Co Sale Agreement

On the other hand, if many of your investors use their co-sale rights, you can expect a dramatic change. A new investor with a majority can make a lot of weight. This weight continues to increase if he or she receives even more co-sale shares. If the investor receives the most shares of your company, that investor can replace all directors, partners, managers and other executives as often as they wish. Yet this is only the most pessimistic scenario. Important note that ROFR and co-sale rights may be reserved for large investors. Suppose XYZ Company is a start-up looking for capital. He sets up a business plan and talks with dozens of potential investors, many of whom are buying shares. XYZ Company makes sure to offer these shares with co-liability rights.

They also have a co-sale right, which allows them to sell their shares to the CUS for 15 $US and force them to buy up to 80 percent of the company instead of 50 percent. Some staff members and small investors may also have ROFR and co-sale rights, but others have not. In the event that [__________] proposes to transfer shares to the company, the company has the right to pre-empt the shares under the same conditions as the proposed transfer. If the company does not exercise its right of pre-emption, the owners of Preferred have a right of pre-emption (pro rata among the holders of Preferred) with regard to the proposed transfer. [The right to purchase unjustifiable shares is redistributed on a pro rata basis among the other legitimate holders of Preferred.] Insofar as the pre-emption rights are not exercised, preferred holders have the right to participate in proportion to the proposed transmission (as for the buyer and Preferred holders). . . .