Stock Purchase Agreement (Representation & Warranty Insurance, No Seller Indemnity)

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 seller. This Standard Document is intended for a transaction structured with a buyer-side representation and warranty (R&W) insurance policy and assumes a no-seller-indemnity model. Key features of this seller-friendly framework include the non-survival of representations, warranties, and pre-closing covenants beyond the closing, positioning the R&W insurance as the buyer's exclusive remedy for breaches. This Standard Document presumes a single corporate buyer and a single corporate seller, with a separate signing and closing. It includes provisions for representations and warranties, pre-closing covenants, closing conditions, and a purchase price adjustment for working capital, debt, and transaction expenses. This Standard Document contains drafting notes with explanations on navigating the complexities of a no-indemnity deal and the strategic use of R&W insurance.