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 Kentucky Right of First Refusal and Co-Sale Agreement is a legal document designed to protect the rights of shareholders or partners in a company. This agreement ensures that if a shareholder wishes to sell their shares or transfer them to a third party, the other shareholders have the first opportunity to purchase those shares at the same price and under the same terms as offered by the third party. The Right of First Refusal (ROAR) clause in this agreement allows existing shareholders to maintain the balance of ownership within the company by providing them with the priority to buy any shares being sold. It ensures that they have the chance to maintain their proportional ownership, prevent unwanted third parties from becoming shareholders, or avoid dilution of their ownership stake. In addition to the ROAR clause, the Co-Sale Agreement clause supplements the right of first refusal by allowing shareholders to sell their proportionate shares along with the selling shareholder. This clause ensures that if one shareholder sells their shares, the other shareholders can sell a proportionate number of their shares as well, allowing them to exit the investment together and receive a fair price for their shares. However, it is worth mentioning that these clauses and agreements can vary in their specifics depending on the context and the desires of the parties involved. There may be customized provisions or variations in the Kentucky Right of First Refusal and Co-Sale Agreement to cater to specific situations or meet the requirements of the shareholders, partners, or the company itself. Overall, the Kentucky Right of First Refusal and Co-Sale Agreement is a vital legal instrument that helps maintain control and protect the interests of shareholders in a company. It ensures that they have the opportunity to maintain their ownership stake and sales occur under fair and agreed-upon terms. Compliance to this agreement can help prevent conflicts, ensure transparency, and provide a smooth framework for future sale or transfer of shares.
