Business Law

LETTER OF INTENT (ASSET AND STOCK SALE)

The documentation for a stock or asset purchase/sale transaction should begin with a letter of intent between the parties. The letter highlights big-picture items that will be further defined in the various agreements and other documents to memorialize the transaction, and is often the first written record of the desired outcome of the transaction.

ASSET PURCHASE AGREEMENT

When your client seeks to acquire another business or entity they will most likely seek to execute an asset purchase. By acquiring the assets of another business or entity the buyer generally avoids acquiring liabilities (unless the assets themselves carry liabilities that have attached). The asset purchase agreement in BusinessDocx is quite robust and contemplates many possible obligations and promises by each party. You’ll want to review and tailor the assembled document to fit your client’s needs.

NON-COMPETITION, NON-SOLICITATION, AND CONFIDENTIALITY AGREEMENT (ASSET AND STOCK SALE)

When a business acquisition is complete, the last thing the buyer wants is for the seller to open up shop across the street and go into competition with the buyer. The noncompetition, nondisclosure, and non-solicitation agreement helps you protect the buyer’s interests by memorializing an agreement that the seller will not go into competition with the buyer, will not disclose material information about the transaction, and will not solicit employees or vendors away from the buyer to a new enterprise the seller pursues.

OPINION LETTERS OF COUNSEL (ASSET AND STOCK SALE)

Your clients should count on you to help them through the due diligence process as they assess any company acquisition. Most often, an acquisition will take the form of an asset purchase to minimize any of the seller’s liabilities. Stock purchases are trickier because they involve acquisition of liabilities, so your client will lean on you even more in those matters.

BusinessDocx provides assemblies to help capture your analysis as you provide advice to your clients through an asset or stock purchase. Because every acquisition will be different, and because assumption of legal obligations is part of a stock purchase transaction, make sure you carefully edit the assembled document to reflect your client’s unique needs.

SECURITY AGREEMENT (ASSET SALE)

The security agreement is often coupled with an asset purchase agreement. If the buyer borrows money from a third party lender, that lender will seek a security interest backed by the acquired assets. The security agreement can be particularly helpful in documenting arms-length transactions when a buyer borrows money from a trust or other wealth preservation tool to acquire assets of another company.

CLOSING CERTIFICATES (ASSET AND STOCK SALE)

The closing certificate accompanies an executed (and performed) stock or asset purchase agreement and states that the seller has complied with all the obligations under the agreement to fully close the transaction. This is an important part of the paper trail to fully consummate an asset or stock purchase transaction.