Oregon 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 Oregon Right of First Refusal Clause in a Shareholders' Agreement is a contractual provision that grants existing shareholders the opportunity to purchase additional shares before they are offered to third parties. This clause ensures that existing shareholders have the first opportunity to maintain or increase their ownership percentage in the company when new shares are issued or when another shareholder wants to sell their shares. Under the Oregon Right of First Refusal Clause, if a shareholder intends to sell their shares to a third party, they must first offer them to the existing shareholders at the same price and on the same terms. The existing shareholders then have the option to purchase the offered shares within a specified timeframe, typically 30 to 60 days. If the existing shareholders decide not to exercise their right of first refusal, the shares can be sold to the third party at the initial offered price. There are various types of Oregon Right of First Refusal Clauses that can be included in a Shareholders' Agreement: 1. Standard Right of First Refusal: This is the most common type of clause where existing shareholders have the right to match the price and terms offered by a potential third-party buyer. If they choose to exercise this right, they can purchase the shares before the sale is made to the third party. 2. Co-Sale Right: This clause works in conjunction with the right of first refusal and grants other shareholders the right to participate in the sale alongside the selling shareholder. If the selling shareholder receives an offer to sell, other shareholders can join in selling their shares, allowing them to exit the company alongside the initial seller. 3. Right of First Offer: This clause gives existing shareholders the first opportunity to negotiate and make an offer to purchase additional shares before any new shares are offered to third parties. However, the selling shareholder is not obligated to accept their offer, and they can still seek other buyers. 4. Tag-Along Right: Similar to the co-sale right, this clause allows minority shareholders to sell their shares alongside a majority shareholder if the majority shareholder receives an offer for their shares. This prevents minority shareholders from being left behind in a potential sale or dilution of their ownership. 5. Drag-Along Right: This clause empowers majority shareholders to force minority shareholders to sell their shares if they receive an offer to sell the majority of the company's shares. It allows majority shareholders to sell the company as a whole, ensuring potential buyers have access to 100% of the shares without encountering resistance from minority shareholders. When drafting an Oregon Right of First Refusal Clause for a Shareholders' Agreement, it is crucial to consider the specific needs and objectives of the company and its shareholders. Seeking legal advice is highly recommended as the nuances of such clauses can vary based on the company's structure, ownership percentages, and desired outcomes.

The Oregon Right of First Refusal Clause in a Shareholders' Agreement is a contractual provision that grants existing shareholders the opportunity to purchase additional shares before they are offered to third parties. This clause ensures that existing shareholders have the first opportunity to maintain or increase their ownership percentage in the company when new shares are issued or when another shareholder wants to sell their shares. Under the Oregon Right of First Refusal Clause, if a shareholder intends to sell their shares to a third party, they must first offer them to the existing shareholders at the same price and on the same terms. The existing shareholders then have the option to purchase the offered shares within a specified timeframe, typically 30 to 60 days. If the existing shareholders decide not to exercise their right of first refusal, the shares can be sold to the third party at the initial offered price. There are various types of Oregon Right of First Refusal Clauses that can be included in a Shareholders' Agreement: 1. Standard Right of First Refusal: This is the most common type of clause where existing shareholders have the right to match the price and terms offered by a potential third-party buyer. If they choose to exercise this right, they can purchase the shares before the sale is made to the third party. 2. Co-Sale Right: This clause works in conjunction with the right of first refusal and grants other shareholders the right to participate in the sale alongside the selling shareholder. If the selling shareholder receives an offer to sell, other shareholders can join in selling their shares, allowing them to exit the company alongside the initial seller. 3. Right of First Offer: This clause gives existing shareholders the first opportunity to negotiate and make an offer to purchase additional shares before any new shares are offered to third parties. However, the selling shareholder is not obligated to accept their offer, and they can still seek other buyers. 4. Tag-Along Right: Similar to the co-sale right, this clause allows minority shareholders to sell their shares alongside a majority shareholder if the majority shareholder receives an offer for their shares. This prevents minority shareholders from being left behind in a potential sale or dilution of their ownership. 5. Drag-Along Right: This clause empowers majority shareholders to force minority shareholders to sell their shares if they receive an offer to sell the majority of the company's shares. It allows majority shareholders to sell the company as a whole, ensuring potential buyers have access to 100% of the shares without encountering resistance from minority shareholders. When drafting an Oregon Right of First Refusal Clause for a Shareholders' Agreement, it is crucial to consider the specific needs and objectives of the company and its shareholders. Seeking legal advice is highly recommended as the nuances of such clauses can vary based on the company's structure, ownership percentages, and desired outcomes.