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SHAREHOLDERS AGREEMENT

Shareholder Agreement

SHAREHOLDERS AGREEMENT | Document Parties: CELLU TISSUE HOLDINGS, INC. | Cellu Parent Corporation You are currently viewing:
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CELLU TISSUE HOLDINGS, INC. | Cellu Parent Corporation

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Title: SHAREHOLDERS AGREEMENT
Governing Law: Delaware     Date: 5/8/2009
Law Firm: Ropes Gray    

SHAREHOLDERS AGREEMENT, Parties: cellu tissue holdings  inc. , cellu parent corporation
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Exhibit 10.8

 

SHAREHOLDERS AGREEMENT

 

This SHAREHOLDERS AGREEMENT (this “ Agreement ”), dated as of June 12, 2006 is made by and among Cellu Parent Corporation, a Delaware corporation, and each of the Securityholders.

 

RECITALS

 

The parties hereto desire to provide for certain transfer restrictions, call rights, rights of co-sale, drag-along rights, rights of first offer on sales of certain securities by the Company, as well as certain other matters, all according to the terms of this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound hereby, agree as follows:

 

1.                                      Certain Definitions .

 

As used in this Agreement, the following terms shall have the following respective meanings:

 

(a)                                   Affiliate ” shall mean, with respect to a specified Person, any other Person, directly or indirectly, controlling, controlled by or under common control with such specified Person.  For purposes of this definition, the term “control,” including the terms “controlling,” “controlled by” and “under common control,” shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

 

(b)                                  Board ” shall mean the board of directors of the Company.

 

(c)                                   Cause ” with respect to any Other Shareholder, shall have the meaning set forth in the employment agreement then in effect, if any, between such holder and the Company or its Subsidiaries or if there is no such meaning in such employment agreement or there is no such employment agreement then in effect, shall mean, the following events or conditions: (i) the  repeated and willful refusal or failure (other than during periods of illness, disability or vacation) to perform the duties of the Other Shareholder set forth in the Other Shareholder’s respective employment agreement with the Company or under any lawful directive of the Board (consistent with the terms of the applicable employment agreement), (ii) the Other Shareholder’s willful misconduct or gross neglect in the performance of the duties set forth in the Other Shareholder’s respective employment agreement which in either case is materially injurious to the Company, monetarily or otherwise, (iii) the willful material breach of the employment agreement, (iv) the commission of fraud, embezzlement, theft or other dishonesty by the Other Shareholder, (v) the conviction of the Other Shareholder of, or plea by such of nolo contendere to, any felony or any other crime involving dishonesty or moral turpitude, and (vi) any other conduct that involves a breach of fiduciary obligation on the part of the Other Shareholder or otherwise could reasonably be expected to have a material adverse effect upon the business, interests or reputation of the Company or any of its Affiliates.

 



 

(d)                                  Cellu Paper ” shall mean Cellu Paper Holdings, Inc., a Delaware corporation and a direct, wholly-owned Subsidiary of the Company.

 

(e)                                   Cellu Tissue ” shall mean Cellu Tissue Holdings, Inc., a Delaware corporation and an indirect, wholly-owned Subsidiary of the Company.

 

(f)                                     Change of Control ” shall mean (i) a sale of all or substantially all of the assets of the Company, Cellu Paper or Cellu Tissue to a Person in which the Shareholders of the Company immediately prior to such transaction do not, directly or indirectly, own securities representing more than 50% of the voting power of the Person acquiring such assets immediately following the transaction, (ii) a sale of Shares by the Company or the Shareholders resulting in more than 50% of the voting power of the Company being held, directly or indirectly, by a Person other than the Shareholders immediately prior to such sale, (iii) a sale by the Company of the equity securities of Cellu Paper or Cellu Tissue resulting in more than 50% of the voting power of Cellu Paper or Cellu Tissue (as the case may be) being held directly or indirectly by a Person other than the Company or the Shareholders immediately prior to such sale, or (iv) a merger or consolidation of the Company, Cellu Paper or Cellu Tissue with or into another Person, if and only if, after such merger or consolidation, more than 50% of the voting power of the Company, Cellu Paper or Cellu Tissue (as the case may be) is directly or indirectly owned by a Person other than the Company or the Shareholders immediately prior to such merger or consolidation.

 

(g)                                  Common Stock ” shall mean the Common Stock, par value $0.001, of the Company.

 

(h)                                  Company ” shall mean Cellu Parent Corporation, a Delaware corporation, and its successors and permitted assigns.

 

(i)                                      Convertible Securities ” shall mean (i) any debt or equity securities of the Company (including but not limited to Preferred Stock) that are convertible into or exchangeable, directly or indirectly, for Common Stock and (ii) any rights, warrants or options to subscribe for or purchase, directly or indirectly, Common Stock or any securities described in clause (i).

 

(j)                                      Cost ” shall mean, for any security, the original price paid to the issuer for such security, as appropriately adjusted for any events referenced in Section 16 after that date of such issuance (it being acknowledged and agreed that the Cost of any Shares issued pursuant to any Rollover Agreement shall be the value of such Shares under such Rollover Agreement as of the date of issuance thereof).

 

(k)                                   Drag-Along Percentage ” shall mean a fraction, the numerator of which is the aggregate number of Equivalent Shares that are to be Transferred by the WP Parties in a Drag-Along Sale, and the denominator of which is the aggregate number of Equivalent Shares owned at such time by the WP Parties.

 

(l)                                      Earn-Out Warrant ” shall mean the Series A Convertible Preferred Stock Purchase Warrant issued by the Company to the WP Party on or about the date of this Agreement.

 

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(m)                                Equivalent Shares ” shall mean, at any date of determination, (a) as to any outstanding shares of Common Stock, such number of shares of Common Stock, but excluding any Shares of Restricted Stock that are not then vested or will not become vested on or prior to, or by reason of, the transaction or circumstance in connection with which the number of Equivalent Shares is to be determined, plus (b) as to any outstanding Convertible Securities, the maximum number of shares of Common Stock issuable upon exercise, conversion or exchange of the vested portion of such Convertible Securities (including for purposes of determining the vested portion of such Convertible Securities any amounts that will become vested on or prior to, or by reason of, the transaction or circumstance in connection with which the number of Equivalent Shares is to be determined),.

 

(n)                                  Fair Market Value ” shall mean, as of any date, as to any Share, the Board’s good faith determination of the fair value of such Share as of the applicable reference date.

 

(o)                                  Good Reason ” with respect to any Other Shareholder, shall have the meaning, if any, set forth in the employment agreement then in effect, if any, between such holder and the Company or its subsidiaries.

 

(p)                                  HSR Act ” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1986, as amended.

 

(q)                                  New Securities ” shall mean any Common Stock or Convertible Securities, whether now authorized or not; provided , however , that “ New Securities ” shall not include: (i) securities issued as consideration for the acquisition of any assets, securities or business entity by the Company, whether by merger, purchase of assets or capital stock of such entity, reorganization or otherwise, provided such acquisition is approved by the Board, (ii) securities issued to employees, officers and directors of, and consultants and advisors to, the Company, pursuant to any arrangement approved by the Board (including but not limited to Common Stock issued to any Other Shareholder pursuant to a Stock Option Agreement and Restricted Stock issued pursuant to any Restricted Stock Agreement), (iii) securities issued to any bank, subordinated debt lender, equipment lessor, landlord or other similar financial institution or creditor if and to the extent that the transaction in which such issuance is to be made is approved by the Board, (iv) securities issued pursuant to any rights or agreements, including, without limitation, securities issued upon exercise, conversion or exchange of any Convertible Securities, provided that the Company shall have complied, to the extent required, with the rights established by Section 7 with respect to the initial sale or grant by the Company of such rights or agreements, including, without limitation, Convertible Securities, (v) securities issued upon the exercise, conversion or exchange of any Convertible Securities outstanding on the date hereof (including but not limited to the Earn-Out Warrant), (vi) securities issued in connection with any stock split, stock combination, stock dividend, distribution or recapitalization by the Company, (vii) Common Stock issued in a Qualified IPO, or (viii) securities issued to any strategic vendor or partner in a transaction approved by the Board in which there is a substantial commercial aspect to the transaction.

 

(r)                                     Other Stock ” shall mean, with respect to an Other Shareholder, all Shares held beneficially or of record, directly or indirectly, by such Other Shareholder.

 

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(s)                                   Other Shareholders ” shall mean the Securityholders set forth on Exhibit A to this Agreement, other than the WP Parties, and any Person (other than the Company or the WP Parties) to whom any such Securityholder Transfers Shares in accordance with this Agreement and, as a result, such Person is required by this Agreement to become a party hereto.

 

(t)                                     Permitted Transfer ” shall mean a Transfer by an Other Shareholder of shares of Other Stock made (i) to the Company or the WP Parties, or (ii) if such Other Shareholder is an individual, (A) by way of gratuitous donation to any trust exclusively for the benefit of such Other Shareholder or such Other Shareholder’s spouse, direct descendants (including legally adopted children) or direct ascendants or (B) by way of bequest or inheritance upon the death of such Other Shareholder to his or her executors, administrators, testamentary trustees, legatees or beneficiaries; provided , however , that, in the event of any Transfer made pursuant to one of the exemptions provided by clause (ii) above, (1) the Other Shareholder making such Transfer pursuant to clause (ii)(A) above shall notify the Company and the WP Parties of such Transfer at least 15 days prior to making the Transfer (such notice to contain a representation by the Other Shareholder to the Company and the WP Parties identifying all of the beneficiaries of such trust), (2) the Other Shareholder making such Transfer pursuant to clause (ii)(A) above shall retain all rights to vote such Transferred shares of Other Stock, grant or withhold consents or approvals with respect to such Transferred shares of Other Stock, and to make any and all other determinations with respect such Transferred shares of Other Stock, and (3) the transferee, assignee or donee shall have become a party to this Agreement in the capacity of an Other Shareholder and Securityholder and shall have furnished the Company and the WP Parties with an executed copy of the joinder to this Agreement in the form attached hereto as Exhibit B , completed as specified by the Company.

 

(u)                                  Permitted Transferee ” shall mean a Person to whom Shares are Transferred in a Permitted Transfer.

 

(v)                                  Person ” shall mean any individual, partnership, limited liability company, corporation, trust, joint venture, unincorporated organization, other legal entity, government or agency or political subdivision thereof.

 

(w)                                Preferred Stock ” shall mean the Preferred Stock, par value $0.001, of the Company, including the Series A Convertible Preferred Stock.

 

(x)                                    Qualified IPO ” means a firm commitment underwritten public offering by the Company of shares of its Common Stock pursuant to an effective registration statement on Form S-1, or any successor form, filed under the Securities Act, with aggregate gross proceeds to the Company of at least $20,000,000.

 

(y)                                  Registration Rights Agreement ” means that certain Registration Rights Agreement among the WP Parties, the Company and certain of the Other Shareholders, dated as of the date hereof, as from time to time in effect.

 

(z)                                    Restricted Stock ” shall mean shares of capital stock of the Company which are initially issued pursuant or subject to a Restricted Stock Agreement and which remain at the relevant time of determination subject to the restrictions therein set forth.

 

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(aa)                             Restricted Stock Agreement ” shall mean a Restricted Stock Agreement entered into between the Company and an employee or consultant of the Company pursuant to a plan or arrangement approved by the Board.

 

(bb)                           Rollover Agreement ” shall mean any one of the Rollover Agreements by and between the Company and each of Mr. Russell Taylor, Ms. Dianne Scheu or Mr. Steven Ziessler, each dated on or about the date hereof.

 

(cc)                             Rule 144 ” shall mean Rule 144 under the Securities Act (or any successor Rule).

 

(dd)                           Securities Act ” shall mean the Securities Act of 1933, as amended.

 

(ee)                             Securityholders ” shall mean the parties listed on Exhibit A to this Agreement, as amended from time to time in accordance with the terms hereof, and any of such parties’ permitted assigns.

 

(ff)                                 Series A Convertible Preferred Stock ” shall mean the Series A Convertible Preferred Stock, par value $0.001, of the Company.

 

(gg)                           Series A Directors ” shall mean the WP Designees.

 

(hh)                           Series A Shareholder ” shall mean the WP Parties.

 

(ii)                                   Shares ” shall mean, as of the time of determination, all outstanding shares of Common Stock and Convertible Securities of the Company at such time.

 

(jj)                                   Shareholders ” shall mean the parties listed on Exhibit A to this Agreement who are holders of shares of capital stock of the Company, as amended from time to time in accordance with the terms hereof, and any of such parties’ permitted assigns.

 

(kk)                             Stock Option Agreement ” shall mean a Stock Option Agreement entered into between the Company and an employee or consultant of the Company pursuant to a plan or arrangement approved by the Board.

 

(ll)                                   Subsidiary ” shall mean any and all corporations, partnerships, limited liability companies and other entities with respect to which another specified corporation or other entity directly or indirectly owns more than 50% of (i) the securities having the power to elect members of the board of directors or similar body governing the affairs of such entity or (ii) the equity interests of such entity.

 

(mm)                       Transfer ” means, with respect to any Shares, any direct or indirect, voluntary or involuntary, offer to sell, transfer, sale, assignment, pledge, hypothecation, short sales, loan, grant of an option to purchase or other disposition of any of the Shares (in each case, whether by merger, consolidation or otherwise), or the entering of any contract or agreement to do any of the foregoing.

 

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(nn)                           Voting Stock ” shall mean shares of outstanding capital stock of the Company that are entitled to vote for the election of directors of the Company.

 

(oo)                           WP Parties ” shall mean Weston Presidio V, L.P., a Delaware limited partnership, and any Person to whom a WP Party Transfers Shares; provided such Person becomes a party to this Agreement in the capacity of a WP Party.

 

2.                                      Transfer Restrictions .

 

(a)   Transfer Restrictions on Other Stock .  In addition to the other restrictions contained herein, without the written consent of the Company and the WP Parties, which they may withhold in their sole discretion, each Other Shareholder agrees not to Transfer any shares of its Other Stock.  Notwithstanding the foregoing, each Other Shareholder may Transfer any shares of its Other Stock pursuant to (i) Permitted Transfers made in compliance with this Agreement and (ii) Transfers permitted or required pursuant to Sections 4 or 5 of this Agreement.  In addition, without the consent of the Company and the WP Parties, which they may withhold in their sole discretion, each Other Shareholder agrees not to Transfer any shares of its Other Stock to a competitor, supplier or customer of the Company or any of its Subsidiaries.  Any attempt to Transfer any shares of Other Stock not in compliance with this Agreement shall be null and void, and neither the Company nor any transfer agent shall give any effect in the Company’s stock records to such attempted Transfer.

 

(b)   Market Stand-off .  The Securityholders hereby agree that, if so requested by the Company or any managing underwriter in respect of an underwritten public offering of the Company’s securities, the Securityholders shall not sell, make any short sale of, loan, grant any option for the purchase of, hypothecate, hedge or otherwise dispose of any securities of the Company (other than those included in the registration statement with respect to such offering) during the up to 180-day period specified by the Company or the managing underwriter(s) following the commencement of the Company’s Qualified IPO, and during the up to 90-day period specified by the Company or the managing underwriter(s) following the commencement of any subsequent underwritten public offering of equity securities of the Company.  In order to enforce the foregoing covenants, the Company may impose stop-transfer instructions with respect to the securities of each Securityholder.  The Securityholders agree to enter into a separate agreement providing for the foregoing, as may be requested by the managing underwriter(s) of any such public offering.  The foregoing provisions of this Section 2(b) are subject in their entirety to the requests and requirements of the managing underwriters of any underwritten public offering; provided that such requests and requirements are applied uniformly; provided , further , that the underwriters may have requests and requirements applicable to executive officers, directors and senior management which are different from their requests and requirements applicable to others.

 

(c)   Securities Laws Compliance .  Each of the Other Shareholders agrees and acknowledges that to the extent such Other Shareholder is permitted pursuant to this Agreement to Transfer Other Stock, such Other Shareholder will not Transfer any shares of Other Stock unless (i) the Transfer is pursuant to an effective registration statement under the Securities Act, or the rules and regulations in effect thereunder or (ii) counsel for the Other Shareholder (which counsel shall be reasonably acceptable to the Company) shall have furnished the Company with

 

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an opinion, satisfactory in form and substance to the Company, that no such registration is required because of the availability of an exemption from registration under the Securities Act and any state securities or blue sky laws applicable to the Company or the Shares proposed to be Transferred.  Notwithstanding the foregoing, the Company acknowledges and agrees that a Permitted Transfer shall be deemed to be in compliance with this Section 2(c) and that no opinion of counsel is required in connection therewith.

 

(d)   Legend .  Any certificate representing outstanding Shares that are held by a party to this Agreement or otherwise subject to the terms hereof shall bear the following legend, in addition to any other legend required by law or otherwise:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE GOVERNED BY THE TERMS OF THAT CERTAIN SHAREHOLDERS AGREEMENT, DATED AS OF JUNE 12, 2006 (AS IN EFFECT FROM TIME TO TIME, THE “ SHAREHOLDERS AGREEMENT ”), A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE COMPANY.  ANY ATTEMPT TO TRANSFER OR ENCUMBER ANY INTEREST IN THE SHARES REPRESENTED BY THIS CERTIFICATE NOT IN ACCORDANCE WITH SUCH SHAREHOLDERS AGREEMENT SHALL BE NULL AND VOID, AND NEITHER THE COMPANY NOR ANY TRANSFER AGENT OF SUCH SECURITIES SHALL GIVE ANY EFFECT TO SUCH ATTEMPTED TRANSFER OR ENCUMBRANCE IN ITS SHARE RECORDS.  THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF IT, AGREES TO BE BOUND BY THE TERMS OF THE SHAREHOLDERS AGREEMENT.”

 

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”).  EXCEPT AS OTHERWISE PROVIDED IN SUCH AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION, OPTION, LOAN OR OTHER DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (B) IF THE COMPANY HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT OR THE RULES AND REGULATIONS IN EFFECT THEREUNDER, AND IN COMPLIANCE WITH PROVISIONS OF APPLICABLE STATE SECURITIES LAWS.”

 

(e)   Termination of 1933 Act Legend .  The requirement imposed by clause (d) hereof as to the Securities Act shall cease and terminate as to any particular Shares (a) when, in the opinion of Ropes & Gray LLP, or other counsel reasonably acceptable to the Company, such legend is no longer required in order to assure compliance by the Company with the Securities Act or (b) when such Shares have been effectively registered under the Securities Act or transferred pursuant to Rule 144.  Wherever (x) such requirement shall cease and terminate as to any Shares or (y) such Shares shall be transferable under paragraph (k) of Rule 144, the holder

 

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thereof shall be entitled to receive from the Company, without expense, new certificates not bearing the legend set forth in clause (d) hereof as to the Securities Act.

 

3.                                        Call Rights .

 

(a)   Call Option .  Except as the Company may otherwise agree with any Other Shareholder with respect to such Other Shareholder’s Shares, upon and following any termination of the employment by the Company and its Subsidiaries of any Other Shareholder for any reason, the Company shall have the right (the “ Call Option ”) to purchase for cash all or any portion of the Shares held by such Other Shareholder or any of its Affiliates or originally issued to such Other Shareholder or any of its Affiliates but held by one or more their respective Permitted Transferees (collectively, the “ Stockholder Call Group ”) at a per Share price equal to the Fair Market Value of such Shares (the “ Call Price ”); provided , however , that if such termination is (i) by the Company for Cause or (ii) by an Other Shareholder who has a then effective employment agreement with the Company or any of its Subsidiaries and who voluntarily terminates his or her employment without Good Reason, then in each case the Call Price shall instead be a per Share price equal to the lesser of the Cost or the Fair Market Value of such Shares; provided , further , that, in the event that an Other Shareholder breaches any covenant or agreement with the Company regarding non-solicitation or non-competition, whether in an employment agreement or otherwise (each, a “ Restrictive Covenant ”), the Company shall have a Call Option to purchase for cash all or any portion of the Shares held by such Other Shareholder’s Stockholder Call Group for a Call Price equal to the lesser of the Cost or the Fair Market Value of such Shares.

 

(b)   Notices .  Any Call Option may be exercised by delivery of written notice thereof (the “ Call Notice ”) to all members of the applicable Stockholder Call Group not later than the 90th day after the effectiveness of the applicable termination of employment, provided that in the case of an exercise of a Call Option following breach of a Restrictive Covenant, such 90 day limitation shall not apply (the “ Call Option Exercise Period ”).  The Call Notice shall state that the Company has elected to exercise the Call Option, and the number and price of the Shares with respect to which the Call Option is being exercised.

 

(c)   Closing .  The closing of any purchase and sale of Shares pursuant to this Section 3 shall take place as soon as reasonably practicable and in no event later than 30 days after termination of the applicable Call Option Exercise Period at the principal office of the Company, or at such other time and location as the parties to such purchase may mutually determine.  At such closing, the holders of Shares to be sold shall deliver to the Company a certificate or certificates representing the Shares to be purchased by the Company duly endorsed, or with stock (or equivalent) powers duly endorsed, for transfer with signature guaranteed, free and clear of any lien or encumbrance, with any necessary stock (or equivalent) transfer tax stamps affixed, and the Company shall pay to such holder, by certified or bank check or wire transfer of immediately available federal funds, the purchase price of the Shares being purchased by the Company.  The delivery of a certificate or certificates for Shares by any Person selling Shares pursuant to any Call Option shall be deemed a representation and warranty by such Person that:  (i) such Person has full right, title and interest in and to such Shares; (ii) such Person has all necessary power and authority and has taken all necessary action to sell such Shares as contemplated; (iii) such Shares are free and clear of any and all liens or encumbrances;

 

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and (iv) there is no adverse claim with respect to such Shares.  Each Other Shareholder acknowledges and agrees that neither the Company nor any Person directly or indirectly affiliated with the Company (in each case whether as a director, officer, manager, employee, shareholder, agent or otherwise) shall have any duty or obligation to affirmatively disclose to such holder, and such holder shall not have any right to be advised of, any material information regarding the Company or otherwise at any time prior to, upon, or in connection with any termination of his employment by the Company and its subsidiaries upon the exercise of any Call Option or any purchase of the Shares in accordance with the terms hereof.

 

4.                                        Other Shareholders’ Right of Co-Sale .

 

(a)   Definition .  For as long as the WP Parties own collectively at least a majority of the voting power of the Voting Stock, if the WP Parties propose to, directly or indirectly, Transfer for value an interest in any Shares owned by the WP Parties to any Person (the “ Transferee ”), except as set forth in Section 4(d) or for Transfers pursuant to Section 5, each Other Shareholder shall have a right of co-sale (the “ Right of Co-Sale ”) to sell a number of shares of Other Stock (if any) held by such Other Shareholder equal to his or her Right of Co-Sale Pro Rata Share (as defined below) multiplied by the number of Shares (treating any Convertible Securities as a number of Shares equal to the number of Equivalent Shares represented by such Convertible Securities) proposed to be transferred by the WP Parties to the Transferee (the “ Transferor Securities ”), on the terms and subject to the conditions set forth in this Section 4 and Section 6; provided , however , that an Other Shareholder may exercise its Right of Co-Sale only with respect to the type or types of Shares that the WP Parties propose to sell.

 

(b)   Right of Co-Sale Pro Rata Share .  The “ Right of Co-Sale Pro Rata Share ” for each Other Shareholder shall be that percentage equal to the number of Equivalent Shares at the time outstanding and owned by such Other Shareholder divided by (A) the number of Equivalent Shares at the time outstanding and owned by such Other Shareholder plus (B) the number of Equivalent Shares at the time outstanding and owned by the WP Parties and by all other holders of Shares entitled to the benefits of any other “tag-along” rights in connection with such sale.  Each Other Shareholder shall have the right to sell that number of Equivalent Shares of Transferor Securities (if any) held by such Other Shareholder to the Transferee (or, upon the unwillingness of any Transferee to purchase directly from such Other Shareholder, to the WP Parties simultaneously with the closing of the sale by the Transferor to the Transferee) up to its respective Right of Co-Sale Pro Rata Share of the Transferor Securities determined as of the date the Transfer Notice (as defined below) is delivered to the Company, upon the terms and subject to the conditions pursuant to which the WP Parties sell its Transferor Securities to the Transferee.

 

(c)   Mechanics of Sale .

 

(i)                                      Exercise by the Other Shareholders .  If the WP Parties propose to Transfer any Transferor Securities in a transaction subject to this Section 4, then it shall notify, or cause to be notified, the Other Shareholders and the Company, in writing, of each such proposed Transfer (the “ Transfer Notice ”).  Such Transfer Notice shall set forth (i) the name of the Transferee and the number and type of Shares proposed

 

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to be Transferred and (ii) the proposed amount and form of consideration and (to the extent then known by the WP Parties) material terms and conditions of the Transfer.  An Other Shareholder shall be entitled to exercise its Right of Co-Sale by delivering a written notice to the WP Parties (the “ Co-Sale Notice ”) within 15 days following receipt of the Transfer Notice.  The Co-Sale Notice shall state the number of shares of Other Stock that such Other Shareholder offers to include in such Transfer to the Transferee, which number may not exceed its Right of Co-Sale Pro Rata Share of the Transferor Securities; providedhowever , that an Other Shareholder may not exercise its Right of Co-Sale with respect to any shares of Other Stock that then constitute Restricted Stock and will constitute Restricted Stock upon the consummation of the Transfer by the WP Parties.  Upon the giving of a Co-Sale Notice by an Other Shareholder, the offer of such Other Shareholder contained in its Co-Sale Notice shall be irrevocable and such Other Shareholder shall be obligated to sell the number and type of Shares set forth in its Co-Sale Notice to the Transferee on the terms and conditions set forth in the Transfer Notice.  Each Other Shareholder who does not deliver a Co-Sale Notice within the 15-day period described above shall be deemed to have waived all of its rights with respect to the proposed Transfer by the WP Parties.

 

(ii)                                   Assignment of Interest .  If an Other Shareholder exercises its respective Right of Co-Sale, then the WP Parties shall assign to such Other Shareholder as much of its interest in the agreement of sale with the Transferee as such Other Shareholder shall be entitled to and shall accept, and such Other Shareholder shall be obligated to provide the same representations, warranties, indemnification and covenants to the Transferee as the WP Parties under such agreement of sale.  To the extent that any Transferee prohibits such assignment or otherwise refuses to purchase shares of Other Stock, as the case may be, from an Other Shareholder exercising its Right of Co-Sale hereunder, then the WP Parties shall not sell to such Transferee any Transferor Securities unless and until, simultaneously with such sale, the WP Parties shall purchase such shares of Other Stock from such Other Shareholder for the same consideration per share and on the same terms and subject to th


 
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