This is a sample of our (approximately) 5 page long Spa notes, which we sell as part of the Private Acquisitions Notes collection, a Distinction package written at Cambridge And Oxilp And College Of Law in 2017 that contains (approximately) 339 pages of notes across 85 different documents.
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Drafted by B and so will be slanted in favour of B (e.g. warranties with few limitations, etc). S to amend the first draft and make it more balanced.
1. Parties and date
typically B and S (note that the target company is not typically party to the agreement)
where more than one seller, details of all sellers normally set out in Schedule to the agreement
where some of sellers give warranties and others don't, the parties will be described as "S(s), warrantor(s) and B(s)".
when the parties execute the agreement it will be dated, so creating a binding contractual agreement to buy and sell either Shares of the target company or the assets of Business.
2. Operative provisions (i) Definitions and Interpretation
Commence with definitions and interpretations clause - purely defines terms used throughout the agreement and imposes no obligations
Sometimes contains a definition of all matters "disclosed" (more common to put in a separate disclosure letter)
Interpretation - statutory provisions are a matter of contention
B will want to provide expressly that reference to statutory provisions includes subsequent amendments.
this is risky for S as it may take on the risk of liabilities increasing as a result of legislation enacted after completion which has retrospective effect. (ii) Conditions precedent
Normally exchange and completion are simultaneous. However, SPA may be entered into on conditional basis
If it is conditional it will normally include:
an obligation to seek fulfilment of a condition
a longstop date by which the condition must be fulfilled or waived
time frame within which the acquisition must complete once the condition has been fulfilled
Example conditions precedent: (i) shareholder approval (ii) approval of competition authorities (iii) industry specific consents (iv) third party consents (iii) Agreement to purchase and sell
SPA will set out what is being bought and sold - normally refers to a detailed schedule confirming shareholdings or assets being acquired.
SPA will also provide that the parties agree to sell and purchase specified shares or assets.
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