5
PLAYBOOK TEMPLATES

Advisory Board Board Observer

An Advisory Board & Board Observer Agreement sets participation terms for advisors or observers in company governance. This playbook reviews confidentiality, fiduciary boundaries, and compensation considerations.

Termination Rights

Why This Matters: Clear exit rights enable parties to manage unforeseen events or underperformance, minimizing disruption and potential litigation.

Negotiation strategy

If you're the Company:

Ensure termination rights are aligned with strategic objectives. Negotiate for reasonable notice periods and minimal break-up fees to maintain flexibility.

If you're the Advisor:

Focus on securing fair compensation for early termination. Advocate for clear breach definitions and adequate cure periods to protect interests.

Essential elements

1

Termination for Convenience

Allows exit with notice.
2

Termination for Cause

Exit upon breach.
3

Break-Up Fees

Compensation for early exit.

Action framework

ACCEPT

Propose edits if notice periods are too short or fees are excessive.

EDIT

Reject if termination rights are overly restrictive or one-sided.

ADD

Add clauses if termination rights are missing or incomplete.

PRO TIP

Always ensure termination clauses are clear and balanced to avoid disputes.

Example clauses

FAVORABLE

Balanced Termination Rights

"Either party may terminate this Agreement for convenience by providing the other party with thirty (30) days written notice. Upon termination for convenience, neither party shall be liable to the other for any damages, costs, or expenses, except as expressly provided in this Agreement."
NEUTRAL

Standard Notice Requirement

"Any notice of termination must be in writing and delivered to the other party at the address specified in this Agreement. Notices shall be deemed received upon actual receipt by the party to whom it is addressed."
UNFAVORABLE

Excessive Break-Up Fees

"In the event of termination by either party, the terminating party shall pay to the non-terminating party a break-up fee of $50,000, unless the termination is due to a material breach by the non-terminating party."

Fallbacks

High-Risk Jurisdictions

In high-risk jurisdictions, consider additional protections or modifications to standard termination rights, such as specific triggers related to changes in law or political instability.

Long-Term Contracts

For long-term contracts, ensure termination rights include periodic review clauses to adapt to changing circumstances.

Technology Agreements

In technology agreements, termination rights should address data transfer and IP rights upon exit.
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