Stock Purchase Agreement Review

Summary

When reviewing a stock purchase agreement from the sellers perspective, focus on the purchase price, payment terms, representations, warranties, indemnification, and closing conditions. Pay special attention to the Purchase Price Adjustment clause, which includes adjustments for the holdback amount, closing indebtedness, and transaction expenses. Ensure that the sellers good faith estimates for closing indebtedness and transaction expenses are reasonable and justifiable. If you have concerns about specific clauses, consider consulting a business attorney for personalized advice.

Full Conversation

review a stock purchase agreement from the seller's point of view
Got it, Jay! To help you review the stock purchase agreement effectively from the seller's perspective, here are some key points you should focus on:
- Purchase Price: Ensure the price is clearly stated and acceptable.
- Payment Terms: Verify the payment method and schedule.
- Representations and Warranties: Review what the seller is guaranteeing about the business.
- Indemnification: Understand the extent of your liability after the sale.
- Closing Conditions: Check for any conditions that must be met before the sale is finalized.
Is there a specific section or clause you're concerned about?
the entire agreement
Reviewing an entire stock purchase agreement is complex. Here are key areas to focus on:
- Purchase Price and Payment Terms: Confirm clarity and fairness.
- Representations and Warranties: Ensure accuracy and limit liabilities.
- Indemnification: Understand post-sale obligations.
- Closing Conditions: Check for any pre-sale requirements.
Is there a specific clause you find particularly confusing or concerning?
Purchase Price Adjustment. At the Closing, the Closing Payment shall be adjusted in the following manner: a decrease by the Holdback Amount; a decrease by the amount of the Closing Indebtedness; and a decrease by the amount of the Transaction Expenses. The net amount after giving effect to the adjustments listed above shall be the “Closing Date Payment.” Prior to the Closing, Seller shall prepare and deliver to Buyer a statement setting forth its good faith estimate of (A) Closing Indebtedness; and (B) Transaction Expenses, which statement contains an estimated balance sheet of the Company as of the Closing Date (without giving effect to the transactions contemplated herein).
Jay, it sounds like the Purchase Price Adjustment clause is essential for your agreement. Here are some key points to consider:
- Holdback Amount: Ensure it's clearly defined and fair.
- Closing Indebtedness: Verify the accuracy of debts being subtracted.
- Transaction Expenses: Confirm all legitimate expenses are included.
- Good Faith Estimate: Ensure the seller's estimates are reasonable and justifiable.
Would you like to dive deeper into any of these specific adjustments?