Share Purchase Agreement Template
SHARE PURCHASE AGREEMENT
This Share Purchase Agreement (hereinafter referred to as this "Agreement") is made and entered into as of this [day] day of [month], [year] (the "Effective Date"), by and between:
[Seller Company Name], a corporation duly organized and validly existing under the laws of the State of [State], having its principal place of business at [address] (hereinafter referred to as the "Seller"); and
[Buyer Company Name], a corporation duly organized and validly existing under the laws of the State of [State], having its principal place of business at [address] (hereinafter referred to as the "Buyer").
The Seller and the Buyer are each hereinafter referred to individually as a "Party" and collectively as the "Parties."
WHEREAS, the Seller is the lawful record and beneficial owner of one hundred percent (100%) of the issued and outstanding shares of capital stock (the "Shares") of [Target Company Name], a corporation duly organized and validly existing under the laws of the State of [State] (the "Company");
WHEREAS, the Seller desires to sell, convey, transfer, assign and deliver to the Buyer, and the Buyer desires to purchase and acquire from the Seller, all of the Shares, upon the terms and subject to the conditions set forth in this Agreement;
WHEREAS, the Parties have engaged in arm's-length negotiations and have conducted such investigations and due diligence as each deems appropriate in connection with the transactions contemplated hereby;
NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, hereby agree as follows:
Definitions and Interpretation
"Affiliate" shall mean, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person, where the term "control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
"Business Day" shall mean any day other than a Saturday, a Sunday or a day on which commercial banks located in [City, State] are authorized or required by law to be closed for the conduct of regular banking business.
"Closing" shall mean the consummation of the sale and purchase of the Shares and the other transactions contemplated by this Agreement, to occur on the Closing Date in accordance with the provisions of this Agreement.
"Closing Date" shall mean the date on which the Closing actually takes place, as determined pursuant to the provisions of this Agreement.
"Encumbrance" shall mean any mortgage, pledge, lien, charge, security interest, claim, option, right of first refusal, preemptive right, restriction on transfer, voting trust or agreement, proxy, or any other encumbrance or restriction of any kind or nature whatsoever.
"Governmental Authority" shall mean any federal, state, local, municipal, foreign or other government or any governmental, regulatory, administrative or self-regulatory authority, agency, bureau, board, commission, court, judicial or arbitral body, department, political subdivision, tribunal or other instrumentality thereof.
"Material Adverse Effect" shall mean any event, change, condition, occurrence, development or effect that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the business, assets, liabilities, operations, financial condition or results of operations of the Company, taken as a whole.
"Person" shall mean any individual, corporation, limited liability company, partnership, trust, joint venture, association, unincorporated organization, Governmental Authority or any other entity or body.
The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Words importing the singular shall include the plural and vice versa. References to any gender shall include all other genders. The words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation."
Sale and Purchase of Shares
Subject to the terms and conditions of this Agreement, at the Closing, the Seller shall sell, convey, transfer, assign and deliver to the Buyer, and the Buyer shall purchase, acquire and accept from the Seller, all of the Shares, constituting one hundred percent (100%) of the issued and outstanding capital stock of the Company, free and clear of any and all Encumbrances.
The Shares to be sold and purchased hereunder shall consist of [number] shares of [class] stock, par value $[amount] per share, of the Company, representing the entirety of the Seller's right, title and interest in and to the capital stock of the Company.
The sale and transfer of the Shares shall include all rights, benefits and entitlements attaching thereto as of the Closing Date, including, without limitation, all rights to dividends, distributions, voting rights and all other economic and governance rights appurtenant thereto.
Title to, and risk of loss with respect to, the Shares shall pass from the Seller to the Buyer upon the Closing, subject to and conditioned upon the full and timely payment of the Purchase Price in accordance with the terms hereof.
The Seller hereby irrevocably waives any and all preemptive rights, rights of first refusal, rights of first offer, tag-along rights, drag-along rights, or other similar rights that the Seller may have or be entitled to under any shareholders' agreement, the Company's organizational documents, applicable law, or otherwise, with respect to the sale and transfer of the Shares contemplated by this Agreement.
At the Closing, the Seller shall deliver to the Buyer original stock certificates representing the Shares (if certificated), duly endorsed in blank or accompanied by duly executed stock powers, together with such other instruments of transfer and conveyance as the Buyer may reasonably request to vest in the Buyer good and marketable title to the Shares.
Purchase Price and Payment
The aggregate purchase price payable by the Buyer to the Seller in consideration of the sale, transfer and delivery of the Shares shall be [amount in words] United States Dollars (US$[amount]) (the "Purchase Price"), subject to any adjustments expressly provided for in this Agreement.
The Purchase Price shall be paid by the Buyer to the Seller in full on the Closing Date, in immediately available funds, by wire transfer to such bank account or accounts as the Seller shall designate in writing to the Buyer no less than three (3) Business Days prior to the Closing Date.
The Purchase Price shall be deemed to be inclusive of all amounts payable in respect of the Shares and the transactions contemplated hereby, and no further consideration shall be payable by the Buyer to the Seller except as expressly set forth herein.
Each Party shall bear and be responsible for its own taxes arising out of or in connection with the transactions contemplated by this Agreement, and each Party shall timely file all tax returns and pay all taxes required to be filed or paid by it in accordance with applicable law.
Any transfer, documentary, sales, use, stamp, registration and other such taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the transactions contemplated hereby shall be borne equally by the Seller and the Buyer, and the Parties shall cooperate in good faith to minimize such taxes to the extent lawfully permissible.
All payments to be made under this Agreement shall be made free and clear of, and without any deduction or withholding for or on account of, any taxes, unless such deduction or withholding is required by applicable law, in which case the Party making such payment shall be entitled to make such deduction or withholding and shall remit the amount so deducted or withheld to the appropriate Governmental Authority.
In the event any payment required to be made under this Agreement is not made when due, such unpaid amount shall bear interest from the due date until paid in full at a rate equal to the lesser of (i) [percentage] percent ([__]%) per annum, or (ii) the maximum rate permitted by applicable law.
Conditions Precedent to Closing
The obligations of the Buyer to consummate the transactions contemplated by this Agreement at the Closing shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions, any of which may be waived in writing by the Buyer in its sole discretion.
The representations and warranties of the Seller contained in this Agreement shall be true, correct and complete in all material respects as of the date hereof and as of the Closing Date as though made on and as of the Closing Date (except for representations and warranties that speak as of a specific date, which shall be true, correct and complete as of such specified date).
The Seller shall have performed, satisfied and complied in all material respects with all covenants, agreements and obligations required by this Agreement to be performed, satisfied or complied with by the Seller at or prior to the Closing.
No action, suit, proceeding, injunction, order or decree shall be pending or threatened before any Governmental Authority seeking to restrain, prohibit, invalidate or set aside, in whole or in part, the consummation of the transactions contemplated by this Agreement.
All consents, approvals, authorizations, permits and waivers of, and all filings and notifications with, any Governmental Authority or third party required for the consummation of the transactions contemplated by this Agreement shall have been duly obtained or made and shall be in full force and effect.
Since the date of this Agreement, there shall not have occurred any event, change, condition, occurrence, development or effect that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect.
The obligations of the Seller to consummate the transactions contemplated by this Agreement at the Closing shall be subject to the fulfillment, at or prior to the Closing, of the following conditions, any of which may be waived in writing by the Seller: (i) the representations and warranties of the Buyer shall be true and correct in all material respects as of the Closing Date; (ii) the Buyer shall have performed in all material respects all of its covenants and obligations hereunder; and (iii) the Buyer shall be ready, willing and able to pay the Purchase Price at Closing.
Closing
The Closing shall take place on the date that is [number] Business Days after the satisfaction or waiver of all of the conditions precedent set forth in this Agreement (other than those conditions which by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions at the Closing), or on such other date as the Parties may mutually agree in writing.
The Closing shall be held at the offices of [location], or remotely by exchange of documents and signatures (or their electronic counterparts) via electronic mail or such other means as the Parties may mutually agree.
At the Closing, the Seller shall deliver, or cause to be delivered, to the Buyer the following: (a) original stock certificates representing the Shares, duly endorsed in blank or accompanied by duly executed stock powers; (b) resignations, effective as of the Closing Date, of such directors and officers of the Company as the Buyer may have requested in writing; (c) the corporate books, records, minute books, stock ledgers and seal of the Company; (d) a certificate executed by a duly authorized officer of the Seller certifying as to the satisfaction of the conditions precedent applicable to the Seller; and (e) such other documents and instruments as the Buyer may reasonably request to effectuate the transactions contemplated hereby.
At the Closing, the Buyer shall deliver, or cause to be delivered, to the Seller the following: (a) the Purchase Price by wire transfer of immediately available funds in accordance with the provisions of this Agreement; (b) a certificate executed by a duly authorized officer of the Buyer certifying as to the satisfaction of the conditions precedent applicable to the Buyer; and (c) such other documents and instruments as the Seller may reasonably request to effectuate the transactions contemplated hereby.
All actions and transactions constituting the Closing shall be regarded as occurring simultaneously, and no action or transaction shall be deemed to have been completed and no document or certificate shall be deemed to have been delivered until all actions have been completed and all documents have been delivered.
If the Closing does not occur on or before [date] (the "Outside Date"), either Party, if not then in material breach of this Agreement, may terminate this Agreement in accordance with the termination provisions set forth herein.
Representations and Warranties of the Seller
The Seller hereby represents and warrants to the Buyer, as of the date hereof and as of the Closing Date, that the Seller is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as presently conducted, and to execute and deliver this Agreement and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by the Seller and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of the Seller, and this Agreement constitutes the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and general principles of equity.
The Seller is the sole legal and beneficial owner of the Shares, and has good and marketable title to the Shares, free and clear of all Encumbrances. The Shares constitute one hundred percent (100%) of the issued and outstanding capital stock of the Company. All of the Shares have been duly authorized, validly issued, fully paid and non-assessable, and were not issued in violation of any preemptive or similar rights.
The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, has all requisite corporate power and authority to carry on its business as presently conducted, and is duly qualified to do business in each jurisdiction where such qualification is required. There are no outstanding options, warrants, convertible securities, subscriptions, rights, agreements or commitments of any kind obligating the Company to issue, sell, deliver or transfer any shares of its capital stock or any other securities.
The financial statements of the Company previously delivered or made available to the Buyer have been prepared in accordance with generally accepted accounting principles consistently applied, and fairly present, in all material respects, the financial position, results of operations and cash flows of the Company as of the dates and for the periods indicated therein.
The Company is in material compliance with all applicable laws, rules, regulations, orders and decrees of any Governmental Authority. The Company holds all material licenses, permits, approvals and authorizations necessary for the lawful conduct of its business as presently conducted, and all such licenses, permits, approvals and authorizations are in full force and effect.
There is no action, suit, claim, proceeding or investigation pending or, to the knowledge of the Seller, threatened against the Company or the Seller that would reasonably be expected to have a Material Adverse Effect or that challenges or seeks to prevent, enjoin or materially delay the transactions contemplated by this Agreement.
The Company has filed all material tax returns required to be filed by it, and has paid all material taxes shown as due thereon or otherwise due and payable. There are no material tax audits, examinations, assessments, or proceedings pending or, to the knowledge of the Seller, threatened against the Company.
Except as expressly set forth in this Agreement, the Seller makes no other representations or warranties, express or implied, of any kind whatsoever with respect to the Seller, the Company, the Shares or the transactions contemplated hereby, and all other representations and warranties, whether statutory, common law or otherwise, are hereby expressly disclaimed.
Representations and Warranties of the Buyer
The Buyer hereby represents and warrants to the Seller, as of the date hereof and as of the Closing Date, that the Buyer is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by the Buyer and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of the Buyer, and this Agreement constitutes the legal, valid and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and general principles of equity.
The execution, delivery and performance by the Buyer of this Agreement and the consummation of the transactions contemplated hereby will not (i) violate any provision of the organizational documents of the Buyer, (ii) conflict with or result in a breach of any material contract or agreement to which the Buyer is a party, or (iii) violate any applicable law, rule, regulation, order or decree of any Governmental Authority.
The Buyer has, and at the Closing will have, sufficient funds immediately available to pay the Purchase Price and to consummate the transactions contemplated by this Agreement, and the Buyer's ability to consummate such transactions is not contingent upon obtaining any financing from any third party.
No consent, approval, authorization or order of, or filing with, any Governmental Authority or any other Person is required to be obtained or made by the Buyer in connection with the execution, delivery or performance of this Agreement, except for such consents, approvals, authorizations, orders or filings which have been obtained or made or which the failure to obtain or make would not materially impair the Buyer's ability to consummate the transactions contemplated hereby.
There is no action, suit, claim, proceeding or investigation pending or, to the knowledge of the Buyer, threatened against the Buyer that would reasonably be expected to materially impair the Buyer's ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.
The Buyer is acquiring the Shares for its own account, for investment purposes, and not with a view to or for sale in connection with any distribution thereof in violation of applicable securities laws. The Buyer acknowledges that it has conducted such independent investigation of the Company as it has deemed appropriate.
Covenants Pending Closing
From the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, the Seller shall cause the Company to conduct its business only in the ordinary course of business, consistent with past practice, and to use commercially reasonable efforts to preserve intact the business organization, assets, properties, operations and relationships of the Company.
Without limiting the generality of the foregoing, from the date of this Agreement until the Closing Date, the Seller shall not, and shall cause the Company not to, without the prior written consent of the Buyer (such consent not to be unreasonably withheld, conditioned or delayed): (i) amend the organizational documents of the Company; (ii) issue, sell or transfer any shares of capital stock or securities convertible into capital stock; (iii) declare or pay any dividends or distributions; (iv) incur any material indebtedness outside the ordinary course of business; (v) sell, lease, license or otherwise dispose of any material assets; or (vi) enter into any material contract outside the ordinary course of business.
The Seller shall provide the Buyer and its authorized representatives with reasonable access, during normal business hours and upon reasonable prior notice, to the properties, books, records, personnel and advisors of the Company for purposes of conducting such investigation and due diligence as the Buyer may reasonably require, subject to applicable law and customary confidentiality undertakings.
The Seller shall promptly notify the Buyer in writing of (i) any event, condition or circumstance that would reasonably be expected to cause any representation or warranty of the Seller contained herein to be untrue or inaccurate in any material respect, (ii) any material breach of any covenant of the Seller hereunder, or (iii) any event or occurrence that would reasonably be expected to result in a Material Adverse Effect.
Each Party shall use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable to consummate the transactions contemplated by this Agreement, including obtaining all required consents, approvals and authorizations of Governmental Authorities and third parties.
During the period from the date of this Agreement until the Closing or the termination hereof, the Seller shall not, and shall cause its Affiliates and representatives not to, directly or indirectly, solicit, initiate, encourage or entertain any inquiries, proposals or offers from any Person (other than the Buyer) relating to any acquisition of the Company, the Shares or any material assets of the Company, or engage in any discussions or negotiations with any such Person regarding any such transaction.
Post-Closing Covenants
From and after the Closing Date, each Party shall execute and deliver such further instruments of conveyance and transfer and take such additional actions as the other Party may reasonably request to effect, consummate, confirm or evidence the transactions contemplated by this Agreement.
The Seller shall, and shall cause its Affiliates to, cooperate with the Buyer and the Company, to the extent reasonably requested, in connection with any tax matters relating to pre-Closing periods, including the preparation and filing of tax returns, the conduct of tax audits or proceedings, and the response to any inquiries from Governmental Authorities.
The Seller shall, and shall cause its Affiliates to, promptly deliver to the Buyer or the Company any mail, communications, payments or other items received by the Seller or its Affiliates after the Closing Date that relate to the Company or its business, and shall promptly remit to the Buyer any payments received that are properly for the account of the Company.
Each Party shall preserve and retain all books, records, documents and other information relating to the Company and in such Party's possession, for a period of at least [number] years following the Closing Date, and shall provide the other Party with reasonable access thereto, during normal business hours and upon reasonable prior notice, as may be reasonably necessary in connection with any legitimate business purpose, including tax, accounting, litigation or regulatory matters.
The Seller shall use commercially reasonable efforts to assist the Buyer, at the Buyer's cost and expense, in the transition and transfer of the Company's business following the Closing, including by making available such personnel and providing such information as the Buyer may reasonably request for a reasonable period of time following the Closing Date.
Neither Party shall take any action after the Closing Date that would reasonably be expected to materially impair or diminish the benefits that the other Party is intended to derive from this Agreement and the transactions contemplated hereby.
Non-Competition and Non-Solicitation
In consideration of the sale of the Shares and the payment of the Purchase Price, the Seller hereby covenants and agrees that, for a period of [number] years commencing on the Closing Date (the "Restricted Period"), the Seller shall not, and shall cause its Affiliates not to, directly or indirectly, whether as owner, partner, shareholder, director, officer, employee, consultant, agent or otherwise, engage in, carry on, participate in, or have any financial interest in any business that competes with the business of the Company as conducted as of the Closing Date, within the geographic area of [territory].
During the Restricted Period, the Seller shall not, and shall cause its Affiliates not to, directly or indirectly, (i) solicit, induce, hire, engage or attempt to solicit, induce, hire or engage any employee, consultant, independent contractor or officer of the Company or the Buyer to terminate his or her employment or engagement with the Company or the Buyer, or (ii) hire or engage any such Person who was an employee, consultant, independent contractor or officer of the Company at any time during the twelve (12) months preceding such hiring or engagement.
During the Restricted Period, the Seller shall not, and shall cause its Affiliates not to, directly or indirectly, solicit, divert, take away or attempt to solicit, divert or take away any customer, client, supplier, vendor, licensee or business partner of the Company for purposes of offering products or services competitive with those offered by the Company, or otherwise interfere with the business relationships of the Company.
Notwithstanding the foregoing, the Seller shall not be prohibited from owning, solely as a passive investment, not more than two percent (2%) of the outstanding equity securities of any publicly traded corporation that may engage in a business competitive with that of the Company, provided that the Seller does not actively participate in the management or operations of such corporation.
The Seller acknowledges and agrees that the restrictions set forth in this section are reasonable in scope, duration and geographic area, and are necessary to protect the legitimate business interests of the Buyer and the Company, including the goodwill acquired by the Buyer pursuant to this Agreement.
The Seller further acknowledges that any breach of the covenants set forth in this section would cause irreparable harm to the Buyer for which monetary damages would be inadequate, and accordingly, the Buyer shall be entitled to seek specific performance, injunctive relief and other equitable remedies, without the necessity of posting bond or proving actual damages, in addition to any other remedies available at law or in equity.
If any provision of this section is held by a court of competent jurisdiction to be unenforceable due to its scope, duration or geographic area, such provision shall be deemed modified to the minimum extent necessary to render it enforceable, and the remaining provisions shall continue in full force and effect.
Indemnification
Subject to the limitations set forth in this Agreement, the Seller shall indemnify, defend and hold harmless the Buyer and its Affiliates (including, following the Closing, the Company), and their respective officers, directors, employees, agents, successors and assigns (collectively, the "Buyer Indemnified Parties"), from and against any and all losses, damages, liabilities, claims, demands, judgments, settlements, costs and expenses, including reasonable attorneys' fees and expenses (collectively, "Losses"), arising out of or resulting from (i) any breach or inaccuracy of any representation or warranty made by the Seller in this Agreement, (ii) any breach or non-fulfillment of any covenant or agreement of the Seller contained in this Agreement, or (iii) any pre-Closing taxes of the Company not reflected in the financial statements.
Subject to the limitations set forth in this Agreement, the Buyer shall indemnify, defend and hold harmless the Seller and its Affiliates and their respective officers, directors, employees, agents, successors and assigns (collectively, the "Seller Indemnified Parties") from and against any and all Losses arising out of or resulting from (i) any breach or inaccuracy of any representation or warranty made by the Buyer in this Agreement, or (ii) any breach or non-fulfillment of any covenant or agreement of the Buyer contained in this Agreement.
Any Person entitled to seek indemnification hereunder (an "Indemnified Party") shall give prompt written notice to the Party from whom indemnification is sought (the "Indemnifying Party") of any claim for which indemnification is sought, describing in reasonable detail the nature of the claim, the facts giving rise thereto and, to the extent known, the amount of Losses claimed; provided, however, that the failure to give such prompt notice shall not relieve the Indemnifying Party of its indemnification obligations hereunder except to the extent that it is actually prejudiced thereby.
In the case of any claim asserted by a third party against an Indemnified Party (a "Third Party Claim"), the Indemnifying Party shall have the right, upon written notice to the Indemnified Party within thirty (30) days after receipt of notice of such Third Party Claim, to assume the defense of such Third Party Claim with counsel reasonably acceptable to the Indemnified Party, at the Indemnifying Party's sole cost and expense.
The Indemnified Party shall cooperate reasonably with the Indemnifying Party in the defense of any Third Party Claim, and shall have the right to participate in the defense thereof with counsel of its own choosing, at its own expense. The Indemnifying Party shall not settle or compromise any Third Party Claim without the prior written consent of the Indemnified Party (such consent not to be unreasonably withheld, conditioned or delayed), unless such settlement includes a full and unconditional release of the Indemnified Party and does not impose any non-monetary obligations on the Indemnified Party.
Payments by an Indemnifying Party in respect of any Losses shall be reduced by the amount of any insurance proceeds or other third-party recoveries actually received by the Indemnified Party in respect of such Losses, net of all reasonable costs and expenses of collection and any resulting increases in insurance premiums.
Except in the case of fraud or intentional misrepresentation, the indemnification provisions set forth in this section shall constitute the sole and exclusive remedy of the Parties for any breach of or inaccuracy in any representation, warranty, covenant or agreement contained in this Agreement, and each Party hereby waives, to the fullest extent permitted by law, any and all other rights, claims and remedies that it may have against the other Party arising under or based upon this Agreement.
Limitations on Liability
The representations and warranties of the Parties contained in this Agreement shall survive the Closing for a period of [number] months following the Closing Date, except that (i) the representations and warranties relating to organization, authority, capitalization and title to the Shares (the "Fundamental Representations") shall survive indefinitely or until the expiration of the applicable statute of limitations, and (ii) the representations and warranties relating to tax matters shall survive until sixty (60) days after the expiration of the applicable statute of limitations.
The Seller shall not have any liability to the Buyer Indemnified Parties for any Losses arising under this Agreement unless and until the aggregate amount of all such Losses exceeds [amount] United States Dollars (US$[amount]) (the "Deductible"), in which event the Seller shall be liable only for the amount of Losses in excess of the Deductible; provided, however, that the Deductible shall not apply to Losses arising from breaches of Fundamental Representations, tax representations, fraud or intentional misrepresentation.
The aggregate maximum liability of the Seller to the Buyer Indemnified Parties for all Losses arising under this Agreement shall not exceed an amount equal to [percentage] percent ([__]%) of the Purchase Price (the "Cap"); provided, however, that the Cap shall not apply to Losses arising from breaches of Fundamental Representations, tax representations, fraud or intentional misrepresentation, in which case the aggregate maximum liability shall not exceed the Purchase Price.
The aggregate maximum liability of the Buyer to the Seller Indemnified Parties for all Losses arising under this Agreement shall not exceed an amount equal to the Purchase Price, except in cases of fraud or intentional misrepresentation.
In no event shall either Party be liable to the other Party for any special, incidental, indirect, consequential, punitive or exemplary damages, or for lost profits or lost business opportunities, except to the extent such damages are awarded to a third party in connection with a Third Party Claim for which indemnification is available hereunder.
Each Indemnified Party shall use commercially reasonable efforts to mitigate any Losses for which it seeks indemnification hereunder, and no Indemnified Party shall be entitled to indemnification for any Losses to the extent such Losses could reasonably have been avoided or mitigated through the exercise of such efforts.
No Party shall be entitled to recover more than once for the same Loss, and in determining the amount of any Loss, the amount shall be reduced by any tax benefit actually realized by the Indemnified Party as a result of the incurrence of such Loss.
Termination
This Agreement may be terminated at any time prior to the Closing: (a) by mutual written consent of the Parties; (b) by either Party upon written notice to the other Party if the Closing shall not have occurred on or before the Outside Date, provided that the terminating Party is not then in material breach of this Agreement; (c) by either Party upon written notice to the other Party if any Governmental Authority shall have issued a final, non-appealable order, decree or ruling permanently restraining or prohibiting the consummation of the transactions contemplated hereby.
Either Party may terminate this Agreement by written notice to the other Party if the other Party has materially breached any representation, warranty, covenant or agreement contained in this Agreement, and such breach (i) would cause any of the conditions precedent to Closing not to be satisfied, and (ii) is not cured within thirty (30) days after written notice thereof is given to the breaching Party, or is incapable of being cured within such period.
In the event of the termination of this Agreement pursuant to the provisions hereof, this Agreement shall forthwith become null and void and of no further force or effect, and there shall be no liability on the part of either Party, except that (i) the provisions relating to confidentiality, notices, governing law, dispute resolution and this termination clause shall survive such termination, and (ii) nothing herein shall relieve any Party from liability for any willful or intentional breach of this Agreement occurring prior to such termination.
The right of termination set forth in this section is in addition to, and not in lieu of, any other rights and remedies available to the Parties at law or in equity for breach of this Agreement.
The Party seeking to terminate this Agreement shall provide written notice of termination to the other Party, specifying in reasonable detail the basis for such termination and the provision of this Agreement under which such termination is being effected.
Upon termination of this Agreement, each Party shall promptly return to the other Party, or destroy, all confidential information of the other Party in its possession, and shall certify such return or destruction in writing upon the other Party's request.
Confidentiality and Public Announcements
Each Party acknowledges that in connection with this Agreement and the transactions contemplated hereby, such Party may have received or may receive confidential and proprietary information of the other Party and the Company, including, without limitation, trade secrets, customer and supplier lists, financial information, business plans, pricing information, technical information and other proprietary information (collectively, "Confidential Information").
Each Party agrees that it shall, and shall cause its Affiliates and representatives to, (i) hold all Confidential Information of the other Party in strict confidence, (ii) use such Confidential Information solely for the purposes of this Agreement and the transactions contemplated hereby, and (iii) not disclose any such Confidential Information to any third party without the prior written consent of the disclosing Party, except as expressly permitted hereunder.
The obligations of confidentiality set forth in this section shall not apply to any information that (i) is or becomes generally available to the public other than as a result of a breach of this Agreement by the receiving Party, (ii) was known to the receiving Party on a non-confidential basis prior to its disclosure, (iii) becomes available to the receiving Party on a non-confidential basis from a source other than the disclosing Party that is not bound by any confidentiality obligation, or (iv) is independently developed by the receiving Party without reference to or use of the disclosing Party's Confidential Information.
If a receiving Party is legally required to disclose any Confidential Information by subpoena, court order or other legal process, such Party shall, to the extent legally permissible, provide prompt written notice to the disclosing Party so that the disclosing Party may seek a protective order or other appropriate remedy, and shall cooperate reasonably with the disclosing Party at the disclosing Party's expense in connection therewith.
Neither Party shall issue any press release or make any public announcement concerning this Agreement or the transactions contemplated hereby without the prior written consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed), except as may be required by applicable law or the rules of any securities exchange on which such Party's securities are listed, in which case the Party required to make such disclosure shall, to the extent practicable, consult with the other Party prior to making such disclosure.
The confidentiality obligations set forth in this section shall survive the termination or expiration of this Agreement for a period of [number] years.
Notices
All notices, requests, demands, consents and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given (i) upon personal delivery, (ii) upon receipt if sent by nationally recognized overnight courier service, (iii) three (3) Business Days after being deposited in the United States mail, postage prepaid, certified or registered mail with return receipt requested, or (iv) upon confirmation of receipt if sent by electronic mail, provided that a copy is also sent by one of the other methods specified herein.
Notices to the Seller shall be addressed to: [Seller Name], [address], Attention: [name/title], Email: [email address], with a copy (which shall not constitute notice) to: [Seller's counsel name and address].
Notices to the Buyer shall be addressed to: [Buyer Name], [address], Attention: [name/title], Email: [email address], with a copy (which shall not constitute notice) to: [Buyer's counsel name and address].
Either Party may change its address or other contact information for purposes of notices hereunder by providing written notice to the other Party in accordance with this section, such change to be effective upon the receipt by the other Party of such notice.
All notices shall be in the English language. Any notice given on a day that is not a Business Day, or after 5:00 p.m. local time at the place of receipt on a Business Day, shall be deemed to have been given on the next succeeding Business Day.
The provisions of this section shall not apply to the service of process in connection with any legal proceeding, which shall be governed by applicable law.
Governing Law and Dispute Resolution
This Agreement, including its formation, validity, interpretation, performance and enforcement, shall be governed by and construed in accordance with the laws of the State of [State], United States of America, without giving effect to any choice of law or conflict of law provisions that would cause the application of the laws of any jurisdiction other than the State of [State].
Any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof (a "Dispute"), shall first be addressed through good-faith negotiations between senior executives of the Parties, who shall meet (whether in person or by telephone or video conference) within thirty (30) days after written notice from one Party to the other requesting such negotiations.
If the Dispute is not resolved through such negotiations within sixty (60) days after the initial notice, then the Dispute shall be finally resolved by binding arbitration administered by [arbitration institution] in accordance with its then-prevailing rules, by [one (1) or three (3)] arbitrator(s) appointed in accordance with such rules. The seat of arbitration shall be [City, State], and the language of arbitration shall be English.
The award rendered by the arbitrator(s) shall be final and binding upon the Parties, and judgment thereon may be entered in any court of competent jurisdiction. The costs of arbitration, including the fees of the arbitrator(s), shall be borne as determined by the arbitrator(s), who shall also be empowered to award reasonable attorneys' fees and costs to the prevailing Party.
Notwithstanding the foregoing, each Party shall have the right to seek interim or provisional relief, including temporary restraining orders, preliminary injunctions and specific performance, from any court of competent jurisdiction, in aid of arbitration or to preserve the status quo pending resolution of a Dispute.
Each Party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts located in [County, State] for the purposes of any judicial proceeding permitted under this Agreement and waives any objection based on venue or forum non conveniens.
EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Miscellaneous
This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, representations, warranties, understandings and negotiations, whether written or oral, with respect to such subject matter.
This Agreement may not be amended, modified or supplemented except by a written instrument duly executed by both Parties. No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by the Party waiving such provision, and no such waiver shall constitute a waiver of any other provision or of the same provision on another occasion.
Neither Party may assign this Agreement or any of its rights or obligations hereunder without the prior written consent of the other Party, except that the Buyer may assign this Agreement, in whole or in part, to any Affiliate or to any successor by merger, consolidation or sale of all or substantially all of its assets, without such consent. Any purported assignment in violation of this section shall be null and void. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns.
If any provision of this Agreement is held by a court of competent jurisdiction or arbitrator to be invalid, illegal or unenforceable, such provision shall be deemed modified to the minimum extent necessary to render it valid, legal and enforceable, and the remaining provisions of this Agreement shall continue in full force and effect.
Except as expressly provided herein, each Party shall bear its own costs and expenses (including fees and expenses of legal counsel, accountants, investment bankers and other advisors) incurred in connection with the negotiation, preparation, execution and performance of this Agreement and the transactions contemplated hereby.
This Agreement is intended solely for the benefit of the Parties and their respective permitted successors and assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by facsimile, electronic mail (in PDF or similar format), or other means of electronic transmission shall be as effective as delivery of a manually executed counterpart hereof.
The relationship of the Parties under this Agreement is that of independent contracting parties, and nothing in this Agreement shall be deemed to create any partnership, joint venture, agency, fiduciary or employment relationship between the Parties.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date first above written.
SELLER:
[Seller Company Name]
By: ______________________________
Name: [name]
Title: [title]
Date: [date]
Address: [address]
Email: [email]
BUYER:
[Buyer Company Name]
By: ______________________________
Name: [name]
Title: [title]
Date: [date]
Address: [address]
Email: [email]