The Oregon Right of First Refusal Clause in a Shareholders' Agreement is a contractual provision that grants existing shareholders the opportunity to purchase additional shares before they are offered to third parties. This clause ensures that existing shareholders have the first opportunity to maintain or increase their ownership percentage in the company when new shares are issued or when another shareholder wants to sell their shares. Under the Oregon Right of First Refusal Clause, if a shareholder intends to sell their shares to a third party, they must first offer them to the existing shareholders at the same price and on the same terms. The existing shareholders then have the option to purchase the offered shares within a specified timeframe, typically 30 to 60 days. If the existing shareholders decide not to exercise their right of first refusal, the shares can be sold to the third party at the initial offered price. There are various types of Oregon Right of First Refusal Clauses that can be included in a Shareholders' Agreement: 1. Standard Right of First Refusal: This is the most common type of clause where existing shareholders have the right to match the price and terms offered by a potential third-party buyer. If they choose to exercise this right, they can purchase the shares before the sale is made to the third party. 2. Co-Sale Right: This clause works in conjunction with the right of first refusal and grants other shareholders the right to participate in the sale alongside the selling shareholder. If the selling shareholder receives an offer to sell, other shareholders can join in selling their shares, allowing them to exit the company alongside the initial seller. 3. Right of First Offer: This clause gives existing shareholders the first opportunity to negotiate and make an offer to purchase additional shares before any new shares are offered to third parties. However, the selling shareholder is not obligated to accept their offer, and they can still seek other buyers. 4. Tag-Along Right: Similar to the co-sale right, this clause allows minority shareholders to sell their shares alongside a majority shareholder if the majority shareholder receives an offer for their shares. This prevents minority shareholders from being left behind in a potential sale or dilution of their ownership. 5. Drag-Along Right: This clause empowers majority shareholders to force minority shareholders to sell their shares if they receive an offer to sell the majority of the company's shares. It allows majority shareholders to sell the company as a whole, ensuring potential buyers have access to 100% of the shares without encountering resistance from minority shareholders. When drafting an Oregon Right of First Refusal Clause for a Shareholders' Agreement, it is crucial to consider the specific needs and objectives of the company and its shareholders. Seeking legal advice is highly recommended as the nuances of such clauses can vary based on the company's structure, ownership percentages, and desired outcomes.
Oregon Right of First Refusal Clause for Shareholders' Agreement
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How to fill out Right Of First Refusal Clause For Shareholders' Agreement?
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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 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.
The United States District Court for the District of Columbia restated the fundamental principle that in order for a right of first refusal to be enforceable, it must be in writing under the Statute of Frauds.
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.
Right of first refusal (ROFR), also known as first right of refusal, is a contractual right to enter into a business transaction with a person or company before anyone else can. If the party with this right declines to enter into a transaction, the obligor is free to entertain other offers.
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.
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.
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.
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" is a contractual right on the part of a potential buyer to purchase real property within a specified period of time after another potential purchaser submits a purchase offer.
