Harris Texas Right of First Refusal Clause for Shareholders' Agreement

• Category: Corporations - Shareholders and Stock
• State: Multi-State
• County: Harris
• 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 Harris Texas Right of First Refusal Clause for Shareholders' Agreement is a critical provision that aims to protect the interests of shareholders in a company based in Harris County, Texas. This clause gives existing shareholders the option to purchase additional shares of the company before they are offered to outside parties. The primary purpose of including a Right of First Refusal (ROAR) clause in a Shareholders' Agreement is to maintain the control and ownership of the company within the existing shareholder base. By granting shareholders the first opportunity to purchase any newly offered shares, this clause restricts the dilution of their ownership and preserves their influence in the decision-making process. There are different types of Harris Texas Right of First Refusal Clauses for Shareholders' Agreement that can be customized to suit the specific needs of the company and its shareholders: 1. Standard Right of First Refusal: This is the most common type of ROAR clause, which grants existing shareholders the right to purchase newly issued shares at the same price and terms offered to a third party. Once the shareholder expresses their intention to exercise their right, they must provide written notice within a specified timeframe. 2. Modified Right of First Refusal: In this variation, the ROAR clause may include certain modifications or additional conditions. For example, it could stipulate that the existing shareholders can purchase the shares at a discounted price, exclusive rights for certain classes of shares, or priority in buying shares allocated for a specific purpose such as employee stock option plans. 3. Standstill Agreement: This is a more advanced form of ROAR clause, where the shareholder is granted the right to purchase additional shares but is also bound by certain restrictions. These restrictions may include refraining from selling their current shares, limiting the number of shares they can buy, or agreeing to vote in a particular manner on certain matters. 4. Cross-Option Agreement: This type of agreement involves multiple shareholders granting each other the right to purchase their shares in predefined circumstances, such as death, disability, or retirement. This gives the remaining shareholders the opportunity to maintain control over the company's ownership in the event of certain shareholder departures. The Harris Texas Right of First Refusal Clause for Shareholders' Agreement is crucial for protecting the shareholders' investments and ensuring their ability to maintain control and influence in the company's decision-making. Before including this clause in any agreement, it is advisable to consult with legal professionals experienced in Texas corporate law to ensure compliance and alignment with the specific objectives of the shareholders and the company.

The Harris Texas Right of First Refusal Clause for Shareholders' Agreement is a critical provision that aims to protect the interests of shareholders in a company based in Harris County, Texas. This clause gives existing shareholders the option to purchase additional shares of the company before they are offered to outside parties. The primary purpose of including a Right of First Refusal (ROAR) clause in a Shareholders' Agreement is to maintain the control and ownership of the company within the existing shareholder base. By granting shareholders the first opportunity to purchase any newly offered shares, this clause restricts the dilution of their ownership and preserves their influence in the decision-making process. There are different types of Harris Texas Right of First Refusal Clauses for Shareholders' Agreement that can be customized to suit the specific needs of the company and its shareholders: 1. Standard Right of First Refusal: This is the most common type of ROAR clause, which grants existing shareholders the right to purchase newly issued shares at the same price and terms offered to a third party. Once the shareholder expresses their intention to exercise their right, they must provide written notice within a specified timeframe. 2. Modified Right of First Refusal: In this variation, the ROAR clause may include certain modifications or additional conditions. For example, it could stipulate that the existing shareholders can purchase the shares at a discounted price, exclusive rights for certain classes of shares, or priority in buying shares allocated for a specific purpose such as employee stock option plans. 3. Standstill Agreement: This is a more advanced form of ROAR clause, where the shareholder is granted the right to purchase additional shares but is also bound by certain restrictions. These restrictions may include refraining from selling their current shares, limiting the number of shares they can buy, or agreeing to vote in a particular manner on certain matters. 4. Cross-Option Agreement: This type of agreement involves multiple shareholders granting each other the right to purchase their shares in predefined circumstances, such as death, disability, or retirement. This gives the remaining shareholders the opportunity to maintain control over the company's ownership in the event of certain shareholder departures. The Harris Texas Right of First Refusal Clause for Shareholders' Agreement is crucial for protecting the shareholders' investments and ensuring their ability to maintain control and influence in the company's decision-making. Before including this clause in any agreement, it is advisable to consult with legal professionals experienced in Texas corporate law to ensure compliance and alignment with the specific objectives of the shareholders and the company.