- 1 Providing Free Sample Stock Transfer Agreements
- 2 Cross-Border M&A
- 3 Preamble, parties
- 4 Purchase of Shares
- 5 Confirmation of Governing Law of Establishment
- 6 Confirmation of Share Transfer Procedures
- 7 Transfer of rights to shares
- 8 Seller’s Warranty Representations Regarding Shares
- 9 Seller’s Warranty Representations Regarding the Company.
- 10 Transfer of Risk
- 11 Obligations of Seller
- 12 Employee and Agent Obligations
- 13 Non-Compete Obligation
- 14 General Clauses
- 15 Governing Law
- 16 Legal Binding
- 17 Interpretation
- 18 Entire Agreement
- 19 Severability
- 20 SUPPLEMENTS
- 21 Modifications
- 22 Jurisdiction
Providing Free Sample Stock Transfer Agreements
We are pleased to offer a free sample Stock Transfer Agreement. If you are considering preparing a stock transfer agreement, please take a look.
Cross-border M&A is an important option as a way to expand overseas. There are two ways to acquire a company through cross-border M&A: purchasing the company’s business or purchasing the company’s shares. When purchasing a company’s business, it is necessary to transfer real estate, movable assets, receivables, contractual relationships with business partners, labor contracts with employees, etc. individually, and it is also necessary to re-obtain licenses and permits. In contrast, the purchase of a company’s shares is a very simple procedure, since the acquisition of a controlling interest in the company encompasses all rights to the company. Especially in the case of cross-border M&A transactions, most of the time, a stock transfer is the most common method of acquisition. A stock transfer agreement is commonly referred to as a Stock Purchase Agreement, or SPA for short.
This Stock Transfer Agreement (the “Agreement”) is entered into as of this 10th day of January, 2020 by and between AAA (“Seller”), and BBB (“Buyers”) in connection with the sale of Seller’s ownership interest in and to CCC Corporation (the “Company”); and
WHEREAS, the Company is a corporation duly formed pursuant to the laws of and which maintains a principal place of business at;
WHEREAS, the Company was formed through the on February 20, 2018 and the Company issued One Hundred (100) shares of no-par value stock in and to the Company (“Stock”); and
WHEREAS, the Parties desire entering into this Agreement whereby Seller shall sell all of its stocks in the Company and Buyer shall purchase all of the stocks in the Company; and
NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein, the parties hereby agree as follows
Since the subject of the transaction is the purchase and sale of shares, it is necessary to clearly state how many shares of the company’s stock are to be transferred by the seller to the buyer, and for how much.
In consideration for Seller’s transfer and assignment of his One Hundred (100) shares of Company Stock to the Buyer, which represents 100% of the interest in and to the Company, the parties agree as follows In consideration for Seller’s transfer and assignment of his One Hundred (100) shares of Company Stock to the Buyer, which represents 100% of the interest in and to Company, upon the execution of this Agreement, the Buyer hereby agrees to pay to Seller the amount of One Hundred Thousand ($100,000) Dollars (the “Purchase Amount”).
Confirmation of Governing Law of Establishment
The method of transferring shares will be determined based on the governing law of incorporation of the target company. Since matters related to the company’s organization and shares are fundamental to the company, they will be determined based on the governing law of incorporation of the company, even if the parties have agreed on a different governing law. Therefore, when acquiring shares in a foreign company, it is necessary to obtain the Articles of Incorporation of the foreign company to confirm the governing law of incorporation.
The procedures for transferring shares vary from country to country, so it is necessary to check with a lawyer in the country where the governing law of incorporation is located for specific procedures. In most cases, the issues include: (1) whether or not a Stock Certificate or Deed is required for the transfer of shares, (2) whether or not entry in the shareholders’ register is an effective requirement, and (3) whether or not the transfer of shares requires the consent of the board of directors or a general meeting of shareholders.
Concurrently with the Buyers delivering the Purchase Amount to Seller upon the terms and conditions set forth herein, Seller shall cause to be delivered to Buyer all of his right, title and interest in and to Company by (a) delivering to Buyer all of Seller’s One Hundred (100) shares of Company Stock in the form of a stock certificate approved and assigned by Seller, and (b) taking any and all other actions necessary to effectuate the transfer and assignment of all of Seller’s ownership interests in and to Company in a timely manner.
Seller represents and warrants to Buyers that: (a) he is the sole record holder of the stock he is transferring to the Buyer pursuant to this Agreement, all of which is owned free and clear of all rights, claims, liens, and other encumbrances, and has not been sold, pledged, assigned, or otherwise transferred; and (b) there are no outstanding subscriptions, rights, options, warrants, or other agreements or undertakings obligating Seller to sell or transfer to any third person any of Seller’s Stock, or any interest therein.
Seller’s Warranty Representations Regarding the Company.
In the purchase and sale of a company, the target company itself operates on a daily basis, and its financial condition and other aspects change. However, even so, it is unlikely that the buyer will have a complete understanding of the other party’s company. Therefore, it is important to require the seller to make a warranty declaration in many contracts, and to leave a form that allows the seller to claim damages (in effect, a partial refund of the purchase price) for breach of warranty declaration in the event of a situation that differs from the parties’ perceptions. In M&A transactions, the most important point is how detailed the warranty representations are. In addition, since the seller may not know the true situation, the warranty statement often states, “To the best of seller’s knowledge, there is no such fact” as the best of knowledge. There is a big difference between “does not exist” and “to the best of seller’s knowledge does not exist,” and this difference should be taken into account when drafting.
Seller represents and warrants to Buyers as follows;
Seller has provided to Buyer all Financial Statements, documents and information that the Buyer has requested and that are related to the operation of the Company.
② Payment of Taxes
The Company, to Seller’s knowledge and good faith belief, has filed all federal, state and local tax returns.
③ No Litigation
There is no litigation, arbitration, investigation or other proceeding of or before any court, arbitrator or governmental or regulatory official, body or authority pending or threatened against the Company, any of its assets, properties or business, or the transactions contemplated by this Agreement, nor does Seller know or have reasonable grounds to know of any basis for any such litigation, arbitration, investigation or proceeding. The Company is not a party to or subject to the provisions of any judgment, order, writ, injunction, decree or award of any court, arbitrator or governmental or regulatory official, body or authority.
④ Compliance with Laws and Regulations
To the best of Seller’s knowledge, the Company has complied with each, and is not in violation of any, law, rule or regulation to which it or its business, operations, assets or properties is subject and has not failed to obtain or to adhere to the requirements of any license, permit or authorization necessary to the ownership of its assets and properties or to the conduct of its business, which non-compliance, violation or failure to obtain or adhere might adversely affect its business, operations, assets, properties, prospects or condition (financial or otherwise).
⑤ Absence of options
There are no existing agreements, options, commitments or rights with, to or in any person to acquire any of the Company’s assets, properties or rights or any interest therein, except for those contracts entered into in the ordinary course of business consistent with past practice for the sale of the Company’s products and services.
Transfer of Risk
Effective upon the party’s execution of this Agreement, the Buyer hereby agrees to take the Company “as is” and to accept, assume and shall comply with all liabilities, obligations and pursuant to and under each contract, sales contract, employee contract, debts, and corporate liabilities and/or outside vendor debts that Company may be a party to or subject to. The Seller shall not be responsible for any of the foregoing obligations or liabilities, if any, whether existing prior to or after the execution of this Agreement. Following the execution of this Agreement the Buyer shall perform and satisfy, shall be solely responsible for, and shall indemnify Seller in accordance with the below for any liability under or in connection with the liabilities that are not paid by Company and/or Buyer.
Obligations of Seller
Seller does not assume and shall in no event be liable for any liabilities, debts or obligations of Buyer or any other person, whether accrued, absolute, matured, contingent or otherwise in connection with the Company or otherwise whether they now exist or arise after the execution of this Agreement and/or the transfer of Seller’s Stock in the Company to the Buyer.
Employee and Agent Obligations
Employee and Agent Obligations. Upon the execution of this Agreement, the Buyer hereby assumes any and all liabilities of any nature whatsoever to any present or former employee, agent or consultant of the Company including, without limitation, any employee wage, salary, bonus, benefit, vacation pay, payroll tax or severance liability for periods prior to the execution of this Agreement and thereafter; provided that Seller represents and warrants to Buyers that all such wages, salaries, and other employment-related amounts have been paid and satisfied in full by the Company through the date of this Agreement. Notwithstanding the foregoing, the Buyer, in its sole discretion, to the extent possible under any applicable laws or regulations of any governmental authority, shall have the right to terminate any and all existing employees of the Company and Buyer will not be obligated to hire any past or present employees of the Company or which were hired by Seller. Notwithstanding the foregoing, Buyer agrees to indemnify Seller from any and all claims by any such third parties as a result of any actions taken by Buyer in connection with the hiring and firing of any present or future employee, except to the extent arising out of any employment agreement not disclosed to Buyers by Seller in writing prior to execution and delivery of this Agreement.
If, after the sale of the company, the seller conducts the same business as before, the seller and the buyer will be in competition with each other after the company purchase agreement is executed. From the buyer’s perspective, it would be considered an act of breach of trust for the buyer to resume business by utilizing the previous customer list and know-how, even though the seller thought that it had acquired all the customers and know-how from the previous business. Therefore, many agreements in which M&A takes place may stipulate the seller’s non-compete obligation and state that the seller may not engage in the same business. On the other hand, if the seller does not have a non-compete obligation, it is also necessary to clearly state in the contract that there is no non-compete obligation, in order to make it clear that there is no burden of such an obligation.
Buyers agree that there are no competition restrictions upon Seller and Seller may form a corporation or any other entity with the purpose to compete against Company, or otherwise individually compete with Company at any time after the execution of this Agreement. Furthermore, Buyer agrees that there are no restrictions on where and at which location Seller may conduct, start and/or operate its business or where Seller may work for another competitor of Company. Buyers’ agreement to this provision is a material inducement for Seller to enter into this Agreement.
The governing law in a stock purchase agreement is the governing law of incorporation of the target company, and the parties cannot agree to anything different. For example, if the target company is incorporated under the laws of the State of New York, the transfer of shares will be governed by the laws of the place of incorporation, regardless of the location of its head office. Apart from the above points, the general terms and conditions are not significantly different from those of an ordinary purchase and sale.
This Agreement and the Company shall be governed by and constructed in accordance with the laws of New York and any and all disputes by the parties to his agreement shall be subject to the jurisdiction of the Courts of New York and in the County of New York.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and, subject to the provisions hereof, their respective heirs, executors, personal representatives, successors and assigns. There are no third-party beneficiaries to this Agreement; without limiting the generality of the preceding statement, no person or entity not a Party to this Agreement shall be entitled to benefit from or rely on any provision of this Agreement.
No court shall interpret any provision of this Agreement as a penalty upon, or forfeiture by, any Party to this Agreement. The Parties acknowledge that each Party to this Agreement shares equally in the drafting and construction of this Agreement and, accordingly, no court construing this Agreement shall construe it more strictly against one party than the other.
This Agreement contains the entire understanding among the parties and supersedes any prior understandings and agreements among them with respect to the subject matter hereof. There are no representations, agreements, arrangements, or understandings, oral or written, between and among the parties hereto relating to the subject matter of this Agreement, which are not fully expressed herein.
This Agreement is intended to be performed in accordance with, and only to the extent permitted by all applicable laws, ordinances, rules, and regulations of the jurisdiction in which the Company does business. If any provision of this Agreement, or the application thereof to any Person or circumstances, shall, for any reason and to any extent, be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected thereby, but rather shall be enforced to the greatest extent permitted by law.
This Agreement and any amendments hereto may be executed in multiple counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument, binding on all Members, and the signature of any party to any counterpart shall be deemed to be a signature to, and may be appended to, any other counterpart.
This Agreement may not be modified, altered or discharged except by an instrument in writing executed by Buyers and Sellers. This Agreement constitutes the entire understanding between you and Sellers and supersedes as of the date hereof, any and all other understandings and agreements between Buyers and Sellers. Our relationship is that of an independent contractor and contracted and neither party is the employee of the other.
Each of the parties hereto hereby submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York and to any New York state court sitting in New York County for the purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. Each party irrevocably consents to the service of any and all process in any legal proceeding by the mailing, certified mail with proof of delivery, or delivery by overnight courier of copies of such process to such party at its address set forth herein. Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. The parties agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. To the extent that any party has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, such party hereby irrevocably waives such immunity in respect of its obligations under this Agreement.