Call Rights. (a) Each Service Provider Partner (and each Permitted Transferee of such Service Provider Partner, if any) agrees that, unless otherwise agreed in writing by the Board, prior to the consummation of an IPO or Company Sale, the Company will have the right, but not the obligation, to purchase (the “Call Right”) up to all Units (other than any Unvested Class B Units) held by a Service Provider Partner (and any Permitted Transferees of such Service Provider Partner) (the “Callable Equity”) following the occurrence of (x) a Termination or (y) a Restrictive Covenant Violation (any such event, a “Call Event”), as provided in this Section 6.7. To the extent that the Callable Equity includes any Units (other than any Unvested Class B Units) held by any Permitted Transferee of a Service Provider Partner, each reference to such “Service Provider Partner” in the remainder of this Section 6.7 shall be deemed to include such Permitted Transferees. Upon a Call Event, the General Partner may exercise the Call Right on behalf of the Company with respect to all or any portion of the Callable Equity by one or more written notices (each, a “Call Right Notice”) delivered to the applicable Service Provider Partner at any time during the period commencing on the date of Termination or the date on which the General Partner acquires actual knowledge of the occurrence of the Restrictive Covenant Violation, as applicable, and ending on the one-year anniversary of the later of the date of Termination and the date on which the General Partner acquires actual knowledge of the occurrence of the Restrictive Covenant Violation, as applicable (such period, the “Call Right Period” and the date such notice is given, the “Call Exercise Date”). Upon the giving of a Call Right Notice, the Company will be obligated to purchase and the applicable Service Provider Partner will be obligated to sell all (or any lesser portion indicated in the Call Right Notice) of the Callable Equity for the consideration calculated either (i) if the Call Event is due to a Termination for “Cause” (as defined in the applicable Award Agreement) or a Restrictive Covenant Violation, the lesser of cost or Fair Market Value or (ii) if the Call Event is due to a Termination for any reason other than described in the preceding clause (i), at the Fair Market Value of such Units on the Call Exercise Date (the “Call Consideration”); provided, that, if, at any time after such Service Provider Partner’s receipt of the Call Consideration, the General Partner acquires actual knowledge of the occurrence of a subsequent or continuing Restrictive Covenant Violation, the General Partner may require such Service Provider Partner to repay promptly to the Company the full amount of the Call Consideration. (b) The closing for all purchases and sales of Callable Equity pursuant to this Section 6.7 will be at the principal executive offices of the Company or such other location and such date and time as the Board may determine within sixty (60) days after the Call Exercise Date and set forth in a written notice to such Service Provider Partner (the date on which such closing occurs, the “Call Repurchase Date”). The Call Consideration will be paid to the applicable Service Provider Partner in cash, by cashier’s check or by wire transfer of funds; provided, that if the payment of such cash or the distribution or dividend to the Company by any other Company Entity of the cash needed to make such payment (x) would be in violation of or prohibited by Applicable Law or securities regulations (including as to solvency of the Company) or (y) would constitute or result in a Financing Default (each such occurrence being a “Default Event”), the Company shall, in lieu of a cash payment, be permitted to issue a promissory note (a “Promissory Note”) equal to the aggregate Call Consideration, with such Promissory Note (1) (A) having an interest rate equal to “prime rate” (as published in The Wall Street Journal) as in effect on the date the Promissory Note is entered into, which interest will be payable in equal yearly installments during the term of the Promissory Note and, at the option of the Board, in cash or in kind and (B) being mandatorily payable within one hundred eighty (180) days (or such shorter period at the sole discretion of the Board) after the date the payment would not (a) violate or be prohibited by Applicable Law or securities regulations and (b) constitute a Default Event, (2) having a term not to exceed four (4) years from the date the Promissory Note was entered into or (3) having such other terms as may be required by any financing agreement of any Company Entity; provided, further, that, in the event of any Default Event, in lieu of closing the purchase and sale of the applicable Callable Equity, the Company, in its sole discretion, may rescind the exercise of such Call Right, in which case, the period upon which the Call Right may be exercised by the Company shall be tolled until thirty (30) days following the date on which there ceases to be any Default Event, and the Company may exercise the Call Right at any time during such thirty (30) day period pursuant to this Section 6.7. Notwithstanding the foregoing, the Company may elect to pay the Call Consideration in shares or other Equity Securities of any Company Entity other than the Company with a Fair Market Value equal to the applicable Call Consideration; provided, that such Company Entity promptly repurchases/redeems such shares or other Equity Securities for cash equal to the applicable Call Consideration or a Promissory Note with a principal amount equal to the applicable Call Consideration. The applicable Service Provider Partner will cause the Callable Equity to be delivered to the Company at the closing free and clear of all Liens of any kind, other than those which continue to apply pursuant to the terms of this Agreement. The applicable Service Provider Partner will take all such actions and deliver all such documents and instruments as the General Partner requests to vest in the Company title to the Callable Equity free of any Lien incurred by or through such Service Provider Partner. (c) Each Service Provider Partner hereby makes the following representations and warranties for the benefit of the purchaser of its Callable Equity as of the Call Repurchase Date, which (A) shall survive the consummation of the purchase of the Callable Equity and the termination of this Agreement and (B) may also be set forth in the purchase agreement giving effect to the purchase of the Callable Equity in the form requested by the Company: (i) The applicable Service Provider Partner (A) is the legal, record and beneficial owner of, and has good and valid title to, the Callable Equity and (B) has full power and authority to sell, assign and transfer the Callable Equity; (ii) The purchaser of the Callable Equity will acquire good, marketable and unencumbered title to such Callable Equity, free and clear of any Liens, and the same will not be subject to any adverse claim or right; and (iii) Each representation and warranty of the applicable Service Provider Partner set forth in the applicable Award Agreement mutatis mutandis with respect to the purchase of the Callable Equity and the purchase agreement giving effect to the purchase of the Callable Equity in the form requested by the Company. (d) The rights of the Company to deliver a Call Right Notice, as the case may be, as contemplated in this Section 6.7 shall automatically terminate upon the consummation of an IPO or Company Sale; provided, that it is understood and agreed that any Callable Equity that is subject to a Call Right Notice that has been delivered prior to the consummation of an IPO or Company Sale shall continue to be subject to the terms and provisions of this Section 6.7. The Company shall have the right to assign its rights and obligations to purchase any Callable Equity set forth in this Section 6.7 to any Person that has been approved in writing by the SL Partners; provided that, notwithstanding anything to the contrary in this Section 6.7, no amendments to the rights, powers and preferences of the Callable Equity may be made in connection with such assignment. (e) In addition to the provisions set forth in this Section 6.7, the Company shall have the right to purchase, from time to time, all or any portion of the Equity Securities owned by any Service Provider Partner to the extent set forth in any subscription agreement, Award Agreement or other agreement pursuant to which such Equity Securities were granted or issued, in each case upon the terms and subject to the conditions set forth in such agreement. (f) All obligations in this Section 6.7 shall, except as expressly provided in this Section 6.7, be satisfied in full without set-off, defense or counterclaim.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Intel Corp), Limited Partnership Agreement (Intel Corp)
Call Rights. (a) Each Service Provider Partner At any time after the fifth anniversary of the date hereof, Depositor shall have the right and option (such right and each Permitted Transferee option, the “High-Value Call Option”) to cause the Trust to purchase all, but not less than all, of the Units from all the Unitholders at a price of $10 per Unit (appropriately adjusted for Unit subdivisions, splits or combinations as described in Section 2.5(b) and Section 3.20(k)), without interest on or any other adjustment to such Service Provider Partner, if anyprice per Unit. Depositor may exercise its High-Value Call Option by providing written notice (the “HV Call Notice”) agrees that, unless otherwise agreed to the Trustee of its election to exercise its High-Value Call Option and tendering to the Trustee the full purchase price for all outstanding Units (other than Units held by Depositor or a Subsidiary of Depositor) by wire transfer of immediately available funds to the account of the Trustee set forth on Schedule 1 (or such other account as designated in writing by the Board, prior Trustee after the date hereof). Any election by Depositor to exercise the High-Value Call Option shall be irrevocable. The HV Call Notice shall state the record date (the “HV Call Record Date”) for which Unitholders shall be determined for purposes of the purchase of the Units pursuant to the consummation High-Value Call Option, which shall be a date not less than 15 nor more than 30 days after the date of an IPO the HV Call Notice. The transfer books for the Units shall be closed as of 11:59 pm, central time, on the HV Call Record Date (the “HV Termination Time”) and no transfer of the Units shall be made or Company Salerecognized after such date. The date and time of the HV Call Record Date and of the HV Termination Time shall be identical.
(b) At any time after the fifth anniversary of the date hereof, if the Units are then listed for trading or admitted for quotation on a national securities exchange or any quotation system and the VWAP per Unit is equal to $0.25 or less for the immediately preceding consecutive nine-calendar-month period (ending as of 11:59 p.m. eastern time on the last day of the applicable calendar month (the “Nine-Month Period”), Depositor shall have the right and option (such right and option, the Company will have “Low-Value Call Option”) to cause the rightTrust to purchase all, but not less than all, of the obligationUnits from all the Unitholders at a price of $0.25 per Unit (appropriately adjusted for Unit subdivisions, splits or combinations as described in Section 2.5(b) or Section 3.20(k)), without interest on or any other adjustment to purchase such price per Unit. Depositor may exercise its Low-Value Call Option by providing to the Trustee within 30 days of the last calendar day of the Nine-Month Period written notice (the “LV Call RightNotice”) up of its election to exercise its Low-Value Call Option, together with a certificate signed by a duly authorized officer of Depositor (on which the Trustee shall be entitled to rely) (the “VWAP Certificate”) certifying that the VWAP per Unit is equal to $0.25 (appropriately adjusted for Unit subdivisions, splits or combinations as described in Section 2.5(b) or Section 3.20(k)) or less for such Nine-Month Period, and tendering to the Trustee the full purchase price for all outstanding Units (other than any Unvested Class B Units) Units held by Depositor or a Service Provider Partner Subsidiary of Depositor) by wire transfer of immediately available funds to the account of the Trustee set forth on Schedule 1 (and any Permitted Transferees of or such Service Provider Partner) other account as may be designated in writing by the Trustee after the date hereof). Any election by Depositor to exercise the Low-Value Call Option shall be irrevocable. The LV Call Notice shall state the record date (the “Callable EquityLV Call Record Date”) following for which Unitholders shall be determined for purposes of the purchase of the Units pursuant to the Low-Value Call Option, which shall be a date not less than 15 nor more than 30 days after the date of the LV Call Notice. The transfer books of the Units shall be closed as of 11:59 pm, central time, on the LV Call Record Date (the “LV Termination Time” and, together with the HV Termination Time, the “Call Termination Time”) and no transfer of the Units shall be made or recognized after such date. The date and time of the LV Call Record Date and of the LV Termination Time shall be identical. The Trustee shall have no duty or authority to question the VWAP Certificate or the matters stated therein and shall be entitled to rely thereon and shall be fully protected in relying thereon without investigation.
(c) As soon as reasonably practicable after the date of either a HV Call Notice or LV Call Notice, the Trustee shall mail or cause to be mailed to each Unitholder of record notice, substantially in form agreed between the Depositor and the Trustee, of the exercise of the High-Value Call Option or the Low-Value Call Option, as applicable, and instructions for use in effecting the surrender of Book-Entry Units in exchange for the purchase price with respect to such Units.
(d) All outstanding Units as of the Call Termination Time shall be cancelled as of the Call Termination Time (including all Units held by Depositor) and no Unitholder shall thereafter have any Beneficial Interest or other right or interest with respect to any Units and all interests, rights and benefits of such Unitholder as a Unitholder shall terminate other than the right to receive the purchase price for such Units as provided in this Section 3.20 and an amount, net of any expenses of the Trustee in connection with the dissolution and termination of the Trust, equal to such Unitholder’s pro rata share of (i) any Quarterly Distribution Amount for which a record date prior to the Call Termination Date has been publicly announced by the Trustee and for which a cash reserve has been established that has not been distributed to such Unitholder and (ii) the Trust’s share of the proceeds of Production that has accrued but not yet been paid prior to the Call Termination Time (the “Accrued Production Amount”). Depositor shall certify to the Trustee the amount of the Accrued Production Amount, and the Trustee shall be fully protected and shall incur no liability in relying on such certification. In lieu of paying the Accrued Production Amount to the Trust in accordance with the terms of the Conveyances, Depositor shall pay the Accrued Production Amount to the Trust within five (5) Business Days after the occurrence of the Call Termination Time. Within ten (10) Business Days after the occurrence of the Call Termination Time, the Trustee shall distribute to each record holder of Units (other than Depositor) as of the Call Termination Time, at such Unitholder’s address as shown on the records of the Trustee as provided in Section 12.6, together with notice of cancellation, an amount equal to the product of (i) the total number of Units held by such Unitholder as of the Call Termination Time multiplied by (ii) the per Unit purchase price as provided in Section 3.20(a) or Section 3.20(b), as applicable. In the event the tender is refused by a Unitholder or if the tendered sum is returned to the Trustee, the tendered sum shall be held by the Trustee in a trust account for the benefit of such Unitholder, until proper claim for same (together with interest accrued thereon) has been made by such Unitholder, but subject to applicable laws concerning unclaimed property. In the event of a transfer of ownership of Units that is not registered in the transfer records of the Trustee, the purchase price to be paid with respect to such Units may be paid to such a transferee upon delivery to the Trustee of all documents required by the Trustee (pursuant to Section 4.7 or otherwise) to evidence and effect such transfer and to evidence that any potentially applicable stock transfer or other similar taxes have been paid or are not applicable are presented to the Trustee. No interest shall be paid or shall accrue on the cash payable upon surrender of any Book-Entry Unit.
(e) All costs and expenses incurred by the Trustee in connection with the exercise by Depositor of the High-Value Call Option or of the Low-Value Call Option shall be paid by Depositor (or, if paid by the Trustee, reimbursed by Depositor), without limitation by the Depositor Annual Expense Cap or any other provision of this Agreement. All expenses and liabilities of the Trust at the Call Termination Time that exceed the funds then available to the Trust shall be paid by Depositor (or, if paid by the Trustee, reimbursed by Depositor, without limitation by the Depositor Annual Expense Cap or any other provision of this Agreement).
(f) The Trustee shall invest, as directed by Depositor, any funds tendered by Depositor to the Trustee pursuant to Section 3.20(a) or Section 3.20(b), as applicable; provided, however, that no such investment or loss thereon shall affect the amounts payable to holders of Units pursuant to this Section 3.20, and following any losses from any such investment, Depositor shall promptly provide additional funds to the Trustee for the benefit of the Unitholders at the Call Termination Time in the amount of such losses, which additional funds will be deemed to be part of the purchase price for such Units. Any interest or other income resulting from such investments shall be paid to Depositor, upon demand.
(g) Any portion of the funds tendered by Depositor to the Trustee pursuant to Section 3.20(a) or Section 3.20(b), as applicable (including any interest or other amounts received with respect thereto) that remains unclaimed by, or otherwise undistributed to, Unitholders for one year after the Call Termination Time shall be delivered to Depositor, upon demand, and any Unitholder who has not theretofore complied with this Section 3.20 shall thereafter look only to Depositor as general creditor thereof, for satisfaction of its claim for the purchase price of the Units held by such Unitholder as of the HV Call Record Date or LV Call Record Date, as applicable, without any interest thereon.
(h) Neither Depositor nor the Trustee shall be liable to any person in respect of any portion of the funds tendered by Depositor to the Trustee pursuant to Section 3.20(a) or Section 3.20(b), as applicable, delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. Notwithstanding any other provision of this Agreement, any portion of the funds tendered by Depositor to the Trustee pursuant to Section 3.20(a) or Section 3.20(b), as applicable, that remains undistributed to the holders of Book-Entry Units as of the second anniversary of the Call Termination Time (or immediately prior to such earlier date on which such funds would otherwise escheat to or become the property of any governmental entity), shall, to the extent permitted by applicable law, become the property of Depositor, free and clear of all claims or interest of any person previously entitled thereto.
(i) Depositor and the Trustee (without duplication) shall be entitled to deduct and withhold from the purchase price and other amounts otherwise payable to any Unitholder upon the purchase of its Units pursuant to this Section 3.20 such amounts as are required to be deducted and withheld with respect to the making of such payment under applicable tax law. Any amounts so deducted, withheld and paid over to the appropriate taxing authority shall be treated for all purposes of this Agreement as having been paid to the Unitholder in respect of which such deduction or withholding was made.
(j) If at any time the Trustee is uncertain about its duties pursuant to this Section 3.20, or is subject to competing, conflicting or inconsistent demands in connection with any matter under any provision of this Agreement, the Trustee shall be fully protected and shall incur no liability to any Unitholder or Depositor or to Grantor or to any other Person if the Trustee declines to take any action until (i) all such demands are resolved in a written agreement signed by all of the Persons having an interest in the matter, (ii) the Trustee has received either (x) written instructions from Depositor (unless Depositor has a Termination conflict of interest in the matter) or (y) a Restrictive Covenant Violation written opinion of counsel, in either case advising Trustee as to its duties or the manner in which to resolve such uncertainties or competing, conflicting or inconsistent demands or (any such event, iii) Trustee has obtained an appropriate order from a “Call Event”), as provided in this Section 6.7. To court of competent jurisdiction.
(k) In the extent that the Callable Equity includes any event outstanding Units (other than any Unvested Class B Units) held by any Permitted Transferee of a Service Provider Partner, each reference to such “Service Provider Partner” in the remainder of this Section 6.7 shall be deemed to include such Permitted Transferees. Upon subdivided or split into a Call Eventgreater number of Units, the General Partner may exercise the Call Right on behalf price of the Company with respect to all or any portion of the Callable Equity by one or more written notices (each, a “High-Value Call Right Notice”) delivered to the applicable Service Provider Partner at any time during the period commencing on the date of Termination or the date on which the General Partner acquires actual knowledge of the occurrence of the Restrictive Covenant Violation, as applicable, and ending on the one-year anniversary of the later of the date of Termination and the date on which the General Partner acquires actual knowledge of the occurrence of the Restrictive Covenant Violation, as applicable (such period, the “Call Right Period” and the date such notice is given, the “Call Exercise Date”). Upon the giving of a Call Right Notice, the Company will be obligated to purchase and the applicable Service Provider Partner will be obligated to sell all (or any lesser portion indicated in the Call Right Notice) of the Callable Equity for the consideration calculated either (i) if the Call Event is due to a Termination for “Cause” Option (as defined in Section 3.20(a)) and the applicable Award Agreement) or a Restrictive Covenant Violation, the lesser of cost or Fair Market Value or (ii) if the Call Event is due to a Termination for any reason other than described in the preceding clause (i), at the Fair Market Value price of such Units on the Low-Value Call Exercise Date (the “Call Consideration”); provided, that, if, at any time after such Service Provider Partner’s receipt of the Call Consideration, the General Partner acquires actual knowledge of the occurrence of a subsequent or continuing Restrictive Covenant Violation, the General Partner may require such Service Provider Partner to repay promptly to the Company the full amount of the Call Consideration.
(b) The closing for all purchases and sales of Callable Equity pursuant to this Section 6.7 will be at the principal executive offices of the Company or such other location and such date and time as the Board may determine within sixty (60) days after the Call Exercise Date and set forth in a written notice to such Service Provider Partner (the date on which such closing occurs, the “Call Repurchase Date”). The Call Consideration will be paid to the applicable Service Provider Partner in cash, by cashier’s check or by wire transfer of funds; provided, that if the payment of such cash or the distribution or dividend to the Company by any other Company Entity of the cash needed to make such payment (x) would be in violation of or prohibited by Applicable Law or securities regulations (including as to solvency of the Company) or (y) would constitute or result in a Financing Default (each such occurrence being a “Default Event”), the Company shall, in lieu of a cash payment, be permitted to issue a promissory note (a “Promissory Note”) equal to the aggregate Call Consideration, with such Promissory Note (1) (A) having an interest rate equal to “prime rate” Option (as published defined in The Wall Street JournalSection 3.20(b)) as in effect on the date the Promissory Note is entered intoday upon which such subdivision or split becomes effective shall be proportionately reduced, which interest will be payable in equal yearly installments during the term of the Promissory Note and, at the option of the Board, in cash or in kind and (B) being mandatorily payable within one hundred eighty (180) days (or such shorter period at the sole discretion of the Board) after the date the payment would not (a) violate or be prohibited by Applicable Law or securities regulations and (b) constitute a Default Event, (2) having a term not to exceed four (4) years from the date the Promissory Note was entered into or (3) having such other terms as may be required by any financing agreement of any Company Entity; provided, further, thatconversely, in the event outstanding Units shall each be combined into a smaller number of any Default Event, in lieu of closing the purchase and sale of the applicable Callable EquityUnits, the Company, in its sole discretion, may rescind the exercise price of such High-Value Call Right, Option (as defined in which case, Section 3.20(a)) and the period price of such Low-Value Call Option (as defined in Section 3.20(b)) in effect on the day upon which the Call Right may be exercised by the Company such combination becomes effective shall be tolled until thirty (30) days following the date on which there ceases to be any Default Eventproportionately increased, and the Company may exercise the Call Right at any time during such thirty (30) day period pursuant to this Section 6.7. Notwithstanding the foregoing, the Company may elect to pay the Call Consideration in shares increase or other Equity Securities of any Company Entity other than the Company with a Fair Market Value equal to the applicable Call Consideration; provided, that such Company Entity promptly repurchases/redeems such shares or other Equity Securities for cash equal to the applicable Call Consideration or a Promissory Note with a principal amount equal to the applicable Call Consideration. The applicable Service Provider Partner will cause the Callable Equity to be delivered to the Company at the closing free and clear of all Liens of any kind, other than those which continue to apply pursuant to the terms of this Agreement. The applicable Service Provider Partner will take all such actions and deliver all such documents and instruments as the General Partner requests to vest in the Company title to the Callable Equity free of any Lien incurred by or through such Service Provider Partner.
(c) Each Service Provider Partner hereby makes the following representations and warranties for the benefit of the purchaser of its Callable Equity as of the Call Repurchase Date, which (A) shall survive the consummation of the purchase of the Callable Equity and the termination of this Agreement and (B) may also be set forth in the purchase agreement giving effect to the purchase of the Callable Equity in the form requested by the Company:
(i) The applicable Service Provider Partner (A) is the legal, record and beneficial owner of, and has good and valid title to, the Callable Equity and (B) has full power and authority to sell, assign and transfer the Callable Equity;
(ii) The purchaser of the Callable Equity will acquire good, marketable and unencumbered title to such Callable Equity, free and clear of any Liens, and the same will not be subject to any adverse claim or right; and
(iii) Each representation and warranty of the applicable Service Provider Partner set forth in the applicable Award Agreement mutatis mutandis with respect to the purchase of the Callable Equity and the purchase agreement giving effect to the purchase of the Callable Equity in the form requested by the Company.
(d) The rights of the Company to deliver a Call Right Noticereduction, as the case may be, to become effective immediately on the day upon which such subdivision, split or combination becomes effective.
(l) Contemporaneously with the Depositor’s delivery to the Trustee of the HV Call Notice or LV Call Notice, as contemplated applicable, Depositor shall deliver or cause to be delivered to each record holder of the Company Convertible Securities a copy of such HV Call Notice or LV Call Notice. If any such holder of the Company Convertible Securities converts such Company Convertible Securities in this Section 6.7 shall automatically terminate upon accordance with the consummation respective terms of an IPO or Company Sale; provided, that it is understood and agreed that any Callable Equity that is subject to a Call Right Notice that has been delivered the applicable underlying agreements prior to the consummation HV Call Record Date or the LV Call Record Date, as applicable, then such holder shall be deemed to hold the number of an IPO Units that would be distributed to such holder upon such conversion (whether or Company Sale not such Units have been distributed to such holder) and shall continue to be subject entitled to the terms and provisions purchase price attributable to such Units upon exercise of this Section 6.7the High-Value Call Option or Low-Value Call Option, as applicable. The Company Depositor shall have notify the right to assign its rights and obligations to purchase any Callable Equity set forth in this Section 6.7 to any Person that has been approved in writing Trustee or transfer agent designated by the SL Partners; provided that, notwithstanding anything to the contrary Trustee of such conversion in this accordance with Section 6.7, no amendments to the rights, powers and preferences of the Callable Equity may be made in connection with such assignment2.5.
(e) In addition to the provisions set forth in this Section 6.7, the Company shall have the right to purchase, from time to time, all or any portion of the Equity Securities owned by any Service Provider Partner to the extent set forth in any subscription agreement, Award Agreement or other agreement pursuant to which such Equity Securities were granted or issued, in each case upon the terms and subject to the conditions set forth in such agreement.
(f) All obligations in this Section 6.7 shall, except as expressly provided in this Section 6.7, be satisfied in full without set-off, defense or counterclaim.
Appears in 2 contracts
Sources: Royalty Trust Agreement (Gulf Coast Ultra Deep Royalty Trust), Royalty Trust Agreement (Gulf Coast Ultra Deep Royalty Trust)
Call Rights. At any time or from time to time after the earlier of (ai) Each Service Provider Partner March 31, 2008 and (and ii) the date an Initial Officer is terminated for Cause, Death or Disability or resigns his employment with the Company (a "Termination Call"), AMIC shall have a Call Right (as defined below). In the event of a Termination Call, AMIC shall have the right to purchase all (but not less than all) of the applicable Initial Officer Pro Rata Interest of each Permitted Transferee of the Minority Members' Membership Interest for the Call Interest Price (as defined below) for the thirty day period beginning on the date of termination of such Service Provider PartnerInitial Officer's employment and ending thirty days thereafter. After March 31, if any2008, AMIC shall have the right to purchase all (but not less than all) agrees that, unless otherwise agreed in writing of the Membership Interests owned by the Board, prior to the consummation of an IPO or Company Sale, the Company will have the right, but not the obligation, to purchase (the “Call Right”) up to all Units (other than any Unvested Class B Units) held by a Service Provider Partner (and any Permitted Transferees of such Service Provider Partner) (the “Callable Equity”) following the occurrence of (x) a Termination or (y) a Restrictive Covenant Violation (any such event, a “Call Event”), as provided in this Section 6.7. To the extent that the Callable Equity includes any Units (other than any Unvested Class B Units) held by any Permitted Transferee of a Service Provider Partner, each reference to such “Service Provider Partner” in the remainder of this Section 6.7 shall be deemed to include such Permitted Transferees. Upon a Call Event, the General Partner may exercise the Call Right on behalf of the Company with respect to all or any portion of the Callable Equity by one or more written notices Minority Members (each, a “"Call Right Notice”Right") delivered to for the applicable Service Provider Partner at any time during the period commencing on the date of Termination or the date on which the General Partner acquires actual knowledge of the occurrence of the Restrictive Covenant Violation, as applicable, and ending on the one-year anniversary of the later of the date of Termination and the date on which the General Partner acquires actual knowledge of the occurrence of the Restrictive Covenant Violation, as applicable (such period, the “Call Right Period” and the date such notice is given, the “Call Exercise Date”)Interest Price. Upon the giving of AMIC may exercise a Call Right Notice, by delivering an irrevocable notice to the Company will be obligated Minority Members indicating that AMIC wishes to purchase and the applicable Service Provider Partner will be obligated to sell all Membership Interest specified in such notice (or any lesser portion indicated in the a "Call Right Notice) of the Callable Equity for the consideration calculated either (i) if the Call Event is due to a Termination for “Cause” (as defined in the applicable Award Agreement) or a Restrictive Covenant Violation, the lesser of cost or Fair Market Value or (ii) if the Call Event is due to a Termination for any reason other than described in the preceding clause (i), at the Fair Market Value of such Units on the Call Exercise Date (the “Call Consideration”); provided, that, if, at any time after such Service Provider Partner’s receipt of the Call Consideration, the General Partner acquires actual knowledge of the occurrence of a subsequent or continuing Restrictive Covenant Violation, the General Partner may require such Service Provider Partner to repay promptly to the Company the full amount of the Call Consideration.
(b) The closing for all purchases and sales of Callable Equity pursuant to this Section 6.7 will be at the principal executive offices of the Company or such other location and such date and time as the Board may determine within sixty (60) days after the Call Exercise Date and set forth in a written notice to such Service Provider Partner (the date on which such closing occurs, the “Call Repurchase Date”"). The date upon which AMIC shall so advise the Minority Members is herein called the "Call Consideration will be paid to the applicable Service Provider Partner in cash, by cashier’s check or by wire transfer of funds; provided, that if the payment of such cash or the distribution or dividend to the Company by any other Company Entity of the cash needed to make such payment (x) would be in violation of or prohibited by Applicable Law or securities regulations (including as to solvency of the Company) or (y) would constitute or result in a Financing Default (each such occurrence being a “Default Event”), the Company shall, in lieu of a cash payment, be permitted to issue a promissory note (a “Promissory Note”) equal to the aggregate Call Consideration, with such Promissory Note (1) (A) having an interest rate equal to “prime rate” (as published in Notice Date". The Wall Street Journal) as in effect on the date the Promissory Note is entered into, which interest will be payable in equal yearly installments during the term of the Promissory Note and, at the option of the Board, in cash or in kind and (B) being mandatorily payable within one hundred eighty (180) days (or such shorter period at the sole discretion of the Board) after the date the payment would not (a) violate or be prohibited by Applicable Law or securities regulations and (b) constitute a Default Event, (2) having a term not to exceed four (4) years from the date the Promissory Note was entered into or (3) having such other terms as may be required by any financing agreement of any Company Entity; provided, further, that, in the event of any Default Event, in lieu of closing the purchase and sale of the applicable Callable EquityMembership Interest pursuant to a Call Right shall be consummated on a date selected by AMIC by giving the Minority Members at least 20 days' prior written notice thereof, which date in no event shall be earlier than the Companydate 5 days, in its sole discretionnor later than the date 30 days, may rescind the exercise of such Call Right, in which case, the period upon which after the Call Right may be exercised by Notice Date. AMIC shall purchase from the Company shall be tolled until thirty (30) days following the date on which there ceases to be any Default EventMinority Members, and the Company may exercise Minority Members shall sell to AMIC, their Membership Interest, at the Call Right Interest Price as of the Call Notice Date. On the closing date, the Minority Members shall deliver to AMIC such assignment and transfer documents as are reasonably requested by AMIC to Transfer and convey the Membership Interest specified in the Call Notice. AMIC shall deliver at any time during the closing payment in full of the Call Interest Price, as described below, provided that if a Termination Put is triggered within 90 days after the end of a Fiscal Year, AMIC may defer payment until the earlier of (i) 2 business days after the Company's financial statements for the Fiscal Year are completed or (ii) the 2nd business day after that 90th day. If AMIC is exercising a Termination Call, the Call Interest Price shall be the EBIT Price for the Fiscal Year immediately prior to the termination of such thirty Initial Officer's employment plus Profit Sharing attributable to such Initial Officer. Otherwise, the Call Interest Price shall be the EBIT Price for Fiscal Year 2007 plus Profit Sharing attributable to such Initial Officer. Payment of the purchase price for the Membership Interest so purchased by AMIC shall be made by wire transfer in immediately available funds provided, however, that the portion of the Call Interest Price attributable to Profit Sharing shall not be due until 30 days after the receipt by AMIC of the cash distribution pursuant to Section 6.1 attributable to such Profit Sharing and provided, further, that at the option of AMIC, AMIC may pay the Call Interest Price by delivering to the Minority Members a promissory note or notes providing for 24 monthly payments with interest at the greater of (30i) day period the prime rate then in effect and (ii) 4 percent per annum, compounded annually. Such note or notes shall be secured with a pledge of the Membership Interest purchased therewith. Upon the purchase of the Minority Members' Percentage Interest by AMIC pursuant to this Section 6.7. Notwithstanding the foregoing8.7, the Company may elect to pay the Call Consideration in shares or other Equity Securities Board of any Company Entity other than the Company with a Fair Market Value equal to the applicable Call Consideration; provided, that such Company Entity promptly repurchases/redeems such shares or other Equity Securities for cash equal to the applicable Call Consideration or a Promissory Note with a principal amount equal to the applicable Call Consideration. The applicable Service Provider Partner will Directors shall cause the Callable Equity Exhibit A to be delivered amended to the Company at the closing free and clear of all Liens of any kind, other than those which continue to apply pursuant to the terms of this Agreement. The applicable Service Provider Partner will take all reflect such actions and deliver all such documents and instruments as the General Partner requests to vest in the Company title to the Callable Equity free of any Lien incurred by or through such Service Provider Partner.
(c) Each Service Provider Partner hereby makes the following representations and warranties for the benefit of the purchaser of its Callable Equity as of the Call Repurchase Date, which (A) shall survive the consummation of the purchase of the Callable Equity and the termination of this Agreement and (B) may also be set forth increase in the purchase agreement giving effect to the purchase of the Callable Equity in the form requested by the Company:
(i) The applicable Service Provider Partner (A) is the legal, record and beneficial owner of, and has good and valid title to, the Callable Equity and (B) has full power and authority to sell, assign and transfer the Callable Equity;
(ii) The purchaser of the Callable Equity will acquire good, marketable and unencumbered title to such Callable Equity, free and clear of any Liens, and the same will not be subject to any adverse claim or right; and
(iii) Each representation and warranty of the applicable Service Provider Partner set forth in the applicable Award Agreement mutatis mutandis with respect to the purchase of the Callable Equity and the purchase agreement giving effect to the purchase of the Callable Equity in the form requested by the CompanyAMIC's Percentage Interest.
(d) The rights of the Company to deliver a Call Right Notice, as the case may be, as contemplated in this Section 6.7 shall automatically terminate upon the consummation of an IPO or Company Sale; provided, that it is understood and agreed that any Callable Equity that is subject to a Call Right Notice that has been delivered prior to the consummation of an IPO or Company Sale shall continue to be subject to the terms and provisions of this Section 6.7. The Company shall have the right to assign its rights and obligations to purchase any Callable Equity set forth in this Section 6.7 to any Person that has been approved in writing by the SL Partners; provided that, notwithstanding anything to the contrary in this Section 6.7, no amendments to the rights, powers and preferences of the Callable Equity may be made in connection with such assignment.
(e) In addition to the provisions set forth in this Section 6.7, the Company shall have the right to purchase, from time to time, all or any portion of the Equity Securities owned by any Service Provider Partner to the extent set forth in any subscription agreement, Award Agreement or other agreement pursuant to which such Equity Securities were granted or issued, in each case upon the terms and subject to the conditions set forth in such agreement.
(f) All obligations in this Section 6.7 shall, except as expressly provided in this Section 6.7, be satisfied in full without set-off, defense or counterclaim.
Appears in 1 contract
Sources: Limited Liability Company Agreement (American Independence Corp)
Call Rights. (a) Each Service Provider Partner (and each Permitted Transferee of such Service Provider Partner, if any) agrees that, unless otherwise agreed in writing by the Board, prior to the consummation of an IPO or Company Sale, the Company will have the right, but not the obligation, to purchase (the “Call Right”) up to all Units (other than any Unvested Class B Units) held by a Service Provider Partner (and any Permitted Transferees of such Service Provider Partner) (the “Callable Equity”) following the occurrence of (x) a Termination or (y) a Restrictive Covenant Violation (any such event, a “Call Event”), as provided in this Section 6.7. To the extent that the Callable Equity includes any Units (other than any Unvested Class B Units) held by any Permitted Transferee of a Service Provider Partner, each reference to such “Service Provider Partner” in the remainder of this Section 6.7 shall be deemed to include such Permitted Transferees. Upon a Call Event, the General Partner may exercise the Call Right on behalf of the Company with respect to all or any portion of the Callable Equity by one or more written notices (each, a “Call Right Notice”) delivered to the applicable Service Provider Partner at At any time during on or after the period commencing on the date of Termination or the date on which the General Partner acquires actual knowledge of the occurrence of the Restrictive Covenant Violation, as applicable, and ending on the one-year fifth anniversary of the later of the date of Termination and the date on which the General Partner acquires actual knowledge of the occurrence of the Restrictive Covenant Violation, as applicable (such periodhereof, the “Call Right Period” and Charter Member shall have the date such notice is given, the “Call Exercise Date”). Upon the giving of a Call Right Notice, the Company will be obligated right to purchase and the applicable Service Provider Partner will be obligated to sell all (or any lesser portion indicated in the Call Right Noticebut not less than all) of the Callable Equity for Securities owned by the consideration calculated either (i) if the Call Event is due to a Termination for “Cause” (as defined in the applicable Award Agreement) or a Restrictive Covenant Violation, the lesser of cost or Fair Market Value or (ii) if the Call Event is due to a Termination for any reason other than described in the preceding clause (i), at the Fair Market Value of such Units on the Call Exercise Date (the “Call Consideration”); provided, that, if, at any time after such Service Provider Partner’s receipt of the Call Consideration, the General Partner acquires actual knowledge of the occurrence of a subsequent or continuing Restrictive Covenant Violation, the General Partner may require such Service Provider Partner to repay promptly to the Company the full amount of the Call ConsiderationHolders.
(b) The closing for Charter Member may exercise a Call Right by delivering an irrevocable notice to the Holders indicating that the Charter Member wishes to purchase all purchases and sales of Callable Equity pursuant to this Section 6.7 will be at the principal executive offices (but not less than all) of the Company or such other location and such date and time as the Board may determine within sixty (60) days after the Call Exercise Date and set forth in a written notice to such Service Provider Partner (the date on which such closing occurs, the “Call Repurchase Date”). The Call Consideration will be paid to the applicable Service Provider Partner in cash, by cashier’s check or by wire transfer Securities of funds; provided, that if the payment of such cash or the distribution or dividend to the Company by any other Company Entity of the cash needed to make such payment (x) would be in violation of or prohibited by Applicable Law or securities regulations (including as to solvency of the Company) or (y) would constitute or result in a Financing Default (each such occurrence being a “Default Event”), the Company shall, in lieu of a cash payment, be permitted to issue a promissory note Holder (a “Promissory Note”"CALL NOTICE").
(c) equal to the aggregate Call Consideration, with such Promissory Note (1) (A) having an interest rate equal to “prime rate” (as published in The Wall Street Journal) as in effect on the date the Promissory Note is entered into, which interest will be payable in equal yearly installments during the term of the Promissory Note and, at the option of the Board, in cash or in kind and (B) being mandatorily payable within one hundred eighty (180) days (or such shorter period at the sole discretion of the Board) after the date the payment would not (a) violate or be prohibited by Applicable Law or securities regulations and (b) constitute a Default Event, (2) having a term not to exceed four (4) years from the date the Promissory Note was entered into or (3) having such other terms as may be required by any financing agreement of any Company Entity; provided, further, that, in the event of any Default Event, in lieu of closing the purchase and sale of the applicable Callable Equity, the Company, in its sole discretion, may rescind the exercise of such Call Right, in which case, the period upon which the Securities pursuant to a Call Right may shall be exercised consummated on a date selected by the Company Charter Member by giving the Holders at least 10 Business Days' prior written notice thereof, which date in no event shall be tolled until thirty (30) days following earlier than the date on which there ceases to be any Default Event5 Business Days, and the Company may exercise the Call Right at any time during such thirty (30) day period pursuant to this Section 6.7. Notwithstanding the foregoing, the Company may elect to pay the Call Consideration in shares or other Equity Securities of any Company Entity other nor later than the Company with a date 10 Business Days, after the determination of the Fair Market Value pursuant to the procedure described in the definition of such term in Section 1 hereof. The Charter Member shall purchase from the Holders, and each Holder shall sell to the Issuer, all of the Securities owned by such Holder: (i) in the case of each Unit and Warrant Unit so purchased, at a price equal to the applicable Price Per Unit as of the Call ConsiderationNotice Date; providedand (ii) in the case of any Warrants owned by such Holder, that such Company Entity promptly repurchases/redeems such shares or other Equity Securities for cash at a purchase price (which shall not be less than zero) equal to (A) the applicable product of (1) the Price Per Unit as of the Call Consideration or a Promissory Note with a principal Notice Date and (2) the Unit Exercisable Amount for such Holder as of the Call Notice Date, MINUS (B) an amount equal to the applicable Call Consideration. The applicable Service Provider Partner will cause the Callable Equity to be delivered to the Company at the closing free and clear of all Liens of any kind, other than those which continue to apply pursuant to the terms of this Agreement. The applicable Service Provider Partner will take all such actions and deliver all such documents and instruments as the General Partner requests to vest in the Company title to the Callable Equity free of any Lien incurred by or through such Service Provider Partner.
(c) Each Service Provider Partner hereby makes the following representations and warranties for the benefit of the purchaser of its Callable Equity aggregate Exercise Price as of the Call Repurchase Date, which (A) shall survive the consummation Notice Date for such Unit Exercisable Amount. Payment of the purchase of price for the Callable Equity and the termination of this Agreement and (B) may also be set forth in the purchase agreement giving effect to the purchase of the Callable Equity in the form requested Securities so purchased by the Company:
(i) The applicable Service Provider Partner (A) is the legal, record and beneficial owner of, and has good and valid title to, the Callable Equity and (B) has full power and authority to sell, assign and Charter Member shall be made by wire transfer the Callable Equity;
(ii) The purchaser of the Callable Equity will acquire good, marketable and unencumbered title to such Callable Equity, free and clear of any Liens, and the same will not be subject to any adverse claim or right; and
(iii) Each representation and warranty of the applicable Service Provider Partner set forth in the applicable Award Agreement mutatis mutandis with respect to the purchase of the Callable Equity and the purchase agreement giving effect to the purchase of the Callable Equity in the form requested by the Companyimmediately available funds.
(d) The rights of the Company to deliver a Call Right Notice, as the case may be, as contemplated in calculations under this Section 6.7 shall automatically terminate upon the consummation of an IPO or Company Sale; provided5.01, that it is understood and agreed that any Callable Equity that is subject to a Call Right Notice that has been delivered prior other than with respect to the consummation determination of an IPO or Company Sale Fair Market Value, shall continue to be subject to the terms and provisions of this Section 6.7. The Company shall have the right to assign its rights and obligations to purchase any Callable Equity set forth in this Section 6.7 to any Person that has been approved in writing made by the SL Partners; provided that, notwithstanding anything to the contrary Issuer in this Section 6.7, no amendments to the rights, powers good faith and preferences of the Callable Equity may be made in connection with such assignmenta commercially reasonable manner.
(e) In addition to the provisions set forth in this Section 6.7, the Company shall have the right to purchase, from time to time, all or any portion of the Equity Securities owned by any Service Provider Partner to the extent set forth in any subscription agreement, Award Agreement or other agreement pursuant to which such Equity Securities were granted or issued, in each case upon the terms and subject to the conditions set forth in such agreement.
(f) All obligations in this Section 6.7 shall, except as expressly provided in this Section 6.7, be satisfied in full without set-off, defense or counterclaim.
Appears in 1 contract
Call Rights. (a) Each Service Provider Partner (On and after the fifth anniversary of the date of this Agreement, during each Permitted Transferee of such Service Provider PartnerCall Valuation Request Period, if any) agrees that, unless otherwise agreed in writing by SEM shall have the Board, prior right to send a written notice to the consummation of an IPO or Company Sale, (with a copy to WCAS) requesting that the Company will have the right, but not the obligation, engage an Investment Bank to purchase (the “Call Right”) up to all Units (other than any Unvested Class B Units) held by a Service Provider Partner (and any Permitted Transferees of such Service Provider Partner) (the “Callable Equity”) following the occurrence of (x) a Termination or (y) a Restrictive Covenant Violation (any such event, a “Call Event”), as provided in this Section 6.7. To the extent that the Callable Equity includes any Units (other than any Unvested Class B Units) held by any Permitted Transferee of a Service Provider Partner, each reference to such “Service Provider Partner” in the remainder of this Section 6.7 shall be deemed to include such Permitted Transferees. Upon a Call Event, the General Partner may exercise the Call Right on behalf of determine the Company Enterprise Value and Call Price Per Interest in accordance with respect to all or any portion of the Callable Equity by one or more written notices Section 9.3(e) (each, a “Call Right Valuation Request”). Following delivery of a Call Valuation Request, the Company shall instruct the Investment Bank selected pursuant to Section 9.3(e) to calculate the Company Enterprise Value and Call Price Per Interest in accordance with Section 9.3(e). During the ten (10) day period following SEM’s and WCAS’s receipt of a written notice from the applicable Investment Bank that sets forth such Investment Bank’s determination of the Company Enterprise Value and Call Price Per Interest in accordance with Section 9.3(e), SEM may elect, in its sole and absolute discretion, to purchase from the Class A Members and Class B Members all or less than all of such Members’ Company Interests at a price per interest equal to the Call Price Per Interest (each, a “Call Exercise”); provided that SEM shall purchase the same relative proportion of each such Member’s Company Interests in connection with any Call Exercise. Any Call Exercise shall be made by delivery during such ten (10) day period of a written notice by SEM to the Class A Members and Class B Members (each, a “Call Exercise Notice”), which Call Exercise Notice shall indicate the number of Company Interests that SEM wishes to purchase from such Members. In connection with each Call Exercise, (x) delivered to SEM shall purchase, and the applicable Service Provider Partner Members shall sell, the applicable Company Interests no later than forty five (45) days following delivery of the applicable Call Exercise Notice and (y) SEM shall pay the applicable purchase price at any time during the closing by one of the following methods determined in SEM’s sole and absolute discretion: (A) wire transfer of immediately available funds, (B) the issuance of shares of SEM Common Stock (valued at the 21 trading day volume-weighted average sales price of such shares for the period commencing on beginning ten (10) trading days immediately preceding the date of Termination or the date on which the General Partner acquires actual knowledge first public announcement of the occurrence of the Restrictive Covenant Violation, as applicable, Call Exercise and ending on the one-year anniversary of the later of the date of Termination and the date on which the General Partner acquires actual knowledge of the occurrence of the Restrictive Covenant Violation, as applicable tenth (10th) trading day immediately following such period, the “Call Right Period” and the date such notice is given, the “Call Exercise Date”). Upon the giving of a Call Right Notice, the Company will be obligated to purchase and the applicable Service Provider Partner will be obligated to sell all (or any lesser portion indicated in the Call Right Notice) of the Callable Equity for the consideration calculated either (i) if the Call Event is due to a Termination for “Cause” (as defined in the applicable Award Agreement) or a Restrictive Covenant Violation, the lesser of cost or Fair Market Value or (ii) if the Call Event is due to a Termination for any reason other than described in the preceding clause (i), at the Fair Market Value of such Units on the Call Exercise Date (the “Call Consideration”); provided, that, if, at any time after such Service Provider Partner’s receipt of the Call Consideration, the General Partner acquires actual knowledge of the occurrence of a subsequent or continuing Restrictive Covenant Violation, the General Partner may require such Service Provider Partner to repay promptly to the Company the full amount of the Call Consideration.
(b) The closing for all purchases and sales of Callable Equity pursuant to this Section 6.7 will be at the principal executive offices of the Company or such other location and such date and time as the Board may determine within sixty (60) days after the Call Exercise Date and set forth in a written notice to such Service Provider Partner (the date on which such closing occurs, the “Call Repurchase Date”). The Call Consideration will be paid to the applicable Service Provider Partner in cash, by cashier’s check or by wire transfer of funds; provided, that if the payment of such cash or the distribution or dividend to the Company by any other Company Entity of the cash needed to make such payment (x) would be in violation of or prohibited by Applicable Law or securities regulations (including as to solvency of the Companyannouncement) or (yC) would constitute or result a combination thereof; provided that each Class A Member and Class B Member shall be paid in a Financing Default (each such occurrence being a “Default Event”), the Company shall, in lieu same relative mix of a cash payment, be permitted to issue a promissory note (a “Promissory Note”) equal to and SEM Common Stock. Each Member hereby acknowledges that the aggregate Call Consideration, with such Promissory Note (1) (A) having an interest rate equal to “prime rate” (as published in The Wall Street Journal) as in effect on the date the Promissory Note is entered into, which interest will be payable in equal yearly installments during the term of the Promissory Note and, at the option of the Board, in cash or in kind and (B) being mandatorily payable within one hundred eighty (180) days (or such shorter period at the sole discretion of the Board) after the date the payment would not (a) violate or be prohibited by Applicable Law or securities regulations and (b) constitute a Default Event, (2) having a term not to exceed four (4) years from the date the Promissory Note was entered into or (3) having such other terms as may be required by any financing agreement issuance of any Company Entity; provided, further, that, in the event shares of any Default Event, in lieu of closing the purchase and sale of the applicable Callable Equity, the Company, in its sole discretion, may rescind the exercise of SEM Common Stock that are paid to such Call Right, in which case, the period upon which the Call Right may be exercised by the Company shall be tolled until thirty (30) days following the date on which there ceases to be any Default Event, and the Company may exercise the Call Right at any time during such thirty (30) day period pursuant to this Section 6.7. Notwithstanding the foregoing, the Company may elect to pay the Call Consideration in shares or other Equity Securities of any Company Entity other than the Company with a Fair Market Value equal to the applicable Call Consideration; provided, that such Company Entity promptly repurchases/redeems such shares or other Equity Securities for cash equal to the applicable Call Consideration or a Promissory Note with a principal amount equal to the applicable Call Consideration. The applicable Service Provider Partner will cause the Callable Equity to be delivered to the Company at the closing free and clear of all Liens of any kind, other than those which continue to apply Member pursuant to the terms of this Agreement. The applicable Service Provider Partner will take all such actions and deliver all such documents and instruments as the General Partner requests to vest in the Company title to the Callable Equity free of any Lien incurred by or through such Service Provider Partner.
(c) Each Service Provider Partner hereby makes the following representations and warranties for the benefit of the purchaser of its Callable Equity as of the Call Repurchase Date, which (A) shall survive the consummation of the purchase of the Callable Equity and the termination of this Agreement and (B) may also be set forth in the purchase agreement giving effect to the purchase of the Callable Equity in the form requested by the Company:
(i) The applicable Service Provider Partner (A) is the legal, record and beneficial owner of, and has good and valid title to, the Callable Equity and (B) has full power and authority to sell, assign and transfer the Callable Equity;
(ii) The purchaser of the Callable Equity will acquire good, marketable and unencumbered title to such Callable Equity, free and clear of any Liens, and the same immediately preceding sentence will not be subject to any adverse claim or right; and
registered under applicable securities laws (iii) Each representation and warranty of the applicable Service Provider Partner set forth in the applicable Award Agreement mutatis mutandis with respect to the purchase of the Callable Equity and the purchase agreement giving effect to the purchase of the Callable Equity in the form requested other than as required by the CompanySection 9.3(d)).
(d) The rights of the Company to deliver a Call Right Notice, as the case may be, as contemplated in this Section 6.7 shall automatically terminate upon the consummation of an IPO or Company Sale; provided, that it is understood and agreed that any Callable Equity that is subject to a Call Right Notice that has been delivered prior to the consummation of an IPO or Company Sale shall continue to be subject to the terms and provisions of this Section 6.7. The Company shall have the right to assign its rights and obligations to purchase any Callable Equity set forth in this Section 6.7 to any Person that has been approved in writing by the SL Partners; provided that, notwithstanding anything to the contrary in this Section 6.7, no amendments to the rights, powers and preferences of the Callable Equity may be made in connection with such assignment.
(e) In addition to the provisions set forth in this Section 6.7, the Company shall have the right to purchase, from time to time, all or any portion of the Equity Securities owned by any Service Provider Partner to the extent set forth in any subscription agreement, Award Agreement or other agreement pursuant to which such Equity Securities were granted or issued, in each case upon the terms and subject to the conditions set forth in such agreement.
(f) All obligations in this Section 6.7 shall, except as expressly provided in this Section 6.7, be satisfied in full without set-off, defense or counterclaim.
Appears in 1 contract
Sources: Limited Liability Company Agreement (Select Medical Corp)
Call Rights. (a) Each Service Provider Partner (and each Permitted Transferee of such Service Provider Partner, if any) agrees that, unless otherwise agreed in writing by the Board, prior to the consummation of an IPO or Company Sale, the Company will have the right, but not the obligation, to purchase (the “Call Right”) up to all Units (other than any Unvested Class B Units) held by a Service Provider Partner (and any Permitted Transferees of such Service Provider Partner) (the “Callable Equity”) following the occurrence of (x) a Termination or (y) a Restrictive Covenant Violation (any such event, a “Call Event”), as provided in this Section 6.7. To the extent that the Callable Equity includes any Units (other than any Unvested Class B Units) held by any Permitted Transferee of a Service Provider Partner, each reference to such “Service Provider Partner” in the remainder of this Section 6.7 shall be deemed to include such Permitted Transferees. Upon a Call Event, the General Partner may exercise the Call Right on behalf of the Company with respect to all or any portion of the Callable Equity by one or more written notices (each, a “Call Right Notice”) delivered to the applicable Service Provider Partner at any time during the period commencing on the date of Termination or the date on which the General Partner acquires actual knowledge of the occurrence of the Restrictive Covenant Violation, as applicable, and ending on the one-year anniversary of the later of the date of Termination and the date on which the General Partner acquires actual knowledge of the occurrence of the Restrictive Covenant Violation, as applicable (such period, the “Call Right Period” and the date such notice is given, the “Call Exercise Date”). Upon the giving of a Call Right Notice, the Company will be obligated to purchase and the applicable Service Provider Partner will be obligated to sell all (or any lesser portion indicated in the Call Right Notice) of the Callable Equity for the consideration calculated either (i) if the Call Event is due to a Termination for “Cause” (as defined in the applicable Award Agreement) or a Restrictive Covenant Violation, the lesser of cost or Fair Market Value or (ii) if the Call Event is due to a Termination for any reason other than described in the preceding clause (i), at the Fair Market Value of such Units on the Call Exercise Date (the “Call Consideration”); provided, that, if, at any time after such Service Provider Partner’s receipt of the Call Consideration, the General Partner acquires actual knowledge of the occurrence of a subsequent or continuing Restrictive Covenant Violation, the General Partner may require such Service Provider Partner to repay promptly to the Company the full amount of the Call Consideration.
(b) The closing for all purchases and sales of Callable Equity pursuant to this Section 6.7 will be at the principal executive offices of the Company or such other location and such date and time as the Board may determine within sixty (60) days after the Call Exercise Date and set forth in a written notice to such Service Provider Partner (the date on which such closing occurs, the “Call Repurchase Date”). The Call Consideration will be paid to the applicable Service Provider Partner in cash, by cashier’s check or by wire transfer of funds; provided, that if the payment of such cash or the distribution or dividend to the Company by any other Company Entity of the cash needed to make such payment (x) would be in violation of or prohibited by Applicable Law or securities regulations (including as to solvency of the Company) or (y) would constitute or result in a Financing Default (each such occurrence being a “Default Event”), the Company shall, in lieu of a cash payment, be permitted to issue a promissory note (a “Promissory Note”) equal to the aggregate Call Consideration, with such Promissory Note (1) (A) having an interest rate equal to “prime rate” (as published in The Wall Street Journal) as in effect on the date the Promissory Note is entered into, which interest will be payable in equal yearly installments during the term of the Promissory Note and, at the option of the Board, in cash or in kind and (B) being mandatorily payable within one hundred eighty (180) days (or such shorter period at the sole discretion of the Board) after the date the payment would not (a) violate or be prohibited by Applicable Law or securities regulations and (b) constitute a Default Event, (2) having a term not to exceed four (4) years from the date the Promissory Note was entered into or (3) having such other terms as may be required by any financing agreement of any Company Entity; provided, further, that, in In the event of any Default Event, in lieu of closing the purchase and sale of the applicable Callable Equity, the Company, in its sole discretion, may rescind the exercise of such Call Right, in which case, the period upon which the Call Right may be exercised by the Company shall be tolled until thirty (30) days following the date on which there ceases to be any Default Event, and the Company may exercise the Call Right at any time during such thirty (30) day period pursuant to this Section 6.7. Notwithstanding the foregoing, the Company may elect to pay the Call Consideration in shares or other Equity Securities of any Company Entity other than the Company with a Fair Market Value equal to the applicable Call Consideration; provided, that such Company Entity promptly repurchases/redeems such shares or other Equity Securities for cash equal to the applicable Call Consideration or a Promissory Note with a principal amount equal to the applicable Call Consideration. The applicable Service Provider Partner will cause the Callable Equity to be delivered to the Company at the closing free and clear of all Liens of any kind, other than those which continue to apply pursuant to the terms of this Agreement. The applicable Service Provider Partner will take all such actions and deliver all such documents and instruments as the General Partner requests to vest in the Company title to the Callable Equity free of any Lien incurred by or through such Service Provider Partner.
(c) Each Service Provider Partner hereby makes the following representations and warranties for the benefit of the purchaser of its Callable Equity as of the Call Repurchase Date, which (A) shall survive the consummation of the purchase of the Callable Equity and the termination of this Agreement and (B) may also be set forth in the purchase agreement giving effect to the purchase of the Callable Equity in the form requested by the Companyof:
(i) The applicable Service Provider Partner (A) is the legal, record and beneficial owner of, and has good and valid title to, the Callable Equity and (B) has full power and authority any Event of Dissociation with respect to sell, assign and transfer the Callable Equitya Member;
(ii) The purchaser the death or Disability of a Member or equity owner of a Member that is an entity if such equity owner controls the Callable Equity will acquire good, marketable and unencumbered title to such Callable Equity, free and clear of any Liens, and the same will not be subject to any adverse claim or right; andMember;
(iii) Each representation and warranty of the applicable Service Provider Partner set forth in the applicable Award Agreement mutatis mutandis a Triggering Event with respect to the purchase of the Callable Equity and the purchase agreement giving effect to the purchase of the Callable Equity in the form requested by the Company.a Member; or
(div) The rights a Termination of the Company to deliver a Call Right Notice, as the case may be, as contemplated in this Section 6.7 shall automatically terminate upon the consummation of an IPO or Company Sale; provided, that it is understood and agreed that any Callable Equity that is subject Service with respect to a Call Right Notice that has been delivered prior to the consummation of an IPO or Company Sale shall continue to be subject to the terms and provisions of this Section 6.7. The Company shall have the right to assign its rights and obligations to purchase Member then in any Callable Equity set forth in this Section 6.7 to any Person that has been approved in writing by the SL Partners; provided that, notwithstanding anything to the contrary in this Section 6.7, no amendments to the rights, powers and preferences of the Callable Equity may be made in connection with such assignment.
(e) In addition to the provisions set forth in this Section 6.7event, the Company shall have the right and option (but not the obligation) to purchase, from time and the applicable Member and its Affiliates shall be required to timesell to the Company, all but not less than all of, the Membership Interests then held by them, at a price equal to the Repurchase Value of such Membership Interests; provided, however, that in the event that this Company option arises as a result of a (A) Triggering Event or (B) Termination of Service for Cause or without Good Reason, the Company may purchase the Membership Interests at question for the lesser of the Repurchase Value of such Membership Interests or the sum of such Member’s Capital Contributions. The Managing Member shall decide whether the Company will exercise its option pursuant to this Section. The Managing Member may exercise the foregoing call option by delivering written notice of such exercise to the applicable Member at any time during the period beginning upon the occurrence of the event and ending ninety (90) days after the occurrence of the event.
(b) For purposes of this Section, the “Repurchase Value” of the Membership Interests to be purchased means the three-year average value of such Membership Interests as of the most recent calendar year-end prior to the event giving rise to the call option described in Section 9.05(a), calculated by multiplying the Company’s earnings before interest, taxes, depreciation and amortization for such calendar year times 5.56. For avoidance, of doubt, the Repurchase Value for any call option arising during calendar year 2024 shall be $3,134,137. The closing of the purchase and sale of the Membership Interests hereunder will take place at the Company’s principal office on a date specified by the Company in writing (which date shall be not later than thirty (30) days after the final determination of the Repurchase Value of the Membership Interests). At such closing, the Company (or its assignees pursuant to subsection (c) above, as applicable) will deliver the purchase price for the Membership Interests to be purchased, against delivery of an instrument of transfer of the Membership Interests so purchased, in form reasonably acceptable to the Company, duly executed in blank, in proper form for transfer, free and clear of any and all claims, charges, security interests or other encumbrances of any nature whatsoever.
(c) At the discretion of the Managing Member, the purchase price shall be payable either (i) in full in cash at the closing or (ii) by delivery to the seller at the closing of an unsecured subordinated promissory note of the Company (a “Note”). Any such Note shall be payable as follows: The Note shall accrue interest on its outstanding balance at the Prime Rate in effect on the day of the Company’s exercise of its call right pursuant to this Section. On each anniversary of the Note until fully paid, the Company shall pay an amount equal to one-third of the original principal amount of the Note plus accrued interest. Any amount of such payment in excess of accrued interest will be applied to reduce the balance of the Note.
(d) Notwithstanding anything in this Agreement to the contrary, the Company shall not be required to purchase any Membership Interests hereunder if such purchase would result in a Violation. If and to the extent that any purchase of Membership Interests by the Company would result in a Violation, then:
(i) if the Company may purchase such Membership Interests without causing a Violation by delivering a Note for the purchase price therefor, the Company shall purchase such Membership Interests by delivering a Note; or
(ii) if the delivery of a Note pursuant to clause (i) would result in a Violation, the Company shall purchase and pay for only that portion of the Equity Securities owned Membership Interests, if any, that would not result in a Violation, and the remaining purchase obligation of the Company shall continue in full force and effect and shall be due and payable at the earliest date on which such purchase would not result in a Violation, and until such date, the selling holders of Membership Interests shall not Transfer any of such Membership Interests.
(e) In the event that any selling Member fails to deliver any Membership Interests at the closing as required by any Service Provider Partner this Agreement, the Company may elect to deposit the purchase price therefor with an escrow agent pending delivery of such Membership Interests and, in that event, such Membership Interests shall be deemed for all purposes (including the right to vote and receive payment of Distributions) to have been Transferred to the extent set forth Company, and the Membership Interests shall be deemed to have been canceled and to represent solely a right to receive payment of such purchase price, without interest, from the escrow. The escrow agent shall not be liable for any action or inaction taken in any subscription agreement, Award Agreement or other agreement pursuant to which good faith and all costs and fees for such Equity Securities were granted or issued, escrow agent shall be deducted from the amount of the purchase price held in each case upon the terms and subject to the conditions set forth in such agreementescrow.
(f) All obligations in Any payment to be made to a Member subject to a Bankruptcy or its Representative pursuant to this Section 6.7 shall9.05 shall be in complete liquidation and satisfaction of all the rights and interest of such Member and its Representative (and of all Persons claiming by, except through or under such Member and its Representative) in and in respect of the Company, including, without limitation, any Membership Interests, any rights in specific Company property, and any rights against the Company and (insofar as expressly provided in this Section 6.7the affairs of the Company are concerned) against the Members, be satisfied in full without set-off, defense or counterclaim.and constitutes a compromise to which all Members have agreed
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Sources: Limited Liability Company Agreement (Lendway, Inc.)