Agreement Signed By Our Side

By stancutler,

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Subsidiary letters often refer to a highly sensitive object that is not intended to circulate among all persons involved in the preparation or completion of the transaction. In the context of an M&A transaction, the side letters could relate to pension schemes or an agreement between the parties on the remedies they are prepared to accept when they submit the transaction to the competition authorities for approval (if the inclusion of such an agreement in an acquisition contract may, in error, encourage the competition authority to demand such relief). It may be a declaration of intent in which the nature of the enterprise is not suitable for admission into the body of a SPA. Other sensitive aspects, such as compensation for embarrassing claims, can also be a reason to prepare a side letter.

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