Drag Along. If the holders of a majority of the shares of the Company’s voting stock then-outstanding (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “Drag-Along Transfer”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”). (a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice. (b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice. (c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto. (d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer. (e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless: (i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency; (ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders); (iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and (iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders. (f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant. (g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 4 contracts
Sources: Stock Option Agreement (Electronic Servitor Publication Network, Inc.), Stock Option Agreement (Electronic Servitor Publication Network, Inc.), Stock Option Agreement (Electronic Servitor Publication Network, Inc.)
Drag Along. (a) If (i) POI Acquisition (for purposes of this Section 4.3, the holders “Selling Stockholder”) receives a bona fide offer from any third party who is not an Affiliate of either the Company or POI Acquisition to purchase (including a majority purchase by merger, consolidation or similar transaction) 100% of the shares Common Shares owned by the Selling Stockholder at such time, (ii) at least 90% of the Company’s voting stock then-outstanding fair market value of the consideration to be received by the Selling Stockholder in such offer is in the form of cash, Cash Equivalents or Marketable Securities and (iii) such offer is accepted by the Selling Stockholder, then QDRF (for purposes of this Section 4.3, the “Majority HoldersOther Stockholder”) propose hereby agrees that, if requested by the Selling Stockholder, it will transfer to sellsuch purchaser, assign or transfersubject to Section 4.3(b), directly or indirectlyon the terms of the offer so accepted by the Selling Stockholder, including time of payment, form of consideration and adjustments to purchase price, all of their shares of capital stock of the Company to any third party (a “Drag-Along Transfer”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”)its Common Shares.
(ab) The Majority Holders shall Selling Stockholder will give written notice (a the “Drag-Along Notice”) at least fifteen to the Other Stockholder of any proposed transfer giving rise to the rights of the Selling Stockholder set forth in Section 4.3(a) (15a “Drag-Along Sale”) not more than 10 days after the execution and delivery by all of the parties thereto of the definitive agreement relating to the Drag-Along Sale and, in any event, no later than 20 days prior to the consummation of closing date for such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Sale. The Drag-Along Rights hereunder, setting Notice will set forth (i) the shares number of Common Shares proposed to be so transferred, (ii) the consideration to be received for such shares, (ii) the identity name of the prospective transfereepurchaser, the proposed amount and (iv) any form of consideration, the number of Common Shares sought and the other material terms and conditions of the proposed transactionoffer. Such notice The Other Stockholder shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for make the same amount representations, warranties, covenants, indemnities and form of consideration per share agreements as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant Selling Stockholder makes in connection with the Drag-Along Transfer are limited Sale (except that in the case of representations, warranties, covenants, indemnities and agreements pertaining specifically to representations the Selling Stockholder, the Other Stockholder shall make the comparable representations, warranties, covenants, indemnities and warranties related agreements pertaining specifically to authorityitself); provided, ownership that all representations, warranties, covenants and indemnities shall be made by the Selling Stockholder and the ability Other Stockholder severally and not jointly and provided further that in the event that at the time of execution of the definitive agreement relating to convey title such Drag-Along Sale the Other Stockholder no longer retains the right to designate the QDRF Designee pursuant to Section 2.1(a), the Other Stockholder shall be required only to make representations, warranties, covenants, indemnities and agreements pertaining specifically to itself consistent with the representations, warranties, covenants, indemnities and agreements pertaining specifically to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to Selling Stockholder. The Other Stockholder will be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms responsible for funding its proportionate share of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person escrow arrangements in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties Sale and covenants of the Company as well as breach by any stockholder for its proportionate share of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability withdrawals therefrom. The Other Stockholder also will be responsible for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy its proportionate share of any representations fees, commissions, adjustments to purchase price and warranties made by the Company, the Majority Holders or the Purchaser expenses in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive Sale. If the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to Sale is not consummated within 90 days from the contrary, there shall be no liability on the part date of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for Notice (subject to extension to obtain any reasonnecessary regulatory approvals), and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Selling Stockholder(s) must deliver another Drag-Along Notice in order to exercise their rights under this Section 4.3 with respect of to such Proposed Drag-Along TransferSale.
Appears in 4 contracts
Sources: Stockholders Agreement (Protection One Alarm Monitoring Inc), Stockholders Agreement (Protection One Inc), Exchange Agreement (Protection One Alarm Monitoring Inc)
Drag Along. (a) If the holders of a majority GM Investor proposes to Transfer more than fifty percent (50%) of the shares of the Company’s voting stock then-issued and outstanding Equity Securities to an Independent Third Party prior to an IPO (the “Majority Holders”other than any Transfer (i) propose as provided in Section 9.08, (ii) in connection with Section 9.10, or (iii) pursuant to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “Drag-Along Transfer”Section 9.12), the Majority Holders may exercise drag-along rights in accordance with and subject GM Investor shall have the right (but not the obligation) to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give deliver a written notice (a such notice, the “Drag-Along Notice”) at least fifteen of its intention to do so to each other Member (15) days prior to the consummation of such proposed “Dragees”). The Drag-Along Transfer to Participant of any election by Notice shall set forth the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the aggregate consideration to be received for such shares, (ii) paid by the identity of Independent Third Party and the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such transaction (a “Drag-Along TransferSale Transaction”), which shall be the same (in all but de minimis and immaterial respects) for the GM Investor and the other Members except as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery otherwise contemplated by this Agreement. Upon receipt of the Drag-Along Notice, Participant each Dragee shall be required to participate in the proposed Transfer in accordance with the terms and conditions of this Section 9.09; provided, that if such Drag-Along Sale Transaction involves less than one hundred percent (100%) of the Shares held by the GM Investor, then each Dragee will only be required to participate in the proposed Transfer to the Independent Third Party with respect to such percentage of each class of its Shares as equals the percentage of the GM Investor’s total Shares being sold in such Drag-Along Sale Transaction (the “Drag Percentage”). If the GM Investor is given an option as to the form and amount of consideration to be received under this Section 9.09, all Dragees shall be given the same option and, otherwise, the ratio of both (i) any cash to any non-cash consideration and (ii) among any type of non-cash property or asset consideration to any other type of non-cash property or asset consideration shall be equal (to the extent reasonably practicable) for each of the GM Investor and the Dragees. Within ten (10) Business Days following receipt of the Drag-Along Notice, each Dragee shall deliver to a representative of the Majority Holders Company or the GM Member designated in the Drag-Along Notice such certificates (if certificated) representing all Shares (or the Drag Percentage of each class of its Shares, as applicable) held by such Dragee or in other cases mutually acceptable instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transfereeduly endorsed, together with a limited power-of-attorney authorizing the Majority Holders Company and the GM Investor to transfer sell or otherwise dispose of such Shares on pursuant to the terms set forth proposed Transfer to the Independent Third Party, as well as any other documents required to be executed in the Drag-Along Notice.
(c) connection with such transaction. In the event that any transfer pursuant Dragee should fail to deliver such certificates (if certificated) or other documentation to the Company or the GM Investor’s representative, the Company shall cause the books and records of the Company to show that the Shares of such Dragee are bound by the provisions of this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take 9.09 and that such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as Shares may be required Transferred only to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect theretothe Independent Third Party.
(db) If The Company and the Drag-Along Transfer is not consummated within one hundred and eighty GM Investor shall have ninety (18090) days after following delivery of the Drag-Along Notice to complete the Transfer of the Shares in accordance with this Section 9.09; provided, that if such Transfer would require the GM Investor, any Dragee, the Independent Third Party, the Company or an Affiliate of any of the foregoing to obtain any regulatory approval prior to consummating such sale, such ninety (90) day period shall be extended to the date that is five (5) Business Days after such regulatory approval has been obtained or finally denied. If, within such ninety (90) day period (as it may be extended) after the Company or the GM Investor has given the Drag-Along Notice, it shall not have completed the Majority Holders Transfer of all the Shares of the GM Investor and the Dragees in accordance with this Section 9.09 the Company or the GM Investor shall return to each of the Dragees all certificates (if certificated) representing Shares, or in other cases, mutually acceptable instruments of transfer, that the Dragees delivered for Transfer pursuant hereto and that were not purchased in accordance with this Section 9.09; provided, that (i) return if any one or more of the Dragees defaults, the Company or the GM Investor shall be permitted, but not obligated, to each Dragcomplete the sale by all non-Along Holder defaulting Dragees, and (ii) the limited powercompletion of the sale by the Company or the GM Investor and such non-defaulting Dragees shall not relieve a defaulting Dragee of liability for its breach. All reasonable out-of-attorney pocket costs and all certificates representing expenses incurred by the shares that Participant delivered pursuant to this Section 9 Company, the GM Investor and any other documents in the possession of the Majority Holders executed by Participant Dragees in connection with the proposed Transfers set forth in this Section 9.09 shall be paid by the Company.
(c) A Drag-Along TransferSale Transaction will be a Deemed Liquidation Event and the aggregate consideration payable upon consummation of such Drag-Along Sale Transaction to all holders of Shares in respect of their Shares included in such Drag-Along Sale Transaction shall be apportioned and distributed (after such aggregate consideration is adjusted for Company expenses, purchase price adjustments, escrow amounts, purchase price holdbacks, indemnity obligations and other similar items) as between the classes of Shares included in such Drag-Along Sale Transaction in accordance with the relevant provisions of Section 3.02 (it being understood that, if less than all of the Shares are being Transferred, for purposes of such calculations, it shall be assumed that the Shares included in such Drag-Along Sale Transaction constitute all of the Shares outstanding). For clarity, the application of Section 3.02 may result in some Shares included in the Drag-Along Sale Transaction not receiving any consideration with respect to such Drag-Along Sale Transaction.
(d) The provisions of this Section 9.09 shall not apply to any Transfer to a Permitted Transferee in accordance with Section 9.02.
(e) Notwithstanding the foregoing, The obligations of a Member in connection with a Drag-Along Holder will not Sale shall be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title subject to the Shares, including, but not limited to, representations and warranties that (ilimitations set forth in Section 9.08(d) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, as if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants Sale was a Sale of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holdersthereunder.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 4 contracts
Sources: Limited Liability Company Agreement (General Motors Co), Limited Liability Company Agreement (General Motors Co), Limited Liability Company Agreement (General Motors Co)
Drag Along. If At any time prior to the holders of a majority time the Principal Stockholders cease to own less than forty (40%) percent of the issued and outstanding shares of Common Stock of the Company’s voting stock then-outstanding Corporation, the Principal Stockholders may, if they elect (the “Majority Holders”"Drag Along Election") propose at any time during such period to sell, assign or transfer, directly or indirectly, sell all of their shares of capital stock Common Stock to a bona fide third-party purchaser not related to, controlled by or under common control with the Principal Stockholders, cause a sale of all of the Company then issued and outstanding shares of Common Stock of the Corporation owned by the Other Stockholder to any third be made to such third-party (a “Dragpurchaser in an arm's-Along Transfer”)length transaction for cash and/or registered, freely marketable securities. Any such sale of all of the Majority Holders may exercise drag-along rights in accordance with issued and subject outstanding shares of the Corporation held by the Other Stockholder must be made on the same terms and conditions, including the price per share, upon which the Principal Stockholders have agreed to sell all of their shares of Common Stock to the terms, conditions and procedures set forth in this Section 9 (“Dragthird-party purchaser. The Principal Stockholders can trigger a Drag Along Rights”).
(a) The Majority Holders shall give Election by providing a written notice of such election (a “Drag-the "Drag Along Notice”") at least fifteen (15) days prior to the consummation of Other Stockholder, such proposed DragDrag Along Notice to include the price per share being paid to the Principal Stockholders by such third-Along Transfer to Participant of any election by party purchaser and the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of such sale. Upon the proposed transaction. Such notice shall also specify the aggregate number Other Stockholder's receipt of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Drag Along Notice, the Majority Holders Other Stockholder shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection fully cooperate with the proposed Drag-Along Transfer.
(e) Notwithstanding Principal Stockholders and shall take all actions and steps to effect such sale as the foregoingPrincipal Stockholders may deem necessary, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach desirable or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transferappropriate, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein the prompt delivery to the contrary, there shall be no liability on the part Principal Stockholders of duly endorsed stock powers with respect to all of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and shares of Common Stock at such time owned by the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along TransferOther Stockholder.
Appears in 4 contracts
Sources: Stockholders Agreement (Formfactor Inc), Stockholders Agreement (Formfactor Inc), Stockholders Agreement (Formfactor Inc)
Drag Along. (a) If the holders of a majority of the shares of the Company’s voting stock then-outstanding Majority Sponsor (the “Initiating Majority Holders”Sponsor) propose proposes to sellSell any Shares (other than pursuant to an Affiliate Transfer), assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “then such Majority Sponsor shall require its respective Drag-Along Transfer”Parties to Sell, at the same economic terms and conditions that apply to the Sale by such Majority Sponsor, a number of their Shares equal to the product of (i) the total number of Shares held by such Drag-Along Party (or, in the case of the GS Syndicatees only, the relevant Majority Sponsor’s Aggregation Pro Rata Share of the total number of Shares held by the GS Syndicatees) multiplied by (ii) a fraction, the numerator of which is the number of Shares that the Majority Sponsor proposes to Sell and the denominator of which is the total number of Shares held by such Majority Sponsor.
(b) With respect to any Sale of Shares pursuant to Section 3.2(a), the Initiating Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders Sponsor shall give deliver a written notice (a “Drag-Along Notice”) at least fifteen (15) days to each of its respective Drag-Along Parties no later than 2 Business Days prior to the consummation of such the proposed Sale, setting forth the name and address of the purchaser (other than in the event of a Public Sale), the number of Shares to be Sold by each of the Majority Sponsor and the Drag-Along Transfer to Participant of any election by Party, the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity amount and form of the prospective transfereeconsideration, and (iv) any all other material terms and conditions of offered by the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified purchaser (other than in the Drag-Along Notice.
(b) Within seven (7) days event of a Public Sale). Upon delivery of the a Drag-Along Notice, Participant the relevant Drag-Along Party shall deliver be required to Sell that number of Shares required to be Sold by it pursuant to Section 3.2(a), subject to the Majority Holders such instruments consummation of transfer as shall be reasonably requested by the Majority Holders or proposed Sale at the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares same price and on the same terms and conditions as set forth in the Drag-Along Notice. Each relevant Drag-Along Party shall (i) take all such actions in such manner as may be necessary and appropriate to ensure that the Sale is consummated and (ii) shall bear its proportionate share of all Third Party transaction fees and expenses in connection with such Sale.
(c) In the event that No Syndicatee shall Sell any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it Shares (other than fees and expenses payable to a Sale pursuant Article 3.3, 4.1 or 4.2 of this Agreement or an Affiliate Transfer) except in accordance with the provisions of this Section 3.2. A Majority Sponsor may agree with any of its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery Parties that the number of the Shares to be Sold by that Drag-Along Notice, Party shall be increased or decreased provided the number of Shares to be Sold by the Majority Holders shall (i) return Sponsor is also adjusted so that the total aggregate number of Shares to each be Sold by the Majority Sponsor and the relevant Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along TransferParty remains unchanged.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 4 contracts
Sources: Shareholder Agreement (Global Aviation Leasing Co., Ltd.), Agreement to Tender (Avolon Holdings LTD), Shareholder Agreement (Avolon Holdings LTD)
Drag Along. (a) If at any time after March 13, 2017, there shall be:
(i) an offer by a Person that is not an Affiliate of any party hereof to purchase all or substantially all the holders of Shares or voting rights in the Company;
(ii) a majority merger or consolidation of the shares Company with or into another corporation in which the Company is not the surviving entity but the Shares or voting rights of the Company outstanding immediately prior to the merger are converted by virtue of the merger into other property, whether in the form of securities, cash, or otherwise; or
(iii) a sale or transfer of all or substantially all the Company’s voting stock then-outstanding properties and assets to any other Person, in each case, if the Majority Class A Ordinary Shareholders, Majority Series A-1 Preferred Shareholders, Majority Series A-2 Preferred Shareholders, Majority Series B Preferred Shareholders (which shall include Apoletto), and Majority Series C Preferred Shareholders (collectively, the “Majority Drag Holders”) propose to sellapprove such transaction, assign or transfer, directly or indirectly, all of their shares of capital stock which is a transaction at arm’s length for an equity valuation of the Company immediately prior to any third party such transaction of not less than US$3,000,000,000, at the request of the Drag Holders, then each remaining Shareholder (each, a “Dragged Holder”) shall sell, transfer, convey or assign its Shares (such sale, transfer, conveyance or assignment pursuant to this Section 9.2, a “Drag-Along TransferSale”)) pursuant to, and so as to give effect to, such offer to purchase, merger or consolidation, sale or transfer, as the Majority Holders case may exercise drag-along rights in accordance with and subject be. If any Dragged Holder does not elect to vote, or give its written consent to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Sale, such Dragged Holder shall be obligated to purchase all the shares held by the Drag Holders shall give written notice (a “and other Dragged Holders who has consented to participate in the Drag-Along Notice”) Sale at least fifteen (15) days prior to the consummation of such proposed price upon terms offered for the Drag-Along Transfer Sale. In such event, the Dragged Holders who do not wish to Participant of any election by the Majority Holders sell their shares shall make a matching offer to exercise their Drag-Along Rights hereunder, setting forth (i) purchase from all other relevant shareholders the shares proposed to be transferred, sold by any other such shareholders on no less favorable terms than the bona fide offer within thirty (ii30) the consideration to be received for such shares, (ii) the identity Business days of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be request for the same amount and form of consideration per share as the Majority Holders will receive in such a Drag-Along TransferNotice issued by the Drag Holders. For the avoidance of doubt, as specified in all cases any exercise of rights pursuant to this Section 9.2 shall constitute a Deemed Liquidation Event under the Revised M&A. If any Dragged Holder has unilateral veto right to veto against the Drag-Along NoticeSale, it is entitled to exercise its veto right to disapprove the Drag-Along Sale. However, if such Dragged Holder selects not to exercise such veto right, it shall act in accordance with this Section 9.2. If the consideration offered is payable in securities or property other than cash (or evidence of cash indebtedness), the Board shall in good faith determine the fair market value of any such securities or property in cash, provided that any holder of Preferred Shares shall have the right to challenge any determination by the Board of fair market value made pursuant hereto, in which case the determination of fair market value shall be made by a valuer selected jointly by the Board and the challenging parties. The valuer shall prepare a report setting forth the basis of its calculating such fair market value, and the determination of such fair market value by the valuer shall, in the absence of manifest error, be final and conclusive. Up to US$100,000 of the costs of appointing the valuer shall be borne solely by the challenging holder(s) of Preferred Shares, and any amount of such costs in excess of US$100,000 shall be borne equally by the challenging holder(s) of Preferred Shares and the Company. The valuer shall act as expert and not as an arbitrator. If the acquiring party is a privately-held entity and the Investors receive in whole or in part non-publicly traded securities of such acquirer, then such non-publicly traded securities shall have liquidation preference(s), protective provision(s), voting right(s), dividend right(s), registration rights and preemptive rights that are substantially similar to those of the Series A-1 Preferred Shares, Series A-2 Preferred Shares, Series B Preferred Shares, and Series C Preferred Shares, as applicable, as set forth herein as of the date hereof.
(b) Within seven (7) days The restrictions on Transfers of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in Sections 10.1, 4.2 and 5 shall not apply in connection with a sale pursuant to this Section 9.2, or anything in this Agreement to the Drag-Along Noticecontrary notwithstanding.
(c) In Upon the event that any transfer pursuant to approval of a Drag-Along Sale as described in this Section 9 is structured as 9.2, each Dragged Holder shall grant to the CEO, a merger, consolidation power of attorney to transfer its Shares and to do and carry out all other necessary or business combination, or any sale of all or substantially all assets, Participant must further agree advisable acts to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If complete the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along TransferSale, including, without limitation, transfer taxes executing any and legal, accounting and investment banking fees, all documents (including instruments of transfer) on behalf of such Dragged Holder. The CEO shall be borne by Participantauthorized to transfer the Shares of each Dragged Holder and to do and carry out all other necessary or advisable acts to complete the Drag-Along Sale, including, without limitation, executing any and all documents (including instruments of transfers) on behalf of each Dragged Holder.
(gd) Notwithstanding anything herein to In any Drag-Along Sale approved by the contraryDrag Holders, there each Drag Holder shall be no liability severally, not jointly, join on a pro rata basis (based on the relative proceeds received in such transaction) in any indemnification obligations that are part of the Majority Holders to Participant if a terms and conditions of such Drag-Along Transfer Sale but only up to the net proceeds paid to such Drag Holder. Without limiting the foregoing sentence, no such Drag Holder who is not consummated for an employee, officer or controlling shareholder of a Group Company shall be required to make any reasonrepresentations or warranties other than with respect to itself (including due authorization, title to shares and enforceability of applicable agreements).
(e) For the Majority Holders avoidance of doubt, any assignee or transferee who acquires any Share of the Company shall not be obligated to consummate the proposed Drag-Along Transferbound by this Section 9.2 as if they were a Party hereunder, regardless of whether the Majority Holders have delivered a Drag-Along Notice by delivering and executing an Adherence Agreement as provided in respect of such Proposed Drag-Along Transfer.Exhibit B.
Appears in 3 contracts
Sources: Shareholder Agreement, Shareholder Agreements (LexinFintech Holdings Ltd.), Shareholder Agreement (LexinFintech Holdings Ltd.)
Drag Along. If the holders of a majority of the shares of the Company’s voting stock then-outstanding (the “Majority Holders”) propose 15.1 Subject to sellprior compliance with Clause 13, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to if any third party AHG Shareholders (a “Drag-Along TransferDragging AHG Shareholder” or the “Dragging AHG Shareholders”), together controlling more than fifty per cent. (50%) of the Majority Holders may exercise drag-along rights Voting Shares then in accordance with and subject issue, propose to the terms, conditions and procedures set forth in this Section 9 Transfer Securities (“Drag-Dragging AHG Shareholders’ Securities”) (other than with respect to a Transfer permitted by Clauses 11.1.1 and 11.1.3) to a Prospective Buyer (such Prospective Buyer, the “Drag Along RightsPurchaser”) which would result in such Prospective Buyer controlling more than fifty per cent. (50%) of the Voting Shares then in issue (a “Required Sale”).
(a) The Majority Holders shall give , then the Dragging AHG Shareholders may deliver a written notice (a “Drag-Along Required Sale Notice”) at least fifteen to each other AHG Shareholder (15) days prior each, a “Dragged AHG Shareholder” and together, the “Dragged AHG Shareholders”), copied to the consummation Company, requiring them to Transfer all of such proposed Drag-their Securities to a Prospective Buyer.
15.2 The Required Sale Notice shall:
15.2.1 be irrevocable but shall lapse if the Required Sale is not completed within twelve (12) months after the date of the Required Sale Notice, subject to any extensions agreed between the Dragging AHG Shareholders and Dragged AHG Shareholders in writing (acting reasonably) to account for any Mandatory Regulatory Consents to be obtained;
15.2.2 be delivered to each Dragged AHG Shareholder within ten (10) Business Days of the Dragging AHG Shareholders and the Drag Along Transfer to Participant Purchaser having entered into binding agreements for the sale and purchase of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares Securities proposed to be transferred, Transferred to the Drag Along Purchaser (ii) “Drag Transaction Documents”);
15.2.3 set out the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify sale of the aggregate number of shares Participant Securities by the Dragging AHG Shareholders to the Drag Along Purchaser, which shall be required to transfer. Any transfer of shares by Participant pursuant to no less favourable than the terms hereof shall be for and conditions of the same Required Sale, including:
(a) the number and class of Dragging AHG Shareholders’ Securities;
(b) the name and address of the Drag Along Purchaser;
(c) the proposed amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver Security to be paid to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisorsDragged AHG Shareholders, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same as the amount and form of consideration per share for Participant’s shares Dragging AHG Shareholders’ Security to be paid to the Dragging AHG Shareholders; provided, that if such consideration consists in part or in whole of assets other than cash (a “Rollover Alternative”), the Dragging AHG Shareholders will provide such information, to the extent reasonably available to the Dragging AHG Shareholders, relating to such assets as is received by the Majority HoldersDragged AHG Shareholders may reasonably request in order to evaluate the value of such assets; and
(d) if known, the proposed completion date of the Required Sale; and
15.2.4 attach copies of all Drag Transaction Documents.
15.3 Subject to Clause 15.2, each Dragged AHG Shareholder which receives a Required Sale Notice shall, subject to receipt of any Mandatory Regulatory Consents, be required to Transfer all (fbut not a portion only) All costs of its Securities (“Drag Along Securities”) to the Drag Along Purchaser, provided that:
15.3.1 each Dragged AHG Shareholder shall have the right to request that any Mandatory Regulatory Consents required in relation to the Transfer of its Drag Along Securities are incorporated into the relevant transaction documents;
15.3.2 no Dragged AHG Shareholder shall be required to give any indemnities or make any representations and expenses incurred by Participant in connection warranties to the Drag Along Purchaser (or any other person), except for warranties as to the title to their Drag Along Securities and the authority and capacity to sell such Drag Along Securities (with such warranties being made severally and not jointly);
15.3.3 no Dragged AHG Shareholder shall be required to agree to any Dragpost-closing undertakings with the Drag Along TransferPurchaser (or any other person), including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.any non-compete or non-solicitation undertakings; and
(g) Notwithstanding anything herein to 15.3.4 the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders Dragged AHG Shareholders shall not be obligated required to consummate Transfer their Drag Along Securities to the proposed Drag-Drag Along Transfer, regardless Purchaser prior to the date on which the Dragging AHG Shareholders’ Securities are Transferred to the Drag Along Purchaser.
15.4 Each Dragging AHG Shareholder and Dragged AHG Shareholder will be responsible for its pro rata share of whether the Majority Holders have delivered a Drag-costs and expenses of the Required Sale and the sale of the Drag Along Notice in respect Securities based on the number of such Proposed Drag-Dragging AHG Shareholder’s or Dragged AHG Shareholder’s Drag Along TransferSecurities relative to the aggregate number of Dragging AHG Shareholders’ Securities and Drag Along Securities held by all Dragging AHG Shareholders and Dragged AHG Shareholders, to the extent not paid or reimbursed by the Drag Along Purchaser.
Appears in 3 contracts
Sources: Shareholders’ Agreement (Prudential Investment Portfolios, Inc. 15), Shareholder Agreement (Prudential Financial Inc), Shareholders’ Agreement (Squarepoint Ops LLC)
Drag Along. 4.1 If a Transferor sells, other than in a public offering pursuant to a registration statement, shares of Common Stock held by such Transferor to a Transferee in one transaction or a series of related transactions on arms-length terms which constitute the holders transfer of a majority all of the Common Stock then owned by ▇▇▇▇▇ and its Affiliates, the Transferor and/or its affiliates may, at their option, cause TCW (together with any party deemed to be included in such definition pursuant to SECTION 4.2 below, a "DRAG-ALONG PARTY") to sell to the Transferee, on the same terms and conditions as provided with respect to the sale by the Transferor to such Transferee in such transaction, all shares of Common Stock which the Company’s voting stock then-outstanding (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “Drag-Along Party then owns (such shares being "DRAG-ALONG SHARES" and such transaction being a "DRAG-ALONG TRANSACTION"); PROVIDED, HOWEVER, that: (x) the price for the Drag-Along Shares may not be lower than the price per share paid to the Transferor in the same or related transaction; and (y) the consideration for the Drag-Along Shares shall be paid in cash at the closing of the Drag-Along Transaction(s) unless the relevant Drag-Along Party consents to payment in a form other than cash or, at the option of the relevant Drag-Along Party, in the same form of payment as received by the Transferor.
4.2 If TCW or any of its Affiliates (a "TCW ENTITY") proposes to Transfer to any Affiliate thereof any of the Common Stock held by such TCW Entity, then such TCW Entity, as a condition to the Transfer”), shall cause such Affiliate to agree to be bound by this SECTION 4 and such Affiliate shall thereupon be deemed to be a party hereto and shall notify ▇▇▇▇▇ of the Majority Holders may exercise identity and address of such Affiliate. Thereupon such Affiliate shall also be deemed a "Drag-Along Party" for purposes of this Agreement. The drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“SECTION 4 shall not be applicable to transferees of the Drag-Along Rights”)Party other than to other Affiliates of such Drag-Along Party.
(a) The Majority Holders 4.3 To exercise a drag-along right, Transferor shall give written notice (a “the "DRAG-ALONG NOTICE") to the Drag-Along Notice”) Party against whom the right is to be enforced at least fifteen (15) business days prior to any proposed Transfer of Common Stock. The notice shall specify the consummation terms of such proposed Transfer and certify as to the facts supporting exercise of the drag-along right and include a copy of the contract between the Transferor and Transferee to consummate the Drag-Along Transfer to Participant of any election by (the Majority Holders to exercise their "SALE CONTRACT"), if such a Sale Contract has been signed . During the Drag-Along Rights hereunderPeriod (as defined below), setting forth the Drag-Along Party in receipt of the Drag-Along Notice may not Transfer any Securities subject to Transferor's drag-along rights under this SECTION 4 to any Person other than Transferor or the Transferee. The "Drag-Along Period" shall be the period commencing on the date the Drag Along Notice is given and terminating on the earlier of (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of 120th day following delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders Notice or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations date of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation termination of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority HoldersSale Contract.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 2 contracts
Sources: Shareholder Agreement (Inland Resources Inc), Shareholder Agreements (Inland Resources Inc)
Drag Along. If (a) Without limiting any rights granted under the holders Marquee Stockholders Agreement, at any time prior to the IPO Date, Investors (which for purposes of this Section 3 shall include any Permitted Transferee of any Investor) constituting a majority Requisite Stockholder Majority (collectively, the “Drag-Along Sellers”) may require each Management Stockholder to include Restricted Shares (including Restricted Shares issuable upon exercise of Vested Options held by such Management Stockholder and including Restricted Shares issuable upon exercise of Employee Options that vest as a result of the shares consummation of the Company’s voting stock thenExit Sale) in any Company Sale pursuant to which the Drag-outstanding Along Sellers are Transferring at least 90% of the Shares then held by the Drag-Along Sellers for consideration consisting of cash and cash equivalents (the an “Majority HoldersExit Sale”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party an Independent Third Party (a “Drag-Along TransferTransferee”)) in a bona fide arm’s length transaction or series of transactions (including pursuant to a stock sale, asset sale, recapitalization, tender offer, merger or other business combination transaction or otherwise) at the Majority Holders may exercise drag-along rights in accordance with purchase price and upon the terms and subject to the terms, conditions and procedures of the Exit Sale (all of which shall be set forth in this Section 9 (“the Drag-Along Rights”Notice). In connection with an Exit Sale, the Company may also require each Management Stockholder to provide his, her or its written consent approving the Exit Sale with respect to all Shares owned by such Management Stockholder, as necessary or desirable to authorize, approve and adopt the Exit Sale. In the event that a sale is proposed pursuant to this Section 3(a), all outstanding proposals to Transfer Restricted Shares shall immediately be withdrawn and no Transfer of Restricted Shares shall be consummated until the expiration of the time period provided for in Section 3(d). The consummation of an Exit Sale by the Drag-Along Sellers shall be subject to the sole discretion of the Drag-Along Sellers, who shall have no liability or obligation whatsoever (other than compliance with this Section 3) to any Management Stockholder participating therein in connection with such Management Stockholder’s Transfer of Shares.
(ab) The Majority Holders rights set forth in Section 3(a) shall give be exercised by the Drag-Along Sellers giving written notice (a the “Drag-Along Notice”) to the Company, at least fifteen ten (1510) days Business Days prior to the consummation of such proposed date on which the Drag-Along Transfer Sellers expect to Participant of any election by consummate the Majority Holders to exercise their Exit Sale. In the event that the terms and/or conditions set forth in the Drag-Along Rights hereunderNotice are thereafter amended in any material respect, setting forth the Drag-Along Sellers shall give written notice (ian “Amended Drag-Along Notice”) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material amended terms and conditions of the proposed transactionTransfer to the Company. Such notice Each Drag-Along Notice and Amended Drag-Along Notice shall also specify set forth: (i) the aggregate name of the Exit Sale Transferee and the number of shares Participant of Common Stock proposed to be purchased by such Exit Sale Transferee, (ii) the proposed amount and type of consideration and material terms and conditions of payment offered by the Exit Sale Transferee and (iii) a summary of any other material terms pertaining to the Transfer (the “Third Party Terms”). Upon receipt of any Drag-Along Notice or Amended Drag-Along Notice, the Company shall deliver a copy of same to each Management Stockholder at least five (5) Business Days prior to the proposed date of such Transfer.
(c) All Transfers of Shares to the Exit Sale Transferee pursuant to this Section 3 shall be consummated simultaneously at the offices of the Company, unless the Drag-Along Sellers elect otherwise, on the later of (i) a Business Day not less than ten (10) or more than sixty (60) days after the Drag-Along Notice is received by the Company or (ii) the third Business Day following receipt of all material Governmental Approvals, or at such other time and/or place as each of the parties to such Transfers may agree. The delivery of stock certificates shall be made on such date, against payment of the purchase price for such Shares minus the aggregate exercise price of any Vested Options being Transferred by the Management Stockholder, duly endorsed for Transfer or with duly executed stock powers or similar instruments, or such other instrument of Transfer of such Shares as may be reasonably requested by the Drag-Along Sellers and acceptable to the Company, with all stock transfer taxes paid and stamps affixed, and in the case of Vested Options subject to a Drag-Along Notice, an instrument acceptable to the Company evidencing the cancellation of Vested Options. Each Management Stockholder shall receive the same form and amount of consideration received by the Drag-Along Sellers per Share (minus the exercise price of Vested Options subject to the Drag-Along Notice). To the extent that the parties (or any successors thereto) to a sale described in this Section 3 are to provide any indemnification or otherwise assume any other post-closing liabilities, the Drag-Along Sellers and all Management Stockholders and other Investors selling Shares in a transaction described under this Section 3 shall do so severally and not jointly (and on a pro rata basis in accordance with the Shares (including Shares subject to Employee Options) being sold by each) and each such Person’s respective potential liability thereunder shall not exceed the proceeds received by such Person. Furthermore, each Management Stockholder shall only be required to give customary representations and warranties, including, but not limited to, title to Shares (including Shares subject to Employee Options) conveyed, legal authority and capacity, and non-contravention of other agreements to which he, she or it is a party, with respect to which indemnification or other post-closing liabilities shall be several and not joint (and only as to the representations and warranties given by such Management Stockholder) and each Management Stockholder’s respective potential liability thereunder shall not exceed the proceeds received by such Management Stockholder; provided, that in connection with such transaction no Management Stockholder shall be required to transferenter into any non-competition agreement. Any transfer of shares by Participant pursuant to the terms hereof Each Management Stockholder shall be for the same amount required to enter into any instrument, undertaking or obligation necessary or reasonably requested and form of consideration per share as the Majority Holders will receive deliver all documents necessary or reasonably requested in connection with such Drag-Along Transfer, sale (as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together in connection with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto3.
(d) If at the Drag-Along Transfer is not consummated within one hundred and eighty (180) days end of the 90th day after delivery the Company’s receipt of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder Sellers have not completed the limited powerproposed Transfer, the Drag-ofAlong Notice shall be null and void, and it shall be necessary for a separate Drag-attorney Along Notice to be delivered, and all certificates representing the shares that Participant delivered terms and provisions of this Section 3 separately complied with, in order to consummate such Transfer pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing3; provided, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds such 90 day time period may be paid out of an escrow established to cover breach of representations, warranties and covenants of extended at the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation option of the Drag-Along Transfer, Participant will receive Sellers for a reasonable period of time not to exceed an additional 90 days to the same amount and form of consideration per share for Participant’s shares as extent that the failure to complete the proposed Transfer is received cause by the Majority Holdersfailure to obtain the necessary Governmental Approvals.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 2 contracts
Sources: Management Stockholders Agreement (Marquee Holdings Inc.), Management Stockholders Agreement (Amc Entertainment Inc)
Drag Along. (a) If Resolute Investors (as defined in the holders of a majority Shareholder Agreement) holding, in the aggregate, at least 50 percent (50%) of the shares of the Company’s voting stock then-outstanding Common Shares (the “Majority HoldersSelling Shareholders”) propose agree to sell, assign or transfer, directly or indirectly, enter into a transaction which would result in the Transfer of all of their shares of capital stock of the Company Common Shares owned by the Selling Shareholders to any a non-Affiliate third party (a the “Drag-Along TransferBuyer”), the Majority Holders Selling Shareholders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give deliver written notice (a “Drag-Along Notice”) at least fifteen to each other Shareholder (15) days prior to the consummation of such proposed “Drag-Along Transfer to Participant of any election by the Majority Holders Shareholders”), stating that such Selling Shareholders wish to exercise their rights under this Section 12 with respect to such Transfer, and setting forth the name and address of the Drag-Along Rights hereunderBuyer, setting forth (i) the shares number of Common Shares proposed to be transferredTransferred, (ii) the consideration to be received for such shares, (ii) the identity proposed amount and form of the prospective transfereeconsideration, and (iv) any all other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares offered by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along NoticeBuyer.
(b) Within seven Upon delivery of a Drag-Along Notice, each Drag-Along Shareholder shall be required to Transfer all, but not less than all, of its Common Shares, upon the same terms and conditions (7including, without limitation, as to price, time of payment and form of consideration) days of delivery as agreed by the Selling Shareholders and the Drag-Along Buyer, and shall make to the Drag-Along Buyer representations, warranties, covenants, indemnities and agreements comparable to those made by the Selling Shareholders in connection with the Transfer (other than any non-competition or similar agreements or covenants that would bind the Drag-Along Shareholder or its Affiliates), and shall agree to the same conditions to the Transfer as the Selling Shareholders agree, it being understood that all such representations, warranties, covenants, indemnities and agreements shall be made by each Selling Shareholder and each Drag-Along Shareholder severally and not jointly and that, except with respect to individual representations, warranties, covenants, indemnities and other agreements of the Drag-Along Notice, Participant shall deliver Shareholder as to the Majority Holders unencumbered title to its Common Shares and the power, authority and legal right to Transfer such instruments Common Shares, the aggregate amount of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in liability of the Drag-Along NoticeShareholder shall not exceed either (i) such Drag-Along Shareholder’s pro rata portion of any such liability, to be determined in accordance with such Drag-Along Shareholder’s portion of the total number of Common Shares included in such Transfer or (ii) the proceeds to such Drag-Along Shareholder in connection with such Transfer.
(c) In the event that any transfer pursuant to this Section 9 such Transfer is structured as a merger, consolidation amalgamation, consolidation, or similar business combination, or any sale of all or substantially all assets, Participant must further agree each Drag-Along Shareholder agrees to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, transaction (subject to Section 12(b)) and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If any Shareholder fails to vote its Voting Shares or to provide a written consent in accordance with the terms of Section 11 (each such Shareholder, a “Breaching Drag-Along Transfer Shareholder”), the Shareholders and the Company shall take such action as is not consummated within one hundred and eighty (180) days after delivery necessary in accordance with the Bye-laws of the Drag-Along NoticeCompany and Bermuda law to convene a general meeting or to circulate written resolutions, the Majority Holders shall (i) return purpose of which will be to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession propose for approval of the Majority Holders executed by Participant Shareholders such actions as are necessary in connection order to ensure compliance with the proposed Drag-Along Transferprovisions of Section 11.
(e) Notwithstanding Solely for purposes of Section 11 and in order to secure the foregoingperformance of each Shareholder’s obligations under Section 11, a each Shareholder hereby: (i) appoints each Drag-Along Proxy Holder will not be required (as defined in Section 11(f)) acting severally: the attorney-in-fact of such Shareholder (with full power of substitution) for the purpose of signing written resolutions circulated pursuant to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i11(d) Any representations on behalf of such Shareholder; and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) agrees on the obligations date hereof to grant a proxy to each Proxy Holder in the form attached hereto as Exhibit for the purpose of Participant in connection voting the Voting Shares held by such Shareholder at a general meeting convened pursuant to Section 11(d). Each Shareholder acknowledges and agrees that the power of attorney granted by such Shareholder pursuant to this Section 11(d) is coupled with an interest and is irrevocable, and that the transaction have been duly authorized, if applicable, (iii) the documents proxy to be entered into by Participant have been duly executed by Participant granted pursuant to this Section 11(d) shall be coupled with an interest and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to shall be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holdersirrevocable.
(f) All costs and expenses incurred by Participant in connection with any For purposes of Section 11, each “Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, Proxy Holder” shall be borne an individual nominated for this purpose by Participantany Selling Shareholder.
(g) Notwithstanding anything herein Each Shareholder agrees to take such further action and to execute such other instruments as may be necessary to effect the contraryappointment of attorneys-in-fact and proxies pursuant to this Section 11, there shall be no liability on the part of the Majority Holders to Participant if a and each Drag-Along Transfer is not consummated Breaching Shareholder hereby revokes any power of attorney or proxy previously granted by it with respect to the matters set forth in Section 11 for purposes of, respectively, any reason, and the Majority Holders shall not be obligated written resolutions circulated or any general meeting convened pursuant to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along TransferSection 11(d).
Appears in 2 contracts
Sources: Management Subscription and Shareholders Agreement (Sensus Metering Systems Inc), Consultant Subscription and Shareholders Agreement (Sensus Metering Systems Inc)
Drag Along. If (i) Each Member hereby agrees, if requested after the holders of a majority of the shares Flip Point by one or more Members holding an aggregate percentage of the Company’s voting stock thentotal Membership Interests exceeding thirty-outstanding four percent (the 34%), or such percentage as agreed by all Members (whether one or more, a “Majority HoldersDrag Along Seller”), to participate in a bona fide, arm’s length sale for cash (a “Drag Along Sale”) propose to sell, assign or transfer, directly or indirectly, all of their shares 100% of capital stock the Membership Interests of the Company to any third party Person not an Affiliate of the Drag Along Seller and with whom the Drag Along Seller has no familial relationship by blood or by marriage or any direct or indirect affiliation, either through ownership entities (a other than public companies) or otherwise (the “Drag-Drag Along Transfer”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along NoticePurchaser”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares manner and on the terms set forth in the Drag-Along Noticethis Section 3.03(d).
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the DragDrag Along Seller elects to exercise its rights under this Section 3.03(d), a notice (the “Drag Along Notice”) shall be furnished by the Drag Along Seller to the non-Disposing Members. The Drag Along Transfer is not consummated within one hundred and eighty (180) days after delivery Notice shall set forth the principal terms of the DragDrag Along Sale, the purchase price, and the name and address of the Drag Along Purchaser. If the Drag Along Seller proceeds with the Drag Along Purchaser to closing, the non-Disposing Members shall be bound and obligated to sell all of their respective Membership Interests to the Drag Along Purchaser on the same terms and conditions as those under which the Drag Along Seller sold its Membership Interest. If at the end of the sixtieth (60th) day following the effective date of the Drag Along Notice the Drag Along Seller has not completed the Drag Along Sale, the non-Disposing Members shall be released from their obligations under the Drag Along Notice, the Majority Holders Drag Along Notice shall (i) return be null and void, and it shall be necessary for a new Drag Along Notice to each Drag-Along Holder be furnished and the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to provisions of this Section 9 and any other documents 3.03(d) separately complied with in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-any such Drag Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along TransferSale.
Appears in 2 contracts
Sources: Limited Liability Company Agreement (GDT TEK, Inc.), Limited Liability Company Agreement (Composite Technology Corp)
Drag Along. If the holders 9.7.1. In connection with a Sale of a majority Series by the Series Majority Class A Holders (each such holder, a “Prospective Selling Holder”) to one or more Persons that are not Affiliates of such Series Majority Class A Holders (collectively, the “Prospective Buyer”) (the percentage of the shares Affected Units held by the Prospective Selling Holders which such number of units to be so sold by the Company’s voting stock then-outstanding (Prospective Selling Holders represents is referred to herein as the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “Drag-Drag Along TransferSale Percentage”), each holder of an Affected Unit hereby agrees, if the Majority Prospective Selling Holders may exercise drag-along rights give the Drag Along Notice referred to in accordance Section 9.7.2, to Sell or otherwise dispose of or exchange Units representing, with and subject respect to such Affected Units held by such holder, the terms, conditions and procedures set forth in this Section 9 (“Drag-Drag Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation Sale Percentage of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunderAffected Units, setting forth (i) the shares proposed to be transferredwhich will first include vested Units and then, (ii) the consideration to be received for such sharesafter all vested Units have been included, (ii) the identity of the prospective transfereeunvested Units, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares manner and on the terms set forth in this Section 9.7.
9.7.2. If the Drag-Prospective Selling Holders elect to exercise their rights under this Section 9.7, a written notice (the “Drag Along Notice”) shall be furnished by the Prospective Selling Holders to each other holder of Affected Units. The Drag Along Notice shall set forth the principal terms of the proposed Sale of a Series including the number, Series and Classes of Units to be acquired or exchanged by the Prospective Buyer in the Sale of a Series, the number of Units to be acquired or exchanged from the Prospective Selling Holders, the manner in which such Units are to be sold or exchanged, the Drag Along Sale Percentage, the per Unit consideration to be received in the proposed Sale of a Series (which may be estimated if the price is determined by a formula including variables which cannot be precisely determined until closing) and the name of the Prospective Buyer. The Prospective Selling Holders shall not be entitled to exercise any rights under this Section 9.7 in connection with a Sale of Class C Preferred Units or Class D Preferred Units unless the Fortress Holders propose to sell at least 50% of their aggregate holdings of Class C Preferred Units or Class D Preferred Units.
9.7.3. If the Prospective Selling Holders consummate the proposed Sale of a Series to which reference is made in the Drag Along Notice, each other holder of Affected Units (ceach a “Participating Seller,” and, together with the Prospective Selling Holders, collectively, the “Drag Along Sellers”) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid bound and obligated to Sell, exchange or otherwise dispose of Units representing, with respect to such Affected Units held by Participantsuch holder, the Drag Along Sale Percentage of such Affected Units in the proposed Sale of a Series on the same terms and conditions with respect to each Unit sold, exchanged or otherwise disposed of (subject to Section 9.8), as may the Prospective Selling Holders shall Sell, exchange or otherwise dispose of each Unit in the Sale of a Series; provided, however, that, in the case of a sale, exchange or disposition of Class C Preferred Units or Class D Preferred Units, the price or value assigned to such Units shall be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery expressed as a specified percentage of the Drag-Along Notice, the Majority Holders shall Series 1 Class C Preferred Priority Return (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession case of Class C Preferred Units) or Series 1 Class D Preferred Priority Return (in the case of Class D Preferred Units) of the Majority Holders executed by Participant Units to be sold, exchanged or disposed of. Notwithstanding any provision contained herein to the contrary, except as provided in Section 9.7.1, no holder of Units shall have the right to exercise any tag along rights contained in Section 9.6 in connection with the proposed Drag-Sale of a Series to which reference is made in the Drag Along Transfer.
(e) Notwithstanding Notice. If at the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation end of the terms 120th day following the date of any agreementthe effectiveness of the Drag Along Notice (provided, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for that if the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transferonly condition, other than the Company (except making of payments or delivery of documents at such closing, to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants completion of the Company as well as breach by any stockholder of any of the identical representationsproposed sale is one or more regulatory or governmental approvals or consents, warranties and covenants provided by all stockholderssuch 120 day period shall automatically be extended for an additional 45 days);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Prospective Selling Holders or have not completed the Purchaser in connection with such Drag-proposed Sale of a Series, each Participating Seller shall be released from his obligation under the Drag Along TransferNotice, is several the Drag Along Notice shall be null and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders)void, and subject it shall be necessary for a separate Drag Along Notice to be furnished and the terms and provisions of this Section 9.7 separately complied with, in order to consummate such proposed Sale of a Series pursuant to this Section 9.7.
9.7.4. The foregoing provisions of this Section 9.7 shall expire upon the closing of a Qualified Public Offering and shall not apply to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata Units which have been Sold in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holdersa Public Sale.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 2 contracts
Sources: Limited Liability Company Agreement (Centex Land Vista Ridge Lewisville III General Partner, LLC), Limited Liability Company Agreement (Centex Land Vista Ridge Lewisville III General Partner, LLC)
Drag Along. If 18.1 Provided that the holders of a majority procedures in clauses 13 and 14 have been exhausted, and subject always to clause 13.4, if Top Ships on the one hand, or Gunvor on the other hand (provided in each case, the Shareholder holds not less than 50% of the shares Shares) ("Selling Shareholder") wish to transfer all (but not some only) of the Company’s voting stock then-outstanding its Shares (the “Majority Holders”"Sellers' Shares") propose (and Shareholder Loans if applicable) to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party a bona fide purchaser on arm's length terms (a “Drag-Along Transfer”"Proposed Buyer"), the Majority Holders Selling Shareholder may exercise drag-along rights require the other Shareholder ("Called Shareholder") to sell and transfer all its shares ("Called Shares") (and Shareholder Loans if applicable) to the Proposed Buyer (or as the Proposed Buyer directs) in accordance with the provisions of this clause 18 ("Drag Along Option").
18.2 Subject to clause 18.1, the Selling Shareholder may exercise the Drag Along Option at any time after the third anniversary of the Completion Date and subject shall only be exercised by the Shareholder wishing to exercise its option giving written notice to that effect to the terms, conditions and procedures set forth in this Section 9 Called Shareholder (“Drag-"Drag Along Rights”Notice").. The Drag Along Notice shall specify:
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to that the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be Called Shareholder is required to transfer. Any transfer of shares by Participant all its Called Shares (and Shareholder Loans if applicable) pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.this clause 18;
(b) Within seven the person to whom the Called Shares (7and Shareholder Loans if applicable) days of delivery of the Drag-Along Notice, Participant shall deliver are to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.transferred;
(c) In the event that any transfer pursuant purchase price payable for the Called Shares ("Offer Price") which shall, for each Called Share be an amount at least equal to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid price per share offered by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.the Proposed Buyer for the Sellers' Shares;
(d) If the Drag-Along Transfer is not consummated within one hundred value of any Shareholder Loans outstanding and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.accrued but unpaid interest; and
(e) Notwithstanding a date, which is no less than five and no more than forty five (45) Business Days after the foregoingdate of the Drag Along Notice, on which completion is to take place.
18.3 Where a Drag Along Option is exercised the Selling Shareholder shall, as a condition precedent to the transfer of the Called Shares to the Proposed Buyer, pay or procure the payment of the Shortfall to the Called Shareholder in addition to the Offer Price. For the avoidance of doubt if a Drag Along Option is exercised after the ninth anniversary of Completion the provisions of this Clause shall not apply.
18.4 Once issued, a Drag-Drag Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, Notice shall be borne by Participant.
(g) Notwithstanding anything herein to the contraryirrevocable. However, there a Drag Along Notice shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated lapse if, for any reason, and the Majority Holders shall Selling Shareholder has not be obligated entered into a definitive agreement to consummate sell the proposed Drag-Sellers' Shares to the Proposed Buyer within forty five (45) Business Days of serving the Drag Along Transfer, regardless Notice. The Selling Shareholders may serve further Drag Along Notices following the lapse of whether the Majority Holders have delivered a Drag-any particular Drag Along Notice in respect of such Proposed Drag-Along TransferNotice.
Appears in 2 contracts
Sources: Joint Venture Agreement (Top Ships Inc.), Joint Venture Agreement (Top Ships Inc.)
Drag Along. If after the holders of a majority fourth (4th) anniversary of the shares of Series B Closing Date, the Company’s voting stock then-outstanding Preferred Supermajority (the “Majority HoldersDrag-Along Requestors”) propose approves a Trade Sale which values the Company at least US$180,000,000 (the “Drag-Along Transaction”) and notify the Company and other Shareholders in writing (“Drag Notice”), then each Shareholder hereby agrees:
(a) if such Drag-Along Transaction requires a Shareholder’s approval, with respect to sellall Shares that such Shareholder owns or over which such Shareholder otherwise exercises voting power, assign to vote (in person, by proxy or transferby action by written consent, directly as applicable) all Shares in favor of, and adopt, such Drag-Along Transaction (together with any related amendment to the Amended M&AA required in order to implement such Drag-along Transaction) and to vote in opposition to any and all other proposals that could reasonably be expected to delay or indirectly, all of their shares of capital stock impair the ability of the Company to any third party (a “Drag-Along Transfer”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in consummate such Drag-Along Transferalong Transaction;
(b) if such Drag-along Transaction is a sale of Shares of the Company, to sell the same proportion of Shares of the Company held by such Shareholder as specified in is being sold by the Drag-Along Notice.Requestor(s) to the Person(s) to whom the Drag-Along Requestor(s) propose to sell their Shares, and on the same terms and conditions as the Drag-Along Requestor(s);
(bc) Within seven (7) days of delivery to execute and deliver all related documentation and take such other action in support of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer Transaction as shall reasonably be reasonably requested by the Majority Holders Company or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(cRequestor(s) In in order to carry out the event that any transfer pursuant to terms and provision of this Section 9 is structured as a merger6, consolidation or business combination, or any sale including without limitation executing and delivering instruments of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees conveyance and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transactiontransfer, and any purchase agreement, merger agreement, indemnity agreement, escrow agreement, consent, waiver, governmental filing, share certificates duly endorsed for transfer (iiifree and clear of impermissible liens, claims and encumbrances) take all action to waive and any dissenters, appraisal similar or other similar rights with respect thereto.related documents;
(d) If the Drag-Along Transfer is not consummated within one hundred to deposit, and eighty (180) days after delivery to cause their Affiliates or Permitted Transferee not to deposit, except as provided in this Agreement, any Shares of the Drag-Along NoticeCompany owned by such party or Affiliate or Permitted Transferee in a voting trust or subject any Shares to any arrangement or agreement with respect to the voting of such Shares, unless specifically requested to do so by the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant acquiror in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agencyTransaction;
(iie) Participant shall not be liable for the inaccuracy to refrain from exercising any dissenters’ rights or rights of appraisal under applicable law at any representation or warranty made by any other person in connection time with the Drag-Along Transfer, other than the Company (except respect to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along TransferTransaction; and
(ivf) upon if the consummation consideration to be paid in exchange for the Shares pursuant to this Section 6 includes any securities and due receipt thereof by any Shareholder would require under applicable law (x) the registration or qualification of such securities or of any person as a broker or dealer or agent with respect to such securities or (y) the provision to any Shareholder of any information other than such information as a prudent issuer would generally furnish in an offering made solely to “accredited investors” as defined in Regulation D promulgated under the Securities Act, the Company may cause to be paid to any such Shareholder in lieu thereof, against surrender of the Drag-Along TransferShares which would have otherwise been sold by such Shareholder, Participant will receive an amount in cash equal to the same amount and form of consideration per share for Participant’s shares fair value (as is received determined in good faith by the Majority Holders.
Company) of the securities which such Shareholder would otherwise receive as of the date of the issuance of such securities in exchange for the Shares. Notwithstanding any provision in this Agreement and the Amended M&A to the contrary (f) All costs and expenses incurred including without limitation Section 7.1), to the extent permitted by Participant in connection with applicable laws, any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, Transaction contemplated under this Section 6 shall not be borne by Participant.
(g) Notwithstanding anything herein subject to the contrary, there shall be no liability on the part a prior written consent or approval of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reasonshareholder except those specifically set forth in this Section 6, and the Majority Holders proceeds of transactions contemplated under this Section 6 shall not be obligated distributed pursuant to consummate Section 7.3. The Company shall use all reasonable efforts to cause all Members to be subject to the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice obligations set forth in respect of such Proposed Drag-Along Transferthis Section 6.
Appears in 2 contracts
Sources: Shareholder Agreements (Uxin LTD), Shareholder Agreements (Uxin LTD)
Drag Along. If the holders TPG agrees at any time to Transfer, in any single or series of a majority related transactions, at least eighty percent (80%) of the shares aggregate Purchase Price Value of the Company’s voting stock thenInvestor Shares then held by TPG and its Affiliates to a non-outstanding (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any affiliated third party (a “Drag-Along Transfer”)” and such purchaser, the Majority Holders “Drag-Along Buyer”) for cash and/or Marketable Securities, TPG may exercise drag-along rights with respect to all Managers in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”)herein.
(a) The Majority Holders 4.3.1. TPG shall promptly give written notice (a “Drag-Along Notice”) at least fifteen to each Manager (15) days prior to the consummation of such proposed “Drag-Along Transfer to Participant Stockholders”) of any election by the Majority Holders TPG to exercise their Dragits drag-Along Rights hereunderalong rights under this Section 4.3, setting forth (i) the shares name and address of the Transferee, the total number and class of Investor Shares proposed to be transferredTransferred by TPG and its Affiliates, (ii) the proposed amount per share and form of consideration to be received for each such shares, (ii) the identity class of the prospective transferee, Investor Shares and (iv) any all other material terms and conditions of the proposed transactionDrag-Along Transfer. Such notice shall also specify the aggregate number and class of shares Participant Company Shares such Drag-Along Stockholders shall be required to transferTransfer, up to such Drag-Along Stockholders’ Pro Rata Portion for each applicable class of Company Shares; provided that the portion of Company Shares of a class with respect to each Drag-Along Stockholder is the same relative proportion for all Drag-Along Stockholders. Any transfer Transfer of shares Company Shares by Participant a Drag-Along Stockholder pursuant to the terms hereof shall be for at the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as purchase price for each class of Company Shares sold by TPG and its Affiliates and specified in the Drag-Along NoticeNotice and each Drag-Along Stockholder shall receive the same relative proportion of cash and Marketable Securities.
4.3.2. Each Drag-Along Stockholder agrees, severally and not jointly, to (bi) Within seven make individual representations, warranties, covenants, indemnities and other agreements solely as to the title to, and the absence of any Adverse Claims with respect to, its Company Shares and the power, authority and legal right to Transfer such Company Shares, (7ii) days of delivery of execute and deliver agreements, covenants and indemnities as made by TPG in connection with the Drag-Along NoticeTransfer (other than any non-competition, Participant shall deliver non-solicitation or other non-financial agreements or covenants that would bind such Drag-Along Stockholder or its Affiliates without the prior written consent of such Drag-Along Stockholder), (iii) agree to, except as provided in the preceding subclause (ii), the same terms and conditions to the Majority Holders Transfer as TPG agrees, (iv) not demand or exercise appraisal or dissenters rights under any applicable business corporation or other law with respect to a transaction subject to this Section 4.3 as to which such instruments of transfer appraisal rights are available and (v) be liable as shall be reasonably requested to all representations, warranties, covenants, indemnities and other agreements being made, agreed to or delivered by the Majority Holders Company or any of its subsidiaries, or in respect of the prospective transfereeCompany or any of its subsidiaries or their respective businesses, includingin connection with such transaction (other than the individual representations, as applicablewarranties, one or more stock certificatescovenants, properly endorsed for transfer to indemnities and other agreements of the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms type set forth in subclause (i)), in each case to the same extent as TPG but pro rata based on the relative proceeds to be received by each of them from the sale of the shares of Common Stock Transferred by each of them. Notwithstanding the foregoing, the aggregate amount of liability for TPG and such Drag-Along NoticeStockholders shall not in any event exceed the U.S. dollar value of the net proceeds received by TPG and such Drag-Along Stockholders, respectively.
(c) 4.3.3. In the event that any transfer pursuant to this Section 9 such Transfer is structured as a merger, consolidation consolidation, or similar business combination, or any sale of all or substantially all assets, Participant must further agree each Drag-Along Stockholder agrees to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction.
4.3.4. Solely for purposes of Section 4.3.3(i) and in order to secure the performance of each Manager’s obligations under Section 4.3.3(i), each Manager hereby irrevocably appoints TPG (or a designee thereof) the attorney-in-fact and proxy of such Manager (with full power of substitution) to vote or provide a written consent with respect to its Company Shares as described in this paragraph if, and (iii) take all action only in the event that, such Manager fails to waive any dissenters, appraisal vote or other similar rights provide a written consent with respect thereto.
to its Company Shares in accordance with the terms of Section 4.3.3(i) (d) If the each such Manager, a “Breaching Drag-Along Transfer is not consummated Stockholder”) within one hundred and eighty three (1803) days after delivery of a request for such vote or written consent. Upon such failure, the TPG (or a designee thereof) shall have and is hereby irrevocably granted a proxy to vote or provide a written consent with respect to each such Breaching Drag-Along NoticeStockholder’s Company Shares for the purposes of taking the actions required by Section 4.3.3(i). Each Manager intends this proxy to be, and it shall be, irrevocable and coupled with an interest, and each Manager will take such further action and execute such other instruments as may be necessary to effectuate the Majority Holders shall (iintent of this proxy and hereby revokes any proxy previously granted by it with respect to the matters set forth in Section 4.3.3(i) return with respect to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed Company Shares owned by Participant in connection with the proposed Drag-Along Transfer.
(e) such Manager. Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with the conditional proxy granted by this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties 4.3.4 shall be deemed to be made by Participant in connection with revoked upon the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear termination of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant this Section 4.3 in accordance with their respective its terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 2 contracts
Sources: Management Stockholders’ Agreement (J Crew Group Inc), Management Stockholders’ Agreement (J. Crew Inc.)
Drag Along. (a) If one or more Stockholders (each, a “Selling Stockholder”) intend to sell, in one transaction or a series of transactions, Shares to a Third Party Purchaser, after complying with Sections 3.01 and 3.03, as applicable, that constitute in the holders of a majority of the shares aggregate more than 50% of the Company’s voting stock then-total outstanding Shares, and it is a condition of the Third Party Purchaser for the completion of such sale that such Third Party Purchaser purchase all of the Company’s issued and outstanding Shares, then the Selling Stockholder(s) shall have the right (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “Drag-Along TransferRight”)) to require each other Stockholder (each, a “Remaining Stockholder”) to sell all, but not less than all of its Shares to the Majority Holders may exercise drag-along rights Third Party Purchaser on the same terms and conditions, mutatis mutandis, as are applicable to the sale by the Selling Stockholder(s) of all of its/their Shares to the Third Party Purchaser and otherwise in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 following provisions:
(“b) The Drag-Along Rights”).
(a) The Majority Holders shall give Right may only be exercised by written notice (a the “Drag-Drag Along Notice”) at least fifteen (15from the Selling Stockholder(s) days prior and the Third Party Purchaser to the consummation of such proposed Remaining Stockholders.
(c) The Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth Notice shall:
(i) state the shares proposed to be transferredname of the Third Party Purchaser, the name of each Selling Stockholder and the number of Shares of each Selling Stockholder being sold, the purchase price for the Shares being sold (expressed and payable in United States funds on a per-Share basis) and the time, date and place of completion of the sale and purchase of such Shares;
(ii) include written confirmation from the consideration to be received for such shares, (ii) the identity Third Party Purchaser that it is a condition of the prospective transferee, completion of such purchase and (iv) any other material terms and conditions sale that the Third Party Purchaser purchase all of the proposed transaction. Such notice shall also specify Company’s issued and outstanding Shares; and
(iii) be given no later than 30 days before the aggregate number date fixed for completion of shares Participant shall be required to transfer. Any transfer the sale by the Selling Stockholder(s) of shares by Participant pursuant its/their Shares to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along NoticeThird Party Purchaser.
(bd) Within seven (7) days of The delivery of the Drag-Along NoticeNotice to a Remaining Stockholder shall constitute an irrevocable and binding obligation of the Remaining Stockholder to sell, Participant shall deliver and the Third Party Purchaser to purchase, all of the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Remaining Stockholder’s Shares on the same terms and conditions, mutatis mutandis, as are applicable to the sale by the Selling Stockholder(s) of its/their Shares to the Third Party Purchaser and on such other applicable terms and conditions as set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer3.04.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with forgoing provisions of this Section 9 in connection with 3.04, any proposed DragRemaining Stockholder who is not a director, officer, or management-Along Transfer, unless:
level employee of the Company (ior an Affiliate of such a Person) Any shall only be obligated to make individual representations and warranties with respect to such Remaining Stockholder’s title to and ownership of such Remaining Stockholder’s Shares, authorization, execution and delivery of relevant documents, enforceability of such documents against such Remaining Stockholder, and other matters directly relating to such Remaining Stockholder, but not with respect to any of the foregoing with respect to Shares owned by the Selling Stockholder(s); provided, further, that all representations, warranties, covenants and indemnities shall be made by Participant each Selling Stockholder(s) and each Remaining Stockholder severally and not jointly and any indemnification obligation shall be pro rata based on the consideration received by each Selling Stockholder and each Remaining Stockholder, in each case in an amount not to exceed the aggregate proceeds received by each Selling Stockholder and each such Remaining Stockholder in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the sale of Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs At or before the time of completion of the sale of the Shares of each Remaining Stockholder to the Third Party Purchaser, each such Remaining Stockholder shall (i) cause to be discharged any and expenses incurred by Participant in connection all Liens against its Shares, and (ii) execute and deliver to the Third Party Purchaser, against payment for such Shares, all stock certificates representing such Shares, duly endorsed for transfer or with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participantduly executed stock powers or other assignment forms attached.
(g) Notwithstanding anything herein Effective upon a Remaining Stockholder failing at the prescribed time to complete a sale of its Shares to a Third Party Purchaser, as described in Section 3.04(f), such Remaining Stockholder hereby irrevocably appoints the Secretary of the Company or, in the Secretary’s absence or failure to act, any other officer of the Company as attorney and agent for, and in the name and on behalf of, such Remaining Stockholder to execute and deliver to the contraryThird Party Purchaser a stock power or other assignment form and all such other agreements, there shall be no liability on instruments and documents as such Third Party Purchaser may reasonably require to effectuate the part sale to it of the Majority Holders Shares of such Remaining Stockholder, and such Remaining Stockholder hereby ratifies and confirms all that the Secretary or such other officer of the Company may lawfully do or cause to Participant if a Drag-Along Transfer be done by virtue of his/her appointment herein as the attorney and agent for such Remaining Stockholder for the limited purposes set forth in this Section 3.04(g). The foregoing power of attorney is coupled with an interest and may not consummated be revoked in any manner or for any reason. Any out-of-pocket costs incurred by any Company officer in taking any such authorized actions in his/her capacity as attorney and agent for such Remaining Stockholder (including legal and other professional fees and amounts paid to creditors holding Liens in or over the Shares of such Remaining Stockholder) shall be for the sole account of such Remaining Stockholder, and shall be deducted from the Majority Holders shall not be obligated purchase price payable to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along TransferRemaining Stockholder for its Shares.
Appears in 2 contracts
Sources: Stockholders Agreement (Boxabl Inc.), Stockholders Agreement (Boxabl Inc.)
Drag Along. If the holders of a majority of the shares of the Company’s voting stock then-outstanding (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “Drag-Along Transfer”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferredMajority Preferred Holders approve a bona-fide, arms-length proposal from a third party that is not an Affiliate of any of the Preferred Shareholders for a Company Sale (a “Sale Proposal”), (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested Sale Proposal has been approved by the Majority Holders or Board with the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this consent required by Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant4.3(f)(ii), as may be required to effect such transaction, and (iii) the Majority Preferred Holders give a notice in writing to each of the other Shareholders (a “Drag Along Notice”) requiring him to do so, each of the other Shareholders shall (if the Company Sale involves the sale of equity securities held by such Shareholders) sell or transfer all of such equity securities held by such Shareholder to a third party specified in the Drag Along Notice in accordance with the Drag Along Notice or (if the Company Sale involves the sale of assets or a merger or consolidation) vote and procure the Company or any other member of the Company Group or their respective directors to vote in favor of the Sale Proposal and otherwise take all action necessary actions to waive any dissenters, appraisal or other similar rights cause the Company Sale to be consummated in accordance with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Drag Along Notice, and (if the Majority Holders shall (iCompany Sale involves the sale of assets or equity interests in any member of the Company Group other than the Company) return to each Drag-Along Holder procure the limited power-of-attorney relevant members of the Company Group to declare and all certificates representing the shares that Participant delivered pursuant to this Section 9 pay dividends and other distributions, repay shareholder loans or effect a redemption of shares, share repurchase, capital reduction or liquidation or take any other documents in action to procure that the possession sale proceeds (and if the Sale Proposal is for a sale of assets or of a member of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, Company Group other than the Company (except or a merger or consolidation, the sale proceeds net of taxes arising on such sale and reasonable expenses incurred by the Company Group) shall be distributed to the extent that funds may be paid out Shareholders in accordance with the Drag Along Notice; including but not limited to converting all Preferred Shares held by such Shareholder into Class A Common Shares prior to the sale of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser such shares in connection with such Drag-Company Sale; provided, however, the Preferred Shareholders shall be entitled to issue a Drag Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of Notice only if the Company as well as breach by any stockholder Sale shall have a valuation of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holdersno less than US$100,000,000.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 2 contracts
Sources: Shareholders Agreement, Shareholders Agreement (iKang Healthcare Group, Inc.)
Drag Along. If the holders of a majority of the shares of the Company’s voting stock then-outstanding Preferred Majority Holders (the “Majority HoldersDrag-Along Requestors”) propose consent to sella bona fide transaction or a series of related transactions in which a Person, assign or transfera group of related Persons (collectively the “Drag-Along Purchaser”), directly or indirectly, indirectly acquires all or substantially all of their shares the equity or assets and undertakings of capital stock the Group that values the Group at least US$3.20 billion (the “Drag-Along Transaction”), the Drag-Along Requestors shall have the right to require all other Shareholders, and any of such Shareholders shall have the obligations:
(a) if such Drag-Along Transaction requires shareholder approval, with respect to all Shares that such Shareholder owns or over which such Shareholder otherwise exercises voting power, to vote (in person, by proxy or by action by written consent, as applicable) all Shares in favor of, and adopt, such Drag-Along Transaction (together with any related amendment to the Amended M&AA required in order to implement such Drag-Along Transaction) and to vote in opposition to any and all other proposals that could reasonably be expected to delay or impair the ability of the Company to any third party (a “Drag-Along Transfer”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in consummate such Drag-Along TransferTransaction;
(b) if such Drag-Along Transaction is a sale of Shares of the Company, to sell the same proportion of Shares of the Company held by such Shareholder as specified is being sold by the Drag-Along Requestors to the Person(s) to whom the Drag-Along Requestors propose to sell their Shares, and on the same date and on the same terms and conditions as the Drag- Along Requestors (for the avoidance of doubt, if such Shareholder is a Series G RMB Investor, such Series G RMB Investor shall promptly comply with all instructions from the Group Companies to implement the Drag-Along Transaction, including, without limitation, the selling of its Shares in the Company and/or its corresponding equity interest in Yougu Shanghai and any of the other Group Companies);
(c) to execute and deliver all related documentation and take such other action in support of the Drag-Along Transaction as shall reasonably be requested by the Company or the Drag-Along Requestors in order to carry out the terms and provision of this Section 7, including without limitation executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement, indemnity agreement, escrow agreement, consent, waiver, governmental filing, share certificates duly endorsed for transfer (free and clear of impermissible liens, claims and Encumbrances) and any similar or related documents (provided that such Shareholder will not be required to sell any of its Shares unless the aggregate obligations and liabilities (including without limitation the liability for indemnification, if any) of such Shareholder in the Drag-Along Notice.
(b) Within seven (7) days of delivery Transaction is several, not joint, and is pro rata in accordance with such Shareholder’s relative Share ownership of the Drag-Along NoticeCompany, Participant shall deliver and will not exceed the consideration payable to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transfereeShareholder, includingif any, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In Transaction); and to procure the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree Company to (iand the Company shall) vote or provide a written consent make proper entries in favor the register of members of the transaction, (ii) take such other action within its power, at no cost Company and cancel the surrendered share certificates and issue any new share certificates as necessary to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.consummate the Drag-Along Transaction;
(d) If not to deposit, and to cause their Affiliates (except for the Drag-Along Transfer is Persons who Control such Shareholder) or Permitted Transferee not consummated within one hundred and eighty (180) days after delivery to deposit, except as provided in this Agreement, any Shares of the Drag-Along NoticeCompany owned by such party or Affiliate or Permitted Transferee in a voting trust or subject any Shares to any arrangement or agreement with respect to the voting of such Shares, unless specifically requested to do so by the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant acquirer in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agencyTransaction;
(iie) Participant shall not be liable for the inaccuracy to refrain from exercising any dissenters’ rights or rights of appraisal under Applicable Law at any representation or warranty made by any other person in connection time with the Drag-Along Transfer, other than the Company (except respect to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along TransferTransaction; and
(ivf) upon if the consummation consideration to be paid in exchange for the Shares pursuant to this Section 7 includes any securities and due receipt thereof by any Shareholder would require under Applicable Law (x) the registration or qualification of such securities or of any Person as a broker or dealer or agent with respect to such securities or (y) the provision to any Shareholder of any information other than such information as a prudent issuer would generally furnish in an offering made solely to “accredited investors” as defined in Regulation D promulgated under the Securities Act, the Company may cause to be paid to any such Shareholder in lieu thereof, against surrender of the Drag-Along TransferShares which would have otherwise been sold by such Shareholder, Participant will receive an amount in cash equal to the same amount and form of consideration per share for Participant’s shares fair value (as is received determined in good faith by the Majority Holders.
(funanimous consent of all members of Board) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and securities which such Shareholder would otherwise receive as of the Majority Holders shall not be obligated to consummate date of the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect issuance of such Proposed Drag-Along Transfersecurities in exchange for the Shares.
Appears in 2 contracts
Sources: Shareholder Agreement (Uxin LTD), Shareholder Agreement (Uxin LTD)
Drag Along. If If, prior to the holders of a majority closing date of the IPO, LLC or the Company shall propose to sell or convey 75% or more of its shares of the Company’s voting stock then's Common Stock and Convertible Securities (calculated on an as-outstanding converted basis), or any interest therein, to an Independent Third Party (the “Majority Holders”) propose to sellincluding, assign or transferwithout limitation, directly or indirectly, all of their shares of capital stock a sale of the Company to any third party by merger, consolidation, sale of all or substantially all of its assets, sale of all of the Company's outstanding Common Stock and Convertible Securities or otherwise) (a “Drag-Along Transfer”the "Approved Sale"), LLC or the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders Company shall give prompt written notice (a “Drag-Along the "Sale Notice”") at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify transfer, including the aggregate identity of the Independent Third Party, the number of shares Participant of the Company's Common Stock and Convertible Securities to be transferred, the per share price to be paid for the shares of the Company's Common Stock and Convertible Securities to be transferred and the type and nature of the consideration to be received therefor. By so indicating in the Sale Notice, LLC shall be required entitled to transfer. Any transfer require the Holders to sell to the Independent Third Party in the same transaction their portion of shares the Option and Option Shares, on the same terms and conditions set forth in the Sale Notice; provided, however, that the provisions of this Section 8.01 shall not apply to the sale or conveyance of any Common Stock of the Company pledged by Participant LLC pursuant to the terms hereof shall be for of the same amount and form of consideration per share Stock Pledge Agreement until such time as such Common Stock is no longer pledged thereunder. Without limitation as to the Majority foregoing, the Holders will receive in such Drag-Along Transfer, as specified in consent to and raise no objections against the Drag-Along Notice.
(b) Within seven (7) days of delivery of Approved Sale. If the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 Approved Sale is structured as a mergermerger or consolidation, consolidation each Holder shall waive any dissenters rights, appraisal rights or business combination, similar rights in connection with such merger or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) consolidation. The Holders will take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred necessary and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant desirable actions in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with consummation of any Approved Sale. For purposes of this Section 9 8.01, an "Independent Third Party" is any Person who, prior to such sale, does not own in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear excess of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions 5% of the Company’s certificate of incorporation 's Common Stock and bylawsConvertible Securities in the aggregate on a Fully Diluted Basis, as amendedwho is not controlling, related to the allocation controlled by or under common control with any such 5% owner of the escrowCompany's Common Stock and Convertible Securities in the aggregate and who is not the spouse, is pro rata in proportion to, and does not exceed, the amount ancestor or descendant (by birth or adoption) of consideration paid to Participant in connection with any such Drag-Along Transfer; and
(iv) upon the consummation 5% owner of the Drag-Along Transfer, Participant will receive Company's Common Stock and Convertible Securities in the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holdersaggregate.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Option Agreement (Pg&e Corp)
Drag Along. If (i) Subject to the holders of a majority right of the shares Remaining Shareholder under Clause 22.4.3(i) to exercise its right of first refusal, if the Transferring Shareholder(s) (the “Dragging Shareholder”) accepts the Third Party Offer and, as a result, the Offeror (together with any Person Acting In Concert with it) will acquire [***] of the share capital of the Company’s voting stock then-outstanding , then [***] Business Days of the date on which the Dragging Shareholder accepts the Third Party Offer the Offeror or the Dragging Shareholder may serve a notice (the “Majority HoldersDrag-along Notice”) propose (in accordance with Clause 22.4.4(ii)) on each other Shareholder (the “Dragged Shareholder”) requiring it to sellsell to the Offeror such portion of Shares held by such Dragged Shareholder as reflects, assign or transferas nearly as possible, directly or indirectly, all of their shares of capital stock the number of the Company to any third party Transfer Shares as a proportion of the total number of Shares held by the Dragging Shareholder (a the “Drag-Along Transferalong Shares”), ) on the Majority Holders may exercise drag-along rights in accordance with same terms and subject to conditions as the terms, conditions and procedures set forth in this Section 9 Third Party Offer (the “Drag-Along Rightsalong Exit”).
(ii) The Drag-along Notice shall specify:
(a) The Majority Holders shall give written notice (a “that each of the Dragged Shareholders is required to sell all its Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.along Shares;
(b) Within seven (7) days of delivery the name of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.Offeror;
(c) In the event that any transfer pursuant to this Section 9 is structured as cash price per a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisorsDrag-along Share, which shall be paid no less than the cash price per Share to be sold by Participantthe Dragging Shareholder(s), as may be required to effect such transaction, ; and Certain information in this document identified by brackets and three asterisks (“[***]”) has been omitted from this exhibit because it both (i) is not material and (iiiii) take all action to waive any dissenters, appraisal or other similar rights with respect theretowould be competitively harmful if disclosed.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery proposed date of completion of the Drag-Along Noticealong Exit.
(iii) The Drag-along Notice shall be accompanied by copies of all documents to be executed by the Dragged Shareholders to give effect to the sale of the Drag-along Shares.
(iv) Each Dragged Shareholder, upon receipt of the Majority Holders Drag-along Notice and accompanying documents, shall be obliged to:
(ia) sell all its Drag-along Shares (including giving warranties as to its title to its Drag-along Shares and its capacity to transfer the Drag-along Shares) on the date of completion of the Drag-along Exit;
(b) return to each the Dragging Shareholders, by no later [***] prior to the anticipated date of completion of the Drag-Along Holder along Exit, the limited power-of-attorney and duly executed documents, all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of which shall be held against payment of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.aggregate consideration due; and
(ec) Notwithstanding the foregoing, bear an amount of any costs of a Drag-Along Holder will not be required to comply with this Section 9 along Exit in connection with any proposed the same proportion as the consideration for its Drag-Along Transfer, unless:
(i) Any representations and warranties along Shares bears to the aggregate consideration for all Shares to be made by Participant paid in connection with the Drag-Along along Exit.
(v) Completion of any transfer pursuant to this Clause 22.4.4 shall take place at the same time as completion of the transfer of the Transfer are limited Shares. In order to representations and warranties related to authorityeffect such completion, ownership and the ability to convey title Offeror shall transfer the purchase price for the Drag-along Shares to the SharesCompany, includingto receive and hold on behalf of each Dragged Shareholder, but not limited to, representations and warranties that each Dragged Shareholder shall deliver duly executed instrument(s) for share transfer (iincluding a duly executed deed of transfer or a power of attorney authorising the execution of a deed of transfer on its behalf) Participant holds all right, title and interest in and for the Drag-along Shares to the Shares that Participant purports to hold, free and clear Company. The Company’s receipt of all liens and encumbrances, (ii) the obligations purchase price as agent on behalf of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to each Dragged Shareholder shall be entered into by Participant have been duly executed by Participant and delivered a good discharge to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant Offeror who shall not be liable bound to see to the application of those moneys. The Company shall hold the purchase price in trust for the inaccuracy of each Dragged Shareholder without any representation or warranty made by obligation to pay interest. If any other person in connection with the Dragged Shareholder fails to deliver its duly executed instrument(s) for share transfer for its Drag-Along Transfer, other than along Shares to the Company (except by completion, the Directors shall authorise any Director to transfer such Drag-along Shares on behalf of such Dragged Shareholder to the Offeror to the extent that the Offeror has, by completion, put the Company in funds may be paid out of an escrow established to cover breach of representations, warranties and covenants pay the purchase price. The Directors shall then authorise registration of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holderstransfer.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. If the holders of a majority of the shares of the Company’s voting stock then-outstanding 8.3.1 Subject to Clause 8.1, if VSC (the “Majority HoldersDrag Along Shareholder”) propose wishes to sell, assign or transfer, directly or indirectly, transfer all of their shares of capital stock Shares and/or Equity Securities in the Company (the “Selling Shares”) to a bona fide arm's length purchaser (a "Proposed Buyer"), the Drag Along Shareholder may require each of the Company remaining Shareholders (together, the "Called Shareholders") to sell and transfer all their Shares and/or Equity Securities to the Proposed Buyer (or as the Proposed Buyer directs) in accordance with the provisions of this Clause (a "Drag Along Option").
8.3.2 The Drag Along Shareholder may exercise the Drag Along Option by giving written notice to that effect (a "Drag Along Notice") at any time before the transfer of the Selling Shares to the Proposed Buyer. The Drag Along Notice shall specify:
(a) that each of the Called Shareholder is required to transfer all its Shares and/or Equity Securities (the "Called Shares") pursuant to this Clause 8.3;
(b) the person to whom the Called Shares are to be transferred;
(c) the consideration payable for the Called Shares (which shall, for each Called Share, be an amount equal to the price per Share offered by the Proposed Buyer for the Selling Shares), which shall not be less than the lower of (i) the last price at which Shares were acquired whether on issue or on transfer by any party within the preceding six months or (ii) the Share valuation as determined by a qualified independent third party acceptable to Investor A; and
(a d) the proposed date for completion of the sale of the Selling Shares (the “Drag-Completion Date”).
8.3.3 The Called Shareholders shall inform the Drag Along TransferShareholder within fourteen (14) Business Days from the receipt of the Drag Along Notice whether the Called Shareholder accepts the Drag Along Option. Should the Called Shareholder refuse to sell their Called Shares to the Proposed Buyer (the “Refusing Shareholder(s)”), the Majority Holders may exercise drag-along rights Refusing Shareholder is obliged to purchase all the Selling Shares of the Drag Along Shareholder and Called Shares of such other Called Shareholder who wished to sell its Shares and/or Equity Securities pursuant to the Drag Along Notice. The consideration payable shall be the same as set forth in Clause 8.3.2(c) above and the sale and purchase of the Selling Shares and Called Shares by the Refusing Shareholder shall be made in accordance with the terms and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, includingClause 7.2 above, as applicable, one or more stock certificates, properly endorsed for transfer within three (3) months from the notice of the Refusing Shareholder to the transfereeDrag Along Shareholder not to sell his Called Shares to the Proposed Buyer. If, together with a limited power-of-attorney authorizing following the Majority Holders expiry of the three (3) month period referred above, the Refusing Shareholder has not purchased the Selling Shares of the Drag Along Shareholder and Called Shares of such other Called Shareholder who wished to transfer such sell its Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer and/or Equity Securities pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Drag Along Notice, the Majority Holders shall (i) return Drag Along Shareholder is entitled to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection proceed with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant transfer in accordance with their respective terms; the Drag Along Notice and (iv) neither the execution and delivery of documents Refusing Shareholder shall be obliged to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except sell his Called Shares to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority HoldersProposed Buyer.
(f) All costs and expenses incurred by Participant in connection with any Drag-8.3.4 Once issued, a Drag Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, Notice shall be borne by Participant.
(g) Notwithstanding anything herein to the contraryirrevocable. However, there a Drag Along Notice shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated lapse if, for any reason, and the Majority Holders shall Drag Along Shareholder has not be obligated sold the Selling Shares to consummate the proposed Drag-Along Transfer, regardless Proposed Buyer within six (6) months of whether serving the Majority Holders have delivered a Drag-Drag Along Notice in respect on the Called Shareholders. The Drag Along Shareholder may serve further Drag Along Notices following the lapse of such Proposed Drag-any particular Drag Along TransferNotice.
Appears in 1 contract
Sources: Shareholders Agreement
Drag Along. 4.1 If a Transferor sells, other than in a public offering pursuant to a registration statement, shares of Common Stock held by such Transferor to a Transferee in one transaction or a series of related transactions on arms-length terms which constitute the holders transfer of a majority all of the Common Stock then owned by ▇▇▇▇▇ and its Affiliates, the Transferor and/or its affiliates may, at their option, cause TCW (together with any party deemed to be included in such definition pursuant to SECTION 4.2 below, a "DRAG-ALONG PARTY") to sell to the Transferee, on the same terms and conditions as provided with respect to the sale by the Transferor to such Transferee in such transaction, all shares of Common Stock which the Company’s voting stock then-outstanding (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “Drag-Along Party then owns (such shares being "DRAG-ALONG SHARES" and such transaction being a "DRAG-ALONG TRANSACTION"); PROVIDED, HOWEVER, that: (x) the price for the Drag-Along Shares may not be lower than the price per share paid to the Transferor in the same or related transaction; and (y) the consideration for the Drag-Along Shares shall be paid in cash at the closing of the Drag-Along Transaction(s) unless the relevant Drag-Along Party consents to payment in a form other than cash or, at the option of the relevant Drag-Along Party, in the same form of payment as received by the Transferor.
4.2 If TCW or any of its Affiliates (a "TCW ENTITY") proposes to Transfer to any Affiliate thereof any of the Common Stock held by such TCW Entity, then such TCW 5 <PAGE> Entity, as a condition to the Transfer”), shall cause such Affiliate to agree to be bound by this SECTION 4 and such Affiliate shall thereupon be deemed to be a party hereto and shall notify ▇▇▇▇▇ of the Majority Holders may exercise identity and address of such Affiliate. Thereupon such Affiliate shall also be deemed a "Drag-Along Party" for purposes of this Agreement. The drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“SECTION 4 shall not be applicable to transferees of the Drag-Along Rights”)Party other than to other Affiliates of such Drag-Along Party.
(a) The Majority Holders 4.3 To exercise a drag-along right, Transferor shall give written notice (a “the "DRAG-ALONG NOTICE") to the Drag-Along Notice”) Party against whom the right is to be enforced at least fifteen (15) business days prior to any proposed Transfer of Common Stock. The notice shall specify the consummation terms of such proposed Transfer and certify as to the facts supporting exercise of the drag-along right and include a copy of the contract between the Transferor and Transferee to consummate the Drag-Along Transfer to Participant of any election by (the Majority Holders to exercise their "SALE CONTRACT"), if such a Sale Contract has been signed . During the Drag-Along Rights hereunderPeriod (as defined below), setting forth the Drag-Along Party in receipt of the Drag-Along Notice may not Transfer any Securities subject to Transferor's drag-along rights under this SECTION 4 to any Person other than Transferor or the Transferee. The "Drag-Along Period" shall be the period commencing on the date the Drag Along Notice is given and terminating on the earlier of (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of 120th day following delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders Notice or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations date of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation termination of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority HoldersSale Contract. SECTION 5.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Shareholder Agreement
Drag Along. If the holders (a) Each Member shall, if requested by another Member who wishes to accept a third party offer for its Shares (“Drag Along Sellers”), participate in a Transfer (a “Drag Along Sale”) of a majority all of the shares Shares and rights to Shares owned by each Member and its Affiliates to any Person not Affiliated with any of the Company’s voting stock then-outstanding Drag Along Sellers (the “Majority HoldersDrag Along Buyer”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “Drag-Along Transfer”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares manner and on the terms set forth in this Section 7; provided, however, that the Drag-Drag Along Notice.
(c) In Sellers and their Affiliates must collectively hold, on a fully diluted basis, at least 50% of the event that any transfer outstanding Shares in order to make a request to cause a Drag Along Sale pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto7.
(db) If the Drag-Drag Along Transfer is not consummated within one hundred and eighty Sellers elect to exercise their rights under this Section 7, a notice (180the “Drag Along Notice”) days after delivery shall be furnished by the Drag Along Sellers to the other Members. The Drag Along Notice shall set forth the principal terms of the Drag-Drag Along Sale, the purchase price and the name and address of the Drag Along Buyer. If the Drag Along Sellers consummate the sale referred to in the Drag Along Notice, the Majority Holders Member shall (i) return be bound and obligated to each Drag-sell all of the Shares and rights to acquire Shares held by it and its Affiliates in the Drag Along Holder Sale on the limited power-of-attorney same terms and all certificates representing conditions. If at the shares that Participant delivered end of the 90th day following the date of the effectiveness of the Drag Along Notice the Drag Along Sellers have not completed the Drag Along Sale, the Member shall be released from its obligations under the Drag Along Notice, the Drag Along Notice shall be null and void, and it shall be necessary for a separate Drag Along Notice to have been furnished and the terms and provisions of this Section 7 separately complied with, in order to consummate such Drag Along Sale pursuant to this Section 9 and 7, unless the failure to complete such sale resulted from any other documents in failure by the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required Member to comply in any material respect with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holdersthis Section 7.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Participation Agreement
Drag Along. If 13.1 After going through the holders of pre-emption procedure set out in Clause 11, if a majority of the shares of the Company’s voting stock then-outstanding Shareholder (the “Majority HoldersSelling Shareholder”) propose wishes to sell, assign or transfer, directly or indirectly, transfer all of their shares of capital stock of the Company its Shares to any third party person who is not a Shareholder (“a Third Party”) then the Selling Shareholder shall have the option (“a Drag-Along Transferalong Option”) to require the other Shareholder (“the Called Shareholder”) to transfer all its Shares to the Third Party or as the Third Party sh;ll direct at a price per Share and on terms and conditions, including as evidenced by ancillary agreements or arrangements such as non-competition or consultancy arrangements (“the Terms and Conditions”), which is no less favourable than the Majority Holders price per Share at which the Selling Shareholder is selling its Shares.
13.2 The Selling Shareholder may exercise dragthe Drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give Option by giving written notice (“a “Drag-Along along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer Called Shareholder specifying that the Called Shareholder is required to Participant of any election by transfer its Shares, the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed price per Share at which they are to be transferred, (ii) the consideration Third Party to whom they are to be received transferred, the Terms and Conditions and the proposed date of transfer.
13.3 Once issued, a Drag-along Notice shall be irrevocable save that it shall lapse if for such shares, any reason the Selling Shareholder does not transfer all of its Shares to the Third Party within thirty (ii30) the identity Business Days of the prospective transfereegiving of such notice.
13.4 Upon exercise of the Drag-along Option, the Called Shareholder shall be bound to sell its Shares for the price and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as Conditions specified in the Drag-Along Notice.along Notice to the Third Party. Completion of the sale of such Shares shall take place on a date specified for that purpose by the Selling Shareholder to the Called Shareholder except that:
13.4.1 the Selling Shareholder may not specify a date which is less than five (b5) Within seven (7) days of delivery Business Days after the giving of the Drag-Along along Notice, Participant shall deliver to ; and
13.4.2 the Majority Holders such instruments of transfer as date so specified by the Selling Shareholder shall be reasonably requested by the Majority Holders or same date as the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed date proposed for transfer to completion of the transferee, together sale of the Selling Shareholder’s Shares unless the Called Shareholder and the Selling Shareholder agree otherwise.
13.5 For the period of time that a Drag-along Notice is served until completion of the sale of the Called Shareholder’s Shares in accordance with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
along Option (c) In or, if earlier, the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery lapsing of the Drag-Along Noticealong Option) the Called Shareholder shall use its best efforts to procure that it shall as a Shareholder, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney or its directors and all certificates representing the shares that Participant delivered pursuant other persons shall, take all action necessary or desirable (including as it relates to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, votes at a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants meeting of the Company as well as breach by or the Board) in order to effect any stockholder of any and all of the identical representations, warranties and covenants provided actions contemplated by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holdersthis Clause 13.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Shareholder Agreement (Unique Logistics International, Inc.)
Drag Along. If (a) Notwithstanding anything contained in this Article VII to the holders of a majority of contrary, if during the shares of first two years following the Company’s voting stock then-outstanding (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectlyClosing Date, all of their shares of capital stock the Investors, on or after the second anniversary of the Company Closing Date, the Investors acting by Investor Supermajority Approval (in each case, the “Dragging Investors”) approve a bona fide proposal to any third party Transfer for cash and/or Marketable Securities in an arm’s length transaction or series of related transactions all of, and not less than all of, the Shares and the PECs (a “Drag-Along TransferSale Proposal”) to a Person that is not an Affiliate of any such Investor (each, a “Required Sale”), then the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders Dragging Investors shall give deliver a written notice (a “Drag-Along Required Sale Notice”) with respect to such Sale Proposal at least fifteen (15) days ten Business Days prior to the consummation anticipated closing date of such proposed Drag-Along Transfer Required Sale to Participant of any election by Holdco and all other Holders.
(b) The Required Sale Notice will include the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the Required Sale, including (A) the name and address of the proposed transaction. Such notice shall also specify Transferee, (B) the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same proposed amount and form of consideration per share Share and per PEC (the “Dragging Consideration”) (and if such consideration consists in part or in whole of Marketable Securities, the Dragging Investors will provide such information, to the extent reasonably available to the Dragging Investors, relating to such Marketable Securities as the Majority Holders other Investors may reasonably request in order to evaluate such Marketable Securities) and (C) if known, the proposed Transfer date. The Dragging Investors will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days deliver or cause to be delivered to each other Holder copies of delivery of the Drag-Along Notice, Participant shall deliver all transaction documents relating to the Majority Holders such instruments of transfer Required Sale promptly as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Noticesame become available.
(c) In Each Shareholder and PEC Holder, upon receipt of a Required Sale Notice, shall be obligated to sell all of its Shares and PECs, and participate in the event that any transfer pursuant Required Sale contemplated by the Sale Proposal, to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent their Shares in favor of the transactionRequired Sale at any meeting of Shareholders called to vote on or approve the Required Sale and/or to consent in writing to the Required Sale, to use its reasonable efforts to cause its Shareholder Directors to vote in favor of the Required Sale at any meeting of the Holdco Board called to vote on or approve the Required Sale and/or to consent in writing to the Required Sale, to waive all dissenters’ or appraisal rights in connection with the Required Sale, to enter into agreements relating to the Required Sale as and to agree (as to itself) to make to the proposed purchaser the same representations, warranties, covenants and agreements as the Dragging Investors agree to make in connection with the Required Sale; provided that (i) in no event shall any Shareholder and PEC Holder be required to make any representations and warranties (other than as to the title to its Shares or PECs, as applicable, its power, authority and legal right to Transfer such Shares or PECs, and the absence of any adverse claims with respect to such Shares or PECs) or provide any indemnities and (ii) take a Shareholder and PEC Holder shall not be obligated to enter into any non-competition or other post-closing covenant that restricts its activities in any way. If at the end of the 120th day after the date of delivery of the Required Sale Notice (as such other action within its powerperiod may be extended to obtain any required regulatory approvals) the Dragging Investors have not completed the proposed transaction, at no cost to it (other than fees and expenses payable to its advisors, which the Required Sale Notice shall be paid by Participant)null and void, as may each Shareholder and PEC Holder shall be required released from such Shareholder’s and PEC Holder’s obligations under the Required Sale Notice and it shall be necessary for a separate Required Sale Notice to effect such transaction, be furnished and (iii) take all action the terms and provisions of this Section 7.4 separately complied with in order to waive consummate any dissenters, appraisal or other similar rights with respect theretoSale Proposal.
(d) If Any expenses incurred for the Drag-Along Transfer is not consummated within one hundred benefit of all Shareholders and eighty (180) days after delivery of the Drag-Along Notice, the Majority PEC Holders shall (i) return to each Drag-Along Holder be paid by the limited power-of-attorney Shareholders and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority PEC Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except Sharing Percentages to the extent that funds may be not paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made or reimbursed by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority HoldersTransferee.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Subscription and Shareholders Agreement (Nordic Telephone CO ApS)
Drag Along. 4.1 If Transferor sells, other than in a public offering pursuant to a registration statement or pursuant to Rule 144 (or any successor provision) under the holders Securities Act, shares of Common Stock and/or Series Z Preferred Stock held by such Transferor to a Transferee in one transaction or a series of related transactions which constitute the transfer of a majority of the then outstanding shares of the Company’s voting stock then-outstanding (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock Common Stock and Series Z Preferred Stock of the Company to Issuer, Holdings and/or its affiliates may, at their option, cause each of the members of the ▇▇▇▇▇ Group and JEDI (either party, and any third party (affiliate thereof, being a “"Drag-Along Transfer”)Party" and collectively, the Majority Holders may exercise "Drag-Along Parties") to sell to the ---------------- ------------------ Transferee, on the same terms and conditions as provided with respect to the sale by Transferor to such Transferee, up to the number of shares of Common Stock (rounded to the nearest whole share) equal to the product of (i) the total number of shares of Common Stock which such Drag-Along Party then owns and (ii) a fraction with a numerator equal to the number of shares of Common Stock and Series Z Preferred Stock then being sold by the Transferor and a denominator equal to the total number of shares of Common Stock and Series Z Preferred Stock owned by the Transferor (such shares being "Drag-Along Shares" and such ----------------- transaction being a "Drag-Along Transaction"); provided however, that: (v) ---------------------- Transferor shall only be entitled to drag along shares of Common Stock under this Section 4 that the Drag-Along Party or Parties own as of the date hereof --------- (securities acquired after the date hereof in any manner shall not be subject to the drag-along rights provided in accordance with this Section 4); (w) Transferor may not --------- receive more than the liquidation preference, plus accrued dividends thereon, for the Series D Preferred Stock sold in a Drag-Along Transaction; (x) the price for the Drag-Along Shares may not be lower than the price paid to other common stockholders in the same or related transaction; (y) the consideration for the Drag-Along Shares shall be paid in cash unless the relevant Drag-Along Party consents to payment in a form other than cash; and subject (z) if the Drag-Along Transaction is a Merger Transaction, the provisions of this Section 4.1 shall not apply to the termsCommon Stock held by JEDI unless the Series E Preferred Stock then held by JEDI is redeemed in cash as of or prior to the effective date of the Merger Transaction.
4.2 If any of the Drag-Along Parties proposes to Transfer to any of its affiliates any of the Common Stock held by such Drag-Along Party, conditions and procedures then such Drag-Along Party, as a condition to the exercise of such right of Transfer, shall cause such Transferee to agree to be bound by this Section 4. The drag-along rights --------- set forth in this Section 9 (“Drag-4 shall not be applicable to transferees of the Drag- --------- Along Rights”)Parties other than to their respective affiliates.
(a) The Majority Holders 4.3 To exercise a drag-along right, Transferor shall give written notice (a “to the Drag-Along Notice”) Party or Parties against whom the right is to be enforced at least fifteen (15) business days prior to any proposed Transfer of Common Stock and/or Series Z Preferred Stock. The notice shall specify the consummation terms of such proposed Transfer and certify as to the facts supporting exercise of the drag-along right. The Drag-Along Transfer to Participant Parties shall have ten (10) business days after receipt of any election by such notice (the Majority Holders to exercise their "Drag-Along Rights hereunder, setting forth (iNotice Period") the shares proposed to be transferred, (ii) the consideration to be received for before such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant ------------------------ parties shall be required to transfer. Any transfer of Transfer their shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in Transferee. During the Drag-Along Notice.
(b) Within seven (7) days of delivery of Notice Period the Drag-Along Notice, Participant shall deliver Party or Parties in receipt of such notice may not Transfer any Securities subject to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited powerTransferor's drag-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to along rights under this Section 9 is structured as a merger, consolidation or business combination, or 4 to any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (Person other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.Transferor. ---------
Appears in 1 contract
Drag Along. (i) If the holders any member or group of a majority members of the shares of Sponsor Group (collectively, the Company’s voting stock then-outstanding “Dragging Party”) proposes to consummate, or proposes to cause the Partnership to consummate, an Extraordinary Transaction (including by (x) transferring equity securities or other interests in any parent entity that holds equity securities or other interests in the General Partner or (y) the General Partner Transferring Partnership Units), the General Partner may (but shall not be required to) notify all other Limited Partners (the “Majority HoldersDragged Limited Partners”) propose in writing of its election to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of exercise the Company to any third party (a “Drag-Along Transfer”), the Majority Holders may exercise drag-drag along rights in respect of Partnership Units held by them in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 11.07 (a “Drag-Drag Along RightsNotice”). If equity securities or other interests in any parent entity that directly or indirectly holds equity securities in the Partnership are the subject of the Drag Along Sale, the provisions of this Section 11.07 shall apply to the Partnership Units beneficially owned by the Dragging Party.
(aii) The Majority Holders In the event the General Partner elects to exercise its drag along rights in connection with an Extraordinary Transaction, the Dragged Limited Partners shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior consent to and raise no objections to the proposed transaction, and the Dragged Limited Partners and the Partnership will take all other actions reasonably necessary or desirable to cause the consummation of such transaction on the terms proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Dragging Party and consistent with the terms of this Section 11.07 (such transaction, a “Drag Along Rights hereunderSale”). Without limiting the foregoing, setting forth (i) if the shares proposed Drag Along Sale requires approval of the Dragged Limited Partners, the Dragged Limited Partners will vote or cause to be voted all Partnership Units that they hold or with respect to which such Dragged Limited Partners have the power to direct the voting and which are entitled to vote on such transaction in favor of such transaction and will waive any appraisal rights which they may have in connection therewith, and (ii) if the proposed Drag Along Sale is structured as or involves a Transfer of securities or interests, each Dragged Limited Partner shall agree to sell to the same transferee (or its designee) in such Drag Along Sale the number of Partnership Units equal to the product of (x) the number of Partnership Units held by such Dragged Limited Partner and (y) a fraction, the numerator of which is the total number of Partnership Units proposed to be transferredTransferred by the Dragging Party in such Drag Along Sale and the denominator of which is the total number of Partnership Units beneficially owned by the Sponsor Group.
(iii) Each Dragged Limited Partner hereby irrevocably makes, constitutes and appoints the General Partner with respect to such Drag Along Sale as such Dragged Limited Partner’s duly appointed proxy and attorney in fact, with full power of substitution and resubstitution, in the name, place and stead of such Dragged Limited Partner, granting the General Partner full power and authority to do and perform each and every act and thing requisite, necessary and advisable to be done in connection with such Drag Along Sale consistent with the provisions of this Section 11.07 (including full power and authority (i) to vote with respect to such Dragged Limited Partner’s Partnership Units in favor of and in furtherance of any such Drag Along Sale and (ii) the consideration to execute, seal (where applicable) and deliver, on behalf of such Dragged Limited Partner, any and all definitive agreements, deeds, notices, documents or certificates to be received executed by such Dragged Limited Partner in connection with such Drag Along Sale and binding such Dragged Limited Partner to deliver its Partnership Units and to all other agreements set forth in such definitive documents for such sharesDrag Along Sale). The foregoing proxy and appointment of attorney in fact (including any successive proxy and attorney in fact), (ii) being coupled with an interest, is irrevocable and will not be revoked by the identity insolvency, bankruptcy, death, incapacity, dissolution, liquidation or other termination of the prospective transfereeexistence of such Dragged Limited Partner. Each Dragged Limited Partner will take such further action or execute such other instruments as may be reasonably necessary to effectuate the intent of such proxy and appointment and hereby revokes any proxy or similar appointment previously granted by such Dragged Limited Partner with respect to any Partnership Units. Except with respect to violations of law, each Dragged Limited Partner agrees that it will ratify and confirm all actions that the General Partner may do or cause to be done pursuant to the foregoing, and waives any and all defenses that may be available to contest, negate or disaffirm any action of the General Partner pursuant to the foregoing.
(iv) any other material terms and conditions of At the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant Dragging Party’s request in connection with a Drag Along Sale, each Dragged Limited Partner shall agree to make the proposed Drag-Along Transfer.
(e) Notwithstanding same representations, warranties, covenants, indemnities and agreements, and enter into the foregoingsame transaction agreements, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with as the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered Dragging Party makes or enters into in connection with the transactionDrag Along Sale (except that, nor in the performance case of Participant’s obligations thereunderrepresentations and warranties pertaining specifically to, or covenants, indemnities or other agreements made specifically by, the Dragging Party, each such Dragged Limited Partner shall make comparable representations and warranties pertaining specifically to (and covenants, indemnities or other agreements specifically by) such Dragged Limited Partner), and will cause agree to bear on a breach several and not joint basis its pro rata share (based on the relative proceeds payable in connection with such Drag Along Sale) of all liabilities arising out of representations, warranties, covenants, indemnities or violation other agreements (other than those representations, warranties, covenants, indemnities or other agreements that pertain specifically to the Dragging Party or any Dragged Limited Partner, who shall bear all of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(iiliability related thereto) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Drag Along TransferSale (provided, other than that, in no event shall the Company (except to the extent that funds may be paid out pro rata share of an escrow established to cover breach of representations, warranties and covenants liabilities of the Company as well as breach by Dragging Party or any stockholder of any of Dragged Limited Partner exceed the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser proceeds payable to such Person in connection with such Drag-Drag Along Transfer, is several and not joint (except to the extent that funds may be paid out Sale). Any escrow of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder sale or other disposition proceeds of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is Drag Along Sale shall be withheld on a pro rata in proportion to, basis among the Dragging Party and does not exceed, the amount of consideration paid to Participant Dragged Limited Partners (based on the relative proceeds payable in connection with such Drag-Drag Along Transfer; andSale) on such terms as shall be reasonably determined by the Dragging Party.
(ivv) upon the consummation The obligations of the Drag-Dragged Limited Partners with respect to the Drag Along Transfer, Participant will Sale are subject to the requirement that the Dragging Party and each Dragged Limited Partner shall receive the same form and amount and form of consideration per share for Participant’s shares in respect of each of their Partnership Units to be Transferred in the Drag Along Sale, or if the Dragging Party is given an option as is to the form and amount of consideration to be received in connection with the Drag Along Sale, all Dragged Limited Partners shall be given the same option; provided that, if the Dragging Party and the Dragged Limited Partners are selling different classes or series of Partnership Units, the economic benefits to be received by, and the burdens to be borne by, the other Limited Partners shall be adjusted as determined by the Majority HoldersDragging Limited Partner that delivered the Drag Along Notice in good faith (taking into account the differences among the classes or series of Units).
(fvi) All Each Dragged Limited Partner will bear (i) its own costs and expenses incurred by Participant in connection with any Drag-the Drag Along Transfer, including, without limitation, transfer taxes Sale and legal, accounting (ii) its pro rata share (based on the relative proceeds payable in connection with such Drag Along Sale) of the costs and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein expenses incurred in connection with the Drag Along Sale to the contrary, there shall be no liability on extent such costs and expenses are incurred for the part benefit of both the Majority Holders to Participant if a Drag-Dragging Party and the Dragged Limited Partners and are not otherwise paid by the transferee. In the event that the Drag Along Transfer Sale is not consummated for any reason, the Partnership will reimburse all Partners and the Majority Holders Dragging Party for all expenses reasonably paid or incurred by them in connection therewith.
(vii) The Dragging Party shall, in its sole and absolute discretion, decide whether or not to pursue, consummate, postpone or abandon any Drag Along Sale and the terms and conditions thereof. No Partner (nor any member of the Sponsor Group) nor any Affiliate of any such Partner shall, to the fullest extent permitted by law, have any liability to any other Partner or the Partnership arising from, relating to or in connection with the pursuit, consummation, postponement, abandonment or terms and conditions of any Drag Along Sale, except to the extent such Partner shall not be obligated have failed to consummate comply with the proposed Drag-Along Transfer, regardless provisions of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transferthis Section 11.07.
Appears in 1 contract
Sources: Merger Agreement (Retail Opportunity Investments Partnership, LP)
Drag Along. If Notwithstanding anything to the holders contrary set forth in this Section 5, in the event that any of the Shareholders ("DRAG ALONG INITIATOR") secures a majority bona fide offer from any third party, in cash or publicly traded securities, to purchase all of the Ordinary Shares then held by, in cash or publicly traded securities, at a price per share (adjusted for allocation of dividend, bonus shares, splits etc.) of not less than US$10, provided that such price per share shall not be lower than 80% of the average of the closing prices of the Company's shares on the NYSE over the consecutive 60 trading days immediately preceding such sale, and the offeror conditions its offer on the acquisition of all the shares held by all of the other Shareholders at such time, such Shareholders will be required (subject to the provisions of the following paragraph), if so demanded by the Drag Along Initiator, to sell all of the shares of the Company’s voting stock then-outstanding (Company then held by them to such offeror, at the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of same price and upon the Company to any third party (a “Drag-Along Transfer”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material same terms and conditions of as those to which the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested sale by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Drag Along Notice.
(c) In the event that any transfer pursuant to this Section 9 Initiator is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) subject. Notwithstanding the foregoing, in lieu of selling the shares, as demanded by the Drag Along Initiator, the other Shareholder(s) may acquire all of the Company's shares then held by the Drag Along Initiator at the price per share and upon the same terms and conditions as those to which the sale to the offeror would have been subject; PROVIDED, HOWEVER, that such acquisition of Company shares by the other Shareholder(s) shall be for cash only (and, if the consideration offered by the offeror is shares of a Drag-Along Holder will not publicly traded entity, such shares shall be required to comply with this Section 9 valued in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection accordance with the Drag-Along Transfer average closing price of such shares on the principal stock exchange on which they are limited traded over the 30 day period prior to representations such demand) and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to such cash amount shall be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither Drag Along Initiator within 10 business days following its demand. For the execution and delivery avoidance of documents to be entered into in connection with the transactiondoubt, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant an offer shall not be liable for deemed bona fide if the inaccuracy of any representation Drag Along Initiator or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
its controlling parties is a "Baal Inyan" (iii) the liability for indemnification, if any, of Participant as such term is defined in the Drag-Along Transfer and for Companies Law) in such third party or in the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company publicly traded entity whose shares are offered as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holdersconsideration.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Purchase Agreement (Tefron LTD)
Drag Along. If the holders a Selling Shareholder that intends to sell all (but not less than all) of its Company Securities to a majority Purchaser holds more than sixty-six and two-thirds percent (66 2/3%) of the shares outstanding Shares on a fully-diluted basis, and it is a condition of the Company’s voting stock then-outstanding (Purchaser for the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, completion of such sale that the Purchaser purchase all of their shares of capital stock of the issued and outstanding Company to any third party (a “Drag-Along Transfer”)Securities, the Majority Holders may exercise drag-along rights in accordance with and then, subject to the terms, conditions and procedures set forth in provisions of this Section 9 6.2, the Selling Shareholder shall have the right to require each Remaining Shareholder to sell all (“Drag-Along Rights”).
(abut not less than all) The Majority Holders shall give of its Company Securities to the Purchaser, such right to be exercised by delivery of a joint written notice (a “Drag-Along Notice”) from the Selling Shareholder and the Purchaser to each Remaining Shareholder, which notice shall state (i) the name of the Purchaser, including the identity of any parent company or other material Affiliate, (ii) that the Selling Shareholder is selling all of its Company Securities to the Purchaser, (iii) the purchase price for the Company Securities being sold (expressed on an aggregate and a per-Company Security basis in United States funds) and the terms of payment of such purchase price, and (iv) the intended date of completion of such sale, after which the following procedure shall apply:
(a) The Drag-Along Notice must be delivered at least fifteen (15) days prior to before the consummation of such proposed Drag-Along Transfer to Participant of any election by closing date for the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity sale and purchase of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along NoticeSelling Shareholder’s Shares.
(b) Within seven Subject to Section 6.2(c), The delivery of the Drag-Along Notice to the Remaining Shareholder shall constitute an irrevocable and binding obligation of the Remaining Shareholder to sell, and the Purchaser to purchase, all of the Remaining Shareholder’s Company Securities on the same terms and conditions, mutatis mutandis, as are applicable to the sale by the Selling Shareholder of its Shares to the Purchaser and on such other applicable terms and conditions as set forth in this Section 6.2(b).
(7c) days The purchase price for any type of Company Security held by a Remaining Shareholder that is not being sold by any Selling Shareholder shall be the fair market value thereof, as determined by agreement of the Purchaser and such Remaining Shareholder or, if such agreement is not reached within ten (10) Business Days after delivery by the Selling Shareholder(s) and the Purchaser of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested determined by an independent valuator appointed by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale Board of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor Directors of the transactionCompany, (ii) take such other action within its power, at no cost to it (other than the fees and expenses payable to its advisors, of which shall be paid shared equally by Participant), as may be required to effect such transaction, the Purchaser and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect theretothe Remaining Shareholder.
(d) If the Drag-Along Transfer is closing of any sale contemplated by this Section 6.2 (a “Drag Transaction”) shall not consummated have occurred within one hundred and eighty ninety (18090) days after delivery of the Drag-date of a Drag Along Notice, the Majority Holders such Drag Along Notice shall (i) return to each Drag-Along Holder the limited power-of-attorney be null and void and of no force and effect and all certificates representing of the shares that Participant delivered pursuant to provisions of this Section 9 and 6.2 shall again become applicable to any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along TransferDrag Transaction.
(e) Notwithstanding At or before the foregoingtime of completion of the sale of the Company Securities of each Remaining Shareholder to the Purchaser, a Drag-Along Holder will not each Remaining Shareholder shall (i) cause to be required discharged any and all encumbrances of, and security interests in, its Shares, and (ii) execute and deliver to comply the Purchaser, against payment for such Company Securities, all certificates representing such Company Securities, duly endorsed for transfer or with duly executed stock powers or other assignment forms attached, as well as such other duly executed documents and instruments as the Purchaser may reasonably require (subject to Section 6.2(b)) to evidence and give effect to the sale and transfer to it of such Shares.
(f) If, on the scheduled date for closing, any Remaining Shareholder fails to execute and deliver the documents and instruments contemplated in clause (ii) of Section 6.2(e), then, effective as of such scheduled date, such Remaining Shareholder hereby irrevocably appoints the Secretary of the Company or, in his absence or failure to act, the President of the Company as attorney and agent for, and in the name and on behalf of, such Remaining Shareholder to take possession of and execute and deliver to the Purchaser all such agreements, instruments and documents as the Purchaser may reasonably require to document and effect the sale to it of the Company Securities of such Remaining Shareholder, and such Remaining Shareholder hereby ratifies and confirms all that the Secretary or President of the Company may lawfully do or cause to be done by virtue of his appointment herein as the attorney and agent for the Remaining Shareholder for the limited purposes set forth in this Section 9 6.2(f). Such power of attorney is coupled with an interest and shall be irrevocable.
(g) Subject to Section 6.2(h), if any Remaining Shareholder does not complete the sale of its Company Securities, as described in connection with any proposed Drag-Along TransferSection 6.2(e), unlessthe Secretary or President of the Company (as applicable), acting on behalf of the Remaining Shareholder pursuant to the power of attorney provided for in Section 6.2(f), may complete such sale and do such other acts and things required of such Remaining Shareholder on behalf of such Remaining Shareholder, in which event:
(i) Any representations the Secretary or President of the Company (as applicable) shall, and warranties to be made by Participant is hereby irrevocably authorized to, register in connection with the Drag-Along Transfer are limited to representations books and warranties related to authority, ownership and records of the ability to convey title Company the transfer of such Remaining Shareholder’s Company Securities to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to Purchaser effective on the Shares that Participant purports to hold, free and clear date fixed for completion of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agencysuch sale;
(ii) Participant effective as of the date fixed for completion of such sale, such Remaining Shareholder’s Company Securities and all of such Remaining Shareholder’s rights thereunder and therein shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except conclusively deemed to have been effectively assigned and transferred to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders)Purchaser;
(iii) each of the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders Secretary or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants President of the Company (as well as breach by any stockholder applicable) shall, and is hereby authorized to, have the proceeds of such sale made payable to the Company in trust for such Remaining Shareholder to be retained without interest accruing thereon until such Remaining Shareholder delivers to the Company (A) satisfactory evidence of the removal of any of lien, encumbrance or other security interest in the identical representations, warranties and covenants provided by all stockholders)Company Securities that were sold on its behalf to the Purchaser, and subject to any provisions of the Company’s certificate of incorporation and bylaws(B) certificates representing such Company Securities, as amended, related to the allocation of the escrow, is pro rata which certificates and/or other documents shall be duly endorsed in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with blank by such Drag-Along TransferRemaining Shareholder for transfer; and
(iv) upon the consummation promptly following receipt of the Drag-Along Transferstock certificates referred to in Section 6.2(f)(iii), Participant will receive the same amount Company shall deliver, and form of consideration per share for Participant’s shares as is received by to the Majority Holdersextent necessary, assign the applicable sale proceeds to such Remaining Shareholder.
(fh) All costs If a Remaining Shareholder cannot surrender a certificate representing its Company Securities due to such certificate being lost or destroyed, the provisions of Section 6.2(g)(iii) shall not apply if such Remaining Shareholder executes and expenses incurred delivers (i) to the Company and the Purchaser a lost certificate affidavit with respect to such Remaining Shareholder’s Company Securities covered by Participant such certificate, together with a corresponding reasonable indemnity against claims made by third-parties alleging ownership of or other interests or rights in connection with any Drag-Along Transferor to such Company Securities (in form and substance satisfactory to the Company and the Purchaser, includingacting reasonably), without limitationand (ii) to the Purchaser, the duly executed stock power or assignment form and other transfer taxes and legal, accounting and investment banking fees, shall be borne by Participantdocuments referred to in clause (ii) of Section 6.2(e).
(gi) Notwithstanding anything herein to the contrarycontrary in this Section 6.2, there in the event the Purchaser is a Restricted Competitor and Cavco is the Remaining Shareholder, this Section 6.2 shall not apply to Cavco as a Remaining Shareholder and Cavco shall be under no liability on obligation or requirement to sell any of its Shares to the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along TransferPurchaser.
Appears in 1 contract
Drag Along. If (i) Subject to the holders of a majority right of the shares Remaining Shareholder under Clause 18.6.3(i) to exercise its right of first refusal, if a Melco Shareholder accepts a Third Party Offer and, as a result, the Offeror (together with any person acting in concert with it) will acquire all or a portion of the Company’s voting stock then-outstanding (Shares held by the “Majority Holders”) propose to sellMelco Shareholders, assign or transfer, directly or indirectly, all of their shares of capital stock then within 15 Business Days of the Company to any third party (date on which a “Drag-Along Transfer”)Melco Shareholder accepts the Third Party Offer, the Majority Holders a Melco Shareholder may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give serve a written notice (a “Drag-Along along Notice”) at least fifteen (15) days prior on each CPZ Shareholder requiring it to sell to the consummation Offeror the Relevant Proportion of such proposed its Shares and any Interest in Shares (the “Drag-Along Transfer to Participant along Shares”) together with all or the Relevant Proportion (as applicable) of any election Debt owed by the Majority Holders Company and/or any Group Company to exercise their each CPZ Shareholder (the “Drag-Along Rights hereunderalong Debt” together with the Drag-along Shares, setting forth (ithe “Drag-along Assets”) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material on no less favourable terms and conditions than the Third Party Offer except that each CPZ Shareholder shall have the right to request the addition of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required any necessary Permitted Regulatory Conditions, or adjustments to transfer. Any transfer of shares by Participant pursuant any existing Permitted Regulatory Conditions, but only to the terms hereof shall extent necessary to be for able to complete the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery transfer of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Noticealong Assets.
(cii) In the event that Completion of any transfer pursuant to this Section 9 is structured Clause 18.6.4 shall take place at the same time as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor completion of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required transfer of the Transfer Assets. In order to effect such transactioncompletion, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Offeror shall transfer the purchase price for the Drag-Along Transfer is not consummated within one hundred along Assets to the Company and eighty (180) days after delivery each CPZ Shareholder shall deliver duly executed transfer forms for the Drag-along Shares, together with the relevant certificates, to the Company and duly executed instruments for assignment of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession along Debt. The Company’s receipt of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, purchase price shall be a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title good discharge to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant Offeror who shall not be liable bound to see to the application of those moneys. The Company shall hold the purchase price in trust for the inaccuracy of each CPZ Shareholder without any representation or warranty made by obligation to pay interest. If any other person in connection with the CPZ Shareholder fails to deliver a duly executed transfer form for its Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties along Shares and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability duly executed instruments for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation assignment of the Drag-Along Transferalong Debt to the Company by completion of the transfer of the Transfer Assets, Participant will receive the same amount Directors shall authorise any Director to transfer such Drag-along Shares and assign such Drag-along Debt on behalf of such CPZ Shareholder to the Offeror to the extent the Offeror has, by completion of the transfer of the Transfer Assets, put the Company in funds to pay the purchase price. The Directors shall then authorise registration of the transfer (in the case of any share transfer once appropriate stamp duty has been paid). Each CPZ Shareholder shall surrender its certificates (or an express indemnity in a form satisfactory to the Offeror in the case of consideration per share any certificate found to be missing) for Participant’s shares as is received its Drag-along Shares to the Company. On surrender, the Company shall transfer to each CPZ Shareholder its relevant proportion of the purchase price, but no CPZ Shareholder shall be entitled to any interest which may have been earned by the Majority HoldersCompany on that amount.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Shareholders’ Agreement (Melco Resorts & Entertainment LTD)
Drag Along. (a) In connection with a Sale Transaction, subject to Section 4.6 and Section 2.7, each Stockholder hereby agrees, if the Controlling Stockholders give the Drag Along Notice referred to in Section 2.5(b), to (i) Transfer the Drag Along Percentage of the Shares of each class or series of Shares held by such holder in the manner and on the terms set forth in Section 2.5(b) and (ii) vote for (to the extent permitted to vote for) and to be deemed to have consented to and agree to raise no objections against (and confirm such consent in writing) such Sale Transaction and the process by which such transaction was arranged, so long as such Sale Transaction complies with this Section 2.5; provided that, for the avoidance of doubt, any debt financing source of a Stockholder to whom any Shares are pledged shall not be prohibited (subject to Section 2.9) from Transferring to a Permitted Transferee (who shall execute a Joinder Agreement substantially in the form of Exhibit A and whose Shares remain subject to this Section 2.5) the Shares pledged to it pursuant to an exercise of remedies after the exercise of rights by the Controlling Stockholders under Section 2.5 and prior to consummation of the related Sale Transaction.
(b) If the holders of Controlling Stockholders elect to exercise their rights under this Section 2.5, a majority of the shares of the Company’s voting stock then-outstanding written notice (the “Majority HoldersDrag Along Notice”) propose shall be furnished by the Controlling Stockholders to selleach other Stockholder. The Drag Along Notice shall set forth the principal terms of the proposed Sale Transaction including, assign if and as applicable, the number and classes or transferseries of Shares to be acquired by the Prospective Buyer in the Sale, directly the number and classes or indirectlyseries of Shares to be acquired from the Controlling Stockholders, all of their shares the manner in which such Shares are to be sold, the per Share consideration to be received by each class or series of capital stock of the Company in the proposed Sale (which shall be the price per Share of such class or series in a Deemed Liquidation Event in which the Controlling Stockholders received the consideration that they will receive in such Sale and which may be estimated if the price is determined by a formula including variables which cannot be precisely determined until closing) and the name of the Prospective Buyer.
(c) If requested by the Controlling Stockholders in order to any third party (a “Drag-consummate the proposed Sale Transaction to which reference is made in the Drag Along Transfer”)Notice, each other Stockholder shall be bound and obligated to take the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures actions set forth in this Section 9 (“Drag-Along Rights”).
(a2.5(a) The Majority Holders and Section 2.6. No Stockholder shall give written notice (a “Drag-have the right to exercise any tag along rights contained in Section 2.4 in connection with the proposed Sale to which reference is made in the Drag Along Notice”) . If at least fifteen (15) days prior to the consummation end of such the 180th day following the date of the effectiveness of the Drag Along Notice the Controlling Stockholders, have not completed the proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunderSale, setting forth (i) each Stockholder shall be released from its obligation under the shares proposed to be transferredDrag Along Notice, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant Drag Along Notice shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount null and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transactionvoid, and (iii) take all action it shall be necessary for a separate Drag Along Notice to waive any dissentersbe furnished and the terms and provisions of this Section 2.5 separately complied with, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return in order to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered consummate such proposed Sale pursuant to this Section 9 and 2.5; provided, however, that if any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be governmental entity approvals are required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such DragSale, such 180-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, day period shall be borne by Participantextended until the expiration of five (5) Business Days following the date on which all governmental approvals are obtained and any applicable waiting periods under applicable law have expired or been terminated.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. If Once the Control Conditions have been satisfied, the Sole Member shall, on the request of the Majority Noteholders and subject to any required approvals of the Gaming Authorities, (i) sell, Transfer and deliver, or cause to be sold, Transferred and delivered, to any Person in connection with a Sale Event (the "BUYER") all of its Equity Interests in the Company; and (ii) execute and deliver such instruments of conveyance and Transfer and take such other action, including voting such Equity Interests in favor of any Sale Event (as defined below) proposed by the Majority Noteholders and executing any purchase agreements, merger agreements, indemnity agreements, escrow agreements or related documents, as such Majority Noteholders or the Buyer may reasonably require in order to carry out the terms and provisions of this Section 6.3 (the "DRAG-ALONG RIGHT"); provided, however that the Noteholders, on the one hand, and the Sole Member, on the other, shall bear responsibility for any indemnity given to the Buyer in connection with such Sale Event in proportion to the net proceeds received by each in the Sale Event. The Sole Member shall be entitled to receive all of the proceeds of any Sale Event that are not used to repay the Noteholder Obligations; provided that the holders of a majority Warrants shall be entitled to receive the portion of such proceeds to which they are entitled under the terms and conditions of the shares Warrants (except that any Warrant Interests granted under Sections 2.2(f) of the Company’s voting stock then-outstanding (Warrants after the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock fulfillment of the Company to any third party (a “Drag-Along Transfer”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”Control Conditions shall be disregarded).
(a) The Majority Holders For purposes of this Section 6.3, a "SALE EVENT" shall give written notice (mean a “Dragbona fide, arms-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by length negotiated transaction in which the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth Noteholders have determined (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders sell or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale otherwise dispose of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transactionassets of the Company and its subsidiaries (on a consolidated basis), or (ii) take to sell sufficient capital stock of the Company or any of its subsidiaries to constitute a change in control of the Company or such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and subsidiary or (iii) take all action to waive cause the Company or any dissenters, appraisal of its subsidiaries to merge with or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection into or consolidate with any proposed Dragnon-Along Transfer, unless:
(iAffiliate(s) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. If Notwithstanding anything to the holders contrary set forth in this Section 5, in the event that any of the Shareholders (“Drag Along Initiator”) secures a majority bona fide offer from any third party, in cash or publicly traded securities, to purchase all of the Ordinary Shares then held by, in cash or publicly traded securities, at a price per share (adjusted for allocation of dividend, bonus shares, splits etc.) of not less than US$10, provided that such price per share shall not be lower than 80% of the average of the closing prices of the Company’s shares on the NYSE over the consecutive 60 trading days immediately preceding such sale, and the offeror conditions its offer on the acquisition of all the shares held by all of the other Shareholders at such time, such Shareholders will be required (subject to the provisions of the following paragraph), if so demanded by the Drag Along Initiator, to sell all of the shares of the Company’s voting stock then-outstanding (Company then held by them to such offeror, at the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of same price and upon the Company to any third party (a “Drag-Along Transfer”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material same terms and conditions of as those to which the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested sale by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Drag Along Notice.
(c) In the event that any transfer pursuant to this Section 9 Initiator is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) subject. Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transferlieu of selling the shares, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made demanded by the CompanyDrag Along Initiator, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds other Shareholder(s) may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by acquire all stockholders), and subject to any provisions of the Company’s certificate of incorporation shares then held by the Drag Along Initiator at the price per share and bylaws, upon the same terms and conditions as amended, related those to which the sale to the allocation offeror would have been subject; provided, however, that such acquisition of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s Company shares as is received by the Majority Holders.
(fother Shareholder(s) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne for cash only (and, if the consideration offered by Participant.
(gthe offeror is shares of a publicly traded entity, such shares shall be valued in accordance with the average closing price of such shares on the principal stock exchange on which they are traded over the 30 day period prior to such demand) Notwithstanding anything herein and such cash amount shall be delivered to the contraryDrag Along Initiator within 10 business days following its demand. For the avoidance of doubt, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders an offer shall not be obligated to consummate deemed bona fide if the proposed Drag-Drag Along Transfer, regardless Initiator or any of whether its controlling parties is a “Baal Inyan” (as such term is defined in the Majority Holders have delivered a Drag-Along Notice Companies Law) in respect of such Proposed Drag-Along Transferthird party or in the publicly traded entity whose shares are offered as consideration.
Appears in 1 contract
Drag Along. If 3.4.1. In connection with the holders good faith Sale by the Sponsors (each such holder, a “Prospective Selling Holder’) on an arm’s-length basis to one or more Persons which are not Affiliates of such Sponsors (collectively, the “Prospective Buyer”) of a number of Shares such that, immediately after giving effect to such Transfer (including the Transfer of Shares by other Holders of Shares in accordance with this Section 3.4), the Prospective Buyer will hold Shares representing at least a majority of the shares of the Company’s voting stock then-all Shares then outstanding (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock percentage of the Company aggregate of all Shares held by the Prospective Selling Holders which such number of Shares to any third party (a be so sold by the Prospective Selling Holders represents is referred to herein as the “Drag-Drag Along TransferSale Percentage”), each Holder of Shares hereby agrees, if the Majority Prospective Selling Holders may exercise drag-along rights give the Drag Along Notice referred to in accordance with Section 3.4.2 and subject to the termsprovisions of Section 3.4.4, conditions to Sell Shares representing, with respect to each Class of Shares held by such holder, the Drag Along Sale Percentage of such Shares, in the manner and procedures on the terms set forth in this Section 9 (“Drag-Along Rights”)3.4.
(a) The Majority 3.4.2. If the Prospective Selling Holders shall give elect to exercise their rights under this Section 3.4, a written notice (a the “Drag-Drag Along Notice”) at least fifteen shall be furnished by the Prospective Selling Holders to each other Holder of Shares. The Drag Along Notice shall set forth the principal terms of the proposed Sale including the number of Shares to be acquired by the Prospective Buyer in the Sale, the number of Shares to be acquired from the Prospective Selling Holders, the manner in which such Shares are to be Sold, the Drag Along Sale Percentage, the per Share consideration to be received in the proposed Sale and the name and address of the Prospective Buyer.
3.4.3. If the Prospective Selling Holders consummate the proposed Sale to which reference is made in the Drag Along Notice, each other Holder of Shares (15each a “Participating Seller”, and, together with the Prospective Selling Holders, collectively, the “Drag Along Sellers”) days prior shall be bound and obligated to Sell Shares representing, with respect to the consummation Shares held by such holder, the Drag Along Sale Percentage of such Shares in the proposed Drag-Along Transfer Sale on the same terms and conditions with respect to Participant each Share Sold (subject to Section 3.5), as the Prospective Selling Holders shall Sell each Share in the Sale. No Holder of any election by Shares shall have the Majority Holders right to exercise their Drag-any rights of first refusal or tag along rights contained in Sections 3.1 or 3.3 in connection with the proposed Sale to which reference is made in the Drag Along Rights hereunderNotice. If at the end of the 135th day following the date of the effectiveness of the Drag Along Notice the Prospective Selling Holders have not completed the proposed Sale, setting forth (i) each Participating Seller shall be released from his obligation under the shares proposed Drag Along Notice, the Drag Along Notice shall be null and void, and it shall be necessary for a separate Drag Along Notice to be transferredfurnished and the terms and provisions of this Section 3.4 separately complied with, in order to consummate such proposed Sale pursuant to this Section 3.4.
3.4.4. Notwithstanding the foregoing, the Sponsors shall not have any right to require (iia) a Holder of Shares to Sell any such Shares pursuant to the provisions of this Section 3.4 with respect to any Sale of Shares to any Affiliate of the Sponsors or (b) any Other Investor to Sell any Shares pursuant to the provisions of this Section 3.4 if the consideration to be received for such shares, Shares in the Sale includes securities or other non-cash consideration other than (i) Marketable Securities or (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights securities with respect thereto.
(d) If to which the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along NoticeOther Investors will receive, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such DragSale, tag-Along Transfer, is several and not joint (except along rights substantially identical to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related rights set forth in this Section 3.4 which shall apply to the allocation transfer or sale of the escrow, is pro rata in proportion to, such securities from and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon after the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority HoldersSale in which such securities are received.
(f) All costs 3.4.5. The foregoing provisions of this Section 3.4 shall expire upon the closing of a Qualified Initial Public Offering and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated apply to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders any Shares which have delivered been Sold in a Drag-Along Notice in respect of such Proposed Drag-Along TransferPublic Sale.
Appears in 1 contract
Sources: Stockholders’ Agreement (McP-MSC Acquisition, Inc.)
Drag Along. If (i) At any time from and after the holders of 3rd anniversary from the date hereof, all Unitholders hereby agree, if requested by the RAH Member pursuant to a majority Transfer Notice to the Unitholders at least 30 days prior to any such Transfer, to sell the Drag Along Sale Amount of the shares Units then held by the Unitholders to the purchaser specified in such Transfer Notice, in the manner and on the same contract terms set forth in this Transfer Notice (including without limitation, making the same representations, warranties, covenants, indemnities, and agreements as the RAH Members), to a bona fide prospective purchaser that is not an Affiliate of the Company’s voting stock then-outstanding (RAH Member, provided that in any such sale the “Majority Holders”) propose RAH Member must sell all Units then held by the RAH Member. Notwithstanding anything to sellthe contrary herein, assign in any Transfer to which this Section applies the Company shall, or transfer, directly or indirectly, shall cause the prospective transferee to redeem all of their shares the Preferred Units in cash by wire transfer of capital stock immediately available funds at a redemption price equal to the Preferred Redemption Value for such Units, such redemption to occur at or before the time the RAH Member receives proceeds from the sale of Units. The "DRAG ALONG SALE AMOUNT", shall equal the number of Units required by the purchaser to be included in such sale less any Units being sold by the RAH Member.
(ii) In furtherance of Section 8.2(b)(i), it is the intent of the Company to any third party (parties that, in a “Drag-Along Transfer”), the Majority Holders may exercise transaction in which drag-along rights in accordance apply, the aggregate sale proceeds shall be divided proportionately with and subject respect to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to Unitholders based on the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the Unitholders' respective shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transfereeliquidation proceeds that Unitholders would receive, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transferrespectively, as specified in the Drag-Along Notice.
(b) Within seven (7) days event of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants hypothetical liquidation of the Company as well as breach at the enterprise value implied by any stockholder of any the proposed sales price; and appropriate adjustments will be made to take account of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants participation of the Company as well as breach by Preferred Units, however in any stockholder of any of event the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will Preferred Units shall receive the same amount and form of consideration per share Preferred Redemption Value for Participant’s shares as is received by the Majority Holderssuch Units.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Limited Liability Company Agreement (Vertex Aerospace Inc)
Drag Along. If If, at any time, (i) Acorn desires to offer to sell to any person or persons, other than an affiliate of Acorn, all the holders of Ordinary Shares then held by Acorn and its affiliates for a majority sale price per Ordinary Share not less than 80% of the shares of price per Ordinary Share under the Company’s voting stock then-outstanding (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party Share Purchase Agreement with R▇▇▇▇▇ (a “Drag-Along Transfer”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along NoticeDivestiture”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, and (ii) the consideration to be received for such shares, (ii) the identity Ordinary Shares then held by Acorn and its affiliates represent at least 30% of the prospective transfereethen issued and outstanding Ordinary Shares, then Acorn shall have the right (“Drag Along Right”) to require each Individual Shareholder to participate in such sale of Ordinary Shares by Acorn and to sell all of his Ordinary Shares, and the Individual Shareholders shall have the right (iv“Tag Along Right”) any other material to so participate, in each case on the same terms and conditions (including representations, warranties and indemnities, so long as such representations, warranties, covenants and indemnities are not less favorable to the Individual Shareholders than those in the Share Purchase Agreement with R▇▇▇▇▇), as are applicable to Acorn’s sale of its Ordinary Shares in the Divestiture To exercise its Drag Along Right, Acorn shall promptly deliver to each of the Individual Shareholders a written notice (the “Divestiture Notice”) stating Acorn’s intention to sell all its Ordinary Shares and that it is electing thereby to exercise its Drag Along Right pursuant to this Letter Agreement in connection therewith, and setting forth the terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along TransferDivestiture, including, without limitation, transfer taxes to the extent known, the identity of the proposed purchaser and legal, accounting the amount and investment banking fees, type of consideration to be paid therefor. The Divestiture Notice shall be borne by Participant.
(g) Notwithstanding anything herein accompanied or followed, to the contraryextent available, there shall be no liability on by a copy of any written offer, letter of intent, term sheet or contract of sale pertaining to the part Divestiture transaction. At any time prior to the closing of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice Divestiture in respect of which Acorn has exercised its Drag Along Right, Acorn may withdraw from the Divestiture and its election to exercise its Drag Along Right upon written notice to the Individual Shareholders. The closing of the purchase and sale of any Ordinary Shares to be sold by the Individual Shareholders to the purchaser pursuant to the Drag Along Right shall occur concurrently with the closing of the sale of the Ordinary Shares by Acorn to the purchaser in the Divestiture. At any such Proposed Drag-closing, each Individual Shareholder shall deliver to the purchaser a certificate or certificates representing the number of Ordinary Shares owned by such Individual Shareholder, 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. The individual Shareholders agree to cooperate with Acorn in effecting the Drag Along TransferRight which is intended to allow Acorn to deliver to the purchaser in the Divestiture the 50% of DSIT collectively held by Acorn and the Individual Shareholders.
Appears in 1 contract
Drag Along. If (a) Without limiting any rights granted under the holders AMC Stockholders Agreement, at any time prior to the IPO Date, Investors (which for purposes of this Section 3 shall include any Permitted Transferee of any Investor) constituting a majority Requisite Stockholder Majority (collectively, the “Drag-Along Sellers”) may require each Management Stockholder to include Restricted Shares (including Restricted Shares issuable upon exercise of Vested Options held by such Management Stockholder and including Restricted Shares issuable upon exercise of Employee Options that vest as a result of the shares consummation of the Company’s voting stock thenExit Sale) in any Company Sale pursuant to which the Drag-outstanding Along Sellers are Transferring at least 90% of the Shares then held by the Drag-Along Sellers for consideration consisting of cash and cash equivalents (the an “Majority HoldersExit Sale”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party an Independent Third Party (a “Drag-Along TransferTransferee”)) in a bona fide arm’s length transaction or series of transactions (including pursuant to a stock sale, asset sale, recapitalization, tender offer, merger or other business combination transaction or otherwise) at the Majority Holders may exercise drag-along rights in accordance with purchase price and upon the terms and subject to the terms, conditions and procedures of the Exit Sale (all of which shall be set forth in this Section 9 (“the Drag-Along Rights”Notice). In connection with an Exit Sale, the Company may also require each Management Stockholder to provide his, her or its written consent approving the Exit Sale with respect to all Shares owned by such Management Stockholder, as necessary or desirable to authorize, approve and adopt the Exit Sale. In the event that a sale is proposed pursuant to this Section 3(a), all outstanding proposals to Transfer Restricted Shares shall immediately be withdrawn and no Transfer of Restricted Shares shall be consummated until the expiration of the time period provided for in Section 3(d). The consummation of an Exit Sale by the Drag-Along Sellers shall be subject to the sole discretion of the Drag-Along Sellers, who shall have no liability or obligation whatsoever (other than compliance with this Section 3) to any Management Stockholder participating therein in connection with such Management Stockholder’s Transfer of Shares.
(ab) The Majority Holders rights set forth in Section 3(a) shall give be exercised by the Drag-Along Sellers giving written notice (a the “Drag-Along Notice”) to the Company, at least fifteen ten (1510) days Business Days prior to the consummation of such proposed date on which the Drag-Along Transfer Sellers expect to Participant of any election by consummate the Majority Holders to exercise their Exit Sale. In the event that the terms and/or conditions set forth in the Drag-Along Rights hereunderNotice are thereafter amended in any material respect, setting forth the Drag-Along Sellers shall give written notice (ian “Amended Drag-Along Notice”) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material amended terms and conditions of the proposed transactionTransfer to the Company. Such notice Each Drag-Along Notice and Amended Drag-Along Notice shall also specify set forth: (i) the aggregate name of the Exit Sale Transferee and the number of shares Participant of Common Stock proposed to be purchased by such Exit Sale Transferee, (ii) the proposed amount and type of consideration and material terms and conditions of payment offered by the Exit Sale Transferee and (iii) a summary of any other material terms pertaining to the Transfer (the “Third Party Terms”). Upon receipt of any Drag-Along Notice or Amended Drag-Along Notice, the Company shall deliver a copy of same to each Management Stockholder at least five (5) Business Days prior to the proposed date of such Transfer.
(c) All Transfers of Shares to the Exit Sale Transferee pursuant to this Section 3 shall be consummated simultaneously at the offices of the Company, unless the Drag-Along Sellers elect otherwise, on the later of (i) a Business Day not less than ten (10) or more than sixty (60) days after the Drag-Along Notice is received by the Company or (ii) the third Business Day following receipt of all material Governmental Approvals, or at such other time and/or place as each of the parties to such Transfers may agree. The delivery of stock certificates shall be made on such date, against payment of the purchase price for such Shares minus the aggregate exercise price of any Vested Options being Transferred by the Management Stockholder, duly endorsed for Transfer or with duly executed stock powers or similar instruments, or such other instrument of Transfer of such Shares as may be reasonably requested by the Drag-Along Sellers and acceptable to the Company, with all stock transfer taxes paid and stamps affixed, and in the case of Vested Options subject to a Drag-Along Notice, an instrument acceptable to the Company evidencing the cancellation of Vested Options. Each Management Stockholder shall receive the same form and amount of consideration received by the Drag-Along Sellers per Share (minus the exercise price of Vested Options subject to the Drag-Along Notice). To the extent that the parties (or any successors thereto) to a sale described in this Section 3 are to provide any indemnification or otherwise assume any other post-closing liabilities, the Drag-Along Sellers and all Management Stockholders and other Investors selling Shares in a transaction described under this Section 3 shall do so severally and not jointly (and on a pro rata basis in accordance with the Shares (including Shares subject to Employee Options) being sold by each) and each such Person’s respective potential liability thereunder shall not exceed the proceeds received by such Person. Furthermore, each Management Stockholder shall only be required to give customary representations and warranties, including, but not limited to, title to Shares (including Shares subject to Employee Options) conveyed, legal authority and capacity, and non-contravention of other agreements to which he, she or it is a party, with respect to which indemnification or other post-closing liabilities shall be several and not joint (and only as to the representations and warranties given by such Management Stockholder) and each Management Stockholder’s respective potential liability thereunder shall not exceed the proceeds received by such Management Stockholder; provided, that in connection with such transaction no Management Stockholder shall be required to transferenter into any non-competition agreement. Any transfer of shares by Participant pursuant to the terms hereof Each Management Stockholder shall be for the same amount required to enter into any instrument, undertaking or obligation necessary or reasonably requested and form of consideration per share as the Majority Holders will receive deliver all documents necessary or reasonably requested in connection with such Drag-Along Transfer, sale (as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together in connection with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto3.
(d) If at the Drag-Along Transfer is not consummated within one hundred and eighty (180) days end of the 90th day after delivery the Company’s receipt of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder Sellers have not completed the limited powerproposed Transfer, the Drag-ofAlong Notice shall be null and void, and it shall be necessary for a separate Drag-attorney Along Notice to be delivered, and all certificates representing the shares that Participant delivered terms and provisions of this Section 3 separately complied with, in order to consummate such Transfer pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing3; provided, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds such 90 day time period may be paid out of an escrow established to cover breach of representations, warranties and covenants of extended at the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation option of the Drag-Along Transfer, Participant will receive Sellers for a reasonable period of time not to exceed an additional 90 days to the same amount and form of consideration per share for Participant’s shares as extent that the failure to complete the proposed Transfer is received cause by the Majority Holdersfailure to obtain the necessary Governmental Approvals.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Management Stockholders Agreement (Amc Entertainment Inc)
Drag Along. If 11.1 Subject to clause 11.10 below and without prejudice to the holders of a majority rights of the shares of Investors under clauses 7 and 10 above, if the Company’s voting stock thenMajority Shareholders wish to sell all their interest in Shares ("Majority Selling Shareholders") and find a bona fide arm's-outstanding length third party purchaser (the “Majority Holders”"Purchaser") propose and agree terms for the sale to sell, assign or transfer, directly or indirectly, all the Purchaser of their shares of capital stock of the Company to any third party Shares (a "Proposed Drag-Along Sale") the Majority Selling Shareholders shall have the option (the “Drag-Along TransferOption”), ) to compel each other holder of Shares (the Majority Holders "Dragged Shareholders") to sell and transfer all of their Shares to the Purchaser or as the Purchaser may exercise drag-along rights in accordance with and direct subject to the termssame terms and conditions (including, conditions as to price per Share, time of payment and procedures set forth in form of consideration) as agreed by the Majority Selling Shareholders. For the avoidance of doubt, any transaction pursuant to this Section 9 (“clause 11 shall constitute an Exit Event for the purposes of this Agreement.
11.2 The Majority Selling Shareholders may exercise the Drag-Along Rights”).Option by giving a written notice (the "Drag-Along Notice") to the Company and the Company shall, within 10 Business Days of receipt of such notice, send a copy of the same in writing to each Shareholder specifying:
(a) The Majority Holders shall give written notice that the Dragged Shareholders are required to transfer their Shares;
(a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (iib) the identity of the prospective transfereePurchaser;
(c) the price per Share which the Purchaser is proposing to pay for each Share of each class (which shall reflect the liquidation preference) (the "Drag Price");
(d) subject to clause 11.4 below, and the manner in which the consideration is to be paid;
(ive) the proposed date of transfer; and
(f) subject to clause 11.4 below, the form of sale agreement or form of acceptance or any other material terms and conditions document of similar effect which the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be Dragged Shareholders are required to transfer. sign in connection with the sale (the "Sale Agreement").
11.3 Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along TransferNotice shall be irrevocable, save that it shall lapse and have no further effect if the Proposed Drag-Along Sale has not completed and the Shares have not been transferred to the Purchaser within ninety (90) days of the date of the Drag-Along Notice. The Majority Selling Shareholders shall be entitled to serve further Drag-Along Notices following the lapse of any particular Drag-Along Notice.
11.4 In respect of any transaction that is subject to a Drag-Along Notice:
(a) any consideration payable must be: (i) paid in cash at closing and/or in accordance with the provisions of clause 11.4(b)(i), below; and/or (ii) satisfied at closing in securities traded on a recognised investment exchange under terms that the recipient is able to sell such securities at closing for an equivalent cash amount; and
(b) such transaction shall not, without the approval of an Investor Majority, include, in respect of any Dragged Shareholder:
(i) any element of deferred or contingent consideration, other than deferred or contingent consideration which: (A) in aggregate comprises not more than ten (10) per cent of the total consideration payable under such Proposed Drag-Along Sale to the Dragged Shareholder(s); and (B) in respect of which any deferral or contingency period is less than one (1) calendar year; and
(ii) any non-cash consideration, save as specified in clause 11.4(b)(i).
11.5 Within 15 Business Days of the Company sending the Drag-Along Notice to each other Shareholder (or such later date as may be specified in the Drag-Along Notice.) in accordance with clause 21.1(a) (the "Drag Completion Date"), each Dragged Shareholder shall deliver:
(a) a duly executed stock transfer form in respect of his/her Shares in favour of the Purchaser;
(b) Within seven the relevant share certificate(s) (7or a duly executed indemnity in respect of any lost, damaged or destroyed certificate, in a form acceptable to the Board) days of delivery to the Company; and
(c) subject to clause 11.10, a duly executed counterpart of the Sale Agreement, if applicable, in the form specified in the Drag-Along Notice or as otherwise specified by the Company, (together the "Drag Documents").
11.6 On the Drag Completion Date, the Purchaser shall pay to the Company, the price per Share paid by the Purchaser to the Majority Selling Shareholders in respect of each Share to be transferred by the Dragged Shareholders (or, if higher in respect of each Share, the price per share calculated by applying the liquidation preference). The Company's receipt of the consideration in respect of the Shares shall be a good discharge by the Purchaser and the Company shall hold such sum on trust for each Dragged Shareholder without any obligation to pay interest.
11.7 If a Dragged Shareholder fails to deliver the Drag Documents for its Shares to the Company by the Drag Completion Date, the Company and each Director shall be appointed as the agent of each such defaulting Dragged Shareholder to take such actions and enter into any Drag Document or such other agreements or documents as are necessary to effect the transfer of the Dragged Shareholder's Shares pursuant to this clause 11 and the Directors shall, if requested by the Purchaser, authorise any Director to transfer the Dragged Shareholder's Shares on the Dragged Shareholder's behalf to the Purchaser to the extent the Purchaser has, by the Drag Completion Date, paid the consideration to the Company for the Dragged Shareholder's Shares offered to him. The Board shall then authorise registration of the transfer once appropriate stamp duty has been paid. The defaulting Dragged Shareholder shall surrender his share certificate for his Shares (or suitably executed indemnity) to the Company. On surrender, he shall be entitled to the consideration due to him.
11.8 Each Dragged Shareholder hereby appoints each and any Director from time to time irrevocably, and by way of security for the performance of that Dragged Shareholder’s obligations under this clause 11, as its attorney or attorneys to execute any agreement or document required to be executed by that Dragged Shareholder under this clause 11 including, without limitation, any transfer of that Dragged Shareholder’s Shares, provided always that this power of attorney shall not apply in respect of any of that Dragged Shareholder’s Shares where the Purchaser has failed to tender payment for the Dragged Shareholder’s Shares or to comply with any of its or their other obligations under this clause 11.
11.9 On any person, following the issue of a Drag-Along Notice, Participant shall deliver becoming a Shareholder pursuant to the Majority Holders such instruments exercise of transfer as shall be reasonably requested by the Majority Holders a pre-existing option or the prospective transferee, including, as applicable, one warrant to acquire Shares or more stock certificates, properly endorsed for transfer pursuant to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that conversion of any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor convertible security of the transaction, Company (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participanta "New Shareholder"), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not Notice shall be required deemed to comply with this Section 9 in connection with any proposed have been served on the New Shareholder on the same terms as the previous Drag-Along TransferNotice and the New Shareholder shall then be bound to sell and transfer all Shares so acquired to the Purchaser and the provisions of this clause 11 shall apply with the necessary changes to the New Shareholder, except that completion of the sale of the Shares shall take place immediately on the Drag-Along Notice being deemed served on the New Shareholder.
11.10 Notwithstanding any other provision of this clause 11, no Investor shall be compelled to sell their Shares pursuant to a Proposed Drag-Along Sale unless:
(ia) Any the Drag Price (per Share) is not less than GBP 3,000 (such amount being adjusted in case or any consolidation or subdivision of Shares held by the Investors);
(b) any representations and warranties to be made by Participant such Investors in connection with the a Proposed Drag-Along Transfer Sale are limited to representations and warranties related to authority, ownership and the ability to convey title to such Investor’s Shares (the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency“Investor Fundamental Warranties”);
(iic) Participant the Investor shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Proposed Drag-Along TransferSale, other than the Company warrantors specified in any acquisition documents (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders“Warrantors”);
(iiid) the liability for indemnification, if any, of Participant such Investor in the Proposed Drag-Along Transfer Sale and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser Warrantors in connection with such Proposed Drag-Along TransferSale, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by with any stockholder of any of the identical representations, warranties and covenants provided by all stockholders)other person, and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, to the amount of consideration paid to Participant such Investor in connection with such Proposed Drag-Along Transfer; andSale (in accordance with the terms of this Agreement);
(ive) with the exception of the Investor Fundamental Warranties, the liability of each Investor shall be limited to such Investor’s applicable share (determined based on the respective proceeds payable to each Investor in connection with such Proposed Drag-Along Sale in accordance with the provisions of this Agreement) of a negotiated aggregate indemnification amount that applies to all Shareholders, except with respect to claims related to fraud by such Investor, the liability for which need not be limited as to such Investor;
(f) the Investor is not required to enter into any restrictive covenant;
(g) upon the consummation of the Proposed Drag-Along TransferSale, Participant (i) each holder of each class or series of the Company’s share capital will receive the same form of consideration for their shares of such class as is received by other holders in respect of their shares of such same class of shares, (ii) each holder of a class of Investor Shares will receive the same amount and form of consideration per share for Participant’s shares of such class of Investor Shares as is received by other holders in respect of their shares of such same class, (iii) each holder of Ordinary Shares will receive the Majority Holders.same amount of consideration per share of Ordinary Shares as is received by other holders in respect of their shares of Ordinary Shares and (iv) the aggregate consideration receivable by all holders of the Investor Shares and Ordinary Shares shall be allocated among the holders of Investor Shares and Ordinary Shares on the basis of the relative liquidation preferences to which the holders of each respective class of Investor Shares and the holders of Ordinary Shares are entitled in an Insolvency Event or Exit Event (assuming for this purpose that the Proposed Drag-Along Sale is an Insolvency Event or Exit Event) in accordance with terms of this Agreement as in effect immediately prior to the Proposed Drag-Along Sale;
(fh) All costs subject to subsection 12.10(g) above, requiring the same form of consideration to be available to the holders of any single class of shares, if any holders of a class of shares of the Company are given an option as to the form and expenses incurred by Participant amount of consideration to be received as a result of the Proposed Drag-Along Sale, all holders of such class of shares will be given the same option; provided, however, that nothing in this subsection 11.10(h) shall entitle any holder to receive any form of consideration that such holder would be ineligible to receive as a result of such holder’s failure to satisfy any condition, requirement or limitation that is generally applicable to the Company’s shareholders; and
(i) if such Investor is not an employee of the Company, such Investor is not required in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along TransferSale to agree to (i) any covenant not to compete with any party and/or (ii) any covenant not to solicit or hire customers, employees or suppliers of any party.
Appears in 1 contract
Drag Along. (i) If (A) a Sale Transaction is approved by the holders Board of a majority of the shares Directors of the Company’s voting stock then-outstanding , the Majority Founders and STI and (B) if such Sale Transaction is an Alternative Transaction, the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock Company shall have obtained the written consent of the Company Requisite Holders with respect thereto in accordance with Section 4(u)(ii) of the Securities Purchase Agreement, then, upon the receipt of notice from the Majority Founders and STI that they wish to any third party invoke the drag-along rights provided in this Section 13(c) (a “Drag-Along TransferSale Notice”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
Holder shall (a) The Majority Holders shall give vote, or act by written notice consent with respect to, all of the Holder’s Converted Stock in favor of, and raise no objections against, such Sale Transaction, and (b) if the Sale Transaction is structured as a “Drag-Along Notice”) at least fifteen (15) days prior sale of outstanding stock, sell or otherwise dispose of pursuant to the consummation such Sale Transaction that number of such proposed Drag-Along Transfer to Participant shares of any election Converted Stock owned by the Majority Holders to exercise their Drag-Along Rights hereunderHolder as of the date of the Sale Notice as shall equal the product of (I) a fraction, setting forth (i) the numerator of which is the number of shares of Capital Stock proposed to be transferred, (ii) transferred by the consideration to be received for such shares, (ii) the identity Founders and STI as of the prospective transfereedate of the Sale Notice, and (iv) any other material terms and conditions the denominator of the proposed transaction. Such notice shall also specify which is the aggregate number of shares Participant of Capital Stock owned as of the date of such Sale Notice by the Founders and STI, multiplied by (II) the number of shares of Converted Stock owned as of the date of such Sale Notice by the Holder. For purposes of this Section 13(c), all numbers of shares of Capital Stock shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Dragcalculated on a Common Stock-Along Transfer, as specified in the Drag-Along Noticeequivalent basis.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within Majority Founders and STI have delivered a Sale Notice, then for a period of one hundred and eighty twenty (180120) days after delivery the date of the Drag-Along such Sale Notice, the Majority Holders Holder shall (i) return be obligated to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession sell or otherwise dispose of the Majority Holders executed Holder’s Converted Stock to the purchaser on substantially the same terms and conditions as apply to the Founders and STI with respect to such Sale Transaction. The Holder shall pay its owns costs and expenses, if any, incurred by Participant it in connection with the proposed Drag-Along Transfersale or other disposition of Converted Stock pursuant to such Sale Transaction.
(eiii) Notwithstanding the foregoing, a Drag-Along the obligations of the Holder will not be required to comply with under this Section 9 in connection with any proposed Drag-Along Transfer, unless13(c) shall only apply to a Sale Transaction that includes the following terms:
(i) Any any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are Holder shall be limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of ParticipantHolder’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agencyConverted Stock;
(ii) Participant the Holder shall not be liable for the inaccuracy of any representation or warranty made by any other person Person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders)proposed sale;
(iii) the liability for indemnification, if any, of Participant in Holder shall not be required to indemnify or hold harmless the Drag-Along Transfer and buyer or any other party to the Sales Transaction other than for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants made by the Holder for itself and not in respect of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; andothers;
(iv) upon the consummation of the Drag-Along Transferproposed sale, Participant will each holder of a class or series of Capital Stock shall receive the same amount and form of consideration per share for Participant’s shares as is received by each other holder of such class or series of Capital Stock, including subject to any escrow, delayed payment or set off provisions applicable to all the Majority Holders.holders of the Capital Stock being sold or transferred in the proposed sale; and
(fv) All costs subject to clause (iv) above, if any holder of a class or series of Capital Stock is given an option as to the form and expenses incurred by Participant amount of consideration to be received in connection with any Drag-Along Transferthe proposed sale, including, without limitation, transfer taxes and legal, accounting and investment banking fees, all holders of such class or series of Capital Stock shall be borne by Participantgiven the same option.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. 9.3.1 If the holders of a majority Investors collectively holding more than 66 2/3% of the shares total number of the Company’s voting stock then-Units outstanding (in such capacity, collectively, the “Majority Holders”"Dragging Investor") propose desire to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company Transfer to any third party a Third Party (a “"Drag-Along Transfer”Purchaser") in a bona fide arm's length transaction or a series of related transactions more than 50% of the total number of Units then outstanding (treating any New Securities on an “as converted” basis) on a pro rata basis (based on the percentage of Units held by each such Investor and its Affiliated Funds) and such transfer results in a Change in Control (a "Drag-Along Sale"), each other Investor (including any Dragging Investor that is Transferring less than its pro rata portion of Units, as described below, a "Dragged Investor") shall, if required by the Majority Holders may exercise drag-along rights Dragging Investor in accordance with and subject the provisions of Article 9.3.2, Transfer to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
Purchaser a pro rata portion of its Units (abased on the number of Units proposed to be Transferred by the Dragging Investor stated as a percentage of the total number of Units then held by the Dragging Investor) The Majority Holders shall give written notice (a “on the same terms and conditions that apply to the Transfer by the Dragging Investor pursuant to the Drag-Along Notice”Sale (including purchase price per Unit, purchase price adjustments, form of consideration, time of payment, escrow funding arrangements, representations, warranties, covenants, indemnities and other agreements in each case that pertain specifically to itself, provided that (x) at least fifteen (15) days prior to if the consummation of such proposed Drag-Along Sale involves a direct Transfer to Participant of any election Units by the Majority Holders to exercise their Investors, such representations and warranties shall not be broader in scope than what is customary for a sale transaction of this type and size executed by the Dragging Investor, unless, in the good faith determination of the Dragging Investor, the Drag-Along Rights hereunder, setting forth (i) Sale would not be consummated unless such representations and warranties are included or the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify Drag-Along Sale, taken as a whole, will be more favourable to all of the aggregate number of shares Participant Investors if such representations and warranties are included, (y) all representations, warranties and indemnities shall be required made by the Dragging Investor and the Dragged Investors severally and not jointly and (z) no Investor’s liability shall exceed such Investor’s proceeds from the sale).
9.3.2 The Dragging Investor may require each Dragged Investor to transfer. Any transfer Transfer up to a pro rata portion of shares its Units to a Drag-Along Purchaser in connection with a Drag-Along Sale by Participant pursuant giving written notice to such Dragged Investor no later than 15 Business Days prior to the terms hereof shall be closing date for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along TransferSale (a "Drag-Along Notice"); provided that, as specified if the Dragging Investor requires any Dragged Investor to Transfer a portion of its Units to a Drag-Along Purchaser in connection with a Drag-Along Sale, it shall require each Dragged Investor to transfer its pro rata portion of its Units to such Drag-Along Purchaser. The Drag-Along Notice shall (x) indicate that the Dragging Investor requires that such Dragged Investor Transfer a pro rata portion of its Units to the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant Purchaser in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title Sale pursuant to the Sharesprovisions hereof and (y) provide the name of the Drag-Along Purchaser, includingspecify the number of Units proposed to be Transferred by the Dragging Investor (including as a percentage of the total number of Units then held by the Dragging Investor) and describe the principal terms and conditions of the Drag-Along Sale. The Dragging Investor will deliver or cause to be delivered to each Dragged Investor copies of all definitive transaction documents relating to the Drag-Along Sale promptly after the same become available. Each Dragged Investor shall take all actions reasonably necessary, but not limited todesirable or appropriate to consummate the Drag-Along Sale, representations as requested by the Dragging Investor, including executing powers of attorney reasonably necessary or appropriate to facilitate closing the Drag-Along Sale, voting its Units in favour of, consenting to and warranties that (i) Participant holds all right, title and interest in raising no objections to such Drag-Along Sale. If and to the Shares that Participant purports to hold, free extent the costs and clear of all liens and encumbrances, (ii) expenses incurred by the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person Dragging Investor and/or each Dragged Investor in connection with the Drag-Along TransferSale (collectively, other than the Company (except to the extent that funds may be "Drag-Along Sale Costs") are not reimbursed or paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer Purchaser, Luxco shall reimburse and/or pay the Drag-Along Sale Costs to the fullest extent permitted by law, provided that the Dragging Investor and each Dragged Investor will be responsible for its pro rata share (based on the inaccuracy number of any representations and warranties made Units actually Transferred by it relative to the Company, the Majority Holders or the Purchaser total number of Units actually Transferred in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(ivSale) upon the consummation of the Drag-Along Transfer, Participant will receive Sale Costs to the same amount and form of consideration per share for Participant’s shares as is received extent not so paid by the Majority Holders.
(f) All costs Drag-Along Purchaser or Luxco, and expenses incurred provided further that the engagement by Participant any Dragged Investor of any professional adviser in connection with the Drag-Along Sale, other than legal counsel, shall not be reimbursable. Each Dragged Investor agrees to permit the Dragging Investor to calculate the total Drag-Along Sale Costs and to determine the pro rata participation of such costs, and to deduct such pro rata amounts from any proceeds payable pursuant to Article 9.3.1 above if the Dragged Investors are required to pay any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by ParticipantSale Costs.
(g) Notwithstanding anything herein to the contrary9.3.3 If, there shall be no liability on the part of the Majority Holders to Participant if in connection with a Drag-Along Transfer is not consummated for any reasonSale, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along TransferPurchaser desires (for its structuring, regardless tax or other commercial reasons) to acquire, instead of whether Units, all of the Majority Holders have delivered a shares of any Intermediate Holdco or VNU held, directly or indirectly, by Luxco, then the Parties agree that the Dragging Investor shall be entitled to cause the Drag-Along Notice Sale to be structured as a sale of the shares of any Intermediate Holdco or VNU, or as a merger, business combination or similar transaction, but only if, as a result, the consideration payable to the Investors (indirectly through the selling entity) is in respect the form of such Proposed cash or freely marketable securities listed on a major securities exchange only and if the Drag-Along TransferSale results in the complete exit by such Investors of their investment in the Units, and the rights of the Parties described in this Article 9.3 shall apply to such transaction mutatis mutandis so that, upon completion of any such sale of shares to such Drag-Along Purchaser, or any such merger, business combination or similar transaction, the cash proceeds of such transaction, are distributed promptly to the Dragging Investor and each Dragged Investor in proportion to their Units in any manner consistent with the principles described in Article 10.1.2 below, and provided that such transaction would not reduce in any material respect the post-tax proceeds received by any Investor compared to the post-tax proceeds that would have resulted from the acquisition of Units, as determined by the financial and tax advisers of the Group (following reasonable consultation with the financial and tax advisers of each Investor).
9.3.4 This Article 9.3 shall terminate following an IPO at the time the Investors collectively cease to hold, directly or indirectly through Luxco or any Intermediate Holdco, more than 50% of the Listed Shares.
Appears in 1 contract
Drag Along. (a) If the holders any Transfer Stock subject to or Proposed Investor Transfer is not purchased pursuant to Section 2.1 above and thereafter is to be sold to a Prospective Transferee and a Change of a majority of the shares of the Company’s voting stock then-outstanding Control will occur in connection therewith (the “Majority Holders”) propose to sellany such transaction, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “Drag-Along TransferTransaction”), such Investors proposing to effect such transaction (the Majority Holders may exercise drag-along rights in accordance with and subject “Dragging Investors”) shall have the right to require all (but not less than all) of the termsother Investors (each, conditions and procedures set forth in this Section 9 (a “Drag-Along RightsInvestor”)) to transfer their Capital Stock in such Drag-Along Transaction; provided, however, the consideration received in a Drag-Along Transaction by the Drag-Along Investors may not include consideration other than cash or Marketable Securities unless otherwise agreed by the Drag-Along Investors.
(ab) The Majority Holders Dragging Investors shall give written provide each Drag-Along Investor notice of the terms and conditions of such proposed Drag-Along Transaction (a the “Drag-Along Notice”) at least fifteen not later than twenty (1520) days prior to the consummation closing of such the proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Transaction. The Drag-Along Rights hereunderNotice shall contain a true and complete copy of any and all available documents constituting the agreement to transfer and, setting to the extent not set forth (i) in the shares proposed accompanying documents, the price offered for the applicable Transfer Stock, all information reasonably available to be transferredthe Dragging Investors regarding the acquirer, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any all other material terms and conditions of the proposed transactionDrag-Along Transaction and, in the case of a proposed Drag-Along Transaction in which the consideration consists in whole or in part of consideration other than cash, such information relating to such other consideration as is reasonably available to the Dragging Investors. Such notice shall also specify the aggregate number of shares Participant Each Drag-Along Investor shall be required to transfer. Any transfer of shares by Participant pursuant to participate in the Drag-Along Transaction on the terms hereof and conditions set forth in the Drag-Along Notice and this Section 2.3. No Investor shall be have any dissenters’ or appraisal rights in connection with the Drag-Along Transaction, and each Investor hereby releases, and will execute such further instrument as the Company reasonably requests to further evidence the waiver of, such rights.
(c) Within ten (10) days following receipt of the Drag-Along Notice, each Drag-Along Investor must deliver to such Dragging Investors (i) wire transfer instructions for payment of the purchase price for the same amount and form of consideration per share as the Majority Holders will receive applicable Capital Stock to be sold in such Drag-Along Transfer, as specified Transaction and (ii) all other documents required to be executed in connection with such Drag-Along Transaction. The Drag-Along Investors shall cooperate fully with all reasonable requests of the Dragging Investors regarding the Drag-Along NoticeTransaction. Each Drag-Along Investor hereby makes, constitutes, and appoints the Dragging Investor holding the highest percentage of Capital Stock among the Dragging Investors, as its true and lawful attorney in fact for such person and in its name, place, and stead and for its use and benefit, to sign, execute, certify, acknowledge, swear to, file and record any instrument that is now or may hereafter be deemed necessary by the Company in its reasonable discretion to carry out fully the provisions and the agreement, obligations, and covenants of such Investor in this Section 2.3 in the event that such Investor is or becomes a Drag-Along Investor pursuant to this Section 2.3. Each Drag-Along Investor hereby gives such attorney in fact full power and authority to do and perform each and every act or thing whatsoever requisite or advisable to be done in connection with such Drag-Along Investor’s obligations and agreements as a Drag-Along Investor pursuant to this Section 2.3 as fully as such Drag-Along Investor might or could do personally, and hereby ratifies and confirms all that any such attorney in fact shall lawfully do or cause to be done by virtue of the power of attorney granted hereby. The power of attorney granted pursuant hereto is a special power of attorney, coupled with an interest, and is irrevocable, and shall survive the bankruptcy, insolvency, dissolution or cessation of existence of the applicable Drag-Along Investor.
(bd) Within seven If, at the end of the 90-day period after the date on which the Dragging Investors give the Drag-Along Notice (7which 90-day period shall be extended if any of the transactions contemplated by the Drag-Along Transaction are subject to regulatory approval until the expiration of ten (10) days of after all such approvals have been received, but in no event later than one hundred and twenty (120) days following the delivery of the Drag-Along Notice), Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by Drag-Along Transaction has not been completed on substantially the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the same terms and conditions set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Investors shall no longer be obligated to sell their Capital Stock pursuant to such Drag-Along Notice, Notice and the Majority Holders Dragging Investors shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and Investor any other documents in the possession of the Majority Holders Dragging Investors executed by Participant or on behalf of such Drag-Along Investor in connection with the proposed Drag-Along TransferTransaction.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply Concurrently with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along TransferTransaction, Participant will receive Dragging Investors shall (i) notify the same amount Drag-Along Investors thereof, (ii) cause the total consideration for the Capital Stock of the Drag-Along Investors transferred pursuant thereto to be remitted directly to the Drag-Along Investors and form (iii) promptly after the consummation of consideration per share for Participant’s shares the Drag-Along Transaction, furnish such other evidence of the completion and the date of completion of such transfer and the terms thereof as is received may be reasonably requested by the Majority HoldersDrag-Along Investors.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrarycontained in this Section 2.3, there shall be no liability on the part of the Majority Holders Dragging Investors to Participant the Drag-Along Investors if the transfer pursuant to this Section 2.3 is not consummated for whatever reason.
(g) Notwithstanding anything contained in this Section 2.3, the obligations of the Drag-Along Investors to participate in a Drag-Along Transfer is not consummated Transaction are subject to the following conditions:
(i) Upon the consummation of such Drag-Along Transaction all of the Investors participating therein will receive the same form of consideration;
(ii) No Investor participating therein shall be obligated to pay any expenses incurred in connection with any unconsummated Drag-Along Transaction except for any reasonits own expenses, and each Investor shall be obligated to pay only its pro rata share (based on the Majority Holders amount of Capital Stock being transferred) of expenses incurred in connection with a consummated Drag-Along Transaction to the extent such expenses are incurred for the benefit of all Investors and are not otherwise paid by the Company or another person;
(iii) Without the written consent of a Drag-Along Investor, such Drag-Along Investor shall not be obligated with respect to consummate the proposed (A) any representation or warranty other than (x) a representation and warranty that relates solely to such Drag-Along TransferInvestor’s title to its Transfer Stock, regardless and its authority and capacity to execute and deliver the subject purchase and sale agreement or (y) a representation and warranty that relates to the Company and its operations which each Investor is severally making (provided, that if such Investor or an Affiliate of whether such Investor is not actively involved in the Majority Holders have delivered day to day operations of the Company, any such representation shall be limited to such Investor’s actual knowledge), or (B) any indemnity obligation beyond a pro rata portion or in excess of the gross proceeds received by a Drag-Along Notice Investor (in respect each case, based on the value of consideration received by such Proposed Drag-Along TransferInvestor in the Drag-Along Transaction) of the indemnity obligations which obligate the Dragging Investors and all Drag-Along Investors and then, such indemnity obligations shall be several and not joint or (C) any other continuing obligation on such Drag-Along Investor in favor of any other person following the Drag-Along Transaction of such Drag-Along Investor’s Interests (other than obligations relating to representations and warranties that relate solely to such Drag-Along Investor and not to any other Investor or the indemnification obligation provided for in clause (B) above); and
(iv) No Drag-Along Investor shall be obligated to consummate such Drag-Along Transaction contemplated by the Drag-Along Notice with respect to its Capital Stock unless the Dragging Investors consummate such Drag-Along Transaction with respect to all (but not less than all) of the Drag-Along Investor’s Capital Stock on the terms and conditions contemplated by the Drag-Along Notice.
Appears in 1 contract
Drag Along. If (a) For so long as the holders of a majority of G▇▇▇▇▇ Parties are the shares of Majority Holder, following the Company’s voting stock then-outstanding date that is eighteen (18) months after the “Majority Holders”) propose Closing Date and in connection with any Full Sale that complies with Section 7.1(b), the Company Board may require the Trawlers Party to sell, assign or transfer, directly or indirectly, sell all of their Company Ordinary Shares and take such other actions as are reasonably necessary to effect the Full Sale, including (i) waiving any appraisal or dissenters' rights, (ii) voting its Company Ordinary Shares to (x) approve such Full Sale or (y) adopt the definitive agreement with respect to such Full Sale and (iii) tendering its shares into a tender offer in respect of capital stock of the Company to any third party such Full Sale (a “Drag-Along Transfer”)Dragged Trawlers” and such transaction, the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (a “Drag-Along RightsDrag Sale”).
(ab) The Majority Holders Company Board shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior be permitted to require the consummation of such proposed Drag-Along Transfer Dragged Trawlers to Participant of any election take the actions contemplated by the Majority Holders to exercise their Drag-Along Rights hereunderSection 7.1(a), setting forth only if: (i) the shares proposed G▇▇▇▇▇ Parties representing the G▇▇▇▇▇ Parties Majority have committed to or agreed to vote or tender their respective Company Ordinary Shares in favor of the Full Sale (evidence of such agreement to be transferredprovided to the Dragged Trawlers in writing promptly following execution thereof and it being understood that such an agreement may include a “fallaway” if the Company Board changes its recommendation in respect of such a transaction); (ii) the Company Board votes in favor of the Full Sale and does not effect a change of recommendation with respect to such Full Sale prior to the applicable shareholder meeting convened to approve, or (if applicable) the closing of the tender offer for, such Full Sale; (iii) the G▇▇▇▇▇ Parties have provided written notice of such proposed Full Sale to the Trawlers Parties, which notice shall include all of the material terms and conditions of such proposed Full Sale, to require the Trawlers Parties to take the actions contemplated by Section 7.1(a) (as applicable); (iv) in connection with such Full Sale the Trawlers Parties receive (directly from the purchaser in such Full Sale or otherwise) (1) consideration solely comprised of cash (without any holdback, escrow or other deduction) and (2) no less than the highest amount of consideration (on a per security basis, looked at per class of security) that is being paid to the holder of such class of security (taking into account any payments made directly or indirectly to any party in connection with such Full Sale); provided, if a definitive agreement is entered into with respect to such Full Sale (or such Full Sale is otherwise consummated) prior to the third (3rd) anniversary of the Closing Date, then without limitation to the foregoing requirement, such consideration received by the Trawlers Parties (directly from the purchaser in such Full Sale or otherwise) will (X) be no less than $33.00 per Company Ordinary Share and (Y) consist solely of cash (unless the Trawlers Parties otherwise elect to receive the transaction consideration prior to the entry into the definitive agreement for such Drag Sale by the Company); and (v) such Full Sale complies with this Agreement; provided, further, that the obligations of the Trawlers Parties in connection with the Drag Sale shall be no more onerous than the obligations of the G▇▇▇▇▇ Parties (the “Drag Terms of Purchase”). Notwithstanding the foregoing, it is understood and agreed that in any such Drag Sale (or in any series of transactions related to such Drag Sale) the G▇▇▇▇▇ Parties may be given the opportunity to rollover, and may accept and effect a rollover of, a portion of their Company Ordinary Shares representing not more than fifty percent (50%) of the Company Ordinary Shares held by the G▇▇▇▇▇ Parties immediately prior to such Drag Sale, which rollover opportunity need not be offered to any of the Trawlers Parties.
(c) Each of the Dragged Trawlers shall cooperate in, and shall take all actions that the Company, acting reasonably, deems necessary to consummate the Drag Sale, including, (i) voting their respective Company Ordinary Shares in favor of the Drag Sale, (ii) voting their respective Company Ordinary Shares in opposition to any and all other proposals that could oppose, prevent, delay, or impair the consideration Company’s ability to be received for such sharesclose the Drag Sale, (iiiii) the identity subjecting any such Company Ordinary Shares to any arrangement or agreement with respect to voting any such Company Ordinary Shares in respect of the prospective transfereesuch Drag Sale, and (iv) any other material terms and conditions subject to the Drag Terms of Purchase, entering into an agreement(s) with the Company and/or the proposed transaction. Such notice shall also specify transferee in connection with the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share Drag Sale as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall may be reasonably requested by the Majority Holders Company. Without limiting the generality of the foregoing, each Dragged Trawlers hereby waives any dissenter’s rights, appraisal rights or similar rights in connection with such transaction contemplated by this Section 7.1 and agrees to execute any agreement evidencing the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together same in connection with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect theretoDrag Sale.
(d) If Notwithstanding anything to the Drag-Along Transfer contrary in this Agreement, any Full Sale that is not consummated within one hundred and eighty (180or a definitive agreement in respect of such Full Sale is entered into) days after delivery prior to the date that is the third (3rd) anniversary of the Drag-Along Notice, the Majority Holders shall Closing Date (i) return shall provide for the Trawlers Parties to each Drag-Along Holder the limited power-of-attorney receive consideration (directly or indirectly) of no less than $33.00 in cash per Company Ordinary Share and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents (ii) may result in the possession G▇▇▇▇▇ Parties rolling over a portion of their Company Ordinary Shares representing not more than fifty percent (50%) of the Majority Holders executed Company Ordinary Shares held by Participant the G▇▇▇▇▇ Parties immediately prior to such Full Sale in connection with the proposed Drag-Along Transfersuch Full Sale (or in any of series of transactions related to such Full Sale).
(e) Notwithstanding anything to the foregoingcontrary in this Agreement, without the prior written consent of the Trawlers Parties, the G▇▇▇▇▇ Parties shall not (and shall cause their respective Representatives not to) directly or indirectly, initiate, solicit, encourage, facilitate, participate in, enter into, approve, consummate or otherwise support any Full Sale prior to the date that is twelve (12) months after the Closing Date, and any attempt to effect a Drag-Along Holder will not be required to comply with Full Sale in violation of this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i7.1(e) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participantnull and void ab initio.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. (a) If ▇▇▇▇▇▇▇▇ Partners delivers a notice to the holders of other Optionees (each a majority "Compelled Holder") in connection with a bona fide offer (a "Sale Offer") by a Third Party to purchase any of the shares of Common Stock issuable upon the Company’s voting stock then-outstanding exercise of the Options (the “Majority Holders”) propose "Underlying Common Stock"), ▇▇▇▇▇▇▇▇ Partners will have the right as provided for in Section 3.1(b), to sell, assign or transfer, directly or indirectly, all of their shares of capital stock require the Compelled Holders to exercise a pro rata portion of the Company Options then held by the Compelled Holders and to any third party (a “Drag-Along Transfer”), sell the Majority Holders may Underlying Common Stock issued upon such exercise drag-along rights in accordance with to such Third Party on terms and subject conditions not less favorable to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”)Compelled Holders than those upon which the ▇▇▇▇▇▇▇▇ Funds shall sell the Options owned by them to such Third Party.
(ab) The Majority Holders shall give If ▇▇▇▇▇▇▇▇ Partners elects to exercise its right to compel sale pursuant to the terms hereof, ▇▇▇▇▇▇▇▇ Partners will promptly deliver written notice (a “Drag-Along "Sale Notice”") at least fifteen (15) days prior of the Sale Offer to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Compelled Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such sharesthe Underlying Common Stock, (ii) the identity of the prospective transferee, Third Party and (iv) any the other material terms and conditions of the proposed transactionSale Offer. Such notice shall also specify ▇▇▇▇▇▇▇▇ Partners will notify each Compelled Holder reasonably in advance of any negotiations with the aggregate number of shares Participant shall Third Party with respect to representations, warranties and indemnities in connection with the Sale Offer if such Compelled Holder will be required to transfer. Any transfer sign an agreement with respect to such representations, warranties or indemnities to effect the sale of shares by Participant pursuant the Compelled Holder's Underlying Common Stock (the "Compelled Sale Transaction"), and in all events the representations, warranties and indemnities applicable to such Compelled Holder will not be more onerous than those applicable to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice▇▇▇▇▇▇▇▇ Funds.
(c) In the event that Promptly after completion of any transfer such sale pursuant to this Section 9 is structured as 4.1, ▇▇▇▇▇▇▇▇ Partners will notify each Compelled Holder and will remit to such Compelled Holder the total sales price attributable to the Securities of such Compelled Holder sold pursuant thereto less a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor pro rata portion of the transactionexpenses and taxes, (ii) take if any, incurred in connection with such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect theretosale.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to Notwithstanding anything in this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein 4.1 to the contrary, there shall will be no liability on the part of ▇▇▇▇▇▇▇▇ Partners or the Majority ▇▇▇▇▇▇▇▇ Funds to the Compelled Holders if any sale of Underlying Common Stock pursuant to Participant if a Drag-Along Transfer this Section 4.1 is not consummated for whatever reason. It is understood that ▇▇▇▇▇▇▇▇ Partners, in its sole discretion, will determine whether to effect a sale of Underlying Common Stock to any reason, and the Majority Holders shall not be obligated Person pursuant to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transferthis Section 4.1.
Appears in 1 contract
Drag Along. If (a) At any time starting on the holders of a majority date that is 24 months following the Closing, if (i) one or more Shareholders holding more than 50% of the shares Preferred Shares, and (ii) one or more Shareholders holding more than 50% of the Company’s voting stock then-outstanding Ordinary Shares, other than Ordinary Shares resulting from the conversion of Preferred Shares (collectively, the “Majority HoldersInitiating Sellers”) propose approve a Qualified Trade Sale (an “Approved Sale”), provided that Shareholders are offered the same price for each Ordinary Share Equivalent sold by them in such Approved Sale, each Shareholder shall approve, consent to selland raise no objections to the Approved Sale, assign or transfer, directly or indirectly, all and if the Approved Sale is structured as a sale of their shares of the issued and outstanding capital stock of the Company to any third party (a “Drag-Along Transfer”whether by merger, recapitalization, consolidation or Transfer of Equity Securities or otherwise), the Majority Holders may exercise drag-along then each Shareholder shall waive any dissenter’s rights, appraisal rights or similar rights in accordance connection with such Approved Sale and subject each Shareholder shall agree to sell its Shares on the terms and conditions approved by the Initiating Sellers. Each Shareholder shall take all necessary and desirable actions in connection with the consummation of the Approved Sale, including executing such agreements and instruments and taking such other actions as may be reasonably necessary to provide the representations, warranties, indemnities, covenants, conditions, escrow agreements and other provisions and agreements, as the case may be, required for the consummation of such Approved Sale. In the event that any Shareholder fails for any reason to take any of the foregoing actions after reasonable notice thereof, such Shareholder hereby grants an irrevocable power of attorney and proxy to the termsInitiating Sellers or an assignee or designee of such Initiating Sellers to take all necessary actions and execute and deliver all documents deemed by such Person to be reasonably necessary to effectuate the terms of this Section 5.9. Subject to clause (b) of this Section 5.9, conditions and procedures the restrictions on transfers of Shares set forth in Sections 5.1, 5.2, 5.3, 5.4, 5.6 and 5.8 shall not apply in connection with an Approved Sale, anything in this Section 9 (“Drag-Along Rights”)Agreement to the contrary notwithstanding.
(ab) The Majority Holders Initiating Sellers shall give deliver written notice to each other Shareholder setting forth in reasonable detail the terms (a including price, time and form of payment) of any Approved Sale (the “Drag-Along Notice”) at least fifteen (15) ). Within 15 days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery following receipt of the Drag-Along Notice, Participant each of such other Shareholders shall deliver to the Majority Holders Company written notice setting forth such instruments of transfer as shall be reasonably requested by Shareholders’ agreement to consent to and raise no objections against, or impediments to, the Majority Holders or the prospective transferee, Approved Sale (including, waiving all dissenter’s and similar rights) and (ii) if the Approved Sale is structured as applicablea sale of capital stock, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such sell its Shares on the terms and conditions set forth in the Drag-Along Drag Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after including delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders such Shareholder’s Shares (duly endorsed for transfer or accompanied by executed by Participant in connection with the proposed Drag-Along Transferstock powers or transfer instruments therefor).
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. If Notwithstanding anything to the holders of contrary set forth in this Agreement, in the event that a majority of the shares of the Company’s voting stock then-outstanding Shareholder (the “Majority Holders”"Selling Shareholder") propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of secures a bona fide offer (the Company to "Acquisition Offer") from any third party (a “the "Drag-Along Transfer”Acquirer ") to purchase all of the Ordinary Shares held by such Selling Shareholder (and it is hereby clarified that for purposes of this Section 8 it shall also include the holdings of its Permitted Transferees) for immediately available funds, at a price per Ordinary Share of at least US$ 23.00 (the "Drag Along PPS"), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Acquirer conditions the Acquisition Offer on the acquisition of all the Ordinary Shares held at such time by the other Shareholder (the "Drag-Along Party" which, for purposes of this Section 8 shall include also the holdings of its Permitted Transferees), the Selling Shareholder shall provide the Drag Along Party with written notice together with a copy of the Acquisition Offer (the "Drag Along Notice.
") and the Drag Along Party will be required to either (bi) Within seven (7) days sell all of delivery of the Ordinary Shares then held by it to the Drag-Along Acquirer, at the same price and upon the same terms and conditions as those to which the sale by the Selling Shareholder is subject under the Acquisition Offer, provided that the sale of all the Ordinary Shares of the Selling Shareholder and the Drag Along Party shall be consummated by no later than 90 days following the receipt of the Drag Along Notice and, provided, further, that the Drag Along Party shall not be required to make any representations or warranties, except for customary representations regarding authorization and good and marketable title to the shares being sold; or (ii) provide the Selling Shareholder with written notice (the "Notice Extension") informing the Selling Shareholder that it wishes to receive an Extension (the "Extension"). In the event that an Extension Notice is delivered to the Selling Shareholder, the Drag Along Shareholder shall be required, by no later than three months following the receipt of the Drag Along Notice, Participant shall deliver to arrange for the sale of all of the Ordinary Shares held by the Selling Shareholder at a price per share that is not lower than the Drag Along PPS, and under terms and conditions that are no less favorable to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms Selling Shareholder than those set forth in the Acquisition Offer or (b) acquire, upon the termination of such three month period, the Ordinary Shares then held by the Selling Shareholder, at a price per share equal to the Drag Along PPS and upon terms and conditions no less favorable than those set forth in the Acquisition Offer. The Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a mergerPPS shall be adjusted for share splits, consolidation or business combinationissuance of bonus shares, or combinations of shares. No other adjustments (for dividend distributions, market conditions or for any sale of all or substantially all assets, Participant must further agree to (iother reason) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Drag Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority HoldersPPS.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Shareholders Agreement (FIMI Opportunity Fund, L.P.)
Drag Along. If Notwithstanding anything to the holders contrary set forth in this Section 5, in the event that any of the Shareholders ("Drag Along Initiator") secures a majority bona fide offer from any third party, in cash or publicly traded securities, to purchase all of the Ordinary Shares then held by, in cash or publicly traded securities, at a price per share (adjusted for allocation of dividend, bonus shares, splits etc.) of not less than US$10, provided that such price per share shall not be lower than 80% of the average of the closing prices of the Company's shares on the NYSE over the consecutive 60 trading days immediately preceding such sale, and the offeror conditions its offer on the acquisition of all the shares held by all of the other Shareholders at such time, such Shareholders will be required (subject to the provisions of the following paragraph), if so demanded by the Drag Along Initiator, to sell all of the shares of the Company’s voting stock then-outstanding (Company then held by them to such offeror, at the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of same price and upon the Company to any third party (a “Drag-Along Transfer”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material same terms and conditions of as those to which the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested sale by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Drag Along Notice.
(c) In the event that any transfer pursuant to this Section 9 Initiator is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) subject. Notwithstanding the foregoing, in lieu of selling the shares, as demanded by the Drag Along Initiator, the other Shareholder(s) may acquire all of the Company's shares then held by the Drag Along Initiator at the price per share and upon the same terms and conditions as those to which the sale to the offeror would have been subject; provided, however, that such acquisition of Company shares by the other Shareholder(s) shall be for cash only (and, if the consideration offered by the offeror is shares of a Drag-Along Holder will not publicly traded entity, such shares shall be required to comply with this Section 9 valued in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection accordance with the Drag-Along Transfer average closing price of such shares on the principal stock exchange on which they are limited traded over the 30 day period prior to representations such demand) and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to such cash amount shall be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither Drag Along Initiator within 10 business days following its demand. For the execution and delivery avoidance of documents to be entered into in connection with the transactiondoubt, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant an offer shall not be liable for deemed bona fide if the inaccuracy of any representation Drag Along Initiator or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
its controlling parties is a "Baal Inyan" (iii) the liability for indemnification, if any, of Participant as such term is defined in the Drag-Along Transfer and for Companies Law) in such third party or in the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company publicly traded entity whose shares are offered as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holdersconsideration.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. 9.3.1 If the holders of a majority Investors collectively holding more than 66 2/3% of the shares total number of the Company’s voting stock then-Units outstanding (in such capacity, collectively, the “Majority HoldersDragging Investor”) propose desire to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company Transfer to any third party a Third Party (a “Drag-Along TransferPurchaser”), ) in a bona fide arm’s length transaction or a series of related transactions more than 50% of the Majority Holders may exercise drag-along rights total number of Units then outstanding (treating any New Securities on an “as converted” basis) on a pro rata basis (based on the percentage of Units held by each such Investor and its Affiliated Funds) and such transfer results in accordance with and subject to the terms, conditions and procedures set forth a Change in this Section 9 Control (a “Drag-Along RightsSale”), each other Investor (including any Dragging Investor that is Transferring less than its pro rata portion of Units, as described below, a “Dragged Investor”) shall, if required by the Dragging Investor in accordance with the provisions of Article 9.3.2, Transfer to the Drag-Along Purchaser a pro rata portion of its Units (based on the number of Units proposed to be Transferred by the Dragging Investor stated as a percentage of the total number of Units then held by the Dragging Investor) on the same terms and conditions that apply to the Transfer by the Dragging Investor pursuant to the Drag-Along Sale (including purchase price per Unit, purchase price adjustments, form of consideration, time of payment, escrow funding arrangements, representations, warranties, covenants, indemnities and other agreements in each case that pertain specifically to itself, provided that (x) if the Drag-Along Sale involves a direct Transfer of Units by the Investors, such representations and warranties shall not be broader in scope than what is customary for a sale transaction of this type and size executed by the Dragging Investor, unless, in the good faith determination of the Dragging Investor, the Drag-Along Sale would not be consummated unless such representations and warranties are included or the terms and conditions of the Drag-Along Sale, taken as a whole, will be more favourable to all of the Investors if such representations and warranties are included, (y) all representations, warranties and indemnities shall be made by the Dragging Investor and the Dragged Investors severally and not jointly and (z) no Investor’s liability shall exceed such Investor’s proceeds from the sale).
(a) 9.3.2 The Majority Holders shall give Dragging Investor may require each Dragged Investor to Transfer up to a pro rata portion of its Units to a Drag-Along Purchaser in connection with a Drag-Along Sale by giving written notice to such Dragged Investor no later than 15 Business Days prior to the closing date for such Drag-Along Sale (a “Drag-Along Notice”) at least fifteen (15) days prior ); provided that, if the Dragging Investor requires any Dragged Investor to the consummation Transfer a portion of such proposed its Units to a Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Purchaser in connection with a Drag-Along Rights hereunderSale, setting forth (i) the shares proposed it shall require each Dragged Investor to be transferred, (ii) the consideration transfer its pro rata portion of its Units to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in Purchaser. The Drag-Along Notice shall (x) indicate that the Dragging Investor requires that such Dragged Investor Transfer a pro rata portion of its Units to the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant Purchaser in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title Sale pursuant to the Sharesprovisions hereof and (y) provide the name of the Drag-Along Purchaser, includingspecify the number of Units proposed to be Transferred by the Dragging Investor (including as a percentage of the total number of Units then held by the Dragging Investor) and describe the principal terms and conditions of the Drag-Along Sale. The Dragging Investor will deliver or cause to be delivered to each Dragged Investor copies of all definitive transaction documents relating to the Drag-Along Sale promptly after the same become available. Each Dragged Investor shall take all actions reasonably necessary, but not limited todesirable or appropriate to consummate the Drag-Along Sale, representations as requested by the Dragging Investor, including executing powers of attorney reasonably necessary or appropriate to facilitate closing the Drag-Along Sale, voting its Units in favour of, consenting to and warranties that (i) Participant holds all right, title and interest in raising no objections to such Drag-Along Sale. If and to the Shares that Participant purports to hold, free extent the costs and clear of all liens and encumbrances, (ii) expenses incurred by the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person Dragging Investor and/or each Dragged Investor in connection with the Drag-Along TransferSale (collectively, other than the Company (except to the extent that funds may be “Drag-Along Sale Costs”) are not reimbursed or paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer Purchaser, Luxco shall reimburse and/or pay the Drag-Along Sale Costs to the fullest extent permitted by law, provided that the Dragging Investor and each Dragged Investor will be responsible for its pro rata share (based on the inaccuracy number of any representations and warranties made Units actually Transferred by it relative to the Company, the Majority Holders or the Purchaser total number of Units actually Transferred in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(ivSale) upon the consummation of the Drag-Along Transfer, Participant will receive Sale Costs to the same amount and form of consideration per share for Participant’s shares as is received extent not so paid by the Majority Holders.
(f) All costs Drag-Along Purchaser or Luxco, and expenses incurred provided further that the engagement by Participant any Dragged Investor of any professional adviser in connection with the Drag-Along Sale, other than legal counsel, shall not be reimbursable. Each Dragged Investor agrees to permit the Dragging Investor to calculate the total Drag-Along Sale Costs and to determine the pro rata participation of such costs, and to deduct such pro rata amounts from any proceeds payable pursuant to Article 9.3.1 above if the Dragged Investors are required to pay any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by ParticipantSale Costs.
(g) Notwithstanding anything herein to the contrary9.3.3 If, there shall be no liability on the part of the Majority Holders to Participant if in connection with a Drag-Along Transfer is not consummated for any reasonSale, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along TransferPurchaser desires (for its structuring, regardless tax or other commercial reasons) to acquire, instead of whether Units, all of the Majority Holders have delivered a shares of any Intermediate Holdco or VNU held, directly or indirectly, by Luxco, then the Parties agree that the Dragging Investor shall be entitled to cause the Drag-Along Notice Sale to be structured as a sale of the shares of any Intermediate Holdco or VNU, or as a merger, business combination or similar transaction, but only if, as a result, the consideration payable to the Investors (indirectly through the selling entity) is in respect the form of such Proposed cash or freely marketable securities listed on a major securities exchange only and if the Drag-Along TransferSale results in the complete exit by such Investors of their investment in the Units, and the rights of the Parties described in this Article 9.3 shall apply to such transaction mutatis mutandis so that, upon completion of any such sale of shares to such Drag-Along Purchaser, or any such merger, business combination or similar transaction, the cash proceeds of such transaction, are distributed promptly to the Dragging Investor and each Dragged Investor in proportion to their Units in any manner consistent with the principles described in Article 10.1.2 below, and provided that such transaction would not reduce in any material respect the post-tax proceeds received by any Investor compared to the post-tax proceeds that would have resulted from the acquisition of Units, as determined by the financial and tax advisers of the Group (following reasonable consultation with the financial and tax advisers of each Investor).
9.3.4 This Article 9.3 shall terminate following an IPO at the time the Investors collectively cease to hold, directly or indirectly through Luxco or any Intermediate Holdco, more than 50% of the Listed Shares.
Appears in 1 contract
Drag Along. If 7.1 In the holders event that a shareholder/s (hereinafter referred to as the “Seller/s”) holding in excess of a majority fifty per cent (50%) of the shares of in the Company’s voting stock then-outstanding Company (hereinafter referred to as the “Majority HoldersInterest”) propose wishes to sell, assign or transfer, directly or indirectly, transfer all of his/their interest in the shares of capital stock of the Company to any a bona fide third party purchaser (a hereinafter referred to as the “Drag-Along TransferProposed Buyer”), the Majority Holders Seller/s may exercise drag-along rights in accordance with require all the other shareholders (hereinafter referred to as the “Other Shareholders”) to sell and subject transfer all their shares to the terms, conditions and procedures set forth in this Section 9 Proposed Buyer (hereinafter referred to as the “Drag-Drag Along RightsOption”).
(a) 7.2 The Majority Holders shall give Seller may exercise the Drag Along Option by giving written notice (a hereinafter referred to as the “Drag-Drag Along Notice”) to the Other Shareholders at least fifteen thirty (1530) days prior Business Days before transferring the Seller’s shares to the consummation Proposed Buyer.
7.3 The Drag Along Notice shall specify: - that the Other Shareholders are required to transfer all their shares (herein called the “Called Shares”); - the person to whom the Called Shares are to be transfer red; - the consideration payable for the Called Shares which shall, for each Called Share, be an amount equal to the price per share offered by the Proposed Buyer for the Seller’s shares; and - the proposed date of such proposed Drag-transfer of the Called Shares.
7.4 The Drag Along Transfer Notice shall lapse if, for any reason, the Sellers have not sold their shares to Participant the Proposed Buyer within twenty (20) Business Days of serving the Drag Along Notice. The Sellers may serve further Drag Along Notices following the lapse of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-particular Drag Along Notice.
7.5 Completion of sale of the Called Shares shall take place on the Completion Date. Completion Date means the date proposed for completion of the sale of the Sellers' Shares unless: - All of the Holder of Called Shares and the Sellers agree otherwise in which case the Completion Date shall be the date agreed in writing by all of the Holder of Called Shares and the Sellers; or - that date is less than thirty (b30) Within Business Days after the date on which the Drag Along Notice is served, in which case the Completion Date shall be seven (7) days of delivery Business Days after service of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Drag Along Notice.
7.6 Within twenty (c20) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor Business Days of the transactionSellers serving a Drag Along Notice on the Holder of Called Shares, the Holder of Called Shares shall deliver transfer forms for the Called Shares, together with the relevant share certificates to be held in escrow by a third party as mutually agreed upon by the Parties (ii) take such other action within its powerherein called the “Third Party”). On the Completion Date, at no cost to it (other than fees and expenses payable to its advisorsthe Third Party, which shall be paid by Participant)pay the Holder of Called Shares, as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery on behalf of the Drag-Along NoticeProposed Buyer, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the amounts they are due for their shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of Proposed Buyer has put the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant Third Party in the Drag-Along Transfer and requisite funds. The Third Party shall hold the amounts due to the Holder of Called Shares in escrow for the inaccuracy Holder of Called Shares without any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except obligation to pay interest.
7.7 To the extent that the Proposed Buyer has not, on the Completion Date, put the Third Party in funds may to pay the consideration due, the Third Party shall be paid out of an escrow established entitled to cover breach of representations, warranties and covenants the return of the Company as well as breach by any stockholder transfer forms and share certificates for the relevant Called Shares to the Holder of any Called Shares and the holder of the identical representations, warranties and covenants provided by all stockholders), and subject to Called Shares shall have no further rights or obligations under this clause in respect of their shares.
7.8 If any provisions holder of the Company’s certificate Called Shares does not, on completion of incorporation the sale of the Called Shares, execute transfer /s in respect of all of the Called Shares held by it, the defaulting holder of the Called Shares shall be deemed to have irrevocably appointed any person nominated for the purpose by the Sellers to be his agent and bylawsattorney to execute all necessary transfer /s on his behalf, as amendedagainst receipt by the Third Party of the consideration payable for the Called Shares, related to deliver such transfer/s to the allocation of Proposed Buyer (or as they may direct) as the escrow, is pro rata in proportion to, and does not exceedholder thereof. After the Proposed Buyer has been registered as the holder, the amount validity of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders proceedings shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of questioned by any such Proposed Drag-Along Transferperson.
Appears in 1 contract
Sources: Subscription of Shares Agreement (ZK International Group Co., Ltd.)
Drag Along. If the one or more B▇▇▇▇▇▇ Entities proposes to effect a Drag Along Sale, such B▇▇▇▇▇▇ Entities may, at their option, require all other holders of a majority Membership Interests to transfer in such Drag Along Sale their respective Drag Along Portion of the shares Membership Interests then held by such other holders on the same terms and conditions, subject to the same agreements and for the same consideration, as such B▇▇▇▇▇▇ Entities pursuant to the terms of this Section 8.06(b), in each case, subject to Section 7.04.
(i) In the event of a proposed Drag Along Sale, the B▇▇▇▇▇▇ Entities that are parties to such sale (or Barnes&Noble on their behalf) shall provide to each other holder of Membership Interests not later than the 30th day prior to the proposed Drag Along Sale: (A) a written notice of the Company’s voting stock then-outstanding (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all terms and conditions of their shares of capital stock of the Company to any third party such Drag Along Sale (a “Drag-Along Transfer”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Drag Along Notice”) at least fifteen (15) days prior together with a statement asserting each such holder’s obligation to participate in such Drag Along Sale on the same terms and conditions, subject to the consummation same agreements and for the same consideration, as such B▇▇▇▇▇▇ Entity, (B) the purchase agreement (or similar instrument of transfer), including all attachments and schedules, that is the subject of such proposed Drag-Drag Along Transfer to Participant Sale and (C) a summary of the material terms of any election by other proposed contemporaneous or related commercial or similar arrangements between any B▇▇▇▇▇▇ Entity (or any Affiliate of Barnes&Noble, other than the Majority Holders Company and any direct or indirect Subsidiary of the Company) and the proposed transferee in such Drag Along Sale, subject to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, customary confidentiality agreements.
(ii) the consideration to be received for such shares, (ii) the identity Each holder of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant Membership Interests that receives a Drag Along Notice shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified participate in the Drag-Drag Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares Sale on the terms and conditions set forth in the Drag-Drag Along Notice.
Notice (c) In the event that any transfer pursuant subject to this Section 9 is structured as 8.06(b)(ii)) and, if any such Drag Along Sale involves a mergermerger or consolidation, consolidation or business combination, or any sale each holder of all or substantially all assets, Participant must further agree Membership Interests that receives a Drag Along Notice with respect to (i) such Drag Along Sale shall be required to vote or provide a written consent in favor of or consent in writing to such merger or consolidation; provided, however, that notwithstanding anything to the transactioncontrary contained herein, no such holder shall be subject to the provisions of this Section 8.06(b) if in the Drag Along Sale such holder: (iiA) take is required to make any representations or warranties in such other action within its power, at no cost to it (Drag Along Sale other than fees as to such holder’s ownership and authority to sell, free of liens, claims and encumbrances, the Membership Interests proposed to be sold by such holder, and as to the due authorization, execution, delivery and enforceability of the definitive documents entered into by such holder in connection with such Drag Along Sale; (B) is required to be subject to an obligation for indemnification or other liability that (X) relates to the representations, warranties or covenants made by any other holder of Membership Interests and relating to such holder’s ownership of Membership Interests or (Y) is in excess of either (I) the aggregate purchase price that such holder actually receives in such transaction or (II) the obligation for indemnification or other liability applicable to the B▇▇▇▇▇▇ Entities in the Drag Along Sale (as appropriately adjusted for the relative portion of the Drag Along Sale that is represented by the Drag Along Portion); or (C) is subject to any obligations that are different and adverse (taking into account the relative positions of any such holder to any B▇▇▇▇▇▇ Entities in such transaction) as compared to any B▇▇▇▇▇▇ Entities in such transaction or is subject to any non-compete or non-solicit or similar covenant. All out of pocket costs and expenses payable to its advisors, which incurred by any holder in connection with a Drag Along Sale shall be paid by Participant)such holder. In connection with any Drag Along Sale, as may be required to effect such transaction, the closing of the sale of Membership Interests held by any B▇▇▇▇▇▇ Entity and (iii) take all action to waive the closing of the sale of Membership Interests held by any dissenters, appraisal or other similar rights with respect theretoholder of Membership Interests that receives a Drag Along Notice shall each occur on the same date.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(eiii) Notwithstanding the foregoing, any B▇▇▇▇▇▇ Entity that delivers a Drag-Drag Along Holder will not be required Notice pursuant to comply with this Section 9 in connection with 8.06(b) may at any time prior to consummation of a Drag Along Sale terminate the proposed Drag-Along Transfer, unless:
(i) Any representations sale and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the any concomitant drag along obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery other holders of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority HoldersMembership Interests.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. If (a) In the event of a Sale Event (as defined below), each Founder and Investor shall be obligated to and shall, upon the written request of a Majority Interest: (i) sell, transfer and deliver, or cause to be sold, transferred and delivered, to the Third Party Buyer (as defined below) a PRO RATA portion of his, her or its Shares on the same terms applicable to the Majority Interest (with any consideration payable in connection with such Sale Event to be distributed among the holders of capital stock in a majority manner that follows the relative rights and preferences of the shares of Shares as provided in the Company’s voting stock then-outstanding (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “Drag-Along Transfer”Charter), the Majority Holders may exercise drag-along rights and/or (ii) execute and deliver such instruments of conveyance and transfer and take such other action, including voting such Shares in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant favor of any election Sale Event proposed by the Majority Holders Interest and executing any purchase agreements, merger agreements, indemnity agreements, escrow agreements or related sale documents, as such Majority Interest and the Third Party Buyer may reasonably require in order to exercise carry out the terms and provisions of this Section 3.6 (the "DRAG-ALONG RIGHT"); PROVIDED that the terms of any such indemnity agreement or escrow agreement impose substantially equivalent obligations on each of the Founders and the Investors PRO RATA in proportion to their Drag-Along Rights hereunderrespective ownership of the Shares; PROVIDED FURTHER, setting forth that, in connection with a Sale Event, (i) the shares proposed to be transferred, Madison Capital Funding LLC (ii"MADISON") the consideration to be received for such shares, and ▇▇▇▇▇▇ Family Holdings LLC (ii"▇▇▇▇▇▇") the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer make representations and warranties only with respect to title to and ownership of shares their respective Shares, their respective authority to enter into the Sale Event and the enforceability against Madison and ▇▇▇▇▇▇, respectively, of any agreements entered into by Participant pursuant Madison or ▇▇▇▇▇▇, as applicable, in connection with such Sale Event and (ii) each of Madison's and ▇▇▇▇▇▇'▇ allocable portion of any liability related to any such Sale Event shall be equal to the terms hereof shall be for lesser of (A) their respective PRO RATA portions of any amounts actually paid to any indemnified party in connection therewith and (B) the same amount proceeds received by Madison and form of consideration per share as the Majority Holders will receive ▇▇▇▇▇▇, respectively, in any such Drag-Along Transfer, as specified in the Drag-Along NoticeSale Event.
(b) Within seven (7) days For purposes of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless3.6:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. If the holders of a majority prior to consummation of the shares Qualified IPO, and subject to other provisions or restrictions set out in Section 8 of this Agreement (Call Option) or Section 2.1(iv) and Section 2.7 of the Right of First Refusal and Co-Sale Agreement (Restricted Transactions), the Supermajority Preferred Holders (if the Trade Sale is a Special Trade Sale) or the Majority Preferred Holders (if the Trade Sale is not a Special Trade Sale), together with the Founder (the Majority Preferred Holders or the Supermajority Preferred Holders (as the case maybe) and the Founder herein shall be collectively referred to as the “Drag Holders”) jointly approve a Deemed Liquidation Event or a Trade Sale, whether structured as a merger, reorganization, asset sale, share sale, sale of control of any Group Company’s voting stock then-outstanding , or otherwise (the “Majority HoldersApproved Sale”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party Person (a the “Drag-Along TransferOfferor”), then at the Majority Holders may exercise drag-along rights request of the Drag Holders, the Company shall promptly notify in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (writing each Shareholder that is a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation party of such proposed Drag-Along Transfer to Participant of any election by Approved Sale and the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of such proposed Approved Sale, whereupon each such Shareholder (each, a “Dragged Holder”) shall, in accordance with instructions received from the proposed transaction. Such notice shall also specify Company at the aggregate number direction of shares Participant the Drag Holders, take each of the actions set forth in clauses (i) through (v) below:
(i) sell, at the same time as the Drag Holders sell to the Offeror, in the Approved Sale, all of its Equity Securities of the Company or the same percentage of its Equity Securities of the Company as the Drag Holders sell, on the same terms and conditions as were agreed to by the Drag Holders; provided, however, that such terms and conditions, including with respect to price paid or received per Equity Security of the Company, may differ as between different classes of Equity Securities of the Company in accordance with their relative liquidation preferences as set forth in Article 8.2 of the Memorandum and Articles, and provided, further, that some Shareholders may be given the right or opportunity to exchange or roll a portion of their Equity Securities of the Company for Equity Securities of the acquirer or an Affiliate thereof in the Approved Sale but in such event there shall be required no obligation to transfer. Any transfer afford such right or opportunity to all of shares the Shareholders;
(ii) vote all of its Equity Securities of the Company, and instruct the Directors (if any) appointed by Participant pursuant such Shareholders to the terms hereof shall be for the same amount and form vote (a) in favor of consideration per share as the Majority Holders will receive in such Drag-Along TransferApproved Sale, as specified in the Drag-Along Notice.
(b) Within seven against any other consolidation, amalgamation, merger, recapitalization, sale of securities, sale of assets, business combination, or transaction that would interfere with, delay, restrict, or otherwise adversely affect such Approved Sale, and (7c) days against any action or agreement that would result in a breach of delivery any covenant, representation or warranty or any other obligation or agreement of the Drag-Along Notice, Participant shall deliver Company under the definitive agreement(s) related to such Approved Sale or that could result in any of the conditions to the Majority Holders closing obligations under such instruments agreement(s) not being fulfilled, and, in connection therewith, to be present (in person or by proxy) at all relevant meetings of transfer the shareholders of the Company (or adjournments thereof) or to approve and execute all relevant written consents in lieu of a meeting;
(iii) not exercise any dissenters’ or appraisal rights under applicable Law with respect to such Approved Sale;
(iv) take all necessary actions in connection with the consummation of such Approved Sale as shall be reasonably requested by the Majority Holders Drag Holders, including but not limited to the execution and delivery of any share transfer or other agreements prepared in connection with such Approved Sale, and the prospective transfereedelivery, includingat the closing of such Approved Sale involving a sale of share, as applicableof all certificates representing shares held or controlled by such Shareholder, one or more stock certificates, properly duly endorsed for transfer or accompanied by a duly executed share transfer form, or affidavits and indemnity undertakings with respect to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.lost certificates; and
(cv) In restructure such Approved Sale, as and if reasonably requested by the event that any transfer pursuant to this Section 9 is structured Drag Holders, as a merger, consolidation consolidation, restructuring or business combinationsimilar transaction, or any a sale of all or substantially all assetsof the assets of any Group Company, Participant must further agree to or otherwise. In any such Approved Sale, (i) vote or provide each Shareholder shall bear a written consent proportionate share (based upon the relative proceeds received in favor such transaction) of the Drag Holders’ expenses incurred in the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, including without limitation, transfer taxes and legal, accounting and investment banking feesfees and expenses, and (ii) each Shareholder shall be borne by Participant.
severally, not jointly, join on a pro rata basis (gbased upon the relative proceeds received in such transaction) Notwithstanding anything herein to the contrary, there shall be no liability on the in any indemnification or other obligations that are part of the Majority Holders terms and conditions of such Approved Sale (other than those that relate specifically to Participant if a Drag-Along Transfer particular Shareholder, such as indemnification with respect to representations and warranties given by such Shareholder regarding such Shareholder’s title to and ownership of shares, due authorization, enforceability, and no conflicts, which shall instead be given solely by such Shareholder) but only up to the net proceeds paid to such Shareholder in connection with such Approved Sale. Without limiting the foregoing sentence, no Shareholder who is not consummated for an employee or officer or controlling shareholder of a Group Company shall be required to make any reasonrepresentations or warranties other than with respect to itself (including due authorization, title to shares, enforceability of applicable agreements, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfersimilar representations and warranties).
Appears in 1 contract
Drag Along. (a) If at any time following the holders date hereof, there shall be:
(i) an offer by a Person that is not an Affiliate of any Party hereof to purchase all the Shares or voting rights in the Company;
(ii) a majority merger or consolidation of the shares Company with or into another corporation in which the Company is not the surviving entity but the Shares or voting rights of the Company outstanding immediately prior to the merger are converted by virtue of the merger into other property, whether in the form of securities, cash, or otherwise; or
(iii) a sale or transfer of all or substantially all the Company’s voting stock then-properties and assets to any other Person, in each case, which is a transaction at arm’s length for an aggregate implied valuation of the Company of not less than US$870 million, if Mr. ▇▇▇ ▇▇▇▇ and the holders representing not less than two thirds (2/3) of the then outstanding Preferred Shares (collectively, the “Majority Drag Holders”) propose to approve such transaction, at the request of the Drag Holders, then each remaining Shareholder (each a “Dragged Holder” and collectively, the “Dragged Holders”) shall sell, assign or transfer, directly convey or indirectlyassign its Shares (such sale, all of their shares of capital stock of the Company transfer, conveyance or assignment pursuant to any third party (this Section 9.2, a “Drag-Along TransferSale”) pursuant to, and so as to give effect to, such offer to purchase, merger or consolidation, sale or transfer, as the case may be. If the consideration offered is payable in securities or property other than cash (or evidence of cash indebtedness), the Majority Board shall in good faith determine the fair market value of any such securities or property in cash, provided that any shareholder of Series A Preferred Shares , Series B Preferred Shares, Series D Preferred Shares, Series D+ Preferred Shares or Series E Preferred Shares shall have the right to challenge any determination by the Board of fair market value made pursuant hereto, in which case the determination of fair market value shall be made by a valuer selected jointly by the Board and the challenging parties. The valuer shall prepare a report setting forth the basis of its calculating such fair market value, and the determination of such fair market value by the valuer shall, in the absence of manifest error, be final and conclusive. The costs of the valuer shall be borne solely by the Company. The valuer shall act as expert and not as an arbitrator. If the acquiring party is a privately-held entity and the Holders of Preferred Shares receive in whole or in part non-publicly traded securities of such acquirer, then such non-publicly traded securities shall have liquidation preference(s), protective provision(s), voting right(s), dividend right(s), registration rights and preemptive rights that are substantially similar to those of the Preferred Shares, as applicable, as set forth herein as of the date hereof.
(b) The restrictions on transfers of Shares set forth in Sections 10.1, 4.2 and 5 shall not apply in connection with a sale pursuant to this Section 9.2, or anything in this Agreement to the contrary notwithstanding.
(c) The Drag Holders may exercise drag-along the rights in accordance with and subject to the terms, conditions and procedures set forth in under this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to 9.2 by notifying in writing each Dragged Holder of the consummation material terms and conditions of such proposed Drag-Along Transfer Sale at least twenty (20) days prior to Participant the transfer of any election their Shares to the acquiring party.
(d) Any transfer of Shares by the Majority Dragged Holders to exercise their Drag-Along Rights hereunder, setting forth (i) shall be on the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares Shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery Drag Holders. Completion of the Drag-Along Notice, Participant shall deliver to transfer of the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger9.2 shall take place on the Completion Date on which the Company shall, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree subject to (i) vote or provide a written consent in favor receipt of the transactionrelevant executed transfer forms, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If make proper entries in the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery Register of Members of the Drag-Along Notice, Company and cancel the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney surrendered share certificates and all issue any new share certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession name of the Majority Holders executed by Participant acquiring party (or as it may direct) as necessary to consummate the transactions in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding exercise by the foregoing, a Drag-Along Holder will not be required to comply with Drag Holders of the rights under this Section 9 9.2. “Completion Date” means the date proposed for completion of the transfer of the Drag Holders’ Shares unless otherwise provided in connection with any proposed Drag-Along Transferthe Revised M&A. On the Completion Date, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to Dragged Holders shall deliver executed share transfer forms for the Shares, including, but not limited to, representations and warranties that together with the relevant share certificates (ior a suitable indemnity for any lost share certificates) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reasonacquiring party, and the Majority Holders acquiring party shall not be obligated to consummate pay the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transferconsideration due for their Shares.
Appears in 1 contract
Sources: Shareholder Agreement (So-Young International Inc.)
Drag Along. If Any time after thirty-six (36) months from the Closing, if the holders of a majority more than two-thirds (2/3) of the shares then outstanding Shares of the Company’s voting stock then-outstanding Company (the “Majority HoldersDrag-Along Requestors”) propose voting as a single class, approve a Liquidation Event in which the valuation of the Company for such proposed Liquidation Event shall result in a price per Share being no less than two point five (2.5) times the Original Series D Issue Price (as defined in the Articles, and subject to sellappropriate adjustments for any subsequent bonus issue, assign share split, consolidation, subdivision, reclassification, recapitalization or transfersimilar arrangement) (the “Drag-Along Transaction”) and notify the Company and other Shareholders in writing, directly then each Shareholder (other than Antfin) hereby agrees:
(a) if such Drag-Along Transaction requires Shareholders’ approval, with respect to all Shares that such Shareholder owns or indirectlyover which such Shareholder otherwise exercises voting power, to vote (in person, by proxy or by action by written consent, as applicable) all of their shares of capital stock Shares in favor of, and adopt, such Drag-Along Transaction (together with any related amendment to the Articles required in order to implement such Drag-Along Transaction) and to vote in opposition to any and all other proposals that could reasonably be expected to delay or impair the ability of the Company to any third party (a “consummate such Drag-Along Transfer”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 Transaction;
(“b) if such Drag-Along Rights”).
(a) The Majority Holders shall give written notice (Transaction is a “sale of Shares of the Company, to sell the same proportion of Shares of the Company held by such Shareholder as is being sold by the Drag-Along Notice”Requestor(s) at least fifteen (15) days prior to the consummation of such proposed Person(s) to whom the Drag-Along Transfer Requestor(s) propose to Participant of any election by sell their Shares, and on the Majority Holders to exercise their same terms and conditions as the Drag-Along Rights hereunder, setting forth Requestor(s);
(ic) the shares proposed to be transferred, (ii) the consideration to be received for execute and deliver all related documentation and take such shares, (ii) the identity other action in support of the prospective transfereeDrag-Along Transaction as shall reasonably be requested by the Company or the Drag-Along Requestor(s) in order to carry out the terms and provision of this Section 7, including without limitation executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement, indemnity agreement, escrow agreement, consent, waiver, governmental filing, share certificates duly endorsed for transfer (ivfree and clear of impermissible liens, claims and encumbrances) and any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant similar or related documents; provided, that no Investor shall be required to transfer. Any transfer of shares by Participant pursuant give any representations or warranties, covenants or indemnities with respect to such Drag-Along Transaction or with respect to the terms hereof shall be Company, except for the same amount ownership and form title of consideration per share as the Majority Holders will receive such Investor’s Shares sold in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect theretoTransaction.
(d) If the Drag-Along Transfer is not consummated within one hundred to deposit, and eighty (180) days after delivery to cause their Affiliates not to deposit, except as provided in this Agreement, any Shares of the Drag-Along NoticeCompany owned by such Party or Affiliate in a voting trust or subject any Shares to any arrangement or agreement with respect to the voting of such Shares, unless specifically requested to do so by the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant acquiror in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective termsTransaction; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;and
(iie) Participant shall not be liable for the inaccuracy to refrain from exercising any dissenters’ rights or rights of appraisal under applicable Law at any representation or warranty made by any other person in connection time with the Drag-Along Transfer, other than the Company (except respect to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority HoldersTransaction.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. 4.1 If a Transferor sells, other than in a public offering pursuant to a registration statement, shares of Common Stock held by such Transferor to a Transferee in one transaction or a series of related transactions on arms-length terms which constitute the holders transfer of a majority all of the Common Stock then owned by Smith and its Affiliates, the Transferor and/or its affiliates may, at t▇▇▇▇ option, cause TCW (together with any party deemed to be included in such definition pursuant to SECTION 4.2 below, a "DRAG-ALONG PARTY") to sell to the Transferee, on the same terms and conditions as provided with respect to the sale by the Transferor to such Transferee in such transaction, all shares of Common Stock which the Company’s voting stock then-outstanding (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “Drag-Along Party then owns (such shares being "DRAG-ALONG SHARES" and such transaction being a "DRAG-ALONG TRANSACTION"); PROVIDED, HOWEVER, that: (x) the price for the Drag-Along Shares may not be lower than the price per share paid to the Transferor in the same or related transaction; and (y) the consideration for the Drag-Along Shares shall be paid in cash at the closing of the Drag-Along Transaction(s) unless the relevant Drag-Along Party consents to payment in a form other than cash or, at the option of the relevant Drag-Along Party, in the same form of payment as received by the Transferor.
4.2 If TCW or any of its Affiliates (a "TCW ENTITY") proposes to Transfer to any Affiliate thereof any of the Common Stock held by such TCW Entity, then such TCW Entity, as a condition to the Transfer”), shall cause such Affiliate to agree to be bound by this SECTION 4 and such Affiliate shall thereupon be deemed to be a party hereto and shall notify Smith of the Majority Holders may exercise identity and address of such Affiliate. Thereupon such Affi▇▇▇▇▇ shall also be deemed a "Drag-Along Party" for purposes of this Agreement. The drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“SECTION 4 shall not be applicable to transferees of the Drag-Along Rights”)Party other than to other Affiliates of such Drag-Along Party.
(a) The Majority Holders 4.3 To exercise a drag-along right, Transferor shall give written notice (a “the "DRAG-ALONG NOTICE") to the Drag-Along Notice”) Party against whom the right is to be enforced at least fifteen (15) business days prior to any proposed Transfer of Common Stock. The notice shall specify the consummation terms of such proposed Transfer and certify as to the facts supporting exercise of the drag-along right and include a copy of the contract between the Transferor and Transferee to consummate the Drag-Along Transfer to Participant of any election by (the Majority Holders to exercise their "SALE CONTRACT"), if such a Sale Contract has been signed . During the Drag-Along Rights hereunderPeriod (as defined below), setting forth the Drag-Along Party in receipt of the Drag-Along Notice may not Transfer any Securities subject to Transferor's drag-along rights under this SECTION 4 to any Person other than Transferor or the Transferee. The "Drag-Along Period" shall be the period commencing on the date the Drag Along Notice is given and terminating on the earlier of (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of 120th day following delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders Notice or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations date of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation termination of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority HoldersSale Contract.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. If Notwithstanding anything to the holders of contrary set forth in this Agreement, in the event that a majority of the shares of the Company’s voting stock then-outstanding Shareholder (the “Majority Holders”"Selling Shareholder") propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of secures a bona fide offer (the Company to "Acquisition Offer") from any third party (a “the "Drag-Along Transfer”Acquirer ") to purchase all of the Ordinary Shares held by such Selling Shareholder (and it is hereby clarified that for purposes of this Section 8 it shall also include the holdings of its Permitted Transferees) for immediately available funds, at a price per Ordinary Share of at least US$ 23.00 (the "Drag Along PPS"), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Acquirer conditions the Acquisition Offer on the acquisition of Shareholders Agreement all the Ordinary Shares held at such time by the other Shareholder (the "Drag-Along Party" which, for purposes of this Section 8 shall include also the holdings of its Permitted Transferees), the Selling Shareholder shall provide the Drag Along Party with written notice together with a copy of the Acquisition Offer (the "Drag Along Notice.
") and the Drag Along Party will be required to either (bi) Within seven (7) days sell all of delivery of the Ordinary Shares then held by it to the Drag-Along Acquirer, at the same price and upon the same terms and conditions as those to which the sale by the Selling Shareholder is subject under the Acquisition Offer, provided that the sale of all the Ordinary Shares of the Selling Shareholder and the Drag Along Party shall be consummated by no later than 90 days following the receipt of the Drag Along Notice and, provided, further, that the Drag Along Party shall not be required to make any representations or warranties, except for customary representations regarding authorization and good and marketable title to the shares being sold; or (ii) provide the Selling Shareholder with written notice (the "Notice Extension") informing the Selling Shareholder that it wishes to receive an Extension (the "Extension"). In the event that an Extension Notice is delivered to the Selling Shareholder, the Drag Along Shareholder shall be required, by no later than three months following the receipt of the Drag Along Notice, Participant shall deliver to arrange for the sale of all of the Ordinary Shares held by the Selling Shareholder at a price per share that is not lower than the Drag Along PPS, and under terms and conditions that are no less favorable to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms Selling Shareholder than those set forth in the Acquisition Offer or (b) acquire, upon the termination of such three month period, the Ordinary Shares then held by the Selling Shareholder, at a price per share equal to the Drag Along PPS and upon terms and conditions no less favorable than those set forth in the Acquisition Offer. The Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a mergerPPS shall be adjusted for share splits, consolidation or business combinationissuance of bonus shares, or combinations of shares. No other adjustments (for dividend distributions, market conditions or for any sale of all or substantially all assets, Participant must further agree to (iother reason) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Drag Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority HoldersPPS.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. If Upon the holders of a majority Managing Member receiving an offer acceptable to the Managing Member to sell some or all of the shares of Managing Member’s interest in the Company’s voting stock then-outstanding Company (such interests proposed to be sold, the “Managing Member Transfer Interests”) to a Bona Fide Purchaser, the Managing Member shall have the right (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “Drag-Along TransferRight”), exercisable in the Majority Holders may exercise dragManaging Member’s sole discretion, to require each Non-along rights Managing Member to sell to such Bona Fide Purchaser a share of such Non-Managing Member’s interests in the Company (such share of the Non-Managing Member’s interests, its “Drag/Tag Interests”) proportionate to the share of the Managing Member’s interests in the Company represented by the Managing Member Transfer Interests, pursuant to and in accordance with such terms and subject conditions agreed between the Managing Member and such Bona Fide Purchaser. If the Managing Member elects to exercise the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
Right, then the Managing Member shall provide each Non-Managing Member with a notice which shall include (ai) The Majority Holders shall give written notice (a “statement that the Managing Member is exercising the Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferredRight, (ii) the consideration share of the Managing Member’s interest in the Company proposed to be received sold, (iii) the purchase price at which such Bona Fide Purchaser has proposed to purchase the Managing Member Transfer Interests and a calculation of the purchase price to be paid by such Bona Fide Purchaser for such shares, (ii) the identity of the prospective transfereeNon-Managing Member’s Drag/Tag Interests, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be closing date for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
sale (b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and no sooner than ten (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (18010) days after delivery following the date of such notice). The purchase price for each Non-Managing Member’s Drag/Tag Interests shall equal the Dragdistributions that such Non-Along NoticeManaging Member would have received, assuming that the Majority Holders shall (i) return to each Drag-Along Holder aggregate purchase price for the limited power-of-attorney Managing Member Transfer Interests and all certificates representing Drag/Tag Interests was distributed to the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership Managing Member and the ability to convey title to the Shares, including, but not limited to, representations Non- Managing Members pro rata and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant pari passu in accordance with their respective terms; and Percentage Interests (iv) neither the execution and delivery of documents subject to be entered into in connection with the transactionSection 9(c)), nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except Managing Member to have received distributions equal to the extent purchase price that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of Managing Member is receiving from the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and Bona Fide Purchaser for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority HoldersManaging Member Transfer Interests.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Limited Liability Company Agreement (Lightstone Real Estate Income Trust Inc.)
Drag Along. If In the holders of a majority of event that the shares of Founder and the Company’s voting stock then-outstanding Preferred Majority (which shall include Series B-1 Preferred Majority) (collectively the “Majority HoldersDrag Along Requestors”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party approve a Trade Sale (as defined below) (a “Drag-Drag Along TransferTransaction”) that has been approved by the Board (including the approval of each Investor Director), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery each of the Drag-Along Requestors shall have the right (the “Drag Along Right”) to require all other shareholders of the Company by giving a written notice (the “Drag Along Notice”) to all such parties, Participant shall deliver subject to the Majority Holders and upon such instruments of transfer terms and conditions as shall be reasonably requested approved by the Majority Holders or Drag Along Requestors, and such other shareholders of the prospective transferee, including, Company shall:
(a) vote all voting Shares held by them in the same manner as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.Requestors vote;
(b) provide any written waivers or consents necessary or desirable for the consummation of the Drag Along Transaction as requested by the Drag Along Requestors;
(c) In the event that refrain from exercising any transfer pursuant dissenters’ rights or rights of appraisal under applicable law at any time with respect to this Section 9 is structured as a merger, consolidation or business combination, or any sale of such Drag-Along Transaction;
(d) execute and deliver all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) related documentation and take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which in support of the Drag Along Transaction as shall reasonably be paid requested by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal the Company or other similar rights with respect thereto.the Drag Along Requestors; and
(de) If in the event that the Drag Along Transaction is to be effected by the sale of Shares held by Drag Along Requestors, to sell all Shares of the Company held by such other shareholders of the Company (or in the event that the Drag-Along Transfer is not consummated within one hundred Requestors are selling fewer than all of their Shares held in the Company, Shares in the same proportion as the Drag Along Requestors are selling) to the person to whom the Drag Along Requestors propose to sell its Shares, on the same terms and eighty (180) days after delivery of conditions as the Drag-Along Notice, the Majority Holders shall Requestors (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority HoldersSection 10.3 below).
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. If Notwithstanding the holders Right of First Offer/Tag-Along above, if Shareholders holding in the aggregate greater than 50% of the outstanding equity interests in Holdco (“Requisite Shareholders”) propose to enter into a transaction that would result in (x) the transfer of greater than 50% of the outstanding equity interests in Holdco, or (y) the sale of substantially all of the business of Holdco and its subsidiaries, taken as a whole, whether structured as a sale of equity or assets, merger, consolidation, scheme of arrangement or similar business combination transaction in respect of Holdco or its subsidiaries (a “Sale of Holdco”), such Requisite Shareholders can drag-along all other Shareholders (the “Drag Along Right”), subject to the following restrictions during the first five years following the Closing as set forth below: (i) during the first three years following the Closing, the Drag Along Right may only be exercised by the Requisite Shareholders if the equity valuation in respect of the Sale of Holdco is no less than the equity valuation of Holdco at the time of the closing of the Acquisition. (ii) during the fourth and fifth years following the Closing, the Drag Along Right may only be exercised by Shareholders holding in the aggregate 2/3 or more of the outstanding shares of Holdco. The Drag Along Right shall include customary covenants to vote in favor, participate in, and raise no objection (including waiver of all appraisal rights) in connection with the Sale of Holdco, and to take all necessary or desirable actions as requested by the Requisite Shareholders. The Drag Along Right will be subject to customary requirements, including without limitation, requirements that the dragged party would sell in the same proportion, and on the same financial terms and conditions applicable to the dragging party. Post-IPO Transfers In the event of an IPO of the Company (or other entity within the Holdco group structure, as applicable), the Shareholders will coordinate and cooperate with each other in all post-IPO sell-down activities in respect of the shares at the time of IPO of the applicable IPO entity. Subject to restrictions in the financing documents and lock-ups in connection with an IPO, all post-IPO sales shall be made by the Shareholders jointly on a pro-rata basis (to the extent of Shareholders then not subject to any applicable lock-up) until each Shareholder’s equity interest in Holdco is reduced to an amount equal to 30% of the equity interest held by such Shareholder at the time of the IPO (as determined on a look-through basis in the event of an IPO of the Company or other entity within the Holdco group structure), following which all Shareholders are then free to sell separately. The timing, price and amount of the post-IPO shares to be sold shall be determined by Shareholders holding a majority of the shares then outstanding shares, which determination shall then be binding on the rest of the Company’s voting stock thenShareholders. Pre-outstanding IPO Distributions If an IPO of the Company (or other entity within the “Majority Holders”Holdco group structure, as applicable), has not occurred by the fourth anniversary of the Closing, Holdco shall, and the Shareholders shall cause Holdco to, subject to restrictions in the financing documents, available cash, the ongoing capital requirements of the Holdco group and applicable law, distribute at least 75% of the net profits of the Holdco group to the Shareholders. Registration Rights If the Company (or other entity within the Holdco group structure, as applicable) propose applies for the listing of its shares on a securities exchange on which registration rights are applicable, the Company (or such other entity, as applicable) shall enter into a registration rights agreement pursuant to sell, assign or transfer, which the Shareholders (directly or indirectly, all of their shares of capital stock of the Company to any third party as applicable) shall have demand (a “Drag-Along Transfer”following an IPO), the Majority Holders may exercise drag-along shelf and piggyback registration rights in accordance with customary for an agreement of this type and subject on terms satisfactory to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”)Shareholders.
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. 4.1 If Transferor sells, other than in a public offering pursuant to a registration statement or pursuant to Rule 144 (or any successor provision) under the holders Securities Act, shares of Common Stock and/or Series Z Preferred Stock held by such Transferor to a Transferee in one transaction or a series of related transactions which constitute the transfer of a majority of the then outstanding shares of Common Stock and Series Z Preferred Stock of the Company’s voting stock thenIssuer, Holdings and/or its affiliates may, at their option, cause each of the members of the ▇▇▇▇▇ Group and JEDI (either party, and any affiliate thereof, being a "DRAG-outstanding (ALONG PARTY" and collectively, the “Majority Holders”"DRAG-ALONG PARTIES") propose to sellsell to the Transferee, assign or transferon the same terms and conditions as provided with respect to the sale by Transferor to such Transferee, directly or indirectly, all up to the number of their shares of capital stock Common Stock (rounded to the nearest whole share) equal to the product of (i) the Company to any third party (a “total number of shares of Common Stock which such Drag-Along Transfer”Party then owns and (ii) a fraction with a numerator equal to the number of shares of Common Stock and Series Z Preferred Stock then being sold by the Transferor and a denominator equal to the total number of shares of Common Stock and Series Z Preferred Stock owned by the Transferor (such shares being "DRAG-ALONG SHARES" and such transaction being a "DRAG-ALONG TRANSACTION"); provided however, that: (v) Transferor shall only be entitled to drag along shares of Common Stock under this SECTION 4 that the Majority Holders may exercise Drag-Along Party or Parties own as of the date hereof (securities acquired after the date hereof in any manner shall not be subject to the drag-along rights provided in accordance with this SECTION 4); (w) Transferor may not receive more than the liquidation preference, plus accrued dividends thereon, for the Series D Preferred Stock sold in a Drag-Along Transaction; (x) the price for the Drag-Along Shares may not be lower than the price paid to other common stockholders in the same or related transaction; (y) the consideration for the Drag-Along Shares shall be paid in cash unless the relevant Drag-Along Party consents to payment in a form other than cash; and subject (z) if the Drag-Along Transaction is a Merger Transaction, the provisions of this Section 4.1 shall not apply to the termsCommon Stock held by JEDI unless the Series E Preferred Stock then held by JEDI is redeemed in cash as of or prior to the effective date of the Merger Transaction.
4.2 If any of the Drag-Along Parties proposes to Transfer to any of its affiliates any of the Common Stock held by such Drag-Along Party, conditions and procedures then such Drag-Along Party, as a condition to the exercise of such right of Transfer, shall cause such Transferee to agree to be bound by this SECTION 4. The drag-along rights set forth in this Section 9 (“SECTION 4 shall not be applicable to transferees of the Drag-Along Rights”)Parties other than to their respective affiliates.
(a) The Majority Holders 4.3 To exercise a drag-along right, Transferor shall give written notice (a “to the Drag-Along Notice”) Party or Parties against whom the right is to be enforced at least fifteen (15) business days prior to any proposed Transfer of Common Stock and/or Series Z Preferred Stock. The notice shall specify the consummation terms of such proposed Transfer and certify as to the facts supporting exercise of the drag-along right. The Drag-Along Transfer to Participant Parties shall have ten (10) business days after receipt of any election by such notice (the Majority Holders to exercise their Drag"DRAG-Along Rights hereunder, setting forth (iALONG NOTICE PERIOD") the shares proposed to be transferred, (ii) the consideration to be received for before such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant parties shall be required to transfer. Any transfer of Transfer their shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in Transferee. During the Drag-Along Notice.
(b) Within seven (7) days of delivery of Notice Period the Drag-Along Notice, Participant shall deliver Party or Parties in receipt of such notice may not Transfer any Securities subject to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer Transferor's drag-along rights under this SECTION 4 to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (Person other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect theretoTransferor.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. Right. -----------------
(A) If the holders a Holder or a group of a majority Holders owning Common Stock representing sixty percent (60%) or more of the shares total amount of the Company’s voting stock then-outstanding (Common Stock plus In the “Majority Holders”) propose Money Warrants, proposes to sell, assign or transfer, directly or indirectly, transfer all of their shares of capital stock of the Company Common Stock to any third party who is not a Holder or an Affiliate of a Holder (each, a “"Drag-Along Transfer”Group") then the Drag- ---------------- Along Group shall have the right to require all other Holders (the "Compelled Holders") to sell to the third party all of their Capital ------------------ Stock notwithstanding any requirements to deliver a Selling Party's Notice pursuant to Section 3(b) which would otherwise be applicable.
(B) If a Third Party Offer is extended contemplating the acquisition of seventy-five percent (75%) or more of all outstanding Common Stock and all In the Money Warrants, and (ii) a Holder or a group of Holders owning Common Stock representing seventy-five percent (75%) or more of the outstanding Common Stock plus In the Money Warrants proposes to accept such Third Party Offer (again, each a "Drag-Along Group"), ; then the Majority Drag-Along Group shall have the right to require all Holders may exercise drag-along rights of Common Stock and In the Money Warrants (which for purposes of this Section 3(b)(x) hereof shall include the Drag Along Group) (the "Compelled Holders") to sell to the third party their ----------------- outstanding Common Stock and In the Money Warrants in accordance with the Third Party Offer notwithstanding any requirements to deliver a Selling Party's Notice pursuant to Section 3(b) which would otherwise be applicable. For purposes of this Section 3(b)(x), "In the Money ------------ Warrants" shall refer to Warrants having a strike price less than the -------- per share price at which the third party proposes to purchase the Common Stock;
(C) Any Common Stock or In the Money Warrants purchased from a Compelled Holder pursuant to this Section 3(b)(x) shall be purchased at the same price and subject on the same terms and conditions as the proposed transfer by the Drag-Along Group, provided that the purchase price for the In the Money Warrants shall not be less than the difference between the per share price of the Common Stock and the strike price of the In the Money Warrant times the number of shares issuable upon exercise of such warrants. With respect to Section 3(b)(x)(A), any Common Stock purchased pursuant thereto will be purchased at the termssame price and terms and conditions (including appropriate representations and warranties, as applicable) as the proposed transfer by the Drag-Along Group, and any other Capital Stock (other than Senior Preferred Stock and Common Stock) purchased pursuant thereto shall be purchased at Fair Market Value but otherwise on all of the same terms and conditions (including appropriate representations and procedures warranties, as applicable) as the proposed transfer by the Drag-Along Group. In any circumstance under Section 3(b)(x)(A) or (B), all Senior Preferred Stock shall be redeemed at its liquidation preference at the time of the transfer (which liquidation preference as set forth in this Section 9 the Certificate includes an amount equal to any accrued but unpaid dividends); provided, however, the Holders of the Preferred Stock shall be given the opportunity to exercise their conversion rights and become a Compelled Holder prior to any redemption.
(“D) The Drag-Along Rights”).
Group that proposes to transfer any Capital Stock shall, unless otherwise requested by the Buyer for confidentiality or other reasons, notify, or cause to be notified, the Company of the proposed transfer not less than ten (a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (1510) days prior to the consummation time of entering into a binding agreement requiring a transfer pursuant to this Section 3(b)(x). Upon receipt of such notice, the Company will promptly forward a copy thereof to all Compelled Holders. In all events the Drag-Along Group shall notify the Company in writing not less than twenty (20) days nor more than sixty (60) days prior to the time of such proposed transfer (the "Transferor Drag-Along Transfer to Participant --------------------- Notice"). The Company will promptly forward a copy of any election by the Majority Holders to exercise their Transferor Drag-Along Rights hereunder, setting forth Notice to all Compelled Holders. The Transferor Drag-Along Notice shall set forth: (iI) the shares proposed to be transferred, name and address of the third party and reasonably detailed information regarding the Buyer's relationship with the other Holders; (iiII) the proposed amount of consideration to (which must be received for such shares, (ii) the identity cash in lawful money of the prospective transferee, United States) and (iv) any other material terms and conditions of payment offered by the proposed transaction. Such notice shall also specify third party (the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such "Drag-Along TransferThird Party Terms"); provided, as specified in however that any transfer by the Compelled Holders of Capital Stock shall be made against delivery of immediately available funds payable to such Compelled Holders; and (III) that the third party has been informed of the "Drag-Along NoticeRight" provided for in ---------------- this Section 3(b)(x) and has agreed to purchase all outstanding Capital Stock in accordance with the terms hereof.
(bE) Within seven (7) days of delivery Upon the giving of the Transferor Drag-Along Notice, Participant each Compelled Holder shall deliver be entitled and obligated to sell to the Majority Holders such instruments third party all of transfer as shall be reasonably requested by the Majority Holders his, her, or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares its Capital Stock on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a mergerThird Party Terms or his, consolidation or business combinationher, or any sale its Applicable Percentage of all or substantially all assetsoutstanding Common Stock and In-the-Money Warrants, Participant must further agree to (i) vote or provide a written consent in favor of whichever the transactioncase may be; provided, (ii) take such other action within its powerhowever, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If that neither the Drag-Along Transfer is Group nor any Compelled Holder shall consummate the sale of any Capital Stock owned by it unless the third party purchases all of the Capital Stock described in the Transferor Drag-Along Notice. If the third party does not consummated within one hundred purchase all Capital Stock owned by each Compelled Holder or the Applicable Percentage of each Holder's of outstanding Common Stock and eighty (180) days after delivery of In-the- Money Warrants as required by this Section 3(b)(x), then any transfer by the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney Group and all certificates representing the shares that Participant delivered pursuant Compelled Holders to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, third party shall be borne by Participantnull and void and of no effect whatsoever.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. If the holders of one or more Partners receive a majority Third Party Offer from a Third Party Offeror to purchase all of the shares of the Company’s voting stock then-outstanding Purchased Securities, such Partner(s) (the “Majority HoldersInitiating Partners”) propose shall forthwith send this Third Party Offer to sellthe other Partners. In such circumstances, assign or transferthe Managing General Partner shall convene a meeting of Partners within ten (10) days following transmittal of the Offer to all Partners, as indicated above. During this meeting of Partners, the Third Party Offer shall be debated and, in circumstances where Partners holding, directly or indirectlythrough Affiliates, all of their shares of capital stock at least eighty-five percent (85%) of the Company securities of each entity forming the Purchased Securities agree to any third party accept the Offer in question, then all the Partners and their Affiliates who own Purchased Securities shall be deemed to have accepted the Offer. The sale of all Purchased Securities shall then be carried out as per the terms and conditions set out in the Third Party Offer. The Closing of a sale pursuant to this section shall take place at the place to be specified in a notice to be provided by the Initiating Partners to such Partners, no later than ten (a “Drag-Along Transfer”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a10) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days Business Days prior to the consummation date of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity Closing of the prospective transferee, and (iv) any other material terms and conditions sale of the proposed transactionPurchased Securities as contemplated in the Third Party Offer. Such notice shall also specify In the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant event that a Third Party Offer is accepted or deemed accepted pursuant to the terms hereof shall be of this section 11.2, then Labopharm Inc. covenants to sell its Shares and Labopharm USA, Inc. and ▇▇▇▇▇▇▇▇ Pharmaceuticals, Inc. covenant to sell their units of Labopharm Pharmaceuticals, LLC as part of the Purchased Securities pursuant to the terms of this section 11.2. To the extent permitted by applicable law, each Partner (for the same amount purposes of this section 11.2, the “Principal”) hereby irrevocably nominates, constitutes and form appoints the Initiating Partners, to be the Principal’s true and lawful attorney and agent, with full power and authority, for and on behalf of consideration per share the Principal, and in the name or otherwise of the Principal, and as the Majority Holders will receive in such Drag-Along TransferPrincipal’s act and deed, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Noticeto do, Participant shall deliver to the Majority Holders such make, execute, swear to, acknowledge, deliver, record and file any, and all, acts, documents, deeds and other instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required necessary or desirable to effect such transaction, effectively transfer and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If assign the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery Purchased Securities held by the Principal upon Closing of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession sale of the Majority Holders executed by Participant in connection Purchased Securities. The power of attorney granted herein is irrevocable and is a power coupled with an interest and will survive the proposed Drag-Along Transfer.
(e) Notwithstanding disability or dissolution of any Principal and extends to the foregoing, successors and assigns of a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties Principal. Each Principal agrees to be made bound by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties actions made or taken by the Company, the Majority Holders or the Purchaser Initiating Partners in connection with good faith pursuant to such Drag-Along Transfer, is several power of attorney and not joint (except to the extent that funds waives any and all defences which may be paid out of an escrow established available to cover breach of representationscontest, warranties and covenants negate or disaffirm the action of the Company as well as breach by any stockholder Initiating Partners so taken in good faith under the power of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any attorney. The provisions of this section 11.2 shall apply in priority over and supersede the Company’s certificate provisions of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holderssection 10.2 hereof.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. Rights If the ESOT proposes to sell for cash all (but not less than all) of the outstanding shares of Common Stock of the Company owned of record by the ESOP to a bona fide unaffiliated third party on an arm’s length basis in a single transaction or a series of related transactions, then the ESOT may issue a drag notice requiring the Warrant holders to sell the all of the Common Stock underlying the Warrants to the proposed transferee on the same terms that the ESOT is proposing to sell its shares (including price per share to be paid), provided, that in such sale transaction, the Warrant holders may elect not to exercise the Warrants into Common Stock but instead may elect to receive, as consideration for the sale of the Common Stock underlying the Warrants, the price per share of Common Stock paid in the sale transaction less the exercise price of the Warrants, provided, further, that the Warrant holders shall not be required to make any representations or warranties concerning the Company. Redemption To the extent permitted under the New Revolving Facility, the New First Lien Term Loan, the New Second Lien Term Loan and the New Third Lien Notes, the Company shall be permitted to purchase Warrants in open market transactions, provided, that any Warrants purchased in open market transactions are immediately retired and the Company shall have no voting rights with respect thereto. Except as set forth in the preceding sentence, the Company shall have no right to redeem the Warrants. Transferability No Warrant holder shall transfer any Warrant: · if such transfer would, (A) violate any applicable securities or other laws, (B) unless the Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, result in the Company having, if such Warrant were exercised, stockholders of record exceeding in number either (i) 2000 or more Accredited Investors or (ii) 500 or more persons who are not Accredited Investors, or (C) limit, impair or eliminate the Company’s net operating losses either upon transfer or upon the exercise of such Warrant; · if the transferee is determined by the Board to be a competitor, customer or supplier of the Company or any Subsidiary of the Company and such transfer would be adverse to the Company; and · if the transferee creates a FOCI issues. Any transfer, sale, assignment, pledge, hypothecation or other disposition of the Warrants and the issuance of the New Common Stock upon exercise of the Warrants will be in transactions pursuant to either a valid registration statement under the Securities Act or any other Applicable Law or an exemption from registration under the Securities Act. Fractional Shares Warrant holders shall receive cash in lieu of fractional shares. Warrant Agreement The Warrants shall be governed by the Warrant Agreement between the Company and the Warrant Agent, in form and substance reasonably acceptable to the Supporting Noteholders. Information The Company shall provide to holders of a majority the Warrants all information, other than material, non-public information, provided to the Company’s lenders under any credit agreements, indentures or similar documents. The Company shall permit, and shall cause each Subsidiary to permit, each holder of Warrants that holds Warrants exercisable into at least five percent (5%) of the shares outstanding Common Stock on a fully diluted basis, to visit and inspect the Company’s or any Subsidiary’s properties, to examine its books of account and records and to discuss the Company’s or any Subsidiary’s affairs, finances and accounts with its officers, all at such reasonable times as may be requested, provided, that, such access does not materially interfere with the operations of the Company’s voting or any Subsidiary’s business. To the extent a holder of Warrants determines to receive material, non-public information, such holder shall enter into confidentiality agreement reasonably acceptable to the Company (and on terms no less onerous to such holder of Warrants than similar confidentiality agreements entered into by the Company). Warrant Agent A financial institution reasonably selected by the Supporting Noteholders. Shareholders Agreement Warrant holders shall be deemed to be bound to the terms of the Shareholders’ Agreement upon exercise of the Warrants. Corporate Opportunities Neither Series A Director, the holders of the Warrants or the Series A Holder shall have an obligation to present corporate opportunities to the Company or any of its subsidiaries. Governing Law Delaware. The following summarizes certain of the key terms of the new series A preferred stock then-outstanding of Alion Science and Technology Company (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “Drag-Along TransferCompany”), . Capitalized terms used herein shall have the Majority Holders may exercise drag-along rights in accordance with and subject meaning ascribed to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along NoticeRefinancing Agreement. Issuer The Company.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Refinancing Support Agreement (Alion Science & Technology Corp)
Drag Along. If 7.1 In connection with a Drag Event, TopCo shall have the holders of a majority of the shares of the Company’s voting stock then-outstanding (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party right (a “Drag-Along TransferRight”), ) to require the Majority Holders may exercise drag-along rights MIP Shareholders to sell all the Limited Voting Shares held by the MIP Shareholders (as exchanged pursuant to Clause 2) on a pro rata basis (the “Drag Shares”) to the Third Party Purchaser at the same price and on the same terms and conditions as the Drag Event in accordance with and subject this Clause 7.
7.2 Topco shall give the MIP Shareholders, simultaneously with serving an Exchange Notice in accordance with Clause 2 to the termsextent that their respective MIP Shares have not been exchanged for Limited Voting Shares pursuant to the exercise of any Exchange Right, a written notice of the exercise of their Drag-Along Right containing details of the terms and conditions of the offer and procedures set forth in this Section 9 the transfer price (the “Drag-Along RightsNotice”)., following which:
(a) The Majority Holders Clause 8 shall not apply in respect of the Drag Event;
(b) each MIP Shareholder shall give TopCo a written notice agreeing to sell the Drag Shares to the Third Party Purchaser in accordance with this Clause 7 (a “Drag-Along Acceptance Notice”) at least fifteen within three (153) days prior to Business Days after the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery date of the Drag-Along Notice, Participant failing which such MIP Shareholder shall be deemed to have served a Drag-Along Acceptance Notice; and
(c) if the MIP Shareholders serve or are deemed to have served a Drag-Along Acceptance Notice, then, subject to this Clause 7, they shall sell the Drag Shares to the Third Party Purchaser at the same price and on the same terms and conditions as the Drag Event, concurrently with the consummation of the Drag Event.
7.3 At completion of the sale and purchase of the Drag Shares to the Third Party Purchaser under this Clause 7, the MIP Shareholders shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unlessThird Party Purchaser:
(ia) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant stock transfer power of attorney with signature guarantee in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation respect of the terms Drag Shares which it holds in favour of any agreement, law the Third Party Purchaser or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any such other person in connection with as the Drag-Along Transfer, other than the Company (except to the extent that funds Third Party Purchaser may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfernominate; and
(ivb) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice certificates in respect of such Proposed Drag-Along Transferthe Drag Shares.
7.4 The liability to the Third Party Purchaser in relation to the sale of Limited Voting Shares under this Clause 7 of each MIP Shareholder shall be several only and shall be determined by reference to their respective proportions of sale.
Appears in 1 contract
Sources: Exchange Rights Agreement (Concordia International Corp.)
Drag Along. 9.1 If the holders of a majority at least 75% of the shares Preferred Shares (calculated on the basis of the Company’s voting stock thenall Preferred Shares issued and outstanding at that time (on an as-outstanding converted to Common Stock basis) and not per capita) (the “Majority HoldersSelling Investors”) propose to sell, assign or transfer, directly or indirectlyrequests the initiation of a Trade Sale, all of their shares of capital stock Shareholders will be obliged to do all things without undue delay as may be necessary and reasonable to permit such Trade Sale. The Selling Investors shall notify the remaining Shareholders on such intended Trade Sale, whereas is applicable by analogy to this notice. Upon request of the Company to any third party (a “Drag-Along Transfer”)Selling Investors, the Majority Holders may exercise drag-along rights remaining Shareholders shall simultaneously sell their Shares to the Acquirer, for total consideration sufficient to be allocated per Share in accordance with the Certificate, at the same price and subject on the same terms and conditions, which apply between the Selling Investors and the Acquirer (the “Drag Along Right”). The Drag Along Right shall also include the right of the Selling Investors to appoint a reputable investment bank or advisor in relation to the terms, conditions preparation and procedures set forth in this Section 9 (“Drag-Along Rights”)execution of the Trade Sale.
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) 9.2 Notwithstanding the foregoing, a Drag-Along Holder Shareholder will not be required to comply with this Section 9 9.1 in connection with any proposed Drag-Along TransferTrade Sale (the “Proposed Sale”), unless:
(i) Any representations and warranties 9.2.1 there are no representations, warranties, covenants or indemnities required to be made by Participant such Shareholder in connection with the Drag-Along Transfer are limited to Proposed Sale other than reasonable and customary representations and warranties related to authority, ownership and given by the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agencySelling Investors;
(ii) Participant 9.2.2 the Shareholder shall not be liable for the inaccuracy of any representation or warranty made by any other person Person in connection with the Drag-Along TransferProposed Sale, other than representations and warranties by the Company (except respective Shareholder or the Company, if any, relating to the extent that funds may be paid out of an escrow established to cover breach of representationsCompany’s business, warranties assets and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders)liabilities;
(iii) 9.2.3 the liability for indemnification, if any, of Participant such Shareholder in the Drag-Along Transfer Proposed Sale and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders Company or the Purchaser its Shareholders in connection with such Drag-Along TransferProposed Sale, is several and not joint with any other Person;
9.2.4 liability shall be limited to such Shareholder’s applicable share (except determined based on the respective proceeds payable to each Shareholder in connection with such Proposed Sale in accordance with the extent Certificate) of a negotiated aggregate indemnification amount that funds may be paid out of an escrow established applies equally to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata Shareholders but that in proportion to, and does not exceed, no event exceeds the amount of consideration paid otherwise payable to Participant such Shareholder in connection with such Drag-Along TransferProposed Sale, except with respect to claims related to fraud by such Shareholder, the liability for which need not be limited as to such Shareholder; and
(iv) upon 9.2.5 if any holders of any Shares are given an option as to the consummation form and amount of consideration to be received as a result of the Drag-Along TransferProposed Sale, Participant all holders of such Shares will receive be given the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holdersoption.
9.3 Section 6 (fRight of First Refusal) All costs and expenses incurred by Participant shall not be applicable in connection with any Drag-Along Transfer, including, without limitation, transfer taxes exercise and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part execution of the Majority Holders to Participant if a Drag-Drag Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along TransferRight.
Appears in 1 contract
Drag Along. If (a) In the holders of event that a majority of the shares of the Company’s voting stock then-outstanding Majority Member has received a bona fide written offer (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “Drag-Along TransferOffer”)) from an unaffiliated third party (the “Drag-Along Transferee”) to purchase Units constituting more than 50% of the total Units, then the Majority Holders may exercise drag-along rights in accordance with and subject to Member shall have the terms, conditions and procedures set forth in this Section 9 right (“Drag-Along RightsRight”)) to require all, but not less than all, of the other Persons holding Units (the “Drag-Along Persons”) to sell the same pro rata portion of their Units as the Majority Member (determined by reference to the relative Units of each such Member) to the Drag-Along Transferee in accordance with the terms of the Drag-Along Offer.
(ab) The Majority Holders shall give Member may elect to exercise its Drag-Along Right by delivering written notice (a the “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Persons. The Drag-Along Rights hereunderNotice must describe the terms of the proposed Transfer in reasonable detail, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) including the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in Transferee and the proposed closing date. In the event the Majority Member delivers a Drag-Along Notice to the Drag-Along Notice.
(b) Within seven (7) Persons, such notice shall constitute an irrevocable obligation of such Persons to sell their applicable Units to the Drag-Along Transferee in accordance with the Drag-Along Offer, so long as the purchase and sale transaction occurs within 90 days of delivery after the date of the Drag-Along Notice. In the event that the Drag-Along Transferee desires to effect such Transfer pursuant to a merger, Participant consolidation or other business combination of the Company, the Majority Member shall deliver have the right to cause the Managers and the other Members and Drag-Along Persons to effect such form of Transfer, and take all actions necessary to approve such form of Transfer pursuant to this Section 7.6. The Majority Member shall give the Drag-Along Persons at least ten business days’ notice of the time and place of the closing.
(c) Each Drag-Along Person as part of its participation in the Transfer pursuant to the Majority Holders Drag-Along Right shall convey its Units, if required by the form of the transaction, to the Drag-Along Transferee at the closing, free and clear of all liens, claims and encumbrances and pursuant to such instruments of transfer conveyance and warranties (including warranty of title and absence of encumbrances) as the Drag-Along Transferee shall be reasonably requested by request, in exchange for payment in full of the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms purchase price set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transactionOffer, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection Person shall enter into agreements with the Drag-Along Transfer are limited Transferee containing the same terms and conditions as those applicable to the Majority Member; provided, however, that except with respect to indemnities for breaches of representations and warranties related to authority, ownership and the ability to convey title to the Sharessuch Drag-Along Person’s Units, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest each Drag-Along Person shall only be required to participate pro rata in and any indemnity given to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along TransferTransferee on the same terms as the Majority Member, other than subject to a maximum indemnity exposure not to exceed the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants proceeds of the Company as well as breach sale received by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants Person. All Members participating in any such transaction shall bear their pro rata share of the Company as well as breach by any stockholder reasonable costs of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses transaction. Costs incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability a Member on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders its own behalf shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect considered costs of such Proposed Drag-Along Transfera transaction and shall be paid solely by such Member.
Appears in 1 contract
Sources: Operating Agreement (Air T Inc)
Drag Along. If the holders of a majority of the shares of the Company’s voting stock then-outstanding (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “Drag-Along Transfer”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders Notwithstanding anything contained in this Article VII to the contrary, if on or after the second anniversary of the Closing Date, the Investors acting by Investor Supermajority Approval (the "Dragging Investors") approve a bona fide proposal to Transfer for cash and/or Marketable Securities in an arm's length transaction or series of related transactions all of, and not less than all of, the Shares and the PECs (a "Sale Proposal") to a Person that is not an Affiliate of any such Investor (each, a "Required Sale"), then the Dragging Investors shall give deliver a written notice (a “Drag-Along "Required Sale Notice”") with respect to such Sale Proposal at least fifteen (15) days ten Business Days prior to the consummation anticipated closing date of such proposed Drag-Along Transfer Required Sale to Participant of any election by Holdco and all other Holders.
(b) The Required Sale Notice will include the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the Required Sale, including (A) the name and address of the proposed transaction. Such notice shall also specify Transferee, (B) the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same proposed amount and form of consideration per share Share and per PEC (the "Dragging Consideration") (and if such consideration consists in part or in whole of Marketable Securities, the Dragging Investors will provide such information, to the extent reasonably available to the Dragging Investors, relating to such Marketable Securities as the Majority Holders other Investors may reasonably request in order to evaluate such Marketable Securities) and (C) if known, the proposed Transfer date. The Dragging Investors will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days deliver or cause to be delivered to each other Holder copies of delivery of the Drag-Along Notice, Participant shall deliver all transaction documents relating to the Majority Holders such instruments of transfer Required Sale promptly as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Noticesame become available.
(c) In Each Shareholder and PEC Holder, upon receipt of a Required Sale Notice, shall be obligated to sell all of its Shares and PECs, and participate in the event that any transfer pursuant Required Sale contemplated by the Sale Proposal, to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent their Shares in favor of the transactionRequired Sale at any meeting of Shareholders called to vote on or approve the Required Sale and/or to consent in writing to the Required Sale, to use its reasonable efforts to cause its Shareholder Directors to vote in favor of the Required Sale at any meeting of the Holdco Board called to vote on or approve the Required Sale and/or to consent in writing to the Required Sale, to waive all dissenters' or appraisal rights in connection with the Required Sale, to enter into agreements relating to the Required Sale as and to agree (as to itself) to make to the proposed purchaser the same representations, warranties, covenants and agreements as the Dragging Investors agree to make in connection with the Required Sale; provided that (i) in no event shall any Shareholder and PEC Holder be required to make any representations and warranties (other than as to the title to its Shares or PECs, as applicable, its power, authority and legal right to Transfer such Shares or PECs, and the absence of any adverse claims with respect to such Shares or PECs) or provide any indemnities and (ii) take a Shareholder and PEC Holder shall not be obligated to enter into any non-competition or other post-closing covenant that restricts its activities in any way. If at the end of the 120th day after the date of delivery of the Required Sale Notice (as such other action within its powerperiod may be extended to obtain any required regulatory approvals) the Dragging Investors have not completed the proposed transaction, at no cost to it (other than fees and expenses payable to its advisors, which the Required Sale Notice shall be paid by Participant)null and void, as may each Shareholder and PEC Holder shall be required released from such Shareholder's and PEC Holder's obligations under the Required Sale Notice and it shall be necessary for a separate Required Sale Notice to effect such transaction, be furnished and (iii) take all action the terms and provisions of this Section 7.4 separately complied with in order to waive consummate any dissenters, appraisal or other similar rights with respect theretoSale Proposal.
(d) If Any expenses incurred for the Drag-Along Transfer is not consummated within one hundred benefit of all Shareholders and eighty (180) days after delivery of the Drag-Along Notice, the Majority PEC Holders shall (i) return to each Drag-Along Holder be paid by the limited power-of-attorney Shareholders and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority PEC Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except Sharing Percentages to the extent that funds may be not paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made or reimbursed by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority HoldersTransferee.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Subscription and Shareholders Agreement (Nordic Telephone CO ApS)
Drag Along. If 12.1 In case (i) a petition of bankruptcy or insolvency has been filed by a creditor for default by the Company and such petition has been admitted by a court of competent jurisdiction or has not been dismissed within 180 (one hundred and eighty) days of filing; or (ii) if the Company and the Promoters have failed to provide an Exit to the Investors within 12 (twelve months) from the expiry of the Exit Period, each Principal Investors may, at their sole discretion, written notice to the Company (“Drag Along Notice”) cause the Promoters and other Shareholders of the Company (excluding the other Principal Investors) (“Dragged Shareholders”), to (i) sell such number of their Shares up to 100% (one hundred percent) as stipulated by the Principal Investors to a third party; or (ii) merge or consolidate the Company with any other entity; (iii) sell all or substantially all Assets or Proprietary Rights of the Company to a third party, in a manner determined by the Principal Investors in conjunction with an offer received from a third party (such sale referred to as the “Drag Sale” and such right of the Principal Investors referred to as the “Drag Along Right”). The Company will facilitate and the Promoters and other Shareholders will co-operate with the Principal Investors in connection with the Principal Investors exercising the Drag Along Right including by (i) co-operating in any due diligence conducted by the any third party and providing all necessary information relating to the Company; (ii) voting, as Shareholders of the Company and as holders of a majority Equity Securities of the shares respective classes and series, in favour of a Drag Sale; and (iii) 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 Principal Investors to cause such Drag Sale to be consummated, including, as appropriate, exercising their best efforts to cause all Directors under their control or influence to vote, as Directors, to approve the Drag Sale.
12.2 In the event of any of the Principal Investors exercising the Drag Along Rights, the Promoters and other Shareholders (excluding the other Principal Investors, Evolvence and the Angel Investors) shall provide customary representations, warranties and indemnities in connection with the Company and its Subsidiaries, its business and operations, and the Equity Securities being Transferred by them. The Principal Investors, Evolvence and the Angel Investors would not be required to provide any representations, warranties and indemnities in respect of the Company and its operations other than representations, warranties and indemnities with reference to the legal standing of such Principal Investors, Evolvence and the Angel Investors respectively, withholding tax if applicable on the Shares held by the Principal Investors, Evolvence and the Angel Investors respectively, title to their respective securities and securities being un-encumbered (with warranties and indemnities on issuance of such securities being provided by the Company’s voting stock then-outstanding ()
12.3 Upon receipt of the “Majority Holders”) propose Drag Along Notice, the Company shall forthwith send such notice to sellall the Dragged Shareholders. A Drag Along Notice shall be revocable by the Investor by written notice to the Company at any time before the completion of the Drag Sale, assign or transfer, and any such revocation shall not prohibit the Investor from serving a further Drag Along Notice subject to fresh compliance with the procedure laid down under this Clause 12. The Dragged Shareholders hereby agree and undertake not to directly or indirectly, all of their shares of capital stock of approach the Company Drag Sale Purchaser to propose or negotiate any third party (a “Drag-Along Transfer”), the Majority Holders may exercise drag-along rights transaction in accordance with and subject relation to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders securities or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions Assets of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Shareholders Agreement
Drag Along. (a) If ▇▇▇▇▇▇▇▇ Partners delivers a notice to the holders of other Securityholders (each a majority of the shares of the Company’s voting stock then-outstanding (the “Majority HoldersCompelled Holder”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party in connection with a bona fide offer (a “Drag-Along TransferSale Offer”)) by a Third Party to purchase any of the Securities held by the Securityholders, ▇▇▇▇▇▇▇▇ Partners will have the Majority Holders may exercise drag-along rights right in accordance with Section 3.1(b), to require the Compelled Holders to sell a pro rata portion of the Securities then held by the Compelled Holders to such Third Party on terms and subject conditions not less favorable to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”)Compelled Holders than those upon which the ▇▇▇▇▇▇▇▇ Funds shall sell Securities owned by them to such Third Party.
(ab) The Majority Holders shall give If ▇▇▇▇▇▇▇▇ Partners elects to exercise its right to compel sale pursuant to the terms hereof, ▇▇▇▇▇▇▇▇ Partners will deliver written notice (a “Drag-Along Sale Notice”) at least fifteen (15) days prior of the Sale Offer to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Compelled Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such sharesthe Securities, (ii) the identity of the prospective transferee, Third Party and (iv) any the other material terms and conditions of the proposed transactionSale Offer. Such notice shall also specify ▇▇▇▇▇▇▇▇ Partners will notify each Compelled Holder reasonably in advance of any negotiations with the aggregate number of shares Participant shall Third Party with respect to representations, warranties and indemnities in connection with the Sale Offer if such Compelled Holder will be required to transfer. Any transfer sign an agreement with respect to such representations, warranties or indemnities to effect the sale of shares by Participant pursuant the Compelled Holder’s Securities (the “Compelled Sale Transaction”), and in all events the representations, warranties and indemnities applicable to such Compelled Holder will not be more onerous than those applicable to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice▇▇▇▇▇▇▇▇ Funds.
(c) In the event that Promptly after completion of any transfer sale pursuant to this Section 9 is structured as 3.1, ▇▇▇▇▇▇▇▇ Partners will notify each Compelled Holder and will remit to such Compelled Holder the total sales price attributable to the Securities of such Compelled Holder sold pursuant thereto less a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor pro rata portion of the transactionexpenses and taxes, (ii) take if any, incurred in connection with such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect theretosale.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to Notwithstanding anything in this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein 3.1 to the contrary, there shall will be no liability on the part of ▇▇▇▇▇▇▇▇ Partners or the Majority ▇▇▇▇▇▇▇▇ Funds to the Compelled Holders if any sale of Securities pursuant to Participant if a Drag-Along Transfer this Section 3.1 is not consummated for whatever reason. It is understood that ▇▇▇▇▇▇▇▇ Partners, in its sole discretion, will determine whether to effect a sale of Securities to any reason, and the Majority Holders shall not be obligated Person pursuant to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transferthis Section 3.1.
Appears in 1 contract
Drag Along. 4.1 If Transferor sells, other than in a public offering pursuant to a registration statement or pursuant to Rule 144 (or any successor provision) under the holders Securities Act, shares of Common Stock and/or Series Z Preferred Stock held by such Transferor to a Transferee in one transaction or a series of related transactions which constitute the transfer of a majority of the then outstanding shares of the Company’s voting stock then-outstanding (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock Common Stock and Series Z Preferred Stock of the Company to Issuer, Holdings and/or its affiliates may, at their option, cause each of the members of the Smit▇ ▇▇▇up and JEDI (either party, and any third party (affiliate thereof, being a “"Drag-Along Transfer”)Party" and collectively, the Majority Holders may exercise "Drag-Along Parties") to sell to the Transferee, on the same terms and conditions as provided with respect to the sale by Transferor to such Transferee, up to the number of shares of Common Stock (rounded to the nearest whole share) equal to the product of (i) the total number of shares of Common Stock which such Drag-Along Party then owns and (ii) a fraction with a numerator equal to the number of shares of Common Stock and Series Z Preferred Stock then being sold by the Transferor and a denominator equal to the total number of shares of Common Stock and Series Z Preferred Stock owned by the Transferor (such shares being "Drag-Along Shares" and such transaction being a "Drag-Along Transaction"); provided however, that: (v) Transferor shall only be entitled to drag along shares of Common Stock under this Section 4 that the Drag-Along Party or Parties own as of the date hereof (securities acquired after the date hereof in any manner shall not be subject to the drag-along rights provided in accordance with this Section 4); (w) Transferor may not receive more than the liquidation preference, plus accrued dividends thereon, for the Series D Preferred Stock sold in a Drag-Along Transaction; (x) the price for the Drag-Along Shares may not be lower than the price paid to other common stockholders in the same or related transaction; (y) the consideration for the Drag-Along Shares shall be paid in cash unless the relevant Drag-Along Party consents to payment in a form other than cash; and subject (z) if the Drag-Along Transaction is a Merger Transaction, the provisions of this Section 4.1 shall not apply to the termsCommon Stock held by JEDI unless the Series E Preferred Stock then held by JEDI is redeemed in cash as of or prior to the effective date of the Merger Transaction.
4.2 If any of the Drag-Along Parties proposes to Transfer to any of its affiliates any of the Common Stock held by such Drag-Along Party, conditions and procedures then such Drag-Along Party, as a condition to the exercise of such right of Transfer, shall cause such Transferee to agree to be bound by this Section 4. The drag-along rights set forth in this Section 9 (“4 shall not be applicable to transferees of the Drag-Along Rights”)Parties other than to their respective affiliates.
(a) The Majority Holders 4.3 To exercise a drag-along right, Transferor shall give written notice (a “to the Drag-Along Notice”) Party or Parties against whom the right is to be enforced at least fifteen (15) business days prior to any proposed Transfer of Common Stock and/or Series Z Preferred Stock. The notice shall specify the consummation terms of such proposed Transfer and certify as to the facts supporting exercise of the drag-along right. The Drag-Along Transfer to Participant Parties shall have ten (10) business days after receipt of any election by such notice (the Majority Holders to exercise their "Drag-Along Rights hereunder, setting forth (iNotice Period") the shares proposed to be transferred, (ii) the consideration to be received for before such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant parties shall be required to transfer. Any transfer of Transfer their shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in Transferee. During the Drag-Along Notice.
(b) Within seven (7) days of delivery of Notice Period the Drag-Along Notice, Participant shall deliver Party or Parties in receipt of such notice may not Transfer any Securities subject to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited powerTransferor's drag-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to along rights under this Section 9 is structured as a merger, consolidation or business combination, or 4 to any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (Person other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect theretoTransferor.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. Rights If the ESOT proposes to sell for cash all (but not less than all) of the outstanding shares of Common Stock of the Company owned of record by the ESOT to a bona fide unaffiliated third party on an arm’s length basis in a single transaction or a series of related transactions, then the ESOT may issue a drag notice requiring the holders of a majority Common Stock to sell the all of their respective Common Stock to the proposed transferee on the same terms that the ESOT is proposing to sell its shares (including price per share to be paid), provided, that, holders of Common Stock shall not be required to make any representations or warranties concerning the Company. Information Upon request, the Company shall provide to any Stockholder all information, other than material, non-public information, provided to the Company’s lenders under any credit agreements, indentures or similar documents. The Company shall permit, and shall cause each Subsidiary to permit, each Stockholder who holds at least 5% of the outstanding shares of Common Stock or any designee of the Series A Holder, to visit and inspect the Company’s or any Subsidiary’s properties, to examine its books of account and records and to discuss the Company’s or any Subsidiary’s affairs, finances and accounts with its officers, all at such reasonable times as may be requested; provided, that such access does not materially interfere with the operations of the Company’s voting stock thenor any Subsidiary’s business. To the extent a holder of Common Stock determines to receive material, non-outstanding public information, such holder shall enter into confidentiality agreement reasonably acceptable to the Company. Termination The Shareholders’ Agreement shall terminate upon the consummation of a Qualified Public Offering, which is defined as a bona fide public offering of Common Stock that yields gross proceeds of an amount to be determined by the Supporting Noteholders. ESOP / ESOP Plan Documents Neither the Company nor the ESOT shall amend, supplement, restate or otherwise modify or alter the ESOP or ESOP Plan Documents unless such amendment, supplement, restatement, modification or alteration (x) is not inconsistent with the terms of this Agreement and the other Transaction Documents or (y) is required by Applicable Law or Internal Revenue Service guidance or procedures; provided that, to the extent that any amendment, supplement, restatement, modification or alteration of the ESOP or the ESOP Documents required by Applicable Law results in the ESOP or the ESOP Documents being inconsistent with terms of this Agreement or any of the Transaction Documents, the Company and the ESOT agree that they will use commercially reasonable efforts to minimize or eliminate such inconsistency, to the fullest extent permitted by Applicable Law. Corporate Opportunities Neither Series A Director, the holders of the Warrants or the Series A Holder shall have an obligation to present corporate opportunities to the Company or any of its subsidiaries. Governing Law Delaware. These Disclosure Schedules (these “Disclosure Schedules”) are a material part of the Refinancing Support Agreement (the “Majority HoldersAgreement”) propose to selldated as of December 24, assign or transfer, directly or indirectly, all of their shares of capital stock of 2013 by and among Alion Science and Technology Corporation (the Company to any third party (a “Drag-Along TransferCompany”), the Majority Holders may exercise drag-along rights in accordance with and subject to the termsASOF II Investments, conditions and procedures set forth in this Section 9 LLC (“Drag-Along RightsASOF”) and Phoenix Investment Advisor LLC (with ASOF, collectively the “Supporting Noteholders”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to capitalized terms used but not otherwise defined herein shall have the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms respective meanings set forth in the Drag-Along Notice.
(c) In Agreement. These Disclosure Schedules are intended only to qualify and limit the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of contained in the Company as well as breach by Agreement, and will not be deemed to expand in any stockholder way the scope or effect of any of the identical such representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant or covenants. Notwithstanding anything in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein Agreement to the contrary, there the inclusion of an item in such schedule as an exception to a representation or warranty will not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had, could have, or could constitute a Material Adverse Effect or Material Adverse Change. Any information set forth in one schedule of these Disclosure Schedules will be deemed to apply to each other section or subsection of the Agreement to which its relevance is reasonably apparent. Any reference to a contract, statement, plan, report or other document of any kind in these Disclosure Schedules shall be no liability on deemed to be a disclosure thereof, and it shall not be necessary to identify or reference specific provisions of such document. Headings have been assigned to the various schedules within these Disclosure Schedules for convenience of reference only and shall not be construed to affect the meaning or construction of the language in the body of such schedules. Matters reflected in these Disclosure Schedules are not necessarily limited to matters required by the Agreement to be reflected in these Disclosure Schedules. Such additional matters are set forth for informational purposes only and do not necessarily include other matters of a similar nature. The information contained in these Disclosure Schedules is the confidential, proprietary information of the Company, and each of the Supporting Noteholders shall maintain and protect such confidential information pursuant to the terms of the Agreement. ASOF $ 97,341,000.00 Phoenix $ 57,256,000.00 None. Amended and Restated Alion Science and Technology Corporation Employee Ownership, Savings and Investment Plan, dated as of October 1, 2011. First Amendment to Amended and Restated Alion Science and Technology Corporation Employee Ownership, Savings and Investment Plan, dated as of October 1, 2013. Second Amendment to Amended and Restated Alion Science and Technology Corporation Employee Ownership, Savings and Investment Plan, dated as of September 27, 2013. The Alion Science and Technology Corporation Employee Ownership, Savings and Investment Trust, dated as of June 4, 2002. First Amendment to the Alion Science and Technology Corporation Employee Ownership, Savings and Investment Trust, dated August 26, 2008 Pursuant to the Refinancing Agreement, unless otherwise determined by the Supporting Noteholders in their sole discretion prior to the Closing, as part of the Majority Holders transactions contemplated by the Refinancing Agreement, the following persons shall enter into new employment agreements with the Company, which agreements shall have a term of five (5) years and shall otherwise by reasonably acceptable to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.Supporting Noteholders:
Appears in 1 contract
Sources: Refinancing Support Agreement (Alion Science & Technology Corp)
Drag Along. If 9.9.1. In connection with the holders Sale by the Majority Class A Holders (each such holder, a “Prospective Selling Holder”) on an arm’s-length basis to one or more Persons that are not Affiliates of such Majority Class A Holders (collectively, the “Prospective Buyer”) of a number of Shares representing, together with the other Shares to be sold after exercise of the rights of the Prospective Selling Holders under this Section 9.9, direct or indirect ownership of at least a majority of Class A and A-2 Shares then outstanding and held by all Members (the shares percentage of the Company’s voting stock then-outstanding (Class A and A-2 Shares held by the Prospective Selling Holders which such number of shares to be so sold by the Prospective Selling Holders represents is referred to herein as the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “Drag-Drag Along TransferSale Percentage”), each holder of Shares hereby agrees, if the Majority Prospective Selling Holders may exercise drag-along rights give the Drag Along Notice referred to in accordance Section 9.9.2, to Sell Shares representing, with and subject respect to each Class of Shares held by such holder, the terms, conditions and procedures set forth in this Section 9 (“Drag-Drag Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation Sale Percentage of such proposed Drag-Along Transfer to Participant Class of any election by the Majority Holders to exercise their Drag-Along Rights hereunderShares, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares manner and on the terms set forth in this Section 9.9.
9.9.2. If the Drag-Prospective Selling Holders elect to exercise their rights under this Section 9.9, a written notice (the “Drag Along Notice”) shall be furnished by the Prospective Selling Holders to each other holder of Shares. The Drag Along Notice shall set forth the principal terms of the proposed Sale including the number and Classes of Shares to be acquired by the Prospective Buyer in the Sale, the number of Shares to be acquired from the Prospective Selling Holders, the manner in which such Shares are to be sold, the Drag Along Sale Percentage, the per Share consideration to be received in the proposed Sale (which may be estimated if the price is determined by a formula including variables which cannot be precisely determined until closing) and the name of the Prospective Buyer.
9.9.3. If the Prospective Selling Holders consummate the proposed Sale to which reference is made in the Drag Along Notice, each other holder of Shares (ceach a “Participating Seller”, and, together with the Prospective Selling Holders, collectively, the “Drag Along Sellers”) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid bound and obligated to Sell Shares representing, with respect to each Class of Shares held by Participantsuch holder, the Drag Along Sale Percentage of such Class of Shares in the proposed Sale on the same terms and conditions with respect to each Share sold (subject to Section 9.10), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Prospective Selling Holders shall (i) return to Sell each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents Share in the possession Sale. Notwithstanding any provision contained herein to the contrary, except as provided in Section 9.9.1, no holder of Shares shall have the Majority Holders executed by Participant right to exercise any rights of first offer or tag along rights contained in Sections 9.7 or 9.8 in connection with the proposed Drag-Sale to which reference is made in the Drag Along TransferNotice. If at the end of the 135th day following the date of the effectiveness of the Drag Along Notice the Prospective Selling Holders have not completed the proposed Sale, each Participating Seller shall be released from his obligation under the Drag Along Notice, the Drag Along Notice shall be null and void, and it shall be necessary for a separate Drag Along Notice to be furnished and the terms and provisions of this Section 9.9 separately complied with, in order to consummate such proposed Sale pursuant to this Section 9.9.
(e) 9.9.4. Notwithstanding the foregoing, a Drag-Along Holder will the Majority Class A Holders shall not be required have any right to comply with exercise any rights pursuant to the provisions of this Section 9 in connection 9.9 with respect to any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties Sale of Shares to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation any Affiliate of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Class A Holders.
(f) All costs 9.9.5. The foregoing provisions of this Section 9.9 shall expire upon the closing of a Qualified Public Offering and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated apply to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders any Shares which have delivered been Sold in a Drag-Along Notice in respect of such Proposed Drag-Along TransferPublic Sale.
Appears in 1 contract
Sources: Limited Liability Company Agreement (Archipelago Learning, Inc.)
Drag Along. 4.1 If the holders of Forcing Sellers intend to sell all the Forcing Sellers’ Shares to a majority of Proposed Purchaser who has made a bona fide offer on arm’s length terms for the shares entire issued share capital of the Company’s voting stock then-outstanding (, the “Majority Holders”) propose Forcing Sellers shall have the right to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of give to the Company a Drag along Notice that the Forcing Sellers intend to any third party (a “Drag-Along Transfer”), sell the Majority Holders may exercise drag-Forcing Sellers’ Shares and the Drag along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).Notice will include details of:
(a) The Majority Holders shall give written notice the number and class of the Forcing Sellers’ Shares;
(a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (iib) the identity of the prospective transfereeProposed Purchaser;
(c) the proposed price to be paid by the Proposed Purchaser, for each of the Forcing Sellers’ Shares;
(d) the proposed place, date and (iv) any other material terms and conditions time of completion of the proposed transaction. Such notice purchase, which shall also specify not be less than 14 days from the aggregate number date of the Drag along Notice; and
(e) a term extending the offer to all the other members for their shares.
4.2 The Board shall promptly send the Drag along Notice to each of the Other Members and require each of them to sell to the Proposed Purchaser at Drag Completion all of their holdings of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to on the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified contained in the Drag-Along Drag along Notice.
(b) Within seven (7) days of delivery 4.3 Each Other Member shall sell his or her shares in the capital of the Drag-Along Notice, Participant shall deliver Company referred to in the Drag along Notice at the highest price proposed to be paid for a Forcing Sellers’ Share to be sold to the Majority Holders such instruments of transfer as shall be reasonably requested Proposed Purchaser on Drag Completion by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares Forcing Sellers and on the terms set forth out in the Drag-Along Drag along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which 4.4 No member shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with a Drag along Notice unless the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and Forcing Sellers shall sell the ability to convey title Forcing Sellers’ Shares to the SharesProposed Purchaser on Drag Completion, including, but not limited to, representations and warranties that (i) Participant holds subject at all right, title and interest in and times to the Shares that Participant purports Forcing Sellers being able to hold, free and clear of all liens and encumbrances, (ii) withdraw the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents Drag along Notice at any time prior to be entered into Drag Completion by Participant have been duly executed by Participant and delivered giving notice to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents Company to be entered into in connection with the transactionthat effect, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant whereupon each Drag along Notice shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except cease to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holdershave effect.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Shareholders' Agreement
Drag Along. (a) If the holders of a majority of Ordinary Majority and the shares of the Company’s voting stock then-outstanding Preferred Majority (collectively, the “Majority Drag Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock approve a Trade Sale with a pre-money valuation of the Company at no less than US$4,000,000,000 (or equivalent RMB) (such sale, transfer, conveyance or assignment pursuant to any third party (this Section 9.1, a “Drag-Along Transfer”), the Majority Holders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along NoticeSale”) at least fifteen any time after the Closing, at the request of the Drag Holders, then each remaining Shareholder (15the “Dragged Holders”) days prior shall sell, transfer, convey or assign its Shares pursuant to, and so as to give effect to, such offer to purchase, merger or consolidation, sale or transfer, as the consummation of such case may be, unless the rejecting Dragged Holder agrees to purchase the Shares proposed to be sold, transferred, conveyed or assigned by the Drag Holders under the proposed Drag-Along Transfer to Participant Sale. If the consideration offered is payable in securities or property other than cash (or evidence of cash indebtedness), the Board (including the affirmative votes of all the Investor Directors) shall in good faith determine the fair market value of any election such securities or property in cash, provided that any holder of Preferred Shares shall have the right to challenge any determination by the Majority Holders to exercise their Drag-Along Rights hereunderBoard of fair market value made pursuant hereto, in which case the determination of fair market value shall be made by a valuer selected jointly by the Board (including the affirmative votes of all the Investor Directors) and the challenging Parties. The valuer shall prepare a report setting forth the basis of its calculating such fair market value, and the determination of such fair market value by the valuer shall, in the absence of manifest error, be final and conclusive. The costs of the valuer shall be borne solely by the Company. The valuer shall act as expert and not as an arbitrator. If the acquiring party is a privately-held entity and the holders of Preferred Shares receive in whole or in part non-publicly traded securities of such acquirer, then such non-publicly traded securities shall have liquidation preference(s), protective provision(s), voting right(s), dividend right(s), registration rights and preemptive rights that are substantially similar to those of the Preferred Shares, as applicable, as set forth herein as of the date hereof, unless otherwise agreed by the Preferred Majority.
(ib) Subject to the shares proposed to be transferredCharter Documents of the Company, (ii) the consideration to be received for such sharesby a Dragged Holder shall be the same form and amount of consideration per share of Ordinary Share to be received by the Drag Holder (or, (iiif the Drag Holders are given an option as to the form and amount of consideration to be received, the same option shall be given to the Dragged Holders) and the identity of the prospective transferee, and (iv) any other material terms and conditions of such sale shall, except as otherwise provided in the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall immediately succeeding sentence, be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as those upon which the Majority Drag Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of delivery of the Drag-Along Notice, Participant sell their Ordinary Shares. Each Dragged Holder shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote make or provide a written consent in favor of the transactioncustomary representations, (ii) take such other action within its powerwarranties, at no cost to it (other than fees covenants, indemnities and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant agreements in connection with the Drag-Along Transfer are limited to representations Sale; provided, that all representations, warranties, covenants and warranties related to authority, ownership indemnities shall be made by each Drag Holder and the ability to convey title to the Shares, including, each Dragged Holder severally but not limited tojointly.
(c) The restrictions on Transfers of Shares set forth in Sections 10.1, representations 4.2 and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant 5 shall not apply in connection with the transaction have been duly authorizeda sale pursuant to this Section 9.1, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered or anything in this Agreement to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;contrary notwithstanding.
(iid) Participant Upon the approval of a Drag-Along Sale as described in this Section 9.1, each Shareholder (other than Drag Holders) shall not be liable for grant to the inaccuracy chief executive officer (“CEO”) or an authorized officer, a power of any representation attorney to transfer their Shares and to do and carry out all other necessary or warranty made by any other person in connection with advisable acts to complete the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along TransferSale, including, without limitation, transfer taxes executing any and legal, accounting and investment banking fees, all documents (including instruments of transfer) on behalf of such Shareholder. The CEO or an authorized officer shall be borne by Participant.
(g) Notwithstanding anything herein authorized to transfer the contrary, there shall be no liability on Shares of each such Shareholder and to do and carry out all other necessary or advisable acts to complete the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for Sale, including, without limitation, executing any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless all documents (including instruments of whether the Majority Holders have delivered a Drag-Along Notice in respect transfers) on behalf of each such Proposed Drag-Along TransferShareholder.
Appears in 1 contract
Sources: Shareholder Agreement (Yunji Inc.)
Drag Along. Drag Along Notice27 If the Company or any Shareholder receives a bona fide offer from a third party to purchase all of the Securities in the Company (Third Party Offer) and the holders of at least [75]% of the issued Shares accept the Third Party Offer (Dragging Shareholders) (provided that Shareholders holding a majority of the shares Seed Preference Shares must be Dragging Shareholders)28, any Dragging Shareholder is entitled to issue to some or all of the Company’s voting stock thenremaining Shareholders (Other Shareholders) a notice (Drag Along Notice) requiring each Other Shareholder to sell to the third party specified in the Drag Along Notice some or all of the Other Shareholders’ Securities upon the terms and conditions specified in the Drag Along Notice. Despite anything else in this agreement the pre-outstanding (emption procedure set out in clause 9 does not apply to the “Majority Holders”) propose relevant Securities once a Drag Along Notice has been issued.29 Terms of Offer The terms on which the Dragging Shareholders require the Other Shareholders to sellsell their Securities must be no less favourable to the Other Shareholders than the terms on which the Dragging Shareholders are selling their Securities. The Drag Along Notice must specify: the details of the third party buyer; the consideration payable for each Security; and any other key terms and conditions upon which the Other Shareholders’ Securities will be purchased pursuant to the Drag Along Notice. Subject to clause 10.2(d), assign or transfereach Other Shareholder must, directly or indirectly, within 10 Business Days of service of the Drag Along Notice sell all of their shares of capital stock of Securities to the Company to any third party (a “Drag-buyer specified in the Drag Along Transfer”), the Majority Holders may exercise drag-along rights Notice in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material key terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Drag Along Notice.
(b. The Other Shareholders are not obliged to sell their Securities in accordance with clause 10.2(c) Within seven (7) days of delivery of if the Drag-Along Notice, Participant shall deliver to Dragging Shareholders do not complete the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree their Securities to (i) vote or provide a written consent the third party buyer on the same key terms and conditions set out in favor the Drag Along Notice. 30Founder Vesting31 Vesting of Founder Shares32 [50]% of the transaction, Shares held by each Founder or Founder Entity (iias applicable) take such other action within its power, as at no cost to it (other than fees and expenses payable to its advisors, which shall the date of this agreement will be paid by Participant), as may be required to effect such transactionUnvested Shares, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If those Unvested Shares will vest as follows: 33 [25]% will vest on the Drag-Along Transfer date that is not consummated within one hundred [12] months after the date of this agreement; and eighty (180) days after delivery at a rate of [1/36th] of the Drag-Along Noticebalance at the end of each month period thereafter, provided that the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed relevant Founder remains engaged by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to provide services, whether as a contractor or employee at the extent that funds may be paid out date of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holdersvesting.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Shareholder Agreement
Drag Along. If (a) Subject to Section 2.5, if Resolute Investors holding, in the holders of a majority aggregate, at least 50 percent (50%) of the shares of the Company’s voting stock then-outstanding Common Shares (the “Majority HoldersSelling Shareholders”) propose agree to sell, assign or transfer, directly or indirectly, enter into a transaction which would result in the Transfer of all of their shares of capital stock of the Company Common Shares owned by the Selling Shareholders to any a non-Affiliate third party (a the “Drag-Along TransferBuyer”), the Majority Holders Selling Shareholders may exercise drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give deliver written notice (a “Drag-Along Notice”) at least fifteen to each other Shareholder (15) days prior to the consummation of such proposed “Drag-Along Transfer to Participant of any election by the Majority Holders Shareholders”), stating that such Selling Shareholders wish to exercise their rights under this Section 4.7 with respect to such Transfer, and setting forth the name and address of the Drag-Along Rights hereunderBuyer, setting forth (i) the shares number of Common Shares proposed to be transferredTransferred, (ii) the consideration to be received for such shares, (ii) the identity proposed amount and form of the prospective transfereeconsideration, and (iv) any all other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares offered by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along NoticeBuyer.
(b) Within seven Upon delivery of a Drag-Along Notice, each Drag-Along Shareholder shall be required to Transfer all, but not less than all, of its Common Shares, upon the same terms and conditions (7including, without limitation, as to price, time of payment and form of consideration) days of delivery as agreed by the Selling Shareholders and the Drag-Along Buyer, and shall make to the Drag-Along Buyer representations, warranties, covenants, indemnities and agreements comparable to those made by the Selling Shareholders in connection with the Transfer (other than any non-competition or similar agreements or covenants that would bind the Drag-Along Shareholder or its Affiliates), and shall agree to the same conditions to the Transfer as the Selling Shareholders agree, it being understood that all such representations, warranties, covenants, indemnities and agreements shall be made by each Selling Shareholder and each Drag-Along Shareholder severally and not jointly and that, except with respect to individual representations, warranties, covenants, indemnities and other agreements of the Drag-Along Notice, Participant shall deliver Shareholder as to the Majority Holders unencumbered title to its Common Shares and the power, authority and legal right to Transfer such instruments Common Shares, the aggregate amount of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in liability of the Drag-Along NoticeShareholder shall not exceed either (i) such Drag-Along Shareholder’s pro rata portion of any such liability, to be determined in accordance with such Drag-Along Shareholder’s portion of the total number of Common Shares included in such Transfer or (ii) the proceeds to such Drag-Along Shareholder in connection with such Transfer.
(c) In the event that any transfer pursuant to this Section 9 such Transfer is structured as a merger, consolidation amalgamation, consolidation, or similar business combination, or any sale of all or substantially all assets, Participant must further agree each Drag-Along Shareholder agrees to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, transaction (subject to Section 4.7(b)) and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If any Shareholder fails to vote its Voting Shares or to provide a written consent in accordance with the terms of Section 4.7 (each such Shareholder, a “Breaching Drag-Along Transfer Shareholder”), the Shareholders and the Company shall take such action as is not consummated within one hundred and eighty (180) days after delivery necessary in accordance with the Bye-laws of the Drag-Along NoticeCompany and Bermuda law to convene a general meeting or to circulate written resolutions, the Majority Holders shall (i) return purpose of which will be to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession propose for approval of the Majority Holders executed by Participant Shareholders such actions as are necessary in connection order to ensure compliance with the proposed Drag-Along Transferprovisions of Section 4.7.
(e) Notwithstanding Solely for purposes of Section 4.7 and in order to secure the foregoingperformance of each Shareholder’s obligations under Section 4.7, a each Shareholder hereby: (i) appoints each Drag-Along Proxy Holder will not be required (as defined in Section 4.7(f)) acting severally: the attorney-in-fact of such Shareholder (with full power of substitution) for the purpose of signing written resolutions circulated pursuant to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i4.7(d) Any representations on behalf of such Shareholder; and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) agrees on the obligations date hereof to grant a proxy to each Proxy Holder in the form attached hereto as Exhibit for the purpose of Participant in connection voting the Voting Shares held by such Shareholder at a general meeting convened pursuant to Section 4.7(d). Each Shareholder acknowledges and agrees that the power of attorney granted by such Shareholder pursuant to this Section 4.7(d) is coupled with an interest and is irrevocable, and that the transaction have been duly authorized, if applicable, (iii) the documents proxy to be entered into by Participant have been duly executed by Participant granted pursuant to this Section 4.7(d) shall be coupled with an interest and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to shall be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holdersirrevocable.
(f) All costs and expenses incurred by Participant in connection with any For purposes of Section 4.7, each “Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, Proxy Holder” shall be borne an individual nominated for this purpose by Participantany Selling Shareholder.
(g) Notwithstanding anything herein Each Shareholder agrees to take such further action and to execute such other instruments as may be necessary to effect the contraryappointment of attorneys-in-fact and proxies pursuant to this Section 4.7, there shall be no liability on the part of the Majority Holders to Participant if a and each Drag-Along Transfer is not consummated Breaching Shareholder hereby revokes any power of attorney or proxy previously granted by it with respect to the matters set forth in Section 4.7 for purposes of, respectively, any reasonwritten resolutions circulated or any general meeting convened pursuant to Section 4.7(d). Notwithstanding the foregoing, the power of attorney and the Majority Holders proxy granted pursuant to this Section 4.7 shall not be obligated to consummate terminate upon the proposed Drag-Along Transfer, regardless termination of whether the Majority Holders have delivered a Drag-Along Notice Article IV in respect of such Proposed Drag-Along Transferaccordance with its terms.
Appears in 1 contract
Sources: Shareholder Agreement (Sensus Metering Systems Inc)
Drag Along. 5.1 If the holders Transferor sells, other than in a public offering pursuant to a registration statement or pursuant to Rule 144, shares of Common Stock of Newco held by Transferor to a majority Transferee in one transaction or a series of related transactions on arms-length terms which constitute the transfer of all of the shares Common Stock then owned by TCW and its Affiliates, the Transferor may, at its sole option, cause each of the Company’s voting stock then-outstanding ▇▇▇▇▇ Group members (the “Majority Holders”) propose together with any party deemed to sellbe included in such definition pursuant to Section 5.2 below, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “"Drag-Along Party") to sell to the Transferee, on the same terms and conditions as provided with respect to the sale by the Transferor to such Transferee in such transaction, all shares of Common Stock of Newco which the Drag-Along Party then owns (such shares being "Drag-Along Shares" and such transaction being a "Drag-Along Transaction"); provided, however, that: (x) the price for the Drag-Along Shares may not be lower than the price per share paid to the Transferor in the same or related transaction; and (y) the consideration for the Drag-Along Shares shall be paid in cash at the closing of the Drag-Along Transaction(s) unless the relevant Drag-Along Party consents to payment in a form other than cash or, at the option of the relevant Drag-Along Party, in the same form of payment as received by the Transferor.
5.2 If any member of the ▇▇▇▇▇ Group or any of its Affiliates (a "▇▇▇▇▇ Party") proposes to Transfer to any Affiliate thereof any of the Common Stock of Newco held by such ▇▇▇▇▇ Party, then such ▇▇▇▇▇ Party, as a condition to the Transfer”), shall cause such Affiliate to agree to be bound by this Section 5 and such Affiliate shall thereupon be deemed to be a party hereto and shall notify TCW of the Majority Holders may exercise identity and address of such Affiliate. Thereupon such Affiliate shall also be deemed a "Drag-Along Party" for purposes of this Agreement. The drag-along rights in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“5 shall not be applicable to transferees of the Drag-Along Rights”)Party other than to other Affiliates of such Drag-Along Party.
(a) The Majority Holders 5.3 To exercise a drag-along right, Transferor shall give written notice (a “the "Drag-Along Notice”") to the Drag-Along Party against whom the right is to be enforced at least fifteen (15) business days prior to any proposed Transfer of Common Stock. The notice shall specify the consummation terms of such proposed Transfer and certify as to the facts supporting exercise of the drag-along right and include a copy of the contract between the Transferor and Transferee to consummate the Drag-Along Transfer to Participant of any election by (the Majority Holders to exercise their "Sale Contract"), if such a Sale Contract has been signed. During the Drag-Along Rights hereunderPeriod (as defined below), setting forth the Drag-Along Party in receipt of the Drag-Along Notice may not Transfer any securities subject to Transferor's drag-along rights under this Section 5 to any Person other than Transferor or the Transferee. The "Drag-Along Period" shall be the period commencing on the date the Drag Along Notice is given and terminating on the earlier of (i) the shares proposed to be transferred, (ii) the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified in the Drag-Along Notice.
(b) Within seven (7) days of 120th day following delivery of the Drag-Along Notice, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders Notice or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In the event that any transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations date of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation termination of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority HoldersSale Contract.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Drag Along. If the holders TPG agrees at any time to Transfer, in any single or series of a majority related transactions, at least eighty percent (80%) of the shares aggregate Purchase Price Value of the Company’s voting stock thenInvestor Shares then held by TPG and its Affiliates to a non-outstanding (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any affiliated third party (a “Drag-Along Transfer”)” and such purchaser, the Majority Holders “Drag-Along Buyer”) for cash and/or Marketable Securities, TPG may exercise drag-along rights with respect to all Managers in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”)herein.
(a) The Majority Holders 4.3.1. TPG shall promptly give written notice (a “Drag-Along Notice”) at least fifteen to each Manager (15) days prior to the consummation of such proposed “Drag-Along Transfer to Participant Stockholders”) of any election by the Majority Holders TPG to exercise their Dragits drag-Along Rights hereunderalong rights under this Section 4.3, setting forth (i) the shares name and address of the Transferee, the total number of Investor Shares proposed to be transferredTransferred by TPG and its Affiliates, (ii) the proposed amount per share and form of consideration to be received for such shares, (ii) the identity of the prospective transferee, Investor Shares and (iv) any all other material terms and conditions of the proposed transactionDrag-Along Transfer. Such notice shall also specify the aggregate number of shares Participant Company Shares such Drag-Along Stockholders shall be required to transferTransfer, up to such Drag-Along Stockholders’ Pro Rata Portion for the Company Shares; provided that the portion of Company Shares with respect to each Drag-Along Stockholder is the same relative proportion for all Drag-Along Stockholders. Any transfer Transfer of shares Company Shares by Participant a Drag-Along Stockholder pursuant to the terms hereof shall be at the same per share purchase price for the same amount Company Shares sold by TPG and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as its Affiliates and specified in the Drag-Along NoticeNotice and each Drag-Along Stockholder shall receive the same relative proportion of cash and Marketable Securities.
4.3.2. Each Drag-Along Stockholder agrees, severally and not jointly, to (bi) Within seven make individual representations, warranties, covenants, indemnities and other agreements solely as to the title to, and the absence of any Adverse Claims with respect to, its Company Shares and the power, authority and legal right to Transfer such Company Shares, (7ii) days of delivery of execute and deliver agreements, covenants and indemnities as made by TPG in connection with the Drag-Along NoticeTransfer (other than any non-competition, Participant shall deliver non-solicitation or other non-financial agreements or covenants that would bind such Drag-Along Stockholder or its Affiliates without the prior written consent of such Drag-Along Stockholder), (iii) except as provided in the preceding subclause (ii), the same terms and conditions to the Majority Holders Transfer as TPG agrees, (iv) not demand or exercise appraisal or dissenters rights under any applicable business corporation or other law with respect to a transaction subject to this Section 4.3 as to which such instruments of transfer appraisal rights are available and (v) be liable as shall be reasonably requested to all representations, warranties, covenants, indemnities and other agreements being made, agreed to or delivered by the Majority Holders Company or any of its subsidiaries, or in respect of the prospective transfereeCompany or any of its subsidiaries or their respective businesses, includingin connection with such transaction (other than the individual representations, as applicablewarranties, one or more stock certificatescovenants, properly endorsed for transfer to indemnities and other agreements of the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms type set forth in subclause (i)), in each case to the same extent as TPG but pro rata based on the relative proceeds to be received by each of them from the sale of the shares of Common Stock Transferred by each of them. Notwithstanding the foregoing, the aggregate amount of liability for TPG and such Drag-Along NoticeStockholders shall not in any event exceed the U.S. dollar value of the net proceeds received by TPG and such Drag-Along Stockholders, respectively.
(c) 4.3.3. In the event that any transfer pursuant to this Section 9 such Transfer is structured as a merger, consolidation consolidation, or similar business combination, or any sale of all or substantially all assets, Participant must further agree to each Drag-Along Stockholder agrees to
(i) vote or provide a written consent in favor of the transaction, transaction and (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction.
4.3.4. Solely for purposes of Section 4.3.3(i) and in order to secure the performance of each Manager’s obligations under Section 4.3.3(i), each Manager hereby irrevocably appoints TPG (or a designee thereof) the attorney-in-fact and proxy of such Manager (with full power of substitution) to vote or provide a written consent with respect to its Company Shares as described in this paragraph if, and (iii) take all action only in the event that, such Manager fails to waive any dissenters, appraisal vote or other similar rights provide a written consent with respect thereto.
to its Company Shares in accordance with the terms of Section 4.3.3(i) (d) If the each such Manager, a “Breaching Drag-Along Transfer is not consummated Stockholder”) within one hundred and eighty three (1803) days after delivery of a request for such vote or written consent. Upon such failure, the TPG (or a designee thereof) shall have and is hereby irrevocably granted a proxy to vote or provide a written consent with respect to each such Breaching Drag-Along NoticeStockholder’s Company Shares for the purposes of taking the actions required by Section 4.3.3(i). Each Manager intends this proxy to be, and it shall be, irrevocable and coupled with an interest, and each Manager will take such further action and execute such other instruments as may be necessary to effectuate the Majority Holders shall (iintent of this proxy and hereby revokes any proxy previously granted by it with respect to the matters set forth in Section 4.3.3(i) return with respect to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed Company Shares owned by Participant in connection with the proposed Drag-Along Transfer.
(e) such Manager. Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with the conditional proxy granted by this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties 4.3.4 shall be deemed to be made by Participant in connection with revoked upon the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear termination of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant this Section 4.3 in accordance with their respective its terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Management Stockholders’ Agreement (J Crew Group Inc)
Drag Along. If the holders of a majority of the shares of the Company’s voting stock then-outstanding (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “Drag-Along Transfer”), the Majority Holders may exercise drag-along rights Notwithstanding anything in accordance with and subject Section 2.1 to the termscontrary, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).
(a) The Majority Holders shall give written notice (if Buyer or any Fortress Stockholder or group of Fortress Stockholders proposes to effect a “Drag-Along Notice”) at least fifteen (15) days Change of Control Sale prior to the consummation of a Buyer IPO, Buyer or such proposed Drag-Along Fortress Stockholders may, at their option, require the Stockholder (and any Permitted Transferee that then owns any Buyer Common Shares) to Transfer to Participant in such Change of any election Control Sale all of the Buyer Common Shares then owned by the Majority Holders Stockholder (and such other Permitted Transferees that then own any Buyer Common Shares) (collectively, the “Drag Along Stockholders”) on the same terms and conditions, subject to the same agreements and for the same consideration, as the applicable Fortress Stockholders participating in such Change of Control Sale, pursuant to the terms of this Section 2.2(b).
(i) In the event Buyer or any Fortress Stockholders elect to exercise their Drag-Along Rights hereunderrights pursuant to this Section 2.2(b), setting forth (i) Buyer shall provide to the shares Stockholder a Change of Control Notice not later than the 10th business day prior to the closing of the proposed to be transferred, Change of Control Sale.
(ii) Upon receipt of a Change of Control Notice, the consideration to be received for such shares, (ii) the identity of the prospective transferee, and (iv) any other material terms and conditions of the proposed transaction. Such notice shall also specify the aggregate number of shares Participant Drag Along Stockholders shall be required to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified participate in the Drag-Along Notice.
(b) Within seven (7) days Change of delivery of the Drag-Along NoticeControl Sale, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms and conditions set forth in the Drag-Along Notice.
Change of Control Notice (c) In the event that any transfer pursuant subject to this Section 9 is structured as 2.2(b)(ii) and Section 2.2(b)(iii)) and, if any such Change of Control Sale involves a merger, consolidation or business combination, or any sale of all or substantially all assetsassets of Buyer and its subsidiaries, Participant must further agree the Drag Along Stockholders shall be required to vote in favor of or consent in writing to such merger, consolidation or sale of all or substantially all assets (and, without limiting the foregoing, each Drag Along Stockholder shall (to the extent applicable) waive any dissenters’ rights, appraisal rights or similar rights in connection therewith). In connection with the foregoing, each Drag Along Stockholder shall be required to join and become a party to each agreement that is approved by Buyer or any Fortress Stockholder or group of Fortress Stockholders, as applicable (or to which any Fortress Stockholder is a party), in connection with a Change of Control Sale, including any such agreement that provides for representations and warranties, indemnification obligations (including escrows, hold backs or other similar arrangements to support such indemnification obligations), releases, covenants or other obligations, in each case, of the holders of Buyer Common Shares party thereto; provided that (x) except in the case of the following clause (y), the indemnification obligations of each Drag Along Stockholder in connection with a Change of Control Sale shall be the same as those made by the Fortress Stockholders and apportioned based on such Drag Along Stockholder’s pro rata portion of the aggregate consideration received by the holders of Buyer Common Shares in such transaction, (y) with respect to breaches of Fundamental Representations made by any Drag Along Stockholder in connection with a Change of Control Sale, such Drag Along Stockholder shall be solely liable, and (z) the aggregate amount of liability for any Drag Along Stockholder shall not in any case exceed the total consideration received by such Drag Along Stockholder in the Change of Control Sale. The Stockholder (i) hereby appoints Buyer or any designee thereof as its representative in connection with any agreement contemplated by this Section 2.2(b) (including the right to resolve any potential indemnification claims or other disputes on behalf of the Fortress Stockholders and the Drag Along Stockholders) and (ii) hereby irrevocably grants to, and appoints, Buyer or any designee thereof, as the Stockholder’s proxy and attorney in fact (with full power of substitution), for and in the name, place and stead of each Drag Along Stockholder, to vote the Buyer Common Shares held by each Drag Along Stockholder, or provide to grant a consent or approval in respect of such Buyer Common Shares, in connection with any meeting of Buyer or any action by written consent in favor lieu of a meeting of Buyer with respect to a Change of Control Sale. The Stockholder hereby affirms that such irrevocable proxy is given to secure the performance of the transactionduties of the Stockholder under this Agreement, (ii) take such other action within its power, at no cost to it (other than fees and is coupled with an interest and irrevocable. All out of pocket costs and expenses payable to its advisors, which incurred by any Drag Along Stockholder in connection with a Change of Control Sale described in this Section 2.2(b) shall be paid by Participantsuch Drag Along Stockholder. In connection with any Change of Control Sale described in this Section 2.2(b), as may be required to effect such transaction, the closing of the Transfer of Buyer Common Shares held by the applicable Fortress Stockholders and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect theretothe closing of the Transfer of Buyer Common Shares held by each Drag Along Stockholder shall each occur on the same date.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(eiii) Notwithstanding the foregoing, Buyer and the applicable Fortress Stockholders may at any time prior to consummation of a Drag-Along Holder will not be required to comply with Change of Control Sale described in this Section 9 in connection with 2.2(b) terminate the proposed Transfer and any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the concomitant drag along obligations of Participant in connection any Drag Along Stockholders with the transaction have been duly authorized, if applicable, (iii) the documents respect to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Virgin Trains USA LLC)
Drag Along. If Each Stockholder hereby agrees, if requested by the holders of a majority of Board, to Transfer the shares of the Company’s voting stock then-outstanding same percentage (the “Majority Holders”) propose to sell, assign or transfer, directly or indirectly, all of their shares of capital stock of the Company to any third party (a “"Drag-Along Transfer”), Sale Percentage") of Shares that are proposed to be sold by the Majority Holders may exercise drag-along rights Riot Stockholders (each such Person, a "Prospective Selling Drag Stockholder") to any Prospective Buyer in accordance with a proposed Transfer, including in respect of any Public Offering in which any Riot Stockholders register and subject to sell Registrable Riot Stockholder Securities, in the terms, conditions manner and procedures on the terms set forth in this Section 9 (“Drag-Along Rights”).
4.2. The obligations of Stockholders to participate in a Transfer subject to this Section 4.2 shall be subject to satisfaction of the following conditions: (a) upon the consummation of the Transfer, each Stockholder shall be entitled to receive for the Shares held by such Stockholder the same form of consideration as each other Stockholder, and the aggregate consideration payable to, or received by, all Stockholders (after payment of all expenses related to such Transfer) in respect of their Shares (the "Aggregate Consideration") shall be apportioned and distributed among the Shares on a ratable basis; and (b) if any Stockholders are given an option as to the form and amount of consideration to be received, each Stockholder shall be given the same option. The costs associated with any Transfer shall be borne by the Stockholders in the same proportion as they share the consideration received. The Board or the Majority Holders Riot Stockholders shall give furnish a written notice (a “the "Drag-Along Notice”") at least fifteen (15) days prior to the consummation of such proposed each Other Stockholder. The Drag-Along Notice shall set forth the principal terms of the proposed Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth including (i) the shares proposed number of Shares to be transferredacquired from the Prospective Selling Drag Stockholder(s), (ii) the Drag-Along Sale Percentage, (iii) the approximate per share consideration for each Share to be received for such shares, (ii) in the identity of the prospective transfereeproposed Transfer, and (iv) any other material terms the name and conditions address of the Prospective Buyer. If the Prospective Selling Drag Stockholders consummate the proposed transaction. Such notice shall also specify the aggregate number of shares Participant shall be required Transfer to transfer. Any transfer of shares by Participant pursuant to the terms hereof shall be for the same amount and form of consideration per share as the Majority Holders will receive in such Drag-Along Transfer, as specified which reference is made in the Drag-Along Notice.
, each Other Stockholder (beach a "Participating Drag Seller"), and, together with the Prospective Selling Drag Stockholders, collectively, the "Drag-Along Sellers") Within seven shall be bound and obligated to Transfer the applicable Drag-Along Sale Percentage of its Shares in the proposed Transfer in accordance with this Section 4.2. If at the end of the one hundred twentieth (7120th) days day following the date of delivery the effectiveness of the Drag-Along NoticeNotice under Section 12.2 the Prospective Selling Drag Stockholders have not completed the proposed Transfer, Participant shall deliver to the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Notice.
(c) In Notice shall be null and void, each Participating Drag Seller shall be released from his, her or its obligation under the event that any transfer Drag-Along Notice and it shall be necessary for a separate Drag-Along Notice to be furnished and the terms and provisions of this Section 4.2 separately complied with, in order to consummate such proposed Transfer pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor of the transaction, (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participant), as may be required to effect such transaction, and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto4.2.
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty (180) days after delivery of the Drag-Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title to the Shares, including, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made by the Company, the Majority Holders or the Purchaser in connection with such Drag-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
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Drag Along. If (a) At any time after the holders of a majority expiration of the shares of Standstill Period and provided that the Company’s voting stock then-outstanding ▇▇▇▇▇▇ Parties have not acquired the Option Securities pursuant to Section 10, an Authorized Group may notify the other Direct Parties (the “Majority HoldersOther Parties”) propose of its intention to sellaccept a Global Offer, assign or transfer, directly or indirectly, all of their shares of capital stock of by delivering a Transfer Notice to the Company to any third party Other Parties (a “Drag-Drag Along TransferNotice”), if:
(i) such Global Offer was the Majority Holders may exercise drag-along rights Best Global Offer submitted during the course of an Auction Bid Process initiated by this Authorized Group in accordance with and subject to the terms, conditions and procedures set forth in this Section 9 (“Drag-Along Rights”).11; or
(a) The Majority Holders shall give written notice (a “Drag-Along Notice”) at least fifteen (15) days prior to the consummation of such proposed Drag-Along Transfer to Participant of any election by the Majority Holders to exercise their Drag-Along Rights hereunder, setting forth (i) the shares proposed to be transferred, (ii) such Global Offer was unsolicited and received by this Authorized Group, provided that where an unsolicited Global Offer is received by an Authorized Group outside the consideration to be received for conduct of an Auction Bid Process, this Authorized Group may only exercise its Drag Along Right (as such sharesterm is defined hereunder) in accordance with this Section 11.2 if such unsolicited Global Offer is approved by the Financial Investors, (ii) the identity of ▇▇▇▇▇ Parties, the prospective transfereeGras Parties and, and (iv) as the case may be, any other material terms and conditions of Direct Party which has become entitled to appoint two (2) nominees at the proposed transactionSupervisory Board in accordance with Section 2.6. Such notice shall also specify the aggregate number of shares Participant shall be required to transfer. Any transfer of shares by Participant pursuant The Authorized Group which delivers a Drag Along Notice to the terms hereof shall be for the same amount and form of consideration per share Other Parties is hereinafter referred to as the Majority Holders will receive in such Drag-“Drag Along Transfer, as specified in the Drag-Along NoticeParty”.
(b) Within seven Without prejudice to the foregoing, in the event that a Permitted Transfer pursuant to Section 9.1(o) qualifies as a Global Offer, all (7and not several of) days the Parties having consented to such Permitted Transfer in accordance with the provisions of delivery Section 9.1(o) will be entitled to jointly serve a Drag Along Notice to the Other Parties (which, for the avoidance of doubt, shall comprise any Direct Party which either has voted against the Permitted Transfer at stake or was not allowed to vote on such Permitted Transfer) and exercise in common their rights as Drag Along Parties under this Section 11.2 irrespective of the Drag-Along Notice, Participant shall deliver to date of the Majority Holders such instruments of transfer as shall be reasonably requested by the Majority Holders or the prospective transferee, including, as applicable, one or more stock certificates, properly endorsed for transfer to the transferee, together with a limited power-of-attorney authorizing the Majority Holders to transfer such Shares on the terms set forth in the Drag-Along Noticesaid Global Offer.
(c) In By delivering the event that any transfer Drag Along Notice, the Drag Along Party(ies) shall have the absolute right to require the Other Parties, to Transfer all of their Securities pursuant to this Section 9 is structured as a merger, consolidation or business combination, or any sale of all or substantially all assets, Participant must further agree to (i) vote or provide a written consent in favor the Global Offer concomitantly with the Transfer of the transactionSecurities of the Drag Along Parties, under the same terms and conditions and for a price calculated in accordance with Section 8 on the basis of the Global Valuation included in the Global Offer (ii) take such other action within its power, at no cost to it (other than fees and expenses payable to its advisors, which shall be paid by Participantthe “Drag Along Right”), within sixty (60) Business Days following the receipt of the Drag Along Notice at the latest (or such later date as may be required necessary to effect such transaction, and (iii) take all action to waive obtain any dissenters, appraisal authorization or other similar rights with respect theretoconsent by a Governmental Authority).
(d) If the Drag-Along Transfer is not consummated within one hundred and eighty Within ten (18010) days after Business Days of delivery of the Drag-Drag Along Notice, the Majority Holders shall (i) return to each Drag-Along Holder the limited power-of-attorney and all certificates representing the shares that Participant delivered pursuant to this Section 9 and any other documents in the possession of the Majority Holders executed by Participant in connection with the proposed Drag-Along Transfer.
(e) Notwithstanding the foregoing, a Drag-Along Holder will not be required to comply with this Section 9 in connection with any proposed Drag-Along Transfer, unless:
(i) Any representations Other Parties shall execute and warranties to be made by Participant in connection with the Drag-Along Transfer are limited to representations and warranties related to authority, ownership and the ability to convey title deliver to the SharesDrag Along Party, includingor in case there are several Drag Along Parties, but not limited to, representations and warranties that (i) Participant holds all right, title and interest in and to the Shares that Participant purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of Participant in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by Participant have been duly executed by Participant and delivered to the acquirer and are enforceable against Participant in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of Participant’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;
(ii) Participant shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag-such Drag Along Transfer, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholders);
(iii) the liability for indemnification, if any, of Participant in the Drag-Along Transfer and for the inaccuracy of any representations and warranties made Party designated by the Company, Drag Along Parties to such effect (the Majority Holders or the Purchaser in connection with such Drag“Attorney-Along Transfer, is several and not joint (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of the identical representations, warranties and covenants provided by all stockholdersin-Fact”), and subject to any provisions of the Company’s certificate of incorporation and bylaws, as amended, related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration paid to Participant in connection with such Drag-Along Transfer; and
(iv) upon the consummation of the Drag-Along Transfer, Participant will receive the same amount and form of consideration per share for Participant’s shares as is received by the Majority Holders.
(f) All costs and expenses incurred by Participant in connection with any Drag-Along Transfer, including, without limitation, transfer taxes and legal, accounting and investment banking fees, shall be borne by Participant.
(g) Notwithstanding anything herein to the contrary, there shall be no liability on the part of the Majority Holders to Participant if a Drag-Along Transfer is not consummated for any reason, and the Majority Holders shall not be obligated to consummate the proposed Drag-Along Transfer, regardless of whether the Majority Holders have delivered a Drag-Along Notice in respect of such Proposed Drag-Along Transfer.
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