This is a model clause for a shareholder's agreement addressing Right of First Refusal. If a shareholder wishes to sell shares, the company will be given notice and has the right to buy the shares during a certain limited time period. Adapt to fit your circumstances.
Chicago Illinois Right of First Refusal Clause for Shareholders' Agreement: A Comprehensive Overview In Chicago, Illinois, the Right of First Refusal (ROAR) clause is an essential provision in a Shareholders' Agreement. This clause grants existing shareholders the opportunity to acquire any shares being sold by another shareholder before they are offered to an outside buyer. It helps maintain the stability and control within a company by ensuring that existing shareholders have a chance to maintain or increase their ownership percentage. There are different types of Right of First Refusal Clauses used in Chicago, Illinois Shareholders' Agreements. Here are some common variations: 1. Standard Right of First Refusal: This clause provides existing shareholders with the first opportunity to purchase any shares being sold by a shareholder who wishes to exit the company. If a shareholder receives an offer from a third party to purchase their shares, they must notify the existing shareholders and allow them a certain period, typically specified in the agreement, to match the same offer. If the existing shareholders decline the offer, the selling shareholder can then proceed with the sale to the third party. 2. Standstill Provision: In some cases, a Standstill Provision may be added to the Right of First Refusal Clause. This provision restricts the selling shareholder from accepting any better offer from a third party for a specified period, even if the existing shareholders decline to match the initial offer. The standstill period enables existing shareholders more time to consider their purchasing options. 3. Multiple Shareholder ROAR: In cases where there are multiple existing shareholders, the Right of First Refusal Clause can be adapted to cater to multiple parties simultaneously. This means that if a selling shareholder receives an offer, all existing shareholders must be given the opportunity to purchase a proportionate number of shares based on their existing ownership percentage. 4. Non-Exercising Shareholder Consequences: Shareholders who decline to exercise their right to purchase the offered shares may face certain consequences as stipulated in the agreement. For example, their voting rights may be diluted, their dividends reduced, or they may face restrictions on selling their own shares in the future. It is crucial for Chicago, Illinois shareholders to draft a well-defined Right of First Refusal Clause in their Shareholders' Agreement to ensure clarity, fairness, and adherence to applicable state laws. Seeking legal counsel is highly advisable when drafting or reviewing this clause, as laws and regulations regarding Right of First Refusal vary. In conclusion, a Right of First Refusal Clause is a critical component of a Shareholders' Agreement in Chicago, Illinois. It grants existing shareholders the opportunity to purchase shares being offered for sale by a fellow shareholder before they are sold to a third party. By implementing this clause, companies can maintain control and stability within their ownership structure, safeguarding the interests of all shareholders involved.
Chicago Illinois Right of First Refusal Clause for Shareholders' Agreement: A Comprehensive Overview In Chicago, Illinois, the Right of First Refusal (ROAR) clause is an essential provision in a Shareholders' Agreement. This clause grants existing shareholders the opportunity to acquire any shares being sold by another shareholder before they are offered to an outside buyer. It helps maintain the stability and control within a company by ensuring that existing shareholders have a chance to maintain or increase their ownership percentage. There are different types of Right of First Refusal Clauses used in Chicago, Illinois Shareholders' Agreements. Here are some common variations: 1. Standard Right of First Refusal: This clause provides existing shareholders with the first opportunity to purchase any shares being sold by a shareholder who wishes to exit the company. If a shareholder receives an offer from a third party to purchase their shares, they must notify the existing shareholders and allow them a certain period, typically specified in the agreement, to match the same offer. If the existing shareholders decline the offer, the selling shareholder can then proceed with the sale to the third party. 2. Standstill Provision: In some cases, a Standstill Provision may be added to the Right of First Refusal Clause. This provision restricts the selling shareholder from accepting any better offer from a third party for a specified period, even if the existing shareholders decline to match the initial offer. The standstill period enables existing shareholders more time to consider their purchasing options. 3. Multiple Shareholder ROAR: In cases where there are multiple existing shareholders, the Right of First Refusal Clause can be adapted to cater to multiple parties simultaneously. This means that if a selling shareholder receives an offer, all existing shareholders must be given the opportunity to purchase a proportionate number of shares based on their existing ownership percentage. 4. Non-Exercising Shareholder Consequences: Shareholders who decline to exercise their right to purchase the offered shares may face certain consequences as stipulated in the agreement. For example, their voting rights may be diluted, their dividends reduced, or they may face restrictions on selling their own shares in the future. It is crucial for Chicago, Illinois shareholders to draft a well-defined Right of First Refusal Clause in their Shareholders' Agreement to ensure clarity, fairness, and adherence to applicable state laws. Seeking legal counsel is highly advisable when drafting or reviewing this clause, as laws and regulations regarding Right of First Refusal vary. In conclusion, a Right of First Refusal Clause is a critical component of a Shareholders' Agreement in Chicago, Illinois. It grants existing shareholders the opportunity to purchase shares being offered for sale by a fellow shareholder before they are sold to a third party. By implementing this clause, companies can maintain control and stability within their ownership structure, safeguarding the interests of all shareholders involved.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés.
For your convenience, the complete English version of this form is attached below the Spanish version.