Share Purchase Agreement

THIS AGREEMENT is made on [agreement date]

PARTIES

The several persons whose names and addresses are set out in Schedule 1 (together the Sellers) and

[buyer name] whose principal address is [buyer address] (the Buyer),

(each of the Sellers and the Buyer being a Party and together the Sellers and the Buyer are the Parties).

BACKGROUND

The Company (as defined below) is a private company limited by shares and is incorporated in [england and wales]. Details of the Company are set out in Schedule 2.

The Sellers are the legal and beneficial owners of the Sale Shares (as defined below), being in aggregate the entire allotted and issued share capital of the Company.

The Sellers have agreed to sell and the Buyer has agreed to purchase the Sale Shares on the terms of this Agreement.

THE PARTIES AGREE:

Definitions and interpretation

In this Agreement unless the context otherwise requires:

Advisory Agreement: has the meaning assigned in clause 10.3.;

Business Day: means a day, other than a Saturday, Sunday or public holiday, on which clearing banks are open for non-automated commercial business in the City of London and Business Days means more than one of them;

Claim: means a claim by the Buyer for a breach of the provisions of this Agreement;

Company: means [acquired company] (company registration number [company registration number]) further details of which are set out in Schedule 2;

Completion: means completion of the matters described in this Agreement (including the sale and purchase of the Sale Shares) by the performance by the Parties of their respective obligations in accordance with clause 6;

Completion Date: means the date that is [completion date e.g. 30 days] after the Effective Date;

Confidential Information: means:

(a) in relation to either Party information that a Party has acquired that is confidential in nature concerning the other Party (including, without limitation, its business, affairs, customers, clients, suppliers, plans or strategy) and any information developed by either Party in performing its obligations under, or otherwise pursuant to this Agreement; and

(b) in relation to Sellers any scientific or technical information, design, process, procedure, formula, or improvement included in the Software that is valuable, not generally known in the industry, and gives the owner of the Software a competitive advantage over those competitors who do not know or use such information

Consideration: means the cash sum of [acquisition price - e.g .$100,000 (one hundred thousand united states dollars)];

Distribution Amount: means the sum of money held in the Company’s accounts on the Effective Date less the Settlement Amount;

Effective Date: means the date of execution of this Agreement set forth first above;

Encumbrance: means any mortgage, claim, charge (fixed or floating), pledge, lien, hypothecation, guarantee, right of set-off, trust, assignment, right of first refusal, right of pre-emption, option, restriction or other encumbrance or any legal or equitable third party right or interest including any security interest of any kind or any type of preferential arrangement (or any like agreement or arrangement creating any of the same or having similar effect) and Encumbrances means more than one of them;

Long-Stop Date has the meaning assigned in clause 4.2.;

Nominated Account means the account of the Seller 1, the details of which are provided in Schedule 1;

Sale Shares means the 11,952 ordinary shares of £0,00001 nominal value each in the capital of the Company, being the entire allotted and issued share capital of the Company;

Seller 1: has the meaning assigned in Schedule 1;

Seller 2: has the meaning assigned in Schedule 1;

Seller 3: has the meaning assigned in Schedule 1;

Seller 4: has the meaning assigned in Schedule 1;

Settlement Agreements: means the Settlement Agreements between the Company and the following contributors to the Software: [add settlement agreements needed] for up to the Settlement Amount in total;

Settlement Amount: means $20,000;

Software: means the [xxx software tool and all other products offered by websitedomain.com, including collectively, the full retail and all other versions of the software in source code and object code forms together with any and all improvements, corrections, modifications, updates, enhancements, or other changes, whether or not included in the current retail version, plus all System Documentation and User Documentation;

System Documentation: means all documentation used in the development and updating of the Software, including but not limited to, design and/or development specifications, error reports, and related correspondence and memoranda.

User Documentation: means the end-user instruction manual that usually accompanies the Software instructing end-users in the use of the Software.

In this Agreement, unless the context otherwise requires:

references to clauses, sub-clauses and/or Schedules are to clauses and/or sub-clauses of and Schedules to this Agreement and references in a Schedule or part of a Schedule are to a paragraph of that Schedule or that part of that Schedule;

references to legislation include any amendment, modification, consolidation or re-enactment of it before the date of this Agreement;

If any provisions of the Schedules conflict with any of the other provisions of this Agreement that are not contained in the Schedules, the provisions of this Agreement that are not contained in the Schedules shall take precedence.

Sale and purchase of Sale Shares

At Completion, the Sellers shall sell, or procure the sale of, the Sale Shares to the Buyer free from Encumbrances and third party claims with full title guarantee and the Buyer shall purchase from the Sellers the Sale Shares together with all rights and benefits attached or accruing to them as at Completion.

The Buyer shall be entitled to all rights and advantages accruing to the Sale Shares including dividends, distributions and any return of capital declared, paid or made in respect of the Sale Shares, on or after the Completion Date.

Each of the Sellers hereby irrevocably waives all rights (including pre-emption rights) which they have had and/or may have (at any time) in relation to the Sale Shares (pursuant to the articles of association of the Company or otherwise) to the extent necessary to permit the sale and purchase of the Sale Shares in accordance with this Agreement and the registration of the Buyer as the holder of the Sale Shares and consent to the transfer of the Sale Shares to the Buyer.

The Company is sold on a “cash free” basis as of the Effective Date meaning that prior to the Completion Date the Sellers will in addition to usual business expenditures of the Company (a) arrange for the Company to make payments under the Settlement Agreements and (b) distribute as dividend or otherwise withdraw from the Company the Distribution Amount. For the avoidance of doubt, none of the funds coming into the Company’s accounts or paid to it otherwise after the Effective Date shall be used for payments under the Settlement Agreements or included in the Distribution Amount.

Consideration

The Consideration for the Sale Shares shall be paid by the Buyer to the Sellers in accordance with this clause 3.

The Buyer shall pay the Consideration to the Seller 1 by way of electronic transfer of funds for same day value into the Nominated Account for further distribution between other Sellers. The Seller 2, Seller 3 and Seller 4 hereby specifically consent that the payment by the Buyer of the Consideration as set out herein shall constitute a good and valuable consideration and proper discharge by the Buyer of its obligation under clause 3.1. above.

The Consideration shall be paid as follows:

[first amount on day 1, e.g. $100,000 (one hundred thousand united states dollars)] on the Effective Date;

[next amount on day 1, e.g. $50,000 (fifty thousand united states dollars)] on Completion.

Conditional completion

Completion is conditional on the following conditions (the Conditions) being satisfied or waived in accordance with clause 4.7:

subject to payment by the Buyer of the part of Consideration set out in clause 3.3.1., the Buyer being given granted full access to all elements of the Company without restriction;

subject to payment by the Buyer of the part of Consideration set out in clause 3.3.1., delivery to the Buyer via transfer of control of the [company name] code repository on [code repository - e.g. github] and a copy of the code on [document sharing platform - e.g. google drive folder] of (1) the Sellers’ entire inventory of copies of the Software in object code form; and (2) all existing System Documentation and User Documentation pertaining to the Software,

The Sellers and the Buyer shall use their respective reasonable endeavours to procure that the Conditions set out in clause 4.1 are satisfied no later than 2 pm on [long stop date] or such later date as may be agreed between the Sellers and the Buyer (the Long-Stop Date).

If at any time either the Sellers or the Buyer become aware of any of the following they shall immediately inform the other in writing:

of any fact or circumstance that might prevent any of the Conditions being satisfied; or

that any of the Conditions have been satisfied;

If any of the Conditions have not been satisfied or waived by the Buyer by 2 pm on the Long-Stop Date and the Buyer has not given notice to extend the Long-Stop Date, this Agreement shall terminate automatically at 4 pm on the Long-Stop Date.

If this Agreement terminates pursuant to clause 4.4:

The Seller 1 shall immediately repay the Buyer the part of the Consideration received in accordance with the clause 3.3.1. hereof;

The rights granted to the Buyer in accordance with clauses 4.1.1. and 4.1.2. shall immediately cease and the Buyer shall have no further rights in the Software,

Each Party’s other rights and obligations cease immediately on termination, save that clauses 1 (Definitions and interpretation), 10.6 (Entire Agreement), 11 (Notices), 12 (Confidential Information) and 13 (Governing Law and Jurisdiction) shall remain in full force and effect and termination shall not affect any Party’s accrued rights and obligations at the date of termination (including for breach of this Agreement).

Pre-Completion Undertakings

The Sellers covenant with the Buyer that, without the prior written consent of the Buyer or except as required under this Agreement, they shall procure that between the date of this Agreement and Completion the Company shall not take, do, carry out, permit or agree to do any of the following actions or matters:

create, increase, reduce, reorganise, consolidate, cancel, redeem or otherwise alter the rights attaching to its share or loan capital;

issue any convertible securities, convertible loan stock, options or warrants or other similar instrument which confers on any person the right to subscribe for shares or loan capital or otherwise grant to any person any right to share in the income or profits of the Company;

pass any resolution or petition for winding-up, resolve to enter into a scheme of arrangement with its creditors, apply for any administration order, appoint any receiver or liquidator or any other event analogous to any of these;

sell, dispose of, transfer, licence, lease or grant any option in respect of all or a material part of its undertaking, business or assets except in the ordinary course of business;

subject to provisions of clause 2.4. otherwise use their powers to compel the Company to take any actions other than in accordance with this Agreement.

The Sellers covenant with the Buyer that they shall not, between the date of this Agreement and Completion, dispose of any interest in, or grant any Encumbrance over, the Sale Shares or any of them.

The Seller 1 covenants with the Buyer that he shall not distribute the portion of the Consideration received in accordance with clause 3.3.1. to the other Sellers prior to Completion.

The Buyer covenants with the Sellers that, between the date of this Agreement and Completion, unless they have the prior written consent of the Sellers or except as required by this Agreement, it shall use reasonable endeavours to procure that the Company shall carry on its business only in the ordinary and usual course as carried on prior to the date of this Agreement and shall not change the general nature or extent of its business or any part of it in any material respect.

Completion

Unless this Agreement has been previously terminated in accordance with its terms, Completion shall take place on the Completion Date by the electronic exchange of documents and signatures.

At Completion, the Sellers shall:

deliver, procure the delivery of, or make available to the Buyer, the documents set out in Schedule 3, Part A; and

procure that a duly convened and quorate board meeting of the Company shall be held at which the matters set out in Schedule 3, Part B shall be transacted.

At Completion, the Buyer shall:

pay the portion of the Consideration set out in clause 3.3.2. to the Seller 1; and

duly execute and deliver those documents to which it is expressed to be a party.

At Completion the Buyer and Seller 1 shall enter into the Advisory Agreement.

If the Buyer shall be in default of any of its obligations under clause 6.3 and Completion is delayed as a result of such default, the Buyer shall be liable to pay interest on the total amount of consideration payable under this clause 6, such interest to accrue from the due date up to the date of actual payment at the rate of 6% above the base rate from time to time of Barclays Bank plc.

Warranties and Disclosure

The Sellers warrant and represent to the Buyer that, save as disclosed to the Buyer in the clause 7.2. below:

they are the sole legal and beneficial owners and the sole registered holders of the Sale Shares;

they are entitled to sell, or procure the sale of, and transfer the full legal and beneficial interest in the Sale Shares to the Buyer on the terms of this Agreement, without obtaining the consent or approval of any third party;

the Sale Shares comprise the entire issued and allotted share capital of the Company;

no shares in the capital of the Company have at any time been issued, and no transfers of shares in the capital of the Company have been registered, otherwise than in accordance with the articles of association (or equivalent documents) of the Company for the time being, the Companies Act 1985 and the Companies Act 2006 and further all necessary consents and approvals have been obtained for each issue and transfer of such shares;

the Sale Shares are fully paid or credited as fully paid and were not allotted at a discount;

there is no Encumbrance on, over or affecting the Sale Shares and no person has any conditional or absolute option, right of pre-emption or conversion, right to put, security interest over, right to acquire and/or the right to call for the transfer, allotment or issue of any share or loan capital of the Company or any right or interest therein and there is no agreement or other arrangement to give or create any of the foregoing and/or an Encumbrance and no person has claimed to be entitled to the same;

the Company holds complete and exclusive right, title, and interest in and to all tangible and intangible property rights existing in the Software;

the Software has been developed by the Company entirely through its own efforts for its own account and the Software is free and clear of all liens, claims, encumbrances, rights, or equities whatsoever of any third party;

the Software does not infringe any patent, copyright, or trade secret of any third party;

the Software is fully eligible for protection under applicable copyright law and has not been forfeited to the public domain; and that the source code and system specifications for the Software have been maintained in confidence;

all personnel, including employees, agents, consultants, and contractors, who have contributed to or participated in the conception and development of the Software either (1) have been party to a work-for-hire relationship with the Company that has accorded the Company full, effective, and exclusive original ownership of all tangible and intangible property arising with respect to the Software or (2) have executed appropriate instruments of assignment in favour of the Company as assignee that have conveyed to the Company full, effective, and exclusive ownership of all tangible and intangible property thereby arising with respect to the Software;

there are no agreements or arrangements in effect with respect to the marketing, distribution, licensing, or promotion of the Software by any independent salesperson, distributor, sub-licensor, or other remarketer or sales organization;

for a period of 30 days from Completion the Software will conform in all material respects to the functional specifications.

The following information shall be disclosed or deemed disclosed to the Buyer:

the contents of this Agreement and any other agreements or documentation entered into upon execution or pursuant to this Agreement and all matters and transactions contemplated by or referred to in them;

all information and matters which would be revealed by an online search of the file of the Company at Companies House;

the facts disclosed to the Buyer during the negotiation and preparation of this Agreement including:

The Company and Software have not been actively developed since 2017 and therefore software code libraries may not be up to date;

The Company’s accounts have not been completed yet for the period ending April 2022.

Subject to clause 7.1, the Seller gives no warranties hereunder in respect of the Sale Shares or the Company and it is agreed that all warranties implied by law in respect of the Sale Shares shall be excluded so far as permitted by applicable law.

Restrictive covenants and protection of goodwill

In order to ensure that the Buyer, among other things, obtains the full benefit and value of the goodwill and relationships of the Company, the Sellers undertake to the Buyer (for the benefit of the Buyer and as trustee for the benefit of the Company) that (except with the prior written consent of the Buyer), they shall not, whether by themselves, through their employees, agents or otherwise and whether on their own account or in conjunction with others, directly or indirectly:

for a period of 1 year after the Completion Date (except as the owner of securities dealt on a recognised investment exchange (within the meaning of FSMA) not exceeding 3% in nominal value of the securities of that class) be economically or otherwise concerned with, engaged, interested, connected with or employed in, any business, person, undertaking, company or firm supplying goods or services of a type supplied by the Company or in competition with the Company as at the Completion Date in any geographical area in which the Company carries on its business or any part of it;

for a period of 1 year after the Completion Date solicit, entice, employ, seek to employ, conclude any contract for services with, offer or procure or facilitate the making of any such offer by any other person, any person who was an officer or employed in a skilled or managerial position by the Company at any time during three months prior to the Completion Date.

The Sellers agree and acknowledge that each of the restrictions in clause 8.1 is reasonable and necessary for the protection of the Buyer's interests. If any such restriction is considered by a court to be void or unenforceable but would be valid if part of the wording included in such restriction was deleted and/or the duration of such restriction was reduced and/or the geographical remit relating to such restriction was reduced, such restriction will apply with such amendments as may be necessary to make it valid and enforceable.

The provisions of this clause 8 are subject to the Advisory Agreement.

Liability and Indemnity

The Sellers represent and warrant that the Software conforms in all material respects to the functional specifications. With that sole exception, THE BUYER ENTERS INTO THIS AGREEMENT UNDERSTANDING THAT THE SOFTWARE IS INCLUDED IN THE ASSETS OF THE COMPANY “AS IS”, AND SELLERS DISCLAIM ALL WARRANTIES EXPRESS OR IMPLIED WITH RESPECT TO THE SOFTWARE, INCLUDING (WITHOUT LIMITATION) ANY WARRANTY OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 

The Buyer is not assuming and will not be liable for any of the liabilities, debts or obligations of the Sellers arising out of the ownership or operation of the Company prior to and including the Closing Date.

The maximum aggregate liability of the Sellers in respect of all Claims shall not exceed the Consideration and the individual liability of each Seller shall not exceed the amount set against their name in the table in Schedule 1.

The Sellers shall not be liable for any Claim unless written particulars of it (giving full details of the matter in respect of which the Claim is made, the nature of the breach and the amount claimed) shall have been given to the Sellers promptly after the Buyer becomes aware of the matters or circumstances giving rise to the Claim:

in case of a Claim based on clause 9.1. within the period of 30 days immediately following the Completion Date;

in case of any other Claim, within the period of 12 months immediately following the Completion Date.

Miscellaneous

Variation

No amendment or variation of this Agreement shall be valid or effective unless made in writing and signed by or on behalf of the Sellers and the Buyer..

Further assurance

Each Party (at its own cost) shall, and shall use its reasonable endeavours to procure that any necessary third parties shall, execute and deliver to the Parties such other instruments and documents (including deeds) and do all such further things as may be reasonably required by the Buyer to carry out, evidence and give effect to the provisions of and the matters contemplated by this Agreement. In Particular, the Sellers agree to:

To execute, acknowledge, and deliver any affidavits or documents of assignment and conveyance;

To provide testimony in connection with any proceeding affecting the right, title, or interest of Buyer; and

To perform any other acts deemed necessary to carry out the intent of this Agreement.

Rights of third parties

A person who is not a Party to this Agreement shall not be entitled to enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

Entire agreement

This Agreement constitutes the entire agreement and understanding between the Parties relating to the matters contemplated by this Agreement and supersedes all previous agreements (if any and whether in writing or not) between the Parties in relation to such matters.

The Buyer acknowledges and agrees that, except as otherwise expressly provided for in this Agreement, it is not entering into this Agreement on the basis of, and is not relying on and has not relied on, any statement, representation, warranty or other provision (in any case whether oral, written, expressed or implied) made, given, or agreed to by any person (whether a party to this Agreement or not) in relation to the subject matter of this Agreement, provided that nothing in this clause shall exclude liability for fraudulent misrepresentation.

Severability

Each provision of this Agreement is severable and distinct from the others. If any provision of this Agreement (wholly or partly) is or becomes illegal, invalid or unenforceable, that shall not affect the legality, validity or enforceability of any other provision of this Agreement.

If any provision of this Agreement (wholly or partly) is or becomes illegal, invalid or unenforceable but would be legal, valid and enforceable if the provision or some part of the provision was deleted or modified, the provision or part of the provision in question shall apply with such deletions and modifications as may be necessary to make it legal, valid and enforceable.

Counterparts

This Agreement may be signed in any number of counterparts and by the Parties on separate counterparts, each of which, when executed and delivered by a Party, shall be an original, and such counterparts taken together shall constitute one and the same Agreement.

Notices

All notices or other communications under this Agreement will be in writing and sent to the person and address in clause 11.2. They may be given, and will be deemed received:

by first-class post: two Business Days after posting;

by hand: on delivery;

by email: on receipt of a delivery return mail from the correct address.

Notices will be sent:

to the Sellers at: the addresses indicated in the Schedule 1; and

to the Buyer at: [buyer address and email].

Either Party may change the address to which such notices to it are to be delivered by giving not less than five Business Days’ notice to the other Party.

Confidential Information

Each applicable Party undertakes that it shall keep the Confidential Information confidential and that it shall not use or disclose the other Party’s Confidential Information to any person, except as permitted by clause 12.2.

A Party may:

disclose any Confidential Information to any of its employees, officers, representatives or advisers (Representatives) who need to know the relevant Confidential Information for the purposes of the performance of any obligations under this Agreement, provided that such party must ensure that each of its Representatives to whom Confidential Information is disclosed is aware of its confidential nature and agrees to comply with this clause 12 as if it were a Party;

disclose any Confidential Information as may be required by law, any court, any governmental, regulatory or supervisory authority (including, without limitation, any securities exchange) or any other authority of competent jurisdiction to be disclosed; and

use Confidential Information only to perform any obligations under this Agreement.

On termination of this clause 12, all Confidential Information relating to or supplied by a Party and which is or should be in the other Party’s possession will be returned by the other Party or (at the first Party’s option) destroyed and certified as destroyed.

This clause 12 will remain in force for a period of five years from the date of this Agreement.

Governing law and jurisdiction

This Agreement and any dispute or claim arising out of, or in connection with it, its subject matter or formation (including non-contractual disputes or claims) shall be governed by, and construed in accordance with, the laws of [england and wales].

The Parties irrevocably agree that the courts of [england and wales] shall have exclusive jurisdiction to settle any dispute or claim arising out of, or in connection with, this Agreement, its subject matter or formation (including non-contractual disputes or claims).

Schedule 1: Seller Details

Details of the Sellers:

Details of the Nominated Account:

Account holder:
[seller account number, including name, account details, bank address]

Schedule 2: Company Details

The Company

Schedule 3: Seller's Deliverables and Company Board Meeting

Part A

Documents to be delivered by the Sellers on Completion

At Completion, the Sellers shall deliver, procure the delivery of, or make available to the Buyer, the following documents:

Transfers of the Sale Shares duly executed by the Sellers in favour of the Buyer, accompanied by the definitive share certificates of the Sale Shares (or an indemnity in a form satisfactory to the Buyer in relation to any lost or damaged share certificate).

All duly executed powers of attorney and other authorities under which any transfer, this Agreement and any document executed in pursuance of this Agreement is executed.

Any waivers, consents and other documents as may be required to give good title to the Sale Shares and enable the Buyer or its nominee to be registered as the holder of the Sale Shares.

If any: the certificate of incorporation, any certificates of incorporation on change of name or re-registration, the common seal, all unused forms of share certificates of the Company and share certificate books of the Company.

Statutory registers and minute and other record books (fully written up to the time immediately prior to Completion).

Written resignations of all the directors of the Company from their respective offices.

Part B

Board Meeting of the Company

At Completion, the Sellers shall procure that a duly convened and quorate board meeting of the Company shall be held at which the following matters shall be transacted:

The transfer of the Sale Shares (subject to stamping) shall be approved for registration in the Company’s register of members.

[acquireror new board member name] shall be appointed as additional director of the Company.

The resignations mentioned in paragraph 1.7 in Schedule 3, Part A shall be submitted and accepted.

The existing bank mandates and instruction for the operation of bank accounts of the Company shall be cancelled and new bank mandates and instructions giving authority to persons nominated by the Buyer shall be issued.

THIS AGREEMENT has been executed on the date written at the beginning of it.