Hawaii Right of First Refusal Clause for Shareholders' Agreement

• Category: Corporations - Shareholders and Stock
• State: Multi-State
• Control #: US-01770
• Format: Word; Rich Text

Description

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. The Hawaii Right of First Refusal Clause for Shareholders' Agreement is a legal provision that aims to protect the interests of existing shareholders by granting them the first opportunity to purchase additional shares before they are offered to third parties. This clause is commonly included in shareholders' agreements to maintain the existing shareholding structure and to prevent dilution of ownership. In Hawaii, there are two types of Right of First Refusal Clauses that may be included in a Shareholders' Agreement: 1. Basic Right of First Refusal Clause: This clause allows existing shareholders to exercise their right to purchase any newly issued shares in proportion to their existing ownership percentage. If a shareholder wishes to sell their shares, they must first offer them to the existing shareholders on the same terms and conditions as offered by a third-party buyer. The existing shareholders have a designated period within which they can accept or decline the offer. 2. Enhanced Right of First Refusal Clause: This clause provides existing shareholders with an expanded right to purchase newly issued shares. It allows shareholders, in addition to their proportional share, to purchase any unsold shares from other selling shareholders. This type of clause is aimed at providing existing shareholders with more control over the ownership structure of the company. The Hawaii Right of First Refusal Clause is designed to promote stability in shareholder relationships, protect the existing shareholder's investment, and prevent unwanted changes in the ownership structure. It ensures that existing shareholders have the first opportunity to maintain their proportional ownership or even increase their stake in the company before any shares are sold to third parties. This clause is crucial in safeguarding the interests and rights of shareholders in Hawaii.

The Hawaii Right of First Refusal Clause for Shareholders' Agreement is a legal provision that aims to protect the interests of existing shareholders by granting them the first opportunity to purchase additional shares before they are offered to third parties. This clause is commonly included in shareholders' agreements to maintain the existing shareholding structure and to prevent dilution of ownership. In Hawaii, there are two types of Right of First Refusal Clauses that may be included in a Shareholders' Agreement: 1. Basic Right of First Refusal Clause: This clause allows existing shareholders to exercise their right to purchase any newly issued shares in proportion to their existing ownership percentage. If a shareholder wishes to sell their shares, they must first offer them to the existing shareholders on the same terms and conditions as offered by a third-party buyer. The existing shareholders have a designated period within which they can accept or decline the offer. 2. Enhanced Right of First Refusal Clause: This clause provides existing shareholders with an expanded right to purchase newly issued shares. It allows shareholders, in addition to their proportional share, to purchase any unsold shares from other selling shareholders. This type of clause is aimed at providing existing shareholders with more control over the ownership structure of the company. The Hawaii Right of First Refusal Clause is designed to promote stability in shareholder relationships, protect the existing shareholder's investment, and prevent unwanted changes in the ownership structure. It ensures that existing shareholders have the first opportunity to maintain their proportional ownership or even increase their stake in the company before any shares are sold to third parties. This clause is crucial in safeguarding the interests and rights of shareholders in Hawaii.