Glossary · Deal documents
Share purchase agreement
Also called SPA, sale and purchase agreement, stock purchase agreement
Definition
A share purchase agreement (SPA) is the main contract in a share deal. It sets the price and how it is paid, the conditions for closing, the warranties and indemnities the seller gives, and what happens if they turn out to be wrong. What the buyer learned in due diligence shapes much of what it negotiates into the SPA.
Where share purchase agreement comes up
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Related terms
Asset purchase agreement The contract for buying selected assets and liabilities of a business, instead of its shares. Representations and warranties Statements of fact the seller makes about the business in the purchase agreement, with a remedy if they prove untrue. Disclosure letter The seller's list of known exceptions to its warranties, which limits what the buyer can later claim for. Indemnity A promise to repay a specific loss in full, often used for known risks found in due diligence. Change of control clause A contract term that lets the other party end or renegotiate the contract if the company is sold. Confidential information memorandum The detailed sales document a seller's adviser sends to buyers after they sign an NDA. Letter of intent A mostly non-binding document that sets out the main terms of a deal before the final contract is negotiated. Material adverse change A clause that lets a buyer walk away if something seriously damages the business between signing and closing.