Recitals

Though is not legally required, yet mentioned because it lays down the basic context of the agreement

The agreement must mention the complete details of the parties, accurately.

The number of shares involved in the transaction and any other details of the said shares.

The purchase price

The purchase price of the shares as considered to be fair to both the parties.

The mode of payment

The mode of payment of the purchase price as mutually agreed upon.

The closing mechanism

City, Date, Time and the duration within which the procedures be concluded

THE REPRESENTATIONS AND WARRANTIES of the Buyer/s and Seller.

Warranties are contractual statements by the seller made upon the completion serving the purpose of bringing out the information which buyer must be aware of in regard to the shares and companies involved.
Any incorrect information furnished may land the parties in the court, thus proper care must be taken.

Restrictive covenants

It may include: a non solicitation clause, prohibiting the seller from soliciting the buyer’s suppliers/ customer & a non-competitive clause restricting the seller in establishing or engaging in a business which may compete with the buyer; for a set period of time as settled.

• These are particularly of utmost importance to the buyer since the seller can considerably hamper the business with the knowledge acquired of the market. The buyer must take adequate measures to significantly protect himself from any actions of the seller that that may impair business.
• The time mentioned for the restraint must be reasonable for both the parties as per the nature of interest involved.
  It may set forth the conditions to be fulfilled by both the parties before the execution of the agreement is made. These shall be covered by conditions PRECEDENT. These may be in form of obligations of the parties, authorizations, permits or permissions to be obtained by the respective parties.

Conditions subsequent

The agreement also safeguards the parties the future defaults, if made by either. That is if the parties fail to abide by the terms set forth in the agreement, the other party shall have a mechanism to turn to and get the terms enforced.

Dispute resolution and arbitration

An essential clause that deals with the method to resolve the legal disputes which may arise between the parties in the future . Arbitration is always preferred after the parties fail to work around the dispute to reach an amicable solution.

Jurisdiction and governing law

This explains the specific jurisdiction in which the dispute resolution be invoked in case any legal disputes should arise.

• NOTICE: Where the notices pursuant to the Agreement be delivered.
• Statement of SEVERABILITY AND BINDING EFFECT of the agreement.
• There may be a CONFIDENTIALITY CLAUSE if the parties feel the need of such.
• Waivers, if any applicable.