Share Purchase Agreement

Since the general “Buyer be careful” rule applies to the sale of shares, the law does not offer much protection to the buyer when unexpected debts or problems are revealed after the sale of the business. In order to protect the buyer from such unexpected costs, a SPA contains extensive warranties of the seller, in which he makes statements and commitments about the state of the business and assets of the company, and perhaps compensation in favor of the buyer allowing him to recover losses from the seller. Normally, there are two parties, but if the shares are held by several people, it is usually necessary for each shareholder to be a party to the agreement. Occasionally, when there are several parties, lawyers will give their details in a schedule separate from the agreement. When purchasing shares, mandatory legal advice is often drawn up by the seller`s lawyers and their delivery to the buyer is a frequent condition precedent for conclusion. These legal notices must be used by a buyer and offer security. In case of inaccuracy or inaccuracy, the buyer may bring a claim against the law firm as well as the seller in case of infringement of the SPA or related documents. In such legal notices, the seller`s lawyer will usually speak on issues such as: shares (or shares) are units of ownership in a company that are shared among the shareholders (also called shareholders). All existing disputes, arbitrations or judgments, pending or imminent, with the amounts concerned. All disputes in the last five years and related amounts.

details of all accidents in the workplace, material infringements occurring under an agreement or arrangement involving the company, all formal insolvency proceedings, including bankruptcy, liquidation, judicial administration, administration or system with creditors that relate to the business. There are usually two types of classes and shares that define shares. The most important are voting and non-voting. Voting shares allow the shareholder to give his opinion on the decisions of the board of directors and on the company`s policy. Shareholders who do not have the right to vote cannot vote on changes to the board of directors or on company guidelines. Earn-outs generally consist of additional conditional payments that can be made at the end of the execution of certain milestones related to the future performance and that expire on a given date. Earn-Outs reduce the risk of acquisition for a buyer and offer the seller a better price if they meet earn-out goals. Earn-outs can be financial (e.g.B. achieve future sales targets) or non-financial (e.g. B.key customers of the target are maintained after the transaction) and can help resolve differences of opinion on the value of the target if, among other things, there are uncertainties about its future prospects, if it is a start-up with limited financial results, but has growth potential or where the seller will continue to lead the company and the buyer: . .