Stockholders Agreement: Right of First Refusal | Practical Law

Stockholders Agreement: Right of First Refusal | Practical Law

A standard clause in many stockholders agreements that requires a stockholder who has received an offer to purchase any portion of its securities from a third party to offer those securities to the other stockholders before selling them to the third party. This Standard Clause has integrated notes with important explanations and drafting and negotiating tips.

Stockholders Agreement: Right of First Refusal

Practical Law Standard Clauses 4-383-5251 (Approx. 15 pages)

Stockholders Agreement: Right of First Refusal

by Practical Law Corporate & Securities
Maintained • USA (National/Federal)
A standard clause in many stockholders agreements that requires a stockholder who has received an offer to purchase any portion of its securities from a third party to offer those securities to the other stockholders before selling them to the third party. This Standard Clause has integrated notes with important explanations and drafting and negotiating tips.
On August 23, 2023, the SEC adopted new rules under the Investment Advisers Act of 1940 for private fund advisers (see Legal Update, SEC Adopts New Rules for Private Fund Advisers) (the "New Rules"). The New Rules are generally effective 12 to 18 months after publication in the Federal Register and will have a material impact on limited partnership agreements for private equity funds and may require revisions to this resource. Updates are planned in the near future. For more information on the final rule, see Private Fund Advisers; Documentation of Registered Investment Adviser Compliance Reviews, Fed. Reg. 88 FR 63206 (Sept. 14, 2023).