12.2 Drag-Along Rights.

(a) At any time, if Avenue desires to effect a Drag-Along Sale, Avenue at its option may require all Members to sell such number of their respective Units on a pro-rata basis as Avenue desires such Members to sell to any Person that is not affiliated with Avenue in such Drag Along Sale for the consideration determined in accordance with Section 12.2(d) and otherwise on the same terms and conditions as apply to those Units to be sold by Avenue. [cut]


(b) Written notice of the Drag-Along Sale (the “Drag-Along Sale Notice”) shall be provided by Avenue to all holders of Units. Such Drag-Along Sale Notice shall disclose in reasonable detail the number and class of Units to be subject to the Drag-Along Sale (the "Drag-Along Securities”), an estimate of the proposed price, the other proposed terms and conditions of the proposed Drag-Along Sale (including copies of the definitive agreements relating thereto, if available) and the identity of the prospective purchaser.

(c)

(d)

(e)

- https://www.lawinsider.com/contracts/4F9mKimuiAjZzfgTBq5X8j/...

------

What type of notice should the majority owner be required to give to the minority owners before invoking drag rights? This issue was the subject of a ruling from the Delaware Court of Chancery in Halpin v. Riverstone National, Inc., C.A. No. 9796-VCG (Del. Ch. Feb. 26, 2015). The court held that a majority owner’s drag rights were not enforceable because it did not comply with the drag sale notice provisions contained in the governing agreement. The governing agreement required the majority owner to provide advance notice of a drag sale transaction, but the majority owner did not give notice of the drag sale until after it had already occurred. - https://www.gibsondunn.com/issues-and-best-practices-in-draf...

----

Examples of Drag-Along Sale in a sentence

The Notice shall contain written notice of the exercise of the Drag-Along Right pursuant to this Section 8.6, setting forth the consideration to be paid by the Drag-Along Purchaser and the other material terms and conditions of the Drag-Along Sale. The price payable in such Transfer shall be the Drag-Along Sale Price. Subject to Section 7.4(c), you shall be required to participate in the Drag-Along Sale on the terms and conditions set forth in the Drag-Along Notice. - https://www.lawinsider.com/dictionary/drag-along-sale

--------

On July 23, 2019, Accel shareholders holding over 58% of the Company’s outstanding shares served formal notice on the Company and all of the Company’s other shareholders (the “Drag-along Notice”) of their election to sell their shares to TPG Pace pursuant to the previously-announced Transaction Agreement, dated as of June 13, 2019, as amended on July 22, 2019, among certain Accel shareholders and TPG Pace (the “Stock Purchase”), and to exercise their drag-along rights under the Company’s Articles of Incorporation - https://www.businesswire.com/news/home/20190724005436/en/Acc...