Payment to Preferred Shareholders Clause Samples
The 'Payment to Preferred Shareholders' clause defines the rights of preferred shareholders to receive specific payments, typically before any distributions are made to common shareholders. In practice, this clause outlines the amount, timing, and priority of dividends or liquidation proceeds owed to preferred shareholders, often specifying that they are paid a fixed dividend or a set return of capital before others. Its core function is to protect the financial interests of preferred shareholders by ensuring they receive agreed-upon payments ahead of common shareholders, thereby reducing their investment risk.
Payment to Preferred Shareholders. The share certificate or certificates that the Co-Sale Rights Holder delivers to the Selling Shareholder pursuant to Section 4.4(b) shall be transferred to the prospective purchaser in consummation of the sale of the Offered Shares pursuant to the terms and conditions specified in the First Transfer Notice, and the Selling Shareholder shall concurrently therewith remit to such Co-Sale Rights Holder that portion of the sale proceeds to which such Co-Sale Rights Holder is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase any shares or other securities from a Co-Sale Rights Holder exercising its co-sale right hereunder, the Selling Shareholder shall not sell to such prospective purchaser or purchasers any ROFR Shares unless and until, simultaneously with such sale, the Selling Shareholder shall purchase such shares or other securities from such Co-Sale Rights Holder.