This is an extract of our Spa document, which we sell as part of our Private Acquisitions Notes collection written by the top tier of Cambridge And Oxilp And College Of Law students.
The following is a more accessble plain text extract of the PDF sample above, taken from our Private Acquisitions Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
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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