Should there be a no shop, no solicit clause in the term sheet, which will be binding? From the investor's standpoint, this is often a preferred way to proceed. It avoids the contingency that the Company will "shop" the terms offered by, in this case ABC, LLC, with other potential investors and pick the winning number. This is viewed as a problem for investors, because they will be wasting their time and money on a process which they did not realize would be, in effect, an auction.
