Share Purchase Agreement: single company completion accounts

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This Share Purchase Agreement is for the purchase of a company which is not part of a group of companies from a single seller and with the consideration being subject to a completion accounts adjustment.

 

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Share Purchase Agreement: single company completion accounts

Share Purchase Agreement for the purchase of a company which is not part of a group of companies from a single seller and with the consideration being subject to a completion accounts adjustment

Background

What are the main features of a Share Purchase Agreement?

The Share Purchase Agreement (SPA) is the principal legal document for a share purchase transaction.

The first draft SPA is usually prepared by the buyer.  An exception is in the case of a competitive auction process, where the seller may provide a draft SPA for review and comment by the competing bidders for the company.

The main features of an SPA are:

  • sale and purchase: the mechanics for the sale and purchase of the target company shares and closing of the transaction
  • conditions: any conditions that need to be satisfied prior to closing
  • consideration: the consideration to be paid by the buyer, including the form of consideration (cash, shares or a combination), upfront consideration paid on closing, deferred consideration, earnout consideration and adjustment for the net assets of the target company on the business of completion accounts
  • warranties: warranties from the seller about the target company, its business, finances, assets, intellectual property, contracts, liabilities and tax history
  • indemnities: any specific indemnities identified during the due diligence and disclosure process and, usually, a tax indemnity relating to pre-closing tax liabilities and compliance
  • restrictive covenants: covenants prohibiting the seller from competing with the target company and soliciting the target company’s customers, suppliers and employees for a period following closing of the transaction

About this Share Purchase Agreement

This Share Purchase Agreement is for the purchase of a company which is not part of a group of companies from a single seller and with the consideration being subject to a completion accounts adjustment.

The document is suitable for a transaction on the following terms:

  • simultaneous signature and completion of the acquisition, with no closing conditions
  • payment of the consideration in cash at completion
  • post-completion adjustment to the consideration based on the net current assets of the target company at completion

Document features

Features include:

  • full-form SPA with 22 clauses and 5 schedules over 38 pages
  • process for the sale and purchase of shares and completion deliverables
  • process for a post-completion adjustment to the purchase price, based on the net current assets of the company and determined by completion accounts
  • warranties from the seller relating to the target company
  • seller limitations from liability under the warranties
  • provision for indemnities for specific issues
  • restrictive covenants from the seller
  • tax covenant for pre-completion tax liabilities

Explanatory guidance

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

Share Purchase Agreement: single company completion accounts

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