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Preliminary Share Purchase Agreement Template for Austria

A preliminary share purchase agreement under Austrian law that establishes the framework for a potential share acquisition transaction. This document outlines the initial terms and conditions between the parties, including binding and non-binding provisions, while setting the stage for detailed due diligence and final negotiations. It incorporates key Austrian legal requirements and corporate law provisions, particularly from the ABGB (Austrian Civil Code) and UGB (Austrian Commercial Code), while addressing specific share transfer requirements based on whether the target is a GmbH or AG under Austrian corporate law.

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What is a Preliminary Share Purchase Agreement?

The Preliminary Share Purchase Agreement serves as a crucial initial step in Austrian M&A transactions, establishing the groundwork for share acquisitions while providing legal protection for all parties during the negotiation phase. This document is typically used when parties have agreed on basic terms but require a formal framework for due diligence and detailed negotiations. It includes both binding elements (such as confidentiality and exclusivity) and non-binding elements (such as the final purchase price and conditions), reflecting Austrian legal requirements and market practice. The agreement must comply with Austrian corporate law, particularly regarding share transfer restrictions and corporate approvals, while providing flexibility for the parties to progress toward a definitive agreement. It's especially important in complex transactions where detailed due diligence is required or when regulatory approvals need to be obtained.

What sections should be included in a Preliminary Share Purchase Agreement?

1. Parties: Identification of the seller(s) and buyer(s), including full legal names and addresses

2. Background: Context of the transaction, including brief description of the target company and transaction rationale

3. Definitions: Key terms used throughout the agreement

4. Subject Matter of the Transaction: Description of shares being sold, target company details, and basic transaction structure

5. Preliminary Purchase Price: Indicative purchase price or price calculation mechanism

6. Binding and Non-Binding Provisions: Clear delineation of which provisions are binding and which are subject to final agreement

7. Due Diligence: Framework for the due diligence process, including access to information and timeline

8. Timeline and Process: Key dates and steps towards definitive agreement

9. Exclusivity: Binding provisions regarding exclusive negotiations

10. Confidentiality: Binding confidentiality obligations

11. Costs and Expenses: Allocation of transaction costs and expenses

12. Governing Law and Jurisdiction: Specification of Austrian law and competent courts

13. Execution: Signature blocks and execution formalities

What sections are optional to include in a Preliminary Share Purchase Agreement?

1. Break Fee: Provisions for break fee payment if either party withdraws under specified circumstances

2. Regulatory Conditions: Include when transaction requires regulatory approvals

3. Financing Arrangements: Include when buyer requires external financing

4. Employee Matters: Include when specific employee-related matters need preliminary agreement

5. Existing Due Diligence: Include when preliminary due diligence has already been conducted

6. Material Adverse Change: Include when specific events might affect transaction progression

7. Shareholders' Rights: Include when minority shareholders have specific rights that need addressing

8. Tax Structure: Include when preliminary agreement on tax structure is necessary

What schedules should be included in a Preliminary Share Purchase Agreement?

1. Corporate Structure: Organization chart and corporate information of target company

2. Share Information: Detailed description of shares, including class, rights, and current ownership

3. Preliminary Due Diligence Findings: Summary of any preliminary due diligence conducted to date

4. Indicative Timeline: Detailed timeline for transaction milestones and completion

5. Due Diligence Requirements: List of required documents and information for due diligence

6. Form of Confidentiality Agreement: If separate detailed NDA is required

7. Key Terms Sheet: Summary of key commercial terms for the final agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Austria

Publisher

Genie AI

Document Type

Stock Agreement

Cost

Free to use

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