Home > M-A > shareholder agreements: the right of pre-emption in relation to the right of first offer Leases can also be included in leases. Here, the tenant can benefit from a pre-sale right on real estate if the owner wishes to sell. This is a form clause that we have used in the past to add a prerogative of first refusal to a shareholder contract. The right to first refusal is a promise that gives a person priority to enter into a purchase or transfer contract. For example, a shareholder of a company often has the right to refuse to buy shares from other shareholders of the company. Of course, only if this is stipulated in the company`s statutes or in the shareholders` pact. In this way, a company`s shareholders can protect themselves against the registration of persons outside the shareholder register. The right of pre-emption is often accompanied by a number of conditions that must be accepted in order to continue the purchase. It is customary for the shareholders of a nearby company to set the rules that govern their relations with each other in the form of a shareholders` pact. One of the main concerns of shareholders when negotiating a shareholder pact is the control of the transfer of shares to unknown or undesirable persons, while maintaining the liquidity of their shares. A common mechanism used to deal with this problem is a right of refusal (ROFR). For the authorized party, a right of pre-emption is a kind of insurance policy that undertakes not to lose rights to an asset it wants or needs.
For example, a commercial tenant may prefer to rent a site; However, he can buy the premises if it meant that he would be dislodged if the property was sold to a new owner. In such a case, the tenant would enter into his tenancy agreement through a right to the first refusal clause. In this way, if leasing becomes impossible, he would have the opportunity to buy the property before others had the chance. The right to the first refusal clauses can be adapted to create derogations from the model agreement.