Company Acquisition Agreement - with Earnout

The Company Acquisition Agreement - with Earnout is a legal document that outlines the terms and conditions of the acquisition of a company by a buyer. The agreement is entered into between the seller, who is the current owner of the company, and the buyer, who wishes to purchase the company. The agreement highlights the importance of the document and provides a detailed introduction for both the entire document and each section of the document.

 

The agreement begins with an interpretation section, which defines the key terms used throughout the document. It also includes schedules that provide information about the company, its subsidiaries, associated companies, and the warranties provided by the seller. The agreement also includes provisions for the sale of shares and the determination of the purchase price.

 

The agreement sets out the conditions that must be fulfilled before the sale and purchase of the shares can be completed. These conditions include the passing of a resolution by the shareholders of the buyer, the delivery of written consents from certain individuals, and the repayment of any outstanding intra-group indebtedness.

 

The agreement provides for the completion of the sale and purchase of the shares at the offices of the company. It sets out the documents that must be delivered by the seller to the buyer on completion, including transfers of shares, share certificates, and statutory books. The buyer is also required to deliver certain documents to the seller, including evidence of payment of the purchase price and a copy of the minutes authorizing the execution and performance of the agreement.

 

The agreement includes provisions for the calculation of the earnout consideration, which is an additional payment that may be made to the seller based on the future performance of the company. The earnout consideration is determined based on the operating profit of the company during certain earnout periods. The agreement sets out the calculation of the earnout consideration and includes provisions for the resolution of any disputes regarding the calculation.

 

The agreement also includes provisions for the protection of the seller during the relevant period, which is the period following completion during which the earnout consideration may be payable. The buyer agrees to conduct the business of the company in a manner that maximizes the operating profit and agrees not to take any actions that would prejudice or adversely affect the amount of the earnout consideration.

 

The agreement also includes provisions for the assignment of rights, announcements, costs, severability, and notices and service. It specifies that English law governs the agreement and provides for the jurisdiction of the courts of England and Wales.

 

Overall, the Company Acquisition Agreement - with Earnout is a comprehensive legal document that outlines the terms and conditions of the acquisition of a company. It provides detailed provisions for the sale and purchase of shares, the determination of the purchase price, the calculation of the earnout consideration, and the protection of the seller during the relevant period.

How to use this document?

To use the Company Acquisition Agreement - with Earnout, follow these steps:

1. Review the agreement: Read through the entire agreement to familiarize yourself with its contents and understand the terms and conditions.

2. Customize the agreement: Modify the agreement as necessary to reflect the specific details of the acquisition, including the names and addresses of the parties, the number of shares being sold, and the purchase price.

3. Fulfill the conditions to completion: Ensure that all conditions specified in the agreement have been fulfilled before proceeding with the sale and purchase of the shares.

4. Complete the sale and purchase: Arrange for the completion of the sale and purchase at the offices of the company, ensuring that all necessary documents are delivered by both parties.

5. Calculate the earnout consideration: Determine the earnout consideration based on the operating profit of the company during the relevant earnout periods, following the provisions set out in the agreement.

6. Protect the seller during the relevant period: Ensure that the buyer conducts the business of the company in a manner that maximizes the operating profit and does not prejudice or adversely affect the amount of the earnout consideration.

7. Resolve any disputes: If any disputes arise regarding the calculation of the earnout consideration, follow the provisions in the agreement for resolving such disputes.

8. Comply with legal requirements: Ensure that all legal requirements, such as the payment of taxes and the filing of necessary documents, are met throughout the acquisition process.

9. Seek legal advice if necessary: If you have any questions or concerns about the agreement or the acquisition process, consult with a legal professional for guidance and assistance.

10. Keep records: Maintain accurate records of all communications, agreements, and transactions related to the acquisition for future reference and compliance purposes.