March 30, 2017This is an agreement between a vendor/seller and a purchaser which sets out the terms and conditions relating to the purchase and sale of a company’s assets.
September 22, 2015Purchasers and their financers will require satisfactory inspection reports as a condition for closing the transaction. An asset purchase agreement should include clear procedures for inspection, and clear standards for determining whether the inspected assets comply with the terms of the agreement.
August 27, 2015This article provides a good explanation on the definition of representations and warranties at the end of the first section, and their use in protecting an asset or share purchaser.
August 25, 2015Both vendors and purchasers have a strong interest in ensuring that the ownership of all liabilities has been clearly allocated by the APA. When drafting an asset purchase agreement, the buyer will likely negotiate for narrow assumed liability and broad excluded liability.
August 20, 2015Some jurisdictions, including California, permit only post-acquisition non-competes, in order to protect a purchaser’s interest in capitalizing on acquired goodwill for a limited period.
August 10, 2015The APA should contain clear provisions allocating responsibility for taxes. Parties should also be familiar with the tax laws applicable to their transaction, particularly if it could be argued that the transaction had no practical economic effects other than the creation of income tax losses.
August 09, 2015Restrictive covenants must be drafted carefully to give adequate protection to the purchaser, and purchasers should be able to show the connection between the price paid for the goodwill of the business, and the temporal and geographic aspects of the non-compete provision.
July 05, 2015Parties who choose arbitration to settle disputes under an APA should note that courts have become increasingly reluctant to interfere with arbitration awards if a fair process has been used to arrive at an arbitration decision.
June 28, 2015Although parties are generally free to negotiate their sale price, in the case of a sale by a bankrupt, the price must reflect the market value of the assets in order to be able to withstand an objection by a Trustee in Bankruptcy.
June 25, 2015When drafting an indemnity clause in an asset purchase agreement, parties may wish to limit the time period in which the indemnity clause is to be effective.
June 12, 2015Parties to an asset purchase agreement may avoid unpleasant surprises with respect to title transfer issues if every asset, or category of assets is carefully itemized in a schedule to the agreement.