to be carried out before the transfer of shares actually takes Anatomy of a share purchase agreement | Hill Dickinson particular date, the purchase price would be paid after deducting the Sellers shall (a)provide to their respective Depository Participants, duly executed. hundred thousand); and (ii)the aggregate of all such Claims (referred to in (i)) exceed USD 1,000,000 (United States Dollar One million), in which case such Indemnified Party shall be DOCX Share Purchase Agreement - Ara Law POPULAR ARTICLES ON: Corporate/Commercial Law from India. The SPA records the terms by which the buyer agrees to purchase from the seller(s) shares in the capital of the target (sale shares): either the entire share capital of the target or a partial share sale. The length of a share purchase agreement will vary depending on the context and transaction type. A share purchase agreement (also referred to as a share transfer agreement) that can be used in a sale of shares between two shareholders of a target corporation or an intercorporate transfer between two affiliates. A shareholders' agreement outlines the internal management framework of the company to effectively protect the overall interest of shareholders by setting out their rights and obligations. Restrictive covenants stop a seller from competing with the buyer after the sale. potential buyer needs to take proper stock of the company before the future. What Is a Sales and Purchase Agreement (SPA)? Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. 3. Youll only need to do it once, and readership information is just for authors and is never sold to third parties. indemnity against the same. For example, a lender of the company may have placed a In a sale of shares between two parties, a draft SPA is normally drawn up by the buyers legal representatives, as its the buyer who is most concerned that the SPA protects them against post-sale liabilities. on a case to case basis and the due diligence carried out. There are no suits, actions, proceedings, or investigations pending or threatened against it before any court, arbitrator, or governmental entity that could adversely impact its ability to enter this Agreement and perform its obligations. it the power to carry out actions in the interest of both the However, the value of the shares would have been decided beforehand pre-emption, claim, right, interest or preference granted to any third party, or any other encumbrance or security interest of any kind (or an agreement or commitment to create any of the same); Equity Shares means the equity shares of face value of Rs. Receive the latest legal insights, practical guides, client stories and other news. The importance of reviewing your shareholders' agr What is a buyback of shares? conditions, post which, the parties would go forward with the sale. Occasionally there may be a delay between contact exchange and the completion of the deal, particularly when there are conditions to be met before the sale can take place. This will typically include information about the seller and buyer, as well as details about the shares being transferred, such as their terms and conditions, number of shares involved in the transfer, and other important information like price per share, payment terms, and deadlines for completing the transaction. create a future liability and obligation on the company would Chartered Bank, a body corporate duly incorporated in England under the Royal Charter of 1853, having its principal office at 1 Aldermanbury Square, London EC2V 7SB, United Kingdom and having its branch at 26 - 27, Raheja Towers MG Road, Bangalore hereto; Seller Claims shall have the meaning ascribed to the term in Clause 10.2; Seller Group means Seller Group 1 or Seller Group 2 or Seller Group 3; Sellers Representatives means collectively Seller Group 1 Representative, Seller Group 2 Representative and This SHARE PURCHASE AGREEMENT (Agreement) is dated January10, 2011 and is made by and amongst (Execution Date): Seller Group 1, Seller Group 2 and Seller Group 3 are hereinafter, unless repugnant to the context or meaning thereof, collectively referred to as the However, during this relief, credit or otherwise) from a. third party, the sum which is referable to the subject matter of the Claim and which would not otherwise have been received by such Party, then such Party shall pay (net of costs and Taxes) to The purchase price may be fixed or could be variable and adjusted when the transaction completes. The Securities Account Control Agreement shall provide for the following: On and from the Completion Date and until release of the entire balance in the Securities Account in accordance with Schedule 11, Whilst the due diligence is key, it may be difficult and more time consuming to gain responses from different departments of the target due to illness, lack of access to computers and lack of access to buildings. generally does not have any conditions precedent which need to be 12, with such modifications as mutually agreed to by the parties thereto which shall be executed on or prior to Completion among iSolutions, such Deposit Bank and iGATE Mauritius as the secured party to create a first priority perfected COMMON STOCK PURCHASE AGREEMENT . A buyer may therefore look to defer part of the consideration to be calculated by reference to future performance of the target. For the purposes For Fundamental Warranty) unless and until (i)such Claim (or a series of Claims for breach of representations and warranties arising from substantially identical facts or circumstances) exceeds USD 200,000 (United States Dollar Two. the relevant Party, as of the Execution Date or thereafter, and in each case, as amended from time to time; Approval means any consent, approval, authorization, waiver, grant, agreement or exemption of any Person that is The due diligence would vary depending Purchase Consideration under this Agreement and payments pursuant to the Open Offer shall be made in Indian Rupees, save and except payments to iSolutions, which shall be made in USD Equivalent of the amount due and payable. of the Companies Act, 1956; Tax Act means (Indian) Income Tax Act, 1961; Tax Authority means any revenue, customs, fiscal, governmental, statutory, state, provincial, local governmental or Hours Monday - Friday 7:30 a.m. - 4:30 p.m. We appreciate that one size never fits all, which is why we leverage our team's sector knowledge through a multi-disciplinary approach to providing you with tailored and relevant advice. For further information, see: Traffic Orders Procedure (Coronavirus), Banking and finance for corporate lawyers, Companies and other forms of business vehicle, Company disclosures, records and registers, Company striking off, dissolution and restoration, Environmental and health and safety law for corporate lawyers, Financial services regulation for corporate lawyers, Restructuring and insolvency for corporate lawyers, International Sales(Includes Middle East), Adjustment of the purchase price post-completion, Standard of disclosure and buyers knowledge, Limitations on the liability of the seller. of shares is to take place. pay an additional sum over the purchase price if the company earns A checklist outlining the key phases in a share purchase transaction, including dealing with preliminary structuring and process issues, putting in place any pre-acquisition agreements (such as heads of terms, confidentiality agreements and exclusivity agreements), coordinating the due diligence exercise, documenting the transaction and managing the completion process. Read a share purchase agreement by carefully reviewing all the terms and conditions included in the document. The urgency to reduce carbon emissions has become a top priority for businesses today as pressure mounts from regulators, employees and new hires to address environmental, social and governance (ESG) concerns. Free Practical Law trial To access this resource, sign up for a free trial of Practical Law. A share purchase agreement is defined as a legal contract between a seller and a buyer. provided, further that any disclosure shall, so far as is practicable, be made only after consultation with the other Parties. Written by lawyers and business experts, these resources will help you decipher legal terminology and tackle key milestones from securing funding and growing your team, to protecting your ideas and expanding to new markets. In such a scenario, the buyer would not only be taking | Covid Risk Assessment (Wales) tribunal or court or other entity authorized to make laws, rules or regulations or pass directions having jurisdiction, or any state or other subdivision thereof or any municipality, district or other subdivision thereof having jurisdiction pursuant the provisions of Schedule 11. interim period does not differ, pre-closing covenants are built By using a lawyer, you can also safeguard yourself against painful post-sale discoveries and liabilities. other actions contemplated under the agreement. Everything you need to know about Share Purchase Agreements - Harper James later (such later date, the Escrow Deposit Date), deposit 100% (One hundred percent) of the Open Offer Consideration in respect of the Open Offer Shares in the Open Offer Escrow; Mr.Gajendra Kumar Patni to resign from the Board and the board of any Subsidiary of the Company, without any claim in respect of breach of ending on the Accounts Date; Accounts Date means September30, 2010; Administrative Employees means any employees of the Company and/or any of its Subsidiaries whose job profile is SALE AND PURCHASE OF SALE SHARES : 11 : . A shares purchase agreement, or SPA, is a legal document that details the terms of an individual's or company's acquisition of shares in another business. security interest in favour of iGATE Mauritius. The reason for tax warranties (in addition to the tax covenant) is so that the buyer can additionally get protection for tax liabilities after completion that are greater than they anticipated following their inspection of the sellers records (for example, the way that tax allowances and reliefs have been calculated). Because a SPA is a private transaction, it usually contains provisions restricting the flow of confidential information and preventing the buyer and seller communicating details of the deal to third parties. Hence the need for a detailed share purchase agreement or SPA. And, unless were talking about a very basic, off-the-shelf purchase, the transaction will be documented by a contract in writing known as a share purchase, share transfer, share sale or sale and purchase agreement. The buyer on the other hand would provide representations about them turn out to be false because of which the transfer is not What to look out for in a share purchase agreement. Except as otherwise stated in this Agreement, all amounts referred to in this Agreement shall be expressed in (insert currency), and all payments under this Agreement shall be made in that same currency. The latest news and insights from Harper James including our 'Meet the client' interview series, case studies, legal updates, thoughts & opinions, podcasts, videos and spotlights on our solicitors. | Pricing Policy If youre thinking of buying or selling a business, the most common way to do it assuming the business is run as a company is via a sale of the companys shares. Although selling shares is generally more straightforward than selling business assets, for key business contracts to remain in place after the sale like leases, the consent of landlords and other third parties may be needed, Consent of the sellers shareholders and waiver of their pre-emption rights if part of the purchase price involves seller shares, How long you want the earn-out period to last, What measures will be used to track performance and how they will be calculated, What involvement, if any, the seller will have after the sale has taken place, How the seller can make sure the buyer doesnt adversely affect the companys results and thus artificially skew the performance figures, When and where completion will take place, The exact procedure at completion (handing over signed documents, transfer of funds, holding of necessary board meetings, etc), Execution of the stock transfer form and handing over of share certificates, Handing over of companys legal records such as the, What happens if completion fails to take place, They encourage the seller to disclose information so that the buyer can investigate the issue and adjust the purchase price if necessary, They act as insurance against any unknown problem that emerges post-sale, giving the buyer the right to adjust the price they paid retrospectively. Patni. Seller Group 3 Representative hereby represents, warrants and undertakes to the Purchaser that he has been An agreement between a corporation and investors to sell the investors shares at a set price is known as a share subscription agreement. A seller will still be seeking to lock the price where possible. Representations and warranties are assertion of facts made on a irrevocably appointed as agent and attorney-in-fact for the. Our creative sector solicitors keep abreast of the latest cases, legislative changes, and industry developments, to ensure our clients receive smart, pragmatic, insightful, and tailored legal services. Existing user? A seller should seek to include flexibility in any undertakings given in the agreement, so that, if there is a further outbreak, the seller can take reasonable steps to respond to any applicable government guidance. The W2 form, also called a Wage & Tax Statement, is an IRS tax form that your company must send to each employee and to the IRS each year. Whatever your business within the retail sector, our retail lawyers understand this challenging market and work across a range of areas including e-commerce, corporate and commercial, commercial property, dispute resolution and employment law to help advise and provide solutions for your business. It may Add images, video, pricing tables, and more. the buyer and seller(s) of shares of a target company. These are those conditions which are necessary To write a share purchase agreement, gather all the relevant information about the transaction, including details about the seller and buyer and the shares being transferred. It outlines the key terms of the sale such as purchase price, payment deadline, and conditions for closing the transaction. The Seller has not made any material misrepresentations or omissions of fact or law in connection with this Agreement. informed about actions that would affect the value of the contract, compensation for loss of office or termination of employment or redundancy or unfair dismissal, or any other grounds whatsoever (other than pursuant to Clauses 6.1(ix), Clause 6.1(x), Clause, 6.1(xi) and the Patni Agreements), whether statutory or otherwise or for unpaid remuneration, and shall facilitate appointment of 2 (two) additional directors nominated by Purchaser to the Board, We provide expert legal advice and representation in relation to all creative endeavours, including clients in advertising and marketing, television, theatre, music, art, publishing, architecture, technology, and all spheres of design. company to perform just as well, if not better, as its previous that Hence any Its becoming more common for parties to use electronic signatures to execute an SPA, and this can include using a web-based e-signature platform, pasting a signature into a document, or using a touchscreen to write a signature manually. An escrow agent is appointed to hold the transfer shares and the This can include clauses regarding the agreed purchase price, payment deadline, closing date, and any other terms that both parties have agreed to. of time. depending upon the business of the company, approvals, of this Agreement, all rights of the Seller Group 3 Members shall be exercised by Seller Group 3 Representative only and Seller Group 3 Representative shall be duly authorised to exercise such rights on behalf of each such Seller Group 3 Member. Our views and perspectives on some of the latest developments. alternative financing in the aggregate are no greater than those set forth in the Financing Commitments in the aggregate); Filings means any form, application, declaration, return, certificate, The content of this article is intended to provide a general contemplated hereby, including the lead arranger or arranger or any of the parties to the debt Financing Commitments and any joinder agreements or credit agreements relating thereto and any under common Control with, the Person specified; Announcement shall have the meaning ascribed to the term Agreement executed among the Company, the Depositary and the owners and beneficial owners of the American Depositary Receipts representing the ADSs, dated July15, 2002; Depositary means The Bank of New York Mellon (f/k/a The Bank of New York) as depositary under the Deposit Agreement; Depository Participant or DP means a depository participant within the meaning of the Depositories authorization, waiver, grant, agreement or exemption of any Person that is required in connection with (i) the execution and delivery by any Party of this Agreement or (ii) . Clearly outline the responsibilities of each party concerning taxes, fees, and expenses related to the agreed-upon transaction. The agreement on the acquisition of shares can be canceled based on clause 2 of Article 450 of the Civil Code of the Russian Federation. The reason for wanting security is that if the buyer is unable to pay future payments and no security is taken out, the seller will be an unsecured creditor and will rank alongside all other creditors of the business. originals or counterparts. Access this content for free with a trial of LexisNexis and benefit from: To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial. To print this article, all you need is to be registered or login on Mondaq.com. For the avoidance of doubt, it is clarified that Immediate Patni Family shall exclude Anirudh Patni. into the Share Purchase Agreement. | Modern Slavery Statement agreement between parties. Share Purchase Agreements entail that the buyer would be taking These meaning ascribed to the term in Clause 10.1; Purchaser Warranties shall have the meaning ascribed to the **Trials are provided to all LexisNexis content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. Analytical cookies are used to understand how visitors interact with the website. shares of the company. Documents and the transactions contemplated hereby and thereby, including all fees and expenses of agents, representatives, counsel and accountants. Characteristics of a Shareholders' Agreement. permitted to be carried out by the company in the ordinary course Subject to along with a scope of adjustment. The buyer will be concerned to ensure that it obtains full title guarantee from the seller (whereby the seller covenants that it is able to transfer title to the buyer free from encumbrances and any third party claims). Closing the gap - KPMG Singapore SHARE PURCHASE AGREEMENT TABLE OF CONTENTS . These disclosures are made in a disclosure letter negotiated and handed over at completion that will help flush out any issues not known to the buyer and that could affect the purchase price or decision to buy. As a result, a buyer may seek to include a clause in the agreement with the effect that a material adverse business or economic change affecting the target or its assets entitles the buyer to walk away. purchase price as security and be responsible for ensuring that the Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features. Comprehensive Share Purchase Agreement Template - PandaDoc They help Vivek Kumar & Anr. parties and in the manner specified under the Share Purchase indemnity and the termination clause in an agreement. Overview, News & Insights IT IS AGREED BY AND AMONGST THE PARTIES HERETO AS FOLLOWS: Accounts means the audited and consolidated accounts of the Company for the period commencing on July1, 2010 and Defining terms up-front in the document helps avoid future disputes. The Buyer shall have the right to conduct due diligence on the Target Firm before the closing of this transaction, including an examination of records, property, assets, and other items deemed necessary by the Buyer. Pursuant to this, a potential buyer would undertake due In most cases, a SPA will be signed as a simple contract and not as a deed (executing a contract as a deed requires the signatures to be witnessed and sealed). For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800 . parties. in the form of ensuring similar performance as previous years or a The Indemnifying Party shall be entitled to assume the defense of any Third Party Claim with counsel reasonably satisfactory to the Indemnified Person, Founders, where are you in your business journey? may seek termination of the Share Purchase Agreement due to lapse 2. municipal authority, body or Person responsible for Tax; Third Party Claim shall have the meaning ascribed No waiver of any | Our Commitment to Net-Zero, This website uses cookies to improve your experience while you navigate through the website. the material terms would already be agreed to between the Parties other than PandaDoc may provide products, services, recommendations, or views on PandaDocs site (Third Party Materials). For this reason, SPAs usually contain tax warranties and a tax covenant (or tax indemnity) that covers the buyer should such expenses come to light. If any of the action promised because generally there are obligations which the parties need to For the avoidance of any doubt, it is clarified that if a CP Confirmation Certificate is wrongfully 5. consequential, punitive or special damages; Material Contract means any agreement or arrangement to which Share Purchase Agreement (Transactions Between Shareholders or The details include the name of the company or companies, number of shares, and the price of the shares. Notwithstanding anything contained in the Transaction Documents, the obligations of the iGATE India and iGATE Mauritius will be several buyers perspective. term in Clause 8.1; RBI Approvals shall have the meaning ascribed to the term in Clause 3.1(ii); Rs. or Indian Rupees means the lawful currency of the Republic of India; Sale Shares means the Equity Shares of the Company held by the Sellers representing 43.58% of the share capital of the as set out in any Clause of this Agreement may be extended with the written consent of the Parties, failing which, time shall be of the essence. We also use third-party cookies that help us analyze and understand how you use this website. We understand the commercial issues involved in tech depend on the services and products involved, which is why we endeavour to understand your niche and its implications. For more answers to commonly asked questions and advice on share purchase agreements, mergers and acquisitions and tax covenants, consult ourcorporate solicitors. sale of shares occurs. It is also part of the information that we share to our content providers ("Contributors") who contribute Content for free for your use. So, the warranties have two main purposes: If a warranty turns out to be untrue, then the buyer will bring a breach of contract claim against the seller to recoup a portion of the purchase price. exclusively in the nature of a support function; ADS means an American Depositary Share, representing 2 Share Purchase Agreement Share Subscription Agreement Conclusion Introduction Whenever a company wants to expand its capital, it does so by either borrowing funds from a bank or by borrowing it from an Angel investor or by issuing shares of its company to the proposed investors. While its possible to find model SPAs on the internet, we wouldnt recommend using them. These adjustments can be either Mr.Gajendra Kumar Patni and Persons Listed in Schedule 3, Mr. Ashok Kumar Patni and Persons Listed in Schedule 3, Mr.Narendra Kumar Patni and Persons Listed in Schedule 3, Pan Asia iGATE Solutions and iGATE Global Solutions Limited, GOVERNING LAW, DISPUTES AND SUBMISSION TO JURISDICTION. A share purchase agreement (" SPA ") is typically entered into by and between a buyer and seller (s) of a target company's shares whereby the seller (s) agrees to sell a specific number of shares to the buyer for a specified price. The contract is proof that the sale and the terms of it were mutually agreed upon. This field is for validation purposes and should be left unchanged. terms of the Share Purchase Agreement. This website uses cookies to improve your experience. Its main purpose is to set out the deal terms in writing, specify any conditions to the sale (such as getting regulatory consents), allocate risk, and protect the buyer by limiting the sellers ability to set up a competing business. If a payment is secured and such security has value and is registered accordingly (if applicable) then the seller will be protected on the buyers insolvency and may be repaid. the provisions of this Agreement, this Agreement is personal to the Parties and shall not be capable of assignment, except with the prior written consent of the other Parties, provided that the Purchaser shall have the right to assign any right or The wording of warranties and indemnities must be extremely precise and should be drafted by an expert. DEFINITIONS AND INTERPRETATIONS : 4 : 2. The party would inform the other party upon completion of these The buyer agrees to pay to the seller the purchase price for the acquisition of the sale shares (consideration) in return for which the seller transfers title in the sale shares to the buyer (by executing a stock transfer form). For more information, see Practice Note: What is a, Highways, street works and statutory undertakersCoronavirus (COVID-19): This Practice Note contains guidance on matters that have temporarily been altered to assist in the management of the coronavirus (COVID-19) pandemic.

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