Membership Interest Purchase Agreement (Pro-Buyer Long Form)

by Practical Law Corporate & Securities, with environmental provisions by Andrew N. Davis, Ph.D. and Aaron D. Levy, Shipman & Goodwin LLP.

A Standard Document that is a long-form agreement for the purchase and sale of all outstanding membership interests of a private US limited liability company, drafted to be favorable to the buyer. This Standard Document is intended for an arm's-length M&A transaction between a single buyer and a single seller where the signing and closing are not simultaneous. It assumes the target limited liability company is treated as a C-corporation for US federal income tax purposes. This Standard Document features comprehensive pro-buyer provisions, including extensive seller representations and warranties, pre- and post-closing covenants, and closing conditions. It also contains detailed mechanisms for a post-closing purchase price adjustment based on working capital, indebtedness, and transaction expenses. Key buyer protections include broad indemnification rights from the seller, which are supported by an indemnification escrow fund, and restrictive covenants such as non-competition and non-solicitation clauses. This resource addresses critical legal areas such as intellectual property, environmental matters, and employee benefits.