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ICC Mergers and Acquisitions Model Contracts I - Share Purchase Agreement

This new model contract is the first in a series of ICC international Mergers & Acquisitions (M&A) agreements and also the first in a series of models dealing with the transfer of a company or business. The notion of M&A agreements, regards, broadly speaking, the transfer of a company or a business and covers a variety of contracts.

This first model is a Share Purchase Agreement (SPA) in its simplest form, i.e. the acquisition of the entire issued share capital of one company. It is intended to assist parties and lawyers who are not specialized in M&A contracts to draft a simple contract covering the most common issues involved.

This means that the model may not be appropriate for complex transactions nor for acquisitions of public companies. The SPA contract takes account of all these specifics and contains enough flexibility for the parties to work out special situations for themselves.This model contract is broken down into several parts including:

Pre-closing and post-closing undertakings
Price and closing
Warranties, breach of warranties
Indemnification, indemnification procedure and limitation of liability</ span>
Restrictive covenants
Confidentiality / announcement

Many issues (e.g. conditions that must be met before closing) are covered in the useful annexes and schedules.

Foreword	5
Part I
Introduction	7
1. The present model	7
2. The drafting technique used	7
3. The negociation and conclusion of SPAs: order of events	8
4. Possible adjustment of the price: closing accounts and earn-outs	9
5. The negociation of payment conditions	10
6. Warranties and disclosure letter	11
7. Knowledge of the buyer and breaches of warranty	12
8. Applicable law	14
Footnotes	16
Share Purchase Agreement	17
Article 1 - Definitions	17
Article 2 - Good faith and fair dealing	18
Article 3 - Object of the Agreement	18
Article 4 - Price	18
Article 5 - Conduct of business	18
Article 6 - Closing	19
Article 7 - Post-closing undertakings	19
Article 8 - Warranties	19
Article 9 - Seller's liability for warranty breach	19
Article 10 - Claim procedure	20
Article 11 - Limitation of liability of warranty breaches	21
Article 12 - Payment for breach	22
Article 13 - Restrictive covenants	23
Article 14 - Confidentiality/announcements	24
Article 15 - General	24
Article 16 - Notices	25
Article 17 - Resolution of disputes	25
Article 18 - Applicable law	26
Article 19 - Automatic inclusion under the present Agreement	26
Footnotes	27
Part II
Annex 1 - Company information	29
Annex 2 -Shares	30
Annex 3 -Pre-Closing Items	31
1. Antitrust matters	31
2. Consent of all regulatory authorities concerned	31
3. Third-parties conditions precedent	31
4. Obligations of the parties	32
Annex 4 -Checklist of Documents and/ or Items to be Delivered	34
1. Antitrust matters	34
2. Consent of all regulatory authorities concerned	34
3. Corporate matters	34
4. Third-parties conditions precedent	34
5. Obligations of the parties	35
Schedules	37
A.1 The Company	38
A.2 The Shares	39
A.3 The Seller	39
A.4 Accounts	40
A.5 Position since the Accounts date	40
A.6 Receivables	41
A.7 Taxes	41
A.8 Subsidiaries	42
A.9 Real Estate	42
A.10 Environmental matters	43
A.11 Asstes	44
A.12 Insurance	45
A.13 Bank Accounts	45
A.14 Conduct of Business, Commercial Contracts and Joint Ventures	46
A.15 Agency and Distribution Agreements	48
A.16 Personnel	48
A.17 Pensions	51
A.18 Intellectual Property Rights	51
A.19 Litigation	52
A.20 Grants	53
A.21 Spec ial Contracts and Arrangements	53
A.22 Transactions with Shareholders or Directors	54
A.23 Competition Matters	54
A.24 Information Technology Systems	55
A.25 Effects of this Agreement	56
Appendix: UNIDROIT Priciples of international commercial contracts	57
ICC at a Glance	73
Selected ICC publications	74

Foreword

By Maria Livanos Cattaui, former Secretary General of ICC

The ICC Model Share Purchase Agreement is the first in a series of model contracts dealing with "mergers and acquisitions" (the transfer of a company or business). It is a share purchase agreement in its simplest form, covering the acquisition of the entire issued share capital of one company.