A generic description for a number of documents that are signed in the early stages of a potential acquisition, usually before detailed due diligence and drafting starts.
Preliminary agreements include the following:
• heads of terms (also called letters of intent, memoranda of understanding, term sheets or protocols).
• confidentiality agreements.
• exclusivity agreements (also called lock-out agreements).
• break fees (also called inducement fees or failure costs agreements).
Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010.