Cette
page en français 
This page in French
Author:
Jonathon
Wise Polier
Member
of the Bars of New York State and Paris (France)
4
rue de Marignan, 75008 Paris
Telephone: (33) 1 47 23 41 51
/
Fax: (33) 1 47 23 37 93
E-Mail: j-polier@paris-law.com
/
http://www.paris-law.com
(List
of articles in English and French relating to various legal issues)
In
transnational acquisition, irrespective of the decision of the
parties to first execute a letter of Intent, it is recommended
that the buyer's attorney prepare and the parties exchange a
draft Heads of Agreement before moving on to the preparation of a
full blown asset of stock Purchase and Sale Agreement.
For the potential purchaser, this intermediary step usually saves time, money and increases the chances to close the deal for a number of reasons:
This simplified draft document helps the parties quickly identify almost all areas of possible disagreement.
Once the buyer understands these issues, the buyer can better evaluate which objections are minor and which are "deal killers".
Then, the buyer and its legal counsel can formulate a "win-win" compromise where new formulations can deal with the legitimate concerns relating to certain issues and other issues can be simply "horse traded".
If the parties cannot agree upon the terms of the Heads of Agreement, there is no purpose in drafting and assuming the cost of a draft a Purchase and Sale Agreement.
Once the Heads of Agreement issues have been settled, the buyer's attorney (the draftsman of the Purchase and Sale Agreement) is better able to draft such Agreement
American Purchase and Sale Agreements are very long and the terminology and concepts may be difficult for understand from the point of view of the European project manager. Thus, the use of the Heads of Agresement put off the day on which this voluminous document must be discussed and explained by the buyer's counsel to such manager.
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DISCLAIMER The information provided here and on the other pages linked hereto is intended for educational purposes only, and is not legal advice. Particular situations require particular analyses that can only be provided by legal professionals who specialize in the relevant fields and who know all the details of a situation. Also, a presentation such as this does not establish the attorney-client relationship that is necessary in any rendering of legal advice. Finally, one should be aware that the law is a chameleon-like beast that changes its colors frequently, and what holds good today may be reversed by tomorrow. The comments herein should then be read in that light. |