Stock Purchase Agreement (Representation & Warranty Insurance, Pro-Buyer)

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 the outstanding capital stock of a private US corporation, drafted in favor of the buyer. This Standard Document contemplates the use of buyer-side representation and warranty insurance (R&W insurance) to supplement the seller's indemnification obligations and assumes a transaction structure with a period between signing and closing. It includes a detailed purchase price adjustment mechanism based on a post-closing working capital true-up, as well as adjustments for indebtedness and transaction expenses. The agreement features extensive seller representations and warranties covering key areas such as financial statements, intellectual property, employee benefits and compensation, and compliance with environmental laws. This Standard Document also outlines pre-closing covenants, restrictive covenants, and detailed closing conditions for both parties, alongside a robust indemnification framework that establishes procedures for post-closing claims and limitations on liability.