The execution of the SPA and completion (when the shares are transferred) is often done, but not always, at the same time. The OSG must describe in detail what happens at completion, for example: this article deals with general concepts and variations of a GSB, but is by no means exhaustive. Specific transactions and companies in different sectors require different conditions and are often the subject of in-depth negotiations between the parties. This section does not take into account the laws of a particular jurisdiction and does not address antitrust or anti-competitive considerations that may be relevant in certain M-A transactions. In addition, SBPs may also be controlled or affected by existing shareholder agreements between the shareholders of a target company. A buyer may decide to waive such legal advice and rely exclusively on the seller`s insurance and guarantees, but this choice depends on the buyer`s risk tolerance. A share purchase agreement is probably long and consists of a main document and different calendars or annexes containing specific information and details of the transaction. While a SPA can be in any format, the following are the most important clauses, and those that should ideally be designed by an experienced legal expert. In some cases, a buyer may wish for the flexibility of compensation as a non-exclusive remedy to pursue other means or remedies to ensure that it can be done entirely. This is desirable where the compensation provisions do not adequately protect the purchaser in the event of unforeseen harm and allow him to take all the protection and remedies provided by the applicable legislation, not limited to the only remedies provided in the G.S.O. Sellers may prefer exclusive remedies because they believe that in the absence of them, a buyer could circumvent the negotiated terms and undermine the central purpose of the compensation rules. Exclusive remedies can also be used as a cap on liability pay.
As a general rule, THE SPAs are signed, the purchase price is paid and the shares are transferred on the same day. There may sometimes be delays between the exchange and the conclusion of the agreement, especially when the preconditions for sale must be met. The amount of shares held by a shareholder determines their share of the ownership of the company and the payment of the dividend to which they are eligible if the company distributes dividends. A dividend payment is money paid to shareholders and is usually the result of a distribution of a company`s annual profit. For most of the transactions, the purchase price is generally determined against the last financial statements of a target. Purchase price adjustments generally protect a buyer from any change in the value of the target between the value of the target and the transaction. In this context, the buyer and seller must agree on an evaluation method and have similar or coordinated accounting methods in place. As a key component of an GSB, this section of the agreement generally indicates the number of shares to be acquired and indicates the rights, securities and shares of the shares that the purchaser has acquired. This section should also indicate the purchase price of the shares and their down payment (cash, purchaser securities, repurchase of bonds and liabilities, exchange of assets (real estate, private property, IP, etc.) or a combination of the above, as well as the date and place of the transaction. In this context, it should also be indicated whether the execution of the GTS and the closure will occur simultaneously or whether there will be a discrepancy between the execution and the conclusion (a deferred conclusion).
Deferred closures are common and may be necessary for a variety of reasons, including the need for various administrative authorizations and authorizations and, in some cases, the purchaser may need time to arrange third-party financing (as may be the case in a private equity scenario).