- Any key holder wishing to sell or transfer shares must first offer such sale to the other key holders of the company first. If the key holders do not accept such sale, then the investors have the right to buy the shares at the offer price and terms.
- If any key holder wishes to sell his stock outside of the company, then the investors have the right to sell an equal amount on an individual basis (this prevents the management team from selling their shares to a third party without bringing the investors along).
- The Agreement gives the investors rights, including reparation for expenses in enforcing the terms of the Agreement, in the event that a key holder attempts to sell or transfer shares in violation of this Agreement.
- The Agreement defined transfers and sales that are exempt from the restrictions of this Agreement including transfer to family, transfer upon death, transfer from an entity to its holders, public offering, etc.
- The Agreement dictates that certain language be placed on the share certificates of the company.
- The Agreement dictates a lock-up period for sale or transfer in the event of an IPO. This is important to prevent shareholder from forcing an IPO in order to short a stock.
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