As per PEMRA IM on DTH and license issued under satellite capacity it states” Satellite Capacity: The Right of First Refusal (ROFR) for provisioning of satellite capacity/bandwidth/service shall rest with M/s PAKSAT INTERNATIONAL, which shall provide / make necessary arrangements for provisioning of satellite capacity / bandwidth / service to DTH licensees within a period of six (6) weeks from the date of receipt of such application. Otherwise, the DTH licensees shall be free to avail the satellite services from other satellite operators, subject to clearance from PEMRA.
Due to unknown reasons ROFR clause is not defined in IM or in license under definitions, making this one of the major reasons for delay in launch of services. The most significant purpose of a definitions clause is that they clarify contract-specific terms, also aid in future risk mitigation. These definitions are usually added at the start of an agreement. They give specific meanings to words that may differ from ordinary meanings. It is important to define terms because it reduces the risk of uncertainty in a contract, especially when defined terms override the usual meaning of a term. In DTH case, ROFR clause is not even structured.
ROFR clause, definition is open now, few definitions are as under:
⮚Black’s Law Dictionary defines right of first refusal as “a potential buyer’s contractual right to meet the terms of a third party’s higher offer.” This means that if a third party offers to purchase an owner’s property, the owner is obligated to notify the holder of the right of first refusal and provide the holder.”
⮚As per the international definition, “In the right-of-first-refusal case, one buyer—the right-holder—has the right to buy the asset at the price offered by the seller to another buyer if that buyer accepted the seller’s offer.”
⮚Open source; “Rights of first refusal clauses are similar to options contracts as the holder has the right, but not the obligation”, to enter into a transaction that generally involves an asset. The person with this right has the opportunity to establish a contract or an agreement on an asset before others can.
Similarly, right of first refusal (RFR or ROFR) has multiple meanings:
⮚In the context of a corporation, an ROFR is a contractual obligation of a shareholder to offer to sell its shares to the other holders (or sometimes back to the corporation) after receiving a bona fide offer to purchase from a third party.
⮚With the (ROFR) clause, one could get the chance to lease that extra space before anyone else gets a shot.
⮚In real estate, (ROFR) is a clause in a contract that gives a prioritized, interested party the right to make the first offer on a house before the owner can negotiate with other prospective buyers.
A ROFR is not the same as a right of first negotiation (ROFN).
⮚A ROFN only requires the landlord (Paksat) to notify (licenses)of any available space and negotiate with him before marketing it to others. You (The holder of ROFR) still have to agree on the price and terms.
⮚A ROFR, allows (Holder of ROFR) to match any offer that the (SS,DTH License) receives from another party and take the space on the same conditions(offered by other party).
⮚A ROFR, allows (Holder of right, Paksat) to match any received from another party
Under the circumstances described above, the courts should treat preemptive rights as personal, and not assignable, unless the parties overcome this presumption with explicit contractual provisions.
Can a Right of First Refusal Be Assigned (The University of Chicago Law Review) PDF attached
Anticipating all these issue, M/S Shazad Sky raised its concern once this clause was added in revised IM (clause was added in revised IM). Later same was included in the license. After getting ROFR in IM, Paksat Intel attitude become very authoritative and bossing. Just to quote one example, once Shazad Sky approached to sign the NDA (Non-disclosure agreement) M/s Shazad Sky CEO and team was not allowed to enter in office premises due to their commitments and sent the NDA outside the gate where CEO shahzad Sky signed. Assuming that FROR has given them the unlimited powers to sell satellite capacity and trat lienees in un dignified way. Without going in to the details of attitude, response time to quarries, behavior, technical competence of Paksat Intl and becoming sick and tired of requesting their attitude/S Shahzad Sky requested to remove this clause as it is against the competitive spirit, other operators are offering much attractive offers and services with very professional management and attitude.
Significance of Definitions in legal documents:
Structuring A Right Of First Refusal
Clear Definitions
An ROFR agreement must have clear and absolute definitions.
Questions to Consider:
Cancellation of a right of first refusal is called extinguishment. This can happen for two reasons:
The right may be declined (the holder passes on the option to purchase)
The holder may fail to exercise the right in the allotted time period.
A right of first refusal clause could apply to family members of the property owner. If an owner decides to sell a property, the ROFR stipulates that named relatives, like children or siblings, may have the first opportunity to buy the property and make an offer.
mportant Clauses in the Right of First Refusal Agreement
The particular clauses in a ROFR agreement in the United States may vary based on the parties involved and the nature of the transaction. Nevertheless, some typical clauses that are frequently included are:
●Scope: This clause specifies the property or asset covered by the agreement and determines the scope of the right of first refusal. It could provide a detailed property description, such as the address or legal description.
●Financing Contingency: A condition in a ROFR agreement may allow the party to exercise the right to receive financing on terms comparable to those given to the third-party buyer. It ensures the party has a reasonable chance of obtaining the necessary finances.
●Notification: This provision emphasizes the property owner’s obligation to notify the party with first refusal about any potential sale or transfer of the property. It outlines how and when such notice must be given.
●Offer: This section specifies the conditions under which the property owner must make an offer to the party having the right of first refusal. It may include the purchase price, payment terms, and other pertinent information.
●Acceptance: This clause specifies how long the party with the right of first refusal has to accept or decline the offer. It usually contains a response deadline and the repercussions of failing to react on time.
●Right to Assign: The agreement may indicate whether the party with the right of first refusal may assign their right to another party. The original party can transfer their right to purchase or lease the property to a third party if approved.
