The acquisition agreement will state that the financial statements that have been presented to the buyer (which may or may not be attached to the agreement) have been prepared in accordance with generally accepted accounting principles on a basis consiste

The representations and warranties in the acquisition agreement focus on matters of great legal and business concern to the buyer. As noted above, representations and warranties are designed to elicit information about the target company.

An indemnity is a form of guaranty under which one party undertakes to reimburse another party for a specified loss or liability the other party may suffer. Insurance is a common form of indemnification.

The preconditions to closing the transaction will be set forth in the acquisition agreement. Typically, conditions are included as to the continued accuracy of the seller’s representations and warranties, the performance of the seller’s covenants,the rend