In M&A transactions, purchase agreement indemnification terms ensure both buyers and sellers get what they bargained for in deals. What should you and your M&A attorney look out for? Appropriate reps and warranties, modified as appropriate by materiality, knowledge and other qualifiers (noting that the basket, discussed below, may serve as a surrogate for materiality qualifiers for non-fundamental Read More

One of the things we often highlight at Sierra Pacific Partners is the importance of a cohesive deal team with open lines of communication. What could be wrong with that? Loss of attorney-client privilege if you're not careful. Generally, attorney-client privilege is lost if the communication is made in the presence of a third party. So, if your banker, broker, or other financial advisor is on a call or email with Read More

In an era where healthcare and finance intersect with increasing frequency, the repercussions of investment decisions can ripple through communities, leaving behind a wake of outcomes both positive and negative. A recent examination into the actions of private equity firms within the healthcare sector sheds light on this complex relationship, highlighting the case of Cerberus's involvement with Steward Health in Read More

Typically, the purchase agreement will contemplate other agreements that are either included as exhibits or negotiated between signing in closing -- so-called "ancillary agreements" or "ancillaries" for short These may include: Lease DocumentsAn assignment of the existing lease or entering into a new lease (especially if the seller separately owns the property used by the business). Employment and Other AgreementsIf Read More

                  Overview In this post, we return to key components of purchase agreements, this time focusing on closing conditions and covenants.  Closing conditions set out the contingencies for when the parties must go through with – or “close” – a transaction.   Covenants are obligations that the parties have between signing and closing and Read More

Overview Indemnification rights give the purchase agreement’s representations and covenants teeth, imposing liability on the seller (or sellers) for the buyer’s losses due to the reps not being true or the covenants not being fulfilled.  Usually, these provisions are heavily negotiated, with the buyer wanting full, long-lasting protection, and the seller wanting narrow, short-lived indemnification obligations.  Some Read More

The Heart of the Deal The definitive acquisition agreement – whether a stock purchase agreement, an asset purchase agreement, or a merger agreement – is where the transaction terms from the LOI are implemented in a negotiated, binding manner. In large transactions, it’s customary in most deal processes for the buyer to prepare the first draft of the acquisition agreement. In small-business transactions, usually the Read More

Conducting a due diligence examination is a fundamental part of buying a business.  Without conducting diligence, a purchaser has no way of knowing whether the business is as presented.  Typically, the buyer will send the seller a due diligence request list that will ask for the following, among other things:  Business Calls and meetings between the purchaser and the seller, the seller’s management team, and Read More

After initially exploring a transaction but before conducting a full due diligence inquiry, the parties will usually enter into a letter of intent (LOI) or term sheet.  A carefully prepared and negotiated LOI will establish critical deal terms prior to drafting and negotiating the definitive agreements.  Getting an appropriate LOI in place makes sure the parties really have the foundation for a deal in place and Read More

Asset deal? Stock Deal? 338 Election? Reverse triangular merger? F-Reorg? Installment sale? “Deal structure” refers to how a business sale is organized or “structured.” Buyers and sellers have options when deciding how to structure a deal. For most lower middle market businesses, asset deals usually make sense, although stocks deals and more complex structuring may be appropriate depending on the Read More