Share purchase agreement

How it is used

Usually called the SPA. It contains the price mechanism, conditions precedent, warranties and indemnities, limits on the seller's liability and the closing steps. When assets rather than shares are bought, the equivalent is an asset purchase agreement (APA).

Example sentences

1. The share purchase agreement was signed in June, and the deal closed in September.

2. The seller's warranties are set out in Schedule 3 to the share purchase agreement.

Common collocations

• sign the share purchase agreement
• draft SPA
• SPA negotiations
• under the SPA

Related terms

• acquisitionThe purchase of a company, part of a company or a business, usually by buying its shares or its assets.
• closingThe final stage of a deal, when the last documents are signed or exchanged, the price is paid and ownership passes to the buyer.
• condition precedentAn event or action that must happen before a contract, or a particular obligation in it, takes effect, such as a regulatory approval.
• warrantyA promise in a contract that a fact is true or that goods or services meet a certain standard; if it proves wrong, the other party can usually claim damages.
• due diligenceA detailed investigation of a company's legal, financial and commercial position, carried out before buying it, investing in it or signing a major contract with it.

More terms: Mergers & Acquisitions

• merger
• earn-out
• takeover
• target company