The New Hampshire Right of First Refusal Clause for Shareholders' Agreement is a legal provision used to protect the interests of shareholders in New Hampshire-based companies. This clause establishes the shareholders' right to have the first opportunity to purchase or acquire additional shares of stock before these shares are offered to any third party. In New Hampshire, there are several types of Right of First Refusal Clauses that can be included in a Shareholders' Agreement: 1. Standard Right of First Refusal: This type of clause grants existing shareholders the first right to purchase any newly issued shares of stock that are to be sold by another shareholder. It ensures that the existing shareholders maintain their proportional ownership in the company. 2. Co-Sale or Tag-Along Right: In addition to the standard right of first refusal, this clause allows minority shareholders the option to participate in the sale of shares by a majority shareholder. If a majority shareholder receives an offer to sell their stock, minority shareholders can exercise their right to sell a proportionate amount of their shares as well. 3. Drag-Along Right: This clause allows majority shareholders to force minority shareholders to join in the sale of the company. If a majority shareholder receives an offer to sell the entire company, they can trigger the drag-along right, which requires minority shareholders to sell their shares on the same terms and conditions. 4. Reverse Right of First Refusal: This clause works in favor of the company rather than the shareholders. It gives the company the right to repurchase shares from a shareholder before they can sell them to a third party. This can be used to maintain ownership control or retain valuable shares within the company. 5. Standstill Agreement: In some cases, shareholders may agree not to exercise their right of first refusal for a specific period, usually to create stability or for strategic reasons. This clause limits the ability of shareholders to sell or transfer their shares outside the agreed terms. The New Hampshire Right of First Refusal Clause for Shareholders' Agreement ensures fairness and transparency when it comes to shareholder transactions. It protects the interests of existing shareholders, allows them to maintain their ownership stake, and prevents dilution of their shares. It also gives shareholders the opportunity to participate in the potential upside of future investment by ensuring they have the first right to acquire additional shares in the company.
New Hampshire Right of First Refusal Clause for Shareholders' Agreement
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Rights of first refusal clauses are similar to options contracts as the holder has the right, but not the obligation, to enter into a transaction that generally involves an asset. The person with this right has the opportunity to establish a contract or an agreement on an asset before others can.
A right of first refusal is a fairly common clause in some business contracts that essentially gives a party the first crack at making an offer on a particular transaction. In real estate terms, the phrase right of first refusal operates similarly.
A right of first refusal is a fairly common clause in some business contracts that essentially gives a party the first crack at making an offer on a particular transaction.
When some of the shareholders wish to sell their share, a clause in the shareholder's agreement should state that the shareholders who wish to sell their shares have to show the right to match an offer received from a third party. This is known as the right of first refusal.
Most of us are familiar with the right of first refusal (ROFR) but not with the right of first offer (ROFO). Generally, a ROFR is advantageous to the purchaser and the ROFO is advantageous to the seller.
The right of first refusal is usually triggered when a third party offers to buy or lease the property owner's asset. Before the property owner accepts this offer, the property holder (the person with the right of first refusal) must be allowed to buy or lease the asset under the same terms offered by the third party.
A right of first refusal, different from a right of first offer, gives the right holder the option to match an offer already received by the seller. A right of first offer is said to favor the seller, while a right of first refusal favors the buyer.
When you have a first right of refusal the seller must contact you and let you potentially move forward with a purchase before an offer can be accepted from another party. The first right of refusal can be put together either before a home is listed for sale or during the time it is on the market.
Written agreement that allowed a right of first refusal to be assigned only with the written con- sent of the grantor, a college). 49 31111 2d 620,203 NE2d 411 (1964). At the other extreme, the parties' contract might expressly de- clare that the right of first refusal is personal, and courts will usually agree.
A right of first offer (ROFO) allows someone the opportunity to make the first move when a homeowner is looking to sell. Unlike a right of first refusal where an owner may be obligated to sell to the potential buyer under the original contract's terms, the seller is still free to market the property for sale to others.
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