M&A Purchase Agreement: What to Bring to Closing - dummies

M&A Purchase Agreement: What to Bring to Closing

By Bill Snow

The purchase agreement defines certain items the Buyer and Seller may need to physically bring to the closing of the M&A deal (or deliver ahead of time, if the closing is virtual).

Seller’s deliveries may include:

  • Stock certificates or other documents providing evidence Seller actually owns what she’s selling

  • Resignations of any or all officers or board members, if Buyer requires that info

  • Stock books, ledgers, minute books, other corporate records, and corporate seals

  • Documentation that Seller has complied with all conditions required by the purchase agreement

  • The company’s articles of incorporation and bylaws

  • Written documentation that all outstanding options, warrants, or other instruments that can claim ownership in Seller have been extinguished or exercised prior to closing

  • Written opinions from Seller’s lawyers that all the necessary legal documents are in order

  • Signatures from both parties for the escrow agreement, confidentiality agreements, noncompetition and non-solicitation agreements, and employment agreements

  • A closing financial statement (generally as of the close of business from the previous day)

Buyer’s deliveries may involve the following:

  • The money! This delivery is the single most important one (at least in the eyes of Seller). Buyer brings the money in the form of a wire transfer, not a check.

  • Some sort of documentation, signed by an authorized officer, that Buyer has performed all necessary due diligence

  • Approvals by Buyer’s board of directors

  • Legal opinion by Buyer’s attorney

  • Signed counterparts to various agreements, including the escrow agreement, noncompetition and non-solicitation agreements, employment agreements, confidentiality agreements, leases, and any other agreement between Buyer and Seller