BUSINESS ACQUISITIONS

NEGOTIATING AND PREPARING THE

ACQUISITION AGREEMENT

BASIC TYPES OF AGREEMENTS

• Asset Purchase

• Stock Purchase

• Cash Merger

• Stock Merger

WHAT THE ACQUISITION AGREEMENT COVERS

• Describes the transaction structure, purchase price and procedures for closing

• Allocates risk between the buyer and seller for both known and unknown liabilities and obligations

• Contains promises (i.e., covenants) of the parties

• Contains indemnification procedures

• Contains the extent of commitment to close the transaction.

WHAT THE BUYER WANTS

• Receiving what is expected at closing– Good Title to the Purchased Assets or Stock– All of the Facilities, Individuals, Assets,

Rights, Contracts and other Items Needed to Continue and Enhance the Businss

• The option to “bail out” if the business is not what has been represented or what is expected

• Post-closing protection against contingent or unknown risks

WHAT THE SELLER WANTS

• Certainty and speed of Closing

• Receiving the Purchase Price without Risk

• Not being at risk for the assets, liabilities or operations of the business after the closing

GENERAL SECTIONS OF ACQUISITON AGREEMENTS

• Introduction and Description of Transaction

• Consideration for Transfer of Business

• Representations and Warranties of Seller

• Representations and Warranties of Buyer

• Covenants of the Parties

• Conditions to Closing

• Termination Procedures and Remedies

• Indemnification

INTRODUCTION AND DESCRIPTION OF TRANSACTION• Description of Parties to the Stock Purchase

Agreement– Shareholders as Sellers in a Stock Purchase

Transaction– The Corporate Target is Often a Party to the

Agreement, even if it’s a stock Purchase– In some states, spouses to the shareholders are

necessary– Need to be sure that stock option and stock warrant

holders are parties

INTRODUCTION AND DESCRIPTION OF TRANSACTION• Description of the Form of the Transaction

– Stock Purchase for All of the Capital Stock of the Corporation

– Consider using a Merger transaction in order to not have each of the shareholders sign the Acquisition Agreement and Avoiding a Recalcitrant Shareholder

– Be Certain that All of the Capital Stock is Being Acquired

• Review the Stock Record Books of the Corporation

• Pay particular regard to Stock Options, Stock Warrants and Conversion Rights of Debt and Preferred Stock.

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement ("Agreement") is madeas of _________, 199__, by ___________, a___________ corporation ("Buyer"), ___________, anindividual resident in ___________ ("A"), and__________, an individual resident in ___________("B" and, collectively with A, "Sellers").

RECITALS

Sellers desire to sell, and Buyer desires topurchase, all of the issued and outstanding shares(the "Shares") of capital stock of ____, a _____corporation (the "Company"), for the considerationand on the terms set forth in this Agreement.

AGREEMENT

The parties, intending to be legally bound, agreeas follows:

THIS IS ONLY A PARTIAL VIEW OF THE FULL DOCUMENT. THE REMAINING PAGES ARE INTENTIONALLY NOT SHOWN. THEY ARE SHOWN ONLY IN THE MEMBERS DOWNLOAD AREA.

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Guides

Acquisition Type Scenarios

Definitive Agreement Anatomy

What's In The M&A

Agreement

Agreement Structure Basics

Antitrust Document

Sanitization

M&A Agreement Tools and Templates

Asset Purchase - Ver1

Asset Purchase - Ver2

Stock Purchase - Ver1

Stock Purchase - Ver2

Stock Purchase - Ver3

Merger Agreement - Ver1

Merger Agreement - Ver2

Merger Agreement - Ver3

Merger Agreement - Ver4

Promissory Note

Non-Disclosure (NDA)

Shareholder Agreement

Acquisition of JV Interest

Assumption of Debt

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Marketing And Sales Only JV

License Technology For Stock

R&D Alliance - Ver1

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Partnership - Ver1

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Partnership - Ver3

Distributor Agreement

Joint Venture Agreement

Stock Purchase and Sale Agreement

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Acquisition Confidentiality

Agreement

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