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 New York Right of First Refusal and Co-Sale Agreement is a legal document that outlines the rights and obligations of shareholders or partners in a corporation or partnership based in New York regarding the sale of their interest in the company. This agreement provides a mechanism to protect the interests of all parties involved when a shareholder or partner wishes to sell their shares or interest. The Right of First Refusal allows the existing shareholders or partners to have the first opportunity to purchase the shares or interest being offered for sale. This means that if a shareholder or partner receives an offer from a third party to buy their shares, they must notify the other shareholders or partners first and give them the opportunity to match or exceed the offer. The purpose of this provision is to maintain the existing ownership structure and ensure that new shareholders or partners are brought in with the approval of the existing ones. On the other hand, the Co-Sale Agreement, also known as a Tag-Along or Take-Me-Along Agreement, allows minority shareholders or partners to join in the sale of a substantial portion or all of the shares held by other shareholders or partners. This provision is designed to protect minority shareholders or partners from being left out of a sale transaction that could significantly alter the ownership of the company. It ensures that if a majority shareholder or partner decides to sell their shares, the minority shareholders or partners have the option to sell their shares on the same terms and conditions as the majority shareholder or partner. There are different types of New York Right of First Refusal and Co-Sale Agreements that may vary depending on the specific needs and preferences of the parties involved. Some common variations include: 1. Simple Right of First Refusal: This type of agreement grants the existing shareholders or partners the right to match any offer made by a third party to purchase the shares being sold. 2. Right of First Negotiation: In this variation, the shareholder or partner looking to sell their shares must first negotiate terms with the existing shareholders or partners before seeking offers from third parties. 3. Right of First Offer: With this provision, the selling shareholder or partner must make an offer to sell their shares to the existing shareholders or partners before considering offers from third parties. Additionally, the Co-Sale Agreement can be customized to suit the specific needs of the shareholders or partners involved. Some variations include setting a minimum percentage of shares required for the minority shareholders or partners to exercise their co-sale rights or allowing for a time period within which they must exercise their rights. In summary, the New York Right of First Refusal and Co-Sale Agreement provides a framework to protect the interests of the shareholders or partners in a corporation or partnership. By granting the existing shareholders or partners the right to match or participate in a sale transaction, this agreement ensures that ownership changes are conducted with the consent and approval of those already involved in the company.
