A right of first offer is a provision in a shareholder agreement, operating agreement, or other legal document governing a North Carolina company that gives one party the right to make the first offer to buy or sell shares of the company before they can be offered to any other party.

In the case of a right of first offer to buy shares, the shareholder who owns the shares must first offer them to the party with the right of first offer at a price and on terms specified in the agreement. If the party declines the offer, then the shareholder is free to offer the shares to other parties.

In the case of a right of first offer to sell shares, the shareholder who owns the shares must first offer them to the party with the right of first offer before they can be sold to any other party. The party with the right of first offer may then either accept the offer or decline, in which case the shareholder is free to sell the shares to other parties.

The purpose of a right of first offer is to give a particular party a chance to participate in a transaction before others are allowed to do so, which can help ensure that the company’s ownership structure remains stable and that existing shareholders have an opportunity to maintain or increase their ownership stakes. It can also be a way to prevent unwanted or undesirable parties from acquiring shares in the company.