We are almost at the end of our 7-part series on selling an emerging growth company, and we have reached the stage of drafting and negotiating the definitive agreement. When we talk about the “definitive agreement” in the context of a sale of an emerging growth company, this usually refers to an asset purchase or stock purchase agreement as part of an acquisition, but when there is a true merger of the acquirer and target, the definitive agreement will be the merger agreement. The actual drafting and negotiating done by your attorney and your acquirer’s attorneys may not be all that exciting, but, for you, the owner of the target (which I’ll refer to in this post as the seller), this means you are hopefully well on your way to a successful closing. [Read more…]
Representations and Warranties Archives
Selling Your Business — Practical Tips for Sellers — Part 11: Indemnification (Part Two)
This post was jointly written by Casey W. Riggs and Jennifer Wilson.
This is part 11 of our series discussing the sale of a business from the seller’s perspective. We’ve covered commencement of a potential deal through the closing and are now discussing indemnification. If you missed the first section of this post, you can find it here.
In this post, we’ll jump into some of the specific negotiation points with indemnification provisions, providing tips and explanation at the same time. [Read more…]
Selling Your Business — Practical Tips for Sellers — Part 10: Indemnification (Part One)
This post was jointly written by Casey W. Riggs and Jennifer Wilson.
This is part 10 of our series discussing the sale of a business from the seller’s perspective. We’ve covered commencement of a potential deal through the closing and now turn back to the purchase agreement to discuss the indemnification provisions, which deal with post-closing events. Indemnification provisions are among the most heavily negotiated portions of a purchase agreement, yet business owners may be tempted into thinking they are simply something lawyers like to argue over without realizing their importance. In this post, we’ll try to give a simple explanation of the indemnification provisions, explain how these provisions may come up after the closing, and give a few generic tips for sellers in handling indemnification. In the next post, we’ll provide some detail on specific provisions of the indemnity section and provide more seller tips related to those provisions. [Read more…]
Selling Your Business – Practical Tips for Sellers – Part 7: Representations, Warranties, and Disclosure Schedules
This is part seven of our series discussing the sale of a business from the seller’s perspective. We’ve covered deal structure issues, seller financing, earn-outs, letters of intent, due diligence, and the first section of the purchase agreement dealing with major business points. In this post, we’ll discuss the seller’s representations and warranties and the related disclosure schedules to the purchase agreement. Lawyers frequently debate the subtle and esoteric differences between “representations” and “warranties”, but for our purposes, in this post, they are basically statements that the parties make about themselves and their businesses, and we’ll refer to them simply as “representations”. [Read more…]