This is a "Right of First Refusal and Co-Sale Agreement." It is entered into by the corporation and the purchasers of preferred stock. It gives the company and the purchasers of preferred stock certain rights of refusal and options upon the transfer of stock.
The Florida Right of First Refusal and Co-Sale Agreement is a legal contract that sets out the rights and obligations of parties involved in a business transaction, specifically when it comes to the sale of shares or ownership interests in a company. This agreement is entered into by shareholders, partners, or members of a company to protect their respective interests and provide a framework for potential sale scenarios. The Right of First Refusal clause in the agreement provides an existing shareholder with the option to purchase the shares or ownership interests being offered for sale by another party. This means that if a shareholder intends to sell their shares, they must first offer them to the existing shareholders on the same terms and conditions that were proposed by the potential buyer. The existing shareholders have the right to either accept or decline the offer. If they decline, the selling shareholder can then proceed with selling the shares to an outside party. The purpose of the Right of First Refusal is to allow existing shareholders to maintain control over who becomes a shareholder in the company. It ensures that they have the opportunity to retain their proportionate ownership and influence in the decision-making process. In addition, the Co-Sale Agreement, also known as the "Tag-Along" or "Piggyback" provision, is another important aspect of this agreement. The Co-Sale Agreement typically applies when a majority shareholder intends to sell their shares to a third party. In such a scenario, the Co-Sale Agreement allows minority shareholders to "tag along" in the sale and sell their shares on the same terms and conditions as the majority shareholder. This provision protects the minority shareholders from being left behind in a potentially favorable sales opportunity. Different types of Florida Right of First Refusal and Co-Sale Agreements may exist depending on the specific needs and circumstances of the parties involved. Some agreements may have variations in the trigger events that activate the Right of First Refusal or Co-Sale provisions. For example, a Right of First Refusal may only be applicable if a certain percentage of shares are being sold, or if the sale involves a specific buyer or price threshold. Furthermore, the terms and conditions of the Right of First Refusal and Co-Sale Agreement can be tailored to meet the requirements and preferences of the shareholders involved. The agreement may specify the timeframes within which the selling shareholder must provide notice to the other shareholders, the process for accepting or declining the right of first refusal, and the procedure for executing the sale transaction. In conclusion, the Florida Right of First Refusal and Co-Sale Agreement is a crucial legal document that safeguards the interests of shareholders in a business transaction. It ensures that existing shareholders have the opportunity to either purchase shares being sold or participate in the sale on the same terms and conditions as the majority shareholder. The agreement provides clarity and protection to all parties involved and helps maintain the stability and control of the company.
