Todd A. Rodriguez was quoted in The Ambulatory M&A Advisor article, "Protect Yourself In A Transaction With An Acquisition Agreement." Full text can be found in the July 1, 2015, issue, but a synopsis is below.

The Ambulatory M&A Advisor recently spoke with several healthcare transaction lawyers about the importance of an acquisition document.

According to Todd A. Rodriguez, partner and co-chair of the health law group of FoxRothschild, the acquisition document is typically the final and binding representation of the deal.

"You might have a letter of intent. You might have a term sheet. You might have various ancillary documents; but the acquisition or purchase agreement, is the final culmination. It's the final and binding incarnation of the transaction," he says.

Rodriguez explains that the document must clearly outline each parties duties and obligations as well as state the time frame of the transaction. According to Rodriguez, most acquisition agreements state the purchase price, when the purchase price is to be paid as well as how how the purchase price is distributed among the assets acquired by the other party.

"It depends on how the transaction is structured, but the purchase price may be allocated among various assets and the parties need to agree on that allocation so that both parties consistently report that allocation for tax purposes," he says.

The ins and outs of the purchase price must be clearly stated, that is, whether it is to be paid in lump sum or various payments as well as the method of payment.

"Also, an important aspect is the timeline for the acquisition," Rodriguez said. "Very often you want to build in a due diligence period so that both parties can conduct their pre-transaction due diligence on the other party. Typically, the purchaser wants to make sure that there are no known or latent liabilities out there like legal judgments, liens on any of the assets being acquired. You want to build in a due diligence period and you also want to clearly spell out what happens if any problems are discovered during due diligence."

According to Rodriguez, there are multiple questions to consider when drafting a document in the event a negative surprise arise: Can the parties walk away? Is there an opportunity to cure any of those issues before a party walks away?

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