Exclusivity Agreement
(No-Shop Agreement, Acquisition Transaction)

Summary

This template Exclusivity Agreement (No-Shop Agreement, Acquisition Transaction) is for use by a potential buyer who does not want the seller to discuss the possibility of a transaction with any other party for a set period of time while negotiations with the buyer are underway. This template includes practical guidance, drafting notes, and alternate clauses. An "exclusivity" or "no-shop" agreement broadly prohibits a seller from soliciting alternative transactions and also usually also prohibits the seller from supplying due diligence information to or negotiating with other potential buyers. Exclusivity agreements tend to be brief and concise. When drafting exclusivity agreements, counsel should consider having the exclusivity period expire on the earlier of the date on which parties agree the deal is not being actively negotiated, or an outside expiration date. Also, counsel to seller should narrowly tailor the exclusivity provision to apply only to the business subject to the transaction. This template is not state specific, and applicable state law should be consulted to conform the agreement to local requirements. For a full listing of related private equity and financial reporting content, see Private Equity Transactions Resource Kit and Financial Statements and Reporting Resource Kit. For a full listing of related stock acquisition content, see Stock Acquisition Resource Kit. For a full listing of related public merger transaction content, see Public Merger Transaction Resource Kit. For a full listing of related private merger transaction content, see Private Merger Transaction Resource Kit. For more information, see Exclusivity (No-Shop) Agreements in Private M&A Deals and Exclusivity (No-Shop) Agreements in Public M&A Deals. See also Exclusivity Agreements Drafting Checklist (No-Shop Agreements, Acquisition Transaction).