Please give us your thoughts and opinions on this article or describe a story that you participated in a share purchase agreement. A share purchase agreement can often be a deal breaker in a transaction of M -A. All detailed legal positions of a transaction must be included in this legal agreement. During the process, until both parties remained at a relatively high level and considered the positive aspects of a transaction. Examples of items that have been discussed are the future of the business, the proceeds of a seller`s sale, a buyer`s new position in the market, etc. In discussions about the content of the share purchase agreement, both parties must defend their own position and are more or less adversaries of the other. Legal advisors have a limited context on the transaction as soon as they enter. They are not familiar with the talks and did not participate in the meetings that took place before the SPA process began. That is why I think legal counsel should be advisers with broad expertise. You need to be able to assess the situation and understand the atmosphere around a transaction.
It is essential to give in to certain objects and listen carefully to the customer and the other party. Having consultants who have these skills is probably more important than their legal knowledge. What I have seen over the last ten years is that lawyers sometimes try to make a SPA very detailed and complicated by inserting details on many exceptions and circumstances. 20. This agreement contains the entire agreement between the parties. All negotiations and agreements have been included in this agreement. Statements or assurances that could have been made by a party to this agreement at the negotiating stage of this agreement may, in some way, be inconsistent with this final written agreement. All these statements are declared unvalescible in this agreement. Only the written terms of this agreement bind the parties. CONSIDERING that the seller holds [number] shares [TYPE] of shares that [percentage] of the outstanding shares in [COMPANY NAME], of a company [STATE] (the “company”); and I`m interested in hearing your ideas and your practical experience of stock purchase contracts, because there must be a lot of interesting stories that can be very useful for our customers, business owners and business buyers.
– Since the seller holds shares in the company and wishes to transfer them to the buyer, and in this case I represented an international buyer who is a supplier in a particular sector. After various visits to an interested seller, we negotiated a LOI between a relatively small team consisting of the buyer and the owner of the business. This was not easy, as the company had debts and had invested heavily in future growth. This clearly had an obvious influence on the deal-multiple, which was eventually agreed in a LOI. It was only then that both parties terminated highly experienced and expensive D-A firms. These advisors are paid every hour and have no direct financial incentive when a transaction is concluded or not. Their interest is obviously to reach a transaction and to result in a signed share purchase agreement. But they also want to be able to show their added value and send an interesting invoice.
Therefore, in practice, this can sometimes encourage legal advisors to place objects for which they can devote their time. In this case, the advisors on both sides of the table tried to show how smart they were. They wanted to show their legal experience that led the transaction to take a big risk of being put on hold. The buyer realized this at one point and clearly took control of the process and eventually the transaction was successfully completed.