This document is a heads of agreement for use in the negotiation for the sale of a business, by way of the sale of shares in a company, or units in a trust.
The document can be used at the commencement of discussions, in order to bind the parties to the negotiation and due diligence process. It is also used to impose obligations of confidentiality on the parties in relation to discussions. The agreement can be used to ensure exclusivity of negotiations between the parties if the appropriate modifications are made.
In addition to the matters in this document, practitioners should consider the specific needs of their clients. For example, practitioners should consider whether their clients will require specific warranties under the business sale agreement or whether there are conditions document that should be included before the sale of business arrangement becomes binding.
Using this precedent
This document will serve as a guide to the sorts of matters which will need to be considered by parties and their advisers at the various stages of the transaction. It will provide guidance as to the sorts of matters that may need to be included in the relevant contract.
This document should be carefully reviewed and amended as appropriate, in light of the circumstances of the transaction. Revenue implications (especially stamp duty and income tax) will affect a large number of aspects of the transaction, and these should be the subject of separate consideration in each case.
This document has been authored for LexisNexis by Rosalyn Gladwin, Principal, Gladwin Legal.
This document is prepared with the assistance of Specialist Editor Murray Landis, Partner, K&L Gates.