Glossary

A · B · C · D · E · F · G · H · I · K · L · M · N · O · P · Q · R · S · T · V · W

A

Acquisition

The purchase of a company or business by another. Most "M&A" in English practice is not a merger of equals but an acquisition: a buyer buys the target's shares (or assets) from its owners for a price. Chapter 1

Agreed form

Describes a document whose final wording the parties have settled by signing, even though the document itself is signed later (board minutes, resignation letters, the announcement). Each agreed-form document is usually initialled or otherwise identified, so there is no argument afterwards about which version was agreed. SPA definition

All reasonable endeavours

English contracts grade how hard a party must try: "reasonable endeavours" (take one sensible course), "all reasonable endeavours" (exhaust the sensible courses — noticeably tougher) and "best endeavours" (the most demanding). The middle standard is common for obligations such as obtaining regulatory approval. Clause 5.2 · Chapter 13

AML (anti-money laundering)

The body of law requiring financial businesses to identify their customers, monitor transactions and report suspicions, so that criminal money cannot flow through them. AML weaknesses are a classic diligence finding in fintech deals — in Project Sunrise they produced a specific indemnity. Chapter 12 · SPA definition

Anchor (negotiation)

The first number or position put on the table, which tends to pull the eventual outcome towards itself. Skilled negotiators anchor early and deliberately — which is one reason the "non-binding" heads of terms matter more than they bind. Chapter 6 · Chapter 14

Asset deal

Buying the business and assets out of a company, rather than the company's shares. The buyer picks what it takes and can leave unwanted liabilities behind. But each contract and licence must be transferred one by one, so regulated businesses are rarely sold this way. Chapter 3

Auction (controlled auction)

A sale process in which the seller invites several bidders to compete in structured rounds, rather than negotiating with one buyer. Competition tends to improve the price and the terms for the seller — at the cost of a heavier, more formal process. Chapter 3

B

Basket

A floor for warranty claims: the seller pays nothing until valid claims together pass an agreed threshold. A tipping basket then makes the seller pay the whole amount, and an excess-only basket only the part above it. Sunrise has a €420,000 tipping basket. Clause 9.3 · Chapter 11

BATNA

Best Alternative To a Negotiated Agreement — what you will actually do if this deal falls through (sell to the underbidder, keep the company, build instead of buy). The stronger your alternative, the stronger your hand. Chapter 14

Bidco

A new company set up by a buyer — very often a private equity fund — specifically to make the acquisition. Using a fresh vehicle keeps the deal (and any acquisition debt) in one tidy box, separate from the rest of the buyer's group. Chapter 4

Bilateral deal

A sale negotiated one-to-one with a single buyer, rather than through an auction. Faster and more private, but the seller gives up the pricing pressure of competition. Chapter 3

Boilerplate

The standard "general" clauses at the back of a contract — notices, counterparts, variation, severance, third-party rights and the like. Standard does not mean unimportant: boilerplate decides cases. Chapter 10 · Clause 16

Break fee

A sum one party agrees to pay the other if the deal fails in specified ways — for example, the seller abandoning the sale to take a rival offer. Used only occasionally in private English deals, and generally not permitted in UK public takeovers. Chapter 5

Business day

A defined term meaning a working day — typically any day other than a weekend or public holiday on which banks are open in named cities. SPA deadlines count in business days, so the definition (which cities? whose holidays?) genuinely matters. SPA definition

Buy-side

Shorthand for the buyer's team and its advisers, or for acting for the buyer — as opposed to the sell-side. Chapter 2

C

Cash-in / cash-out

Deal slang for primary and secondary money. In a cash-in, the company issues new shares and the money goes into the business. In a cash-out, a shareholder sells existing shares and keeps the price. Chapter 3

Caveat emptor

"Let the buyer beware" — the English-law starting point that a seller of shares has, with narrow exceptions, no duty to volunteer bad news. It is the reason buyers do due diligence and build their protection into the contract. Chapter 1

Certain funds

Proof that the buyer's financing is fully committed before it signs, so the money cannot fail to arrive at completion. It is strict in public takeovers and common in auctions, and sellers increasingly expect it on private deals too. Chapter 5

Change of control

A change in who ultimately controls a company. A regulator must approve a new controller of an authorised firm before completion. A change of control clause in a contract may also let the other party end it, so due diligence checks for these clauses. Chapter 13

Class tests

Size tests under the UK listing regime that measure how big a transaction is relative to the listed company doing it (comparing things like assets, profits and consideration). The bigger the deal in proportion to the company, the heavier the announcement and approval obligations. Chapter 4

Clean team

A small, named group permitted to see the most competitively sensitive information exchanged during a deal (customer pricing, margins), walled off from colleagues who could misuse it. Keeps the parties on the right side of competition law and confidentiality obligations while diligence proceeds. Chapter 5

Closing bible

The organised electronic set of all final, signed transaction documents, compiled after completion so anyone can later find what was agreed. Assembling it is traditionally a junior lawyer's job — and a surprisingly good education. Chapter 15

Completion (closing)

The moment the deal actually happens: the shares transfer, the money moves and the buyer takes control. "Completion" is the English term; American lawyers and most bankers say "closing" — same thing. Chapter 1 · Chapter 15

Completion accounts

Accounts drawn up at the completion date, used to adjust the price for the cash, debt and working capital actually delivered. The buyer pays for what it really gets, but the accounting takes months and can end in disputes. It is the main alternative to a locked box. Chapter 9

Condition precedent (CP)

Something that must happen before completion is required — most commonly a regulatory or competition approval. If the conditions are not satisfied by the long stop date, either party can usually walk away from the signed deal. Clause 5.1 · Chapter 13

Conduct of claims

SPA provisions deciding who steers the defence of a third-party claim that could become a warranty or indemnity claim. The buyer's company faces the claimant, but the seller ultimately pays — so each side wants a hand on the wheel. Chapter 12 · Clause 9.7

Consideration

The lawyer's word for the price — what the buyer gives in exchange for the shares, whether cash, shares in the buyer, or a mix. In Sunrise: €42 million plus locked box interest. SPA definition · Chapter 1

Control (50% / 75%)

Ownership that gives power over a company. More than 50% of the votes passes ordinary resolutions, such as appointing directors. 75% passes special resolutions, such as changing the articles, so a holder of more than 25% can block them. Chapter 3

D

Data room

The document library the seller assembles so bidders can do due diligence — today always a virtual data room hosted online. Its contents usually count as disclosed against the warranties, which is why what went into it matters long after completion. SPA definition · Chapter 7

Deal perimeter

The precise boundary of what is being bought: which companies, assets, contracts and people are inside the deal and which stay behind with the seller. Drawing the perimeter is a structuring exercise done before the SPA is drafted — get it wrong and you buy too much or too little. Chapter 4

Deed

A document executed with extra formality under English law — an individual's signature witnessed, or particular signing arrangements for companies. A deed is binding without anything being given in return and carries a twelve-year limitation period instead of six; some transaction documents (such as powers of attorney) must be deeds. Chapter 10

Deferred consideration

Any part of the price paid after completion, whether on fixed later dates or when conditions are met. Simple to draft, but it leaves the seller exposed to the buyer's ability (and willingness) to pay later. Chapter 9

De minimis

The per-claim floor for warranty claims: individual claims below the figure are ignored entirely, so the parties do not fight over trivia. Sunrise sets it at €50,000. Clause 9.2 · Chapter 11

Disclosure / disclosure letter / fairly disclosed

Disclosure is the seller's shield: a matter properly disclosed against the warranties cannot found a warranty claim. The disclosure letter makes those disclosures, usually with the data room attached. A matter is fairly disclosed only if a reasonable buyer could see its nature and scope. SPA definition · Chapter 11

Drag-along

A right in a company's articles or shareholders' agreement letting a selling majority force the minority to sell to the same buyer on the same terms. It lets a buyer be sure of getting 100%. Chapter 3

Due diligence (DD)

The buyer's structured investigation of the target — legal, financial, tax, regulatory, commercial — before it commits. Each finding becomes a price adjustment, a condition, a warranty, an indemnity or a reason to walk away. Chapter 7

E

Earn-out

Extra consideration paid after completion only if the business hits agreed targets — revenue, profit, client retention. It bridges a valuation gap, but is notoriously dispute-prone: the seller is being measured on a business it no longer controls. Chapter 9

Encumbrance

Any third-party right over an asset — a mortgage, charge, pledge, lien, option or right of pre-emption. Buyers insist the shares come "free from all Encumbrances": no one else may have a claim on what they are paying for. SPA definition

Engagement letter

The contract between a client and each of its advisers — bank, law firm, accountants — setting out scope, fees, liability caps and (for banks) success fees. The first document on many deals, and worth reading more carefully than most clients do. Chapter 2

Enterprise value vs equity value

Enterprise value is what the whole business is worth, ignoring how it is financed. Equity value is what the shares are worth: enterprise value less debt, plus cash. That bridge is how a headline valuation becomes the price in the SPA. Chapter 8

Entire agreement clause

A boilerplate clause confirming that the written contract is the whole deal, superseding earlier drafts, emails and the heads of terms — so no one can later claim there was a side promise. Usually paired with non-reliance wording that shuts out misrepresentation claims. Clause 14 · Chapter 10

Escrow

Money held by an independent third party — often a solicitors' or dedicated escrow account — to secure future obligations. In M&A, typically a slice of the price held back as a ready fund for warranty or indemnity claims. Chapter 9

Exclusivity (lock-out)

The seller's binding promise not to negotiate with anyone else for a set period, giving the buyer a clear run while it spends money on diligence. English law will enforce a lock-out for a defined period — but not a vague agreement to negotiate in good faith (Walford v Miles). Chapter 5

F

Full title guarantee

Statutory words with built-in promises. Selling "with full title guarantee" implies that the seller has the right to sell. It also implies that the asset is free from third-party rights, other than ones the seller does not and could not reasonably know about. Clause 2.1

Fundamental warranties

The warranties at the root of the deal: the seller owns the shares, has power to sell them, and the company properly exists. If they are false, the buyer did not get what it paid for. So they run longer and carry much higher caps than the business warranties. SPA definition · Chapter 11

Funds flow

The statement agreed shortly before completion showing exactly who pays what to whom, in what order — the price, repayment of the target's debt, advisers' fees. Every euro at completion moves according to the funds flow, so it is checked to the cent. Chapter 15

G

Good discharge

Confirmation that paying money to a named recipient — usually the seller's solicitors' client account — legally discharges the payer's obligation. The buyer's job ends when the funds arrive; how they are divided afterwards is not its concern. Clause 7.3 · Chapter 15

Gun-jumping

The competition-law offence of behaving as the target's owner before completion or before merger clearance — integrating operations early, directing management, or swapping competitively sensitive information. Regulators fine it heavily, which is why pre-completion covenants stop short of giving the buyer control. Chapter 13

H

Heads of terms

A short document recording the outline commercial deal before full contracts are drafted — also called a term sheet, letter of intent (LOI) or memorandum of understanding. Deliberately non-binding on the deal itself, though chosen provisions such as exclusivity and confidentiality are made binding. Chapter 6

Hive-down

A pre-sale reorganisation that moves a business down into a new subsidiary, so that the subsidiary's shares can be sold. It packages part of a group into one clean company. Chapter 4

I

Indemnity

A promise to repay a specific loss pound for pound if it happens. The buyer need not prove the shares lost value, and most of the usual defences to a warranty claim do not apply. It is the tool for known risks found in diligence, like the Legacy AML Matter. Clause 10.2 · Chapter 12

Information memorandum (IM)

The seller's marketing document describing the business in detail — history, financials, strategy — sent to interested bidders once they have signed the NDA. In substance, the target's sales brochure. Chapter 5

Insider list

Where a listed company is involved, the formal record required by market abuse rules of everyone who knows about the unannounced deal. An undisclosed deal is inside information, so knowledge of it is tracked and dealing on it is a crime. Chapter 5

K

Knowledge qualifier

Wording that softens a warranty from a guarantee of fact into a statement of awareness — "so far as the Seller is aware". Whose knowledge counts, and whether those people must first make enquiries, is itself defined and hard-fought. SPA definition · Chapter 11

L

Leakage / permitted leakage

In a locked box deal, leakage is value flowing from the target to the seller after the locked box date, such as dividends or fees. The seller must repay it euro for euro. Permitted leakage is the agreed list of exceptions, such as ordinary salaries or a disclosed management charge. SPA definition · Chapter 9

Locked box

A pricing mechanism that fixes the price from a past balance sheet, drawn up at the locked box date. The seller promises that no value has leaked out since, so the price is not adjusted after completion. Project Sunrise is a locked box deal. Chapter 9

Long stop date

The deadline by which the conditions must be satisfied; if they are not, either party can usually terminate the signed deal. It caps how long the parties can be left in limbo waiting for approvals — in Sunrise, 31 March 2027. SPA definition · Chapter 13

M

MAC / MAE

Material adverse change / material adverse effect. A MAC condition would let a buyer refuse to complete if something seriously bad happens to the target between signing and completion. English courts construe them narrowly, sellers resist them fiercely, and many English private deals — Sunrise included — have none. Chapter 13

Management presentation

The set-piece meeting at which the target's management present the business to shortlisted bidders and take questions — part marketing, part diligence, and closely rehearsed on the sell-side. Chapter 7

Merger control

Competition (antitrust) review of acquisitions: authorities check whether a deal would substantially harm competition, and larger deals may not complete before clearance. Despite the name, it has nothing to do with whether the deal is technically a merger. Chapter 13

MiCA / CASP

MiCA is the EU's Markets in Crypto-Assets Regulation; a CASP is a crypto-asset service provider authorised under it. Buying a qualifying holding in a CASP needs the regulator's prior approval — the condition at the heart of Project Sunrise. SPA definition · Chapter 13

N

NDA (non-disclosure agreement)

The confidentiality agreement signed before any secrets change hands — usually the first contract on a deal, and often a junior lawyer's first drafting job. It survives if the deal dies, which is precisely the point. Chapter 5

Non-compete / non-solicit

Promises the seller gives for after the sale. A non-compete stops it competing with the business it sold for a period, and a non-solicit stops it poaching the staff or customers. A court enforces them only if they go no wider than needed to protect the goodwill sold. Clause 11 · Chapter 15

Notice clause

Boilerplate prescribing how formal notices — including warranty claims — must be given: to whom, at what address, by what method, and when they are deemed received. Serving a claim notice the wrong way can lose the claim entirely, which is why litigators read this clause first. Clause 15 · Chapter 10

O

Ordinary course (of business)

The way the target normally runs its business, consistent with past practice. Between signing and completion the seller typically promises to keep the company in the ordinary course, so the buyer receives at completion the business it priced at signing. Clause 6.1 · Chapter 13

P

Pre-emption right

A right of first refusal: existing shareholders must be offered shares — on a transfer or a new issue — before any outsider. On a sale, pre-emption rights in the target's constitution or shareholders' agreement must be waived or disapplied, or the transfer to the buyer can be blocked. Clause 2.2 · Chapter 3

Process letter

In an auction, the seller's letter telling bidders how the process works: the timetable, what a bid must contain and how the data room operates. Bids that ignore it tend to go to the bottom of the pile. Chapter 3

Q

Q&A process

The structured channel through which bidders ask written questions about the data room and the seller answers — numbered, logged and managed through the data room platform. The answers are often swept into disclosure at signing, so they are drafted with care. Chapter 7

Qualifying holding

The regulatory threshold of ownership or influence in an authorised financial firm — broadly 10% or more of shares or votes, or the ability to exercise significant influence. Acquiring or increasing one requires the regulator's prior approval, which is exactly the approval Atlas needs from the CBI in Project Sunrise. Clause 5.1 · Chapter 13

R

Recitals

The "Background" paragraphs at the front of a contract, lettered (A), (B), (C), telling the story of the deal. They are not operative promises, but they set the scene and can colour how a court reads the rest. SPA recitals · Chapter 10

Red-flag report

A due diligence report confined to the issues that matter — the deal-breakers, price-changers and items needing contractual protection — rather than a description of everything reviewed. The modern default, because nobody pays for a 400-page summary of documents the client owns. Chapter 7

Representation vs warranty

In English law the labels carry different remedies. An untrue representation may let the buyer unwind the contract (rescission), while a breached warranty gives contractual damages only. So English SPAs say the seller "warrants" and expressly exclude representations. Chapter 11

Restrictive covenants

The umbrella term for the seller's post-completion promises not to compete with the sold business or solicit its staff and clients. They protect the goodwill the buyer paid for — and are enforceable only if reasonably limited in scope, geography and duration. Clause 11 · Chapter 15

Retention

Part of the price held back — by the buyer or in escrow — for a period after completion, as a ready fund if warranty or indemnity claims arise. Simpler than suing a seller who has already distributed the money. Chapter 9

S

Sandbagging

A buyer claiming on a warranty it knew was untrue when it signed. Well-drafted English deals answer the question expressly: Sunrise has an anti-sandbagging clause excluding claims where the buyer's deal team actually knew of the problem. Clause 9.6 · Chapter 11

Schedule

An annex at the back of an agreement carrying detailed content — the warranties, the completion steps, permitted leakage. Schedules have exactly the same contractual force as the main body; they sit at the back for readability, not because they matter less. Chapter 10

Sell-side

The seller's team and its advisers; acting for the seller — as opposed to the buy-side. Chapter 2

Share purchase agreement (SPA)

The central contract for a share sale: parties, price, conditions, completion mechanics, warranties, indemnities, limitations and boilerplate, with the detail in schedules. This workbook dissects a complete one — the Sunrise SPA — clause by clause. Chapter 10

Shareholders' agreement

A private contract among a company's shareholders governing how they will run and eventually exit the company — board seats, veto rights, and transfer rights such as drag-along and tag-along. Reviewed in diligence and normally terminated at completion. Chapter 3

Signing

The execution of the SPA, at which the terms become legally binding. If conditions must be satisfied first, the shares and money move later at completion; if not, signing and completion happen simultaneously. Chapter 1 · Chapter 13

Stamp duty

The UK tax on share transfers: £5 for every £1,000 of the price, normally paid by the buyer. The buyer cannot be registered as shareholder until the transfer is stamped. Solaris is Irish, so in Sunrise it is Irish stamp duty, and clause 16.2 puts it on the Buyer. Clause 16.2 · Chapter 15

Standstill

A promise — usually in an NDA where the target is listed — that the recipient of confidential information will not buy shares in the target or launch a bid for a period. It stops a "friendly" approach turning into a hostile one armed with inside knowledge. Chapter 5

Subject to contract

The label showing a document or negotiation is not intended to be binding until formal contracts are signed. It rebuts the intention to create legal relations — the reason heads of terms and draft-stage emails do not accidentally become contracts. Chapter 6

Synergies

The extra value a buyer hopes to create by combining businesses — shared costs, cross-selling, better purchasing power. A negotiation staple: buyers try not to pay the seller for synergies the buyer itself will create; sellers price them in anyway. Chapter 8

T

Tag-along

A minority shareholder's right to join a majority sale on the same terms. If the majority sells, the minority can exit too, rather than stay with a new controller it never chose. Chapter 3

Takeover Code

The City Code on Takeovers and Mergers — the rulebook, administered by the Takeover Panel, governing bids for UK public companies, with mandatory offers, strict timetables and equal treatment of shareholders. A different world from the private deals in this workbook. Chapter 3

Tax covenant

The seller's promise to pay the buyer, pound for pound, for the target's pre-completion tax liabilities — in substance a standing indemnity for old tax, working alongside (and more powerfully than) the tax warranties. Clause 10.1 · Chapter 12

Teaser

A short, usually anonymised summary of the business sent to potential buyers to test appetite before anyone signs an NDA. Enough to intrigue; not enough to identify or harm the target if it circulates. Chapter 5

Term sheet

Another name for heads of terms — see that entry. The label is more common in US-influenced and venture practice; "letter of intent" (LOI) is a third name for the same document. Chapter 6

TUPE

The UK Transfer of Undertakings (Protection of Employment) Regulations. On a business or asset sale, employees move to the buyer automatically on their existing terms. A share sale does not trigger TUPE, because the employer does not change. Chapter 3

V

Vendor due diligence (VDD)

Due diligence commissioned by the seller on its own business, with the report shared with bidders — who are usually allowed to rely on it. It speeds up auctions, reduces duplicated cost, and lets the seller find (and fix) its own skeletons first. Chapter 5

Virtual data room (VDR)

The secure online platform that hosts the data room: permissioned access, watermarking, activity logs and a built-in Q&A module. See data room. Chapter 7

W

W&I insurance

Warranty and indemnity insurance: a policy — usually taken out by the buyer — that pays warranty claims instead of the seller, so the seller exits cleanly and the buyer claims against an insurer. Standard on private equity exits; Americans call it RWI. Chapter 11

Warranty

A contractual statement of fact about the target, such as "there is no litigation". If it proves untrue, the buyer can claim damages, usually for the fall in the value of the shares. Warranties also force the seller to disclose exceptions, or face a claim. SPA definition · Chapter 11

Working capital peg

In a completion accounts deal, the agreed normal level of working capital the business needs. If the actual figure at completion is above the peg, the price goes up, and below it, down. So the seller cannot flatter the price by running down stock before handover. Chapter 9