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.
A South Dakota Right of First Refusal and Co-Sale Agreement is a legal document that outlines the rights and obligations of parties involved in a business transaction, specifically related to the sale or transfer of ownership of a company's shares or assets. This agreement is designed to protect the interests of current shareholders or owners by giving them the opportunity to purchase shares or assets before they are sold to or transferred to a third party. The Right of First Refusal provision in the agreement grants existing shareholders or owners the right to be offered the opportunity to purchase the shares or assets that a selling shareholder or owner intends to sell. This provision ensures that existing shareholders have the first chance to acquire the shares or assets on the same terms and conditions offered to the selling shareholder or owner. Furthermore, the Co-Sale Agreement is often included in conjunction with the Right of First Refusal provision. It provides protection to minority shareholders or owners by granting them the right to participate in the sale or transfer of shares or assets on a pro rata basis if a majority shareholder or owner intends to sell their shares or assets. This enables minority shareholders to sell their shares or assets alongside the majority shareholder, ensuring fair treatment and preventing them from being left behind. There are various types of South Dakota Right of First Refusal and Co-Sale Agreements, each catering to different scenarios and requirements. Here are a few types: 1. Shareholder's Agreement: This type of agreement is specifically designed for corporations or companies with multiple shareholders. It establishes the rights and obligations of each shareholder, including the Right of First Refusal and Co-Sale provisions. 2. Partnership Agreement: In the case of partnerships, this agreement outlines the rights and obligations of partners and includes provisions related to the Right of First Refusal and Co-Sale. 3. Operating Agreement: Limited liability companies (LCS) often utilize an operating agreement, which includes provisions for the Right of First Refusal and Co-Sale. This agreement outlines the structure and management of the company, while also protecting the interests of its members. 4. Buy-Sell Agreement: This agreement is commonly used in small businesses, especially family-owned businesses, where it establishes protocols for the sale or transfer of shares or assets. It typically incorporates the Right of First Refusal and Co-Sale provisions. In conclusion, a South Dakota Right of First Refusal and Co-Sale Agreement is a legally binding document that safeguards the interests of shareholders or owners when it comes to the sale or transfer of shares or assets. By incorporating provisions like the Right of First Refusal and Co-Sale, this agreement ensures fair treatment and provides an opportunity for existing shareholders to participate in any potential transactions.
