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.
Washington Right of First Refusal and Co-Sale Agreement is a legal mechanism that grants certain rights to shareholders or potential buyers when it comes to the purchase or transfer of shares in a company incorporated in Washington state. This agreement aims to protect the interests of shareholders and ensure fairness in the process of selling or transferring shares. The Right of First Refusal (ROAR) aspect of the agreement gives existing shareholders the first opportunity to purchase shares being offered for sale by another shareholder. This means that if a shareholder intends to sell their shares, they must first offer them to existing shareholders at the same price and on the same terms. The existing shareholders have the option to exercise their right within a specified time frame, typically outlined in the agreement. The Co-Sale Agreement, also known as a tag-along provision, is another essential component of this agreement. It provides protection to minority shareholders by allowing them to "tag-along" with a major shareholder's sale. If a majority shareholder receives a bona fide offer to sell their shares, the minority shareholders can join the transaction on the same terms and conditions, ensuring they do not face unfair dilution or exclusion from potential benefits. In Washington state, there may be variations or different types of ROAR and Co-Sale Agreements tailored to specific circumstances. These may include: 1. Standard ROAR and Co-Sale Agreement: This is the most common type of agreement where existing shareholders have the right of first refusal and the minority shareholders have the option to participate in a sale. 2. Enhanced ROAR and Co-Sale Agreement: This type of agreement may grant additional rights or preferences to specific groups of shareholders based on their ownership percentage or other criteria. For instance, it could prioritize certain classes of shares or provide different waiting periods for different classes of shareholders. 3. Customized or Company-specific Agreement: In certain cases, companies may create unique agreements to address specific needs or expectations of their shareholders. These agreements could contain additional provisions or modifications that deviate from standard templates, as long as they comply with Washington state laws and regulations. It is important to consult with legal professionals who specialize in corporate law to draft and review the Washington Right of First Refusal and Co-Sale Agreement. The agreement should be accurately tailored to the company's requirements while adhering to the legal framework in place.
