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Shareholder Purchase Agreement for the United States

Shareholder Purchase Agreement Template for United States

A Shareholder Purchase Agreement is a legally binding contract used in the United States that documents the sale and transfer of shares between parties. It outlines the terms and conditions of the share transfer, including purchase price, payment terms, representations and warranties, and any conditions precedent to closing. The agreement is governed by both federal securities laws and state-specific corporate laws, requiring careful consideration of regulatory compliance and disclosure requirements.

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What is a Shareholder Purchase Agreement?

A Shareholder Purchase Agreement is essential when transferring ownership of shares in a company. This document is commonly used in the United States for both private and public company transactions, though requirements vary by state jurisdiction. The agreement details crucial elements such as share valuation, payment terms, representations and warranties, and closing conditions. It must comply with federal securities laws, state-specific corporate regulations, and may require SEC approval depending on transaction size. The agreement protects both buyer and seller by clearly documenting the terms of the transfer and any ongoing obligations.

What sections should be included in a Shareholder Purchase Agreement?

1. Parties: Identification of seller(s), purchaser(s), and the company

2. Background: Context of the transaction and current shareholding structure

3. Definitions: Key terms used throughout the agreement

4. Sale and Purchase: Core transaction terms including shares being sold and purchase price

5. Completion: Timing and mechanics of the transfer

6. Warranties: Seller's representations regarding the shares and company

7. Governing Law: Applicable jurisdiction and dispute resolution

What sections are optional to include in a Shareholder Purchase Agreement?

1. Conditions Precedent: Pre-completion requirements and conditions that must be satisfied before the transaction can complete

2. Non-Compete: Restrictions on seller's future activities and competition limitations

3. Tag-Along Rights: Rights of other shareholders to join the sale on same terms

4. Drag-Along Rights: Rights of majority shareholders to force minority shareholders to join the sale

5. Confidentiality: Provisions regarding the treatment of confidential information

What schedules should be included in a Shareholder Purchase Agreement?

1. Schedule 1 - Share Details: Details of shares being transferred including share certificates and share capital structure

2. Schedule 2 - Company Information: Key company details, assets, liabilities, and material contracts

3. Schedule 3 - Warranties: Detailed warranties and representations by the seller

4. Schedule 4 - Disclosure Letter: Exceptions and qualifications to the warranties

5. Schedule 5 - Board Resolutions: Corporate approvals and board resolutions authorizing the transfer

6. Schedule 6 - Completion Deliverables: List of documents and actions required at completion

Authors

Alex Denne

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

Jurisdiction

United States

Publisher

Ƶ

Cost

Free to use
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Industries

Federal Securities Laws: Primary federal regulations including Securities Act of 1933, Securities Exchange Act of 1934, SEC Rules and Regulations, and Regulation D for private placements

Blue Sky Laws: State-specific securities regulations including registration requirements and disclosure obligations that vary by jurisdiction

Corporate Law: Includes Delaware General Corporation Law (if applicable) and state-specific corporate laws governing shareholder rights and obligations in the state of incorporation

Tax Laws: Internal Revenue Code provisions, state/local tax regulations, capital gains considerations, and transfer tax requirements affecting share transactions

Antitrust Laws: Hart-Scott-Rodino Act, Clayton Act, and Sherman Act provisions for ensuring compliance with competition laws, particularly for larger transactions

Uniform Commercial Code: Article 8 (Investment Securities) and Article 9 (Secured Transactions) governing securities transfers and secured interests

Contract Law: State-specific contract laws and Statute of Frauds requirements governing the formation and enforcement of agreements

Employment Laws: ERISA considerations and stock option/compensation regulations when share purchases involve employee transactions

Industry-Specific Regulations: Additional regulatory requirements specific to the company's industry, including stock exchange rules for public companies and banking regulations for financial institutions

Foreign Investment Laws: International investment regulations and cross-border transaction requirements when dealing with foreign parties

Teams

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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