asset acquisitions - Jackson Walker LLP

4. recorded agreements or declarations that relate to real property owned by theSeller and that contain covenants or restrictions “running with the land”; and5. contracts entered into by a partnership in which the Seller is a generalpartner.The Seller is required to provide (in Part 3.2 of the Disclosure Letter) a list ofgovernmental and third-party consents needed to consummate the acquisition. Some of theseconsents may be sufficiently important to justify giving the Buyer (and, in some cases, theSeller) a “walk right” if they are not ultimately obtained (see Sections 7.3 and 8.3 and therelated Comments).Clause (vii) deals with appraisal rights. MBCA § 13.02(a)(3) confers upon certainshareholders not consenting to the sale or other disposition the right to dissent from thetransaction and to obtain appraisal and payment of the fair value of their shares. The right isgenerally limited to shareholders who are entitled to vote on the sale. Some states, such asDelaware, do not give appraisal rights in connection with sales of assets. The MBCA setsforth procedural requirements for the exercise of appraisal rights that must be strictlycomplied with. A brief summary follows:1. If the sale or other disposition of the assets of a corporation is to besubmitted to a meeting of the shareholders, the meeting notice must state that shareholdersare or may be entitled to assert appraisal rights under the MBCA. The notice must include acopy of the section of the statute conferring those rights. MBCA § 13.20(a). A shareholderdesiring to exercise those rights must deliver to the corporation before the vote is taken anotice of his or her intention to exercise dissenters’ rights and must not vote in favor of theproposal. MBCA § 13.21(a).2. Following the approval of the sale or other disposition, a specific noticemust be sent by the corporation to the dissenting shareholders who have given the requirednotice, enclosing a form to be completed by those shareholders and specifying the date bywhich the form must be returned to the corporation and the date the shareholders’ stockcertificates must be returned for deposit with the corporation. The notice must also state thecorporation’s estimate of the fair value of the shares and the date by which any withdrawalmust be received by the corporation. MBCA § 13.22.3. Following the receipt by the corporation of the completed form from adissenting shareholder and the return and deposit of his or her stock certificates, thecorporation must pay to each shareholder who has complied with the appraisal requirementsand who has not withdrawn his or her demand for payment, the amount of the corporationestimates to be the “fair value” of his or her shares, plus interest, and must accompany thispayment with copies of certain financial information concerning the corporation. MBCA §13.24. Some jurisdictions only require an offer of payment by the corporation, with finalpayment to await acceptance by the shareholder of the offer.4. A dissenting shareholder who is not satisfied with the payment by thecorporation must timely object to the determination of fair value and present his or her ownvaluation and demand payment. MBCA § 13.26.5. If the dissenting shareholder’s demand remains unresolved for sixty daysafter the payment demand is made, the corporation must either commence a judicial3148166v1- 76 -