Right of first refusal

Right of first refusal (ROFR or RFR) is a contractual right that gives its holder the option to enter a business transaction with the owner of something, according to specified terms, before the owner is entitled to enter into that transaction with a third party. A first refusal right must have at least three parties: the owner, the third party or buyer and the option holder. In general, the owner must make the same offer to the option holder before making the offer to the buyer. The right of first refusal is similar in concept to a call option.

An ROFR can cover almost any sort of asset, including real estate, personal property, a patent license, a screenplay, or an interest in a business. It might also cover business transactions that are not strictly assets, such as the right to enter a joint venture or distribution arrangement. In entertainment, a right of first refusal on a concept or a screenplay would give the holder the right to make that movie first. Only if the holder turns it down may the owner then shop it around to other parties.

Because an ROFR is a contract right, the holder's remedies for breach are typically limited to recovery of damages. In other words, if the owner sells the asset to a third party without offering the holder the opportunity to purchase it first, the holder can then sue the owner for damages but may have a difficult time obtaining a court order to stop or reverse the sale. However, in some cases the option becomes a property right that may be used to invalidate an improper sale.

ROFR also arises in visitation agreements/orders in divorce cases. In such cases, an ROFR may require a custodial parent to offer parenting time to the non-custodial parent (rather than having a child supervised by a third party) any time that the custodial parent or his/her family is unable to exercise his/her right to parenting time (e.g., the custodial parent needs to travel out of town). Under these circumstances a breach may result in a finding of contempt and any remedies for contempt.

An ROFR differs from a Right of First Offer (ROFO, also known as a Right of First Negotiation) in that the ROFO merely obliges the owner to undergo exclusive good faith negotiations with the rights holder before negotiating with other parties. A ROFR is an option to enter a transaction on exact or approximate transaction terms. A ROFO is merely an agreement to negotiate.


ROFR: Abe owns a house and Bo offers to buy that house for $1 million. However, Carl holds a right of first refusal to purchase the house. Therefore, before Abe can sell the house to Bo, he must first offer it to Carl for the $1 million that Bo is willing to buy it for. If Carl accepts, he buys the house instead of Bo. If Carl declines, Bo may now buy the house at the proposed $1 million price.

ROFO: Carl holds a ROFO instead of an ROFR. Before Abe can negotiate a deal with Bo, he must first try to sell the house to Carl on whatever terms Abe is willing to sell. If they reach an agreement, Abe sells the house to Carl. However, if they fail, then Abe is free to start fresh negotiations with Bo without any restriction as to price or terms.


The following are all variations on the basic ROFR:

  • Duration: The ROFR is limited in time. For example, Abe must make the offer to Carl for any proposed sale only in the first five years. After that, the right expires and Abe has no further obligation to Carl.
  • Exceptions include certain transactions. Abe may sell or transfer the property to a holding company, a trust, family members, etc. without first offering it to Carl. However, the new owners remain subject to the right.
  • Transferability: Carl may assign his ROFR to Bo. Abe must now offer Bo an option to purchase the property instead of Carl. Not every ROFR is transferable; some are personal to the original holder.
  • Extinguished on first sale: if Abe sells the property to Bo because Carl declines the right, the property is no longer subject to the right. Bo may resell it free of the ROFR.
  • Extinguished on declined/failed exercise: if Abe proposes to sell the property to Bo and Carl declines, or if Carl accepts but is unable to complete the transaction, the right is extinguished whether or not Abe ultimately sells the property.
  • Persistent: in contrast to the above two, in this case, the right runs with the property and binds the new purchaser. If Abe sells the property to Bo, Bo must offer the property to Carl first, just like Abe if Bo wishes to re-sell it.
  • Offer and acceptance terms: specific deadlines, procedures, and forms may be required. For example, Abe must give Carl a "notice of sale." Carl has 30 days to accept or reject, with failure to respond counting as rejection. Carl must then close the transaction within that time, or that counts as a failed attempt to exercise.
  • Limited time period to close transaction: Abe offers the property to Carl under the ROFR, and Carl declines. Abe now has 60 days to close the transaction with Bo. If it cannot close within 60 days, Abe must offer it again to Carl before proceeding further with Bo.
  • Substitute purchaser allowed: Abe offers the property to Carl, who declines. Abe is then free to sell it to Bo but fails to do so. Abe may sell the property under the same terms to Erin instead without reoffering it to Carl.
  • No pending transaction required: Abe wishes to sell the house for $1 million but has not yet identified a purchaser. He prepares proposed sales terms and offers it to Carl on those terms. If Carl declines, he may then shop around for a purchaser.
  • Slight variations allowed in exercise: Abe enters an agreement with Bo calling for Bo to put down a 30% down payment, conduct certain inspections, and close the transaction in 20 days. He offers it to Carl at those terms. Carl accepts but is entitled to insist on a 20% down payment and a 30-day closing period.
  • Slight variations allowed in sale: Abe offers the house for $1 million to Carl, who declines. Abe then enters a transaction with Bo but during the escrow, Bo discovers a flaw in title and several defects. Abe is entitled to discount the price by $20,000 to close the sale with Bo without having to reoffer the house to Carl at $980,000.
  • Continuous: a continuous right of first refusal can be worded to continue to live, even upon infinite opportunities that are declined.

Many other variations are possible. A fully drafted ROFR addresses all of the types of issues and more, and in the case of valuable or complex transactions it is subject to negotiation and review by business transaction attorneys. However, many ROFR are not completely specified. Even the best drafted ROFR agreements suffer a high risk of dispute and litigation because they are anticipating future transactions and contingencies that are unknowable when the ROFR originates.

In venture capital

In venture capital deals, the right of first refusal is a term sheet provision permitting existing investors in a company to accept or refuse the purchase of equity shares offered by the company, before third parties have access to the deal. The main goal of the provision is to allow investors to prevent ownership dilution as the company raises additional capital. Typically, the provision will exempt certain types of shares, such as those in an employee pool, or shares issued to equipment loaners or lessors.[1][2] Startup companies are advised to attempt negotiating out this right, because it enables existing investors to send stronger (potentially negative) signals to new investors, and consequently drive down the company's valuation.[3]

See also


  1. ^ "What is a "right of first refusal" on Company sales?". Nov 4, 2009.
  2. ^ Brad Feld (2005-06-01). "Term Sheet: Right of First Refusal".
  3. ^ Babak Nivi (2007-05-08). "Keep your Series A options open if you raise debt".

External links

Chapter 61

Chapter 61 is a voluntary current use program designed by the Massachusetts Legislature to tax real property in the Commonwealth of Massachusetts at its timber resources value rather than its highest and best use (development) value. Landowners who enroll their land in the program receive property tax reductions in exchange for a lien on their property. The terms of the lien require that enrolled land remain in an undeveloped state and be managed for forest resources extraction under a forest management plan approved by the state. Furthermore, the lien provides the municipal government of the town in which the enrolled property is located a right of first refusal should the landowner put the land up for sale while it is enrolled in the program. Towns may assign their right of first refusal to a state agency or a non-profit land trust. Landowners who develop their land while enrolled in the program, or for a period of time after withdrawing from the program, may be required to pay penalties.

Farsund Hospital

Farsund Hospital was a local hospital situated close to the town centre of Farsund in Norway. It closed in 2007 and the municipality bought the property in December 2008. It has been disused since.

Built in 1937 on 1.1 hectares (2.7 acres) on a hill overlooking the town, the hospital opened in September 1938 and has over 4,000 square metres (43,000 sq ft) of floor space on four levels. It was operated by the municipality until the health care reform of 2003, when it came under the regional Sørlandet sykehus HF system.

The hospital had a fine reputation for osteopathic medicine, according to Svein Mathisen, who had an ankle operation there in December 1983.The maternity ward closed in 1993 and the surgical department in 1996. In 1998 there were 70 employees. On 30 June 2005 the polyclinic, radiology, and laboratory departments closed, and the hospital stopped operating 24 hours a day. Many employees were transferred to other hospitals. In 2005 there were 55 employees. The hospital closed in October 2007 when the paediatric and youth psychiatry department moved out. The municipality of Farsund had the right of first refusal on the hospital under a 1955 agreement; on 15 December 2008 they bought it from Sørlandet sykehus, planning to use it to offer private health services such as radiography. The old X-ray equipment was donated to a hospital in Zimbabwei.In late 2012 the municipality decided to sell the building, but it must first be rezoned so that it can be used for purposes other than health care. In May 2013 the municipality published planning documents under which the site is to be used for high-density housing.

First look deal

A first-look deal is any contract containing a clause granting, usually for a fee or other consideration that covers a specified period of time, a pre-emption right, right of first refusal, or right of first offer (also called a right of first negotiation) to another party, who then is given the first opportunity to buy outright, co-own, invest in, license, etc., something that is newly coming into existence or on the market for the first time or after an absence, such as intellectual property (manuscript, musical composition, invention, artwork, business idea, etc.) or real property (real estate).

Hilton Grand Vacations

Hilton Grand Vacations Inc. is based in Orlando, Florida, United States, with regional offices located in Las Vegas, Nevada, Oahu, Hawaii, New York City, Marco Island, Florida and Sanibel Island, Florida. It was formerly a wholly owned subsidiary of Hilton Inc. (formerly Hilton Worldwide) until it was spun off into a publicly traded company.

Dealing in timeshares, Hilton Grand Vacations Company, LLC develops, manages, markets, and operates a system of brand-name vacation club ownership resorts. Resort villas are jointly owned by members who have exclusive use of the properties for limited periods of time (also known as timeshares). Club members can also exchange their intervals for vacations at affiliated resorts worldwide. Various timeshare websites report timeshare owner critiques of the HGVC property experience.

A year out after investing, HNA Group was in talks to sell some or all of its 25% share in Hilton Grand Vacations, a timeshare business which had spun off from Hilton Worldwide Holdings the year before.

Ius in re

Ius in re, or jus in re, under civil law, more commonly referred to as a real right or right in rem, is a right in property, known as an interest under common law. A real right vests in a person with respect to property, inherent in his relation to it, and is good against the world (erga omnes). The primary real right is ownership (dominium) (freehold, leasehold, commonhold). Whether possession (possessio) is recognized as a real right, or merely as a source of certain powers and actions, depends on the legal system at hand. Subordinate or limited real rights generally refer to encumbrances, rights of use and security interests. The term right in rem is derived from the action given to its holder, an actio in rem. In Latin grammar the action against the thing demands a fourth case. The underlying right itself, Ius in re, has a fifth case, as the right rests on, or burdens, the thing. By mistake the common law terminology now uses the fourth case for describing the right itself. Compare jus ad rem.

jus in re propria – the right of enjoyment (i.e., the right to use the property in any legal manner) which is incident to full ownership or property, and is often used to denote the full ownership or property itself.

jus in re aliena, or encumbrance, which includes servitudes, security interests, real burdens, land charge, rentcharge, emphyteusis, right of first refusal.Maxims:

ius in re inhaerit ossibus usufructarii "A real right attaches to the usufructuary".

Lease purchase contract

A Lease-Purchase Contract, also known as a Lease Purchase Agreement, is the heart of rent-to-own properties. It combines elements of a traditional rental agreement with an exclusive right of first refusal option for later purchase on the home. It is a shortened name for Lease with Option to Purchase Contract.

MLS Re-Entry Draft

The MLS Re-Entry Draft is an annual event in which Major League Soccer teams select players who are out of contract or have had their options declined by their current teams. Although the single-entity league does not have true free agency, the re-entry draft was created to provide an outlet of internal movement for veteran players.

Marvel Entertainment

Marvel Entertainment, LLC (formerly Marvel Enterprises and Toy Biz, Inc., and marketed and stylized as MARVEL) is an American entertainment company founded in June 1998 and based in New York City, formed by the merger of Marvel Entertainment Group, Inc. and ToyBiz. The company is a wholly owned subsidiary of The Walt Disney Company, and is mainly known for its Marvel Comics, Marvel Animation, and Marvel Television units. Marvel Studios, formerly under the Marvel umbrella, became a subsidiary of The Walt Disney Studios, where it develops and produces a shared universe of films that shares continuity with some of the shows produced by the television unit.

In 2009, The Walt Disney Company acquired Marvel Entertainment for US$4 billion; it has been a limited liability company (LLC) since then. For financial reporting purposes, Marvel is primarily reported as part of Disney's Consumer Products segment ever since Marvel Studios' reorganization into Walt Disney Studios.Over the years, Marvel Entertainment has entered into several partnerships and negotiations with other companies across a variety of businesses. As of 2019, Marvel has film licensing agreements with Sony Pictures (for Spider-Man films), and Universal Pictures (a right of first refusal to pick up the distribution rights to any future Hulk films produced by Marvel Studios), and a theme park licensing agreement with Universal Parks & Resorts (for specific Marvel character rights at Islands of Adventure and Universal Studios Japan). Aside from their contract with Universal Parks & Resorts, Marvel's characters and properties have also appeared at Disney Parks.

Marvel Studios

Marvel Studios, LLC (originally known as Marvel Films from 1993 to 1996) is an American motion picture studio based at the Walt Disney Studios in Burbank, California and is a subsidiary of Walt Disney Studios, itself a wholly owned division of The Walt Disney Company, with film producer Kevin Feige serving as president. Previously, the studio was a subsidiary of Marvel Entertainment until Disney reorganized the companies in August 2015.

Dedicated to producing films based on Marvel Comics characters, the studio has been involved in three Marvel-character film franchises to have exceeded $1 billion in North American revenue: the X-Men, Spider-Man, and Marvel Cinematic Universe multi-film franchises. The Spider-Man franchise is licensed to Sony Pictures. Since 2012, Marvel Studios' films are distributed theatrically by Walt Disney Studios Motion Pictures, having previously been distributed by Paramount Pictures from 2008 to 2011. Universal Pictures distributed The Incredible Hulk (2008) and has the right of first refusal to distribute any future Hulk films produced by Marvel Studios, while Sony Pictures distributed Spider-Man: Homecoming (2017) and will distribute any future Spider-Man films produced in conjunction with Marvel Studios.Marvel Studios has released 21 films since 2008 within the Marvel Cinematic Universe, from Iron Man (2008) to Captain Marvel (2019). These films all share continuity with each other, along with the One-Shots produced by the studio and the television shows produced by Marvel Television. The series has grossed over $18 billion at the global box office, making it the highest-grossing film franchise of all time.

New Era Field II

New Era Field II is the working title for a proposed American football stadium located near or within Buffalo, New York for use by the Buffalo Bills. Numerous proposals have been submitted to the City of Buffalo, Erie County, the Bills, and the State of New York. Regardless of whatever proposal is built, New Era Cap Company will hold right of first refusal over naming rights to the stadium as part of a naming rights deal with the team's current stadium that was signed in August 2016.

Pat Bowlen

Patrick Dennis Bowlen (born February 18, 1944) is the majority owner of the Denver Broncos of the National Football League (NFL). The Bowlen Family, including his two brothers John Bowlen and Bill Bowlen, and sister Marybeth Bowlen, purchased the team from Edgar Kaiser in 1984. He served as the Broncos CEO from his purchase of the club in 1984 until July 2014, when he stepped down as Broncos' CEO due to the onset and progression of Alzheimer's disease.

Performance Racing Network

The Performance Racing Network (PRN) is a radio network controlled by Speedway Motorsports.

Since 1981, PRN has aired all NASCAR-sanctioned Monster Energy NASCAR Cup and Xfinity Series events held at Speedway Motorsports-controlled tracks which include Atlanta, Bristol, Charlotte, Kentucky, Las Vegas, New Hampshire, Sonoma and Texas, along with the Indianapolis Motor Speedway. The Big Machine 400 is jointly produced with the IndyCar Radio Network, where special restrictions are imposed by Indianapolis (radio stations must carry additional IndyCar Series races or pay a fee, and in conflicts where the PRN station and the IndyCar Radio station are different stations, the IndyCar Radio station has right of first refusal), and the streaming radio rights belong to PRN. This is in contrast to other NASCAR events (operated by ISC, Dover Motorsports and the Mattioli family), which are broadcast by ISC-controlled Motor Racing Network. PRN and MRN on most occasions share the same radio affiliates (IMS also, although PRN jointly produces the IMS race) in order to broadcast a complete NASCAR schedule.

All PRN shows with the exception of the pre and post race shows originate from Performance Racing Network's studios at Charlotte Motor Speedway.

All PRN race broadcasts, including Indianapolis, are available via Sirius XM NASCAR Radio. Fast Talk is also carried on Sirius XM NASCAR Radio on Wednesdays at 10:00 p.m. Eastern time. Fast Talk, The O'Reilly Pit Reporters and Garage Pass can all be heard online at goprn.com.

Pre-emption right

A pre-emption right, right of pre-emption, or first option to buy is a contractual right to acquire certain property newly coming into existence before it can be offered to any other person or entity. It comes from the Latin verb emo, emere, emi, emptum, to buy or purchase, plus the inseparable preposition pre, before. A right to acquire existing property in preference to any other person is usually referred to as a right of first refusal.

Preemption (land)

Preemption was a term used in the nineteenth century to refer to a settler's right to purchase public land at a federally set minimum price; it was a right of first refusal. Usually this was conferred to male heads of households who developed the property into a farm. If he was a citizen or was taking steps to become one and he and his family developed the land (buildings, fields, fences) he had the right to then buy that land for the minimum price. Land was otherwise sold through auction, typically at a price too high for these settlers. Preemption is similar to squatter's rights and mining claims.Preemption was politically controversial, primarily among land speculators and their allies in government. In the early history of the United States, and even to some degree during the colonial era, settlers were moving into the "virgin wilderness" and building homes and farms without regard to land title. The improvements increased the value of all the nearby property. Eventually the political opposition by the speculators crumbled and the Preemption Act of 1841 was passed.

The Preemption Act of 1841 was abused by speculators who now operated as money lending businesses, or were able to coerce accomplices to falsely claim they were living on land that they wanted. A common example of the latter practice was in the logging industry in the upper Midwest, where mill workers who lived in mill towns made a preemption claim on timber land that would then be harvested by the mill owners. Another avenue of fraud was the Desert Land Act, which did not include the residence requirement, although the preempting claimant still needed to improve the land, primarily by providing a water source. In California, tens of thousands of acres of land were claimed via false preemptors – "dummy entrymen" – on behalf of several large land speculating companies.The Preemption Act of 1841 was pivotal, but was neither the beginning nor the end of the issue of preemption. The Land Act of 1804, the Homestead Act, the aforementioned Desert Land Act, and other similar land acts addressed the issue of preemption.

Restraint on alienation

A restraint on alienation, in the law of real property, is a clause used in the conveyance of real property that seeks to prohibit the recipient from selling or otherwise transferring his interest in the property. Under the common law such restraints are void as against the public policy of allowing landowners to freely dispose of their property. Perhaps the ultimate restraint on alienation was the fee tail, a form of ownership which required that property be passed down in the same family from generation to generation, which has also been widely abolished.However, certain reasonable restraints will be given effect in most jurisdictions. These traditionally include:

A prohibition against partition of property for a limited time.

The right of first refusal – for example, if Joey sells property to Rachel, he may require that if Rachel later decides to sell the property, she must first give Joey the opportunity to buy it back.

The establishment of public parks and gardens, as was the case for The Royal Parks of London in the UK. These public spaces were created under such terms by the Crown Estate; which meant that these parks were held in perpetuity for the public to use.Some specific restraints on alienation in the United States include:

Disabling restraints

To be effective the grantor must sue the grantee for enforcement. The effectiveness of the lawsuit could prevent the transfer from being made. In addition, if the disabling restraint is found to be unconstitutional the restraint will not be effective.

Promissory restraints

If the promissory note is breached by the grantee, the grantor may sue for damages. Unlike disabling restraints, the effectiveness of the lawsuit does not prevent the transfer from being made. However, the Supreme Court says promissory restraints are not permissible. The promissory note discourages the person getting ready to sell the property which is the same effect as the disabling restraint.

Forfeiture restraints

In the event of a breach the property returns to the grantor or the grantor's heirs. The return happens automatically, hence the argument can be made that there is no state actions. However, according to a constitutional argument the mere fact that the state recognizes the validity of an automatic transfer makes it a state action.To be effective the restraint must be reasonable and the restraint must be the same as a real covenant or equitable servitude.

There are six factors to determine if a restraint on alienation is reasonable:

Type of price (fixed or not fixed; courts prefer non-fixed)

Purpose: Is it a legitimate purpose, or not? (courts prefer legitimate)

Equal bargaining power of the parties

Duration (a time limit to the restraint is preferred)

Limit to the number of persons to which transfer is prohibited

A restraint that increases the value of property is more reasonable.There are five basic conditions that must be met in order for there to be an effective real covenant and equitable servitude:

It must be enforceable. To be enforceable it must not be too vague, it must not violate a statute or the constitution, it must not violate public policy, and it must meet the requirements under the statute of frauds.

It must touch and concern the land.

It must be intended to run.

There must be privity between the successive occupants.

There must be notice of the existence of a real covenant/equitable servitude.

Restricted free agent

A restricted free agent is a type of free agent in the National Football League (NFL), National Hockey League (NHL), or National Basketball Association (NBA). Such players have special restrictions on the terms under which they can retain or change employment status with their athletic club teams.

Times Books

Times Books (previously the New York Times Book Company) is a publishing imprint owned by The New York Times Company and licensed to Henry Holt and Company.

Times Books began as the New York Times Book Company in 1969, when The New York Times Company purchased Quadrangle Books, a small publishing house in Chicago, Illinois, founded in 1959 by Michael Braude. Its President was Melvin J. Brisk. Initially run entirely by The New York Times Company, the publishing arm name was changed to Times Books in 1977.

In 1984, the Times Company licensed the imprint to Random House. From 1991 through 1996, during the Random House tenure, the head of Times Books was Peter Osnos, who later founded Public Affairs Books.Times Books was re-licensed in 2000 as an imprint of Henry Holt, which is itself an imprint of Holtzbrinck Publishers/Macmillan, the U.S. arm of the Georg von Holtzbrinck Publishing Group.

Editorial directors for Times Books have included David Sobel and Paul Golob.Times Books has had a somewhat controversial right of first refusal policy with respect to manuscripts by employees of The New York Times Company.

The current location of Times Books is 115 West 18th Street, between Sixth and Seventh Avenues in the Chelsea/Flatiron area of Manhattan, New York City, United States.


WLPW (105.5 FM) is a radio station licensed to serve Lake Placid, New York, United States. Established in 1979, the station is owned by Radio Lake Placid, Inc. As of June 2017, the station is silent.WLPW formerly broadcast a classic rock format branded as "Rock 105", which was simulcast with WRGR (102.1 FM) in Tupper Lake, New York; the stations subsequently began to simulcast sister station WNBZ-FM. WLPW went silent in June 2017 after the station stopped paying rent on the tower it had broadcast from. In November 2017, as part of its acquisition of WNBZ in Saranac Lake, North Country Radio, owner of WSLP, obtained a right of first refusal to buy WLPW for $25,000 within thirty days of the station returning to the air.On March 9, 2018, the FCC granted the application to transfer the license and ownership to North Country Radio.


WVSL (1240 AM) is a radio station licensed to serve Saranac Lake, New York, United States. Established in 1927 as WNBZ, the station is owned by Jonathan Becker and Gregory Gallacher, through licensee North Country Radio, Inc.

In June 2017, the Adirondack Daily Enterprise reported that WNBZ had been silent since at least 2016. The station had simulcast an adult contemporary format with WNBZ-FM (106.3). WNBZ's "Radio Park" studio and transmitter facility was put up for tax auction in November 2017. On November 22, 2017, Saranac Lake Radio, LLC filed to sell the station to North Country Radio, owner of WSLP (93.3 FM), for $6,000; the new owners would be required to change WNBZ's call sign, and will also receive a right of first refusal to purchase Lake Placid sister station WLPW (105.5 FM). Concurrently, the "Radio Park" properties were withdrawn from the Essex County tax auction list. North Country Radio's purchase of WNBZ was consummated on February 9, 2018, and the new owners changed the station's call sign to WVSL on February 28, 2018.

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