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Key Provisions of Right of First Refusal Agreements
Shareholders of startup companies often enter into a Right of First Refusal Agreement requiring shareholders to give the company or the other shareholders the priority right to match any offers to buy shares in the company. Here are the key provisions.
Shareholders of startup companies often enter into a Right of First Refusal Agreement requiring shareholders to give the company or the other shareholders the priority right to match any offers to buy shares in the company. This right arises when a shareholder wishes to sell his or her stock. Such an agreement is usually desirable to try to keep stock in friendly hands and maintain the continuity of the corporation. This agreement is sometimes included within the Buy-Sell Agreement.
Key provisions of the Right of First Refusal Agreement
include:
- Restrictions on transfer
- Right of first refusal
- Legend on stock certificate
- No transfer to competitors
- Term of agreement
- Will provisions
- Spouses' (partners') consent
Click here to view a sample
Right of First Refusal Agreement for a California corporation.
Click here to view a sample
Right of First Refusal Agreement for a Delaware
corporation.
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