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Share Purchase Agreement Sample

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By Author: Jack
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A share purchase agreement (SPA) is executed by and between sellers of shares and its purchasers or / and incoming investors. A share purchase agreement is a legally binding contract and found in all types of businesses but commonly executed when an incoming shareholder is willing to infuse capital in a company or when an existing shareholder wishes to sell shares to a 3rd party. It’s executed before closing an investment deal. Hereunder is an example of a share purchase agreement that will help you understand the nuances of such a document. The parties to a share purchase agreement usually agree to the following terms:

1.Upon terms and subject to the conditions set forth in the share purchase agreement and in consideration of mutual understanding between the parties, the purchasers agree to purchase, and the sellers agree to transfer and deliver, the purchase shares, free and clear of all encumbrances and with all attached and accrued rights, for consideration of, as full and final payment for the purchase shares, the purchase price, to the purchaser. The shares transferred to the purchasers by the sellers will rank ...
... pari passu with other equity shares of the company in all respects, including, entitlement to receive proportionately the dividends and other distributions declared or to be declared in respect of the equity capital of the company. The purchase price be paid by the purchasers to or in favour of the sellers is determined in advance.

2.Covenants and undertakings of the company and/or the seller: The sellers and the company agree, undertake and covenant that they will not enter into any commitment or transaction that could potentially adversely impact the transfer of the shares; do or permit anything which would constitute a breach of any terms of this Agreement; and the company is not involved in, or has been threatened with, any material litigation filed or threatened to be filed against the company.

3.Exercise of voting rights. The sellers agree and undertake that it shall exercise its voting rights in a meeting of shareholders of the company, in such a manner, and cause the directors nominated by it on the Board of the company to exercise their votes in such manner, so as to cause the company to give full legal effect to the terms of the share purchase agreement, including but not limited to, for the purposes of amending the charter documents, of the company, if required, to incorporate the terms of the agreement.

4.Governing law, dispute resolution and jurisdiction is decided.

The above is an example of what is included in a share purchase agreement (sample). Such an agreement in essence sets out a complete understanding by and between the sellers of shares and purchaser of shares with respect to the subject matter contained therewith. For a detailed understanding and detailed legal advice on a share purchase agreement including laws that govern such agreements, you could contact Evaluer which provides best business agreement service. Attorneys at Evaluer specialize in drafting commercial contracts.

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