Tag-Along Right

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 ?
refusal and a tag-along right in relation to all of Israel 18
If the investor is not willing to remain a co-owner with the proposed third-party purchaser, the minority investor can elect to exercise its tag-along right and participate in the sale to the third party.
If Exelon were to exercise its Tag-along Right, the consideration offered by FPL Energy for a 50 percent interest in AmerGen would be applied pro rata to the interests of British Energy and Exelon, leaving each with a 25 percent interest in AmerGen.
The conditions precedent include the other shareholders of TAP not exercising their pre-emption rights and tag-along rights, and the approval of the board of directors of TAP.
The Company is listed in the BM&FBovespa Novo Mercado since 2006, with 100% tag-along rights and 100% payout ratio since 2009 and investors in 33 countries.
Profits interests are extremely flexible and may include terms that are typically found in traditional equity grants, including vesting requirements, acceleration and forfeiture provisions, voting restrictions (if desired), drag-along and tag-along rights, and other transfer restrictions.
Bank of America will no longer have the right to appoint a person to Itau Unibanco s board or have tag-along rights during an eventual sale of control of the Brazilian bank after the stake sales are finalized, Itau Unibanco added.
In the New Market, non-controlling shareholders will have tag-along rights and there will also be a permanent fiscal board controlled by minority shareholders to increase transparency.
These organizational documents contain customary provisions, including provisions relating to certain approval rights, preemptive rights, restrictions on transfer, rights of first refusal, tag-along rights, drag-along rights and other customary provisions.
All minority stockholders will have tag-along rights in the event a company is sold.
The most common forms of liquidity are registration rights, tag-along rights on future sales of equity by the company, and put and call arrangements.
Motient's ownership of TerreStar could increase to as much as 100%, assuming other TerreStar stock and option holders exercise their tag-along rights.