NDA: share sale (short)

Name: NDA: share sales (short) - Paper Rock Docs
SKU: NDA008.002
Price: 30.00 GBP
Availability: InStock

A short form NDA, in the form of a letter agreement, to use in a share sale transaction where a seller will disclose confirmation information to a potential purchaser. It covers the principal legal protections for the benefit of the seller as the disclosing party.

for a share sale transaction
where confidential information about the target company will be disclosed to a potential buyer
for a shorter form NDA with principal legal protections for the seller as the discloser of confidential information

Key features include:

16 paragraphs over 3 pages
definitions of Confidential Information and Proposed Transaction
confidentiality obligations
authorised recipients of Confidential Information
circumstances permitting compulsory disclosure
procedure for returning Confidential Information to the seller
duration of agreement

What else do I need to know?

Negotiations on the terms of NDAs often become protracted due to the inclusion of unreasonable and excessive terms by the party providing the initial draft. This template has been prepared and designed to help the parties quickly reach agreement on the NDA, enabling them to move forward to the disclosure of confidential information and discussions on the main transaction documents.

What other docs are available?

For a longer form of confidentiality agreement for a company sale transaction, see

NDA: share sale (long)

Description

When do I use this document?

as an advance subscription agreement between the company and a single investor
where the conversion price will be calculated as a percentage discount to the issue price for shares in the qualified investment round
if agreed, where there is an agreed valuation cap on the company’s valuation

What are the key features?

advance subscription terms and payment
conversion on the occurrence of defined events, including a qualifying financing round, the sale of the company or on a longstop date
conversion price on a qualified financing round to be at an agreed percentage discount to the qualified financing round share price
if agreed, a cap on the valuation of the company for the purpose of calculating the conversion price
warranties regarding the investor’s compliance with Financial Services and Markets Act 2000 regime regarding financial promotions

What else do I need to know?

For detailed discussion regarding the purpose of advance subscription agreements and their benefits and disadvantages for investors and the company, click here.

Negotiating points

Prior to entering into this ASA, the parties will need to consider and agree:

discount rate: the discounted price per share (expressed as a percentage) at which the ASA investor will receive shares in the qualified financing round
valuation cap: if agreed, the cap on the valuation of the company for the purpose of calculating the price at which the advance subscription will convert into shares on a qualified investment round
default valuation: the default valuation of the company which will be used to calculate the conversion price of the advance subscription in circumstances where conversion occurs on the agreed longstop date or the company’s insolvency
longstop date: the longstop date on which (and in the absence of a prior qualifying financing round) the ASA will automatically convert into shares
qualified financing round: the minimum amount of funding which the company must raise before that funding round will count as the qualified financing round under the ASA which results in the conversion of the advance subscription into shares
subscription amount: the amount of the investor’s advance subscription

Explanatory Guides

As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.

£30.00 exc VAT

Updated by a lawyer on 30/06/2025

Updated By a lawyer on 05/09/2023

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NDA: share sale (short)