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Share Purchase Agreement And Shareholders Agreement Template for Canada

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Key Requirements PROMPT example:

Share Purchase Agreement And Shareholders Agreement

"I need a Share Purchase Agreement And Shareholders Agreement for the acquisition of 60% shares in a Canadian technology startup, where the existing founders will retain 40% ownership and continue managing the company, with specific provisions for anti-dilution and board representation."

Document background
The Share Purchase Agreement And Shareholders Agreement is a vital legal document used in Canadian business transactions where shares in a company are being transferred and ongoing relationships between shareholders need to be regulated. This document is particularly relevant when new shareholders are entering a company or existing shareholders are restructuring their relationships. It addresses both the immediate transaction details (such as purchase price, warranties, and completion mechanics) and the long-term governance structure (including shareholder rights, decision-making processes, and share transfer restrictions). The document must comply with both federal Canadian legislation (such as the Canada Business Corporations Act) and provincial requirements, making it essential for businesses operating across Canadian jurisdictions. It's commonly used in private company transactions, joint ventures, and investment deals where detailed governance arrangements are necessary.
Suggested Sections

1. Parties: Identification of all parties to the agreement, including full legal names and addresses

2. Background: Context of the transaction, including description of the company, current shareholding structure, and purpose of the agreement

3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and rules of interpretation

4. Sale and Purchase of Shares: Core transaction terms including number of shares, purchase price, and payment terms

5. Conditions Precedent: Conditions that must be satisfied before completion of the share purchase

6. Completion: Details of the completion process, timing, and deliverables

7. Warranties and Representations: Statements of fact and assurances given by the sellers regarding the company and shares

8. Management and Operation: Governance structure and decision-making processes for the company

9. Share Transfer Restrictions: Limitations on the transfer of shares and process for permitted transfers

10. Tag-Along and Drag-Along Rights: Rights of shareholders to participate in or be required to join in future sales

11. Pre-emptive Rights: Rights of existing shareholders to maintain their percentage ownership in future share issues

12. Confidentiality: Obligations regarding confidential information and trade secrets

13. Dispute Resolution: Process for resolving disputes between shareholders

14. General Provisions: Standard boilerplate clauses including notices, amendments, and governing law

Optional Sections

1. Anti-Dilution Protection: Protection for investors against future down rounds, used when dealing with preferred shares or venture capital investments

2. Board Composition: Specific provisions about board structure and appointment rights, used when shareholders want guaranteed board representation

3. Dividend Policy: Specific provisions about dividend distributions, used when shareholders want to establish clear dividend rights

4. Non-Compete and Non-Solicit: Restrictions on competitive activities, used when sellers will remain involved or there are specific competitive concerns

5. Put and Call Options: Rights to force purchase or sale of shares, used in joint ventures or when planning future exit scenarios

6. Strategic Decisions: List of matters requiring special majority or unanimous approval, used in joint ventures or when minority shareholders need additional protection

7. Information Rights: Specific rights to company information and reports, used when dealing with sophisticated investors or minority shareholders

Suggested Schedules

1. Share Capital Table: Current and post-completion shareholding structure

2. Warranties: Detailed list of warranties given by the sellers

3. Disclosure Letter: Exceptions and qualifications to the warranties

4. Company Information: Key details about the company including corporate information, material contracts, and assets

5. Completion Deliverables: List of documents and actions required at completion

6. Reserved Matters: List of decisions requiring special approval

7. Form of Share Transfer Form: Template for future share transfers

8. Deed of Adherence: Template for new shareholders to join the agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Relevant Industries

Technology

Manufacturing

Professional Services

Retail

Healthcare

Real Estate

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Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Compliance

Executive Leadership

Corporate Secretariat

Investment

Due Diligence

Risk Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Corporate Lawyer

Legal Counsel

Company Secretary

Investment Manager

Business Development Director

Mergers & Acquisitions Director

Corporate Development Manager

Board Member

Managing Director

Finance Director

Compliance Officer

Due Diligence Officer

Investment Banker

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Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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