Share Sale & Purchase Agreement – Sale of Shares by One Shareholder only

This SPA is different from most of the other share sale and purchase agreements in this subfolder in that this template assumes that there are two shareholders in a company and the sale of shares is by one of the shareholders only to an outside third party. The second (continuing shareholder), is maintaining their shareholding but agrees to be joined as a party to the SPA in order to provide the buyer with some level of ongoing comfort in relation to the company. Therefore, the buyer will be buying a percentage only of the existing shares in the company.

This agreement has been drafted with the following assumptions:

• There are 2 existing shareholders (A and B), each holding 50% of the current issued share capital;
• Shareholder A is selling all their shares (50%) to the buyer;
• Shareholder B is keeping all their shares (50%) in the company;
• There is no issue of new share capital, rather this is a sale of existing shares;
• There are limited warranties being given on the basis that the sale is to a known third party who is familiar with the shareholders/company;
• A and B will both give warranties;
• There are no tax provisions or tax warranties included. Independent tax advice should be sought.

This template can be adjusted to include more than one selling shareholder, should there be multiple shareholders in a company and the percentage holdings can be adjusted to suit the needs of the company concerned.

This is a short form basic agreement which includes the following clauses:

1. Definitions & Interpretation

2. Sale and Purchase of the Sale Shares

3. Consideration

4. Conditions

5. Completion

6. Warranties

7. Limitation on Claims

8. Confidential information

9. Non-Competition

10. Miscellaneous

11. Governing Law and Jurisdiction

And the following schedules:

Schedule 1 – the Company

Schedule 2 – Consideration

Schedule 3 – Post Completion Shareholdings

Schedule 4 – Warranties

This document is in open format. Fields should be completed and wording in square brackets is optional and can be deleted or retained according to requirements.

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