Deconstructing M&A Agreement
When I review a draft sale and purchase agreement for an M&A transaction, here’s how I would break down the key items that need to be addressed in the agreement: 1. Before fulfilment of conditions precedent What are the conditions precedent? Who is responsible for fulfilling the conditions precedent? When …
M&A Specialist and Generalist
I didn’t fully appreciate how specialised and broad M&A practice is until I found myself thinking about how various legal issues discussed in the articles I read apply to M&A transactions. While reading an article on whether consideration is required for the variation of contracts, I was reminded of a …
Exclusivity when negotiating an M&A deal
If you are a buyer negotiating to acquire business or shares of a company, you would want to ensure that you do not incur costs during the negotiation only for the seller to end the negotiation and sell to another party. A buyer would want to ensure that the seller …
Material Adverse Effect (“MAE”) Clause in M&A Transactions
I came across the following definition of “MAE” from the American Bar Association’s Canadian Private Target M&A Deal Point Study: “MAE” means any result, occurrence, fact, change, event, or effect that has, or could reasonably be expected to have, a materially adverse effect on the business, assets, liabilities, capitalization, condition …
Don’t Rush the Disclosure Letter in M&A Transactions
In M&A transactions, a disclosure letter sets out the exceptions to seller’s representations and warranties in a sale and purchase agreement for an M&A transaction (“SPA”). Instead of negotiating heavily on sellers’ representations and warranties in SPAs, it is common to provide in SPAs that sellers’ representations and warranties are …
Can the Purchaser Rely on the Warranty and Indemnity Clauses in the Share Purchase Agreement?
In M&A transactions, warranty and indemnity clauses are toolkits for protecting the purchaser’s interest. But what happens if the seller can’t fulfill these obligations due to financial reason? A well-drafted clause is only as effective as the seller’s ability to pay. If the purchaser is concerned that the seller may …
IP Warranties in M&A Agreements
If intellectual property of a target company is what drives the acquisition, the IP warranties in the transaction agreement should be comprehensive to protect the buyer’s interests. The IP warranties in the transaction agreement should include: The target company owns or holds valid licenses for all IP essential to its …
What to Look Out for When Acquiring a Company with Valuable Intellectual Property
1. Ownership of IP Identify the IP that is material to the business and who owns the IP. Request the sellers to provide a comprehensive list of all IP material to the business, whether registered or not. For registered IP, such as patents and registered trademarks, conduct searches for all …
Why You Shouldn’t Rely on Online Shareholders’ Agreement Templates
Drafting an effective shareholders’ agreement requires expertise in company law, shareholders’ rights and directors’ duties. It’s perplexing that some people think a shareholders’ agreement can be put together quickly and easily by using an online template and changing the parties’ names and a few details. While online templates are easily …
Legal Requirements for Allotment of Shares in Malaysia
M&A transactions often involve allotment of shares in a company. Understanding the legal requirements for allotment of shares is essential to ensure compliance and avoid potential disputes over the validity of allotment of shares. The following are the key steps for allotment of shares under the Companies Act 2016 (CA) …