Stock Purchase Agreement (Pro-Seller 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 provides a long-form, pro-seller stock purchase agreement for the acquisition of all outstanding capital stock of a private US corporation. This model is particularly useful in an auction context where a seller seeks competing bids from multiple potential buyers. This Standard Document assumes a single corporate buyer and a single corporate seller, and that the signing and closing of the transaction are not simultaneous. It includes detailed, seller-friendly provisions on key aspects of the deal, such as representations and warranties, pre-closing and post-closing covenants, and conditions to closing. The agreement features a post-closing purchase price adjustment mechanism based on working capital, indebtedness, and transaction expenses. It also contains robust indemnification provisions drafted to limit the seller's post-closing liability, including limitations such as baskets and caps. This Standard Document contains extensive drafting notes with important explanations, negotiating tips, and market trend information from sources like the ABA Private Target Mergers & Acquisitions Deal Point Study.