Ecvc Draft Rofr Co Sale

Skill: Draft Right of First Refusal and Co-Sale Agreement

1. Subject-matter triage

• Treat the requested agreement as an amended and restated venture financing ancillary document, not a standalone policy memo.
• Identify all equity holders who are intended to be bound, including any trusts, holding companies, family vehicles, or other entities through which equity is held.
• Check whether the deal documents require the agreement to track the financing close, post-close cap table, voting arrangements, or investor rights package.
• If the source set includes a separate memorandum request, plan to produce the operative agreement first and the memo second.

2. Failure modes the skill is correcting

• The agreement names only individuals, leaving shares held through estate-planning or holding vehicles outside the transfer restrictions.
• A permitted transfer to a family trust or similar vehicle is allowed without requiring the transferor to keep sole voting control, enabling an indirect change in control without triggering protections.
• Charitable transfers are omitted from the permitted-transfer architecture, creating uncertainty over whether donations or donor-advised transfers are covered.
• The de minimis exception is drafted as a fixed share count, making it stale after recapitalizations, splits, or time.
• Termination turns on the public offering itself, even though the shares may remain locked up and illiquid after pricing.
• The co-sale mechanics do not clearly handle pro rata allocation, over-subscription, or failure-to-fill scenarios.
• The agreement reads like a summary of drafting choices rather than operative contract language.
• The companion memorandum explains conclusions without tying them to the source documents and the open items that still need business input.

3. Legal frameworks / domain conventions that apply

• Use standard venture-backed ROFR/co-sale architecture: company first right, then investor or designated holder right, then co-sale participation for secondary transfers.
• Draft permitted-transfer carve-outs narrowly and expressly; do not rely on generic affiliate language to capture trusts, estate vehicles, or charitable assignees.
• For estate-planning transfers, require retained sole voting control by the original holder and, where needed, a joinder by the transferee or vehicle.
• If charitable transfers are allowed, state whether the recipient must sign a joinder and whether the transfer remains subject to the agreement after transfer.
• Express de minimis thresholds as a percentage of the transferring holder’s outstanding holdings measured at the time of the proposed transfer, rather than as an absolute number.
• Key termination to the point at which the shares are freely tradable after any applicable lock-up or contractual resale restriction, not merely to the occurrence of a liquidity event.
• Use conventional mechanics for exercise periods, deemed waiver, notice content, transferee terms, and allocation among co-selling holders.
• Where the source documents impose special ownership or transfer conditions, reflect those conditions in the agreement text and in the memorandum as drafting judgments rather than assumptions.

4. Analytical scaffolds

• Inventory the parties and bound holders:
  • identify each named stockholder expected to sign;
  • identify any related vehicle that should sign because it is the record or beneficial holder;
  • identify whether a joinder form is needed for later transferees.
• Draft the permitted-transfer section by category:
  • estate planning transfers with voting-control retention;
  • transfers to family members or family entities if permitted;
  • charitable transfers, if any;
  • de minimis transfers keyed to a percentage threshold;
  • transfers required by law or court order if the deal documents contemplate them.
• Draft ROFR mechanics in sequence:
  • notice of proposed transfer;
  • company election period;
  • investor election period if applicable;
  • deemed waiver if no timely election;
  • permitted closing only on matching terms.
• Draft co-sale mechanics in sequence:
  • notice of partial sale;
  • election to participate;
  • pro rata calculation by relative holdings;
  • treatment of over-subscription;
  • obligation that the transferee purchase participating shares first if the sale cannot accommodate everyone.
• Draft termination mechanics to make clear that rights end only when the shares are actually freely tradeable after the relevant lock-up or similar restriction expires.
• Prepare the memorandum as an explanation of drafting decisions, open issues, and any assumptions that depend on the attached deal package.
• If multiple holders, transfer types, or temporal triggers appear in the source set, analyze each separately instead of compressing them into one generic statement.

5. Vertical / structural / temporal relationships

• Distinguish between record ownership, beneficial ownership, and voting control; a transfer can be economically permissive yet still trigger protective rights if control changes.
• Treat estate-planning vehicles as extensions of the holder only when the holder retains the required control rights throughout the transfer.
• Distinguish the signing population at closing from the universe of future transferees who may need joinders.
• Distinguish the transaction date, closing date, public offering date, lock-up expiration date, and actual free-trading date; termination should track the last of these operative milestones where applicable.
• Distinguish a transfer that is exempt from ROFR from one that is exempt from co-sale; the carve-outs may overlap but need not be identical.
• Distinguish notice delivery timing from exercise timing and from final closing timing; each should be set out separately in the operative document.
• Distinguish the agreement’s operative text from the memorandum’s explanatory role; the memo should not replace missing contract language.

6. Output structure conventions

• Deliver the amended and restated ROFR and co-sale agreement as the primary document, with complete operative clauses and defined terms suited to the financing.
• Include all relevant holder-affiliated entities as parties where their shares are intended to be covered or where their participation is needed for enforceability.
• State permitted-transfer carve-outs expressly, including the voting-control condition for estate planning transfers and any joinder requirement for transferees.
• State the de minimis transfer carve-out as a percentage-based threshold measured at the time of transfer.
• State termination by reference to post-lock-up free tradability, not simply the occurrence of the offering.
• Draft the co-sale allocation and over-subscription provisions so the transfer mechanics work even when not all requested co-sale shares can be sold.
• Prepare the drafting memorandum as a separate companion document that summarizes principal drafting decisions, points to the source-document assumptions used, and flags unresolved business or legal issues needing confirmation.
• Before finalizing, confirm that the agreement file exists and contains operative contract language, and that the memorandum file exists and contains actual drafting analysis rather than a placeholder summary.