Exclusivity clauses in scheme of arrangement implementation agreements must satisfy three requirements: (1) the exclusivity period must be reasonable and precisely ascertainable; (2) the clause must be subject to an overriding qualification preserving directors' fiduciary duties and lawfulness, whether it constrains active solicitation or dealing with unsolicited proposals; and (3) the constraint must be given adequate prominence in the explanatory memorandum. The court left open the question of what additional scrutiny applies when an exclusivity clause is accompanied by a break fee.
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