Document background
The Preliminary Share Purchase Agreement is a crucial document used in the initial stages of M&A transactions under Swiss law when parties have reached preliminary understanding on key terms but require a formal framework for further negotiation and due diligence. It serves as a bridge between initial negotiations and the final Share Purchase Agreement, typically used in situations where parties need to establish binding commitments regarding exclusivity, confidentiality, and the negotiation process while maintaining flexibility on final terms. The document reflects Swiss legal requirements and commercial practices, particularly incorporating provisions from the Swiss Code of Obligations and corporate law. It typically includes preliminary agreement on purchase price mechanisms, conditions precedent, due diligence frameworks, and key commercial terms, while establishing clear timelines and responsibilities for moving towards a definitive agreement.
