Tag-Along Right

(redirected from Co-Sale Rights)

Tag-Along Right

The contractually guaranteed right of a minority shareholder to sell his/her stake in a company if the majority shareholder does so. The tag-along rights further guarantee the exact same terms to the minority shareholder. This protects the minority shareholder from the possibility that a new majority owner will come along and ruin the company or take it in a direction disadvantageous to the minority shareholder. Tag-along rights are also called co-sale rights and are common in venture capital agreements.
References in periodicals archive ?
Certain investors in NextPoint Networks have formally notified Safeguard that they will exercise their co-sale rights and will therefore participate in the sale of NextPoint Networks shares to Saints.
Quincy granted to HHB and Westgate certain co-sale rights.
In addition, the exercise of the warrants automatically terminated the company's stockholders' agreement, which gave preferential rights to certain shareholders, including Rights of First Refusal, Co-Sale Rights, Tag Along Rights, Preemptive Rights and the right to name directors.
In connection with this agreement and as a condition to closing, ThinkTank will enter into an agreement with GolfGear and Wyngate Ltd, a significant shareholder of GolfGear, providing both ThinkTank and Wyngate with certain rights of first offer, co-sale rights and piggy-back registration rights as well as a voting agreement which provides ThinkTank and Wyngate each the right to designate four of the eight designees on the board of directors.