Exclusivity Agreement (Company Share Or Asset Sale)
This Exclusivity Agreement (Company, Share or Asset Sale) is suitable for use where either the entire share capital of a company or the assets and undertaking of a business are sold. It is also known as a “lock out” agreement because the Seller undertakes with the Buyer that i) it will not negotiate with any third party for the sale of the share capital or the assets and undertaking and ii) that the Buyer will have the exclusive right to negotiate with the Seller. The agreement is for a limited period. Exclusivity will often be required by a Buyer when the Heads of Terms are agreed. It will give the Buyer time to carry out due diligence and finalise negotiations without worrying about competition or wasted expenditure. As far as the Seller is concerned, any period of exclusivity could prevent them from accepting a better offer and so Sellers will want the exclusivity period to be as short as possible.
This Exclusivity Agreement (Company, Share or Asset Sale) is in open format. Enter the requisite details in the highlighted fields or, alternatively, adjust the wording to suit your purposes. Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. For example, the definition of “The Proposed Transaction” should be amended and the correct wording used in clause 3.1 according to the nature of the transaction. If a confidentiality agreement is also being entered into, then the wording in square brackets in clause 3.4 should be retained. Finally, the choice of an exclusive or non-exclusive jurisdiction should be chosen at clause 11. Unused options should be removed from the document.
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