Related Categories:
Jurisdiction: Federal
Description
Exclusivity Agreement
Exclusivity Agreement Preparation Form (Coming Soon) – We recommend that you gather the information in this form prior to access the online questionnaire. Doing so will help you efficiently create your custom legal document.
Summary
This is a form of Exclusivity Agreement in which a target company or seller agrees to negotiate exclusively with a particular buyer for a given period of time. Parties most commonly use these agreements in the acquisition context. However, parties may also use them when negotiating an investment, joint venture, or merger of equals. Parties should use this agreement in the context of an acquisition.
Details
As is common for exclusivity agreements, this agreement is a letter from the potential buyer to the target company. However, a more formal agreement (with a preamble, recitals, numbered sections, etc.) can also be used.
The Negotiating Dynamic
This Exclusivity Agreement is a stand-alone agreement in which the parties only address the subject of exclusivity. At an early stage of negotiations, this agreement might be the only document signed by the parties. Alternatively, parties might sign an exclusivity agreement simultaneously with a term sheet or other letter of intent (LOI). These set out a preliminary understanding of the deal terms. Similarly, the parties can negotiate exclusivity as a separate provision within a broader confidentiality agreement or term sheet.
Exclusivity is frequently only negotiated in, or simultaneously with, an LOI if the target has chosen to preserve its leverage and not grant exclusivity to the buyer until it has negotiated the material terms of the transaction. For its part, the buyer will often make its execution of the LOI conditioned on the target agreeing to an exclusivity period. Similarly, in an auction context, the buyer may include an exclusivity provision in a bid letter that it submits to the target that sets out various other terms and conditions relating to its bid.
Additional Documents
Legal Disclaimers
Important Legal Disclaimers
Helix Compliance, LLC (“Helix”) is not a law firm, and Helix’s employees and representatives are not acting as your attorney. Helix provides a technology-based platform for those seeking to prepare their own legal documents. Using Helix’s system-generated documents does not create an attorney-client relationship between you and Helix or any Helix employee or representative. Therefore, your communications with Helix do not constitute privileged communications. Likewise, neither the attorney-client privilege nor the work product doctrine protect your communications with Helix. Helix is not your lawyer in any way, shape, or form.
Using Helix’s documents is not a substitute for the expertise of an attorney. Thus, you should not use Helix’s system-generated documents as a substitute for legal advice. Additionally, you should not construe Helix’s system-generated documents as legal advice. Helix does not review any information provided to it for legal accuracy or sufficiency. Helix does not apply the law to the facts of your situation, and Helix does not draw legal conclusions. Further, Helix does not provide opinions about your selection of documents. Users seeking legal advice should consult a qualified licensed attorney.
Even though Helix seeks to ensure that document content is up-to-date, laws change rapidly. Therefore, Helix does not guarantee that each document is completely current. The law differs in each legal jurisdiction and may be applied differently depending on your factual circumstances. If you are unsure whether your situation requires a specific document or whether the document’s contents are legally sufficient for your specific purposes, you should consult a qualified licensed attorney.
Comments from the Author
Exclusivity Agreement