Travis Texas Right of First Refusal Clause for Shareholders' Agreement

• Category: Corporations - Shareholders and Stock
• State: Multi-State
• County: Travis
• 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 Travis Texas Right of First Refusal Clause for Shareholders' Agreement is a legal provision that grants existing shareholders the first opportunity to purchase additional shares or transferable interests in a company before they are offered to external parties. This clause ensures that existing shareholders have the right to maintain their proportionate ownership and control over the company. In Travis Texas, there are different types of Right of First Refusal Clauses that can be included in a Shareholders' Agreement: 1. Standard Right of First Refusal Clause: This type of clause gives existing shareholders the right, but not the obligation, to purchase additional shares or interests that are being offered for sale by a shareholder who wishes to sell. The existing shareholders are given a time frame within which they can exercise this right, usually by matching the terms of the external offer. 2. Right of First Offer Clause: Similar to the standard Right of First Refusal, this clause requires the selling shareholder to first offer the shares or interests to the existing shareholders at a specified price before seeking external buyers. However, the existing shareholders are only given the opportunity to make an offer and the selling shareholder has the flexibility to accept or reject it. 3. Tag-Along Right Clause: This clause is designed to protect minority shareholders. It enables minority shareholders to "tag-along" with a majority shareholder who intends to sell their shares to a third party. The minority shareholders have the right to sell their shares on the same terms as the majority shareholder. 4. Drag-Along Right Clause: This clause grants majority shareholders the power to "drag-along" minority shareholders when selling their shares to a third party. If a majority shareholder receives an offer from a third party, they can force the minority shareholders to also sell their shares on the same terms and conditions. The Travis Texas Right of First Refusal Clause for Shareholders' Agreement is an essential tool for maintaining stability and control within a company by providing existing shareholders with the opportunity to maintain their ownership in the face of potential share or interest transfers. It ensures fair treatment and safeguards the interests of both majority and minority shareholders.

The Travis Texas Right of First Refusal Clause for Shareholders' Agreement is a legal provision that grants existing shareholders the first opportunity to purchase additional shares or transferable interests in a company before they are offered to external parties. This clause ensures that existing shareholders have the right to maintain their proportionate ownership and control over the company. In Travis Texas, there are different types of Right of First Refusal Clauses that can be included in a Shareholders' Agreement: 1. Standard Right of First Refusal Clause: This type of clause gives existing shareholders the right, but not the obligation, to purchase additional shares or interests that are being offered for sale by a shareholder who wishes to sell. The existing shareholders are given a time frame within which they can exercise this right, usually by matching the terms of the external offer. 2. Right of First Offer Clause: Similar to the standard Right of First Refusal, this clause requires the selling shareholder to first offer the shares or interests to the existing shareholders at a specified price before seeking external buyers. However, the existing shareholders are only given the opportunity to make an offer and the selling shareholder has the flexibility to accept or reject it. 3. Tag-Along Right Clause: This clause is designed to protect minority shareholders. It enables minority shareholders to "tag-along" with a majority shareholder who intends to sell their shares to a third party. The minority shareholders have the right to sell their shares on the same terms as the majority shareholder. 4. Drag-Along Right Clause: This clause grants majority shareholders the power to "drag-along" minority shareholders when selling their shares to a third party. If a majority shareholder receives an offer from a third party, they can force the minority shareholders to also sell their shares on the same terms and conditions. The Travis Texas Right of First Refusal Clause for Shareholders' Agreement is an essential tool for maintaining stability and control within a company by providing existing shareholders with the opportunity to maintain their ownership in the face of potential share or interest transfers. It ensures fair treatment and safeguards the interests of both majority and minority shareholders.