Dragalong Sample Clauses
A Dragalong clause allows majority shareholders to compel minority shareholders to join in the sale of a company on the same terms and conditions as the majority. In practice, if a majority owner finds a buyer for their shares, they can require minority owners to sell their shares as well, ensuring the buyer can acquire 100% ownership without resistance. This clause is primarily used to facilitate smoother company sales by preventing minority shareholders from blocking or complicating a full transfer of ownership.
Dragalong. If Stockholders holding at least a majority of Common Stock Equivalents at the time held by the Stockholders (the "Dragalong Group") determine to sell or exchange (in a sale or exchange of securities of the Company or in a merger, consolidation or other business combination or any similar transaction) in one or a series of bona fide arms-length transactions to an unrelated and unaffiliated Third party fifty percent (50%) or more of the Subject Securities at the time held by them (the actual percentage of the total number of Subject Securities held by the Dragalong Group represented by the Subject Securities determined to be so sold or exchanged being referred to as the "Dragalong Percentage"), then, upon 30 days' written notice from the Dragalong Group to the other Stockholders, which notice shall include reasonable details of the proposed sale or exchange including the proposed time and place of closing and the consideration to be received by the Dragalong Group (such notice being referred to as the "Sale Request"), each other Stockholder shall be obligated to, and shall, (i) sell, transfer and deliver, or cause to be sold, transferred and delivered, to such Third Party the Dragalong Percentage of the Subject Securities at the time held by such Stockholder, in the same transaction at the closing thereof and shall (A) execute and deliver such agreements for the purchase of such Subject Securities and other agreements, instruments and certificates as the members of the Dragalong Group shall execute and deliver in connection with such proposed transaction and (B) deliver certificates and/or other instruments representing all of such Stockholder's Subject Securities, together with stock or other appropriate powers therefor duly executed, at the closing, free and clear of all claims, liens and encumbrances), and each Stockholder shall receive upon the closing of such transaction the same per share consideration to be paid or delivered by the proposed transferee in respect of such Stockholder's Subject Securities as shall be payable to the members of the Dragalong Group in respect of their Subject Securities, and (ii) if stockholder approval of the transaction is required, vote such Stockholder's Common Stock in favor thereof.
Dragalong