Los Angeles Kids Activities – A great new website

As parents, we are frequently looking for fun kids activities to take our daughters to. Plus it keeps things interesting for Mom and I!

There’s a great new kids activities site which we’ve started in Los Angeles that organizes these family events by category and local neighborhood. We’ve partnered with Jen’s List in Los Angeles and the San Fernando Valley to start, and we’ll see where it goes.

So if you’re looking for fun things to do with your family, whether it’s for museums, kids classes, sports and fitness, library events, parks and trails, kids eat free, or just all around everyday fun, check it out at burstible.com.


Manufacturing Contracts and Agreements for Legal and Business Professionals

We get a ton of visitors to our sites looking for templates for manufacturing contracts and agreements, as well as supply agreements.  The reason is pretty straight-forward – we have thousands of these agreements that are categorized and easily searchable among the millions of searchable legal agreements and contracts at RealDealDocs.com.  But what are they, and why is it so important for lawyers and top management to find and leverage these types of legal documents?

Manufacturing contracts involve the outsourcing of the creation of tangible products by one company to another.  This of course really means that one company is hiring another to manufacture products for it, but my 5th grade English teacher taught me that a definition can’t include the word to be defined, so I had to mix it up a bit.  In any event, the ability to successfully utilize outsourced manufacturing capacity is a critical component of a company’s competitive advantages, and the components of these successful relationships are imbedded in the manufacturing agreement itself.

Key business or term sheet elements of a manufacturing contract include:

  1. Pricing terms, including base pricing, volume-based adjustments, forecasting issues, and other pricing factors
  2. Volume production / purchase commitments, including whether there are any manufacturing minimums
  3. Payment terms
  4. The contract length
  5. Any intellectual property / technology development issues, such as technology transfer or ownership issues
  6. Exclusivity or non-exclusive production, both of which are loaded issues for the parties
  7. Quality assurance, including the potential impact of recall issues, which have hit the headlines in the past 12 months, particularly with regard to children’s toys

Once the business terms are established as a baseline for the negotiation and drafting of the manufacturing contract, the lawyers can take over on the legalese.  That being said, it’s always helpful to consult other manufacturing contracts as a reference point, and as I mentioned previously, you can find thousands of manufacturing contracts at RealDealDocs.com.


Consulting Agreements for Small Business

At our business (Practice Technologies Inc, a technology and content provider for law firms and business professionals), we’ve recently updated our consulting services agreements in conjunction with kicking off two new consulting engagements.  One of the consulting engagements will be with an individual, the other is likely to be a search engine optimization project with a company specializing in those activities.  I thought I’d share some of the key issues in retaining both individuals and companies in consulting agreements and contracts.

In any consulting agreement, basic terms include:

  • A description of the services to be provided by the consultant 
  • Compensation terms, including timing of payments
  • Some type of performance metrics or specific deliverables are very desirable, although I’ve frequently seen them left out of far too many consulting agreements
  • The usual representations and warranties of both the company and the consultant
  • A clear statement that the engagement is on an independent contractor basis (not as an employer-employee relationship)
  • Termination provisions, including a discussion of how disputes are to be resolved
  • Liability limitations (usually to the benefit of the consultant)

Depending on the work to be performed, it can be essential that the Company also obtain specific assignments of any intellectual property that is created by the consultant which would otherwise belong to the consultant under intellectual property law.  This can be done either within the body of the Consulting Services Agreement itself, or in a separate Intellectual Property Assignment Agreement.

When working with a company as the service provider, or even with an individual, it is my experience that the consulting agreement should be carefully negotiated to make sure that the termination provisions, particularly the notice period, appropriately reflect how the end game should be played out.  That seems rather self-evident, but I’ve seen that provision overlooked in the drafting phase, usually resulting in the service provider being paid for too long a period following the realization that the engagement is not working out for the client company.

For those of you who follow my blog posts, you’ll note that I’m a big advocate of leveraging the legal drafting work of others, particularly when it comes to drafting legal agreements and contracts.  I’ve provided some links to literally thousands of consulting agreements that have been drafted by large law firms for big and small companies alike.


Employment Agreements in a Down Market

 We’re in the process of adding another web developer to our talented team, and we thought it made sense to update our employment agreements.  Of course, in doing this we have an advantage since one of our web properties has over twenty thousand employment contracts among the millions of legal agreements and clauses from the top law firms and companies in the world.  The property, RealDealDocs.com, is used by tens of thousands of legal and business professionals to find legal documents to use in their research and drafting.

We’ve previously discussed employment agreements on our legal agreements blog, so let me just briefly review some of the key elements before talking about how we’re looking to tailor our employment contracts.  These key elements of employment agreements include:

  1. Term. First, this provision should list the employee’s annual salary. Also, any agreement regarding the option to renew the agreement, either on the executive’s side, the company’s side, or both, should be addressed.
  2. Duties of Employee. If the precise services of the employee may be extended or curtailed by mutual agreement, this should be listed as well.
  3. Duties of Employer. The employer should promise to pay all compensation, benefits, and allowances as set forth in the agreement.
  4. Confidential Information. The employee must promise to keep all secret information confidential.
  5. Termination. The relevant termination provisions should be carefully spelled out.  If the employer may only terminate the employee for cause, then cause must be defined.  In at will states, such as for California employment agreements, this should be delineated.

Other elements include appropriate non-competition / non-disclosure agreements, intellectual property transfers, etc.  I’ll review those in a separate post shortly.

We’ve had most of the issues well covered, so the primary employment agreement related issue we’re working on is to better tie performance to compensation.  Additionally, for this hire in particular, we’re looking to defer some portion of the compensation to the end of the year in the form of a retention bonus.  The reason for this is that  we are looking to hire a rather junior level position and we want to make sure we realize our investment in his development.


Asset Purchase Agreements vs Stock Purchase Agreements

We were contemplating acquiring a small legal content provider in our space with an unusual set of circumstances surrounding its capital structure.  As we were working through fit and valuation issues, it became apparent that the structure of the deal would be even more important than usual.

There are many ways to structure the acquisition of a corporation, but in any event they can be boiled down to two simple forms:  asset purchase agreements or stock purchase agreements

Asset purchase agreements (more links to real transactions from top law firms and public companies provided) are used to acquire the existing assets of a company, rather than the entire ownership interest in the company.  As such, they are generally preferred by the buyer for several reasons:

  1. Most importantly, they limit exposure to buyers from any known or unknown liabilities relating to the target company
  2. The buyer can choose to acquire only certain assets
  3. The buyer can avoid unfavorable obligations such as pension liabilities, collective bargaining agreements, etc.
  4. Asset purchase agreements can also result in potentially favorable tax treatment

Of course, from the seller’s perspective, many of these issues are the inverse of what the seller may want, such as the complete sale of the company including any liabilities.  That’s why sellers tend to prefer stock purchase agreements when they enter into a company sale.

In our case, we are in the process of winding down our discussions and it seems unlikely there will be  a deal here.  I’ll update this post if anything changes.


How Big Law Handles Court Rules and Updates

Sorry for being away for the past few weeks – some personal family matters (which worked out great!) and, more importantly as far as you’re concerned, the release of a great new product for litigators, paralegals, and other professionals have kept me tied up.  And sorry about the “press release” you’re about to read, but we’re really excited about the general release of SmartRules.com.

What is SmartRules.com?  Well, it solves the problem of keeping track of how all the different sources of court rules and procedures affect the way litigators need to draft and file litigation documents with courts across the country.  SmartRules does this by providing step-by-step instructions for handling procedures in state and federal courts across the country, including state or federal rules of civil procedure, evidence codes, state-wide court rules, etc. all the way down to local court rules.


Basically, SmartRules.com takes all the hassle out of complying with all of the various rules that apply to drafting and filing legal documents with courts across the country.  It’s been used by 40 of the top 200 law firms in the country for the past 7 years, and now it’s available for online purchase by small firms or individual practitioners, paralegals, and other legal professionals.

Let me give you a quick example:

Figuring out which rules apply to a given scenario such as filing a motion to dismiss often requires consulting multiple sources – civil procedure, rules of evidence, standing orders, local rules, etc. – some of which may conflict with each other or even be out of date.

SmartRules.com eliminates the need to make sense of all these rules sources individually. Instead, just enter your jurisdiction and what you’re working on. SmartRules.com then provides you with a SmartRules Guide—a step-by-step checklist for that particular task, including up-to-date drafting and filing requirements from all applicable rules sources.  Here are a couple of links to popular SmartRules modules for your review (with free previews available):

Ø      Answer in Los Angeles Superior Court

Ø      Motion to Dismiss in the Central District Court of California

Ø      Answer in Cook County Superior Court

Ø      Application for a Temporary Restraining Order in the Eastern District Court of New York

We keep working on killer new applications, and we have another one coming out in after the first of the year.  I’ll keep you posted as I get back into the blogging mode.  Happy Thanksgiving!


$85 billion about cover it? Nope – AIG needs another $38 billion for now

Last month the Federal Reserve loaned AIG $85 billion for two years in return for a hefty interest rate and a warrant agreements to purchase 80% of AIG.  The objective was to give AIG enough breathing room to have an orderly disposition of its assets without a fire sale bringing the global financial system to its knees.  Now we know that the fire has spread far beyond AIG, even while it still burns within AIG’s walls.

It turns out that the price tag, for now, isn’t an $85 billion loan for which the federal government (and taxpayers) might stand a chance to at least cover the loan, let alone make a profit.  Tack on another $37.8 billion extended by the Federal Reserve Bank of New York to provide badly needed liquidity.  In exchange, AIG is giving the New York Fed investment-grade, fixed-income securities that it had previously lent out to other institutions for a fee. Those institutions are now returning these securities and want their money back, further accelerating the liquidity crunch at AIG.

AIG has already drawn down some $60+ billion of the credit line in the past two weeks to cover its cash requirements.  Let’s all hope that enough stability returns to the financial markets over the next several months to alllow an orderly disposition of its assets.