This is a “Sale of Shares Agreement (underlying asset is a business)” with a restraint of tradebuilt into it. The restraint of trade is to protect the purchaser’s proprietary interests in respect of the underlying business.
This is a very detailed agreement that may be used where a shareholder in a private or unlisted public company is selling his/her/its shares in such company to a party that is not an existing shareholder. Certain individuals may be subject to a restraint of trade and are also parties to the agreement.
The agreement is drafted to cater for a situation where there are remaining current shareholders in the company and also where there are no remaining current shareholders. Detailed drafting notes assist with making the necessary changes.
This agreement is for use where the company – whose shares are being sold- owns an underlying business.
NOTE: this is an agreement for the sale of shares only and NOTfor the sale of a business. HOWEVER, as this agreement caters for a situation where the company (in which shares are being sold) owns a business, this agreement requires that the seller provide the purchaser with certain undertakings in respect of the business as well as the shares and the claims on loan account.