“[Is] an agreement to acquire part or a substantial portion of the production or product produced by a project.” As a general rule, enterprise agreements are negotiated after a feasibility study has been completed and before the construction of mines; they help assure producers that there is a market for the equipment they want to produce. This is an advantage for a number of reasons – it clearly means that the mining company does not have to worry about being able to sell its metal. The acquisition agreement is one of the most important documents of a project financing transaction, given the continuing depressed commodity prices that are putting pressure on projects and their financing. The acquisition agreement is the agreement under which the purchaser purchases all or a substantial portion of the facility`s production and provides the source of revenue to support project financing. Overall, the main factors that need to be taken into account in an acquisition agreement are the length, price and solvency of the buyer. Buyers will also sometimes make money available to producers to advance their mining projects if a money loss contract is entered into. But that`s not always the case. Company Y is a snack food producer. He likes the idea of purple popcorn and wants to put it in his different products. As a result, it enters into an acquisition agreement with X, with Y Company agreeing to purchase the entire production of purple popcorn from Company X next year. Offtake agreements are carefully developed, long-term agreements between buyers and sellers, which are negotiated and concluded even before the thematic project is developed, take effect when the development of the project is completed and production is put online and continues for a long time, at least several years.
These agreements help the project owner finance the project and, indeed, are most likely necessary, as the offtake agreements are a promise of future revenue and proof of the existence of a market for the product. An acquisition agreement is essentially a binding contract between a company that produces a specific resource and a company that must purchase that resource. It formalizes the buyer`s intention to purchase a certain amount of the manufacturer`s future production.