Purchase Agreement

The purchase agreement is the binding contract that closes the deal. Everything negotiated in the term sheet and LOI gets translated into legally enforceable language: the final price, the payment structure, the representations and warranties the seller makes about the business, the indemnification terms that define what happens when those representations turn out to be wrong, the escrow provisions, the working capital target, and every other condition of the sale. The purchase agreement is typically 60–120 pages and takes 4–8 weeks to negotiate after the LOI is signed. It’s where the real deal gets made, because the attorneys on both sides turn every ambiguous term-sheet provision into specific, enforceable language — and the seller often discovers that the “agreed” terms look very different when drafted by the buyer’s counsel. Founders need their own experienced M&A attorney reviewing every provision. The purchase agreement is not a document you sign because your banker says the deal is done.