The provision prohibits soliciting or engaging with competing offers during the exclusivity window. Public company agreements include fiduciary out exceptions permitting response to unsolicited superior proposals.
Breach supports damages and injunctive relief.
Alternative Names:
No-Shop Provision|Exclusivity Agreement
Why it Matters?
Fiduciary out exceptions are what reconcile exclusivity with the board's duties in public deals, permitting the target to respond to an unsolicited superior proposal despite the no-shop. Private transactions lacking that constraint enforce exclusivity strictly. Damages for breach are difficult to quantify, which makes injunctive relief the practical remedy and prompt application essential before the competing transaction closes.
Frequently Confused with
Related terms
Frequently asked questions
What is a fiduciary out?
What is the practical remedy for breach?
