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Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to drafting, reviewing, interpreting or resolving disputes concerning a share purchase agreement, you should seek professional assistance (e.g. make a post on Dynamic Lawyers).
In his first blog, Toronto Lawyer Michael Carabash talked about when share purchase agreements are used, an outline of a typical share purchase agreement, and went about the introductory clause. In his second blog, he discussed the background section of a share purchase agreement and the definitions and interpretation. In his third blog, he talked about the terms of the actual purchase and sale of the shares (e.g. price, closing costs, tax matters, etc.). In his fourth blog, he discussed the representations and warranties given by the parties. In his fifth blog, he talked about COVENANTS (conditions which the parties must do or refrain from doing during the time after the signing of the Share Purchase Agreement and leading up to and including the Closing Date). In his sixth blog, he discussed how the deal closes (closing conditions, closing place and deliveries). In his seventh blog,he talked about a really contentious matter in share purchase agreements: indemnification provisions. In this blog, he’ll be reviewing some of the general clauses you find near the end of the agreement.
General Terms
At the end of a typical Share Purchase Agreement, you usually find the following provisions:
Agreement and Counterparts
This section states how the parties can enter into this agreement (e.g. by fax, email, etc.). They can send each other copies of the agreement and all of the copies together shall constitute the same agreement. This is especially useful when you have a lot of parties signing the agreement. This section will also state that schedules, appendices, etc. are incorporated into the agreement.
Entire Agreement
This section will state that there is nothing beyond the four corners of the Agreement itself that will rule the subject matter of the agreement (i.e. the share purchase). If you want to have a separate confidentiality, non-compete, or non-solicitation agreement as part of this agreement, you don’t want to accidentally invalidate it! You want to make reference to it in this section.
Further Assurances
This section basically states that the parties shall right away do what they have to do in order to make this deal happen. Examples are: getting consents and approvals (from within and externally). It may also include paying off liabilities, liens, and other debts.
Governing Law
Normally, parties want to have their own local laws govern because it will be most convenient and cost-effective for them. But each jurisdiction has its own laws and parties should be careful of which legal jurisdictions are more favourable to them (i.e. as Vendor or Purchaser) based on judicial precedent.
Notice
Notice can be made using fax, email, postage pre-paid, personal service, etc. You’ll want to include the contact information for each party too.
Survival
Usually you see a provision stating that, if one provision of the agreement is struck down by a court of competent jurisdiction, then the rest of the agreement will however remain complete and valid.
Waiver
The bottom line is that, for a waiver of a right to be valid, the party entitled to benefit from it must expressly (not implicitly) give that waiver and that acquiescence or silence won’t count. And, a party that gives one waiver doesn’t mean it gives other waivers.
Remember: if you’d like to buy a text link on this blog post to your website,or if you are looking for Toronto Share Agreement Lawyer, you can contact Michael Carabash at www.dynamiclawyers.com for a quote.