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GLOSSARY

Back to back warranties definition

Published by a LexisNexis Corporate expert

What does Back to back warranties mean?

If a resale of the target company/target business is to follow the initial transaction, the two transactions can be seen as ‘back to back’. ‘Back to back’ warranty provisions act to protect the buyer’s position in the two transactions. This may be an arm’s length sale to a third party, but is often a transfer of ownership within the buyer’s group. If warranties are given on a ‘back to back’ basis, this first of all means that the warranties in the resale transaction are identical to those in the initial transaction. Second, because the two transactions are contemplated by the original parties as being ‘back to back’, the buyer must be able to still have full recourse against the seller and also be able to effectively pass on liability for any warranty claim from the resale buyer to the seller.

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Drafting and negotiating the share purchase agreement in a private equity buyout transaction

Drafting and negotiating the share purchase agreement in a private equity buyout transaction This Practice Note is part of the Lexis+® UK Corporate private equity buyout transaction toolkit. Drafting the share purchase agreement The private equity investor's lawyers will generally prepare the first draft of the share purchase agreement (SPA). Which precedent agreement to use When looking for a suitable Precedent, the factors relevant to the choice of Precedent are: • whether you choose a buyer's draft version (drafted in terms generally favourable to the buyer, suitable for use as a buyer's first draft) or a seller's draft version (drafted in terms generally favourable to the seller, suitable for where the seller is preparing the first draft, or is marking up the buyer's draft) • whether or not there are conditions to completion: if there are conditions, this will require a gap in time between signing of the SPA, when beneficial title in the sale shares passes to the buyer (exchange) and the point at which the...

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Back to back warranties provisions—asset purchase agreement

Back to back warranties provisions—asset purchase agreement Insert the following clauses as new clauses 11.13 and 11.14 of Precedent: Asset purchase agreement—pro-buyer—corporate seller—conditional—long form: 11 Warranties 11.13 The Seller acknowledges that: 11.13.1 following Completion, the Buyer intends to transfer [all OR some of] the Assets (the Resale Transaction) to either a member of the Buyer’s Group or a third party (the Resale Buyer); 11.13.2 pursuant to the terms of the Resale Transaction, the Resale Buyer will be relying, among other things, on warranties given by the Buyer (the Resale Warranties); and 11.13.3 the Resale Warranties will be in identical form to those contained in Schedule [12 OR [insert number

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