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Shareholder Buyout Agreement
"I need a Shareholder Buyout Agreement for my tech startup where two founding shareholders are selling their combined 30% stake to the company for NZD 2.5 million, with completion planned for March 2025; the selling shareholders will also be stepping down from their executive positions."
1. Parties: Identification of the selling shareholder(s), purchasing shareholder(s) or company, and the company whose shares are being transferred
2. Background: Context of the buyout, current shareholding structure, and reason for the transaction
3. Definitions and Interpretation: Key terms used throughout the agreement and rules for interpretation
4. Sale and Purchase of Shares: Core transaction terms including number of shares, price, and basic mechanism of transfer
5. Purchase Price and Payment: Detailed payment terms, timing, and method of payment
6. Completion: Requirements and process for completing the share transfer, including timing and delivery of documents
7. Seller's Warranties: Warranties regarding share ownership, authority to sell, and company-related representations
8. Buyer's Warranties: Warranties regarding authority and capacity to purchase, and funding availability
9. Confidentiality: Obligations regarding confidential information and announcement of the transaction
10. Tax Matters: Tax-related obligations, indemnities, and arrangements
11. General Provisions: Standard boilerplate clauses including notices, governing law, and dispute resolution
1. Staged Payments: Required when the purchase price is to be paid in installments, including payment schedule and security arrangements
2. Employee Matters: Needed when the selling shareholder is also an employee/director and arrangements for their departure need to be documented
3. Non-Compete Provisions: Used when restrictions on the seller's future business activities are required
4. Continuing Obligations: Required when the seller retains certain obligations or responsibilities post-completion
5. Third Party Consents: Needed when the transfer requires approval from other shareholders, the board, or external parties
6. Earn-out Provisions: Used when part of the purchase price is contingent on future performance
7. Shareholder Loans: Required when existing shareholder loans need to be addressed as part of the transaction
1. Share Details: Details of shares being transferred including share numbers, classes, and certificates
2. Purchase Price Calculation: Detailed breakdown of how the purchase price was calculated
3. Completion Obligations: Checklist of documents and actions required for completion
4. Company Information: Key details about the company including assets, liabilities, and material contracts
5. Warranties: Detailed warranties and representations by the seller regarding the company and shares
6. Board Resolution: Copy of board resolution approving the share transfer (if required)
7. Share Transfer Forms: Pro-forma share transfer documents to be executed at completion
Authors
Professional Services
Manufacturing
Technology
Retail
Healthcare
Construction
Financial Services
Agriculture
Hospitality
Real Estate
Education
Transportation and Logistics
Media and Entertainment
Legal
Finance
Corporate Secretariat
Compliance
Executive Leadership
Board of Directors
Corporate Advisory
Investment
Risk Management
Corporate Development
Chief Executive Officer
Chief Financial Officer
Company Secretary
Legal Counsel
Corporate Lawyer
Finance Director
Managing Director
Board Member
Shareholder
Investment Manager
Corporate Advisory Manager
Business Development Director
Company Director
Compliance Officer
Financial Controller
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