholder Transfers its Common Shares. Each Drag-along Shareholder shall make or provide the same representations, warranties, covenants, indemnities and agreements as the Enstar Shareholder makes or provides in connection with the Drag-along Sale (except that in the case of representations, warranties, covenants, indemnities and agreements pertaining specifically to Section 4.5 of the Stockholders AgreementEnstar Shareholder, then notwithstanding Section 4.5(f) of the Stockholders AgreementDrag-along Shareholder shall make the comparable representations, youwarranties, in your capacity as a Participating Stockholder Seller or Drag- Along Sellercovenants, as applicable, shall have the right indemnities and agreements pertaining specifically to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreementitself); provided, that all representations, warranties, covenants and indemnities shall be made by the Sponsor Investor Sellers Enstar Shareholder and each Drag-along Shareholder severally and not jointly and any indemnification obligation shall have be pro rata based on the right, but not consideration received by the obligation, to cause to be paid to youEnstar Shareholder and each Drag-along Shareholder, in your capacity as each case in an amount not to exceed the aggregate proceeds received by the Enstar Shareholder and each such Drag-along Shareholder in connection with the Drag-along Sale.
(e) The fees and expenses of the Enstar Shareholder incurred in connection with a Drag-Along Seller, in lieu along Sale and for the benefit of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement all Shareholders (it being understood that any existing non-compete agreement then in effect between you and costs incurred by or on behalf of a Enstar Shareholder for its sole benefit will not be considered to be for the benefit of all Shareholders), to the extent not paid or reimbursed by the Company or one of its parents the Third Party Purchaser, shall be shared by all the Shareholders on a pro rata basis, based on the aggregate consideration received by each Shareholder; provided, that no Shareholder shall be obligated to make or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “reimburse any out-of-pocket expenditure prior to the money” vested Options consummation of the Drag-along Sale.
(f) Each Shareholder shall take all actions as may be treated reasonably necessary to consummate the Drag-along Sale, including entering into agreements and delivering certificates and instruments, in accordance each case consistent with the applicable award agreementagreements being entered into and the certificates being delivered by the Enstar Shareholder.
(g) The Enstar Shareholder shall have 180 days following the date of the Drag-along Notice in which to consummate the Drag-along Sale, on the terms set forth in the Drag-along Notice (which such 180-day period may be extended for a reasonable time not to exceed 270 days to the extent reasonably necessary to obtain any Government Approvals). If at the end of such period, the Enstar Shareholder has not completed the Drag-along Sale, the Enstar Shareholder may not then effect a transaction subject to this Section 3.3 without again fully complying with the provisions of this Section 3.3.
Appears in 1 contract
Sources: Voting and Shareholders’ Agreement (Enstar Group LTD)
Drag Along Right. In the event that you become If holders of a Participating Stockholder Seller pursuant to Section 4.5 majority of the Stockholders Agreement, all Shares issuable in respect outstanding common stock of vested the Company (the “Majority Holders”) consent to engage in the money” Options held by you whether or not exercised (including any Options that would vest as a result Sale of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement Company (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewithas defined below). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, Majority Holders shall have the right to sell Shares require all of the remaining stockholders of the Company (the “Remaining Stockholders”) to participate in such proposed Transfer pursuant to Section 4.5 Sale of the Stockholders Agreement; providedCompany on a pro rata basis and otherwise on the same terms and conditions as those agreed to by the Majority Holders (“Drag-Along Rights”). If the Majority Holders elect to exercise their Drag-Along Rights in connection with such a transaction, that they shall deliver, or instruct the Sponsor Investor Sellers Company to deliver, a notice to each Remaining Stockholder (“Drag-Along Notice”), setting forth the terms of the transaction, including the proposed closing date for its consummation, which shall not be less than twenty (20) days from the date of such Drag-Along Notice, and all documents required to be executed by each Remaining Stockholder in order to consummate such transaction. Each Remaining Stockholder shall deliver to the Majority Holders, within ten (10) days of receipt of such Drag-Along Notice, a countersigned copy of such Drag-Along Notice and all such other documents previously furnished to such Remaining Stockholder for execution in connection with such transaction. If any Remaining Stockholder fails to execute and deliver such Drag-Along Notice and other documents within such ten-day period, then any officer of the Company shall have the rightauthority to execute such Drag-Along Notice and other documents on behalf of such Remaining Stockholder, but not and the obligationprovisions of this Section 11 shall constitute the granting to such officer of a power of attorney on behalf of such Remaining Stockholder to execute and deliver any and all such documents. The Majority Holders shall cause to be remitted to each Remaining Stockholder the proceeds of such Sale of the Company attributable to the Remaining Stockholder’s shares of common stock on the closing date of such sale. Each Remaining Stockholder hereby irrevocably and unconditionally waives, and agrees to cause to be paid waived and to youprevent the exercise of, in your capacity as a Drag-Along Sellerany rights of appraisal, in lieu of such securities described in the preceding sentence, an amount in cash equal any dissenters’ rights and any similar rights relating to the Fair Market Value of such Shares as Sale of the date Company or any related transaction that such securities otherwise would Remaining Stockholder or any other person may have been issued in exchange for such Sharesby virtue of, or with respect to, any shares of Company common stock owned by the Remaining Stockholder. The Drag-Along Right For purposes of this Section 11, “Sale of the Sponsors Company” shall terminate upon mean each of the earlier to occur of following events: (a) merger or consolidation in which (i) an IPO and the Company is a constituent party or (ii) a Liquidity Event. The Drag-Along Right subsidiary of the Sponsors shall not include Company is a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you constituent party and the Company or one issues shares of its parents common stock pursuant to such merger or subsidiaries consolidation, except any such merger or consolidation involving the Company or a subsidiary in which the shares of common stock of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for common stock that represents, immediately following such merger or consolidation, at least a majority, by voting power, of (1) the surviving or resulting company; or (2) if the surviving or resulting company is a wholly owned subsidiary of another company immediately following such merger or consolidation, the parent company of such surviving or resulting company (provided that, for the purpose of this Subsection (a), all Common Stock issuable upon exercise of options outstanding immediately prior to such merger or consolidation or upon conversion of convertible securities outstanding immediately prior to such merger or consolidation shall not terminate solely be deemed to be outstanding immediately prior to such merger or consolidation and, if applicable, converted or exchanged in such merger or consolidation on the same terms as the actual outstanding Common Units are converted or exchanged); (b) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all or a significant portion of the assets of the Company and its subsidiaries, taken as a result whole, or the sale or disposition (whether by merger, consolidation or otherwise) of one (1) or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such Transfer). Any unvested subsidiary or “out-of-subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the money” vested Options shall be treated in accordance with the applicable award agreementCompany.
Appears in 1 contract
Sources: Subscription Agreement
Drag Along Right. (a) In the event that you become Acorn Energy owns more than fifty percent (50%) of the Company’s issued and outstanding capital stock and Acorn Energy desires to accept a Participating Stockholder Seller bona fide offer (a “Purchase Offer”) from any person or persons, other than an Affiliate or another Stockholder, to purchase all (a “Divestiture”) the shares of Stock then held by Acorn Energy, then Acorn Energy shall promptly deliver to each of the other Stockholders a written notice (the “Purchase Offer Notice”) stating Acorn Energy’s intention to sell such shares pursuant to Section 4.5 such Purchase Offer and setting forth the terms and conditions of such Purchase Offer, including, without limitation, the identity of the Stockholders Agreementproposed purchaser and the amount and type of consideration to be paid therefor. The Purchase Offer Notice shall include a copy of any written offer, all Shares issuable in respect letter of vested “in intent, term sheet or contract of sale pertaining to the money” Options held by you whether or not exercised Purchase Offer.
(including any Options that would vest as b) In connection with a result Divestiture, if Acorn Energy owns more than fifty percent (50%) of the consummation Company’s issued and outstanding capital stock, it shall have the right (“Drag Along Right”) to require each other Stockholder to participate in such sale of Common Stock by Acorn Energy on the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation terms and conditions set forth in the first sentence Purchase Offer Notice (which shall be the same terms and conditions (on a per share basis) as are applicable to Acorn Energy’s sale of Section 4.5(ashares of Common Stock to the proposed purchaser). Such Drag Along Right shall be exercisable by Acorn Energy including in its Purchase Offer Notice a statement to the effect that Acorn Energy elects to exercise its Drag Along Right in connection with the proposed sale. At any time prior to the closing of such sale, Acorn Energy may withdraw its election to exercise its Drag Along Right upon written notice to the Stockholders.
(c) The closing of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 purchase and sale of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares any shares of Stock to be sold pursuant to Section 4.5 the Drag Along Right shall occur concurrently with the closing of the sale of the shares of the Stock by Acorn Energy, which shall be a date not less than sixty (60) days after the giving of the Purchase Offer Notice. At any such closing, each Stockholder shall deliver to the purchaser a certificate or certificates representing the number of shares of Stock to be sold by such Stockholder, duly endorsed in blank or accompanied by a duly executed stock power in blank, with signatures duly guaranteed and all requisite stock transfer stamps affixed thereto. All Stockholders Agreement includes securities shall be treated equally under this Section 2.5. It shall be a condition of the obligation to sell under this Section 2.5 that all facts and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, circumstances and all material aspects of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to transaction under this Section 2.5 shall be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Sharesdisclosed. The Drag-Along Right provisions of the Sponsors this Section 2.5 shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementIPO.
Appears in 1 contract
Drag Along Right. In the event that you become a Participating Stockholder Seller pursuant to Section 4.5 of the Stockholders Agreement(a) If, all Shares issuable in respect of vested “in the money” Options held by you whether one or not exercised more Shareholders (including any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreementat least one Shareholder other than Profusa) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(aholding, individually or collectively, no less than fifty percent (50%) of the Stockholders Agreement outstanding Shares of the Company (providedon a fully-diluted and as-converted basis) (the “Dragging Shareholder(s)”) propose(s) a Transfer of the Company, notwithstanding anything whether structured as a merger, reorganization, sale of assets, sale of stock, sale of control of the Company, or otherwise, to a proposed transferee, including a Competitor of the Company (the “Proposed Transfer”), such Dragging Shareholder(s) shall have the right (but not the obligation) to require each other Shareholder (the “Dragged Shareholder(s)”), at least fifteen (15) days prior to the contrary in Section 4.5 proposed closing of the Stockholders AgreementDrag Along Sale (as defined below), you by delivering a written notice (the “Drag Along Notice”) to each Dragged Shareholder, to sell all (and not less than all) of its Shares in the Company to the proposed transferee at the same price and on the same terms and conditions as agreed between the Dragging Shareholder(s) and the proposed transferee (the “Drag Along Sale”).
(b) The Drag-Along Notice shall state that the Dragging Shareholder(s) wish(es) to exercise its drag along right under this Section 5.2 with respect to the Drag Along Sale and shall also set forth the material terms and conditions of the Drag Along Sale, including (i) the consideration to be received in the Drag Along Sale, the price per Share or the formula by which such price is to be determined; and (ii) the identity of the proposed transferee. Each Dragged Shareholder shall execute and deliver all necessary documents and take all necessary actions to complete the Drag Along Sale within thirty (30) days after the Dragging Shareholder(s) deliver(s) the Drag Along Notice to each Dragged Shareholder, unless a longer period of time is otherwise required due to applicable Consent from any Government Entity in connection with the Drag Along Sale or as may be otherwise agreed between the Shareholders and the proposed transferee.
(c) Each Dragged Shareholder agrees,
(1) to waive any dissenter’s and appraisal rights that it be entitled under Applicable Laws or otherwise;
(2) to give the proposed transferee indemnities on a full basis with respect to matters solely relating to such Dragged Shareholder or covenants made by such Dragged Shareholder, provided that the Dragged Shareholder shall be required entitled to exercise only liability limitations that are no less favorable than those enjoyed by the applicable “Dragging Shareholder(s) (on a pro rata basis based upon the proceeds such Dragged Shareholder receives in the money” Options Drag Along Sale);
(3) to join the Dragging Shareholder(s), severally but not jointly, on a pro rata basis (based upon the proceeds such Dragged Shareholder receives in the Drag Along Sale), and make to the proposed transferee the same representations and warranties relating to the Company and its subsidiaries, provided that each Shareholder's aggregate liabilities with respect to such Shares representations and warranties shall only be up to the proceeds received by such Shareholder in accordance therewithconnection with the Drag Along Sale; and
(4) to make to the proposed transferee representations and warranties with respect to itself or with respect to matters solely under such Dragged Shareholder’s control (including those regarding title to and ownership of Shares, due authorization, enforceability, and no conflicts). In ; provided that the event Dragged Shareholder shall be entitled to liability limitations that are no less favorable than those enjoyed by Dragging Shareholder(s) (xon a pro rata basis based upon the proceeds such Dragged Shareholder receives in the Drag Along Sale).
(d) If the consideration payable for Shares to be sold pursuant to Section 4.5 Drag Along Sale is not consummated within sixty (60) days following the date of the Stockholders Agreement includes securities and Drag Along Notice issued by the Dragging Shareholder(s) (y) as may be extended due to applicable law would require Consent from any Government Entity in connection with the provision to youDrag Along Sale), in your capacity as a Participating Stockholder Seller or Drag-the Drag Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, Sale shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal once again become subject to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementprocedures set forth under this Section 5.2.
Appears in 1 contract
Drag Along Right. In (a) After the event that you become Closing Date, if the Stockholder Majority elect to effect a Participating Company Sale, then such Stockholder Seller pursuant Majority (the Stockholder Majority in its capacity as such under this Section 5.1(a), the “Drag-Along Representative”) may (but shall not have an obligation to) notify the other Stockholders not included in such Stockholder Majority (each a “Drag-Along Party”) in writing (the “Drag-Along Notice”) at least fifteen (15) Business Days prior to Section 4.5 the consummation of such Company Sale (the “Drag-Along Transaction”). The Drag-Along Notice shall specify the identity of the Stockholders Agreement, all Shares issuable in respect of vested “prospective parties involved in the money” Options held Drag-Along Transaction, a reasonable summary of the material terms and conditions of the Drag-Along Transaction and a copy of any form of agreement proposed to be executed in connection therewith (but only if available at the time the Drag-Along Notice is delivered). If the Drag-Along Representative delivers such Drag-Along Notice: (A) the Drag-Along Party shall be deemed to approve the proposed Drag-Along Transaction, (B) to the extent any vote or consent to the Drag-Along Transaction is required, the Drag-Along Party shall vote for and consent to such Drag-Along Transaction (including on behalf of all of its Equity Securities and on behalf of all Equity Securities with respect to which the Drag-Along Party has the power to direct the voting thereof) and shall waive any dissenter’s rights, appraisal rights or similar rights which the Drag-Along Party may have in connection therewith, (C) no Drag-Along Party shall raise any objections to the proposed Drag-Along Transaction, (D) the Drag-Along Party shall agree to sell its Drag-Along Pro Rata Share of each class of Equity Securities being sold in such Drag-Along Transaction (or such lesser number of Equity Securities if so designated by you whether or the Drag-Along Representative in the Drag-Along Notice) on the same terms and conditions as the Stockholder Majority, subject to clause (F) below and Section 5.1, (E) the Drag-Along Party shall execute all documents reasonably required to effectuate such Drag-Along Transaction, as determined by the Drag-Along Representative in good faith, (F) the Drag-Along Party shall be obligated to provide the same representations, warranties, covenants, agreements, indemnities (on a pro rata basis (but not exercised a joint and several basis); provided that the aggregate liability (including any Options indemnification obligation) of the Drag-Along Party in the Drag-Along Transaction shall not exceed the consideration received by the Drag-Along Party for the sale of its Equity Securities in such transaction, other than in the case of fraud, intentional misrepresentation or willful misconduct on the part of the Drag-Along Party) and other obligations that would vest the Drag-Along Representative agrees to provide in connection with such Drag-Along Transaction (other than any such obligations that relate specifically to a particular holder of Equity Securities, such as a result indemnification with respect to representations and warranties given by such holder regarding such holder’s title to and ownership of such Person’s Equity Securities, which shall be solely the responsibility of such holder), and (G) each Drag-Along Party shall take all other actions reasonably necessary or desirable, as reasonably determined by the Drag-Along Representative, to cause the consummation of such Drag-Along Transaction on the Change terms proposed by the Drag-Along Representative (including, in connection with a Drag-Along Transaction involving a sale of Control Transaction described in Section 4.5 all or substantially all of the Stockholders Agreement) shall constitute Shares held by you for purposes assets of the calculation set forth Company and its Subsidiaries, causing the Company and its Subsidiaries to enter into such agreements and arrangements with the applicable third party purchaser of such assets in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything connection with such Company Sale in a form and on terms and conditions reasonably acceptable to the contrary in Section 4.5 of Drag-Along Representative consistent with the Stockholders Agreementforegoing). Notwithstanding the foregoing, you shall be required to exercise only the applicable “in the money” Options except with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or any Drag-Along Seller, as applicable, Party that is an employee of any specified information regarding the Company or any of its parents Subsidiaries, no Drag-Along Party shall be required to execute agreements in connection with any Drag-Along Transaction containing non-competition, non-solicitation, no-hire and/or and confidentiality provisions which are more restrictive than those entered into by the Stockholders constituting the Stockholder Majority exercising its rights under this Section 5.1; provided that with respect to any Drag-Along Party that is an employee of the Company or subsidiariesany of its Subsidiaries, such securities or the issuer thereof that is not otherwise Drag-Along Party shall only be required to be provided for execute agreements in connection with any Drag-Along Transaction containing non-competition, non-solicitation, no-hire and/or and confidentiality provisions to the extent that such Transfer pursuant to Section 4.5 provisions are reasonable and customary, in light of the Stockholders Agreement, then notwithstanding Section 4.5(f) circumstances of the Stockholders AgreementDrag-Along Transaction. As used herein, you“Drag-Along Pro Rata Share” of the Drag-Along Party means the number derived by multiplying (x) the total number of Equity Securities of such class held by the Drag-Along Party, by (y) a fraction, the numerator of which is the total number of Equity Securities of such class to be sold by the Stockholder Majority triggering this Section 5.1 in your capacity as a Participating the Drag-Along Transaction and the denominator of which is the total number of the then outstanding Equity Securities of such class held by such Stockholder Seller or Drag- Majority.
(b) The obligations of the Drag-Along SellerParty with respect to the proposed Drag-Along Transaction are subject to the condition that upon the consummation of the Drag-Along Transaction, as applicablethe Drag-Along Party, to the extent entitled thereto based on the Equity Securities held thereby, shall have receive the right same form of consideration as the Stockholder Majority triggering this Section 5.1 (less any applicable taxes or withholding obligations).
(c) If requested by the Drag-Along Representative, at least five (5) Business Days prior to sell Shares in such proposed Transfer pursuant to Section 4.5 the consummation of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along SellerTransaction, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right Parties shall deliver to the Company to hold in escrow pending transfer of the Sponsors consideration therefor, the duly endorsed certificate or certificates representing the Equity Securities held by the Drag-Along Party to be sold, and a stock power and limited power-of-attorney authorizing the Drag-Along Representative to take all actions reasonably necessary to sell or otherwise dispose of such Equity Securities. In the event that a Drag-Along Party should fail to deliver such Equity Securities (or the certificates evidencing such Equity Securities), the Company shall terminate cause the books and records of the Company to show that such Equity Securities are bound by the provisions of this Section 5.1 and that such Equity Securities may be Transferred to the purchaser in such Drag-Along Transaction.
(d) If a proposed Drag-Along Transaction is consummated, then each Drag-Along Party shall bear its pro rata share (based upon the earlier relative aggregate amounts of consideration received by such Drag-Along Party as compared to occur the aggregate amounts received by the other Stockholders participating in such Drag-Along Transaction) of all costs of sale of the Equity Securities pursuant to such Drag-Along Transaction to the extent such costs are not otherwise paid by the Company or the acquiring party. Costs incurred by any Drag-Along Party in connection with a Drag-Along Transaction shall not be considered costs of the Drag-Along Transaction hereunder.
(e) Whenever more than one (1) class of Equity Securities is outstanding, the Board shall make all determinations of pro rata shares rights and obligations under this Section 5.1 reasonably and in good faith.
(f) Without limiting anything contained in this Agreement (including this Section 5.1), (i) any Company Sale may be structured as an IPO auction and may be initiated by the delivery to the Company of a written notice that the Stockholder Majority triggering this Section 5.1 has elected to initiate an auction sale procedure, (ii) a Liquidity Event. The the Drag-Along Right Representative, on behalf of such Stockholder Majority, shall be entitled to take all steps reasonably necessary to carry out an auction of the Sponsors shall not include a right to require you to sign a non-compete agreement Company, including selecting an investment bank, providing confidential information, selecting the winning bidder and negotiating the requisite documentation, and (it being understood that any existing non-compete agreement then in effect between you and iii) the Company and each Stockholder (whether a Drag-Along Party or one otherwise) shall provide reasonable assistance with respect to these actions as reasonably requested by the Drag-Along Representative in connection therewith.
(g) Each Stockholder acknowledges that even if a Drag-Along Notice has been given, none of its parents the Stockholder Majority triggering this Section 5.1, the Drag-Along Representative or subsidiaries the Company shall not terminate solely as a result of such Transfer). Any unvested have any obligation to consummate any Drag-Along Transaction or “out-of-the money” vested Options shall be treated have any liability to any Stockholder arising from, relating to or in accordance connection with the applicable award agreementpursuit, consummation, postponement, abandonment or terms and conditions of any such Drag-Along Transaction, except to the extent of any failure to comply with any express provision of this Section 5.1.
Appears in 1 contract
Drag Along Right. (a) In the event that you become a Participating Stockholder Seller MayAir is the Transferring Shareholder which proposes to Transfer any Shares to the Proposed Transferee, and the Non-transferring Shareholder elects not to exercise its Right of First Refusal pursuant to Section 4.5 of the Stockholders Agreement, all Shares issuable Clause 9.2 in respect of vested “in such Transfer, and PROVIDED ALWAYS THAT the money” Options held by you whether or not exercised purchase price for the Drag-Along Shares (including any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreementdefined below) shall constitute not be less than the Deadlock Price for the Drag-Along Shares, MayAir shall be entitled to drag the Non-transferring Shareholder to participate in such Transfer and transfer all the Shares held by you for purposes the Non-transferring Shareholder, simultaneously with the Shares of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement MayAir (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or "Drag-Along SellerShares"), as applicableto the Proposed Transferee on terms and conditions that are no less favourable than those specified in the Transfer Notice.
(b) MayAir may exercise its right under this Clause 9.4 ("Drag-Along Right"), which is exercisable only if the purchase price for the Drag-Along Shares shall not be less than the Deadlock Price, by providing a written notice ("Drag-Along Notice") to the Non-transferring Shareholder no later than thirty (30) Business Days from the date of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 expiry of the Stockholders AgreementROFR Period ("Drag-Along Period"). Once issued, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in Notice shall be irrevocable. MayAir shall exercise commercial reasonable efforts to procure the preceding sentence, an amount in cash equal Proposed Transferee to purchase all the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of Shares and the Sponsors shall terminate upon Transferring Shares. If the earlier Proposed Transferee agrees to occur of (i) an IPO and (ii) a Liquidity Event. The purchase the Drag-Along Right Shares and the Transferring Shares, then the Non-transferring Shareholder shall comply with the Drag-Along Notice and cooperate and take all actions to ensure that all things necessary to ensure the transfer of the Sponsors Drag-Along Shares are performed in an expeditious manner. If the Proposed Transferee declines to do so, then MayAir shall not include a right Transfer any of the Transferring Shares to require you the Proposed Transferee.
(c) The Non-transferring Shareholder hereby grants to sign a nonMayAir an irrevocable power of attorney to execute and deliver in the name and on behalf of the Non- transferring Shareholder all such agreements, instruments and other documentation (including any written consents of the Non-compete agreement (it being understood transferring Shareholder) as is required to Transfer the Drag-Along Shares held by such Non- transferring Shareholder to the Proposed Transferee. MayAir shall provide notice to the Non-transferring Shareholder that any existing non-compete agreement then sets forth the circumstances in effect between you and which such power of attorney was used immediately following the Company or one exercise of its parents or subsidiaries shall not terminate solely the Drag- Along Right as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementset forth above.
Appears in 1 contract
Sources: Shareholders' Agreement
Drag Along Right. 5.1 In addition to serving a Disposal Notice pursuant to Clause 4.1 above, CME ME shall have the right (subject to Clause 5.4 below) to require Top Tone Holdings to sell its Ownership Interest in CME Bulgaria to the Purchaser at the price per share and otherwise on the terms and conditions specified in the Disposal Notice (the "Drag Along Right"). CME ME may exercise the Drag Along Right by delivering a written notice stating the exercise of such right to Top Tone Holdings concurrently with or within the Disposal Notice (the "Drag Along Notice").
5.2 Once delivered, such Drag Along Notice shall be irrevocable. However, a Drag Along Notice shall lapse if, for any reason, CME ME has not sold its Ownership Interest by the transaction date set out in the Disposal Notice. CME ME may serve further Drag Along Notices following the lapse of any particular Drag Along Notice and Top Tone Holdings shall be obligated to deliver and sell its Ownership Interest pursuant thereto and on the terms thereof.
5.3 The Ownership Interest of Top Tone Holdings sold under this Clause 5 shall be sold at the price per share and otherwise on the terms and conditions specified in, and concurrently with the proposed transaction described in, the Disposal Notice.
5.4 In the event that you become a Participating Stockholder Seller pursuant CME ME so exercises the Drag Along Right and that the Purchaser wishes to Section 4.5 purchase some but not all of the Stockholders AgreementOwnership Interests offered by CME ME and Top Tone Holdings, all Shares issuable in respect each of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) CME ME and Top Tone Holdings shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything be entitled to sell to the contrary Purchaser such portion of their respective Ownership Interests pro rata to the entire Ownership Interest in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “CME Bulgaria that are offered by CME ME and Top Tone Holdings in the money” Options with respect to such Shares in accordance therewith). connection herewith.
5.5 In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Drag Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that Notice is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal delivered prior to the Fair Market Value first anniversary of such Shares as of Closing, Top Tone Holdings may exercise the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of Share Option at the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you applicable Share Option Price and the Company or one of its parents or subsidiaries shall not terminate solely Ownership Interests acquired as a result of such Transfer). Any unvested or “out-of-the money” vested Options thereof shall be treated included in accordance with the applicable award agreementOwnership Interests referred to in this Clause 5.
Appears in 1 contract
Sources: Investment Agreement (Central European Media Enterprises LTD)
Drag Along Right. (a) In the event that you become a Participating Stockholder Seller pursuant holders of Total Evercore Equity seek to Section 4.5 sell 50% or more of the Stockholders Agreement, all Shares issuable in respect of vested “in the money” Options held by you whether or Total Evercore Equity to a bona fide buyer which is not exercised (including any Options that would vest as a result an Affiliate of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders AgreementCompany (a “Desired Sale”), such holders may provide, at least fifteen (15) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (providedBusiness Days prior to any related shareholder vote or any transaction closing, notwithstanding anything written notice to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company Investor or any of its parents or subsidiariesPermitted Transferees of such intention, describing in reasonable detail the price and general terms of the Desired Sale.
(b) Upon receipt of such securities notice of a Desired Sale, the Investor and its Permitted Transferees shall (i) consent to, vote for and raise no objections against the Desired Sale or the issuer thereof process pursuant to which the Desired Sale was arranged, (ii) waive any dissenters’, appraisal and similar rights, if any, with respect thereto and (iii) if the Desired Sale is a sale of shares of Equity Securities, agree to sell a percentage of its Equity-Linked Securities (calculated on an as-converted basis) equal to the percentage of the Total Evercore Equity to be sold in the Desired Sale, on the terms and conditions of the Desired Sale; provided that, in the event that is the Investor no longer has the right to designate a Director for nomination for election to the Board at the time of receipt of notice of a Desired Sale, the Investor shall not otherwise be required to be provided provide (A) any representations, warranties or indemnities other than with respect to itself, its Permitted Transferees and the Equity Securities held by it or its Permitted Transferees or (B) any joint and several obligation in connection with the Desired Sale (other than any obligation which is joint and several among the Investor and its Permitted Transferees); provided, further that, in the event the Investor has the right to designate a Director for nomination for election to the Board at the time of receipt of notice of a Desired Sale, the Investor’s indemnification obligations in connection with such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(fDesired Sale shall not exceed fifty percent (50%) of the Stockholders consideration received by the Investor and its Permitted Transferees in such Desired Sale (except that the foregoing fifty percent (50%) limitation shall not apply with respect to indemnification for breaches of representations, warranties or obligations that relate specifically to the Investor and/or its Permitted Transferees such as representations and warranties regarding the Investor’s and/or its Permitted Transferee’s title to or ownership of securities).
(c) The Investor shall take all necessary and desirable actions in connection with the consummation of any Desired Sale including the execution of such agreements and instruments and taking other actions reasonably necessary to (A) cooperate with the purchaser in such Desired Sale to provide such access and information as may be reasonably requested by the purchaser, (B) provide, together with the holders of 50% or more of the Total Evercore Equity, the representations, warranties, indemnities, covenants, conditions, escrow agreements, other provisions and agreements (in each case as limited by paragraph (b) above) relating to such Desired Sale as determined by the holders of 50% or more of the Total Evercore Equity (provided that the Investor and/or its Permitted Transferees shall not be liable for any obligations that relate specifically to a particular seller (other than the Investor and/or its Permitted Transferees) in such Desired Sale such as indemnification with respect to representations and warranties given by such seller regarding such seller’s title to or ownership of securities) and (C) effectuate the allocation and distribution of the aggregate consideration upon the Desired Sale as set forth below. At the closing of the Desired Sale, such Equity-Linked Securities to be transferred by the Investor in the Desired Sale shall be free and clear of any liens, claims or encumbrances (other than restrictions imposed pursuant to this Agreement, youthe Restated Certificate of Incorporation, in your capacity as a Participating Stockholder Seller or Drag- Along Sellerthe Bylaws and applicable federal and state securities laws). In connection with any Desired Sale, as applicable, the Investor shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 bear its own costs and its pro rata share of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal costs to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementextent incurred by all sellers.
Appears in 1 contract
Drag Along Right. In (a) If at any time and from time to time after the event that you become date of this Agreement, the holder or holders of a Participating Stockholder Seller pursuant to Section 4.5 majority of the Stockholders Agreement, all Shares issuable in respect outstanding shares of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result voting capital stock of the consummation Company (the "Proposed Transferors") wish to Transfer in a bona fide arms' length sale all shares of Common Stock and Preferred Stock then owned by them to any Person or Persons who are not Affiliates of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you Proposed Transferors (for purposes of this Section 3(a), the calculation set forth in "Proposed Transferee"), the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, Proposed Transferors shall have the right (the "Drag-Along Right") to require each Management Stockholder to sell Shares to the Proposed Transferee all Securities (for the same per share consideration received by the Proposed Transferor for each such class of capital stock, and with respect to unexercised Options, less any exercise price payable with respect thereto) then held by the Management Stockholders, subject to purchase by the Proposed Transferee. Each Management Stockholders, agrees to take all steps necessary to enable him or it to comply with the provisions of this Section 3(a), including, if necessary, voting any Securities in such proposed Transfer pursuant to Section 4.5 favor of the Stockholders Agreement; provided, that transaction with the Sponsor Investor Sellers shall have Proposed Transferee (whether effected as a merger or otherwise) to facilitate the right, but not the obligation, to cause to be paid to you, in your capacity as Proposed Transferors' exercise of a Drag-Along SellerRight.
(b) To exercise a Drag-Along Right, the Proposed Transferors shall give each Management Stockholder a written notice (for purposes of this Section 3, a "Drag-Along Notice") containing (i) the number of Securities that the Proposed Transferee proposes to acquire from the Proposed Transferors, (ii) the name and address of the Proposed Transferee, and (iii) the proposed purchase price, terms of payment and other material terms and conditions of the Proposed Transferee's offer. Each Management Stockholder shall thereafter be obligated to sell the Securities subject to such Drag-Along Notice, provided that the sale -------- to the Proposed Transferee is consummated within 120 days of delivery of the Drag-Along Notice. If the sale is not consummated within such 120-day period, then each Management Stockholder shall no longer be obligated to sell such Management Stockholder's Securities pursuant to that specific Drag-Along Right but shall remain subject to the provisions of this Section 3.
(c) Notwithstanding anything contained in this Section 3, in the event that all or a portion of the purchase price consists of securities and the sale of such securities to the Management Stockholders would require either a registration under the Securities Act or the preparation of a disclosure document pursuant to Regulation D under the Securities Act (or any successor regulation) or a similar provision of any applicable state securities law, then, at the option of the Proposed Transferors, the Management Stockholders may receive, in lieu of such securities described in securities, the preceding sentence, an amount in cash equal to the Fair Market Value fair market value of such Shares securities in cash, as determined in good faith by the Board, unless, at the request of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right Management Stockholders holding a majority of the Sponsors shall terminate upon Shares, the earlier to occur of (iappraisal procedure set forth in Section 3(d) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementbelow is invoked.
Appears in 1 contract
Sources: Stockholders Agreement (Knoll Inc)
Drag Along Right. (a) If, by the IPO Due Date, the Equity Shares of the Company are not listed in accordance with Clause 6.1, then any Other Shareholder (other than QMT), holding more than 6% (six percent) of the Share Capital of the Company, desires to sell all its Shares in the Company (the “Individual Dragging Shareholder”), shall be entitled to require the Other Shareholders and QMT (“Dragged Shareholders”) to sell all but not less than all their Shares to any potential purchaser (“Drag Purchaser”) hereof and the Dragged Shareholders shall be obligated to sell all their Shares, in accordance with the process set out in this Clause 6.3. Provided that, nothing under this Clause 6.3(a) shall restrict SFL from exercising its drag along right under this Clause 6.3 as an Individual Dragging Shareholder, in the event it does not intend to Transfer the SFL Samara Manager Shares, the Creador SFL Drag Price Restricted Shares and SFL New Investor Shares to a Drag Purchaser.
(b) Any exercise of drag by an Individual Dragging Shareholder on the Shares held by Creador, Creador SFL Drag Price Restricted Shares and SFL New Investor Shares shall be subject to this Clause 6.3(b). If such sale is being undertaken after the IPO Due Date but prior to the expiry of 72 (seventy two) months from the Closing Date, then, the Individual Dragging Shareholder shall be entitled to drag the Shares of Creador and SFL (to the extent of SFL New Investor Shares and the Creador SFL Drag Price Restricted Shares), only in compliance with the following:
(i) Creador or SFL (to the extent of Creador SFL Drag Price Restricted Shares), the per share price at which such drag right shall be exercised in relation to the Shares held by Creador and in relation to the Creador SFL Drag Price Restricted Shares held by SFL shall be the higher of (“Creador Valuation Threshold”): (X) an IRR of at least 20% on the Creador Per Share Price, or (Y) 2.5 times the Creador Per Share Price; and
(ii) SFL (to the extent of SFL New Investor Shares), the per share price at which such drag right shall be exercised in relation to SFL New Investor Shares held by SFL shall be the higher of (“SFL New Investor Valuation Threshold”): (X) an IRR of at least 20% on the SFL New Investor Per Share Price, or (Y) 2 times the SFL New Investor Per Share Price. The Shares being sold by the Dragged Shareholders under Clause 6.3(a) shall be on terms (including price) similar to the terms on which the Individual Dragging Shareholders are transferring their Shares. It is clarified that the valuation protections prescribed above shall not apply on the Shares held by SFL in the Company other than the Creador SFL Drag Price Restricted Shares and the SFL New Investor Securities. After the expiry of 72 (seventy two) months from the Closing Date, any Individual Dragging Shareholder shall be entitled to issue a notice and require all the Dragged Shareholders to sell all but not less than all their Shares to the Drag Purchaser. It is clarified that no Shareholder shall have any price protection upon any Transfers under this Clause 6.3 to the Drag Purchaser after expiry of 72 months from the Closing Date.
(c) In the event that you become any Individual Dragging Shareholder intends to exercise its drag right under this Clause 6.3, it shall notify in writing to the Company, Other Shareholders and QMT of its intention to do so and require the identification of a Participating Stockholder Seller pursuant to Section 4.5 potential Drag Purchaser (“Exit Notice”). Within 15 (fifteen) days from the date of the Stockholders AgreementExit Notice, a committee shall be formed to identify a potential Drag Purchaser (“Drag Committee”). Any of the Other Shareholders may respectively nominate one representative each on the Drag Committee and the Drag Committee shall be formed consisting of such representatives(along with representative of the Individual Dragging Shareholder); provided that the representative nominated by Creador and SFL New Investors (in the event the SFL New Investors become direct Shareholders in the Company) shall not have the right to exercise any vote in the Drag Committee unless Creador or the SFL New Investor, as the case may be, is an Individual Dragging Shareholder. If at least 2 (two) nominations from the Other Shareholders (the representatives of which are entitled to vote in the Drag Committee) are received including nomination from the Individual Dragging Shareholder, then the Drag Committee shall be deemed to be constituted and all its decisions shall be binding on all Shareholders. However, if such nominations have not been received in 15 (fifteen) days of the Exit Notice, then, the Individual Dragging Shareholder(s) shall not be required to follow the process indicated in this sub-Clause (c) for forming the Drag Committee. The Company and QMT shall undertake and be obligated to render all support and assistance required to the Drag Committee and the Individual Dragging Shareholder, including providing access to information and meetings with management team and/ or Yum.
(d) The Drag Committee shall appoint a merchant banker no later than 2 (two) weeks from the date of its formation and the Drag Committee shall attempt to identify a Drag Purchaser with the help of such merchant banker within a period of 3 (three) months from the date of its formation. The Drag Committee shall identify a strategic and/or a financial buyer (which shall be a Person who is not an Affiliate and/or a Related Party of any of the Other Shareholders), determine the best offer, etc. All decisions of the Drag Committee including the determination of the best offer made by the Drag Purchaser shall be approved by majority of the members of the Drag Committee, with each member having one vote; provided that the representative nominated by Creador and SFL New Investors (in the event the SFL New Investors become direct Shareholders in the Company) shall not have the right to exercise any vote in the Drag Committee unless Creador or the SFL New Investor, as the case may be, is an Individual Dragging Shareholder. For the avoidance of doubt, the representatives of GS, CX, Edelweiss and SFL shall have voting rights. All decisions of the Drag Committee shall be minuted and communicated to its members within 7 (seven) days of each meeting. The Drag Committee shall regulate all other matters as it deems fit, in relation to its operation. The determination by the Drag Committee shall be final and binding on the Shareholders and the Company.
(e) If the Drag Committee has identified a Drag Purchaser, then, the Individual Dragging Shareholder, on behalf of the Drag Committee shall be entitled to issue a notice (“Drag Notice”) requiring, subject to Clause 6.3(b), all Shares issuable in respect of vested “in the money” Options held by you whether or other Shareholders to sell all, and not exercised (including any Options that would vest as a result less than all, of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes such Shareholder to the Drag Purchaser so identified, at the same price and on the same terms which have been offered to the Individual Dragging Shareholder. Such notice shall be binding on the Shareholders.
(f) If, (i) the Drag Committee has not been constituted within 15 (fifteen) days of the calculation set forth in the first sentence of Section 4.5(a) date of the Stockholders Agreement Exit Notice; or (providedii) if the Drag Committee has even number of members and there is a tie on any matter which cannot be resolved by them within 15 (fifteen) days of such tie; or (iii) the Drag Committee has failed to identity a Drag Purchaser, notwithstanding anything to the contrary in Section 4.5 accordance with sub-Clause (d) above, within 3 (three) months of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any date of its parents or subsidiariesformation, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreementthen, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, any Individual Dragging Shareholder shall have the right to sell issue a Drag Notice upon receiving a bona fide firm offer from a Drag Purchaser. In any event, if the Drag Committee is dissolved, then the member who initiated the formation of such Drag Committee, may independently continue the process initiated by the Drag Committee and pursue any offer made to the Drag Committee. Notwithstanding anything stated herein, if for any reason whatsoever, the Drag Committee is not constituted in accordance with sub-Clause (c), then, any such Drag Committee shall be subsequently formed only upon written mutual agreement between the Other Shareholders; provided the mutual agreement shall not be required with Creador and SFL New Investors (in the event the SFL New Investors become direct Shareholders in the Company) unless Creador or the SFL New Investor, as the case may be, is an Individual Dragging Shareholder.
(g) The Drag Notice shall set out the terms on which shares will be dragged (including the per share price), which terms shall not be less favourable than those offered to the Individual Dragging Shareholder (“Drag Terms”). Subject to Clause 6.3(b), the Drag Notice shall be binding on all the Shareholders.
(h) Within a period of 15 (fifteen) days from the Drag Notice, any other Individual Dragging Shareholder can provide a better firm offer/terms than the Drag Terms (“Alternate Offer”). In case multiple Alternate Offers are provided by Individual Dragging Shareholders, then for the purpose of drag under this Clause 6.3, the Alternate Offer which offers the highest per share price to the Shareholders shall deemed to be the “Better Alternate Offer” for the purpose of drag and shall, subject to Clause 6.3(b) be binding on all Shareholders.
(i) If no Alternate Offer is received within 15 (fifteen) days from of date of the Drag Notice, then, subject to Clause 6.3(b), all Shareholders will be obligated to transfer their Shares in such proposed Transfer pursuant to Section 4.5 terms of the Stockholders AgreementDrag Notice to the Drag Purchaser on the Drag Terms. In the event an Alternate Offer or Better Alternate Offer, as the case may be, is received within the said period of 15 (fifteen) days, the Individual Dragging Shareholder which has received the Alternate Offer or Better Alternate Offer, as the case may be, shall, subject to Clause 6.3(b), be entitled to require the Dragged Shareholders to sell all, and not less than all, the Shares of the Dragged Shareholders, by issuing a Drag Notice.
(j) The Transfer under sub-Clause (d) or sub-Clause (f) or sub-Clause (h), as the case may be, shall be completed, as soon as possible, but no later than 45 (forty-five) days from the issue of the Drag Notice. This period shall stand extended for approval required from Yum or any approval from a Government Authority.
(k) Any exercise of drag along right under this Clause 6.3 on Shares held by QMT and SFL shall be subject to compliance with the requirements of Clauses 5.1(b) and 5.11. Without prejudice to the foregoing, in the event QMT is required to only sell a part of its shareholding in the Company, then QMT may at its option tag along up to all of its remaining shares in the Company by giving a notice to the Shareholder(s) exercising the drag of not less than 15 (fifteen) days. It is also agreed that:
(a) In the event Creador issues an Exit Notice in accordance with Clause 6.3(c), the rights available with Creador under Clause 5.11 on occurrence of a CoC Transaction shall fall away; provided, and
(b) In the event SFL issues an Exit Notice in accordance with Clause 6.3(c) to the effect that the Sponsor drag along rights under this Clause 6.3 are proposed to be exercised in relation to the SFL New Investor Sellers Shares of any SFL New Investor, the rights available with such SFL New Investor under Clause 5.11 on occurrence of a CoC Transaction shall have fall away.
(l) Subject to Clause 5.11, subsequent to sale of Shares of QMT in the rightmanner specified in Clause 6.3: (i) for the remaining Shares held by it in the Company, but not QMT shall be deemed as an Other Shareholder and shall be entitled to exercise only such rights as are mentioned in Clause 5.11; (ii) the obligationobligations of QMT as set out under Clause 5.1(b) shall cease to apply; and (iii) the Company shall undertake transactions with a Related Party (including any mergers, to change of control events, acquisitions or sale of assets, in each case, involving any Related Party) only on an arms’ length basis and at or above the fair market value.
(m) Upon receipt of a Drag Notice, the Company, QMT and the Dragged Shareholders shall take all such actions as may be required, provide its full cooperation including execute all such documents, and do and perform, and cause to be paid done and performed such further acts and things as may be necessary in order to yougive full effect to the drag right under this Clause 6.3, in your capacity a timely manner and in any event within such time period as a Drag-Along Sellermay be specified in the Drag Notice, in lieu order to successfully complete the drag sale contemplated in this Clause 6.3, including with respect to complying with the requirements of such securities described the Yum Documents. For purposes of this Clause 6.3(l), "fair market value" shall be determined by an independent valuer selected by the Board from amongst the Big 4 Firms.
(n) Any exercise of drag along right under the provisions of this Clause 6.3 shall be subject to the compliances and requirements under the Yum Documents.
(o) Notwithstanding anything in the preceding sentenceTransaction Documents, an amount in cash equal all rights and obligations of QMT (including the obligations of QMT towards Yum) under the Transaction Documents and Yum Documents shall stand automatically assigned to the Fair Market Value Drag Purchaser in the manner specified in Clause 17.7.5.
(p) Nothing under this Clause 6.3 shall apply and this Clause 6.3 shall stand nullified and of such Shares as no effect upon CoC Transaction being consummated pursuant to this Clause 6.3.
(q) The Parties agree that, on any exercise of drag under this Clause 6.3, the Individual Dragging Shareholders and the members of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right Drag Committee shall make best efforts to ensure that the Tax exposure of the Sponsors shall terminate upon Dragged Shareholders on the earlier to occur sale of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then their Shares in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely is to as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementlittle as reasonably possible.
Appears in 1 contract
Sources: Shareholders' Agreement
Drag Along Right. In the event that you become a Participating Stockholder Seller pursuant to Section 4.5 13.1 If any of the Stockholders Shareholder(s) (the "Dragging Shareholders") proposes to Transfer, whether through a single transaction or a series of related transactions, such number of Securities held by them which in aggregate would constitute a Change of Control (a "Drag-Along Sale"), the Dragging Shareholders may require all other Shareholders (other than (i) the NIP Shareholders, unless the Dragging Shareholders include all of the NIP Founder Holdcos; and (ii) the VE Financial Shareholders unless the Dragging Shareholders include all of the VE Founder Holdcos) (the "Dragged Shareholders") to participate in such Drag-Along Sale in accordance with this Clause 13, provided that the Drag-Along Sale (including such price and terms thereof) has been approved as a Shareholders Reserved Matter following the Requisite Approvals and agreed to by all of the Founder Parties in writing. For the avoidance of doubt, the provisions under Clause 12 shall not apply to a Drag-Along Sale.
13.2 Within five (5) calendar days after entering into any binding agreement (in the form approved as a Shareholders Reserved Matter for purposes of the Drag-Along Sale) (the "Sale Agreement"), the Dragging Shareholders shall deliver a written notice (the "Tag Notice") to all other Shareholders (the "Tag Holders") stating:
(a) the name and address of the proposed Qualified Third Party(ies) for the Drag-Along Sale (the "Tag Transferee");
(b) the number of Securities to be Transferred;
(c) the expected date of consummation of the proposed Drag-Along Sale;
(d) a representation that the Tag Transferee has been informed of the Tag-Along Right;
(e) a representation that no consideration is being provided to any Dragging Shareholder that is not reflected in the price to be paid to such Tag Holder (if it exercises the Tag-Along Right); and
(f) a representation that the Tag Transferee is a Qualified Third Party. The Tag Notice shall be accompanied by true and complete copies of all agreements (including the Sale Agreement) between the Dragging Shareholders and the Tag Transferee regarding the proposed Drag-Along Sale. For the avoidance of doubt, for the purposes of this Clause 13, the Shareholders who have a Tag-Along Right are the same Shareholders who may be subject to the Drag Notice.
13.3 The Dragging Shareholders may, within five (5) calendar days after the date of the Tag Notice, by delivering a notice in writing (a "Drag Notice") on each of the Dragged Shareholders, require each Dragged Shareholder to participate in the Drag-Along Sale by Transferring all of such Securities registered in the name of such Dragged Shareholder (the "Dragged Shares"), subject to the terms and on the date of completion of the Sale Agreement (which shall not be less than thirty (30) calendar days after the date of the Drag Notice) (the "Drag Completion Date") as stipulated in the Drag Notice. If the Drag-Along Sale contemplated in the Sale Agreement is not completed on or prior to the Drag Completion Date, the Drag Notice shall lapse.
13.4 The price for each Dragged Share shall: (a) be equal to the highest consideration offered for each Security in the Company in the Sale Agreement; (b) be in the same form as that offered for each Security in the Company in the Sale Agreement; and (c) shall be paid at the same time as the consideration is payable under the Sale Agreement (or, if later, on the Drag Completion Date) and shall be subject to the same payment terms.
13.5 For the avoidance of doubt, all Dragged Shareholders' obligations under this Clause 13 to Transfer the Dragged Shares shall apply regardless of whether the Dragged Shares are of the same class or type of Securities of the Company which the Dragging Shareholders propose to Transfer, provided that, to the extent such a difference in class or type exists, the consideration payable to the Dragged Shareholders for the Dragged Shares shall be calculated as if all Securities of the Company held by the applicable Dragging Shareholders and the Dragged Shareholders which will be subject to a Transfer under this Clause 13 (assuming the Dragging Shareholders exercise their drag-along rights in full) had been converted into Ordinary Shares on the date immediately prior to the date of the Drag Notice (to the extent not already in the form of Ordinary Shares) at the conversion price which would be applicable on such date had such conversion occurred on such date.
13.6 Any Transfer by a Dragged Shareholder shall be made on substantially the same terms and conditions as described in the Sale Agreement. However, the Dragged Shareholders shall not be required to make any representation or warranty to the proposed Qualified Third Party(ies), other than as to good title to any Dragged Shares, absence of liens with respect to such Dragged Shares, customary representations and warranties concerning the Dragged Shareholder's power and authority to undertake the proposed Transfer and the validity and enforceability of the Dragged Shareholder's obligations in connection with it. If any or all Dragged Shareholders are required to provide any indemnity under the Sale Agreement, all each Dragged Shareholder's liability under such indemnity shall be several only and limited in amount to the proportion of its Dragged Shares issuable that bears to the total number of Dragged Shares that are the subject of the Sale Agreement.
13.7 Clauses 13.1 to 13.6 shall not apply to the extent that the price, in respect of vested “cash or cash equivalents, for each Dragged Share does not represent a Fair Market Value for an arm's length sale as determined by an Independent Valuer, or is not in the money” Options held by you whether cash or not exercised (including any Options that would vest as a result of cash equivalents.
13.8 The obligations under this Clause 13 shall be terminated upon the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementQualified IPO.
Appears in 1 contract
Drag Along Right. In (a) Notwithstanding anything contained herein to the event that you become a Participating Stockholder Seller pursuant to Section 4.5 contrary, if, at any time after the third anniversary of the Stockholders date of this Agreement, the holders of 60% of the then outstanding shares of Series B Preferred Stock (the “Selling Purchasers”) wish to accept a bona fide arms length proposal (a “Sale Proposal”) from a person (the “Drag Along Purchaser”) to acquire all Shares issuable or substantially all of the assets or shares of capital stock of the Company (by merger, consolidation or otherwise), then the Company and the remaining Stockholders (the “Remaining Stockholders”), shall either:
(i) approve the Sale Proposal (the “Sale Option”) in respect accordance with the provisions of vested the Company’s Third Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) and Bylaws (the “Bylaws”), in which case the Company and each Remaining Stockholder shall be obligated to take all necessary action to cause the transaction contemplated in the money” Options Sale Proposal (a “Required Sale”) to be consummated; or
(ii) purchase (the “Purchase Option”) from the Selling Purchasers, on the same terms and conditions as set forth in the Sale Proposal, the Shares held by you whether or not exercised such Selling Purchasers.
(including any Options that would vest as a result of b) Not later than sixty (60) days prior to the proposed date for the consummation of the Change of Control Transaction described in Section 4.5 Required Sale (the “Drag-Along Closing Date”), the Selling Purchasers shall send a notice (the “Drag-Along Notice”) to the Company and each Remaining Stockholder, which notice shall include, among other things (i) the name and address of the Stockholders AgreementDrag-Along Purchaser, (ii) shall constitute Shares held by you for purposes of the calculation aggregate price at which the Drag-Along Purchaser is willing to acquire the Company’s assets or outstanding shares and (iii) any other material terms as set forth in the first sentence of Section 4.5(aSale Proposal. Not later than thirty (30) days prior to the Drag-Along Closing Date, each Remaining Stockholder shall deliver to the Company a notice indicating whether such Remaining Stockholder elects the Sale Option or the Purchase Option.
(i) If the Remaining Stockholders holding a majority of the outstanding Shares held by all Remaining Stockholders Agreement elect the Sale Option, then the Company shall approve the Required Sale and each Remaining Stockholder shall execute and deliver such documents and take all other actions as may be reasonably requested by the Drag Along Purchaser or the Selling Purchasers in connection with the Require Sale. In furtherance of the foregoing, in connection with such sale, each Remaining Stockholder will (providedA) vote in favor of, notwithstanding anything consent to, participate in and raise no objections against the Required Sale or the process pursuant to which it was arranged and (B) waive any dissenters’ rights, appraisal rights and other similar rights. The closing of the proposed Sale Proposal shall be held at the time and place designated by the Selling Purchasers and the Drag-Along Purchaser pursuant to the contrary in Section 4.5 terms of the Drag Along Notice. Notwithstanding the above, the Remaining Stockholders Agreement, you shall (1) will not be required to exercise only the applicable “in the money” Options make any representations or warranties except with respect to ownership of its Shares and then only to the same extent as the Selling Purchasers and (2) will not be required to give any indemnities except on a pro rata basis with the Selling Purchasers based on the amount of proceeds received by each, and that any such indemnification obligation by a Remaining Stockholder will in no event exceed the proceeds received by or paid on behalf of such Remaining Stockholder.
(ii) If the Remaining Stockholders holding a majority of the outstanding Shares held by all Remaining Stockholders elect the Purchase Option, then the Company or the Remaining Stockholders shall purchase all Shares held by the Selling Purchasers on the same terms and conditions as set forth in accordance therewith)the Sale Proposal, and at a price per share equal to what the Selling Purchasers would have received had the Required Sale been consummated. In The closing shall take place within thirty (30) days following the event that (x) last date on which the consideration payable for Shares Remaining Stockholders were required to be sold deliver notice to the Company pursuant to Section 4.5 7(b) above. The Selling Stockholders shall execute all documents reasonably requested (and typically required in transactions of this nature) by the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller Company or Drag-Along SellerRemaining Stockholders, as applicable, of any specified information regarding in connection with the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu consummation of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementtransaction.
Appears in 1 contract
Sources: Stockholders Agreement (Precision Therapeutics Inc)
Drag Along Right. In (a) Following the event that you become KKR Holding Period but prior to an IPO, if the KKR Shareholder Group or any Syndicatees with whom it is acting in concert (the “Dragging Shareholders”) intends to Transfer Securities to a Participating Stockholder Seller bona fide third party or a group of bona fide third parties acting in concert (other than to a Permitted Transferee or to a Syndicatee in accordance with Clause 5.4) which would result in the Proposed Transferee (together with any of its Affiliates) holding an Equity Percentage of 50% or more (a “Proposed Sale”), such Dragging Shareholders may, at their option and subject to the provisions of Clause 5.8(d), require the other Shareholders (“Dragged Shareholders”) to participate in the Proposed Sale and Transfer all the Securities held by the Dragged Shareholders to the Proposed Transferee at the same time and on the same economic terms and conditions (including as to price) as Rainbow Capital under such Proposed Sale (the “Drag-Along Right”).
(b) If the Dragging Shareholders wish to exercise their Drag-Along Right and require the participation of the Dragged Shareholders as provided herein, the Dragging Shareholders shall furnish to each Dragged Shareholder a written notice of such Proposed Sale pursuant to Section 4.5 the Drag-Along Right (the “Drag-Along Notice”) no later than 20 Business Days prior to the anticipated closing date of such Proposed Sale, which shall be accompanied by all definitive documentation required to be entered into by the Stockholders Agreement, all Shares issuable Dragged Shareholders in respect of vested “the Proposed Sale. The relevant Drag-Along Notice will include: (A) the number of Securities to be transferred by the Dragging Shareholders; (B) the proposed price per Security (which shall be calculated as if the Proposed Sale has occurred by way of a sale of all Securities on such date and shall be the same price per Security as the Dragging Shareholders are receiving) and form of consideration to be received by the Dragging Shareholders per Security (as applicable) (and if such consideration consists in part or in whole of assets other than cash, a good faith estimate of the fair market value of such non-cash consideration and relevant information, if available, relating to such non-cash consideration); (C) to the extent known, the identity of the Proposed Transferee(s); (D) to the extent known, the expected closing date of the proposed Transfer; and (E) to the extent known, a summary of any other material terms and conditions of the proposed Transfer.
(c) Each Dragged Shareholder shall, upon receipt of a Drag-Along Notice, be obligated to (i) participate in the money” Options Proposed Sale and sell or otherwise Transfer all the Securities held by you whether the Dragged Shareholder; (ii) to vote its securities in favour of the Proposed Sale at any meeting of the shareholders called to vote on or not exercised approve the Proposed Sale and Transfer and/or consent in writing to the proposed Transaction; (including any Options that would vest as a result of iii) waive all dissenters’ or appraisal rights in connection with the Proposed Sale and enter into agreements relating to the Proposed Sale; and (v) take all reasonable actions in connection with the consummation of the Change of Control Transaction described Proposed Sale and the Transfer as may be requested by the Dragging Shareholders. In connection with any such Transfer, each Dragged Shareholder must agree to make the same representations, warranties, covenants, undertakings and indemnities as Rainbow Capital agrees to make in Section 4.5 of connection with such Transfer; provided that, unless otherwise agreed by such Dragged Shareholder, (A) a Dragged Shareholder shall not be required to give any business warranties in connection with the Stockholders AgreementProposed Sale; (B) in no event shall constitute Shares held by you for purposes of any Dragged Shareholder be required to enter into any non-compete, non-solicit or similar covenant in connection with such Transfer on terms which are less favourable and/or more onerous in scope and time period than the calculation terms set forth in the first sentence of Section 4.5(aClause 9.8; (C) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you no such Dragged Shareholder shall be required to exercise only make representations and warranties or covenants or provide undertakings or indemnities as to any other Shareholder; (D) no Dragged Shareholder shall be liable for the applicable “breach of any covenant by any other Shareholder; and (E) notwithstanding anything in this Clause 5.8(c) to the contrary, (y) any liability relating to representations, warranties and covenants (and related indemnities) and other undertakings or indemnification obligations regarding the Business of the Group assumed in connection with the Transfer, and (z) any distribution to the Shareholders of any amount placed in escrow or subject to holdback in connection with such Transfer that has been released from such escrow or holdback or in respect of any earn out or other delayed or deferred payment, shall be shared by or made to, as the case may be, each such Shareholder pro rata in proportion to (and shall not exceed) the aggregate proceeds received by each Shareholder in the money” Options proposed Transfer.
(d) The obligations of the Dragged Shareholders pursuant to this Clause 5.8 are subject to the satisfaction of the following conditions:
(i) upon the consummation of the proposed Transfer, the Dragged Shareholders shall receive for each of its Securities being sold, the same consideration the Dragging Shareholders receive for each of its Securities being sold; and
(ii) each Dragged Shareholder will be responsible for its proportionate share of costs and expenses incurred for the benefit of all Shareholders (including the Dragging Shareholders) in connection with a consummated proposed Transfer, and any indemnities, holdbacks, escrows and similar items relating to the consummated proposed Transfer (other than those that relate to representations or indemnities concerning a shareholder’s valid ownership of the Securities held by it free and clear of all liens, claims and Encumbrances or a Shareholder’s authority, power and legal right to enter into and consummate a sale and purchase or merger agreement or ancillary document), based on the gross proceeds received or to be received in such proposed Transfer, to the extent that not paid or reimbursed by the proposed transferee or member of the Group.
(e) The Dragging Shareholders shall, in their sole discretion, decide whether to or not to pursue, consummate, postpone or abandon any proposed Transfer and the terms and conditions thereof, provided that such Proposed Sale may only be made if completed within 60 Business Days of the expiry of the date upon which the Drag-Along Notice is served (or, where any anti-trust, regulatory or other third party conditions are required to be satisfied before the Proposed Sale can be completed, by the long-stop date for the satisfaction of such conditions in the Proposed Sale documentation). No Shareholder or any Affiliate of such Shareholder shall have any liability to any other Shareholder or the Group arising from, relating to or in connection with the pursuit, consummation, postponement, abandonment or terms and conditions of any such proposed Transfer except to the extent such Shareholder shall have failed to comply with the provisions of this Clause 5.8.
(f) If the Proposed Sale is not completed within the period set out in Clause 5.8(e) above, the Dragging Shareholders shall promptly return to the Dragged Shareholders all documents (if any) previously delivered in respect of the Proposed Sale, and all the restrictions on Transfer contained in this Agreement with respect to such Shares Securities held or owned by the Shareholders shall once again be in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementeffect.
Appears in 1 contract
Sources: Shareholders' Agreement (Coty Inc.)
Drag Along Right.
(a) In the event that you become the buy-back as provided in Clause 8.5(a) is not completed within a Participating Stockholder Seller pursuant to Section 4.5 period of 180 (one hundred and eighty) days from the expiry of the Stockholders AgreementExtended Exit Period, all Shares issuable in respect of vested “in the money” Options held by you whether or not exercised (including then any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you Investors (for purposes of the calculation set forth in the first sentence of Section 4.5(aas long as they hold at least 5% (five percent) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 Share Capital of the Stockholders AgreementCompany, you shall be required to exercise only the applicable on a Fully Diluted Basis) (“in the money” Options with respect to such Shares in accordance therewithDragging Shareholder”). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not exercisable by written notice to the obligationCompany (“Drag Along Notice”), to cause to be paid to yourequire the carrying out of a Drag Sale, in your capacity as a Drag-Along Sellermanner determined by the Dragging Shareholder in conjunction with an offer received from a Third Party (the “Drag Sale Purchaser”) (including by way of sale of Investment Securities of the Company, sale of Assets of the Company, or a merger or amalgamation), in lieu of such securities described the manner set out in this Clause 8.6, provided that the price (on a per Investment Security basis) payable to all the Shareholders who are being dragged (“Dragged Shareholder(s)”) and the Dragging Shareholder in the preceding sentenceDrag Sale is the same and is such that, unless such Dragged Shareholder consents to otherwise, such Dragged Shareholder receives an amount IRR of at least 15% (fifteen per cent) on its Aggregate Investor Investment (as defined in cash equal SCHEDULE V).
(b) All Parties hereby agree that if they are a Dragged Shareholder, they shall: (a) Transfer all (and not less than all, unless agreed otherwise by the Dragged Shareholder) the Investment Securities of the Company held by them to the Fair Market Value Drag Sale Purchaser, in furtherance of such Shares as of a Drag Sale, provided that the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of price (on a per Investment Security basis) offered to the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options Dragged Shareholder shall be treated the same as that offered to the Dragging Shareholder and in accordance with Clause 8.6 and the applicable award agreementDragging Shareholder Transfers all its Investment Securities to the Drag Sale Purchaser on the same terms and conditions and the same time as the Transfer by the Dragged Shareholders; (b) vote, as Shareholders of the Company and as holders of Investment Securities, in favour of a Drag Sale; and (c) execute and deliver any and all agreements, certificates, deeds, instruments and other documents reasonably required in connection therewith and to take all other steps requested by the Dragging Shareholder to cause such Drag Sale to be consummated, including, as appropriate, exercising their best efforts to cause their respective nominee Directors to vote, as Directors (subject to the fiduciary duties of such Directors), to approve the Drag Sale.
(c) Upon receipt of the Drag Along Notice, the Company shall forthwith send such notice to all the Dragged Shareholders. A Drag Along Notice shall be revocable by the Dragging Shareholder by written notice to the Company at any time before the completion of the Drag Sale, and any such revocation shall not prohibit the Dragging Shareholders from serving a further Drag Along Notice subject to fresh compliance with the procedure laid down under this Clause 8.6. On receipt of the Drag Along Notice, the Dragged Shareholders hereby agree and undertake not to, directly or indirectly, approach the Drag Sale Purchaser to propose or negotiate any transaction in relation to the securities or Assets of the Company.
(d) The Company and the Promoter agree to provide such access and information as may be requested by the Drag Sale Purchaser, co-operate in any due-diligence conducted by such Drag Sale Purchaser, and provide such (a) representations, warranties and related indemnities with respect to the operations of the Company as are customary for such transactions; and (b) covenant to not compete, as may be required by such Drag Sale Purchaser.
Appears in 1 contract
Sources: Shareholders Agreement
Drag Along Right. In (a) If Parent at any time proposes to sell or dispose of Shares representing more than 50% of the event Shares then outstanding to any Person or Persons other than an Affiliate of Parent (such transferee Person or Persons are hereinafter referred to collectively as the Drag-Along Purchasers), Parent shall have the right (the Drag-Along Right) to require the Stockholder to sell or dispose to the Drag-Along Purchasers such number of outstanding Shares owned by the Stockholder determined in accordance with this Section 3.01 (a Drag-Along Disposition Transaction). Parent shall send a written notice (a Drag-Along Notice) to the Stockholder not less than 30 days prior to the date upon which such sale or disposition is scheduled to close. Each Drag-Along Notice shall (i) specify in reasonable detail all the terms and conditions upon which such sale or disposition is to occur and (ii) make reference to this Section 3.01 and state that you become a Participating the Stockholder Seller is obligated to sell or dispose of its Drag-Along Shares (as defined below) pursuant to Section 4.5 of such sale.
(b) In connection with any Drag- Along Disposition Transaction, (i the Stockholders Agreement, all Shares issuable in respect of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you Stockholder shall be required to exercise only sell or dispose of the number of remaining Shares (the Drag-Along Shares), requested by Parent; provided, however, that the percentage of the total number of remaining Shares then owned by the Stockholder represented by such Drag-Along Shares shall be equal to the percentage of the total number of outstanding Shares then owned by Parent to be sold by Parent. Unless the Stockholder agrees otherwise, the Stockholder shall receive as consideration upon such sale or disposition for his Shares the same type of consideration and the same amount of consideration per share and on the same terms and conditions as are applicable “in to the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant by Parent. The Stockholder shall agree to Section 4.5 of the Stockholders Agreement includes securities same covenants, representations and (y) applicable law would require warranties as Parent agrees to in connection with the provision proposed sale. To the extent the Stockholder is required to you, provide indemnification in your capacity as a Participating Stockholder Seller or connection with the Drag-Along SellerDisposition Transaction, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 monetary indemnification obligations of the Stockholders Agreement, then notwithstanding Section 4.5(f) Stockholder shall be limited to the fair market value of the Stockholders Agreementcash, you, in your capacity as a Participating property and other assets received by the Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders AgreementDrag-Along Disposition Transaction; provided, however, that this limitation shall not apply in respect of any representations, warranties or covenants that are personal in nature to the Sponsor Investor Sellers Stockholder (e.g., title to Shares being transferred).
(c) Each of Parent and each Drag-Along Purchaser shall have the right, but not in its sole discretion, at all times prior to consummation of the obligation, to cause to be paid to you, in your capacity as a proposed Drag-Along SellerDisposition Transaction, in lieu of to abandon or otherwise terminate such securities described in the preceding sentencetransaction, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The and neither Parent nor any Drag-Along Right Purchaser shall have any liability or obligation to the Stockholder with respect thereto by virtue of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood such abandonment or termination; provided, however, that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “promptly pay to the Stockholder his reasonable out-of-the money” vested Options shall be treated pocket costs and expenses (if any) incurred in accordance connection with the applicable award agreementtransaction through the date of abandonment or termination thereof.
Appears in 1 contract
Drag Along Right. In If and to the event that you become extent the pre-emption right under section 17 is not duly exercised, the following shall apply:
18.1 A Selling Shareholder intending to sell all of its Shares to any bona fide third party which must not be an Affiliate of such Selling Shareholder and must be dealing at arm’s length, shall be entitled to require the other Shareholder (“Drag-Along Shareholder”) to sell and transfer all of its Shares (“Dragged Shares”) on the same terms (“Drag-Along Right”) as the Selling Shareholder to the third party.
18.2 To exercise a Participating Stockholder Seller pursuant to Section 4.5 Drag-Along Right, the Selling Shareholder shall request the sale and transfer of the Stockholders AgreementDragged Shares by the Drag-Along Shareholder to the third party by written notice to the Drag-Along Shareholder no later than 30 Business Days following the Purchase Option being delivered to the Drag-Along Shareholder (the “Drag-Along Notice”).
18.3 Within 10 Business Days following the receipt of the Drag-Along Notice, all the Drag-Along Shareholder shall sell its Dragged Shares issuable in respect of vested “to the third party (i) on the same terms and conditions as the Selling Shareholder sells its Shares to the third party but not on terms and conditions less favourable than set out in the money” Options held Purchase Option and (ii) subject to the disposal of its Shares by you whether or not exercised (including any Options the Selling Shareholder to the third party, provided, however, that would vest as a result the liability of the consummation Shareholders under such definitive agreements shall be several and not joint and several.
18.4 Each Shareholder undertakes to take all actions necessary for a sale to the third party following the exercise of the Change Drag-Along Right, according to the provisions of Control Transaction described in Section 4.5 this section.
18.5 The Selling Shareholder shall have a period of 10 Business Days from the date of the Stockholders Agreement) shall constitute Shares held by you for purposes delivery of the calculation Drag-Along Notice to consummate the sale and transfer on the terms and conditions set forth in the first sentence Drag-Along Notice, provided, however, that, if such sale and transfer is subject to governmental or regulatory consents, approvals or clearances (including expiration or termination of Section 4.5(aall applicable waiting periods under applicable law), such 10 Business Days period shall be extended until the expiration of 10 Business Days after all such consents, approvals or clearances (including expiration or termination of all applicable waiting periods under applicable law) have been received, but in no event later than nine months following the date of the Stockholders Agreement (provideddelivery of the Drag-Along Notice. If the sale and transfer shall not have been consummated during such period, notwithstanding anything the Selling Shareholder shall return to the contrary Drag-Along Shareholder any documents in Section 4.5 the possession of the Stockholders AgreementSelling Shareholder executed by the Drag-Along Shareholder in connection with such proposed sale and transfer, you shall be required to exercise only and all the restrictions on transfers of Shares contained in this Agreement or otherwise applicable “in the money” Options at such time with respect to such the Shares shall again be in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementeffect.
Appears in 1 contract
Sources: Shareholders’ and Joint Venture Agreement (Rockwood Holdings, Inc.)
Drag Along Right. In (a) If at any time the event that you become Oaktree Member shall propose to Transfer all, but not less than all, of its Membership Interest in one or a Participating Stockholder Seller pursuant to Section 4.5 series of the Stockholders Agreement, all Shares issuable in respect of vested related transactions (a “in the money” Options held by you whether or not exercised (including any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along SellerSale”) to any Person other than a Permitted Transferee (such Person, as applicablethe “Drag-Along Purchaser”), of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, Oaktree Member shall have the right (the “Drag-Along Right”) to sell Shares require the HC-KBS Member to participate in such proposed Transfer pursuant to Drag-Along Sale by Transferring its entire Membership Interest (which, for purposes of this Section 4.5 8.4, shall include its Profits Interest and all of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the its right, but not title and interest in and to any Additional Equity Loans theretofore made by it) as hereinafter provided.
(b) The Oaktree Member may exercise the obligation, to cause to be paid to you, Drag-Along Right in your capacity as connection with a Drag-Along SellerSale by delivering notice thereof (a “Drag-Along Notice”) to the HC-KBS Member not less than 30 days prior to the proposed closing date of such Drag-Along Sale (the “Drag-Along Closing Date”). Any Drag-Along Notice shall state (i) the identity of the Drag-Along Purchaser, (ii) that the Drag-Along Purchaser has agreed to purchase all of the Membership Interests in the Company, (iii) the aggregate purchase price proposed to be paid by the Drag-Along Purchaser (the “Drag-Along Price”), (iv) the other material terms and conditions of the Drag-Along Sale (the “Drag-Along Terms”), (v) the terms of the Drag-Along Purchaser’s financing, if any, and (vi) the proposed Drag-Along Closing Date.
(c) If the Oaktree Member delivers a Drag-Along Notice in accordance with Section 8.4(b), the HC-KBS Member shall take all actions necessary to cause its Membership Interest to be Transferred to the Drag-Along Purchaser in connection with the Drag-Along Sale. Without limiting the generality of the foregoing, in lieu connection with such Drag-Along Sale, the HC-KBS Member shall execute and deliver such agreements as may be reasonably requested by the Oaktree Member (which shall be in all material respects on the same terms as those executed by the Oaktree Member and may include agreements that (i) contain customary representations, warranties, covenants and other agreements with respect to, among other things, the HC-KBS Member’s unencumbered title to its Membership Interest and its power, authority and legal right to Transfer such Membership Interest and (ii) so long as the agreements executed by the Oaktree Member also so provide, provide ________________________________________________________________________________________________________________________ for contingent or deferred payment of such securities described a portion of the aggregate purchase price and the establishment of an escrow account or other form of holdback in connection therewith). At the preceding sentenceclosing of the proposed Drag-Along Sale (the date, an amount in cash equal time and location of which shall be confirmed by the Oaktree Member and provided to the Fair Market Value HC-KBS Member in writing at least five days prior thereto), the HC-KBS Member shall deliver written instruments of transfer in form and substance satisfactory to the Drag-Along Purchaser, duly executed by the HC-KBS Member, conveying its entire Membership Interest free and clear of any and all Liens, together with any certificates theretofore issued to evidence such Shares Membership Interest, and take such other actions as of may be reasonably requested by the date Oaktree Member in connection with such securities otherwise would have been issued in exchange for such SharesDrag-Along Sale. The Drag-Along Right Price, after payment of all of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “reasonable out-of-pocket fees and expenses incurred by the money” vested Options Oaktree Member and the HC-KBS Member in connection with the Drag-Along Sale, shall be treated allocated between the Oaktree Member and the HC-KBS Member in the same manner as distributions would be made to them pursuant to Section 5.2 if the Company were dissolved, its affairs wound up, its assets sold for an amount equal to the Drag-Along Price (increased by any liabilities of the Company), all Company liabilities were then satisfied, and the net assets of the Company were distributed to the Members in accordance with the applicable award agreementSection 5.2.
Appears in 1 contract
Sources: Limited Liability Company Agreement (KBS Real Estate Investment Trust, Inc.)
Drag Along Right. In the event that you become a Participating Stockholder Seller pursuant the Members holding at least 85% of Voting Interests (the “Drag Along Holders”) determine to Section 4.5 sell or otherwise dispose of all or substantially all of the Stockholders Agreement, all Shares issuable in respect of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result assets of the consummation Company or all or fifty percent (50%) or more of the Change of Control Transaction described Voting Interests, in Section 4.5 each case in a transaction constituting a change in control of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(aCompany, to any non-Affiliate(s) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents the Drag Along Holders, or subsidiaries, such securities to cause the Company to merge with or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(finto or consolidate with any non-Affiliate(s) of the Stockholders AgreementCompany or any of the Drag Along Holders (in each case, youthe “Drag Along Buyer”) in a bona fide negotiated transaction (a “Drag Along Sale”), each of the Members, including any of its successors as contemplated herein, shall be obligated to and shall upon the written request of the Drag Along Holders: (a) sell, transfer and deliver, or cause to be sold, transferred and delivered, to the Drag Along Buyer, its Interests on substantially the same terms applicable to the Drag Along Holders; and (b) execute and deliver such instruments of conveyance and transfer and take such other action, including voting such Interests, if applicable, in your capacity as a Participating Stockholder Seller favor of any Drag Along Sale proposed by the Drag Along Holders and executing any purchase agreements, merger agreements, indemnity agreements, escrow agreements or Drag- Along Sellerrelated documents, as applicablethe Drag Along Holders or the Drag Along Buyer may reasonably require in order to carry out the terms and provisions of this Section 12.3, provided that NAV CANADA US Subsidiary shall have the right to sell Shares elect that NAV CANADA US Subsidiary Stockholder participate in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, Sale by selling its NAV CANADA US Subsidiary stock (and/or the equity of any direct or indirect corporate parent of NAV CANADA US Subsidiary whose only asset is ownership of NAV CANADA US Subsidiary) to the prospective buyer in lieu of a transfer of NAV CANADA US Subsidiary’s Interests thereto, and the purchase price payable by the prospective buyer for such securities described in the preceding sentence, an amount in cash NAV CANADA US Subsidiary stock shall be equal to the Fair Market Value of such Shares as of the date such securities otherwise price that would have been issued payable in exchange for such Sharesthe Drag Along Sale with respect to NAV CANADA US Subsidiary’s Interests. The Drag-Along Right of the Sponsors obligations under this Section 12.3 shall terminate upon the earlier to occur occurrence of (i) an a Qualified IPO and (ii) a Liquidity Event. The Drag-Along Right or the consolidation, liquidation, winding up or Dissolution of the Sponsors shall not include a right Company pursuant to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then Article 10. *** Certain confidential information contained in effect between you this document, marked by brackets, has been omitted and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance filed separately with the applicable award agreement.Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 74
Appears in 1 contract
Sources: Limited Liability Company Agreement (Iridium Communications Inc.)
Drag Along Right. In the event that you become a Participating Stockholder Seller pursuant to Section 4.5 of the Stockholders Agreement, all Shares issuable in respect of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding Notwithstanding anything to the contrary set forth in Section 4.5 of the Stockholders this Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, REIT LP shall have the right to sell Shares deliver a notice (a “Drag Along Notice”), in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligationits sole discretion, to cause the Potential Participating Members electing to be paid require the Potential Participating Members to you, in your capacity as Transfer their entire Membership Interests to any Purchaser for a purchase price equal to the Drag-Along Seller, in lieu of such securities described in Purchase Price (as defined below) and otherwise on the preceding sentence, an amount in cash equal terms and conditions pursuant to which the REIT LP shall Transfer its entire Membership Interests to the Fair Market Value same Purchaser pursuant to Article 21(a). If the REIT LP shall deliver a Drag Along Notice, then the Potential Participating Members shall be obligated to Transfer its Membership Interests as and when required by the REIT LP in accordance with this Article or, at the REIT LP’s election, the REIT LP may deliver one or more deeds (and/or other instruments of conveyance) to the Company’s assets or otherwise structure such Shares Transfer as an asset sale rather than a sale of Membership Interests, provided that any asset sale shall not prejudice the date such securities otherwise would have been issued in exchange for such SharesPotential Participating Members. The “Drag-Along Right Purchase Price” shall be calculated in the same manner as the calculation of the Sponsors shall terminate upon amount payable to the earlier to occur of (i) an IPO and (ii) Potential Participating Members in connection with a Liquidity Event. The Drag-Along Right Transfer of the Sponsors Potential Participating Members’ interest in accordance with Article 21(a). Notwithstanding anything herein to the contrary, in the event any proposed Transfer by the REIT LP is not to a third party purchaser pursuant to a bona fide purchase and sale offer, then the REIT LP shall not include a have no right to require you deliver a Drag Along Notice to sign the Potential Participating Members. Anything to the contrary set forth herein notwithstanding, in the event that a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you Drag Along Notice is delivered and the Company or one proposed sale transaction is consummated, all of its parents or subsidiaries shall not terminate solely as a result the net proceeds generated by the sale of such Transfer). Any unvested or “out-of-the money” vested Options interests of the REIT LP and the Potential Participating Members shall be treated distributed in accordance with the applicable award agreementprovisions of Article 11 of this Agreement. In no event however will any of the Potential Participating Member’s Principals or any of their Affiliates be subjected to any personal liability as part of any transaction that is the subject of a Drag Along Notice, other than if requested by the Purchaser to provide personal indemnification from one or more of the Potential Participating Member Principals for the breach of any representations (i) regarding their authority to enter into any transaction documents to effectuate a sale of their Membership Interests, or (ii) regarding their ownership of such interests and/or the lack of any encumbrances thereon.
Appears in 1 contract
Sources: Limited Liability Company Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.)
Drag Along Right. (a) (i) In the event case that you become a Participating Stockholder Seller pursuant to Section 4.5 of the Stockholders Agreement, all Shares issuable in respect of vested “in the money” Options held by you whether or not exercised (including any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company Dolphin or any of its parents Affiliates do not pay the Put Option (as such term is defined below) within 90 days of its exercise by EDFI, or subsidiaries, (ii) in case EDENOR defaults in the payment of any fees due under the Technical Assistance Agreement and any such securities or default under the issuer thereof that Technical Assistance Agreement is not otherwise remedied within 45 days of EDENOR and Dolphin having received a written default notice from EDFI, EDFI shall have, for a period of 12 months from the last date in which Dolphin could have paid the Put Option in case (i), and for a period of 12 months from the date of such payment default in case (ii), a right to sell to a bona fide third party all of NEV’s Shares, Dolphin Energia’s shares in EASA, and IEASA’s shares in EASA (the “Drag-Along Right”). Dolphin hereby agrees and Dolphin shall cause EASA to agree (and by executing this Shareholders Agreement irrevocably grants to EDFI the required powers of attorney, in the form attached hereto as Exhibit B, Exhibit C and Exhibit D respectively) that, if requested by EDFI pursuant to this Section 6.02(a), Dolphin and EASA will transfer to such bona fide third party, all of NEV’s Shares, Dolphin Energy’s shares in EASA and IEASA’s shares in EASA receiving the same terms and conditions (including time of payment and form of consideration) as to be paid and given to EDFI, provided for that the price of Dolphin’s EASA shares shall be adjusted if applicable based on any net debt that EASA may have. Upon completion of such Transfer pursuant to Section 4.5 transfer all rights and obligations of the Stockholders Agreementparties under the Put Option shall be extinguished.
(b) In connection with the Drag-Along Right, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, EDFI shall have the right to sell cause EDENOR, EASA and NEV to provide EDFI’s legal and financial advisors and any potential buyers with reasonable access subject to a Confidentiality Agreement; to EDENOR’s, EASA’s and NEV’s officers, advisors, auditors, legal counsel, operations and books and records of the companies in order to consummate a sale process of its Shares subject to the Drag-Along Right.
(c) EDFI will give notice (the “Drag-Along Notice”) to Dolphin Energia and/or EASA and/or NEV and/or IEASA as the case may be, of any proposed transfer giving rise to the tights of EDFI set forth in Section 6.02(a). The Drag-Along Notice will set forth, the name and address of the third party and the proposed amount and form of consideration. EDFI will notify Dolphin at least 30 days in advance of entering into a definitive agreement in connection with such proposed Transfer offer. In any such agreement, Dolphin will be required to pay its proportionate share of the costs incurred in connection with such transfer to the extent not paid or reimbursed by the third party. Such Drag-Along Notice may be amended at any time by EDFI and shall remain valid for the 12-month time-period contemplated in Section 6.02(a), subject to Section 6.02(d).
(d) Notwithstanding the above, in case that the Drag-Along Right is exercised pursuant to Section 4.5 of 6.02(a) above and the Stockholders Agreement; providedconsideration for the Shares offered by the third party were less than the Put Option Exercise Price (as such term is defined below), that then the Sponsor Investor Sellers Drag-Along Notice shall also constitute an irrevocable offer to sell EDFI’s Shares (the “Offered Equity”) for the same consideration and on the same terms and conditions set forth by the third party. In such case, Dolphin shall have the right, but not for a period of 25 days after the obligation, to cause to be paid to you, in your capacity as a Drag-Along SellerNotice is given (the “Response Period”) to purchase, in lieu of such securities described in the preceding sentence, an amount in cash equal pursuant to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of Notice, in whole but not in part, the Sponsors shall terminate upon the earlier to occur of Offered Equity, exercisable by delivering (i) an IPO a written notice to EDFI, within the Response Period, stating therein that all of the Offered Equity will be purchased and (ii) a Liquidity EventStand-By Letter of Credit supporting the obligation of Dolphin to pay in full the purchase price for the Offered Equity. The Drag-If Dolphin exercises such a right, the Drag Along Right right will no longer be exercised and all right and obligations of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and parties under the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options Put Option shall be treated in accordance with the applicable award agreementextinguished.
Appears in 1 contract
Sources: Shareholders Agreement
Drag Along Right. (a) In the event that you become a Participating Stockholder Seller pursuant Talecris LLC proposes to Section 4.5 Sell (the “Drag-Along Sale”) all or any portion of the Stockholders AgreementShares held by it to a Third Party in a single transaction or series of related transactions that would result in such Third Party and its Affiliates becoming the beneficial owner, directly or indirectly, of 50% or more of the Fully Diluted Common Shares of the Company, Talecris LLC may require each Employee Holder to participate in such Drag-Along Sale and Sell the same percentage of its Common Shares, as the Fully Diluted Common Shares that would be Sold by Talecris LLC, assuming the conversion, exercise or exchange of all Equity Interests of the Company, represent to the total number of Fully Diluted Common Shares issuable that would be held by Talecris LLC, assuming the conversion, exercise or exchange of all Equity Interests of the Company, on the same terms and conditions and at the same time or times as applicable to Talecris LLC.
(b) Talecris LLC shall, promptly upon determining the terms of the Drag-Along Sale, deliver to Employee Holders written notice (the “Drag-Along Notice”) specifying the material terms of the Drag-Along Sale, including the identity of the purchaser to which the Drag-Along Sale is proposed to be made, the terms per Fully Diluted Common Share of such Sale and the costs expected to be incurred by Talecris LLC in respect connection with such Sale. In connection with any such Sale, each Employee Holder will agree to make or agree to any customary representations, covenants, indemnities and agreements as Talecris LLC so long as they are made severally and not jointly and the liabilities thereunder are borne on a pro rata basis based on the numbers of vested “Fully Diluted Common Shares into which Shares sold by each of Talecris LLC and such Employee Holder are convertible, exercisable or exchangeable.
(c) Each Employee Holder agrees that it will deliver at the closing of the Drag-Along Sale certificates evidencing the Common Shares to be sold by such Employee Holder in the money” Options held Drag-Along Sale duly endorsed in blank or accompanied by you whether or not exercised written instruments of transfer in form reasonably satisfactory to Talecris LLC executed by such Employee Holder, and each Employee Holder shall execute such other documents of transfer that Talecris LLC may reasonably request in order to consummate the Drag-Along Sale at the time specified by Talecris LLC.
(including any Options that would vest as a result d) On the date of the consummation of the Change of Control Transaction described in Section 4.5 Drag-Along Sale, Talecris LLC shall remit or cause to be remitted to each Employee Holder its portion of the Stockholders Agreement) shall constitute consideration for the Common Shares held by you for purposes sold pursuant thereto less its proportionate share of the calculation set forth reasonable and documented costs (including, without limitation, reasonable legal fees and expenses) incurred in connection with such Drag-Along Sale, including costs incurred by the first sentence of Section 4.5(aEmployee Holders, to the extent not paid or reimbursed by the Company or the Third Party.
(e) of the Stockholders Agreement (provided, notwithstanding anything Anything herein to the contrary in Section 4.5 of the Stockholders Agreementnotwithstanding, you Talecris LLC shall be required have no obligation to exercise only the applicable “in the money” Options with respect any Employee Holder to such Sell any Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to this Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity 3.03 as a Participating Stockholder Seller result of any decision by Talecris LLC not to accept or consummate any Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement Sale (it being understood that any existing non-compete agreement then and all such decisions shall be made by Talecris LLC in effect between you and the Company or one of its parents or subsidiaries sole discretion). The Employee Holders shall not terminate solely as be entitled to make any Sale of Common Shares directly to any Third Party pursuant to a result of Drag-Along Sale (it being understood that all such Transfer). Any unvested or “out-of-the money” vested Options Sales shall be treated made only on the terms and pursuant to the procedures set forth in accordance with this Section 3.03).
(f) This Section 3.03 shall terminate immediately prior to the applicable award agreementconsummation of an IPO.
Appears in 1 contract
Sources: Stockholders Agreement (Talecris Biotherapeutics Holdings Corp.)
Drag Along Right. In (a) After the event that you become a Participating Stockholder Seller pursuant to Section 4.5 twenty-four (24)-month anniversary of the Restructuring Closing Date and other than with respect to a Transfer to a Permitted Transferee, if a Stockholder or group of Stockholders Agreementholding a majority of the issued and outstanding Company Securities (together, the “Dragging Holders”) desire to Transfer all Shares issuable in respect or substantially all of vested such Dragging Holders’ Company Securities to an Unaffiliated Person or any Person on an arm’s-length basis (a “Drag-Along Sale”), then if requested by any Dragging Holder, each other Stockholder (a “Dragged Holder”) shall be required to participate in the money” Options held Drag-Along Sale in accordance with this Section 3.5.
(b) No more than ten (10) Business Days after the execution and delivery by you whether all parties thereto of the definitive agreement entered into with respect to the Drag-Along Sale and, in any event, at least fifteen (15) Business Days prior to the proposed closing date thereof, the Dragging Holders shall deliver to each Dragged Holder and to the Company written notice (the “Drag-Along Notice”), setting forth the material terms of the Drag-Along Sale, including the consideration to be paid by the purchaser for the Company Securities. The consideration to be received by a Dragged Holder in the Drag-Along Sale shall be the same form and amount of consideration per Unit to be received by the Dragging Holders, and the terms and conditions of such sale shall be the same as those upon which the Dragging Holders sell their Company Securities.
(c) Each Stockholder agrees to (i) refrain from the exercise of dissenters rights, approval rights, appraisal rights or not exercised similar rights at any time with respect to the Drag-Along Sale, (ii) consent to and raise no objections to the Drag-Along Sale, including asserting any Options that would vest claim or commencing any suit premised on a breach of fiduciary duty (or aiding and abetting thereof) by a Stockholder or any of its Affiliates in connection with the Drag-Along Sale and (iii) to the extent a Drag-Along Sale is structured as a result merger or consolidation, each Stockholder shall vote any shares of Common Stock which it has the right to vote to approve such merger or consolidation, whether by written consent or at a stockholders’ meeting, and waive all dissenters rights, approval rights and similar rights in connection with such merger or consolidation. In addition, each Dragged Holder and the Company shall take all other action reasonably necessary or desirable to cause the consummation of the Change of Control Transaction described in Section 4.5 Drag-Along Sale. Without limitation of the Stockholders Agreementforegoing, at least ten (10) shall constitute Shares held by you for purposes Business Days prior to the proposed closing date of the calculation set forth Drag-Along Sale, each Dragged Holder shall deliver to the Company to hold in the first sentence of Section 4.5(a) escrow pending transfer of the Stockholders Agreement consideration therefor, any agreements or other documents reasonably requested of such Dragged Holder to consummate such Drag-Along Sale. Upon the consummation of the Drag-Along Sale, the acquiring Person shall pay directly to each Dragged Holder, by wire transfer of immediately available funds, the purchase price for the Company Securities sold by such Dragged Holder pursuant thereto.
(providedd) All Dragged Holders holding currently vested and exercisable options or warrants to acquire Common Stock shall be required, notwithstanding anything at the Board’s discretion, to either (i) exercise such options or warrants prior to the contrary in Section 4.5 consummation of the Stockholders Drag-Along Sale and participate in such sale as holders of such class of Common Stock or (ii) upon the consummation of the sale, receive in exchange for such options or warrants consideration equal to the amount determined by multiplying (A) the same amount of consideration per share of such Stock received by the holders of such class of Common Stock in connection with the sale less the exercise price per share of Common Stock of such options or warrants to acquire such Common Stock by (B) the number of shares of Common Stock represented by such then currently vested and exercisable options or warrants, subject to the same adjustments, escrows and contingent liabilities as such class of Common Stock. Each Dragged Holder hereby appoints the Dragging Holders and any designee thereof, each of them individually, its proxy and attorney-in-fact, with full power of substitution and resubstitution to vote or act by written consent with respect to all of such Dragged Holder’s shares of Common Stock which it has the right to vote (i) in accordance with this Section 3.5 and (ii) to sign its name (as a Stockholder) to any consent, certificate or other document relating to the Company that the law of the State of Delaware may permit or require solely to fulfill the requirements of this Section 3.5. This proxy is given to secure the performance of the duties and obligations of such Dragged Holder under this Section 3.5. Each Dragged Holder affirms that the proxy granted hereunder is coupled with an interest and is irrevocable until termination of this Agreement, you whereupon such proxy and power of attorney will automatically terminate.
(e) In connection with the Drag-Along Sale, each Dragged Holder shall (i) agree to make, or agree to, customary representations and warranties regarding such Dragged Holder’s legal status and authority and ownership of the Company Securities being Transferred and customary indemnities on a several but not joint basis regarding the same and (ii) not be required to exercise only agree to any non-competition, non-solicitation or similar restrictive covenants other than confidentiality and employee non-solicitation or to indemnify or contribute any amount in excess of the applicable “total purchase price received by such Dragged Holder in any such Drag-Along Sale.
(f) Each Dragged Holder shall bear a pro rata share of the fees and expenses incurred by the Company in connection with any Drag-Along Sale, in each case, based on the proceeds to be received by such Dragged Holder. To the extent any Dragged Holder is required to provide indemnification in connection with the Drag-Along Sale, the indemnification obligations of such Dragged Holder shall be (i) several and not joint, (ii) no less favorable to such Dragged Holder than that resulting from pro rata indemnification among all the Dragged Holders (other than with respect to indemnification arising from breaches of customary representations relating to such Dragged Holder’s ownership of Company Securities and authority) and the Dragging Holders based on the proceeds to be received by such Dragged Holder or Dragging Holder in the money” Options Drag-Along Sale and (iii) limited to the aggregate proceeds received by such Dragged Holder in such Drag-Along Sale except in cases of fraud with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares customary representations relating to be sold pursuant to Section 4.5 such Dragged Holder’s ownership of the Stockholders Agreement includes securities Company Securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementauthority.
Appears in 1 contract
Drag Along Right. In the event that you become If holders of a Participating Stockholder Seller pursuant to Section 4.5 majority of the Stockholders Agreement, all Shares issuable in respect outstanding class B common stock of vested the Company (the “Class B Majority”) consent to engage in the money” Options held by you whether or not exercised (including any Options that would vest as a result Sale of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement Company (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewithas defined below). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, Class B Majority shall have the right to sell Shares require all of the remaining stockholders of the Company (the “Remaining Stockholders”) to participate in such proposed Transfer pursuant to Section 4.5 Sale of the Stockholders Agreement; providedCompany on a pro rata basis and otherwise on the same terms and conditions as those agreed to by the Class B Majority (“Drag-Along Rights”). If the Class B Majority elect to exercise their Drag-Along Rights in connection with such a transaction, that they shall deliver, or instruct the Sponsor Investor Sellers Company to deliver, a notice to each Remaining Stockholder (“Drag-Along Notice”), setting forth the terms of the transaction, including the proposed closing date for its consummation, which shall not be less than twenty (20) days from the date of such Drag-Along Notice, and all documents required to be executed by each Remaining Stockholder in order to consummate such transaction. Each Remaining Stockholder shall deliver to the Class B Majority, within ten (10) days of receipt of such Drag-Along Notice, a countersigned copy of such Drag-Along Notice and all such other documents previously furnished to such Remaining Stockholder for execution in connection with such transaction. If any Remaining Stockholder fails to execute and deliver such Drag-Along Notice and other documents within such ten-day period, then any officer of the Company shall have the rightauthority to execute such Drag-Along Notice and other documents on behalf of such Remaining Stockholder, but not and the obligationprovisions of this Section 12 shall constitute the granting to such officer of a power of attorney on behalf of such Remaining Stockholder to execute and deliver any and all such documents. The Class B Majority shall cause to be remitted to each Remaining Stockholder the proceeds of such Sale of the Company attributable to the Remaining Stockholder’s shares of common stock on the closing date of such sale. Each Remaining Stockholder hereby irrevocably and unconditionally waives, and agrees to cause to be paid waived and to youprevent the exercise of, in your capacity as a Drag-Along Sellerany rights of appraisal, in lieu of such securities described in the preceding sentence, an amount in cash equal any dissenters’ rights and any similar rights relating to the Fair Market Value of such Shares as Sale of the date Company or any related transaction that such securities otherwise would Remaining Stockholder or any other person may have been issued in exchange for such Sharesby virtue of, or with respect to, any shares of Company common stock owned by the Remaining Stockholder. The Drag-Along Right For purposes of this Section 12, “Sale of the Sponsors Company” shall terminate upon mean each of the earlier to occur of following events: (a) merger or consolidation in which (i) an IPO and the Company is a constituent party or (ii) a Liquidity Event. The Drag-Along Right subsidiary of the Sponsors shall not include Company is a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you constituent party and the Company or one issues shares of its parents common stock pursuant to such merger or subsidiaries consolidation, except any such merger or consolidation involving the Company or a subsidiary in which the shares of common stock of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for common stock that represents, immediately following such merger or consolidation, at least a majority, by voting power, of (1) the surviving or resulting company; or (2) if the surviving or resulting company is a wholly owned subsidiary of another company immediately following such merger or consolidation, the parent company of such surviving or resulting company (provided that, for the purpose of this Subsection (a), all Common Stock issuable upon exercise of options outstanding immediately prior to such merger or consolidation or upon conversion of convertible securities outstanding immediately prior to such merger or consolidation shall not terminate solely be deemed to be outstanding immediately prior to such merger or consolidation and, if applicable, converted or exchanged in such merger or consolidation on the same terms as the actual outstanding Common Units are converted or exchanged); (b) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all or a significant portion of the assets of the Company and its subsidiaries, taken as a result whole, or the sale or disposition (whether by merger, consolidation or otherwise) of one (1) or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such Transfer). Any unvested subsidiary or “out-of-subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the money” vested Options shall be treated in accordance with the applicable award agreementCompany.
Appears in 1 contract
Sources: Subscription Agreement
Drag Along Right. (1) In the event that you become AGTPL accepts a Participating Stockholder Seller pursuant Third Party Purchase Offer with respect to Section 4.5 the entire extent of the Stockholders Agreement, all Shares issuable in respect of vested “AGTPL’s shareholding in the money” Options held by you whether or not exercised (including any Options that would vest as Company and proposes to Transfer the Sale Shares to a result third party purchaser, AGTPL shall have the right to drag along PTC, only for their entire shareholding on a Fully Diluted Basis and PTC shall have the obligation to offer their shares to the third party purchaser on the terms and conditions set out in this Article 172. However, prior to exercising its Drag along Right, AGTPL shall provide GEPL an opportunity to purchase the entire extent of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of PTC on the calculation set forth same terms as stated in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith)Drag Along Notice. In the event that GEPL does not exercise its right to purchase the entire extent of PTC’s shares and make payment to PTC for the same on the terms stated in the Drag Along Notice within 7 (xSeven) days from the consideration payable for Shares date of receipt of the Drag Along Notice, AGTPL shall be free to exercise its Drag Along Right and to require PTC to transfer the entire extent of shares held by PTC to the purchaser on the same terms as stated in the Drag Along Notice. Within 5 (Five) Business Days of agreeing to Transfer its shareholding in SUL to a third party purchaser, AGTPL shall send a written notice (“Drag Along Notice”) to PTC and GEPL, setting forth in detail the terms of the proposed sale, including the name(s) of the third party purchaser(s) to whom the proposed sale is to be sold pursuant to Section 4.5 made, price per share (“Drag Price”) payable by the third party purchaser, date of the Stockholders Agreement includes securities proposed sale (which shall not be less than 7 (Seven) days from the date of receipt of the Drag Notice by PTC), and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, number of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise shares required to be provided for offered by PTC to such Transfer third party purchaser (“Drag Shares”).
(2) PTC shall be obligated to sell their shares pursuant to Section 4.5 the Drag Along Notice only if all the following conditions are met with:
(a) The Drag Price is not less than the fair value of the Stockholders Agreement, then notwithstanding Section 4.5(f) Company divided by the total number of shares of the Stockholders Agreement, you, Company on a Fully Diluted Basis (which in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, any case shall not be less than the par value).
(b) The fair value shall have been determined by any one of the right to sell Shares in such proposed Transfer top four international accounting firms (“Price Determination”) which should also reflect valuation pursuant to Section 4.5 sale of majority stake.
(3) Within 10 (Ten) Business Days from the date of receipt of the Stockholders Agreement; providedDrag Along Notice, that the Sponsor Investor Sellers PTC shall have the right, but not the obligation, be obliged to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO Transfer, in the manner required under Applicable Law, such number of Drag Shares held by them to such third party purchaser on the terms and conditions mentioned in the Drag Along Notice, and (ii) a Liquidity Event. The Drag-Along Right of take all such necessary action to cause the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result consummation of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreement.
Appears in 1 contract
Sources: Shareholder Agreements
Drag Along Right. In (a) Subject to the event that you become provisions of Section 2.5, following the sixth anniversary of the Closing Date and so long as the Company has not completed an IPO, if the CD&R Investors, on the one hand, or the KKR. Investors, on the other hand (as applicable, the “Initiating Stockholder”), desire to Transfer a Participating Stockholder Seller number of shares of Common Stock to a non-Affiliate of such Investor, in a single transaction or series of related transactions (other than Transfers pursuant to Section 4.5 the Registration Rights Agreement or Transfers to any Permitted Transferees of the Stockholders AgreementInitiating Stockholder) such that the transaction would result in a Change of Control (taking into account all interests being “dragged”) (a “Drag Transaction”), all Shares issuable in respect then if requested by the Initiating Stockholder each other Stockholder (together with its Affiliates) (a “Selling Stockholder”) shall be required to sell the same proportion of vested “in its Common Stock as is being Transferred by the money” Options Initiating Stockholder of the Common Stock held by you whether it in such Drag Transaction in accordance with this Section 3.5.
(b) The consideration to be received by a Selling Stockholder shall be the same form and amount of consideration per share to be received by the Initiating Stockholder, and the terms and conditions of such Drag Transaction shall be the same as those upon which the Initiating Stockholder sells its Equity Securities; provided that, without the consent of the Selling Stockholder, the consideration to be received by such Selling Stockholder shall consist solely of cash. In connection with the Drag Transaction, the Selling Stockholder will agree to make or agree to the same customary representations, covenants, indemnities and agreements as the Initiating Stockholder so long as they are made severally and not exercised jointly and the liabilities thereunder are borne on a pro rata basis based on the consideration to be received by each Stockholder; provided, however, that (including i) any Options general indemnity given by the Initiating Stockholder, applicable to liabilities not specific to the Initiating Stockholder, to the purchaser in connection with such sale shall be apportioned among the Selling Stockholders according to the consideration received by each Selling Stockholder and shall not exceed such Selling Stockholder's proceeds from the sale and (ii) any representation relating specifically to a Selling Stockholder shall be made only by that would vest as Selling Stockholder and provided, further, that any representation made by a result Selling Stockholder shall relate only to such Selling Stockholder and its Equity Securities.
(c) Subject to the provisions of Section 2.5, in connection with any Drag Transaction, each Selling Stockholder shall be required to vote, if required by this Agreement or otherwise, its shares of Common Stock in favor of such Drag Transaction at any meeting of the Company's stockholders called to vote on or approve such Drag Transaction and/or to consent in writing to such Drag Transaction, to use its reasonable best efforts to cause any individuals designated by such Selling Stockholder to serve on the Board to vote in favor of such Drag Transaction at any meeting of the Board called to vote on or approve such Drag Transaction and/or to consent in writing to such Drag Transaction, and to waive all dissenters' or appraisal rights, if any, in connection with such Drag Transaction.
(d) The fees and expenses, other than those payable to any Stockholder or any of their respective Affiliates, incurred in connection with a Drag Transaction under this Section 3.5 and for the benefit of all Stockholders (it being understood that costs incurred by or on behalf of a Stockholder for his, her or its sole benefit will not be considered to be for the benefit of all Stockholders), to the extent not paid or reimbursed by the Company or the Transferee or acquiring Person, shall be shared by all the Stockholders on a pro rata basis, based on the consideration received by each Stockholder; provided that no Stockholder shall be obligated to make any out-of-pocket expenditure prior to the consummation of the Change Drag Transaction consummated pursuant to this Section 3.5 (excluding modest expenditures for postage, copies, etc.).
(e) The Initiating Stockholder shall provide written notice (the “Drag Along Notice”) to each other Selling Stockholder of Control any proposed Drag Transaction described as soon as practicable following its exercise of the rights provided in Section 4.5 3.5(a). The Drag Along Sale Notice will include the material terms and conditions of the Drag Transaction, including (i) the name and address of the proposed transferee, (ii) the proposed amount and form of consideration (and if such consideration consists in part or in whole of property other than cash, the Initiating Stockholder will provide such information, to the extent reasonably available to the Initiating Stockholder, relating to such non-cash consideration as the Selling Stockholders Agreementmay reasonably request in order to evaluate such non-cash consideration, provided, however that the provision of such information (or lack thereof) shall constitute Shares not require a Selling Stockholder to accept such non-cash consideration without its prior consent) and (iii) the proposed Transfer date, if known. The Initiating Stockholder will deliver or cause to be delivered to each Selling Stockholder copies of all transaction documents relating to the Drag Transaction promptly as the same become available.
(f) If any holders of Equity Securities of any class are given an option as to the form and amount of consideration to be received, all holders of Equity Securities of such class will be given the same option.
(g) At least five Business Days prior to the consummation of the Drag Transaction, each Selling Stockholder shall deliver to the Company to hold in escrow pending transfer of the consideration therefor, the duly endorsed certificate or certificates representing the Equity Securities held by you for purposes such Selling Stockholder to be sold, and a stock power and limited power-of-attorney authorizing the Company to take all actions necessary to sell or otherwise dispose of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith)securities. In the event that a Selling Stockholder should fail to deliver the Equity Securities, the Company shall cause the books and records of the Company to show that such Equity Securities are bound by the provisions of this Section 3.5 and that such securities may only be Transferred to the purchaser in such Drag Transaction.
(h) Any Selling Stockholder whose assets (“Plan Assets”) constitute assets of one or more employee benefit plans and are subject to Part IV of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), shall not be obligated to sell to any Person to whom the sale of any Equity Securities would constitute a non-exempt “prohibited transaction” within the meaning of ERISA or the Code, provided, however, that if so requested by the Section 3.5 Transferring Stockholder(s): (i) such Selling Stockholder shall have taken commercially reasonable efforts to (x) the consideration payable for Shares structure its sale of Equity Securities so as not to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and constitute a non-exempt “prohibited transaction” or (y) applicable law would require obtain a ruling from the provision Department of Labor to you, in your capacity the effect that such sale (as a Participating Stockholder Seller originally proposed or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer restructured pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(fclause (i)(x)) of the Stockholders Agreement, you, in your capacity as does not constitute a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Dragnon-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO exempt “prohibited transaction” and (ii) a Liquidity Event. The Drag-Along Right such Selling Stockholder shall have delivered an opinion of counsel (which opinion and counsel are reasonably satisfactory to the Sponsors shall not include a right Section 3.5 Transferring Stockholder(s)) to require you the effect that such sale (as originally proposed or as restructured pursuant to sign clause (i)(x)) would constitute a non-compete agreement exempt “prohibited transaction.”
(it being understood that any existing non-compete agreement then in effect between you i) Upon the consummation of the Drag Transaction, the acquiring Person shall remit directly to the Selling Stockholder, by wire transfer if available and if requested by the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-Selling Stockholder, the money” vested Options shall be treated in accordance with consideration for the applicable award agreementsecurities sold pursuant thereto.
Appears in 1 contract
Drag Along Right. In (a) So long as the event that you become Company has not completed an IPO, subject to Section 2.8(a), if (i) on or prior to the third anniversary of the Closing Date the Principal Investors acting unanimously or (ii) following the third anniversary of the Closing Date the Requisite Investors (the “Initiating Stockholders”), desire to Transfer (the “Drag-Along Transfer”) a Participating Stockholder Seller number of Equity Securities to a (x) non-Affiliate of any such Investor and its Affiliates or (y) to a Person in which any such Investor, together with its Affiliates, holds no more than 20% of the outstanding equity interests, in a single transaction or series of related transactions (other than Transfers pursuant to Section 4.5 the Registration Rights Agreement or Transfers to any Permitted Transferees of the Initiating Stockholders), including a merger, consolidation or similar transaction, such that the transaction or series of transactions would result in a Change of Control (taking into account all interests being “dragged”) (a “Drag Transaction”), then if requested by the Initiating Stockholders each other Stockholder (together with its Affiliates) (a “Selling Stockholder”) shall be required to sell the same proportion of its Equity Securities as is being Transferred by the Initiating Stockholders of the Equity Securities held by them in such Drag Transaction in accordance with this Section 3.5.
(b) The consideration to be received by a Selling Stockholder shall be the same form and amount of consideration per share to be received by the Initiating Stockholders, and the terms and conditions of such Drag Transaction shall be the same as those upon which the Initiating Stockholders sells its Equity Securities. In connection with the Drag Transaction, the Selling Stockholder will agree to make or agree to the same customary representations, covenants, indemnities and agreements as the Initiating Stockholders so long as they are made severally and not jointly and the liabilities thereunder are borne on a pro rata basis based on the consideration to be received by each Stockholder; provided, however, that (i) any general indemnity given by the Initiating Stockholders, applicable to liabilities not specific to the Initiating Stockholders, to the purchaser in connection with such sale shall be apportioned among the Initiating Stockholders and the Selling Stockholders according to the consideration received by each such Initiating Stockholder and Selling Stockholder and shall not exceed such Initiating Stockholder’s or Selling Stockholder’s proceeds from the sale, (ii) any representation relating specifically to a Stockholder and/or its ownership of the Equity Securities to be Transferred shall be made only by such Stockholder and (iii) in no event shall any such Stockholder be obligated to agree to any non-competition covenant, employee non-solicit covenant or other similar agreement restricting the business operations of the Stockholder as a condition to participating in such Transfer.
(c) Subject to the provisions of Section 2.4, in connection with any Drag Transaction, each Selling Stockholder shall be required to vote, if required by this Agreement, the Initiating Stockholders or otherwise, its shares of Voting Securities in favor of such Drag Transaction at any meeting of the Company’s stockholders called to vote on or approve such Drag Transaction and/or to consent in writing to such Drag Transaction, to use its reasonable best efforts to cause any individuals designated by such Selling Stockholder to serve on the Board to vote in favor of such Drag Transaction at any meeting of the Board called to vote on or approve such Drag Transaction and/or to consent in writing to such Drag Transaction, and to waive all Shares issuable appraisal rights, if any, in connection with such Drag Transaction.
(d) The fees and expenses, other than those payable to any Stockholder or any of their respective Affiliates, incurred in connection with a Drag Transaction under this Section 3.5 and for the benefit of all Stockholders (it being understood that costs incurred by or on behalf of a Stockholder for his, her or its sole benefit will not be considered to be for the benefit of all Stockholders), to the extent not paid or reimbursed by the Company or the Transferee or acquiring Person, shall be shared by all the Stockholders on a pro rata basis, based on the consideration received by each Stockholder; provided that no Stockholder shall be obligated to make any out-of-pocket expenditure in respect of vested “in the money” Options held by you whether such fees or not exercised (including any Options that would vest as a result of expenses prior to the consummation of the Change Drag Transaction (excluding de minimis expenditures).
(e) The Initiating Stockholders shall provide written notice (the “Drag-Along Notice”) to each other Selling Stockholder of Control any proposed Drag Transaction described as soon as practicable following its exercise of the rights provided in Section 4.5 3.5(a). The Drag-Along Notice will include the material terms and conditions of the Drag Transaction, including (i) the name and address of the proposed transferee, (ii) the proposed amount and form of consideration (and if such consideration consists in part or in whole of property other than cash, the Initiating Stockholders Agreementwill provide such information, to the extent reasonably available to the Initiating Stockholders, relating to such non-cash consideration as the Selling Stockholders may reasonably request in order to evaluate such non-cash consideration and (iii) the proposed Transfer date, if known. The Initiating Stockholders will deliver or cause to be delivered to each Selling Stockholder copies of all transaction documents relating to the Drag Transaction promptly as the same become available.
(f) If any holders of Equity Securities of any class are given an option as to the form and amount of consideration to be received, all holders of Equity Securities of such class will be given the same option.
(g) At least five Business Days prior to the consummation of the Drag Transaction, each Selling Stockholder shall constitute Shares deliver to the Company to hold in escrow pending transfer of the consideration therefor, the duly endorsed certificate or certificates representing the Equity Securities held by you for purposes of the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (providedsuch Selling Stockholder to be sold, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith)and a stock power. In the event that a Selling Stockholder should fail to deliver such Equity Securities, the Company shall cause the books and records of the Company to show that such securities are bound by the provisions of this Section 3.5 and that such securities may only be Transferred to the purchaser in such Drag Transaction.
(h) Any Selling Stockholder whose assets (“Plan Assets”) constitute assets of one or more employee benefit plans and are subject to Part IV of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), shall not be obligated to sell to any Person to whom the sale of any Equity Securities would constitute a non-exempt “prohibited transaction” within the meaning of ERISA or the Code, provided, however, that if so requested by the Initiating Stockholder(s): (i) such Selling Stockholder shall have taken commercially reasonable efforts to (x) the consideration payable for Shares to be sold pursuant to Section 4.5 structure its sale of the Stockholders Agreement includes securities and Equity Securities so as not to constitute a non-exempt “prohibited transaction” or (y) applicable law would require obtain a ruling from the provision Department of Labor to you, in your capacity the effect that such sale (as a Participating Stockholder Seller originally proposed or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer restructured pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(fclause (i)(x)) of the Stockholders Agreement, you, in your capacity as does not constitute a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Dragnon-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO exempt “prohibited transaction” and (ii) a Liquidity Event. The Drag-Along Right such Selling Stockholder shall have delivered an opinion of counsel (which opinion and counsel are reasonably satisfactory to the Sponsors shall not include a right Initiating Stockholder(s)) to require you the effect that such sale (as originally proposed or as restructured pursuant to sign clause (i)(x)) would constitute a non-compete agreement exempt “prohibited transaction.”
(it being understood that i) Upon the consummation of the Drag Transaction, the acquiring Person shall remit directly to the Selling Stockholder, by wire transfer if available and if requested by such Selling Stockholders, the consideration for the securities sold pursuant thereto.
(j) The Initiating Stockholders shall, in their sole discretion, decide whether or not to pursue, consummate, postpone or abandon any existing non-compete agreement then in effect between you proposed Transfer subject to this Section 3.5 and the terms and conditions hereof. No Stockholder or Affiliate of a Stockholder shall have any liability to any other Stockholder or the Company arising from, relating to or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance connection with the applicable award agreementpursuit, consummation, postponement, abandonment or terms and conditions of any proposed Transfer subject to this Section 3.5, except to the extent such Stockholder shall have failed to comply with the provisions of this Section 3.5.
Appears in 1 contract
Drag Along Right. In (a) If a Stockholder proposes to Transfer to any Purchaser a number of shares of Stock which represents at least a majority of the event outstanding shares of Common Stock on a fully-diluted basis (the "Transferred Shares") then, at the election of such holder or holders (a "Drag Along Seller"), each other Stockholder (each, a "Drag Along Stockholder") shall be required to sell to such Purchaser (a "Drag Along Sale") a number of shares of Stock determined by the Drag Along Seller up to the total number of shares of Stock then held by such Drag Along Stockholder (the "Drag Along Shares"). If the percentage of any Drag Along Stockholder's Stock required to be sold as Drag Along Shares exceeds the percentage of the Drag Along Seller's Stock to be sold to Purchaser in a Drag Along Sale, Drag Along Seller, shall, at its sole expense, arrange for the delivery of a fairness opinion by an investment banking firm of nationally recognized standing acceptable to such Drag Along Stockholder (which acceptance shall not be unreasonably withheld or delayed). Such fairness opinion shall confirm that you become the terms of the Drag Along Sale are fair to the Drag Along Stockholders from a Participating financial point of view.
(b) The Drag Along Seller shall deliver to each Drag Along Stockholder Seller written notice (the "Drag Along Notice") of any sale to be made pursuant to Section 4.5 5.2(a) above, which notice shall set forth the consideration to be paid by the Purchaser for each Transferred Share, the number of Transferred Shares to be sold by the Drag Along Seller, the number of shares to be sold by each Drag Along Stockholder, and the other terms and conditions, if any, of such transaction. Pending consummation of the Stockholders AgreementDrag Along Sale, all Shares issuable in respect the Drag Along Seller shall promptly notify each Drag Along Stockholder of vested “any changes in the money” Options held proposed timing for the Drag Along Sale and any other material developments in connection therewith. The Drag Along Sale shall be on the same terms and conditions as the sale of the Transferred Shares by you whether the Drag Along Seller. The Drag Along Stockholder shall only be required to give representations and warranties as to its due organization, its due authorization and title to the Drag Along Shares and shall only be required to indemnify for breach of its own representations and warranties.
(c) If, within 15 days after the Drag Along Seller provides the Drag Along Notice, no sale of the Transferred Shares owned by the Drag Along Seller or not exercised the Drag Along Stockholder in accordance with the provisions of this Section 5 shall have been completed, the Drag Along Sale shall be terminated for purposes hereof.
(including any Options that would vest as a result of d) Simultaneously with the consummation of the Change of Control Transaction described in Section 4.5 sale of the Stockholders Agreement) Transferred Shares pursuant to this Section 5, the Drag Along Seller shall constitute Shares held by you for purposes of cause the calculation set forth in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything Purchaser to remit directly to the contrary in Section 4.5 of Drag Along Stockholder the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options consideration with respect to the Drag Along Shares and shall furnish such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 other evidence of the Stockholders Agreement includes securities completion and time of completion of such sale and terms and conditions, if any, thereof as may reasonably be requested by the Drag Along Stockholder.
(ye) applicable law would require the provision to youThe provisions of this Section 5, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicablehowever, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then remain in effect between you and the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementfor any subsequent proposed sale.
Appears in 1 contract
Drag Along Right. In If no exit has been provided to the event that you become a Participating Stockholder Seller pursuant Anchor Investors after the expiry of 12 (twelve) months after the Exit Period, the Anchor Investors shall have the right ("Drag Along Right") but not the obligation to Section 4.5 require the other Shareholders or any of them ("Drag Along Parties") to sell all the Stockholders Agreement, all Shares issuable in respect of vested “in the money” Options Securities held by you whether or them on such date and on such terms, including the price for the relevant Securities ("Drag-Along Price"), that the Anchor Investors may have agreed with any bona-fide third party purchaser ("Drag-Along Buyer"). In such event, the Drag Along Parties shall be unconditionally obliged to sell such Securities to the Drag-Along Buyer at the Drag-Along Price and on the same terms and price offered to Anchor Investors. Provided however that the Drag Along Right can be exercised only if Anchor Investors having a shareholding of not exercised less than 66% (including any Options that would vest as a result of the consummation of the Change of Control Transaction described in Section 4.5 of the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation set forth in the first sentence of Section 4.5(asixty-six percent) of the Stockholders Agreement share capital of the Company on a Fully Diluted Basis have agreed and approved of the exercise of the Drag Along Right.
12.5.1 For the purpose of this Clause, the Anchor Investors shall deliver a written notice (provided, notwithstanding anything "Drag-Along Notice") to the contrary in Section 4.5 Drag Along Parties and to the other Shareholders (only for the purpose of information), stating that the Anchor Investors wish to exercise their rights under Clause 12.5 above, and setting forth the name and address of the Stockholders AgreementDrag-Along Buyer, you the number of Securities of the Drag Along Parties proposed to be Transferred to the Drag-Along Buyer, the Drag-Along Price and all material terms and conditions offered by the Drag-Along Buyer.
12.5.2 Upon delivery of a Drag-Along Notice, the Drag Along Parties shall be required to exercise only the applicable “unconditionally and irrevocably Transfer such number of their Securities, as specified in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligationNotice, to cause to be paid to you, in your capacity as a the Drag-Along SellerBuyer, in lieu of such securities described in upon the preceding sentencesame terms and conditions (including, an amount in cash equal to without limitation, the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of Price) as agreed to by the Sponsors Anchor Investors and the Drag- Along Buyer, and shall terminate upon make to the earlier to occur of (i) an IPO and (ii) a Liquidity Event. The Drag-Along Right of Buyer representations, warranties, covenants, indemnities and agreements comparable to those made by the Sponsors Anchor Investors in connection with the Transfer and shall not include a right agree to require you the same conditions to sign a non-compete agreement (the Transfer as the Anchor Investors agree, it being understood that any existing non-compete agreement then in effect between you all such representation, warranties, covenants, indemnities and agreements shall be made by each Drag Along Party and the Company or one of its parents or subsidiaries shall Anchor Investors severally and not terminate solely as a result of such Transfer)jointly. Any unvested or “out-of-the money” vested Options The Drag Along Parties (other than Dvara and Anchor Investors) shall be treated required to Authenticated through Leegality.com (nVVKkrT) SUVALAXMI CHAKRABORTY Date: Fri Sep 24 22:19:02 IST 2021 Authenticated through Leegality.com (nVVKkrT) Samir Amrit Shah Date: Fri Sep 24 20:26:39 IST 2021 Authenticated through Leegality.com (nVVKkrT) Samir Amrit Shah Date: Fri Sep 24 20:26:39 IST 2021 Authenticated through Leegality.com (nVVKkrT) Kshama Fernandes Date: Mon Sep 27 13:51:22 IST 2021 Authenticated through Leegality.com (nVVKkrT) Misty Burns Date: Fri Sep 24 20:31:49 IST 2021 Authenticated through Leegality.com (nVVKkrT) BV Narasimham Date: Sat Sep 25 12:54:12 IST 2021 Authenticated through Leegality.com (nVVKkrT) Jeffrey Hom 43 Date: Wed Sep 29 11:12:06 IST 2021 provide all representations, warranties, undertakings and indemnities in accordance with respect of the applicable award agreementBusiness and operations of the Company to such Drag-Along Buyer.
Appears in 1 contract
Sources: Framework Agreement
Drag Along Right. In the event that you become a Participating Stockholder Seller pursuant (a) Subject to Section 4.5 3.2 and Section 3.4, if Investors with a majority of the Stockholders AgreementInvestor Percentage Interest (the “Dragging Investors”) propose to consummate a Liquidity Event involving a third party that is not an Investor or Affiliate of an Investor (a “Drag Third Party Purchaser”) in exchange for cash and/or freely transferable and marketable Securities (such a transaction, all a “Drag-Along Sale”), then such Dragging Investors shall have the right to require each Investor and each Management Equity Holder to include its Common Shares issuable in such Drag-Along Sale and/or vote its Common Shares and take any other actions in furtherance thereof on the same terms and conditions applicable to the Dragging Investors, including by waiving any appraisal or similar rights with respect of vested “in to the money” Options held Drag-Along Sale and executing any action by you whether or not exercised (including any Options that would vest as a result written consent of the consummation Investors and the Management Equity Holders. Such right shall be exercisable by written notice (a “Buyout Notice”) given to each Investor and Management Equity Holder other than the Dragging Investors that shall state (i) that such Dragging Investors propose to effect the Drag-Along Sale to such Drag Third Party Purchaser, (ii) the name of the Change Drag Third Party Purchaser, and (iii) the purchase price the Drag Third Party Purchaser is paying for the Common Shares and that shall include a copy of Control Transaction described any definitive agreements in Section 4.5 connection with such Drag-Along Sale. Each such Investor and Management Equity Holder agrees that, upon receipt of a Buyout Notice, such Investor or Management Equity Holder shall be obligated to sell all of its Common Shares for the Stockholders Agreement) shall constitute Shares held by you for purposes of the calculation purchase price set forth in the first sentence Buyout Notice (on the same price and with the same (but proportionate) amount of consideration or choice of consideration given to all other Investors) and on the other terms and subject to the conditions of such transaction (and otherwise take all reasonably necessary action to cause consummation of the proposed transaction).
(b) Notwithstanding the foregoing, the Dragging Investors may only require the consummation of an Drag-Along Sale following the delivery of a Buyout Notice if such Drag-Along Sale would result in the receipt of gross aggregate consideration in respect of the Common Shares pursuant to the Drag-Along Sale (taking into account all prior dividends in respect of such Common Shares) sufficient to achieve, in the aggregate with respect to the Common Shares:
(i) prior to the second anniversary of the date hereof, a MOIC of at least [ ]x;
(ii) on or after the second anniversary of the date hereof but prior to the fourth anniversary of the date hereof, a MOIC of at least [ ]x; and
(iii) following the fourth anniversary of the date hereof, a MOIC of at least [ ]x.
(c) The closing of any Drag-Along Sale pursuant to this Section 3.3 shall be held as promptly as practicable and at the time and place specified in the Buyout Notice, but in any event within 180 days after the date the Buyout Notice is delivered to the Investors; provided, that such 180-day period may be extended at the election of the Dragging Investors for a period of up to 90 days to the extent necessary to obtain any regulatory approvals required in connection with the Drag-Along Sale (the “Drag-Along Outside Date”). Consummation of the Transfer of Common Shares by any Investor or Management Equity Holder to the Drag Third Party Purchaser in a Drag-Along Sale (i) shall be conditioned upon consummation of the Transfer by each Dragging Investor to such Drag Third Party Purchaser of the Common Shares proposed to be Transferred by the Dragging Investor and (ii) may be effected by a Transfer of such Common Shares or the merger, consolidation, recapitalization or other combination of the Company with or into the Drag Third Party Purchaser or any of its Affiliates, in one or a series of related transactions. If the proposed Transfer with respect to the applicable Common Shares subject to the Buyout Notice does not meet the requirements of Section 4.5(a3.3(a) prior to the Drag-Along Outside Date, such Dragging Investors shall be deemed to have forfeited their rights to require the other Investors to sell all of their Common Shares to such Drag Third Party Purchaser in connection with such Drag-Along Sale.
(d) In connection with any Transfer pursuant to a Buyout Notice, each Investor and Management Equity Holder shall execute the applicable transaction agreement and make or provide the same representations, warranties, covenants, indemnities, agreements, escrows and holdback arrangements as the Dragging Investors make or provide in connection with the Drag-Along Sale (such representations, warranties, covenants, indemnities, agreements, escrows and holdback arrangements to be set forth in the Buyout Notice); provided, that each Investor and Management Equity Holder shall be obligated to make only individual representations and warranties with respect to its title to and ownership of the Stockholders Agreement (applicable Common Shares, authorization, execution and delivery of relevant documents, enforceability of such documents against such Investor or Management Equity Holder, and other matters relating to such Investor or Management Equity Holder, but not with respect to any of the foregoing with respect to any other Investors or Management Equity Holders or their Common Shares or the Company and its Subsidiaries; provided, notwithstanding anything further, that all representations and warranties in the applicable transaction agreement with respect to the contrary Company and its Subsidiaries shall be made by the Dragging Investors or the Company and the other Investors and Management Equity Holders shall be severally and not jointly liable with respect to any indemnification obligation with respect thereto, and any such indemnification obligation shall be pro rata based on the proceeds received by such Investors and Management Equity Holders, in Section 4.5 of each case, in an amount not to exceed the Stockholders Agreementaggregate proceeds received by such Investors; provided, you further, that in no event shall any Investor be required to enter into a non-compete, non-solicit or other similar restrictive covenant and no Management Equity Holder shall be required to exercise only enter into a non-compete, non-solicit or other similar restrictive covenant that is more restrictive than any such existing arrangement between the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities Management Equity Holder and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any of its parents or subsidiariesSubsidiaries. Any transaction costs, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreementincluding legal, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, accounting and investment banking fees and expenses incurred in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as connection with a Drag-Along Seller, in lieu Sale and for the benefit of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The Drag-Along Right of the Sponsors shall terminate upon the earlier to occur of (i) an IPO all Investors and (ii) a Liquidity Event. The Drag-Along Right of the Sponsors shall not include a right to require you to sign a non-compete agreement Management Equity Holders (it being understood that any existing non-compete agreement then in effect between you costs incurred by or on behalf of an Investor or Management Equity Holder for its sole benefit shall not be considered to be for the benefit of all Investors and Management Equity Holders), shall be paid or reimbursed by the Company or one of its parents or subsidiaries shall not terminate solely as a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementDrag Third Party Purchaser.
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Drag Along Right. In the event that you become a Participating RN Stockholder Seller pursuant to Section 4.5 (for so long as such Stockholder owns at least twenty-five percent (25%) of the Stockholders Agreement, all Shares issuable in respect then outstanding shares of vested “in the money” Options held by you whether or not exercised Voting Stock) and MTVN Stockholder (including any Options that would vest for so long as a result such Stockholder owns at least twenty-five percent (25%) of the consummation then outstanding shares of the Change of Control Transaction described in Section 4.5 of the Stockholders AgreementVoting Stock) shall constitute Shares held by you (for purposes of this Section 3.06, each, an “Original Stockholder”) shall have jointly entered into an agreement with any Person (such Person, a “Drag-Along Purchaser”) regarding the calculation set forth in the first sentence Transfer of Section 4.5(aall of their Voting Stock, an Original Stockholder shall be entitled, at its option, to require each Stockholder holding less than ten percent (10%) of the Stockholders Agreement then outstanding shares of Voting Stock (provided, notwithstanding anything to the contrary in Section 4.5 of the Stockholders Agreement, you shall be required to exercise only the applicable “in the money” Options with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or Drag-Along Seller, as applicable, of any specified information regarding the Company or any Party”) to include all of its parents or subsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares Voting Stock in such proposed Transfer pursuant to Section 4.5 of sale (the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a “Drag-Along Seller, in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such SharesRight”). The Drag-Along Right shall be exercised by written notice (the “Drag-Along Notice”) to the Drag-Along Party, at least thirty (30) days prior to closing of the Sponsors shall terminate upon proposed Transfer, of the earlier to occur identity of the Drag-Along Purchaser, the consideration offered for the transferring Stockholder’s Voting Stock (i) an IPO the “Drag-Along Price”), the terms of the Drag-Along Purchaser’s financing (if any and if known), the anticipated date of closing of the proposed Transfer and any other material terms and conditions of the proposed Transfer (ii) a Liquidity Eventthe “Drag-Along Terms”). The Drag-Along Right Party shall be obligated to sell all of its Voting Stock to the Drag-Along Purchaser on the Drag-Along Terms at a price equal to the product of (x) the ratio of the Sponsors percentage of ownership of Voting Stock then outstanding of the Drag-Along Party over the percentage of ownership of Voting Stock then outstanding of the transferring Stockholder and (y) the Drag-Along Price; provided, however, that the holders of shares of Preferred Stock shall not include a right be entitled to require you be paid the amount determined pursuant to sign a nonSection 3(c) of Article IV of the Charter to the extent applicable. At the closing of such Transfer (which anticipated date, place and time shall be designated in the Drag-compete Along Terms), the Drag-Along Party shall deliver an assignment agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one transferring all of its parents or subsidiaries Voting Stock, duly executed, free and clear of any Liens, against delivery of the purchase price therefor. Each party shall not terminate solely as bear its own expenses in connection with a result of such Transfer). Any unvested or “out-of-the money” vested Options shall be treated in accordance with the applicable award agreementTransfer pursuant to this Section 3.06.
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Drag Along Right. In (a) After the event that you become Closing Date, if the Stockholder Majority elect to effect a Participating Company Sale, then such Stockholder Seller pursuant Majority (the Stockholder Majority in its capacity as such under this Section 3.1(a), the “Drag-Along Representative”) may (but shall not have an obligation to) notify the Management Stockholders (each a “Drag-Along Party”) in writing (the “Drag-Along Notice”) at least fifteen (15) Business Days prior to the consummation of such Company Sale (the “Drag-Along Transaction”). The Drag-Along Notice shall specify the identity of the prospective parties involved in the Drag-Along Transaction, a reasonable summary of the material terms and conditions of the Drag-Along Transaction and a copy of any form of agreement proposed to be executed in connection therewith (but only if available at the time the Drag-Along Notice is delivered). If the Drag-Along Representative delivers such Drag-Along Notice: (A) the Drag-Along Party shall be deemed to approve the proposed Drag-Along Transaction (solely in such Drag-Along Party’s capacity as a Stockholder), (B) subject to Section 4.5 6.8, to the extent any vote or consent to the Drag-Along Transaction is required, the Drag-Along Party shall vote for and consent to such Drag-Along Transaction (including on behalf of all of its Equity Securities and on behalf of all Equity Securities with respect to which the Stockholders AgreementDrag-Along Party has the power to direct the voting thereof) and shall waive any dissenter’s rights, all Shares issuable appraisal rights or similar rights which the Drag-Along Party may have in respect connection therewith, (C) no Drag-Along Party shall raise any objections to the proposed Drag-Along Transaction, (D) the Drag-Along Party shall agree to sell its Drag-Along Pro Rata Share of vested “each class of Equity Securities being sold in such Drag-Along Transaction (or such lesser number of Equity Securities if so designated by the Drag-Along Representative in the money” Options held Drag-Along Notice) on the same terms and conditions as the Stockholder Majority, subject to clause (F) below and Section 3.1, (E) the Drag-Along Party shall execute all documents reasonably required to effectuate such Drag-Along Transaction, as determined by you whether or the Drag-Along Representative in good faith, (F) the Drag-Along Party shall be obligated to provide the same representations, warranties, covenants, agreements, indemnities (on a pro rata basis (but not exercised a joint and several basis); provided that the aggregate liability (including any Options indemnification obligation) of the Drag-Along Party in the Drag-Along Transaction shall not exceed the consideration received by the Drag-Along Party for the sale of its Equity Securities in such transaction, other than in the case of fraud, intentional misrepresentation or willful misconduct on the part of the Drag-Along Party) and other obligations that would vest the Drag-Along Representative agrees to provide in connection with such Drag-Along Transaction (other than any such obligations that relate specifically to a particular holder of Equity Securities, such as a result indemnification with respect to representations and warranties given by such holder regarding such holder’s title to and ownership of such Person’s Equity Securities, which shall be solely the responsibility of such holder), and (G) each Drag-Along Party shall take all other actions reasonably necessary or desirable, as reasonably determined by the Drag-Along Representative, to cause the consummation of such Drag-Along Transaction on the Change terms proposed by the Drag-Along Representative (including, in connection with a Drag-Along Transaction involving a sale of Control Transaction described in Section 4.5 all or substantially all of the Stockholders Agreement) shall constitute Shares held by you for purposes assets of the calculation set forth Company and its Subsidiaries, causing the Company and its Subsidiaries to enter into such agreements and arrangements with the applicable third party purchaser of such assets in the first sentence of Section 4.5(a) of the Stockholders Agreement (provided, notwithstanding anything connection with such Company Sale in a form and on terms and conditions reasonably acceptable to the contrary in Section 4.5 of Drag-Along Representative consistent with the Stockholders Agreementforegoing). Notwithstanding the foregoing, you shall be required to exercise only the applicable “in the money” Options except with respect to such Shares in accordance therewith). In the event that (x) the consideration payable for Shares to be sold pursuant to Section 4.5 of the Stockholders Agreement includes securities and (y) applicable law would require the provision to you, in your capacity as a Participating Stockholder Seller or any Drag-Along Seller, as applicable, Party that is an employee of any specified information regarding the Company or any of its parents or subsidiariesSubsidiaries, such securities or the issuer thereof that is not otherwise required to be provided for such Transfer pursuant to Section 4.5 of the Stockholders Agreement, then notwithstanding Section 4.5(f) of the Stockholders Agreement, you, in your capacity as a Participating Stockholder Seller or Drag- Along Seller, as applicable, shall have the right to sell Shares in such proposed Transfer pursuant to Section 4.5 of the Stockholders Agreement; provided, that the Sponsor Investor Sellers shall have the right, but not the obligation, to cause to be paid to you, in your capacity as a no Drag-Along Seller, Party shall be required to execute agreements in lieu of such securities described in the preceding sentence, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities otherwise would have been issued in exchange for such Shares. The connection with any Drag-Along Right of Transaction containing non-competition, non-solicitation, no-hire and/or and confidentiality provisions which are more restrictive than those entered into by the Sponsors shall terminate upon Stockholders constituting the earlier Stockholder Majority exercising its rights under this Section 3.1; provided that with respect to occur of (i) an IPO and (ii) a Liquidity Event. The any Drag-Along Right Party that is an employee of the Sponsors shall not include a right to require you to sign a non-compete agreement (it being understood that any existing non-compete agreement then in effect between you and the Company or one any of its parents or subsidiaries Subsidiaries, such Drag-Along Party shall not terminate solely as a result only be required to execute agreements in connection with any Drag-Along Transaction containing non-competition, non-solicitation, no-hire and/or and confidentiality provisions to the extent that such provisions are reasonable and customary, in light of the circumstances of the Drag-Along Transaction. As used herein, “Drag-Along Pro Rata Share” of the Drag-Along Party means the number derived by multiplying (x) the total number of Equity Securities of such Transfer). Any unvested or “outclass held by the Drag-ofAlong Party, by (y) a fraction, the numerator of which is the total number of Equity Securities of such class to be sold by the Stockholder Majority triggering this Section 3.1 in the Drag-Along Transaction and the money” vested Options shall be treated in accordance with denominator of which is the applicable award agreementtotal number of the then outstanding Equity Securities of such class held by such Stockholder Majority.
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Sources: Management Stockholders Agreement (Legacy Reserves Inc.)