Date: _____________________________________________
Reference: _____________________________________________
To:
_____________________________________________
_____________________________________________
_____________________________________________
Attention: _____________________________________________
Dear _____________________________________________,
RE: Grant of Exclusivity — [Brief Description of Commercial Relationship]
This Exclusivity Letter (the "Letter") sets out the terms on which _____________________________________________ (the "Grantor") agrees to grant exclusivity to _____________________________________________ (the "Beneficiary") in connection with the commercial relationship or transaction described below. This Letter, once countersigned by the Beneficiary, shall constitute a legally binding agreement between the Parties.
1. Background
The Grantor and the Beneficiary have been in commercial discussions regarding _____________________________________________ (the "Commercial Arrangement"). In the context of those discussions, the Beneficiary has requested, and the Grantor has agreed to grant, exclusivity on the terms set out in this Letter as an expression of the Grantor's commitment to proceed with the Beneficiary as its preferred commercial partner for the purposes described below.
2. Grant of Exclusivity
Subject to the terms and conditions of this Letter, the Grantor hereby grants to the Beneficiary the exclusive right to _____________________________________________ (describe the exclusive right: e.g. purchase the Products / distribute the Products / supply the Services / develop the opportunity) within the following scope:
Exclusive scope (product / service / opportunity): _____________________________________________
Exclusive territory (if applicable): _____________________________________________
Exclusive period: From _____________ to _____________ (the "Exclusivity Period").
During the Exclusivity Period, the Grantor shall not, directly or indirectly: (a) grant equivalent exclusive or non-exclusive rights to any third party within the same scope; (b) negotiate or conclude any agreement with any third party that would conflict with or diminish the exclusivity granted to the Beneficiary; or (c) circumvent the Beneficiary's exclusivity by restructuring the Commercial Arrangement or routing it through an affiliate or related entity.
The exclusivity granted under this Letter applies only within the scope, territory, and period specified in clause 2.1. The Grantor retains full rights to operate outside such scope, territory, and period without restriction.
3. Conditions Attached to Exclusivity
The Grantor's grant of exclusivity under clause 2 is conditional upon the Beneficiary satisfying the following conditions during the Exclusivity Period:
The Beneficiary shall negotiate in good faith towards the execution of a formal commercial agreement on the terms discussed between the Parties, with a target date for execution of _____________.
The Beneficiary shall purchase / supply / develop _____________________________________________ at the volumes / rates / targets set out below:
Minimum commitment: _____________________________________________
Performance milestone: _____________________________________________
Measurement period: _____________________________________________
The Beneficiary shall not, during the Exclusivity Period, negotiate or enter into any agreement with any third party that would conflict with the exclusivity granted hereunder or that would give any third party rights equivalent or superior to those granted to the Beneficiary under this Letter.
The Beneficiary shall comply with all applicable laws and regulations in connection with its activities under this Letter.
4. Consequences of Breach
If the Grantor breaches the exclusivity obligations in clause 2, the Beneficiary shall be entitled to: (a) claim damages for any loss caused by such breach; (b) seek specific performance or injunctive relief; and (c) terminate any formal agreement that has been executed between the Parties on the basis of this exclusivity, without liability.
If the Beneficiary fails to satisfy the conditions in clause 3, the Grantor shall be entitled to terminate the exclusivity granted under this Letter by giving _____ days' written notice to the Beneficiary, without prejudice to any other rights. Termination of exclusivity shall not automatically terminate any formal commercial agreement already in place between the Parties.
5. No Binding Commercial Obligation
Save for the exclusivity obligations set out in this Letter and the confidentiality obligations in clause 6, this Letter does not constitute a binding obligation on either Party to enter into the Commercial Arrangement or any other commercial agreement. Either Party may withdraw from negotiations relating to the Commercial Arrangement at any time without liability, provided that the withdrawal is not in breach of any separately agreed or formal agreement.
6. Confidentiality
Each Party shall keep strictly confidential the terms of this Letter and all information exchanged in connection with the Commercial Arrangement, and shall not disclose such information to any third party without the prior written consent of the other Party.
This obligation shall survive the expiry or termination of this Letter for a period of two (2) years.
7. Extension of Exclusivity Period
The Exclusivity Period may be extended by mutual written agreement of the Parties at any time prior to its expiry, specifying the new expiry date and any revised conditions attached to the extension.
8. Governing Law
This Letter shall be governed by and construed in accordance with the laws of _____________________________________________. Any dispute arising out of or in connection with this Letter shall be resolved in accordance with the dispute resolution mechanism agreed in the formal commercial agreement between the Parties, or, failing that, by the courts of _____________________________________________.
9. Entire Agreement on Exclusivity
This Letter constitutes the entire agreement between the Parties with respect to the grant of exclusivity and supersedes all prior discussions, representations, or understandings on the same subject. Amendments must be in writing and signed by both Parties. Electronic signatures are valid.
Yours sincerely,
For and on behalf of the Grantor:
Authorised Signatory: _____________________________________________
Full Name: _____________________________________________
Title: _____________________________________________
Entity Name: _____________________________________________
Date: _____________________________________________
ACCEPTED AND AGREED — BENEFICIARY COUNTERSIGNATURE
The Beneficiary confirms its agreement to the terms of this Exclusivity Letter and its acceptance of the conditions attached to the exclusivity granted herein.
For and on behalf of the Beneficiary:
Authorised Signatory: _____________________________________________
Full Name: _____________________________________________
Title: _____________________________________________
Entity Name: _____________________________________________
Date: _____________________________________________
Doc 17 — Exclusivity Letter — Neutral Template