Right of First Refusal Partnership Agreement

This agreement establishes a right of first refusal between two companies that plan to collaborate on goods and services while maintaining control over client work. In plain terms, a right of first refusal gives the designated holder the first opportunity to accept or refuse a deal before outside parties can step in. Here, each company grants the other a first chance to perform Primary Goods and Services at customary fees and terms.

When a project includes work that the other party typically provides, the rofr holder gets the first right to take it on. The parties involved must give timely written notice, and silence after a stated period is deemed a refusal. If the receiving party cannot close within the limited time period to complete the transaction, the other party may proceed with the deal as outlined in such notice.

The agreement sets expectations that help prevent disputes. It requires good faith communications, a clear mechanism for giving notice, and a set period measured in days to accept, exercise, or refuse. Exceptions can be defined in writing.

Termination can occur on 30 days written notice, but obligations regarding proprietary information survive. The document specifies governing law and venue, and it binds successors and assigns, with assignment requiring prior consent. Equitable relief is available if a breach makes money damages an inadequate remedy. Collectively, these provisions promote diligence, clarify scope, and protect each entity's ability to maintain control of work it is best positioned to deliver.

Right of refusal clauses are common across various transactions. In real estate transactions, a property owner or landlord decides to sell or lease, and a tenant or other interested buyers with a right of first refusal clause can match a bona fide offer from external parties on the same terms, at a purchase price equal to the third-party offer, often tied to fair market value or an appraisal. Similar provisions appear in purchase agreements for assets, stock, or warrants, where an investor or shareholder may match an external offer. Conditions set for notification, expiration date, financing, and execution are typically addressed within a business-day timeframe, helping interested parties act in competitive markets or a seller's market.

Use cases include existing partners coordinating overlapping services, agencies aligning on client projects, vendors handling a portion or portion thereof of a larger engagement, and asset owners organizing orderly exits or acquisitions.

Proposal Kit supports writing agreements like this by streamlining document assembly, generating automated line-item quoting for related proposals, and using its AI Writer to build supporting documents. Its extensive template library and ease of use help teams produce consistent notices and transaction paperwork that align with the deal's terms.

Beyond the basics, many ROFR agreements spell out a refusal clause that governs how a seller must notify the right holder and how the holder may exercise such right. A common sequence is i) the seller receives an initial offer or bona fide terms from a specific party, ii) the seller must notify the holder in writing and include details of such offer, and iii) the holder must submit acceptance, refusal to purchase, or a request for such time as is needed to secure financing. Failure to respond within the period determined by the agreement can constitute refusal to purchase. If the holder accepts, it must pay the stated consideration and complete payment in accordance with the terms offered; if not, the seller's ability to proceed with such sale to other buyers on the same price and same terms is preserved.

These provisions appear in a purchase agreement, a lease agreement between landlords and tenants, or an acquisition where an asset owner wishes to transfer such portion of the business. In corporate contexts, a general partner or shareholder may be a right holder, and board and directors' authority, restrictions, and obligations often apply. Some clauses exclude family members, a public offering, or an open market process on an exchange.

Notwithstanding these carve-outs, the parties benefit from clear steps for due diligence, negotiation, determination of fair market value, and the receipt and signing of documents. The process helps manage risk in circumstances like an exit, an advance sale of assets, or a favorable offer where other potential buyers compete. Note that intent, intention, and performance timelines are crucial; if performance becomes impossible, parties may terminate pursuant to the agreement.

Example process: submit a first offer, decide whether to acquire or assume security obligations tied to the asset, negotiate compensation in dollar terms, and, if needed, request an extended deadline. Other offers may remain contingent until the holder's decision. In this context, Proposal Kit helps teams write the first refusal clause and related provision language, assemble notices and purchase agreement exhibits, and maintain consistency across documents. Its document assembly, automated line-item quoting, AI Writer for supporting documents, and extensive template library streamline the workflow from notification to closing.

Additional considerations often overlooked in ROFR practice center on precision and scope. Well-drafted rofr clauses should define who qualifies as a buyer, including any person acting through affiliates, and whether a grant of the first refusal to purchase applies to assets, equity, or changes in ownership. The agreement should also state whether partial transfers trigger the right and how concurrent deals connect in connection with broader restructuring.

An article defining notice and disclosure can impose an obligation to provide all material terms so the holder can match without ambiguity. To respect timing and deal with momentum, parties can set staged decision points for preliminary and final terms, with clear consequences if milestones are missed. Governance language can align ROFR exercise with internal approvals so the right holder's decision does not conflict with board calendars or financing checkpoints. Proposal Kit can help teams keep these definitions, article references, and cross-document connections consistent across drafts and related exhibits.

How to write my Right of First Refusal Partnership Agreement document - The Narrative

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