Schedule - Purchase Price Paid in Shares (Share Sales)

This Schedule - Purchase Price Paid in Shares (Share Sales) replaces the purchase price schedule in the relevant share sale agreement where the default position is that the purchase price is paid in cash.

It is designed for transactions where the purchase price (or part of it) is to be satisfied by the buyer allotting shares in its own share capital to the seller or sellers.

What does Schedule - Purchase Price Paid in Shares (Share Sales) do?

It sets out an alternative purchase price mechanism for a share sale, so that consideration is delivered by the issue of shares in the buyer to the seller or sellers rather than by a cash payment.

What does Schedule - Purchase Price Paid in Shares (Share Sales) cover?

• Valuation of the buyer’s shares at completion by a chartered accountant chosen by the buyer and seller, to calculate the number of consideration shares to be allotted.
• Confirmation that the seller or sellers are not entitled to dividends declared or paid by reference to a date prior to allotment of the consideration shares.
• A requirement for the consideration shares to be retained for a specified number of months after completion.
• An option for the buyer to pay the purchase price wholly or partly in cash.
• Alternative cash payment methods where cash is used, including payment by banker’s draft or by telegraphic transfer to a designated account.

When should you use Schedule - Purchase Price Paid in Shares (Share Sales)?

• The parties have agreed that the purchase price will be paid by the buyer allotting shares to the seller or sellers (in whole or in part), rather than being paid entirely in cash.
• You need a mechanism to value the buyer’s shares at completion and translate the agreed price into a number of consideration shares.
• The deal terms require post-completion restrictions on the seller’s ability to dispose of the consideration shares for a specified period.
• The parties want the flexibility for the buyer to satisfy the purchase price wholly or partly in cash, and to specify the cash payment method where relevant.

What else you may need

If any part of the purchase price is to be paid in cash and completion takes place outside normal banking hours, an undertaking should be signed. Two examples of completion monies undertakings are included in this collection.

Schedule - Purchase Price Paid in Shares (Share Sales) is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.