Covenants | Spain | Global Private M&A Guide - Limited External Content

Is a noncompete common?

Frequency/market practice: Fairly common; more common in certain sectors and if sellers are individuals.

Is it common to use waterfall or blue pencil methods to interpret contractual provisions?

Frequency/market practice: Fairly common.

Are nonsolicitation provisions (of employees) common?

Frequency/market practice: Common (in conjunction with a noncompete).

Are nonsolicitation provisions (of customers) common?

Frequency/market practice: Fairly common in conjunction with a noncompete.

Are seller restrictions usually imposed on the target business between signing the purchase agreement and closing?

Frequency/market practice: Fairly common.

Is there broad access to books, records and management between signing and closing?

Frequency/market practice: Fairly common; generally, access is obtained for private deals, but some sellers resist and seek to mitigate this by adding exceptions and limitations. There are competition law issues around potential gun-jumping.

Is it common to update warranty disclosure or notify of possible breach?

Frequency/market practice: Fairly common; updating schedules is common but limited to things such as lists of contracts or employees in the ordinary course of business. Confirmation of representations and warranties at closing is common. Where there is a material breach, there may be a right to terminate.

Global Private M&A Guide - Limited External Content

Spain

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