VIEWS: 9,684 PAGES: 6 CATEGORY: Selling a Business POSTED ON: 11/6/2009
This is an agreement that grants its holder the right to accept or decline an offer for certain property before it can be offered to third parties. The holder does not have an obligation to accept the offer, they simply have the right to be the first party that gets the opportunity to enter into the specific transaction. This agreement defines the property subject to the agreement as well as providing the holder with a grace period when they can accept or decline the offer. This agreement can be used by small businesses or other entities that want to have the option to enter into a business transaction before it is offered to the general public.
This is an agreement that grants its holder the right to accept or decline an offer for certain property before it can be offered to third parties. The holder does not have an obligation to accept the offer, they simply have the right to be the first party that gets the opportunity to enter into the specific transaction. This agreement defines the property subject to the agreement as well as providing the holder with a grace period when they can accept or decline the offer. This agreement can be used by small businesses or other entities that want to have the option to enter into a business transaction before it is offered to the general public. RIGHT OF FIRST REFUSAL AGREEMENT THIS RIGHT OF FIRST REFUSAL AGREEMENT is entered into as of the _________ day of ____________, _____ (the “Effective Date”) by and between __________________________ (the “Property Holder”) and ___________________________________________ (the “Company”), with reference to the following facts: RECITALS: WHEREAS: Property Holder owns certain property (the “Property”) and has agreed to provide the Company with this Right of First Refusal to purchase the Property; NOW, THEREFORE, in consideration of the mutual covenants, warranties and representations contained herein, the parties hereby agree as follows: 1.00 THIRD PARTY OFFER 1.01 No sale by Property Holder of any of the Property to any Person other than to the Company shall be affected except in compliance with this Agreement. 1.02 If Property Holder receives a bona fide written offer (a “Third Party Offer”) from any person (the “Buyer”) dealing at arm's length to purchase any of the Property owned by Property Holder (the “Purchased Shares”), which Third Party Offer is acceptable to Property Holder, then Property Holder shall, by notice in writing to the Company, make an offer (the “Offer”) to sell the Property to the Company at the same price and upon the same terms and conditions as are contained in the Third Party Offer. 1.03 The Offer shall: (i) identify in reasonable detail the Buyer and, if the Buyer is not an individual, identify those Persons who, together with their Associates and Affiliates, control the Buyer; (ii) be accompanied by a true copy of the Third Party Offer setting forth all of the terms and conditions of the Third Party Offer; (iii) provide such information concerning the business experience and expertise of the Buyer and its financial condition as is reasonably available to Property Holder; and (iv) the Offer shall not be revocable except with the consent of Property Holder. 1.04 The Company shall have a period of ___________ (____) days from the date the Offer is received by the Company (the "Offer Period”) to accept the Offer. Acceptance of the Offer shall be made in writing (the ”Notice of Acceptance”), and the Company shall deliver a Notice of Acceptance of such Offer and shall state therein whether the Company: (i) accepts the Offer on the condition that it is able to purchase all of the Property; or (ii) accepts the Offer on the condition that it is able to purchase an equal portion of the Property. 1.05 Notwithstanding the provisions of this Agreement which restrict the disposition of or dealing with the Property. Property Holder shall at any time or from time to time have the right, without the approval of the Company, to dispose of all or any of the Property to a Permitted Transferee, provided that at the time of such disposition: (i) Such Permitted Transferee shall agree with Property Holder in writing and in form and substance satisfactory to Property Holder, acting reasonably, to assume and be bound by all of the terms and obligations contained in this Agreement as if such Permitted Transferee had entered into this Agreement in the place and stead of Property Holder. (ii) The Permitted Transferee agrees to remain a Permitted Transferee of Property Holder for so long as the Permitted Transferee holds the Property. (iii) The Company shall receive, in form and substance satisfactory to it, acting reasonably, evidence that the Permitted Transferee is a Permitted Transferee of Property Holder and that the Agreements referred to in Sections 1.05 are legal, valid and binding obligations of the Permitted Transferee. 1.06 For the purposes of this section, “Permitted Transferee” means: (i) a trust of which Property Holder or his/her spouse and/or issue are the sole beneficiaries, provided that such trust is a resident of _______________; (ii) the spouse or issue of Property Holder , provided such spouse or issue, as the case may be, is then a resident of _________________; or (iii) a Company of which Property Holder is the sole and registered beneficial shareholder. 2.00 ACCEPTANCE OF OFFER 2.01 If the Offer is accepted by the Company within the Offer Period, Property Holder shall sell and the Company shall purchase the Property upon the terms and conditions contained in the Offer. In such case, the Company shall purchase the Property from Property Holder. 2.02 The closing of the transaction of purchase and sale pursuant to the Offer (a “Sale Transaction”) shall take place at _____________________ on the date which is _____________ (___) days after the proposed date of closing contained in the Third Party Offer. © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 3 3.00 THIRD PARTY SALE 3.01 If the Company does not accept the Offer during the Offer Period then, subject to the provisions of Section 3.02 hereof, the rights of the Company to purchase the Purchased Shares shall cease and Property Holder may sell the Property to the Buyer upon exactly the same terms and conditions as those contained in the Third Party Offer for a price not less than the Purchase Price contained in the Third Party Offer. 3.02 Upon completion of the sale of the Purchased Shares to the Buyer pursuant to the terms of section 3.01 aforementioned, Property Holder shall, within _________ (____) days of the closing date for the sale of the Property, provide the Company with such information and documentation regarding the sale of the Property to the Buyer as it may reasonably require as evidence of the fact that the sale of the Property to the Buyer was carried out on exactly the same terms and conditions and at the Purchase Price as those contained in the Third Party Offer. 3.03 In the event that the sale of the Property to the Buyer has not been carried out exactly in accordance with the terms of the Third Party Offer, or on terms more favorable to the Buyer than those contained in the Third Party Offer then the Company shall be entitled to: (i) make application for and obtain an immediate order of a court of competent jurisdiction setting aside the sale of the Property to the Buyer; and (ii) direct that the Purchased Shares be sold to the Company on exactly the same the terms and conditions for which the Property was sold to the Buyer. 4.00 EXPIRATION 4.01 This Right of First Refusal Agreement shall expire and be of no further force or effect on the ______ day of _________________, ______. 5.00 NOTICES 5.01 Any notice, direction or other instrument required or permitted to be given to any party hereto shall be in writing and may be given by mailing the same postage prepaid or delivering the same to such party at the following addressed: If to Property Holder: Fax: (_____) If to the Company: © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 4 Fax: (_____) or to such other address as the party may in writing advise the other and such notices shall be deemed to have been given to such party on the date of delivery or three (3) business days after the date of mailing. 6.00 MISCELLANEOUS 6.01 This Agreement constitutes the entire Agreement between the parties hereto pertaining to the subject matter hereof and supersedes all prior Agreements, understanding, negotiations and discussions, whether oral or written, of the parties and there are no warranties, representations or other agreements between the parties in connection with the subject matter hereof except such written Agreements as have been executed by the parties thereto. No supplement, modification, waiver or termination of this Agreement shall be binding unless executed in writing by the parties to be bound thereby. 6.02 This Agreement shall be governed by and construed in accordance with the laws of the /State of ______________________ and the applicable laws of _______________ (enter country) and shall be treated in all respects as a(n) __________________ contract. The parties hereto submit to the non-exclusive jurisdiction of the Courts of ______________ with respect to any dispute, claim or other matter arising under this Agreement. 6.03 This Agreement may be executed in two or more identical counterparts, each of which will be deemed to be an original and all of which together will constitute one and the same instrument. Execution of this Agreement and transmission by facsimile document transfer will be acceptable and binding upon the parties hereto. 6.04 This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors, personal representatives and permitted assigns. IN WITNESS WHEREOF the parties hereto have duly executed this Agreement. (COMPANY) Title: © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 5
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