Right of First Refusal Clause
(Stockholders' Agreement)

Summary

This clause can be included in an agreement between a corporation and its shareholders to grant the company and any non-selling shareholders the contractual right to match any third party's offer to purchase a large or controlling interest in the company. This clause includes practical guidance and drafting notes. In a stockholders' agreement, the right of first refusal (also known as the "ROFR") grants the holder the contractual right to match any third party's offer to purchase a large or controlling interest in the company, thus allowing it to step in and take the deal away from any interested buyer. The ROFR is not to be confused with the right of first offer, which is a requirement that any selling shareholder first offer the deal to the other shareholders (which can occur whether a third-party buyer is there or not). For related content, see Stockholders' Agreement Resource Kit. For a template stockholders' agreement for a Delaware corporation, see Stockholders' Agreement (DE S Corporation).