First Right of Refusal Agreement

G

Grandview Productions

New member
I have a private equity investor who is interested in putting the final funding on a feature.

They are looking to put 100k into a 250k budget.

As a caveat they are requesting a first right of refusal clause for any future projects for equal or greater investments.

Does anyone have any experience with this?

I feel like this is a positive thing but want to make sure that I am not over looking any potential pitfalls.

Any ideas or suggestions would be appreciated.

Thanks!
 
Hire a lawyer to review the contract and explain exactly what everything means. Don't go by what you read on the web or learn in forums like this because EVERY contract is unique.

RoFR's can work to both parties advantage, or they can work towards one party at the expense of the other. It's all in the details of the contract.

A few hundred dollars now can potentially save you a ton later.

Good luck!
 
I would consider thinking long and hard, if say, another investor wants to invest 2 mil in your next project, saying this current one generates some revenue. And your current investor only has 10% of that, Your not gonna have the ability to get your film made with the best possible budget. I could be totally wrong, but it's a scenario that popped in my head. As the above poster said, each contract is different, so most deffinetly get counsil on the matter.
 
maranfilms said:
I would consider thinking long and hard, if say, another investor wants to invest 2 mil in your next project, saying this current one generates some revenue. And your current investor only has 10% of that, Your not gonna have the ability to get your film made with the best possible budget. I could be totally wrong, but it's a scenario that popped in my head. As the above poster said, each contract is different, so most deffinetly get counsil on the matter.
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Well, the right would generally require them to match the 2 mil. But they could agree to match it without actually having the money available and then seek to raise the money. That could cause delay, and in the end if they can't raise the money, your other funder could have soured on the project. Again, it all depends on what's in the contract.
 
keylight said:
For the OP: Where are you located? In the U.S.? If so, what state?
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Located in Massachusetts.

I definitely have to take this to my lawyer to go over, I just wanted to be prepared as possible before doing so.

This is a very good problem / situation to have (obviously).

Thanks for the advice!
 
Make sure that your lawyer is well-versed in arts and entertainment contract law.

If you have a GP that you trust, then you may also want to get a second opinion/consultation with VLA (Volunteer Lawyers for the Arts).

In general, yes, you have a great problem to have!

GJ
 
Congrats on being in a first right of refusal situation! I am in MA as well and have made several features. Good luck with yours!

Michael
 
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