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:
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
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
(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
(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
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
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.
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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;
(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
4.01 This Right of First Refusal Agreement shall expire and be of no further force or
effect on the ______ day of _________________, ______.
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:
If to the Company:
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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.
6.01 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.
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