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PLAYBOOK TEMPLATES
Strategic Alliance Agreement
A Strategic Alliance Agreement documents cooperative arrangements between entities for mutual benefit. This playbook highlights IP ownership, performance metrics, and termination strategies.
Termination Rights
Negotiation strategy
Ensure that termination rights are balanced to protect the company's interests. Negotiate for a reasonable notice period and ensure any break fees are manageable.
Seek to include flexible termination rights that allow for exit in case of unforeseen circumstances. Aim for a fair notice period and minimal break fees.
Essential elements
1
Termination for Convenience
Exit with notice, no penalty.
2
Material Adverse Change
Exit if significant impact occurs.
3
Termination for Breach
Exit if breach not cured.
Action framework
ACCEPT
Propose edits if notice periods are too short or break fees are excessive.
EDIT
Reject if termination rights are heavily skewed against the client.
ADD
Add clauses for specific industry risks or additional exit conditions.
PRO TIP
Always ensure termination clauses align with your business strategy and risk tolerance.
Real-world examples
FAVORABLE
Preferred Termination for Convenience
"Either party may terminate this Agreement for convenience upon providing the other party with thirty (30) days written notice. Such termination shall not incur any penalty or break fee, provided that all obligations incurred prior to the termination date are fulfilled."
NEUTRAL
Termination for Material Adverse Change
"Either party may terminate this Agreement if a material adverse change occurs that significantly impacts the ability of the affected party to perform its obligations under this Agreement. The party seeking termination must provide written notice to the other party, detailing the nature of the material adverse change and allowing a thirty (30) day period for the other party to remedy the situation, if possible."
UNFAVORABLE
Termination for Breach
"In the event of a breach of any material term of this Agreement by either party, the non-breaching party may terminate this Agreement by providing written notice to the breaching party. The breaching party shall have a period of thirty (30) days from the receipt of such notice to cure the breach. If the breach is not cured within this period, the Agreement shall terminate immediately."
Alternative scenarios & positions
High-Risk Projects
In high-risk projects, ensure termination rights include specific conditions for risk mitigation and exit strategies.
Long-Term Contracts
For long-term contracts, include periodic review clauses to reassess termination rights and conditions.
Material Adverse Change in Specific Industries
If the contract involves industries prone to rapid changes (e.g., technology, pharmaceuticals), additional analysis is required to ensure the clause accounts for industry-specific risks.
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WEEK 1
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WEEK 2
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WEEK 3
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WEEK 4
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