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BUSINESS TRANSACTIONS AND DOCUMENT DRAFTING (A Skills-Based Seminar & Workshop)
University of Florida Levin College of Law
Law 6802
Spring Term – 2016
COURSE SYLLABUS _______________________
ADJUNCT FACULTY / INSTRUCTORS / COACHES:
Daniel H. Aronson (Leader, Organizer & Coordinator) – Partner | Berger Singerman LLP
Louis T. M. Conti – Partner | Holland & Knight LLP
Gardner F. Davis – Partner | Foley & Lardner LLP
Gregory C. Yadley – Partner | Shumaker, Loop & Kendrick LLP
CLASS DAY, TIME AND ROOM:
Wednesdays – 1:00 pm to 2:50 pm (commencing January 6, 2016)
Classroom – 355D (Holland Hall)
BOOKS AND MATERIALS: The principal books and resource materials for this course are:
Course Materials Book (Volumes I and II) (compiled and edited by Daniel H. Aronson)
Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You (2nd
Ed. 2008)
Documents & Forms Supplement (accessible solely via the Course TWEN site)
Practical Law (Thomson Reuters) Documents, Forms, Practice Pointers, Checklists & Resources
Additional articles, outlines, materials, exercises, databases and other resources will be introduced and
provided from time to time throughout the term (via in-class handouts, TWEN site posting and data base
logins). Students are urged and expected to read regularly (daily) The Wall Street Journal (a form for
discounted student and online subscriptions will be provided during our first class).
PREREQUISITES: The Course – a two credit skills-based seminar and workshop – is limited to 20 law
students, with registration preference (based on submitted applications) given to 3Ls who have
completed certain courses (Securities Regulation, Mergers & Acquisitions and Unincorporated
Business Enterprises). In addition, the Course is only available to students who have completed the
Legal Drafting course and either the Corporations or Business Associations Survey course.
CLASS PREPARATION AND ATTENDANCE; ASSIGNMENTS; GRADING: Because the class
meets only once each week, and given the skills-based, drafting-focused and “hands-on” interactive
nature of the Course and planned exercises, both advance preparation for and attendance at ALL classes
are essential to the incremental learning experience. Students are expected to read all assigned
materials (per the detailed Course Schedule & Reading Assignments outline to be distributed during our
first class and as posted on the TWEN site and as otherwise assigned by faculty) in advance of each
class. Drafting exercises and certain other assignments will be distributed (and then submitted by
students, and reviewed and “scored” by faculty) – both in class and via TWEN site (“Assignments &
Quizzes”) submission/posting – throughout the term. There is no Final Exam for this Course. Each
student’s final grade will be based on a composite of all "scored"/graded drafting assignments, as well
as thoughtful and meaningful participation and performance in class (including in our five planned in-
class drafting exercises). Please see the Course “Ground Rules & Administrative Matters”
accompanying this Syllabus and posted on the TWEN site.
Business Transactions and Document Drafting Spring 2016
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GROUND RULES & ADMINISTRATIVE MATTERS
Attendance, Participation, Professionalism & Respect. Students are required to attend every class
(barring emergency or illness excused in advance) and to be prepared for and participate in all class
discussions, exchanges and exercises. Please be and stay engaged, informed and committed. Advance
preparation includes reading and thoughtfully considering all assigned material and thinking about and
preparing responses (including drafts) to assigned questions and exercises. In class, you are expected (i) to
volunteer, willingly respond and to participate when called upon, and (ii) to conduct yourself
professionally, and to respect and be courteous to your fellow classmates (and course faculty).
Reading Assignments. The detailed Course Schedule & Reading Assignments outline (distributed during
our first class and posted on TWEN) lists the reading (and skimming) material assigned, on an advance,
class-by-class basis, over the course of the spring term. This list (and your advance review and reading
assignments) will be updated, revised and supplemented from time to time, either in class by the assigning
faculty member or via periodic posting on TWEN. Importantly, your faculty relies heavily on the
assumption that each student will timely complete all assigned reading in advance of the relevant class.
Grading (and Assignment “Scoring”). Your final grade in this Course will be based on:
90% - Performance (Composite Scores) on Homework Assignments
10% - Class Participation (including timeliness, preparation, respect, thoughtfulness, meaningful
engagement and performance, in the Course Coordinator’s discretion)
Preparing and Submitting Homework Assignments. All homework exercises and assignments (seven
are planned) will be assigned and submitted solely via the Assignments & Quizzes link on the Course
TWEN site. Please review and follow carefully the “Guidelines for Preparing and Submitting Homework
Assignments” posted on the Course TWEN site (under the Assignments & Quizzes link).
Note on Deadlines: Your faculty reserves the right not to accept any assignment which is submitted
late (i.e., after the posted “due” date and time). If a faculty member determines to accept a tardy
submission, the “score” for that submission may automatically be lowered by 10%.
Collaboration; Use of Forms/Precedents/External Resources; Doing your Own Work (Honor Code).
In general, all scored/graded work, exercises and assignments in this Course will be individual in nature
(with each student expected to do his or her own work). When you are expected to work in pairs or teams,
the assigning faculty member will make that clear. There will be much class discussion about the proper
role and use of forms, precedents and other resources in document preparation, drafting and negotiation.
At best, a form is only a starting point. Using a form, precedent or drafting resource is not the same thing
as using (or basing one’s work on) another student’s work, drafting effort or responses (the latter is
impermissible plagiarism), whether from this or a previous version of this course. If you have any
questions about this, please ask. The honor code applies to this Course and all its exercises and
assignments.
Office Hours; Meetings with Faculty. The four members of your course faculty are full-time practicing
attorneys who work (and live) outside the Gainesville area. Generally, an “on duty” adjunct will be at the
law school each Wednesday during the term approximately two hours before and one to two hours after
each class. Occasionally, the faculty will be on campus other days and times as well. We will maintain an
“open door” policy while at the law school (in our assigned faculty office – Room 362, Holland Hall),
seeing students on a “first come, first (re)served” basis. If you desire to schedule an appointment, please
contact the instructor teaching the class the week in question to arrange a mutually convenient time to
meet. In addition, as part of the Course, we encourage each student to meet with each of the adjunct
faculty members (at least once outside of class).
Business Transactions and Document Drafting Spring 2016
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BUSINESS TRANSACTIONS AND DOCUMENT DRAFTING
(A Skills-Based Seminar & Workshop)
University of Florida Levin College of Law
Spring Term - 2016
COURSE SCHEDULE &
READING ASSIGNMENTS
_______________________
Class Session(s)
(Date(s))
1 - 2 Introduction; Business Lawyer’s Role, Skills-Base, Approach, Functions &
(Jan. 6 & 13) Value-Adds; Contract Building Blocks and Drafting Resources; Framework
and Model for Developing Skills and Proficiency in Contract Drafting and
Transaction Negotiation
(Mr. Aronson)
Course Overview & Full Syllabus with Assigned Reading List; Ground Rules &
Administrative Matters; Respect & Professionalism; Class Participation & Exercises;
Grades (and “Scoring” of Assignments) & Assignment Feedback; Course TWEN Site
and Other Resources; Adjunct Faculty, Office/Office Hours & Appointments
A. Introduction: Business/Transactional Lawyer's Role, Skills-Base, Mindset,
Rigor, Tool Kits and Value Adds (Business Lawyer’s Role as Trusted Counselor,
Strategist, Translator, Issues Identifier/Narrower/Resolver, Drafter, Advocate,
Negotiator, Risk/Compliance Advisor, Choreographer & Execution Specialist)
B. Framework for Developing Proficiency in Contract Drafting and Transaction
Negotiation; Client-Centered Approach – Building Trust; Assessing, Creating
and Adding Value Early, Often and Throughout Relationship
C. Building Blocks and Critical Provisions of Contracts and Business Documents
D. Negotiating Contracts & Transactions – The Art & Craft of Negotiation through
Listening, Analyzing, Drafting, Leveraging Information and Utilizing
Qualification, Limitation and Exception Tools & Resources
E. A Primer on (and the Importance of) Letters of Intent (LOIs) and Term Sheets
F. A Model for Developing and Improving Contract Drafting Skills; Related In-
Class Drafting Exercise (A) – Class 2
G. Introduction to and Context for First Homework (H/W) Assignment (#1)
ASSIGNED READING (Prior to Class 1):
Fox – Table of Contents; Chapters 1 and 2
Course Materials Book (Vol. I, Forepart) – Table of Contents; Syllabus; Ground Rules
& Administrative Matters; Course Overview & Schedule (Pages i-viii)
Course Materials Book – Pages 2 - 24 (Part I), 29 - 60, 636 - 639, 640 - 646
Case: Find and Read United Rentals, Inc. v. Ram Holdings, Inc., 937 A.2d 810
(Del. Ch. 2007)
Documents & Forms Supplement (link on Course TWEN site) – Selected Consumer
Contracts folder (Skim all six contracts)
Business Transactions and Document Drafting Spring 2016
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Additional Course Materials (link on Course TWEN site) – Read (posted articles)
Wordsmithing – Why contract language shouldn’t be an afterthought (K. Adams);
and What They Don’t Teach Law Students: Lawyering (D. Segal)
MANDATORY ONLINE WEBINAR (After Class 1, on Thursday, January 7, at 6:00
pm) re: Practical Law (Thomson Reuters Legal Solution) Database and Resource
Platform – Introduction, Overview and Useful Resources for Business Lawyers & Law
Students (log-in and access details to be provided by email) [Note: Regarding
references to “Practical Law” materials below, each student must be able to login,
access and review documents, tools and resources on the Practical Law Database.]
ASSIGNMENT (Prior to Class 2): Review and Be Prepared to Discuss Email Request to
Spring 2016 Law Associate (re: New Client – Need Your Help) (to be posted on
Course TWEN site by Mr. Aronson)
ASSIGNED READING (Prior to Class 2):
Fox – Chapter 3, Chapter 4, Chapter 5 (Sections 5:1 - 5:5) and Chapter 8
(Sections 8:3 and 8:4)
Course Materials Book – Read Pages 24 - 28 (Part II), 61 - 73 (re: Primer on Letters
of Intent and Term Sheets); and pages 285 - 297, 390 - 409, 596; Skim pages
603 - 624 (Selected Pages and Excerpts from ABA Model Asset and Stock
Purchase Agreements with Commentary)
Practical Law – Read Aligning Associate Training with Client Needs; and Drafting or
Reviewing a Commercial Contract
Case: Find and Read Espresso Disposition Corp. 1 et al. v. Santana Sales & Marketing
Group, Inc., No. 3D12-1147 (Fla. 3d DCA, November 14, 2012)
Documents & Forms Supplement (link on Course TWEN site) – Sample Contracts –
Drafting Progression Series folder – Skim Residential Real Estate - Purchase and
Sale Agreement (3 versions); and Selected Private Company Documents &
Agreements folder – Skim Contract of Sale (Commercial Real Estate)
OPTIONAL SUGGESTED READING (Articles of Interest) (Prior to Class 2):
Additional Course Materials (link on Course TWEN site) – Read (posted article)
Teaching Contract Drafting to First-Year Law Students in Three Hours or Less (S.
Payne)
HOMEWORK (H/W) ASSIGNMENT (Class 2):
First H/W Assignment (#1) – Assigned @ End of Class 2 by Mr. Aronson
3 Organizing and Working with Business Entities and their Constituent
(Jan. 20) Documents – An Introduction
(Mr. Conti)
A. Primer on Business Entity Differences & Entity Selection Considerations
B. Keys to Effective Org Doc Drafting: Importance of State Statute(s), “Default”
and Procedural Provisions, and Terms that may not be Altered or Modified
C. Preparing & Drafting LLC Organizational Documents – Articles of
Organization/Certificate of Formation and LLC Operating Agreement
D. In-Class Drafting Exercise (B) – Drafting Key Provisions of a Multi-Member
LLC Operating Agreement
Business Transactions and Document Drafting Spring 2016
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ASSIGNED READING (Prior to Class 3):
Fox – Glossary (Pages 265 - 297); Chapter 5 (Section 5:6), Chapter 6 (Sections
6:1 - 6:3) and Chapter 9 (Sections 9:1 - 9:2)
Course Materials Book – Skim Pages 119 - 146 (Exhibits A - C); Read Pages 75 -
77 (Early Planning Considerations: Entity Selection & Structural
Considerations in Organizing a Business Venture) and Pages 147 - 185
(Exhibit D – Form of FL LLC Operating Agreement)
Additional Course Materials (link on Course TWEN site) – Read (posted articles):
Eleven Fundamental Errors in Drafting LLC Operating Agreements (J.
Cunningham); Model Organizational Checklist for a Limited Liability
Company (ABA Business Law Section LLC Subcommittee)
Practical Law – Read LLC Agreement Commentary; and Setting Up a New
Business Checklist; Skim LLC Agreement Checklist
Case: Find and Read In re Kinder Morgan, Inc. Corporate Reorganization
Litigation, C.A. No. 10093-VCL (Del. Ch., Aug. 20, 2015)
4 Organizing and Working with (the Principal Documents and Agreements
(Jan. 27) Essential to) Corporations and Other Business Entities
(Mr. Davis)
A. Review of Class 3 Discussion & In-Class Drafting Exercise
B. Working and Contracting with Different Forms of Business Entities
C. Keys to Preparing/Drafting Principal Corporate Organizational Documents
1. Articles/Certificate of Incorporation and Bylaws
2. Organizational Actions (Election of Board, Appointment of Officers, etc.)
3. Minutes, Authorizing Resolutions and Actions by Written Consent
D. Fundamentals of and Key Considerations in Drafting and Negotiating Corporate
Shareholders’ Agreements – Up Close
E. In-Class Drafting Exercise (C) – Drafting Key Provisions of a Corporate
Shareholders’ Agreement
F. Introduction to and Context for H/W Assignment (#2)
ASSIGNED READING (Prior to Class 4):
Fox – Chapter 7 and Chapter 8 (Sections 8:1 and 8:2)
Course Materials Book – Pages 186 - 244 (Exhibit E – Supp. Lecture Outline)
Documents & Forms Supplement (link on Course TWEN site) – Selected Private
Company Documents & Agreements folder – Skim Sample Form of Shareholders
Agreement (Exhibit “A” - DAVIS), and Sample Form of Shareholders
Agreement with P/E Owners (Exhibit “B” - DAVIS); Read Example of “Mark-
up” of Shareholders Agreement (Exhibit “G” - DAVIS)
Practical Law – Read Forming and Organizing a Corporation; Preparing Minutes:
Checklist; and Stockholders Agreement Checklist; Skim Corporate Formation
and Housekeeping Toolkit; Certificate of Incorporation (Short-form DE); By-
laws: DE Corporation; Organizational Action by Sole Incorporator; and
Unanimous Written Consent of the Board in Lieu of Organizational Meeting
HOMEWORK ASSIGNMENT (Class 4)
H/W Assignment (#2) – Assigned @ End of Class 4 by Mr. Davis
Business Transactions and Document Drafting Spring 2016
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5 Agreements with Management and Key Employees; Executive and Employee
(Feb. 3) Agreements and Incentive Compensation Plans
(Mr. Davis)
A. Review of Class 4 Discussion & In-Class Drafting Exercise
B. Critical Importance of Retaining, Incenting and Motivating Key Employees
(including through employee agreements and plans)
C. Primer on Employee Contracts and Plans, Compensation, Severance &
Termination Provisions, Restrictive Covenants & Tax Considerations
D. Keys to Preparing and Drafting Employee Agreements/Documents
1. Employment Agreements (including “At Will” agreements) and Incentive
Compensation (including Stock Option) Plans and Agreements
2. Non-compete, Non-solicitation, Invention Assignment and Confidentiality
Agreements
3. Termination & Severance Considerations
ASSIGNED READING (Prior to Class 5):
Course Materials Book – Pages 245 - 249 (Exhibit “F”), Pages 368 - 380 (Selected
Excerpt from ABA Model Asset Purchase Agreement with Commentary –
Noncompetition, Nondisclosure and Nonsolicitation Agreement, exhibit) and
Pages 625 - 635 (Selected Excerpt from ABA Model Stock Purchase Agreement
with Commentary – Considerations Regarding Employment Agreements in
Connection with Sale of Stock, appendix)
Practical Law – Read Negotiating and Drafting an Executive Employment
Agreement; Drafting an Employee Non-compete Agreement: Best Practices
Checklist; and Restrictive Covenants Toolkit; Skim Non-compete Agreements
with Employees; and Employee Non-compete Agreement (FL)
Documents & Forms Supplement (link on Course TWEN site) – Skim Sample
Contracts – Drafting Progression Series folder – Employment Agreement (3
versions); and Selected Public Company Documents & Agreements folder –
Twitter CEO Employment Agreement (2013)
6 Subscription, Purchase & Sale of Stock and Equity Interests - Part I;
(Feb. 10) Establishing the Client Relationship and Funding a Start-Up Business
(Mr. Yadley)
A. Offer, Issuance & Sale of Equity Interests in a New Business – Legal &
Practical Considerations
1. Role of the Business Lawyer (including junior associates)
2. Importance of Understanding Business, Financial Statements & Key
Accounting and Tax Matters
B. Establishing and Maintaining a Lawyer-Client Relationship
1. Understanding, Minding and Meeting Client Expectations
2. Professional Obligations
3. Keys to Effective Client Interviews, Meetings and Counseling in
Business, Finance and Transactional Engagements
C. Funding a Start-Up Business – Sale and Issuance of Equity Interests –
The Entrepreneur and the Investor: How to Align Their Interests
D. Introduction to & Context for H/W Assignment (#3)
Business Transactions and Document Drafting Spring 2016
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ASSIGNED READING (Prior to Class 6):
Fox – Chapter 2 (Section 2:2)
Course Materials Book – Pages 250 - 258 (Memo re: Proposed Private Sale of
Common Stock); 259 - 261 (Memo re: Offering Procedures for Proposed
Private Sale of Common Stock); and Pages 459 - 463, 596, 597 - 602 (Selected
Excerpts from ABA Model Stock Purchase Agreement with Commentary –
Representations and Warranties (of Buyer); Introduction to Exhibits; Legal
Opinions)
Case: Find and Read ENI Holdings, LLC v. KBR Group Holdings, LLC (Del. Ch.
Sept. 13, 2013)
Practical Law – Read Subscription Agreement: Private Placement of Equity Securities
(Regulation D); and Confidentiality Agreement: Early-stage Business (Pro-
discloser)
Additional Course Materials (link on Course TWEN site) – Read Reading &
Understanding Financial Statements – A Guide to Financial Reporting (F. Jaumot,
M. Borkowski); and Interviewing: The Beginning of the Attorney-Client
Relationship (Excerpt) (A. Alvarez and P. Tremblay)
HOMEWORK ASSIGNMENT
H/W Assignment (#3) – Assigned @ End of Class 6 by Mr. Yadley
7 Subscription, Purchase & Sale of Stock and Equity Interests - Part II;
(Feb. 17) Conducting Due Diligence and Drafting Contract Reps & Warranties
and Disclosure Schedules
(Mr. Yadley)
A. Key Steps in Private Securities Offering/Private Placement Transactions
1. Establishing 1933 Act Exemptions (including under new SEC rules)
2. Who are the Prospective Investors?
3. Drafting Securities Offering Disclosure Documents (Drafting Style,
Technique and Approach Contrasted)
B. Key Legal, Regulatory and Drafting Considerations
1. Offers; Authorization & Issuance; Purchase & Sale; Purchase Price;
Equity Securities Provisions; LLCs and “Uncertificated” LLC Interests
(Caution)
2. Offeree and Purchaser Representative Questionnaires
3. How will Potential Investors be Reached and/or Contacted? “General
Solicitation” Issues & Considerations (Reasonable Verification Measures
re: Accredited Investor status)
4. Felon and “Bad Actor” Disqualification
C. “Due Diligence” – Requests & Responses; Data Rooms; Relationship with/to
Transaction Documents
1. Critical Role of Counsel – Early, Often & Throughout the Deal
2. Allocation of Risk in Contract Drafting and Negotiation
3. Due Diligence Requests, Responses and Handling Information
4. (Virtual) Data Rooms
5. From Due Diligence to Disclosure Schedules
6. Effect on, and Need to Update and Fine-Tune, Reps & Warranties
D. In-Class Drafting Exercise (D) – Drafting and Correlating Due Diligence,
Disclosure Schedules, Reps & Warranties and Indemnification Provisions
Business Transactions and Document Drafting Spring 2016
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ASSIGNED READING (Prior to Class 7):
Fox – Chapter 6 (Sections 6:4.1 and 6:4.7) and Chapter 9 (Sections 9:1 - 9:2 – review)
Course Materials Book – Pages 279 - 284 (Corp. Associate Experience Checklist)
Practical Law – Read Due Diligence Checklist: Securities Offerings; Skim Due
Diligence Request List: Securities Offerings; Investor Questionnaire; Bad Actor
Questionnaire: Rule 506 Offering; and Private Placement Memorandum
Additional Course Materials (link on Course TWEN site) – Read Top 12 Most FAQs by
Junior Associates Conducting Due Diligence (V. Tsaganos)
8 Commercial Loans, Notes & Debt Financing Transactions –
(Feb. 24) Promissory Notes, Credit/Loan Agreements and Security Agreements
(Mr. Davis)
A. Primer on Documenting Commercial Loans and Debt Financing Transactions,
including Credit/Loan Agreements (Term and Revolver), Notes/Debentures,
and Intercreditor/Subordination and Security Agreements
B. Understanding and Drafting Key Provisions of Loan Agreements (including
Covenants, Default and Remedial Provisions, Subordination and Guarantees)
C. Issues, Approaches & Tactics in Drafting Complex Loan Agreements and
Documents – The Good, Bad & Ugly
D. Resources for Loan-Related Documents and Drafting/Negotiation Pointers
E. Introduction to and Context for H/W Assignment (#4)
ASSIGNED READING (Prior to Class 8):
Fox – Chapter 2 (Section 2:3.2), Chapter 6 (Sections 6:4.8 and 6:4.9) and Chapter 9
(Section 9:3 in total)
Practical Law – Read Loan Agreement: Overview; Closing a Loan Transaction
Checklist; Loan Agreement: Representations and Warranties; Loan
Agreement: Events of Default; Skim Loan Agreement: Standard Definitions;
and Loan Agreement: Financial Covenants
Additional Course Materials (link on Course TWEN site) – Read Precision’s
Counterfeit: The Failures of Complex Documents, and Some Suggested
Remedies (H. Darmstadter)
HOMEWORK ASSIGNMENT
H/W Assignment (#4) – Assigned @ End of Class 8 by Mr. Davis
< March 2nd – No Class – Spring Break >
9 Drafting Public Securities Registration, Offering and Disclosure Documents;
(March 9) Drafting “Risk Factor” and Investment Considerations Disclosures
(Mr. Yadley)
A. Review of H/W and Drafting Exercises (including H/W Assignment #3)
B. Key Considerations in Drafting the Principal Offering/Subscription Documents
1. Compiling and Preparing a First Draft; Business Description
2. Management Discussion/Analysis of Financial Statements (MD&A)
3. Risk Factor Provisions & Disclosures
4. Forward-Looking Information (and Other Notices/Warnings)
5. SEC Forms and Filings
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C. The Initial Public Offering (IPO) Process – Role of Counsel
1. “All Hands” Organizational Meeting
2. “Pacing Issues”, Timetables and Checklists
3. Pricing, Listing, Closing and Closing Binders
D. Confidentiality and Nondisclosure Agreements (Up Close) – Key Drafting and
Negotiation Considerations (and importance of these agreements as a precursor
to significant transaction due diligence and negotiations)
E. Risk Factors: Critical Disclosures Regarding Legal and Other Considerations
that May Adversely Impact an Investment (and How to Address Them)
F. Introduction to & Context for H/W Assignment (#5)
ASSIGNED READING (Prior to Class 9):
Fox – Chapter 10
Course Materials Book – Pages 52 - 59 (Example of “Miscellaneous” Contract
Provisions) and Pages 262 - 278 (Memo re: Initial Public Offering (“IPO”))
Practical Law – Read Risk Factors: What Keeps You Up at Night?; and Risk
Factors Toolkit; Skim Initial Public Offerings Toolkit; and Confidentiality
and Nondisclosure Agreements
Documents & Forms Supplement (link on Course TWEN site) – Sample Contracts
– Drafting Progression Series folder – Skim Underwriting Agreement (for
IPO) (3 versions) and Investment Banking/Financial Advisory Engagement
Agreement (3 versions); Selected Public Company Documents & Agreements
folder – Skim Ferrari Final IPO Prospectus
Check for additional TWEN postings prior to Class (including a recent IPO
prospectus and selected excerpts from the SEC Plain English Handbook)
HOMEWORK ASSIGNMENT
H/W Assignment (#5) – Assigned @ End of Class 9 by Mr. Yadley
10 Buying & Selling Companies and Businesses | M&A Agreements – Part I
(March 16) (Mr. Conti)
A. Transition to M&A-Related Classes, Skills, Documents, Assigned
Reading and Upcoming H/W Assignment
Various differences and distinctions between investment (and joint
venture/strategic alliance) transactions and M&A (purchase and
sale) transactions and the agreements providing for same
B. Understanding M&A Transaction Structures & Agreements (following review
of Confidentiality and Nondisclosure Agreements discussion)
1. Stock (Equity Securities) Purchase Agreements
2. Asset Purchase Agreements
3. Merger Agreements (and related plans) and State Merger Statutes
C. Key “Building Blocks” in M&A Agreements – Drafting & Negotiation
Touchstones
1. Reps & Warranties of Buyers and Sellers
2. Covenants (various, including pre- and post-closing) of Buyers and
Sellers; No-Shop/Exclusivity Provisions
3. Conditions Precedent to Closing – Pre-Closing Rigor & Closing Checklists
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4. Material Adverse Effect and Material Adverse Change ("MAE" and
“MAC”) Clauses & Definitions (and relationship to bring-down closing
conditions)
5. Termination, Survival, Indemnification & Remedies
D. Representation & Warranty Insurance in M&A Transactions
E. In-Class Drafting Exercise (E) – Drafting Key Provisions of M&A Agreements
F. Introduction to and Context for H/W Assignment (#6)
ASSIGNED READING (Prior to Class 10):
Fox – Chapter 2 (Section 2:3 - 2:5 in total), Chapter 6 (Sections 6:4.1, 6:4.4 - 6:4.6)
and Chapter 9 (Section 9:4 in total)
Course Materials Book – Skim Pages 402 - 513, 514 - 566, 567 - 595 (Selected
Excerpts from ABA Model Stock Purchase Agreement with Commentary)
Practical Law – Read Avoiding Key Risk Allocation Pitfalls under Commercial
Contracts; Acquiring a Business Checklist (Private Company Target);
Indemnification Clauses in Private M&A Agreements; and Key Negotiating Points
in Private Acquisition Agreements Comparison Chart; Skim Stock Purchase
Agreement (Pro-Buyer Short Form); Disclosure Schedules: Mergers and
Acquisitions; and Representation and Warranty Insurance for M&A Transactions
Additional Course Materials (link on Course TWEN site) – The Special Challenges of
Training Deal Lawyers (C. Fox)
Documents & Forms Supplement (link on Course TWEN site) – Skim Sample Contracts
– Drafting Progression Series folder – Stock Purchase Agreement (3 versions);
and Selected Public Company Documents & Agreements folder – Verizon / MCI
Merger Agreement
OPTIONAL SUGGESTED READING (Articles of Interest):
Additional Course Materials (link on Course TWEN site) – Common Mistakes of M&A
Practitioners (ABA Business Law Section M&A Committee); and Merger Pacts:
Contract Drafting, Cerberus Litigation (K. Adams)
Practical Law – Confidentiality Agreements: Mergers and Acquisitions; and Material
Adverse Change Provisions: Mergers & Acquisitions
HOMEWORK ASSIGNMENT
H/W Assignment (#6) – Assigned @ End of Class 10 by Mr. Conti
11 Buying & Selling Companies and Businesses | M&A Agreements – Part II
(March 23) (Mr. Conti)
A. Review of H/W Assignment (#6) with “Best Drafting” Model
B. Asset Purchase Agreements (Up Close) – Critical Provisions; Key Inflexion
Points; Role of Due Diligence and Disclosure Schedules (Revisited); Drafting
& Negotiation Tools, Tips and Considerations
1. Purchased Assets; Assumed vs. Excluded Liabilities
2. Working Capital and Purchase Price Adjustments
3. Earn-out, Deferred Consideration & Escrows
4. Special Representations, Warranties & Covenants
5. "No Shop" & Exclusivity Provisions
6. Indemnification Provisions (and “Survival” Limitations, Escrows, Baskets,
Caps, Carve-Outs, “Sole Remedy” and Other Provisions/Limitations)
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7. Termination, “Fiduciary Outs”, "Break-Up" and Termination fees
8. Signing vs. Closing Considerations, Preparations and Deliverables
C. Timetables, Checklists, Closing(s) and Closing Binders
D. Practical Law and Other Resources for M&A Deals and Agreements
ASSIGNED READING (Prior to Class 11):
Fox – Chapter 5 (Section 5:2.1) and Chapter 6 (Sections 6:4.2 and 6:4.3)
Course Materials Book – Pages 43 - 52 (Examples of Other Contractual Provisions
of Interest); 285 – 297 (revisited), 298 - 306, 307 - 333, 334 - 349, 350 - 364,
381 - 387, 388 - 389 (Read all Notes, Comments & Discussion, Skim
Contractual Provisions) (Selected Excerpts from ABA Model Asset Purchase
Agreement with Commentary and Exhibits)
Practical Law – Read Asset Acquisitions: Overview; Asset Acquisition Checklist; and
Asset Purchase Agreement Commentary; and Due Diligence for Private Mergers
and Acquisitions; Skim Asset Purchase Agreement (Pro-Buyer Short Form); and
Due Diligence Request List: Private Mergers & Acquisitions
OPTIONAL SUGGESTED READING (Articles of Interest):
Additional Course Materials (link on Course TWEN site) – Scraping By (J. LcClaire et
al.); How to Structure Contingent Purchase Price/Earnout Provisions (F.
Tannenbaum); and 2013 Private Target Mergers & Acquisitions Deal Points Study
(ABA Business Law Section M&A Committee)
Documents & Forms Supplement (link on Course TWEN site) – Skim Sample Contracts
– Drafting Progression Series folder – Indemnification & Remedies Provisions
(from APA) (2 versions)
12 Advanced (Institutional) Private Equity / Venture Capital Investment
(March 30) Agreements, Documents and Transactions – Part I
(Mr. Aronson)
A. Course Review (to date); Review of Certain Previous H/W Assignments,
Performance and Faculty Comments
B. The Market and Need for Private Equity Investments; Dynamics of
Venture Capital (VC) and Institutional Equity Funding Transactions;
Participants, Deals and Terms that Impact Party Objectives, Leverage
and Document Drafting and Negotiation
C. Anatomy of a VC Transaction | Role, Requirements and Value-Adds of Counsel
D. VC Term Sheets & LOIs (Up Close) – Key Provisions & Considerations
E. Review of Assigned Illustration and Proposed Draft Letter of Intent
F. Introduction to and Context for H/W Assignment (#7)
ASSIGNED READING (Prior to Class 10):
Venture Capital Guidebook* – Pages 1 - 2, 15 - 32, 35 (bottom) - 60, 61 - 72
Fox – Chapters 3, 4 and 5 (Sections 5:1 and 5:2), Chapter 6 (Section 6:2) and
Chapter 9 (Section 9:4.4) (review and reinforce)
* Mr. Aronson will provide a complimentary copy of his book, Venture Capital: A Practical Guidebook for Business
Owners, Managers and Advisors (R. R. Donnelley, Fifth Ed. 2011), during the first class on January 6th
.
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Course Materials Book – Pages 61 - 73 (review), 78 - 118 (excerpt from Mr.
Aronson’s Venture Capital Guidebook – Annex B – Glossary of Venture
Capital Terms and Jargon)
Practical Law – Read Preferred Stock: Overview; Skim Startup Venture
Finance: Overview; and Preferred Stock in Private Equity Transactions:
Key Characteristics Chart
ASSIGNMENT: Review (and be prepared to discuss and advise and assist with) the
Venture Capital Transaction Illustration and Proposed Draft Letter of Intent (to be
posted and assigned on the Course TWEN site)
HOMEWORK ASSIGNMENT
H/W Assignment (#7) – Assigned @ End of Class 12 by Mr. Aronson
13 Advanced (Institutional) Private Equity / Venture Capital Investment
(April 6) Agreements, Documents and Transactions – Part II
(Mr. Aronson)
A. From Term Sheets/LOIs to Definitive Investment Agreements & Documents
B. Key Considerations in Drafting VC Agreements & Documents
1. Stock/Securities Purchase Agreement
2. Amended & Restated Charter / Certificate of Designation (authorizing
Convertible Preferred Stock)
3. Investor Rights Agreement
4. Voting Agreement; Right of First Refusal and Co-Sale Agreement
C. Practical Illustration – Continued Review of Assigned Illustration and
Proposed Draft Letter of Intent (and the Drafting & Negotiation process)
D. Resources for Counsel in Sophisticated Private Equity Capital Transactions
E. Discussion regarding Final Class (next week)
ASSIGNED READING (Prior to Class 13):
Venture Capital Guidebook – Pages A-1 - A-29 (Illustrative Series A Investment
Transaction Term Sheet - Annex A)
Fox – Chapter 6 (Sections 6:4.1 and 6:4.7)
Course Materials Book – Read Pages 2 - 28 (review); Skim Pages 29 - 60 (review)
Check for additional TWEN postings prior to Class (including selected portions of the
NVCA.org website and its Model VC Legal Documents)
14 Class Catch-Up, Wrap-Up, Review & "Take-Aways"
(April 13) (Mr. Aronson)
A. Open Class Questions & Discussion
B. Review of Previous H/W Assignments and Faculty Feedback
C. Course Review – Keys to Proficient, Skillful and Effective Document Drafting
and Transaction Negotiation, Client Advocacy, Value-Add Counseling and
“Getting the Deal Done”
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D. Case Study – Working and Making Sense of the Pieces of the Puzzle and
Document Drafting, Negotiation and Execution Challenges over a Corporate
Lifespan; Applying Systems Thinking & Functional Integration to Contract
Drafting and Negotiation
E. Building on the Base: The Road to Continued Learning, Improvement and
Fulfillment
F. Course Wrap-up; Submission of Course Evaluation Form
ASSIGNED READING (Prior to Class 14):
Check for TWEN postings prior to Class (including the special student Course
Evaluation Form)
[ A portion of our Class 14 will be devoted to a review and discussion session,
and related illustrations, designed following Class input. ]
Business Transactions and Document Drafting Spring 2016
Aronson