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 being sold.

It is also known as a “lock out” agreement. The seller undertakes that it will not negotiate with any third party for the sale and that the buyer will have the exclusive right to negotiate with the seller for a limited period.

Exclusivity is often agreed when heads of terms are settled. It gives the buyer time to carry out due diligence and finalise negotiations without competition or wasted expenditure. For the seller, an exclusivity period may prevent acceptance of a better offer, so sellers will often want the period to be as short as possible.

What does Exclusivity Agreement (Company Share Or Asset Sale) do?

It grants the buyer a time-limited period of exclusivity to negotiate the proposed transaction and restricts the seller from negotiating with third parties during that period.

What does Exclusivity Agreement (Company Share Or Asset Sale) cover?

• A time-limited exclusivity (lock out) period for negotiations.
• Seller undertakings not to negotiate with third parties during the exclusivity period.
• The proposed transaction, whether a share sale or an asset and undertaking sale.
• Optional treatment where a separate confidentiality agreement is also being entered into.
• A jurisdiction clause.

When should you use Exclusivity Agreement (Company Share Or Asset Sale)?

• Heads of terms have been agreed and the buyer wants an exclusive negotiation window to complete due diligence and settle the final documents.
• The seller is willing to grant exclusivity for a defined period on a share sale or asset sale.

What else you may need

Depending on the transaction, you may also need a confidentiality agreement to protect information shared during negotiations and due diligence.

Exclusivity Agreement (Company Share Or Asset Sale) is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.