Buyer Protection Provisions in M&A Agreements: AR Repurchase Obligation, Inventory Audit, Insurance and More

Minimizing Buyer's Risk With Deal-Specific Provisions Beyond Indemnification and Escrows

Recording of a 90-minute CLE webinar with Q&A


Conducted on Thursday, October 8, 2015

Recorded event now available

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Program Materials

This CLE webinar will guide deal counsel in negotiating and drafting provisions in M&A purchase agreements that provide additional protections to buyers beyond indemnification and escrows. The panel will outline approaches for leveraging purchase price adjustments, accounts receivable repurchase obligations, buyers’ right to conduct an inventory audit, M&A transactional insurance, and other buyer protections to minimize risk.

Description

In many M&A transactions, indemnification is the buyer’s exclusive remedy following a seller’s breach of the representations and warranties provisions in the purchase agreement and for excluded liabilities. Because carve-outs from the exclusive remedy provision are narrow, buyer’s counsel is wise to negotiate additional protections beyond indemnification and escrow in the purchase agreement.

Buyer protection provisions may include purchase price adjustments, an accounts receivable repurchase obligation, the buyer’s right to conduct an inventory audit, M&A transactional insurance, setoff rights and cross-default provisions.

With the recent resurgence of M&A activity, counsel should stay on top of the latest thinking in buyer protection provisions.

Listen as our panel of experienced M&A attorneys discusses best practices to minimize deal risks for buyers through buyer protection provisions in the acquisition agreement.

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Outline

  1. Purchase Price Adjustments as an alternative to indemnification
  2. Key clauses beyond indemnification and escrow:
    1. Accounts receivable repurchase
    2. Inventory audits
    3. M&A transactional insurance
    4. Setoff rights
    5. Cross-default provisions

Benefits

The panel will review these and other key issues:

  • Why is it important to include provisions beyond indemnification and escrows to protect buyers in M&A purchase agreements?
  • How does a seller’s obligation to repurchase uncollected accounts receivable interplay with other provisions of the purchase agreement?
  • How can buyers leverage transactional insurance to protect themselves against risks?

Faculty

Herman, Dimitry
Dimitry Herman

Founder and Managing Partner
Herman Law

Mr. Herman serves as outside general counsel to growing technology companies and as deal counsel for venture...  |  Read More

John Marsalek
John Marsalek

Partner
Dorsey & Whitney

Mr. Marsalek engages in a general corporate practice with an emphasis on corporate transactions, including private...  |  Read More

Reed Sussman, Esq.
Reed Sussman, Esq.

Senior Vice President
Gallagher WGA

Mr. Sussman is the Director of the firm's Mergers and Acquisitions Practice. He is responsible for implementing and...  |  Read More

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