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.
In Minnesota, the Right of First Refusal and Co-Sale Agreement is a legal document that outlines the rights and obligations of parties involved in a potential sale of a particular asset, typically shares in a corporation or membership interests in a limited liability company (LLC). This agreement is designed to protect the interests of both existing and potential investors by giving them certain rights when a shareholder or member intends to sell their interest. The Right of First Refusal (ROAR) aspect of the agreement grants existing shareholders or members the right to purchase the shares or membership interests of the selling party before any third party can do so. This provision ensures that the other shareholders or members have the opportunity to maintain their proportional ownership in the company and not dilute their interests. If any of the existing shareholders or members decline to exercise their right of first refusal, then the selling party can proceed with selling their interest to a third party. On the other hand, the Co-Sale provision allows the other shareholders or members who did not initially exercise their right of first refusal to join in the sale to the third party. This means that they can sell a proportionate amount of their own shares or membership interests alongside the selling party, thereby taking advantage of the opportunity to sell at the same price and terms. Different types of Right of First Refusal and Co-Sale Agreements can exist depending on the specific terms and conditions agreed upon by the parties involved. These agreements may vary in terms of the triggering events that would initiate the right of first refusal, such as a voluntary sale, an involuntary sale due to death or disability, or a deemed sale triggered by divorce or bankruptcy. Furthermore, the agreement may specify the time frame within which the existing shareholders or members must exercise their right of first refusal, and the process for conducting the sale transaction. In Minnesota, it is important for businesses and investors to carefully draft and review their Right of First Refusal and Co-Sale Agreements to ensure that they comply with state laws and adequately protect their interests. Consulting with an experienced attorney is highly recommended navigating the complexities of these agreements and ensure they are tailored to the specific needs and circumstances of the parties involved. Common keywords: Minnesota, Right of First Refusal, Co-Sale Agreement, shareholders, members, asset, sale, corporation, limited liability company, proportional ownership, dilution, third party, triggering events, voluntary sale, involuntary sale, divorce, bankruptcy, time frame, transaction, attorney.
