Which sums are apportioned at completion? When a property is being sold the parties need to agree in the contract how income and outgoings are to be dealt with at completion. The contract should deal with the apportionment of occupational lease yearly rents and (if the property is leasehold) the headlease rents. In this note, we assume that the rents are paid in advance (as is usual) and not in arrears. If rents are paid in arrears, all that is needed is for the buyer to make a payment to the seller following receipt on the quarter day immediately following the completion date (and a specific contract provision should be included). Which sums are not apportioned? The following do not generally form part of the apportionment exercise: • insurance sums (these are usually dealt with separately—the seller cancels the policy and pays over any refund to the buyer to hold on trust for the occupational tenants. See Practice Note: Buyer’s contract negotiation guide—insurance and risk • service charge (again this is usually dealt with separately, not least as

Are title clauses just standard ‘boilerplate’? Many commercial property contracts will deal with title matters in a similar way and often there is little scope or need to amend the clauses if the title is straightforward and nothing bespoke is required. However, it is important to be clear on the effect of the clauses, the legal background, how they apply in particular scenarios and their interaction with the buyer’s due diligence. Key legal principles for sellers and buyers of property We consider here the fundamental legal principles of the buyer-seller relationship. Implied obligation selling free from encumbrances There is an implied obligation that the seller is selling a freehold estate free from encumbrances. This can only be rebutted in three ways: • by express contractual provision • if the buyer knows (actual knowledge) that there is an irremovable encumbrance, or • if there is a patent (ie visible) defect in title (although this is overridden if the seller expressly agrees to sell free from encumbrances) Seller’s duty to disclose latent defects Buyers are

What happens to rent deposits on a sale? How the sale contract should deal with rent deposits depends, of course, upon the terms of the relevant deposit deeds. Sellers should check the deeds early on to identify if the tenant needs to be a party to any deed as, inevitably, this will take time, it is not within the control of the parties and the tenant will have less commercial impetus than the seller and buyer to move quickly. There are usually three ways of dealing with rent deposits: • assignment • novation, or • new direct covenants between the buyer (as the new landlord) and the tenant It is essential that the parties comply with the deed’s requirements as otherwise the rent deposit may need to be repaid which will be a problem for the buyer. The seller’s lawyers may not always check what is required before issuing the draft contract, or they may include some generic draft wording such as: ‘the Seller must assign to the Buyer

This Guide provides an overview of the steps involved in buying a home. It is intended to provide you with a basic outline of the conveyancing process from the acceptance of an offer to the completion of your purchase. 1 Mortgage decision in principle Before viewing properties, you may obtain a mortgage decision in principle giving an estimate of how much you can borrow. You can then make an offer to buy a property. 2 Property offer accepted The seller accepts your offer for the property and the property is taken off the market. 3 Mortgage offer You obtain a mortgage offer, usually via a broker. 4 Solicitors instructed At this point, you must instruct a conveyancer (as will the seller). Solicitors, licensed conveyancers, chartered legal executives and CILEx conveyancing practitioners are qualified to carry out conveyancing work. Usually, but not always, your conveyancer will also act for the lender (ie the building society or bank providing your mortgage) in this type of transaction, and your conveyancer will be responsible for applying to HM Land Registry for the mortgage to be registered in favour of the lender.

Buyers often seek to include a clause in the SPA/APA to the effect that, subject to matters disclosed in the disclosure letter (according to the agreed standard of disclosure), the buyer’s knowledge (actual knowledge) or its advisers' knowledge (constructive or imputed knowledge) of a matter that could give rise to a warranty claim will not affect its ability to bring a warranty claim.

Insert the following as a new definition (if not already included) in the definitions and interpretation clause of the share purchase agreement: 1 Definitions and interpretation Warranties • means the warranties[ and representations] set out in Schedule [insert number] and Warranty means any one of them; 1 Termination of this Agreement by the Buyer 1.1 In addition to any right of the Buyer to claim damages for breach of Warranty, the Buyer shall be entitled to terminate or rescind this Agreement (as the case may be) at any time immediately by notice in writing to the Seller, served in accordance with clause [insert number] (Notices), if, between the date of this Agreement and Completion: 1.1.1 the Seller is in breach of clauses [insert number] to (and including) [insert number]; 1.1.2 [the Seller is in[ material] breach

Insert the following as a new definition (if not already included) in the definitions and interpretation clause of the share purchase agreement: 1 Definitions and interpretation Warranties • means the warranties set out in Schedule [insert number] and Warranty means any one of them. 1 Termination of this Agreement by

Buying the business and/or assets of a company from an insolvency practitioner (insolvent sale) in a company liquidation or administration is quite different from buying the business and/or assets of a company which is solvent. While this note generally refers to a purchase of a ‘business and/or assets’ from an insolvency practitioner, many points also apply to the purchase of shares from an insolvency practitioner. Headline points to note which differentiate an insolvent sale from a solvent sale are that: • the insolvency practitioner’s solicitors produce the first draft of the sale agreement, rather than the buyer • it is very unlikely that any representations or warranties are given, and any which are given would be very limited • the statutory terms and conditions for the protection of a buyer implied by the Unfair Contract Terms Act 1977 will be explicitly excluded • usually no title guarantee is given • the buyer usually takes the assets (or shares) subject to any defect in title or encumbrances that may exist • the buyer often

This Checklist has been drafted for use by the buyer and is designed to highlight issues commonly arising, and key questions that should be asked, when undertaking due diligence in the course of acquiring a software business. Similar issues will be relevant whether the transaction involves buying the assets or the shares (although differences have been highlighted where appropriate). This focuses on the software assets and associated intellectual property (IP) aspects of the transaction, and is intended to be used in conjunction with due diligence enquiries in other areas such as general corporate, accounting and tax and as to financial position. The purpose for which the buyer is acquiring the business will inform the extent and nature of the due diligence enquiries that need to be undertaken. This scenario is different to where a non-IT business that has some IT and IP assets, such as IT systems and a trade mark, is being acquired. For further information, see: • Practice Note: Buying a software business—key considerations • Information technology due diligence in share purchase transactions—checklist

This Practice Note highlights the key legal and commercial issues for a buyer when looking to buy a software business. This particularly focuses on the technology and intellectual property (IP) aspects, alongside some more general issues that typically arise when buying any type of business. Due diligence is considered specifically. This has been approached mainly from the buyer's perspective but also flags some concerns for the seller where relevant. See also Practice Note: Corporate transactions for technology lawyers for further discussion of the issues relevant to the IT aspects of corporate transactions. Data protection issues are outside the scope of this Practice Note but should also be considered as appropriate. For guidance on data protection issues that may arise in a corporate acquisition (including in connection with the IT systems), see Practice Note: The impact of the UK GDPR on M&A transactions. Purpose of the transaction If acting for the buyer, ascertain at the outset their reasons for wanting to buy the software business. These might commonly include: • being a strategic move to eliminate competition

A limited company may hold, or deal with, shares in itself that it has bought back in accordance with the Companies Act 2006 (CA 2006), if certain conditions set out in CA 2006 are met. Those shares are referred to as being held in treasury or as the company's treasury shares. In addition to the provisions of CA 2006 relating to share buybacks, there are other rules and guidelines that are relevant to a listed company or an AIM company that is to purchase its own shares (for the purpose of this Practice Note, references to a listed company are to a company that has a listing of equity shares in the equity shares (commercial companies) category). In particular, a listed company must have regard to the UK Listing Rules (UKLRs) and the Disclosure Guidance and Transparency Rules (DTRs). An AIM company must have regard to the AIM Rules for Companies (AIM Rules), but these do not specifically refer to share buybacks, so AIM Regulation has confirmed that compliance by an AIM company with the UKLRs

In this Practice Note, receivers, administrators and liquidators will, for convenience, be referred to collectively as Insolvency Practitioners (IPs). Speed of the essence In nearly all receivership or insolvency sales, speed is of key importance once a sale has been agreed. Considerable pressure is placed on all parties and their respective advisors to exchange contracts and complete in the shortest possible timescale. In an administration, if the disposal is part of a pre-pack, both the agreement for sale and the transfer typically will be exchanged and completed as soon as the administrator is appointed (see Practice Note: Pre-packs—landlords’ issues and remedies). If a pre-pack is not involved, the administrator will still want to dispose of the company’s assets and conclude the administration as quickly and effectively as possible. An administrator’s appointment is initially for a period of 12 months (which cannot be extended without the leave of the court or the creditors) and an administrator is under a statutory duty to perform their duties as quickly and efficiently