AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
of
STONEFIELD LOGISTICS GROUP INC.
a Delaware corporation
Dated as of December 12, 2023
among
STONEFIELD LOGISTICS GROUP INC.,
RIDGELINE CAPITAL PARTNERS FUND III, L.P.,
and
THE MEZZ HOLDERS LISTED ON SCHEDULE A HERETO
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AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
This AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT (this "Agreement") is entered into as of December 12, 2023, by and among:
(1) Stonefield Logistics Group Inc., a Delaware corporation (the "Company");
(2) Ridgeline Capital Partners Fund III, L.P., a Delaware limited partnership (the "Sponsor"); and
(3) Each of the Mezzanine Equitization Recipients listed on Schedule A hereto (collectively, the "Mezz Holders" and, together with the Sponsor, the "Stockholders").
The Company and the Stockholders are sometimes referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, the Company was acquired by Ridgeline Capital Partners Fund III, L.P. in a leveraged buyout that closed on December 15, 2017 (the "Original Closing Date"), and the Sponsor previously held 100% of the outstanding common equity of the Company;
WHEREAS, in connection with the Original Closing Date, the Company and the Sponsor entered into that certain Stockholders' Agreement dated as of December 15, 2017 (the "Original Stockholders' Agreement"), which set forth certain rights and obligations of the parties thereto with respect to the governance and equity securities of the Company;
WHEREAS, as a result of operational underperformance and the macroeconomic environment, the Company undertook a comprehensive review of its capital structure and engaged in arm's-length negotiations with its key creditor constituencies beginning in early 2023;
WHEREAS, on June 30, 2023, the Company, the Sponsor, and certain holders of the Company's 11.50% Senior Secured Second Lien Notes due June 15, 2025 (CUSIP 861537 AA 2) (the "Mezzanine Notes"), issued under that certain Indenture dated December 15, 2017 (the "Mezzanine Indenture"), between the Company, as Issuer, and Continental Fiduciary Trust Company, as Trustee, entered into a Restructuring Support Agreement (the "RSA"), which set forth the agreed framework for a consensual out-of-court restructuring of the Company's capital structure, with a long-stop date of December 31, 2023;
WHEREAS, pursuant to that certain Exchange Agreement dated December 8, 2023 (the "Exchange Agreement"), among the Company and the exchanging holders of the Mezzanine Notes, the Mezz Holders have exchanged $134.5 million in aggregate principal amount of Mezzanine Notes (plus waiver of $8.1 million in accrued payment-in-kind interest thereon) for (i) shares of the Company's Series A Preferred Stock with an aggregate liquidation preference of $35.0 million and a 10.00% payment-in-kind dividend rate, and (ii) shares of Common Stock representing 47.5% of the pro forma common equity of the Company (collectively, the "Equitization");
WHEREAS, following the consummation of the transactions contemplated by the Exchange Agreement and the RSA, the pro forma common equity ownership of the Company is as follows: the Sponsor — 47.5%; the Mezz Holders (collectively) — 47.5%; and the Management Incentive Plan (as defined below) — 5.0%;
WHEREAS, in connection with the restructuring, the Company's Amended and Restated Certificate of Incorporation and the Certificate of Designations for the Series A Preferred Stock were duly filed with the Secretary of State of the State of Delaware on December 12, 2023;
WHEREAS, the Sponsor has committed to contribute, and on December 15, 2023 shall contribute, $12.5 million in new cash equity to the Company (the "Sponsor Cash Contribution") to fund working capital needs and transaction costs associated with the restructuring;
WHEREAS, the Parties desire to amend and restate the Original Stockholders' Agreement in its entirety and to set forth their agreements regarding the governance, transfer, and other matters with respect to the Company and its Equity Securities (as defined below) following the consummation of the Equitization; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following terms have the meanings set forth below:
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by," and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. For the avoidance of doubt, (i) with respect to the Sponsor, the term "Affiliate" shall include Ridgeline Capital Management III LLC, any predecessor or successor fund managed by Ridgeline Capital Management III LLC or its Affiliates, and any portfolio company of the foregoing (other than the Company and its Subsidiaries), and (ii) with respect to each Mezz Holder, the term "Affiliate" shall include any fund, account, or investment vehicle managed by the same investment manager or investment adviser as such Mezz Holder.
"Agreement" means this Amended and Restated Stockholders' Agreement, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof.
"Amended and Restated First Lien Credit Agreement" means that certain Amended and Restated Credit Agreement dated as of December 1, 2023, among the Company, as Borrower, Stonefield Logistics Holdings LLC, as Holdings, the lenders party thereto, and Pinnacle National Bank, N.A., as Administrative Agent and Collateral Agent, as the same may be amended, restated, supplemented, refinanced, or otherwise modified from time to time.
"Board" means the Board of Directors of the Company, as constituted from time to time in accordance with this Agreement and the Certificate of Incorporation.
"Business Day" means any day that is not a Saturday, Sunday, or other day on which commercial banks in New York, New York are authorized or required by law to remain closed.
"Certificate of Designations" means the Certificate of Designations, Preferences, and Rights of the Series A Preferred Stock of Stonefield Logistics Group Inc., as filed with the Secretary of State of the State of Delaware on December 12, 2023, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Certificate of Incorporation" means the Amended and Restated Certificate of Incorporation of Stonefield Logistics Group Inc., as filed with the Secretary of State of the State of Delaware on December 12, 2023, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Change of Control" means any transaction or series of related transactions as a result of which any Person or group of Persons (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) (other than the Sponsor, the Mezz Holders, and their respective Permitted Transferees) acquires, directly or indirectly, Equity Securities representing more than 50% of the voting power of the then-outstanding voting equity of the Company. For the avoidance of doubt, a "Change of Control" hereunder shall also constitute a "Change of Control" (or comparable term) under each of (i) the Amended and Restated First Lien Credit Agreement and (ii) the Super-Priority Credit Agreement, in each case, triggering a mandatory prepayment at a price equal to 101% of the aggregate principal amount thereof, together with accrued and unpaid interest thereon.
"Closing Date" means December 19, 2023, the date on which the transactions contemplated by the Exchange Agreement and the RSA are consummated.
"Common Stock" means the common stock of the Company, par value $0.01 per share.
"Company" means Stonefield Logistics Group Inc., a Delaware corporation (Employer Identification Number 83-2457109; Delaware File No. 6341872), with its principal executive offices at 4200 Commerce Street, Suite 1500, Dallas, Texas 75201, and its successors and assigns.
"Drag-Along Sale" has the meaning set forth in Section 7.1 of this Agreement.
"Equity Securities" means the Common Stock, the Series A Preferred Stock, and any other equity or equity-linked securities of the Company, including, without limitation, options, warrants, restricted stock, restricted stock units, or other rights to acquire or receive equity securities of the Company, whether now existing or hereafter created.
"Exchange Agreement" means that certain Exchange Agreement dated as of December 8, 2023, among the Company and the exchanging holders of the Mezzanine Notes, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"GAAP" means generally accepted accounting principles in the United States, as in effect from time to time.
"Governmental Authority" means any federal, state, local, foreign, or supranational government, governmental subdivision, governmental authority, court, tribunal, arbitral body, administrative agency, or regulatory body.
"Independent Director" has the meaning set forth in Section 2.1(d) of this Agreement.
"Intercreditor Agreement" means that certain Amended and Restated Intercreditor Agreement dated as of November 10, 2023, among Pinnacle National Bank, N.A. (as First Lien Agent), Belvedere Credit Opportunities Fund LP (as Super-Priority Agent), and the Company and its Subsidiaries, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Law" means any federal, state, local, foreign, or supranational statute, law, rule, regulation, ordinance, order, judgment, decree, or governmental requirement of any kind.
"Management Holders" means the holders of Common Stock issued under the MIP, which shares represent, in the aggregate, 5.0% of the Pro Forma Common Equity.
"Mezz Holders" means the former holders of Mezzanine Notes who received Equity Securities pursuant to the Exchange Agreement, including Graystone Mezzanine Capital Fund II LP, Ashland Structured Credit LLC, Dunmore Special Situations Fund LP, and the other holders listed on Schedule A hereto, together with their Permitted Transferees who have executed and delivered a Joinder Agreement.
"Mezz Holder Designees" has the meaning set forth in Section 2.1(c) of this Agreement.
"Mezz Holder Majority" means those Mezz Holders holding a majority of the aggregate shares of Common Stock then held by all Mezz Holders.
"Mezzanine Indenture" means that certain Indenture dated as of December 15, 2017, between the Company, as Issuer, and Continental Fiduciary Trust Company, as Trustee, governing the Mezzanine Notes.
"Mezzanine Notes" means the Company's 11.50% Senior Secured Second Lien Notes due June 15, 2025 (CUSIP 861537 AA 2), issued pursuant to the Mezzanine Indenture.
"MIP" means the Management Incentive Plan authorized by the Board providing for the issuance of up to 5.0% of the Pro Forma Common Equity to management employees and directors of the Company and its Subsidiaries, on such terms and conditions as determined by the Compensation Committee.
"Permitted Transferee" has the meaning set forth in Section 5.2 of this Agreement.
"Person" means any individual, corporation, limited liability company, partnership, joint venture, trust, estate, unincorporated association, Governmental Authority, or any other entity.
"Pro Forma Common Equity" means the total outstanding Common Stock on a fully diluted basis following the consummation of the Equitization and the authorization of the MIP, comprised of 47.5% held by the Sponsor, 47.5% held by the Mezz Holders (collectively), and 5.0% reserved for the MIP.
"Qualified IPO" means an underwritten initial public offering of Common Stock pursuant to an effective registration statement under the Securities Act, in which shares of Common Stock are listed and traded on a nationally recognized securities exchange (including the New York Stock Exchange or the Nasdaq Stock Market), resulting in aggregate gross proceeds to the Company and/or selling stockholders of not less than $200.0 million.
"Registration Rights Agreement" means that certain Registration Rights Agreement dated as of December 12, 2023, among the Company, the Sponsor, and the Mezz Holders, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Restructuring Support Agreement" or "RSA" means that certain Restructuring Support Agreement dated as of June 30, 2023, among the Company, the Sponsor, and the holders of Mezzanine Notes party thereto, with a long-stop date of December 31, 2023, as the same may have been amended, supplemented, or otherwise modified prior to the consummation of the transactions contemplated thereby.
"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
"Series A Preferred Stock" means the Series A Preferred Stock of the Company designated pursuant to the Certificate of Designations, with an aggregate liquidation preference of $35.0 million and a 10.00% payment-in-kind dividend rate, and having such other rights, preferences, and privileges as set forth in the Certificate of Designations.
"Sponsor" means Ridgeline Capital Partners Fund III, L.P., a Delaware limited partnership, whose general partner is Ridgeline Capital Management III LLC, a Delaware limited liability company, with its principal office at 300 Park Avenue, 28th Floor, New York, New York 10022, and its Permitted Transferees who have executed and delivered a Joinder Agreement.
"Sponsor Designees" has the meaning set forth in Section 2.1(b) of this Agreement.
"Sponsor Majority" means the Sponsor and its Affiliates holding a majority of the aggregate shares of Common Stock then held by the Sponsor and its Affiliates.
"Subsidiary" or "Subsidiaries" means, with respect to the Company, (i) Stonefield Logistics Holdings LLC, a Delaware limited liability company (the direct parent/holding entity), (ii) Stonefield Freight Services LLC, a Texas limited liability company, (iii) Stonefield Last Mile Inc., a Delaware corporation, and (iv) Stonefield Warehousing LLC, a Texas limited liability company, and any other entity of which the Company, directly or indirectly, owns or controls more than 50% of the outstanding voting power or equity interests, whether now existing or hereafter formed or acquired.
"Super-Priority Credit Agreement" means that certain Super-Priority Credit Agreement dated as of November 17, 2023, among the Company, as Borrower, the lenders party thereto, and Belvedere Credit Opportunities Fund LP, as Administrative Agent and Collateral Agent, as the same may be amended, restated, supplemented, refinanced, or otherwise modified from time to time.
"Tag-Along Sale" has the meaning set forth in Section 6.1 of this Agreement.
"Transfer" has the meaning set forth in Section 5.1 of this Agreement.
Section 1.2 Interpretation. Unless the context requires otherwise: (a) the terms "hereof," "herein," "hereby," "hereto," and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; (b) references to an "Article," "Section," "Schedule," or "Exhibit" refer to the corresponding Article, Section, Schedule, or Exhibit of or to this Agreement; (c) words importing the singular include the plural and vice versa, and words denoting any gender include all genders; (d) the word "including" means "including, without limitation"; (e) references to any agreement or document mean such agreement or document as amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms (unless otherwise specified); (f) references to any Law mean such Law as amended, supplemented, or otherwise modified from time to time and any successor Law thereto; and (g) headings and captions are for convenience of reference only and shall not be used in interpreting this Agreement.
ARTICLE II — BOARD OF DIRECTORS; GOVERNANCE
Section 2.1 Board Composition.
(a) Size. The Board shall consist of seven (7) directors. The number of directors constituting the Board shall not be increased or decreased except with the prior written consent of the Sponsor Majority and the Mezz Holder Majority, and any such increase or decrease shall be subject to the protective provisions set forth in Section 2.5 of this Agreement.
(b) Sponsor Designees. For so long as the Sponsor and its Affiliates hold shares of Common Stock representing at least 25% of the total outstanding Common Stock, the Sponsor shall have the right to designate three (3) directors to the Board (each, a "Sponsor Designee" and, collectively, the "Sponsor Designees"). The initial Sponsor Designees shall be:
(i) Julian Voight, Managing Director of Ridgeline Capital Management III LLC;
(ii) Serena Chu, Principal of Ridgeline Capital Management III LLC; and
(iii) one (1) additional designee to be named by the Sponsor, such designee to be identified and notified to the Company and the Mezz Holder Majority within thirty (30) days following the Closing Date.
(c) Mezz Holder Designees. For so long as the Mezz Holders collectively hold shares of Common Stock representing at least 25% of the total outstanding Common Stock, the Mezz Holder Majority shall have the right to designate three (3) directors to the Board (each, a "Mezz Holder Designee" and, collectively, the "Mezz Holder Designees"). The initial Mezz Holder Designees shall be identified by the Mezz Holder Majority and notified to the Company and the Sponsor within thirty (30) days following the Closing Date.
(d) Independent Director. One (1) director shall be an individual who is not an employee, officer, or Affiliate of the Sponsor, any Mezz Holder, or the Company, and who does not have any material relationship (whether direct or indirect) with the Sponsor, any Mezz Holder, or the Company (the "Independent Director"). The Independent Director shall be mutually agreed upon by the Sponsor Majority and the Mezz Holder Majority. The Independent Director shall qualify as "independent" under the rules of the New York Stock Exchange and the Nasdaq Stock Market (as if the Common Stock were listed thereon) and under Section 10A of the Securities Exchange Act of 1934, as amended. If the Sponsor Majority and the Mezz Holder Majority are unable to agree on the identity of the Independent Director within sixty (60) days following the Closing Date, the Independent Director shall be selected by an independent search firm mutually agreed upon by the Sponsor Majority and the Mezz Holder Majority.
(e) Management Observers. Marcus Delano, in his capacity as Chief Executive Officer of the Company, and Priya Sundaram, in her capacity as Chief Financial Officer of the Company, shall have the right to attend all meetings of the Board (including telephonic and video conference meetings) as non-voting observers and shall receive all materials distributed to the directors in connection with such meetings at the same time as such materials are distributed to the directors; provided, however, that the Board may exclude such observers from any portion of a Board meeting designated as executive session by a majority of the directors, including any discussion or deliberation relating to (i) the terms of employment, compensation, or performance evaluation of such observers, (ii) potential conflicts of interest involving such observers, or (iii) privileged attorney-client communications. For the avoidance of doubt, neither Marcus Delano nor Priya Sundaram shall be deemed a director of the Company by virtue of serving as a management observer, unless separately designated as a director by the applicable designating party in accordance with this Section 2.1.
Section 2.2 Nomination, Removal, and Replacement of Directors.
(a) Exclusive Designation Right. Each designating party (the Sponsor, in the case of the Sponsor Designees, and the Mezz Holder Majority, in the case of the Mezz Holder Designees) shall have the exclusive right, at any time and from time to time, to remove and replace any or all of its designees on the Board, with or without cause, by delivering written notice to the Company and the other designating party. The Company and each Stockholder shall take all actions within their respective power (including voting their shares of Common Stock and executing and delivering written consents) to give effect to such removal and replacement.
(b) Ownership Threshold Step-Downs. The designation rights set forth in this Section 2.2 are subject to the following step-down provisions:
(i) Sponsor Step-Down. If the Sponsor's (and its Affiliates') ownership of Common Stock falls below 25% of the total outstanding Common Stock but remains at or above 10%, the Sponsor's designation rights shall be reduced to two (2) Sponsor Designees; if such ownership falls below 10% but remains at or above 5%, the Sponsor's designation rights shall be reduced to one (1) Sponsor Designee; and if such ownership falls below 5%, the Sponsor shall have no further designation rights.
(ii) Mezz Holder Step-Down. If the Mezz Holders' collective ownership of Common Stock falls below 25% of the total outstanding Common Stock but remains at or above 10%, the Mezz Holder Majority's designation rights shall be reduced to two (2) Mezz Holder Designees; if such ownership falls below 10% but remains at or above 5%, the Mezz Holder Majority's designation rights shall be reduced to one (1) Mezz Holder Designee; and if such ownership falls below 5%, the Mezz Holder Majority shall have no further designation rights.
Upon the occurrence of any step-down event described above, the applicable designating party shall promptly cause the requisite number of its designees to resign from the Board, and the resulting vacancy or vacancies shall not be filled except in accordance with the remaining provisions of this Section 2.2 and applicable Law.
(c) Vacancies. Any vacancy on the Board resulting from the death, disability, resignation, or removal of a Sponsor Designee shall be filled exclusively by the Sponsor (subject to the step-down provisions in Section 2.2(b)(i)). Any vacancy on the Board resulting from the death, disability, resignation, or removal of a Mezz Holder Designee shall be filled exclusively by the Mezz Holder Majority (subject to the step-down provisions in Section 2.2(b)(ii)). Any vacancy on the Board resulting from the death, disability, resignation, or removal of the Independent Director shall be filled by mutual agreement of the Sponsor Majority and the Mezz Holder Majority.
Section 2.3 Committees.
(a) Required Committees. The Board shall establish and at all times maintain (i) an Audit Committee and (ii) a Compensation Committee. The Board may establish such other committees as it may determine from time to time.
(b) Audit Committee. The Audit Committee shall consist of not fewer than three (3) directors, and shall include the Independent Director, at least one (1) Sponsor Designee, and at least one (1) Mezz Holder Designee. The Audit Committee shall be responsible for, among other things, (i) overseeing the Company's financial reporting, internal controls, and audit functions, (ii) appointing, retaining, compensating, and overseeing the work of the Company's independent auditor, (iii) reviewing and approving related-party transactions in accordance with Section 2.5(vi), and (iv) such other duties as may be delegated to it by the Board. The Independent Director shall serve as the chair of the Audit Committee.
(c) Compensation Committee. The Compensation Committee shall consist of not fewer than three (3) directors, and shall include at least one (1) Sponsor Designee and at least one (1) Mezz Holder Designee. The Compensation Committee shall be responsible for, among other things, (i) administering the MIP, including the granting of awards, the determination of vesting schedules, and the establishment of performance conditions, (ii) reviewing and approving the compensation of the Company's executive officers, and (iii) such other duties as may be delegated to it by the Board.
(d) Other Committees. The composition and authority of any other committee of the Board shall be determined by the Board, subject to the protective provisions set forth in Section 2.5.
Section 2.4 Board Meetings; Quorum; Actions.
(a) Frequency. The Board shall meet at least quarterly and at such other times as may be necessary to fulfill its obligations under this Agreement and applicable Law. The Board shall hold at least one (1) in-person meeting per calendar year at the Company's headquarters in Dallas, Texas, or such other location as may be determined by the Board. Meetings may otherwise be conducted telephonically or by video conference.
(b) Notice. Written notice of each meeting of the Board shall be provided to each director at least ten (10) Business Days prior to such meeting (or such shorter period as may be agreed upon by all directors), together with an agenda and any materials to be considered at such meeting. Written notice of any special meeting of the Board shall be provided at least five (5) Business Days prior to such meeting (or such shorter period as may be agreed upon by a majority of the directors).
(c) Quorum. A quorum for the transaction of business at any meeting of the Board shall require the presence (in person, by telephone, or by video conference) of a majority of the directors then in office; provided, however, that a quorum must include at least one (1) Sponsor Designee and one (1) Mezz Holder Designee. If a quorum is not present at any duly called meeting, the meeting may be adjourned to a date not less than five (5) Business Days thereafter, at which adjourned meeting a quorum shall consist of a majority of the directors then in office, irrespective of whether a Sponsor Designee or a Mezz Holder Designee is present; provided, however, that no action requiring supermajority approval under Section 2.5 may be taken at any such adjourned meeting without the requisite approvals set forth therein.
(d) Voting. Except as otherwise provided in Section 2.5, all actions of the Board shall require the affirmative vote of a majority of the directors present at a duly convened meeting at which a quorum is present. Each director shall have one (1) vote. Actions may also be taken by unanimous written consent of all directors then in office without a meeting.
Section 2.5 Protective Provisions (Supermajority/Consent Rights).
Notwithstanding any other provision of this Agreement, the Certificate of Incorporation, or the Company's bylaws, the following actions shall require the affirmative vote of at least five (5) of the seven (7) directors then in office, which affirmative vote must include the vote of at least two (2) Sponsor Designees and at least two (2) Mezz Holder Designees:
(i) Change of Control Transactions. Any Change of Control transaction, merger, consolidation, recapitalization, business combination, or sale, lease, exchange, or other disposition of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole;
(ii) Equity Issuances and Indebtedness. Any (A) issuance of Equity Securities (other than shares of Common Stock issued under the MIP in an aggregate amount not to exceed 5.0% of the Pro Forma Common Equity, or shares issued in connection with stock splits, stock dividends, or similar recapitalizations), or (B) incurrence, assumption, guarantee, or refinancing of indebtedness for borrowed money in excess of $5.0 million in the aggregate, other than (1) borrowings under the Amended and Restated First Lien Credit Agreement in accordance with its terms, (2) borrowings under the Super-Priority Credit Agreement in accordance with its terms, and (3) trade payables incurred in the ordinary course of business;
(iii) Bankruptcy or Insolvency. The commencement of any case, proceeding, or other action under any applicable bankruptcy, insolvency, reorganization, or similar Law on behalf of the Company or any of its material Subsidiaries, or the making of a general assignment for the benefit of creditors, or the consent to or acquiescence in the appointment of a receiver, trustee, custodian, or liquidator for the Company or any of its material Subsidiaries;
(iv) Amendments. Any amendment, modification, restatement, or waiver of (A) the Certificate of Incorporation, (B) the Certificate of Designations, (C) the bylaws of the Company, or (D) this Agreement;
(v) Dividends and Distributions. The declaration, setting aside, or payment of any dividend or other distribution on Common Stock (whether in cash, securities, or other property), other than (A) payment-in-kind dividends on the Series A Preferred Stock in accordance with the Certificate of Designations, and (B) dividends or distributions on Common Stock payable solely in additional shares of Common Stock;
(vi) Related-Party Transactions. The entry into, amendment, or modification of any transaction, agreement, or arrangement between or among the Company or any of its Subsidiaries, on the one hand, and the Sponsor, any Mezz Holder, or any of their respective Affiliates (including, for the avoidance of doubt, any portfolio company of the Sponsor), on the other hand, if such transaction involves aggregate consideration or payments in excess of $1.0 million, other than (A) reasonable and customary indemnification and expense reimbursement arrangements in favor of directors and officers, and (B) transactions expressly contemplated by this Agreement;
(vii) Capital Expenditures. The approval of annual capital expenditure budgets providing for aggregate capital expenditures in excess of 110% of the capital expenditures set forth in the then-current Board-approved business plan;
(viii) Hiring and Termination of Senior Officers. The hiring, termination (with or without cause), or material modification of the compensation arrangements of the Chief Executive Officer or the Chief Financial Officer of the Company;
(ix) MIP Modifications. The adoption, termination, or material modification of the MIP, including any increase in the aggregate number of shares of Common Stock reserved for issuance thereunder; and
(x) Liquidation and Dissolution. Any liquidation, dissolution, or winding up of the Company or any of its material Subsidiaries, whether voluntary or involuntary (to the extent within the control of the Company).
For the avoidance of doubt, the protective provisions set forth in this Section 2.5 are in addition to, and not in lieu of, any approval or consent rights of the holders of the Series A Preferred Stock set forth in the Certificate of Designations or any approval or consent rights under the Certificate of Incorporation or applicable Law.
Section 2.6 Officers.
(a) Initial Officers. The initial officers of the Company shall be:
(i) Marcus Delano — Chief Executive Officer;
(ii) Priya Sundaram — Chief Financial Officer; and
(iii) Howard Kessler — General Counsel and Secretary.
(b) Service. Each officer of the Company shall serve at the pleasure of the Board, subject to the terms of any employment agreement between such officer and the Company, and subject to the protective provisions set forth in Section 2.5(viii) with respect to the hiring or termination of the Chief Executive Officer or the Chief Financial Officer.
Section 2.7 Directors' and Officers' Insurance; Indemnification.
(a) D&O Insurance. The Company shall obtain and maintain directors' and officers' liability insurance with aggregate coverage limits of not less than $15.0 million, on terms and conditions reasonably acceptable to the Board. As of the date hereof, the Company's directors' and officers' liability insurance is maintained with Northgate Specialty Insurance Company under Policy No. NSI-DOL-2023-07721. In connection with the consummation of the transactions contemplated by the Exchange Agreement, the Company has procured a six (6)-year "tail" insurance policy (the "D&O Tail Policy") effective as of the Closing Date (December 19, 2023), which shall provide coverage for claims arising from acts or omissions occurring prior to the Closing Date for a period of six (6) years following the Closing Date. The Company shall not take any action or fail to take any action that would result in the cancellation or lapse of such D&O Tail Policy.
(b) Indemnification. The Company shall indemnify, defend, and hold harmless each director, officer, and management observer of the Company (and their respective heirs, executors, and personal representatives) to the fullest extent permitted under the Delaware General Corporation Law, the Certificate of Incorporation, and the Company's bylaws against all losses, claims, damages, liabilities, costs, and expenses (including reasonable attorneys' fees and disbursements) arising out of or relating to their service in such capacity.
(c) Advancement of Expenses. The Company shall advance expenses (including reasonable attorneys' fees and disbursements) incurred by any director, officer, or management observer in connection with any action, suit, or proceeding for which indemnification may be sought pursuant to Section 2.7(b), to the fullest extent permitted under the Delaware General Corporation Law, subject to an undertaking by such person to repay such amounts if it is ultimately determined that such person is not entitled to indemnification.
Section 2.8 Expenses.
The Company shall reimburse each director for all reasonable and documented out-of-pocket expenses incurred by such director in connection with attending meetings of the Board and any committees thereof, including travel, lodging, and meal expenses. Such reimbursement shall be made within thirty (30) days following submission of a written expense report with supporting documentation.
ARTICLE III — INFORMATION RIGHTS
Section 3.1 Financial Information.
The Company shall provide to each Stockholder (and, with respect to the Mezz Holders, to the Mezz Holder representative designated by the Mezz Holder Majority for such purpose) the following financial information:
(a) Annual Financial Statements. Within one hundred twenty (120) days after the end of each fiscal year, audited consolidated financial statements of the Company and its Subsidiaries, prepared in accordance with GAAP, audited by Whitfield & Pryce LLP (or such other independent registered public accounting firm as may be engaged with the approval of the Board), including (i) a consolidated balance sheet as of the last day of such fiscal year, (ii) consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for such fiscal year, and (iii) notes to such financial statements. The Company's current engagement partner at Whitfield & Pryce LLP is Todd Ashburn, CPA. Each set of annual financial statements shall be accompanied by an unqualified opinion of the independent auditor.
(b) Quarterly Financial Statements. Within sixty (60) days after the end of each of the first three fiscal quarters of each fiscal year, unaudited consolidated financial statements of the Company and its Subsidiaries, prepared in accordance with GAAP (subject to normal year-end adjustments and the absence of footnote disclosures), including (i) a consolidated balance sheet as of the last day of such fiscal quarter, (ii) consolidated statements of income and cash flows for such fiscal quarter and the year-to-date period, and (iii) a management discussion and analysis narrative summarizing key operational and financial developments during such quarter.
(c) Monthly Management Reports. Within thirty (30) days after the end of each calendar month, unaudited monthly financial reports of the Company and its Subsidiaries, including (i) revenue, (ii) Adjusted EBITDA (as defined in the Amended and Restated First Lien Credit Agreement), (iii) a liquidity summary (including cash on hand and availability under revolving credit facilities), and (iv) a comparison to the applicable Board-approved budget, with explanations for material variances.
(d) Annual Budget and Business Plan. No later than thirty (30) days prior to the beginning of each fiscal year, a proposed annual operating budget and three-year business plan, including projected revenue, expenses, capital expenditures, Adjusted EBITDA, and liquidity. Such proposed budget and business plan shall be subject to approval by the Board.
Section 3.2 Compliance Reports.
The Company shall promptly deliver to each Stockholder (and, with respect to the Mezz Holders, to the Mezz Holder representative designated by the Mezz Holder Majority for such purpose) copies of all (a) compliance certificates, (b) financial covenant calculations, and (c) other financial reports delivered by the Company to the lenders, agents, or trustees under the Amended and Restated First Lien Credit Agreement (Pinnacle National Bank, N.A., as Administrative Agent) and the Super-Priority Credit Agreement (Belvedere Credit Opportunities Fund LP, as Administrative Agent), in each case, concurrently with the delivery thereof to such lenders, agents, or trustees. Without limiting the generality of the foregoing, the Company shall provide to each Stockholder calculations demonstrating compliance with the following post-restructuring financial covenants:
(i) Total Net Leverage Ratio: Total Net Leverage (as defined in the Amended and Restated First Lien Credit Agreement) not to exceed (A) 6.50x for the fiscal quarter ending December 31, 2025 and each fiscal quarter thereafter through and including the fiscal quarter ending September 30, 2027, and (B) 5.75x for the fiscal quarter ending December 31, 2027 and each fiscal quarter thereafter; and
(ii) Minimum Liquidity: the Company shall maintain Minimum Liquidity (as defined in the Amended and Restated First Lien Credit Agreement) of not less than $20.0 million at all times, tested on the last Business Day of each fiscal quarter.
Section 3.3 Access Rights.
Each Stockholder (together with its authorized representatives) holding at least 10% of the then-outstanding Common Stock shall have reasonable access, upon reasonable prior written notice (not less than five (5) Business Days) and during normal business hours, to the Company's books, records, properties, offices, and senior management. Such access shall not unreasonably interfere with the Company's operations and shall be subject to compliance with applicable Law and Section 3.4.
Section 3.4 Confidentiality.
All information provided by the Company to any Stockholder or its representatives pursuant to this Article III (including any information obtained through the exercise of access rights under Section 3.3) shall be treated as strictly confidential and shall not be disclosed by any Stockholder or its representatives to any Person other than such Stockholder's Affiliates, partners, members, directors, officers, employees, agents, advisors, counsel, accountants, and other representatives who have a need to know such information and who are bound by obligations of confidentiality at least as restrictive as those set forth in this Section 3.4 (collectively, such Stockholder's "Permitted Recipients"); provided, however, that the foregoing confidentiality obligation shall not apply to: (a) information that becomes publicly available other than as a result of a breach of this Section 3.4; (b) information that was already known to the Stockholder prior to receipt from the Company (as evidenced by such Stockholder's records); (c) information that is independently developed by the Stockholder without use of or reference to the Company's confidential information; (d) information that is disclosed pursuant to a requirement of Law, a subpoena, civil investigative demand, or other legal process (provided that the disclosing Stockholder shall, to the extent legally permitted, provide prompt written notice to the Company of such requirement and cooperate with the Company in seeking a protective order or other appropriate remedy); or (e) information disclosed in connection with a proposed Transfer of Equity Securities to a bona fide potential transferee who has executed a confidentiality agreement with the Company on terms reasonably acceptable to the Company.
ARTICLE IV — PREEMPTIVE RIGHTS
Section 4.1 Right of First Offer.
If the Company proposes to issue any new Equity Securities (the "New Securities"), each Stockholder holding at least 10% of the then-outstanding Common Stock (each, an "Eligible Stockholder") shall have the right to purchase up to its pro rata share of such New Securities on the same terms and conditions as the proposed issuance. For purposes of this Article IV, a Stockholder's "pro rata share" shall mean a fraction, the numerator of which is the number of shares of Common Stock held by such Stockholder immediately prior to such issuance and the denominator of which is the total number of shares of Common Stock outstanding immediately prior to such issuance (in each case, on a fully diluted basis). The preemptive rights set forth in this Article IV shall not apply to:
(i) shares of Common Stock issued under the MIP in an aggregate amount not to exceed 5.0% of the Pro Forma Common Equity;
(ii) shares of Equity Securities issued in connection with stock splits, stock dividends, combinations, recapitalizations, or similar transactions;
(iii) shares of Equity Securities issued in connection with acquisitions, mergers, or strategic transactions approved by the Board in accordance with Section 2.5; and
(iv) shares of Equity Securities issued upon the exercise, conversion, or exchange of any Equity Securities issued in compliance with this Article IV (or otherwise excluded from this Article IV pursuant to the foregoing clauses (i) through (iii)).
Section 4.2 Procedures.
(a) Issuance Notice. The Company shall deliver a written notice (an "Issuance Notice") to each Eligible Stockholder at least twenty (20) Business Days prior to the proposed date of issuance of any New Securities, which Issuance Notice shall specify (i) the type and aggregate amount of New Securities proposed to be issued, (ii) the purchase price per security (or the formula or methodology for determining such price), (iii) the proposed date of issuance, (iv) the identity of any proposed purchaser(s) (if known), and (v) all other material terms and conditions of the proposed issuance.
(b) Exercise Period. Each Eligible Stockholder shall have fifteen (15) Business Days from the date of receipt of the Issuance Notice (the "Exercise Period") to elect to purchase its pro rata share of the New Securities by delivering written notice of such election (an "Exercise Notice") to the Company, specifying the number of New Securities such Eligible Stockholder elects to purchase (up to its pro rata share). An Eligible Stockholder's failure to deliver an Exercise Notice within the Exercise Period shall be deemed a waiver of its preemptive rights with respect to such issuance.
(c) Over-Allotment. If any Eligible Stockholder declines to purchase all or any portion of its pro rata share of the New Securities, the Company shall promptly notify the remaining Eligible Stockholders who have exercised their preemptive rights in full (the "Fully Exercising Stockholders"), and each Fully Exercising Stockholder shall have an additional ten (10) Business Days from receipt of such notification to elect to purchase its pro rata share (based on the Common Stock holdings of the Fully Exercising Stockholders) of the unsubscribed portion of the New Securities. This process shall be repeated until all unsubscribed New Securities have been allocated or until no Fully Exercising Stockholder elects to purchase additional New Securities.
(d) Issuance to Third Parties. To the extent that any New Securities remain unsubscribed following completion of the procedures set forth in Sections 4.2(b) and 4.2(c), the Company may issue such remaining New Securities to any Person on terms no more favorable to such Person than those set forth in the Issuance Notice, at any time within ninety (90) days following the expiration of the over-allotment period. If the Company does not consummate such issuance within such ninety (90)-day period, it must again comply with the procedures of this Article IV before issuing such New Securities.
Section 4.3 Waiver.
The preemptive rights set forth in this Article IV may be waived by any Eligible Stockholder with respect to any particular issuance of New Securities by delivering a written waiver to the Company, which waiver shall be irrevocable with respect to such issuance but shall not constitute a waiver of such Stockholder's preemptive rights with respect to any future issuance.
ARTICLE V — TRANSFER RESTRICTIONS
Section 5.1 General Restriction.
No Stockholder shall sell, assign, transfer, pledge, hypothecate, encumber, gift, or otherwise dispose of (whether directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise) (each, a "Transfer") any Equity Securities except in compliance with this Article V. Any purported Transfer in violation of this Agreement shall be void and of no force or effect, and the Company shall not, and shall instruct its transfer agent not to, record or register any such purported Transfer on its books and records. For the avoidance of doubt, the granting of a proxy with respect to voting rights in Equity Securities shall not constitute a Transfer for purposes of this Article V, but the pledge or hypothecation of Equity Securities shall constitute a Transfer.
Section 5.2 Permitted Transfers.
Notwithstanding Section 5.1, the following Transfers shall be permitted without compliance with Sections 5.3 and 5.5 (each such transferee, a "Permitted Transferee"):
(a) Sponsor Permitted Transfers. The Sponsor may Transfer Equity Securities to:
(i) any Affiliate of the Sponsor, including Ridgeline Capital Management III LLC, any predecessor or successor general partner of the Sponsor, or any successor fund managed by Ridgeline Capital Management III LLC or its Affiliates;
(ii) any limited partner of Ridgeline Capital Partners Fund III, L.P. in connection with a distribution of securities in kind upon the liquidation, dissolution, or winding up of the Sponsor, or any interim distribution of securities in kind made in the ordinary course of the Sponsor's business; or
(iii) any other transferee approved in advance in writing by the Mezz Holder Majority;
provided, in each case, that such Permitted Transferee shall, as a condition precedent to the consummation of such Transfer, execute and deliver to the Company a Joinder Agreement in substantially the form attached hereto as Exhibit A, agreeing to be bound by all the terms and conditions of this Agreement as a "Stockholder" hereunder.
(b) Mezz Holder Permitted Transfers. Each Mezz Holder may Transfer Equity Securities to:
(i) any Affiliate of such Mezz Holder;
(ii) any fund, account, or investment vehicle managed by the same investment manager or investment adviser as such Mezz Holder (including, by way of example, Tralvendo Asset Management LLC, to the extent managing Tralvendo CLO 2018-I, Ltd. or any other fund or account); or
(iii) any other transferee approved in advance in writing by the Sponsor Majority;
provided, in each case, that such Permitted Transferee shall, as a condition precedent to the consummation of such Transfer, execute and deliver to the Company a Joinder Agreement in substantially the form attached hereto as Exhibit A, agreeing to be bound by all the terms and conditions of this Agreement as a "Stockholder" hereunder.
(c) Management Holder Transfers. Management Holders may Transfer Equity Securities only as expressly permitted under the terms of the MIP, the applicable award agreement or restricted stock agreement, and with the prior approval of the Board (including any applicable committee thereof). Any such Transfer shall be subject to all transfer restrictions and repurchase rights set forth in the MIP documents.
Section 5.3 Right of First Refusal.
(a) General. If any Stockholder (the "Transferring Stockholder") proposes to Transfer any Equity Securities to any Person (other than a Permitted Transfer pursuant to Section 5.2), the Transferring Stockholder shall first offer such Equity Securities to the Company and then to the other Stockholders in accordance with the procedures set forth in this Section 5.3.
(b) Transfer Notice. The Transferring Stockholder shall deliver a written notice (a "Transfer Notice") to the Company and each other Stockholder, specifying: (i) the number, class, and series of Equity Securities proposed to be Transferred, (ii) the identity of the proposed transferee, (iii) the purchase price per security (or the formula or methodology for determining such price), (iv) the proposed date of Transfer, and (v) all other material terms and conditions of the proposed Transfer (including the form of consideration).
(c) Company ROFR. The Company shall have fifteen (15) Business Days from receipt of the Transfer Notice (the "Company ROFR Period") to elect to purchase all (but not less than all) of the Equity Securities specified in the Transfer Notice at the price and on the terms set forth therein, by delivering written notice of such election to the Transferring Stockholder. If the Company elects to exercise its right of first refusal, the closing of such purchase shall occur within thirty (30) Business Days following delivery of the Company's election notice. The Company's right to purchase Equity Securities pursuant to this Section 5.3(c) is subject to compliance with applicable Law, including limitations on repurchases or redemptions under the Delaware General Corporation Law and any restrictive covenants under the Amended and Restated First Lien Credit Agreement and the Super-Priority Credit Agreement.
(d) Stockholder ROFR. If the Company declines to exercise its right of first refusal (or fails to respond within the Company ROFR Period), the Company shall promptly notify each other Stockholder (each, a "Remaining Stockholder"), and each Remaining Stockholder shall have fifteen (15) Business Days from receipt of such notification to elect to purchase its pro rata share of the Equity Securities specified in the Transfer Notice at the price and on the terms set forth therein, by delivering written notice of such election to the Transferring Stockholder and the Company. For purposes of this Section 5.3(d), each Remaining Stockholder's "pro rata share" shall mean a fraction, the numerator of which is the number of shares of Common Stock held by such Remaining Stockholder and the denominator of which is the total number of shares of Common Stock held by all Remaining Stockholders. If any Remaining Stockholder declines to purchase its full pro rata share, the remaining Remaining Stockholders who have exercised their rights in full shall have an additional ten (10) Business Days to purchase the unsubscribed portion pro rata. If the closing of such purchase shall occur within thirty (30) Business Days following delivery of the last Remaining Stockholder's election notice (or the expiration of the over-allotment period, as applicable).
(e) Transfer to Third Party. If the Company and the Remaining Stockholders do not collectively elect to purchase all of the Equity Securities specified in the Transfer Notice pursuant to Sections 5.3(c) and 5.3(d), the Transferring Stockholder may consummate the Transfer to the proposed transferee specified in the Transfer Notice on terms no more favorable to such transferee than those set forth in the Transfer Notice, at any time within ninety (90) days following the expiration of the applicable exercise periods; provided, however, that such Transfer shall be subject to (i) the joinder requirement set forth in Section 5.4, (ii) the tag-along rights set forth in Article VI (if applicable), and (iii) all applicable requirements of Section 5.6. If the Transferring Stockholder does not consummate such Transfer within such ninety (90)-day period, it must again comply with the procedures of this Section 5.3 before making any subsequent Transfer.
Section 5.4 Joinder Requirement.
As a condition precedent to the effectiveness of any Transfer of Equity Securities (other than a Transfer that is exempt from joinder as expressly provided in Section 5.2), the proposed transferee must execute and deliver to the Company a Joinder Agreement in substantially the form attached hereto as Exhibit A, agreeing to be bound by all the terms and conditions of this Agreement as a "Stockholder" hereunder, and agreeing that the Equity Securities so acquired shall be subject to all rights, obligations, and restrictions applicable to such Equity Securities under this Agreement. No Transfer shall be recorded on the books of the Company unless and until the Company has received a duly executed Joinder Agreement from the proposed transferee.
Section 5.5 Lock-Up Period.
(a) General Lock-Up. Notwithstanding anything to the contrary in this Article V, no Stockholder shall Transfer any Equity Securities (other than a Permitted Transfer pursuant to Section 5.2) during the eighteen (18)-month period commencing on the Closing Date (December 19, 2023) and ending on June 19, 2025 (the "Lock-Up Period").
(b) Exceptions. The restrictions set forth in Section 5.5(a) shall not apply to Transfers:
(i) in connection with a Qualified IPO;
(ii) in connection with a Drag-Along Sale pursuant to Article VII; or
(iii) in connection with a Tag-Along Sale pursuant to Article VI.
Section 5.6 Securities Law Compliance.
All Transfers of Equity Securities must be made in compliance with the Securities Act, applicable state securities or "blue sky" laws, and all other applicable Laws. In connection with any Transfer (other than a Transfer pursuant to an effective registration statement under the Securities Act), the Transferring Stockholder shall, upon request of the Company, deliver to the Company an opinion of counsel reasonably satisfactory to the Company in form and substance (or such other evidence reasonably satisfactory to the Company) to the effect that such Transfer is exempt from the registration requirements of the Securities Act and all applicable state securities laws. The Company shall not be required to register or recognize any Transfer that does not comply with this Section 5.6.
ARTICLE VI — TAG-ALONG RIGHTS
Section 6.1 Tag-Along Right.
If (a) the Sponsor (together with its Affiliates) proposes to Transfer, in one transaction or a series of related transactions, more than 50% of the aggregate shares of Common Stock held by the Sponsor (and its Affiliates) to one or more third parties that are not Permitted Transferees, or (b) any group of Mezz Holders holding a majority of the aggregate shares of Common Stock then held by all Mezz Holders proposes to Transfer, in one transaction or a series of related transactions, more than 50% of the aggregate shares of Common Stock held by all Mezz Holders to one or more third parties that are not Permitted Transferees (any such transaction, a "Tag-Along Sale"), then each Stockholder that is not a party to such proposed Transfer (each, a "Tagging Stockholder") shall have the right to participate in such Tag-Along Sale on the same terms, conditions, and price per share as the selling Stockholder(s), on a pro rata basis (based on the relative number of shares of Common Stock held by the selling Stockholder(s) and all Tagging Stockholders electing to participate).
Section 6.2 Tag-Along Notice.
The selling Stockholder(s) shall deliver a written notice (a "Tag-Along Notice") to each Tagging Stockholder at least thirty (30) Business Days prior to the proposed closing date of the Tag-Along Sale, which Tag-Along Notice shall set forth: (a) the identity and contact information of the proposed purchaser(s), (b) the price per share of Common Stock (and the form of consideration, including whether cash, securities, or a combination thereof), (c) the aggregate number of shares of Common Stock proposed to be Transferred, (d) the proposed closing date and location, and (e) all other material terms and conditions of the proposed Tag-Along Sale (including representations, warranties, indemnification, escrow, or holdback arrangements, if any).
Section 6.3 Election.
Each Tagging Stockholder shall have fifteen (15) Business Days from the date of receipt of the Tag-Along Notice (the "Tag-Along Election Period") to elect to participate in the Tag-Along Sale by delivering written notice of such election to the selling Stockholder(s) and the Company, specifying the number of shares of Common Stock such Tagging Stockholder desires to include in the Tag-Along Sale (up to such Tagging Stockholder's pro rata share). Any Tagging Stockholder who fails to deliver a written election notice within the Tag-Along Election Period shall be deemed to have waived its tag-along rights with respect to such particular Tag-Along Sale (but not with respect to any future Tag-Along Sale).
Section 6.4 Reduction.
If the proposed purchaser(s) in a Tag-Along Sale declines to purchase all of the shares of Common Stock tendered by the selling Stockholder(s) and the Tagging Stockholders, the number of shares to be sold by each participating Stockholder (including the selling Stockholder(s)) shall be reduced pro rata based on the aggregate number of shares of Common Stock each participating Stockholder initially proposed to include in the Tag-Along Sale. In no event shall the selling Stockholder(s) consummate a Tag-Along Sale unless each Tagging Stockholder that has timely elected to participate is permitted to sell its pro rata share (subject to the pro rata reduction set forth in this Section 6.4).
Section 6.5 Closing.
The closing of the Tag-Along Sale shall occur concurrently with the closing of the selling Stockholder(s)' Transfer. At the closing, each participating Tagging Stockholder shall deliver the applicable shares of Common Stock, duly endorsed for transfer, together with such other documents, instruments, and agreements as may be reasonably required to consummate the sale. If the selling Stockholder(s) does not consummate the Tag-Along Sale within one hundred twenty (120) days following the delivery of the Tag-Along Notice, the Tag-Along Notice shall be deemed withdrawn, and any subsequent proposed Transfer shall be subject to the provisions of this Article VI.
ARTICLE VII — DRAG-ALONG RIGHTS
Section 7.1 Drag-Along Right.
If the Sponsor Majority and the Mezz Holder Majority jointly approve a sale of 100% of the Equity Securities, or a sale, lease, exchange, or other disposition of all or substantially all of the assets, of the Company and its Subsidiaries (taken as a whole) to a bona fide third-party purchaser that is not an Affiliate of the Sponsor or any Mezz Holder (a "Drag-Along Sale"), then all Stockholders (including Management Holders) shall be obligated to:
(i) sell, transfer, and deliver all of their Equity Securities in such Drag-Along Sale on the same terms, conditions, and per-share price as the Sponsor and the Mezz Holders;