D
Deleted member 33582
Guest
This was so helpful, thank you!!Hey!
I've done some research on this, and for SPAs, some of the main "deal-making" clauses that tend to come up are things like:
I've always found that a good way to think about these is that most of them are really about risk allocation - i.e. who bears what risk after the deal closes, how much control investors/shareholders have, and what happens if things go wrong.
- Warranties and Indemnities
- Limitation of Liability Clauses
- Completion Accounts/Locked Box Mechanisms (i.e. whether the final purchase price is adjusted based on the company's actual financial position at closing (for CA) or it is fixed using historical accounts (for locked-box))
- Restrictive Covenants
- Conditions Precedents
- Material Adverse Change Clauses (allows a buyer to walk away or renegotiate if the target business suffers a significant negative change before completion)
- Earn-Outs (part of the purchase price is paid later if the business hits certain financial/performance targets after the acquisition)
On the finance side, the legal analysis is often less about whether something is commercially sensible and more about how the lender protects itself, what security is available, the repayment structure and cash flow, enforcement risk, regulatory issues, and intercreditor priorities (if there are multiple lenders involved).
Therefore, the main types of documents or contracts that you'll often see include:
Whilst this isn't an exhaustive list, it should cover the main ones you should know about (particularly things like security documents, which are crucial for lenders)! In project finance specifically, there is usually a web of contracts underpinning the project itself too (e.g. construction agreements, offtake agreements, supply agreements, etc.) as lenders care a lot about whether the project will actually generate stable cash flow in order to repay the debt.
- Facility Agreements (outline the terms of the loan)
- Security Documents (i.e. charges, debentures, guarantees, etc.)
- Intercreditor Agreements (if there are multiple lenders)
It helps to view finance lawyers as people who manage legal and financial risk while also coordinating multiple moving parts of a transaction to ensure that the funding structure protects all parties involved.
I hope that assists!![]()