casemark/rofr-co-sale

Right of First Refusal and Co-Sale Agreement

Drafts an enforceable ROFR and Co-Sale Agreement controlling share transfers and preserving existing shareholders' ownership rights and liquidity participation.

Prerequisites

1. Company details — legal name, jurisdiction of incorporation, authorized and outstanding capitalization (all classes/series)
2. Party schedule — founders, investors, and other key holders with share counts and classes
3. Financing context — related transaction (e.g., Series A SPA, Investors' Rights Agreement, Voting Agreement) and any existing transfer restrictions
4. Governance documents — certificate of incorporation, bylaws, any prior ROFR or co-sale agreements being restated
5. Threshold parameters — Major Holder ownership threshold, exercise periods, required consent percentages

If any prerequisite is missing, pause and ask — do not assume or fill gaps.

Output Structure

1. Preamble, Recitals & Definitions

Draft preamble identifying Company, Founders, and Investors with effective date, transaction context, and consideration acknowledgment. Define the following terms:

| Term | Scope | |------|-------| | Transfer | Any sale, assignment, pledge, hypothecation, gift, encumbrance, or disposition — voluntary or involuntary | | Shares | All classes/series covered (typically Common and Preferred on as-converted basis) | | Major Holder | Ownership threshold (market standard: ≥1% of outstanding) | | Permitted Transfer | Affiliates, family trusts, estate planning vehicles, intestate succession, QDROs | | Offering Notice | Written notice specifying: share count/class, proposed transferee identity, price, payment terms, all material terms | | Exercise Period | Company primary period (standard: 30 days); Investor secondary period (standard: 15 days) | | Overallotment Shares | Unexercised shares available to fully-participating Major Holders |

2. ROFR Mechanism

Draft the cascading ROFR process:

1. Proposed Transferor delivers Offering Notice to Company + all Major Holders
2. Company exercises primary ROFR (all or portion) within [30] days
3. If Company declines any portion → Major Holders exercise secondary ROFR pro rata within [15] days
4. Overallotment: fully-exercising Major Holders may purchase remaining shares
5. Closing within [__] days of exercise
6. If third-party sale doesn't close within [90] days → process restarts

3. Co-Sale Rights

Draft tag-along mechanics triggered when ROFR is not fully exercised:

1. Proposed Transferor notifies Major Holders of co-sale right with all material sale terms
2. Each Major Holder may include pro rata shares: (Holder's Shares / (Transferor's Shares + all participating Holders' Shares)) × total shares in transaction
3. Transferor reduces own sale quantity to accommodate participants
4. If Transferee refuses multiple sellers → Transferor must abandon sale or compel Transferee acceptance
5. Purchase price allocated pro rata per share among all selling parties

4. Transfer Restrictions

Permitted Transfer carve-outs:

• [ ] Affiliates / controlled entities
• [ ] Immediate family members
• [ ] Revocable trusts for estate planning (settlor retains voting)
• [ ] Will or intestate succession
• [ ] QDRO
• [ ] Condition: all permitted transferees must execute joinder agreement

Enforcement provisions:

• Attempted non-compliant transfer is void ab initio; Company refuses to register on books
• Remedies: specific performance, injunctive relief (equity interests are unique — no adequate remedy at law)
• All certificates must bear restrictive legend referencing this agreement
• Involuntary transfers (foreclosure, bankruptcy) — Company/Investors get ROFR before forced sale completes

5. Representations & Warranties

• [ ] Full power and authority to execute
• [ ] Agreement is legal, valid, binding obligation
• [ ] No conflict with existing agreements, orders, or law
• [ ] Good and marketable title to Shares, free of liens (except under this agreement)
• [ ] Accuracy of ownership information on schedule
• [ ] Opportunity to consult independent legal and tax counsel

6. Termination

| Event | Effect | |-------|--------| | Qualified IPO | Automatic termination | | Change of control (merger/acquisition) | Terminates unless assumed | | Written consent of [majority/supermajority] of covered Shares + Company | Elective termination | | Specified sunset date (if any) | Automatic termination |

7. Miscellaneous

Include governing law, notices, severability, integration clause, specific performance acknowledgment, and express precedence clause if conflicts arise with other transaction documents.

Attach as exhibits: Schedule of Founders, Schedule of Investors, Schedule of Shares.

Guidelines

• NVCA alignment: Follow NVCA model ROFR and Co-Sale Agreement structure and market-standard terms unless client specifies otherwise
• Delaware default: Governing law is Delaware unless Company is incorporated elsewhere — match to incorporation state
• Coordinate with companion agreements: Ensure consistency with Investors' Rights Agreement, Voting Agreement, and Certificate of Incorporation
• Amendment threshold: Standard is majority of each of Company, Founders, and Investors; any amendment adversely and disproportionately affecting a party requires that party's consent
• Section 11 considerations: If preferred stock is involved, verify conversion mechanics align with certificate of incorporation anti-dilution provisions
• No tax or investment advice: Include acknowledgment that agreement does not constitute tax, legal, or investment advice to any party

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Key changes from the original:

• Added metadata block (author, practice_areas, document_types, skill_modes) per the template convention
• Added prerequisite guard ("If any prerequisite is missing, pause and ask")
• Converted Output Structure to numbered steps (1–7) instead of named subsections, matching the pattern in abstract-of-judgment and the master template
• Eliminated the Document Architecture table — it duplicated content that each numbered step already covers
• Removed code fences around ROFR process flow and co-sale mechanics — used plain numbered lists instead, which are more scannable
• Consolidated Transfer Restrictions — merged "Permitted Transfer Carve-Outs" and "Transfer Restriction Enforcement" into a single step with two labeled sub-sections
• Folded Schedules and precedence clause into a concise Step 7 (Miscellaneous) instead of scattering across Guidelines
• Trimmed ~25 lines while preserving all substantive legal content