1. M&A Agreement in New York | Regulatory Alignment and Transaction Framework
The acquisition required early alignment with New York corporate law provisions governing mergers, asset acquisitions, and shareholder approval mechanics.
Counsel also considered antitrust review under the New York General Business Law when assessing market concentration in the respiratory therapy segment.
During the initial phase, the parties agreed to a staged diligence protocol to prevent disclosure risks while ensuring compliance with confidentiality duties under New York common law.
Establishing Transaction Priorities and Deal Protections
Counsel designed the M&A agreement to incorporate:
• Representations addressing regulatory compliance, data integrity practices, and ongoing clinical trial obligations.
• A specialized indemnification framework tied to potential liabilities arising from aerosol device defects or incomplete clinical study reporting.
• Clear break fee and reverse termination provisions to protect the buyer if the seller failed to obtain necessary consents from licensors or research facility partners.
Early Stage Diligence and Confidentiality Protocols
The team implemented a phased diligence structure to control disclosure of proprietary formulations and device engineering specifications.
Three key measures shaped this stage:
1. A tiered access data room requiring verification of authorized users under New York cybersecurity guidelines.
2. A confidentiality agreement restricting downstream use of clinical trial information, enforceable through equitable remedies recognized by New York courts.
3. Pre clearance of sensitive scientific information to avoid premature public filing requirements.
2. M&A Agreement in New York | Competitive Bidding and Negotiation Strategy
A multi party auction created timing pressure and required strict adherence to fiduciary duty standards under New York Business Corporation Law (BCL §§ 717, 909).
Counsel ensured the board’s decision making process demonstrated informed judgment, independence, and fair consideration of competing bids.
Managing Auction Driven Risks and Conflicts
Negotiations required navigating:
• Potential conflicts among early investors who held varying liquidation preferences.
• Demands for accelerated diligence from competing bidders.
• Board level questions regarding duty of care and duty of loyalty under New York law.
Counsel developed a decision support framework documenting the board’s evaluation process, mitigating risk of post-closing shareholder disputes.
Deal Economics Optimization Using Contingent Structures
Because the target’s lead product had not completed Phase 2 development, the buyer sought downside protection by integrating several contingent mechanisms:
• Milestone based earnouts tied to clinical development progress.
• Equity rollover options for certain founders.
• Adjustment clauses addressing unexpected regulatory delays.
These structures ensured alignment of long-term economic incentives under the M&A agreement.
3. M&A Agreement in New York | Renegotiation of Third Party License and Supply Agreements
The transaction could not close without revising multiple licensing contracts with research institutions, device manufacturers, and formulation technology providers.
New York contract law governed the consent process, including notice requirements, indemnity reallocations, and amendment execution formalities.
License Agreement Amendments Enabling Closing
Counsel renegotiated several provisions:
• Expanded field of use rights enabling commercialization beyond COPD into other chronic respiratory indications.
• Revised royalty structures reflecting shared development contributions.
• Updated indemnification clauses addressing joint intellectual property enforcement obligations.
These amendments were incorporated into the closing deliverables to satisfy conditions precedent in the M&A agreement.
Supply Chain and Manufacturing Considerations
Because the target relied on specialized aerosol device components, counsel assessed:
• New York UCC provisions governing enforceability of long term supply contracts.
• Contingency planning for potential supplier insolvency.
• Quality assurance duties relevant to devices regulated by federal law but enforceable under New York commercial contract principles.
This analysis strengthened the buyer’s operational readiness post closing.
4. M&A Agreement in New York | Post Closing Integration, Compliance, and Risk Mitigation
After closing, the legal team coordinated a structured integration plan involving regulatory reporting, clinical trial oversight, and employee transition measures consistent with New York labor protections.
Workforce Integration and Compensation Obligations
Counsel reviewed employment contracts, equity vesting schedules, and obligations under the New York Workers’ Compensation Law to ensure continuity of benefits for employees transitioning into the buyer’s corporate structure.
The team also addressed reclassification risks for research consultants to avoid violations under state labor statutes regulating independent contractor status.
Regulatory Reporting, Quality Controls, and Continued Compliance
Post closing efforts included:
• Verifying accuracy of clinical data used in ongoing FDA submissions.
• Implementing compliance protocols to satisfy New York’s reporting requirements for hazardous material handling in research facilities.
• Establishing internal audit procedures to maintain enforceability of indemnification rights under the M&A agreement.
These actions ensured the buyer preserved value while limiting exposure to successor liabilities.
11 Dec, 2025
