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Standstill Agreement | FindLegalForms.com
This Standstill Agreement is between two companies who are contemplating entering into an agreement regarding technology and desire to do so without interference from other parties. It is important that this business transaction be set out in writing. This form is for use in all states.
Standstill Agreement FindLegalForms.com Sample Form
This Standstill Agreement is between two companies who are contemplating entering into a business arrangement regarding a certain type of technology and wish to discuss this transaction without interference from a third party who has similar interests. This agreement sets forth the arrangement including the fact that neither party will solicit nor encourage submission of proposals from other parties during the term of this agreement. It is crucial this type of business arrangement be set out in writing and not via oral agreement. A written Standstill Agreement will prove invaluable in the event of disagreements or misunderstandings between the parties.
This Standstill Agreement includes the following provisions:
Parties: Sets forth the names and addresses of the parties entering into the agreement;
Background: Sets forth that both parties are considering entering into this arrangement regarding technology and the desire to discuss potential business transactions without interruption from third parties who have common interests;
Technologies: Sets out the common name of the technology developed by the first party;
Standstill by Both Parties: Sets out the provisions under which neither party will solicit, initiate or encourage submissions of proposals from third parties while this agreement is in effect;
Standstill Period: Sets out the date of commencement and how this agreement can be terminated;
Signatures: Both parties must sign the agreement in the presence of witnesses.
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THIS AGREEMENT made as of [Date (ie. July 31, 2002)] between [Name of Party 1]., of [Address of Party 1] ("Party 1"), and [Name of Party 2], of [Address of Party 2]
(A) Party 1 and Party 2 are considering entering into a business transaction between the two companies relating to the Technologies (as defined below); and
(B) Party 1 and Party 2 wish to discuss the potential business transactions regarding the Technologies freely without interruption or interference by third parties who may have common business interests in the Technologies;
NOW THEREFORE FOR AND IN CONSIDERATION OF the mutual exchange of information, the anticipated business transactions between the parties, and other good and valuable consideration, the receipt, sufficiency and adequacy of which is hereby acknowledged, the parties agree as follows:
1. Definitions. In this Agreement, the following capitalized words and phrases shall have the following respective meanings, unless otherwise defined herein or the context otherwise requires:
(a) “Party 1 Group” means collectively Party 1 and its Affiliates.
(b) “Affiliate”, when used in connection with any party hereto, means any person, firm or entity that, directly or indirectly, is controlled by or is under common control with such party.
(c) “Party 2 Group” means collectively Party 2, its shareholders and Affiliates.
(d) “Standstill Period” has the meaning given to it in paragraph 4 below.
(e) “Technologies” means the technologies developed by Party 1 and commonly known and described as "[Common Name of Technology]".
2. Standstill by Party 1. Party 1, on behalf of the Party 1 Group, hereby covenants and agrees that during the Standstill Period, the Party 1 Group will not:
(a) solicit, initiate or encourage submissions of proposals or offers from any person, entity or group other than Party 2 and/or the Party 2 Group, relating to, or facilitate or encourage any effort or attempt involving the following (each an “Extraordinary Business Combination”):
(i) the acquisition or disposition of all or any substantial part of the issued and outstanding shares of Party 1;
(ii) the acquisition of all or any substantial part of the assets and undertaking of Party 1;
(iii) the acquisition or licensing of all or any part of the Technologies; or
(iv) the reorganization, recapitalization, liquidation or winding-up of or other business combination or similar transaction involving Party 1 and any other party, or
(b) participate in any negotiations regarding, or (except as required by law) furnish to any other person, entity or group, any information with respect to, or otherwise co-operate in any way with, or assist or participate in any Extraordinary Business Combination.
3. Standstill by Party 2. Party 2, on behalf of the Party 2 Group, hereby covenants and agrees that during the Standstill Period, the Party 2 Group will not:
(a) solicit, initiate or encourage submissions of proposals or offers from any person, entity or group other than Party 1 and/or the Party 1 Group, relating to, or facilitate or encourage any effort or attempt involving the following (each an “Extraordinary Business Combination”):
(i) the acquisition or disposition of all or any substantial part of the issued and outstanding shares of Party 2;
(ii) the acquisition of all or any substantial part of the assets and undertaking of Party 2;
4. Standstill Period. This Agreement shall commence on the date hereof and shall continue in full force and effect until either party delivers to the other party written notice terminating this Agreement, not less than seven (7) days prior to the effective date of termination (the “Standstill Period”).
5. Notices. All notices under this Agreement shall be in writing and shall be deemed to have been duly given (i) on the date of service if served personally on the party to whom notice is given; (ii) on the day of transmission if sent via facsimile transmission to the facsimile number given below, provided telephone confirmation of receipt is obtained promptly after completion of transmission; (iii) on the business day after delivery to an overnight courier service or the express mail service maintained by the United States Postal Service or Canada Post Corporation, provided receipt of delivery is confirmed; or (iv) on the fifth day after mailing, provided receipt of delivery is confirmed, if mailed to the party to whom notice is to be given, by first class mail, registered or certified postage prepaid, properly addressed and return receipt requested, to the party as set forth below:
To Party 1 at:
[Address of Party 1]
Attention: [Name of Party 1]Fax No. [Name of Party 1]
To Party 2 at:
[Address of Party 2]
Attention: [Name of Party 2]Fax No. [Name of Party 2]
Any party may change its address by giving the other party written notice of its new address in the manner set forth above.
6. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties’ respective successors and assigns.
7. Authority. Each party warrants that it has the authority to enter into this Agreement for itself and its affiliates.
8. Entire Agreement. This Agreement represents the entire understanding between the parties with respect to the subject matter hereof and supersedes all prior communications, agreements and understandings relating thereto. The provisions of this Agreement may not be modified, amended, or waived, except by a written instrument duly executed by both parties.
9. Governing Law. This Agreement shall be governed in all respects by the laws of the State of [State (ie. California)] without regard to its conflict of laws principles.
Product number#28856