What is an exclusivity agreement? An exclusivity agreement is a contract that establishes an exclusive relationship between a buyer and a seller.
It gives the buyer time to complete due diligence and negotiate the terms of the purchase.
Exclusivity period: The time period during which the seller cannot negotiate with other parties.
Breach of contract remedies: Provisions for equitable relief if either party breaches the agreement.
What does an exclusivity agreement include?
Confidentiality restrictions: Restricts the disclosure of sensitive information.
Cancellation: The seller may be able to cancel the agreement if it's unlikely the transaction will be completed by a certain date.
It gives the seller the opportunity to ensure the buyer is the best fit for the transaction.
In a merger and acquisition (M&A) transaction, an exclusivity agreement grants a buyer the right to negotiate the terms of a purchase with a seller. The agreement prohibits the seller from negotiating with other potential buyers during the exclusivity period.
It also gives the seller the opportunity to ensure the buyer is the best fit for the transaction.
It allows the buyer to focus on negotiations without worrying about the seller selling to another party.
Breach of contract remedies: Provisions for equitable relief if either party breaches the agreement.
Why is an exclusivity agreement important?
It gives the seller the opportunity to ensure the buyer is the best fit for the transaction.
Why am I posting this? I strongly suspect we are getting closer and closer to the end of an exclusivity agreement phase. Something will become evident one way or another in the next four to five months. Darkest before the dawn.... something will break one way or another.