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Cristina MARTINETTI

BUFFA, BORTOLOTTI & MATHIS

DISPUTE RESOLUTION IN M&A TRANSACTIONSWARSAW

13-14 May 2010

MODEL M&A CONTRACTS OF THE INTERNATIONAL CHAMBER OF

COMMERCE

CRISTINA MARTINETTI - BBMPARTNERS.COM

ICC and the soft law

• Incoterms (1935-2010)• Models of Contract • UCP• URDG• Force Majeure Clause


HISTORY OF THE MODELS

Up to date 12 models:Agency, distributorship, occasional intermediary, franchising, selective distributionSale turnkey supply, turnkey for major projectconfidentialitytransfer of technologytrademark licenceM&A I share purchase agreement


ICC MODEL M&A CONTRACT I share purchase agreement

(icc pub. N 656)

ICC MODEL M&A CONTRACT II asset purchase agreement

Work in progress


Balanced agreementTo give tools which can be used to work out the final contract To provide the business world and the lawyers with less experience with accurate model forms

The aim of the ICC


Members from different jurisdictionsPro:Different and broad experiences in negotiating m&a contracts and managing post closing

Difficulties:To cope with the strong influence of common law jurisdictions (terms and definitions, reps and warranties, disclosure)

The task force


Techniques: explanations and annexes

In the introduction all relevant clauses are explainedNotes are provided to comment and to give alternativesThe annexes have been used to make the specifications of the deal


SCHEDULE A SCHEDULE B

REPRESENTATIONS AND WARRANTIES

EXCEPTIONS AND QUALIFICATIONS TO THE REPRESENTATIONS AND

WARRANTIES

All warranties and representations are subject to the exceptions and qualifications set forth in Schedule B. Such Schedule will follow the same numbering (e.g. an exception to warranty A.3.2 regarding accounting principles and practices will be under B.3.2).

In Schedule B the Task Force has tried to give some explanations which may help to better understand the various warranties and the matters to check in order to correctly draft possible exceptions or qualifications restricting the corresponding warranty

ANNEX A and B reps & warranties vs disclosure


A.2 The Shares

A.2.1 The Shares constitute the whole of the issued and outstanding share capital of the Company and are fully paid.

B.2.1 Verify that the share capital has been fully paid in. Verify t he structure of the share capital under the relevant jurisdiction. There is jurisdiction where there is no difference between issued and authorised share capital.

A.2.2 No person is e ntitled or has claimed to be entitled to require the Company to issue any share or l oan capital either now or at any future date whether contingently or not.

B.2.2 Verify that the Company has issued no bonds or other instruments. Verify there are no share warrants or bearer shares in existence.

reps & warranties vs disclosure


The asset purchase agreement



Article 3 – Object of the Agreement

3.1 The object of this Agreement is to set out the terms

including the conditions to and the timing of the sale and purchase of the

Business, including the Assets specified in Annex 1 and the assignment of the

Rights & Obligations specified in Annex 2 .



definitions“Assets” means all the assets necessary for the conduct of the Business as it is currently conducted, including, but not limited to, tangible property, machinery, equipment, stock, intangibles (brands and logotypes), real properties and other assets which are listed in Annex 1.

When identifying the assets to be purchased two alternatives are possible: the first is to include only the assets expressly listed in Annex 1; the other alternative consists in a wider definition including also assets which are not expressly mentioned, but which are necessary for the conduct of the business. The choice between these two alternatives is provided for in Annex 1.

“Business” means the [manufacturing, marketing and/or distribution of Describe the activities and products developed by the Seller] as currently carried out by the Seller

“Rights & Obligations” means the rights and obligations that the Seller agrees to assign or otherwise make available to the Purchaser under this Agreement and which are listed in Annex 2.



Article 5 – Transfer of liability and apportionment of ongoing contract, services and supplies

…

5.5 In case of dispute over any account, the dispute shall be referred

to an independent accountant appointed by the Parties or should the

Parties fail to appoint the expert within 30 days from the dispute notice,

the expert shall be appointed pursuant to ICC Rules on Expertise.


The asset purchase agreementArticle […]– Resolution of disputes

[…] The parties may at any time, without prejudice to this Article […], seek to settle any dispute arising out of or in connection with this Agreement in accordance with the ICC ADR Rules.

[…] A Arbitration

[…] B Litigation

(ordinary courts)

All disputes arising out of or i n connection with this Agreement shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators

In case of dispute the courts of […] (place) […] (country) shall have exclusive jurisdiction.


The disputes inasset purchase agreement

WHO? Seller, buyer and guarantorsWHAT? The businessHOW MUCH? The amount of claims involvedEXPERT? The role of the expert for certain dispute (accountant, etc)WHICH LAW? “Business” may have links with different jurisdictions

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Cristina MARTINETTI

BUFFA, BORTOLOTTI & MATHIS

THANK YOU!

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