Share purchase agreement
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SHARE PURCHASE AGREEMENT
This Share Purchase Agreement ("Agreement") is executed at Place of executionon this Day of execution day of Month of execution, Year of execution
1.BY AND BETWEEN
Seller name, a company incorporated under the Companies Act, 2013 / an individual, having its registered office / residing at Seller address, represented by Seller representative name, Seller representative designation (hereinafter referred to as the "SELLER", which expression shall include its successors and permitted assigns)OF THE ONE PART
Buyer name, a company incorporated under the Companies Act, 2013 / an individual, having its registered office / residing at Buyer address, represented by Buyer representative name, Buyer representative designation (hereinafter referred to as the "BUYER", which expression shall include its successors and permitted assigns)OF THE OTHER PART
1.The Seller and the Buyer are hereinafter individually referred to as a "Party" and collectively as the "Parties".
1.BACKGROUND
(a)Target company name (the "Company") is a company incorporated under the Companies Act, 2013, bearing CIN Target company CIN, with its registered office at Target company registered office address.
(b)The Seller is the legal and beneficial owner of Number of sale shares equity shares of face value Face value per share each, being Percentage of share capital being sold of the issued, subscribed and paid-up equity share capital of the Company (the "Sale Shares").
(c)The Buyer wishes to acquire the Sale Shares from the Seller on the terms set out in this Agreement.
1.PURCHASE AND SALE OF SHARES
2.Subject to the terms of this Agreement, the Seller agrees to sell, transfer and assign, and the Buyer agrees to purchase and acquire, the Sale Shares, free and clear of all liens, encumbrances, pledges, charges and other third-party rights, together with all rights attached thereto as on the Completion Date.
3.The effective date of transfer of ownership and risk in respect of the Sale Shares shall be the Completion Date defined in Clause 8.
1.PURCHASE CONSIDERATION
4.The aggregate consideration for the Sale Shares shall be Purchase consideration amount (Rupees Purchase consideration in words only) (the "Consideration"), to be paid as follows:
•On execution of this Agreement: Advance payment amount, being Advance percentage of consideration of the Consideration;
•On the Completion Date: the balance of Balance payment amount.
5.All payments shall be made by electronic transfer to the Seller's bank account Seller bank account details.
6.The parties shall, and shall procure that the Company shall, account for and discharge all applicable taxes including GST, if any, on the transaction in accordance with the CGST Act, 2017 and applicable State GST laws. Transfers of securities being exempt from GST under Notification No. 12/2017-Central Tax (Rate) as amended, no GST shall be levied on the transfer of Sale Shares to the extent such exemption applies.
7.The Seller shall be solely liable for capital gains tax arising on the sale of the Sale Shares. Tax deduction at source, if applicable under the Income-tax Act, 1961, shall be effected by the Buyer, and a lower/nil deduction certificate shall be obtained if available.
1.CONDITIONS PRECEDENT AND COMPLETION
8."Completion Date" shall mean the date falling Period from conditions precedent to completion from the fulfilment or waiver of the conditions precedent set out below, or such other date as the Parties may agree in writing.
9.The following are conditions precedent ("Conditions Precedent"):
•(a) Approval of the transaction by Regulatory approval body, if any, if required;
•(b) Waiver or consent of any third party required under the Company's material contracts;
•(c) Delivery of the corporate authorisations of each Party;
•(d) No material adverse change having occurred in the business, assets or financial condition of the Company;
•(e) Other conditions precedent.
10.On the Completion Date, the Seller shall deliver to the Buyer:
•(a) The original share certificates for the Sale Shares, duly stamped and endorsed/registered by the Company;
•(b) A valid share transfer deed in Form SH-4 under the Companies Act, 2013, duly stamped under the applicable Stamp Act;
•(c) Board resolution of the Company registering the transfer;
•(d) Updated register of members extract; and
•(e) Additional completion deliverables.
11.The Buyer shall pay the balance Consideration on the Completion Date against delivery of the documents in Clause 10.
1.SELLER'S REPRESENTATIONS AND WARRANTIES
12.The Seller represents and warrants to the Buyer, as of the date of this Agreement and the Completion Date, that:
•(a) It has full legal capacity, power and authority to execute this Agreement and to sell the Sale Shares;
•(b) It is the sole legal and beneficial owner of the Sale Shares, and the Sale Shares are free from all encumbrances;
•(c) This Agreement constitutes a legal, valid and binding obligation enforceable against it;
•(d) No proceedings for insolvency, winding-up or liquidation are pending against it;
•(e) The sale of the Sale Shares does not breach any law, contract, or order of any court or tribunal to which it is a party or bound;
•(f) Additional seller warranties.
13.The Seller further represents, warrants and undertakes in respect of the Company that, as on the date of this Agreement:
•(a) The Company is duly incorporated and validly existing under the Companies Act, 2013;
•(b) The audited/unaudited financial statements of the Company as at Date of Company's accounts (the "Accounts") are true and fair, and prepared in accordance with applicable law;
•(c) The authorised, issued, subscribed and paid-up share capital of the Company is as stated in the Accounts, and no share capital has been issued or agreed to be issued other than as disclosed;
•(d) The Company has no undisclosed liabilities, whether actual or contingent, other than those disclosed in the Accounts or in Disclosure letter reference;
•(e) All statutory dues, taxes, duties including GST, cess and municipal charges payable by the Company have been duly paid, and returns duly filed;
•(f) The Company has complied with the provisions of the Companies Act, 2013, and there are no outstanding prosecutions, penalties, or show-cause notices under it;
•(g) The Company has complied with all applicable labour laws including the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020, and no claims are pending;
•(h) All material contracts, intellectual property, licences and permits of the Company are valid and subsisting;
•(i) There is no litigation, arbitration or investigation pending or threatened against the Company, other than as disclosed;
•(j) Additional Company warranties.
14.The Seller's liability for breach of the warranties in this Agreement shall be subject to the following:
•(a) De minimis threshold: Warranty claim de minimis threshold;
•(b) Aggregate cap on liability: Liability cap amount or Liability cap percentage of consideration of the Consideration, whichever is lower;
•(c) Warranty claims to be notified within Period for warranty claims after completion of Completion;
•(d) Nothing in this Clause shall limit liability for fraud or fraudulent misrepresentation.
1.BUYER'S OBLIGATIONS
15.The Buyer represents and warrants that it has the funds necessary to pay the Consideration, and the authority to enter into and perform this Agreement.
16.The Buyer shall not, between execution and Completion, solicit or interfere with the employees of the Company, except with the Seller's prior written consent.
1.TRANSITION AND NON-COMPETE
17.For a period of Non-compete period from the Completion Date, the Seller shall not, directly or indirectly, within Non-compete territory, carry on or be engaged in any business competing with the business of the Company, being Description of the Company's business.
18.In consideration of the restraint in Clause 17, the Buyer shall pay the Seller Non-compete compensation amount. The Parties acknowledge that the restraint is reasonable and necessary to protect the Buyer's legitimate business interest, and enforceable in accordance with Section 27 read with Section 25 of the Indian Contract Act, 1872.
19.The Seller shall not, for Non-solicitation period from Completion, solicit employees or customers of the Company.
1.INDEMNITY
20.The Seller shall indemnify and hold harmless the Buyer and the Company from and against all losses, damages, claims, costs and expenses arising out of:
•(a) Breach of any representation, warranty or undertaking in this Agreement;
•(b) Any undisclosed liability of the Company relating to a period prior to the Completion Date;
•(c) Any tax liability of the Company relating to periods prior to the Completion Date;
•(d) Any pending litigation disclosed or undisclosed, to the extent it materialises.
21.The Buyer shall indemnify the Seller against liabilities arising from the conduct of the Company's business after the Completion Date.
22.Indemnification obligations shall survive for Indemnity survival period from the Completion Date, except in cases of fraud, which survive without limitation.
1.DISPUTE RESOLUTION AND GOVERNING LAW
23.This Agreement shall be governed by and construed in accordance with the laws of India.
24.Any dispute arising out of or in connection with this Agreement which the Parties fail to resolve amicably within Amicable dispute resolution period of notice shall be referred to arbitration under the Arbitration and Conciliation Act, 1996, by a sole arbitrator mutually appointed by the Parties, failing which by an arbitrator appointed in accordance with that Act. The seat and venue of arbitration shall be Arbitration seat and venue, and the language of arbitration shall be English.
25.Subject to Clause 24, the courts at Exclusive jurisdiction courts shall have exclusive jurisdiction.
26.Nothing in this Agreement shall prevent a Party from seeking urgent interim relief under Section 9 of the Arbitration and Conciliation Act, 1996, or other equitable relief from a competent court, including under the Specific Relief Act, 1963.
1.MISCELLANEOUS
27.Stamp duty and registration: The share transfer deed shall be stamped at the rate prescribed under Article 62 of Schedule I of the Indian Stamp Act, 1899, as amended and as applicable to the State of Applicable state for stamp duty, being 0.015% of the higher of the consideration or the face value of the shares. This Agreement itself shall be stamped as required under the applicable State Stamp Act; stamp duty shall be borne by Party bearing stamp duty. The Parties acknowledge that an agreement to sell immovable or intangible property requiring compulsory registration shall be registered in accordance with the Registration Act, 1908; the Parties agree that this Agreement, being for transfer of shares, requires no registration, but the share transfer shall be registered with the Company.
28.Entire agreement: This Agreement, together with Schedules and annexures forming the agreement, constitutes the entire agreement between the Parties in respect of its subject matter.
29.Amendment: No amendment shall be valid unless in writing and signed by both Parties.
30.Waiver: No failure or delay in exercising any right shall operate as a waiver thereof.
31.Severability: If any provision is held invalid, the remainder shall continue in full force.
32.Notices: Notices shall be in writing and delivered to the addresses stated above, by registered post with acknowledgment due, or email at Seller notice email and Buyer notice email respectively.
33.Counterparts: This Agreement may be executed in counterparts, each of which shall be an original, including by electronic signature, which shall be valid and binding.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the day, month and year first above written.
For and on behalf of the SELLERFor and on behalf of the BUYER
Signature: Signature:
Name: Seller signatory nameName: Buyer signatory name
Designation: Seller signatory designationDesignation: Buyer signatory designation
Date: Seller signature dateDate: Buyer signature date
Place: Seller signature placePlace: Buyer signature place
WITNESSES:
1. Name: First witness name, Address: First witness addressSignature:
2. Name: Second witness name, Address: Second witness addressSignature:
SCHEDULE I — DETAILS OF SALE SHARES
| Description | Details |
|---|---|
| Name of Company | Target company name |
| CIN | Target company CIN |
| Number of Sale Shares | Number of sale shares |
| Face value per share | Face value per share |
| Percentage of share capital | Percentage of share capital being sold |
| Distinctive numbers | Share distinctive numbers |
| Certificate numbers | Share certificate numbers |
SCHEDULE II — DISCLOSED LIABILITIES AND MATTERS
| No. | Disclosure |
|---|---|
| 1 | First disclosed matter |
| 2 | Second disclosed matter |