Closing
Agenda
Best Practice Summary
Virtual Paralegal Services provides senior level corporate paralegal assistance. If you’d like to discuss how VPS can assist with your closing, please contact us at [email protected]). Learn more about Virtual Paralegal Services
A closing agenda or closing checklist is a tool for tracking the preparation and completion of each document necessary for the closing of a transaction, whether prior to or after the closing. Depending on the size of the closing or the supervising attorney's preference, a formal, detailed closing agenda or a more informal closing checklist may be used.
The closing agenda or checklist for a corporate financing
or merger transaction is generally extracted from the closing condition section
of the primary transaction document such as the Asset Purchase Agreement, Stock
Purchase Agreement or Agreement and Plan of Merger (although it may be convenient
to use a model from a similar transaction as a drafting aid). It will include
some or all of the following items:
- The primary transaction document.
- Any amendments to the primary transaction document.
- Ancillary documents
to the primary transaction agreement such as employment agreements, non-competition
agreements, escrow agreements and any other agreement that is required as a condition
to closing the transaction.
- Closing certificates including officer's certificates and secretary's certificates.
-
Certified charter documents and good standing certificates for each company involved in the transaction.
- Third party consents (if any).
- State filings (if any, i.e. certificate of merger).
- Securities filings
(Blue Sky, Form D).
- UCC-1 or UCC-3 financing statement filings (if any).
- Stock conversions, stock certificates and cross receipts.
- Wire
transfer instructions and escrow arrangements.
- Regulatory approvals,
if necessary, including HSR pre-merger notification filings.
-
Legal opinions and related backup certificates.
Read through the primary transaction document looking for closing conditions and other issues from the list above. If you are in doubt whether an item may be required, it is best to err on the side of inclusion.
The initial version of the agenda or checklist should have two columns. The first column identifies the documents necessary to consummate the transaction. The second column contains responsibility and status. Initially it will generally identify the law firm or company responsible for the agenda item, while later drafts name the specific responsible individual. As work continues and documents are finalized or are in the process of being signed and/or completely executed, updated status notes on the agenda makes for easy reference and tracking.
As a general rule, each entry in the "Status/Responsibility" column should clearly indicate who is responsible for taking the next step on the item. This avoids having items "fall through the cracks" as individuals assume that someone else is responsible for the item. For example, an entry such as "signatures needed" should be avoided because it leaves the reader uncertain as to whether the document has been sent to the signatories or not.
Some examples of useful notations in the "Status/Responsibility"
column:
| "To be drafted" | No action has been taken. |
| "Done" | The document is complete and fully executed. |
| "To be sent for signature" | The document is in its final form, but has not been sent for signature. |
| "Awaiting signature(s) from ____" | Meaning that the document has been sent out for signature, but the signature has not yet been received from the specified parties. |
| "On Order" | The document has been ordered, but not yet received. Certificates of good standing and/or certified copies of the charter should be ordered a few weeks before the scheduled closing. These documents should not be over 30 days old at the time of the closing. |
| "Awaiting comments from _____" | The document has been sent to the working group for comments, but not all parties have responded. |
Successive Drafts
Once the initial
draft of the agenda is completed, it will circulate among the attorneys and return
with proposed revisions. This may continue through a few rounds. It is important
to show a date or version number prominently on the agenda so it is clear to readers
when it was last updated. Agendas should be updated and circulated to the working
group periodically to keep everyone apprised of the progress of the transaction
and their respective responsibilities. Agendas should be circulated at least once
per day during the later stages of a complex transaction.
Post-Closing
The closing agenda continues to be a tracking and organizing tool for post-closing matters such as Blue Sky and Form D filings. Finally, it is used as the basis for the index to the closing binder. Exact dates and other data are filled in where necessary and the "Status/Responsibility" column is replaced with a "Tab" column containing numbers that will correspond to the numbered tabs inserted between each item in the closing binder.
More information on conducting a closing can be found in LeapLaw's Closing Room Management Best Practice Summary.
LeapLaw's
Related Best Practice Summaries
|
| Access to this document and the LeapLaw web site is provided with the understanding that neither LeapLaw Inc. nor any of the providers of information that appear on the web site is engaged in rendering legal, accounting or other professional services. If you require legal advice or other expert assistance, you agree that you will obtain the services of a competent, professional person and will not rely on information provided on the web site as a substitute for such advice or assistance. Neither the presentation of this document to you nor your receipt of this document creates an attorney-client relationship. |
| close window |