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Shareholder Purchase Agreement Template for Germany

A comprehensive legal agreement governed by German law that documents the terms and conditions for the purchase and sale of shares in a company. The agreement includes detailed provisions on purchase price, payment terms, warranties, indemnities, and closing conditions, all structured in compliance with German corporate law requirements. It typically requires notarization under German law and addresses specific German legal concepts while incorporating necessary regulatory approvals, tax considerations, and corporate governance requirements. The document serves as the primary transaction document in share acquisitions, whether for partial or complete ownership transfers.

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What is a Shareholder Purchase Agreement?

The Shareholder Purchase Agreement is a crucial document in German corporate transactions, used when one party wishes to acquire shares in a company from existing shareholders. It must comply with specific requirements of German corporate law, including notarization requirements for GmbH share transfers. The agreement covers all essential aspects of the transaction, including purchase price mechanisms, warranties about the company's condition, tax indemnities, and conditions precedent. It's particularly important in M&A transactions and requires careful consideration of German regulatory requirements, including foreign investment reviews where applicable. The document is typically more complex when involving multiple shareholders or cross-border elements, and often requires coordination with German public authorities and notaries for successful execution.

What sections should be included in a Shareholder Purchase Agreement?

1. Parties: Identification of seller(s) and purchaser(s), including full legal names and addresses as required under German law

2. Background: Context of the transaction, description of the target company and current shareholding structure

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including German legal concepts where necessary

4. Sale and Purchase: Core transaction terms including details of shares being sold and purchase price

5. Purchase Price: Detailed provisions on consideration, including payment mechanics and any adjustments

6. Conditions Precedent: Requirements to be fulfilled before completion, including regulatory approvals

7. Pre-Completion Obligations: Obligations of parties between signing and completion, including conduct of business requirements

8. Completion: Mechanics and requirements for closing the transaction, including notarization requirements

9. Seller's Warranties: Warranties regarding the seller's capacity and authority, ownership of shares, and target company

10. Purchaser's Warranties: Basic warranties from purchaser regarding capacity and authority

11. Tax Indemnity: Specific indemnities relating to tax liabilities

12. Limitations on Liability: Limitations on warranties and indemnities, including caps and time limits

13. Confidentiality: Obligations regarding transaction confidentiality and public announcements

14. Notices: Process for formal communications between parties

15. General Provisions: Standard boilerplate provisions including governing law, jurisdiction, and entire agreement

16. Execution: Signature blocks and execution formalities

What sections are optional to include in a Shareholder Purchase Agreement?

1. Purchase Price Adjustment: Detailed mechanisms for post-completion price adjustments, used when price depends on completion accounts

2. Earn-out Provisions: Structure for additional payments based on future performance, used in transactions with contingent consideration

3. Employee Matters: Specific provisions regarding employees and management, relevant when there are key personnel considerations

4. Non-Competition: Restrictions on seller's future activities, used when seller could compete with target business

5. Transitional Services: Arrangements for post-completion services by seller, needed when target relies on seller's infrastructure

6. Break Fee: Compensation if transaction fails, used in larger or more complex transactions

7. Material Adverse Change: Rights if target business deteriorates, important in volatile markets or long-term transactions

8. Guarantee: Parent company or bank guarantees, used when additional security is required

What schedules should be included in a Shareholder Purchase Agreement?

1. Details of the Company: Full corporate information including registration details, share capital, and corporate structure

2. Properties: Details of all real estate owned or leased by the target company

3. Intellectual Property: List of all IP rights owned or licensed by the target company

4. Material Contracts: Summary of key commercial contracts and arrangements

5. Employees: Details of employment arrangements and benefits

6. Pension Schemes: Details of any pension arrangements

7. Insurance: Summary of insurance policies

8. Bank Accounts: Details of all bank accounts and financial facilities

9. Data Room Index: Index of due diligence materials provided

10. Completion Deliverables: List of documents to be delivered at completion

11. Form of Resignation Letters: Template resignation letters for departing directors

12. Form of Power of Attorney: Template power of attorney if required for completion

13. Tax Computation: Detailed tax calculations and provisions

14. Disclosed Matters: Specific disclosures against warranties

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

Germany

Publisher

Genie AI

Cost

Free to use

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