A right of first refusal (or ROFR) is a contractual obligation of a stockholder or LLC member (as applicable) to offer to sell its equity to the other holders, or sometimes back to the company, after receiving a bona fide offer from a third party to buy that equity stake. The ROFR is usually described in the original purchase agreement, a stockholders’ agreement or LLC agreement, as applicable, and the offer to the company and other equity-holders must typically be made on substantially the same terms as those offered by the third party. The effect of a ROFR is usually to delay the process of selling equity to a third party.