The SPA Course – Commercial Issues in Sale and Purchase Agreements

£725.00 +VAT

This Sale and Purchase Agreement course can also be presented face to face in-house or via live in-house webinar.

Sale and Purchase Agreement Course Objectives:

Participants will:

  • Master the basics of the SPA structure, contrast jurisdictions and consider interpretation
  • Learn about ancillary agreements including confidentiality letters and exclusivity agreements
  • Be appraised of how the purchase price might be adjusted
  • Learn how to reconcile enterprise value to equity value
  • Explore other adjustments to the price
  • Gain an understanding of the completion mechanisms, as well as non-simultaneous exchange & completion
  • Have a deeper knowledge on the limitations on liability under the warranties & indemnities
  • Understand the pros and cons of tax covenants and tax warranties

Sale and Purchase Agreement Course Content:

SPA structure & Interpretation issues

  • The skeleton structure of the SPA: overview
  • General approach to interpretation of contracts
    • UK vs USA vs Europe
    • Influence of Arnold v Britton case
  • Interpretation – Forex issues re price / currency (avoiding the traps)
  • Implied terms & “duty to negotiate in good faith”
    • Position in the UK
    • Position in the USA
    • Position in Europe / civil law – Traps for the unwary
  • The spectrum of “endeavours/ efforts” –Best vs Reasonable other variants
  • Force majeure –
    • Doctrine of Frustration
    • Problems in English law
  • Dispute Resolution
  • Jurisdiction & choice of law

Ancillary agreements

  • Confidentiality letters
  • Exclusivity agreements
  • Heads of agreement / letter of Intent
    • Checklist of key issues
    • Drafting guidelines
    • Migrating the terms to the SPA
    • Pros & cons
  • Side letters
    • What’s in a name

The purchase price: reconciling enterprise to equity value

  • Common purchase price protections
    • Cash free/ debt free (What should be included in Debt)
    • Cash vs trapped cash?
    • Equity / NAV adjustments
    • Capex issues
    • Debt – what is included?
  • Adjustments for working capital
    • Receivables
    • Inventory
    • WIP – problem areas
    • Normalised working capital
  • Other adjustments to the price – warranties & indemnity claims

Completion mechanisms & non-simultaneous exchange & completion

  • How this can affect the deal, source of value loss
  • Locked box vs completion accounts
    • Key differences
  • Completion accounts
    • Pros & cons
    • Problem areas – access post completion
  • Locked box
    • Pros & cons
    • Leakage vs permitted leakage
    • Other areas of potential dispute
  • Issues with the “accounts”
    • Impact & role in the deal – why they matter
    • Which accounts? Consolidated vs individual, statutory, audited, management
  • Issues to consider when exchange & completion not simultaneous
    • Conditions to completion
    • Matters between exchange & completion
    • Other matters – warranties, costs, breach by seller

Representations & misrepresentations

  • Representations vs warranties vs indemnities
    • Representations vs “term” (of contract)
  • Critical negotiating issues (buyer vs seller friendly)
    • Financial statements “fair presentation” representation
    • “No undisclosed liabilities” representation
    • “Full disclosure” representation
  • Manner of misrepresentations
    • Statements of opinion vs statements of law
  • Types of misrepresentations & their remedies
    • Fraudulent vs negligent vs innocent misrepresentations
  • Accuracy of representations
    • When must representation to be accurate – agreement vs closing date
    • Accuracy of representations – in all vs material respects vs MAE qualification


  • Warranties – rationale
  • Warranties and interaction with disclosure
  • Purpose of warranties
    • Retrospective price adjustment
  • The common areas of warranty protection
  • The information warranty (on the target)
    • Quality of information – information is “true, accurate, complete and not misleading”
    • Accuracy of information in the disclosure letter / bundle
    • The “full disclosure / sweeper” warranty
  • Who provides the warranties
    • Issues with multiple sellers, limits on liability
    • Sales of subsidiaries
    • Sales by trustees
    • What about the directors?
    • Private equity issues – managers (not owners)


  • Why & how it matters
  • General vs specific disclosure
  • The disclosure letter & disclosure bundle
  • When should disclosure be made?
  • Seller’s vs buyer’s approach to disclosure
  • What is disclosed – the data room?
  • How full & complete must disclosure be
  • What is fair disclosure?


  • Purpose of & rationale for Indemnities
  • Key issues
    • Sandbagging (buyer’s ability to seek redress despite prior knowledge)
    • Indemnification as the exclusive remedy (carve-outs)
  • Main areas of Indemnity coverage
    • Environmental
    • Product liability
    • Litigation (esp IPR)

Limitations on liability under the warranties & indemnities

  • Awareness carve-outs
  • Time limits
  • Financial limits
    • De minimis limits
    • Threshold for aggregate claims
    • Overall cap
  • Other limits
  • Security for breach of warranty
    • Retentions & escrow accounts
    • Set-off
    • Bank guarantees
  • Warranty & Indemnity insurance – a viable solution?
    • Buyer vs seller policies – key differences

Specific matters re U.S. deals

  • Jurisdiction does matter (U.S. is a Federal System)
  • Heads / LOI– different approaches in NY vs Delaware (good faith)
  • Different aproache to Reps & Warranties
  • Different approaches to Disclosure

Background of the Trainer:

The trainer is a consultant, public speaker and author. He provides training programmes globally to a blue-chip client base on private equity, debt finance, loan documentation and restructuring. He is a senior consultant with Debt Explained, with Grant Thornton UK (Debt Advisory) and is also a Senior Advisor to KPMG Finland. He has spoken at conferences in the UK, Europe, and Australasia & South Africa. He provides training to a wide range of clients on a bespoke in-house basis & publicly through Redcliffe Training Associates. Additionally, he is the Programme Director for the infrastructure / project finance module for the MBA programme at the Cass Business School in London.

Sale and Purchase Agreement Course Summary:

A simplistic view of an acquisition is that the actual price paid is paramount but experienced practitioners recognise that price is but one aspect of the deal and that there is the potential for significant value leakage in arriving at the actual price and also from claims arising after completion.

The “price” paid may seem a simple concept but, in practice, requires an understanding of how this is derived. Most private acquisitions are based on a “cash-free, debt-free basis” with adjustments for working capital or net assets. Buyers typically develop an enterprise value which is then adjusted to derive an equity value by adjusting for cash, debt and working capital all of which needs to be captured in the Sale & Purchase Agreement (“SPA”). When the consideration is to be paid in a foreign currency, a range of issues can intervene to create problems for both parties.

English law is widely used for many contracts and the recent decision in Arnold v Britton has clarified decisions in earlier judgements and clarified the how the courts and parties will approach this in the future. The course reviews these and the differing approach to this in the USA.

Negotiating and documenting these items is not as straightforward as one might expect; for example, does “cash” include “trapped cash”, what does debt include, what is wrong with using “average” working capital and how can parties minimise subsequent disputes? Additionally, the choice of the completion mechanism (completion accounts or locked box) creates further opportunity for further value transfer. Even after completion the seller may find further value erosion through claims arising under the warranties and indemnities.

There is no right or wrong answer to many of these questions and the ultimate position will be dictated by the negotiating strength of the respective buyer and seller. Despite that, a sound grasp of the key commercial and legal issues can minimise value loss for parties.

This Sale and Purchase Agreement Course course focuses on transactions involving the purchase of shares but also covers areas of specific relevance to asset purchases. It provides a step by step template to the basics but also covers the critical legal and commercial aspects in the transaction from the perspective of both buyer and seller. Reference is made to recent or relevant leading cases.

Please note that this Sale and Purchase Agreement course covers material that is also covered on the Advanced Negotiation Issues in M&A course.

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5-6 participants – 20% discount,7-8 participants – 25% discount,Over 9 participants – 30% discount


26 November 2018, 1 March 2019, 28 June 2019, 28 November 2019