Share Purchase Agreement Locked Box

As regards the potential negative consequences, the buyer would take into account, first, additional duties of care and permanent monitoring between the date of the closed box and the closing in order to control the potential risk of leaks that could affect the operation. In addition, the parties need to discuss certain points in advance and the buyer may be in a weaker negotiating position and perhaps have fewer details at this point. Conversely, the seller could be affected by the fact that he is not able to take full advantage of the activity during the transition period, given that they are not even offset by the De Locked Box interest rate (if agreed), which is usually too low compared to the missed returns of the target. On the other hand, the locked box can give the seller and buyer greater security on the price and simplicity of the process, as well as on cost reduction. In addition, the buyer will settle outstanding business-to-business balances with the seller once completed (just as the buyer inherits the obligation to settle all other debts of the business in its financial statements). Key elements in addressing buyer`s concerns are likely to include the time between the base balance sheet and the likely balance sheet date, the level of collateral and the extent of due diligence available in the effective date balance sheet of the effective date, as well as the comfort of the ring and the accurate recording of profits and losses (critical of cash collection). between the effective date and completion. .

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