The Kansas Right of First Refusal Clause for Shareholders' Agreement is a legal provision that grants existing shareholders the opportunity to purchase additional shares of a company if a fellow shareholder decides to sell their stake. This clause aims to protect the interests of existing shareholders by giving them the first opportunity to acquire any shares being offered for sale before they are sold to a third party. In Kansas, there are two main types of Right of First Refusal Clauses commonly used in Shareholders' Agreements: 1. Standard Right of First Refusal: This type of clause grants existing shareholders the right to purchase the shares being sold under the same terms and conditions offered by a third-party buyer. If a shareholder decides to sell their shares, they must first offer them to the existing shareholders before making them available to external parties. The existing shareholders then have the option to exercise their right to purchase the shares or waive their right, allowing the selling shareholder to proceed with the sale. 2. Co-sale Right of First Refusal: This clause is typically used when multiple shareholders jointly own a significant portion of a company's shares. In this scenario, if any of the co-shareholders receives an offer to sell their shares, the remaining co-shareholders have the right to join in the sale and offer their own shares on the same terms and conditions. This clause prevents any individual co-shareholder from selling their shares to a third party without other co-shareholders having the opportunity to participate in the sale proportionally. The primary objective of including a Right of First Refusal Clause in a Kansas Shareholders' Agreement is to maintain ownership control within a company, protect shareholders' investments, and avoid unwanted ownership transfers to external parties. It provides existing shareholders with the ability to manage the ownership structure and ensure that new shareholders are added only after current shareholders have had the opportunity to purchase any shares being sold.
Kansas 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.
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.
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.
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.
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.
Once that is done the ROFR holder has the option of purchasing the property instead or waiving their ROFR and allowing another sale to go through. To get to closing, a title company has to have a signed Waiver of Right of First Refusal document in the file before funding can occur.
Written agreement that allowed a right of first refusal to be assigned only with the written con- sent of the grantor, a college). 49 31111 2d 620,203 NE2d 411 (1964). At the other extreme, the parties' contract might expressly de- clare that the right of first refusal is personal, and courts will usually agree.
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.
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.
To be enforceable, options and rights of first refusal must usually be in writing, signed, contain an adequate description of the property, and be supported by consideration. They may be included in lease contracts, or they may be drafted as standalone agreements.
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