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Purchase Of Shares Agreement for Ireland

Purchase Of Shares Agreement Template for Ireland

A comprehensive legal document governed by Irish law that formalizes the sale and purchase of shares in a company. This agreement outlines the terms and conditions of the share transfer, including the purchase price, payment terms, warranties, indemnities, and completion mechanics. It incorporates specific requirements under Irish company law and financial regulations, ensuring compliance with local statutory requirements while protecting the interests of both buyers and sellers. The document typically includes detailed provisions for due diligence findings, regulatory approvals, and post-completion obligations.

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What is a Purchase Of Shares Agreement?

The Purchase Of Shares Agreement is a crucial legal document used in corporate transactions under Irish law when one party wishes to acquire ownership of a company through the purchase of its shares from existing shareholders. This document is essential for both private and public company transactions, though its complexity may vary depending on the size and nature of the deal. It captures all material terms of the transaction, including purchase price, payment structure, warranties about the company's condition, indemnities, and completion mechanics. The agreement must comply with Irish Companies Act 2014 requirements and other relevant legislation, while also addressing practical commercial concerns such as tax implications and regulatory approvals. It's particularly important in merger and acquisition transactions, corporate restructurings, and investment deals, providing legal certainty and risk allocation between the parties involved.

What sections should be included in a Purchase Of Shares Agreement?

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

2. Background: Context of the transaction, including brief description of the target company and purpose of the agreement

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

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

5. Consideration: Details of the purchase price, payment terms, and any price adjustment mechanisms

6. Conditions Precedent: Any conditions that must be satisfied before completion can occur

7. Pre-Completion Obligations: Obligations of parties between signing and completion

8. Completion: Mechanics of completion, including timing, location, and deliverables

9. Warranties: Seller's warranties regarding the shares, target company, and business

10. Limitations on Liability: Limitations on seller's liability under the warranties and indemnities

11. Tax Covenant: Specific provisions relating to tax liabilities and indemnities

12. Confidentiality: Obligations regarding confidential information

13. Announcements: Provisions regarding public announcements about the transaction

14. Further Assurance: Obligations to take further actions necessary to give effect to the agreement

15. Assignment: Restrictions on assignment of rights under the agreement

16. Notices: Process for giving formal notices under the agreement

17. Governing Law and Jurisdiction: Specification of Irish law as governing law and jurisdiction for disputes

What sections are optional to include in a Purchase Of Shares Agreement?

1. Earn-out Provisions: Used when part of the purchase price is contingent on future performance

2. Non-Competition Covenants: Required when sellers need to be restricted from competing post-completion

3. Security for Claims: Used when specific security is required for warranty or indemnity claims

4. Intellectual Property Rights: Detailed provisions when IP is a significant asset of the target company

5. Employee Matters: Specific provisions when employment issues are material to the transaction

6. Property Matters: Detailed provisions when real property is material to the target company

7. Data Protection: Extended provisions when the target company processes significant personal data

8. Environmental Matters: Required when environmental risks are material to the business

9. Escrow Arrangements: Used when part of the consideration is held in escrow

10. Break Fee: Provisions for payment if the transaction fails to complete under certain circumstances

What schedules should be included in a Purchase Of Shares Agreement?

1. Details of the Target Company: Corporate information, share capital structure, and subsidiaries

2. Warranties: Detailed warranties given by the seller

3. Properties: Details of all properties owned or leased by the target company

4. Intellectual Property: List of all IP owned or licensed by the target company

5. Material Contracts: Summary of key commercial contracts

6. Employees: Details of employees and their terms of employment

7. Completion Obligations: Detailed list of completion deliverables

8. Tax Covenant: Detailed tax indemnity provisions

9. Disclosed Documents: List of documents disclosed against the warranties

10. Form of Resignation Letters: Template resignation letters for outgoing directors

11. Form of Board Resolutions: Template board resolutions for completion

12. Completion Accounts: Format and principles for preparation of completion accounts

Authors

Alex Denne

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

Jurisdiction

Ireland

Publisher

Ƶ

Cost

Free to use

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