The Firm brings substantial experience in advising, negotiating, drafting and closing stock of sales, asset purchase agreements and dispositions, mergers, joint ventures, and other strategic transactions for small businesses, emerging companies, and middle market firms. Rather than merely identifying roadblocks to a transaction, the Firm will work closely with the client and its other trusted advisers to find solutions that protect the client, enable informed decisions, and give peace of mind at closing. The M&A transactions closed by the Firm have often involved negotiations for seller, bank, or third-party financing secured by receivables, equipment and machinery, intellectual property, or even the acquirer’s equity.

The Firm works closely with its clients on evaluating the merits of a prospective transaction and complex legal considerations including:

• Transaction Structure – Stock Purchase, Equity Purchase, Asset Sale, Forward Triangular Merger and Reverse Triangle Mergers, with careful consideration of state corporate law, and the liability and tax exposure under each structure.
• Due Diligence – Review of all company agreements (including loans and credit agreements; customer and supplier contracts, equipment leases, intellectual property licensing agreements, real property leases; and employment contracts). Identification of any potential disputes or regulatory issues that can implicate the contemplated transaction and expose the client to unanticipated liability.
• Transferability of Liability – Negotiating post-closing assumption of existing liabilities, including trade and accounts payable, lines of credit, equipment financing, and secured and unsecured long-term debt.
• Third-Party Consents – To the extent required, the Firm will negotiate with each underlying customer to obtain their consent to the assignment of customer prior to closing. To facilitate a smooth post-closing transition, the Firm will negotiate a consulting agreement with the prior owners that includes introduction to key customers, clients, and vendors to enable those relationships to continue.
• Representations & Warranties – The Firm will aggressively negotiate the representations & warranties with respect to such matters as the target’s corporate authority, capitalization, intellectual property, tax, financial statements, compliance with law, employment, ERISA and material contracts to avoid post-closing claims by the acquirer.
• Tax Consequences – The Firm will work closely with the client’s CPA and financial adviser with the aim minimize the tax liability of any prospective transaction. In several instances, the Firm has successfully negotiated 338(h)(10) elections allowing the parties in a sale of stock of a corporation to treat the transaction for federal income tax purposes as if the deal had been structured as an asset sale.
• Earnouts – In the event that the parties to a prospective deal differ on the valuation of an acquisition target, the Firm will negotiate arn-out provisions are typically tied to the future performance of the business, with the target and/or its stockholders only receiving the additional consideration to the extent certain milestones are met.
• Non-Competes & Non-Solicitation – The Firm will aggressively negotiate post-closing restrictive covenants on the target and its owners for non-competition and non-solicitation of the target’s customers designed to protect the acquirer during its post-closing operations, while drafting these provisions with the aim of ensuring the enforceability before a court of law or arbitrator.

As each client’s or business owner’s situation is unique, the above is not intended to constitute legal or tax advice and cannot be used for the purpose of complying or avoiding penalties under the Internal Revenue Code. The Firm urges its clients and other business owners to seek advice from Mr. Salva, as well as tax professionals and CPAs with regard to their specific situation and concerns.