Drag-along and tag-along

Factual definition

Contractual sale rights: drag-along provisions can require other holders to participate in a sale, while tag-along provisions can let holders join one. Triggers, thresholds and participation terms depend on the agreement.

Drag-along and tag-along in round numbers

Hypothetical: a holder selling its 70% stake can require the remaining 30% to sell only if a valid drag-along right applies and its conditions are met. A tag-along may instead permit minority participation, sometimes proportionally, on the agreed terms; it is not an automatic entitlement in every sale.

How Shayne Fitz-Coy uses Drag-along and tag-along

That one person dragged out the process and waited, I believe, 13 months before coming around. We didn’t have drag-along rights, so we couldn’t make them sell.