Private Company Acquisition Agreements: Drafting Reps and Warranties, Covenants, and Closing Conditions

Representations and warranties, covenants, closing conditions, and indemnification provisions are critical in private company acquisition agreements. Buyers and sellers in private company acquisitions must strategically draft and negotiate these clauses to ensure their respective rights are protected before and after the deal closes.

Reps and warranties clauses require the target to disclose and explain specific issues and risks associated with the deal and allow buyers to exit the agreement under certain circumstances. Covenant provisions require or restrict conduct by the parties between the date the acquisition agreement is signed and the time the deal closes. Closing conditions outline steps the parties must complete before the transaction may close. Indemnification clauses allocate risk in the event of damages or losses.

Counsel structuring these essential provisions in private company acquisition agreements must understand the current trends in the market and where drafting and negotiation challenges are likely to arise.

Listen as Sarah McLean, Partner at Shearman & Sterling, reviews the latest trends in deal terms for private company acquisitions. The panel will discuss best practices for negotiating representations and warranties, covenants, closing conditions, and indemnification provisions.