Share purchase agreement

EQUTIY STOCK PURCHASE AGREEMENT

THIS AGREEMENT is made and entered into this ______________, by and between __________ Limited, represented by its managing director and authorized signatory Mr. ___________ ("Seller") and _____________________, ("Purchaser");

WHEREAS, the Seller is a company registered under the Companies act of 1956, with the registrar of companies, Andhra Pradesh, Hyderabad, India. The company is in the business of designing and developing __________ ________________ ________________ __________ India. The company is presently issuing equity shares of Rs 1/- each to the friends and relatives of the founders and management of _________ ________ Limited, (" the company"), at such premium for furthering the objects of the company, ranking paripasu in respect of voting rights, dividend rights and liquidation rights with the existing share holders of the company.

WHEREAS, the Purchaser a friend and associate of the management of _______ ________ (p) ltd, desires to purchase _________equity shares of Rs 1/- each out of the total budgeted 50 Crores of Equity shares of Rs 1/- each, for a total consideration of Rs ________________ only (Rupees _________ only) basing on level 1 valuation of the _______ ________ _ the company has. The purchase consideration comes to Rs 1/- face value of the equity share and Rs __/- premium per share totaling to Rs ___/- per share of the company.

The Seller desires to sell, accept and allot the said no’s of the Equity Shares, upon the terms and subject to the conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and in order to consummate the purchase and the sale of the Company’s equity shares aforementioned, it is hereby agreed as follows:

1) PURCHASE AND SALE: Subject to the terms and conditions hereinafter set forth, at the closing of the transaction contemplated hereby, the Seller shall sell, convey, transfer, and deliver to the Purchaser, Equity share certificates representing such ___ __________ of Equity shares of __________ ___________ ____(p) Limited, and the Purchaser shall purchase from the Seller the Company’s Equity Shares in consideration of the purchase price set forth in this Agreement. The certificates representing the Company’s Equity shares shall be duly accepted as subscribed and allotted in the board of the company in favor of the purchaser and / or his representatives (if any) and issue Share Certificates duly executed with signatures guaranteed in the customary fashion, and shall have all the necessary tax stamps affixed thereto at the expense of the Seller. The closing of the transactions contemplated by this Agreement ("Closing"), shall be held at ______ January, _____, at Hyderabad , or such other place, date and time as the parties hereto may otherwise agree.







2) AMOUNT AND PAYMENT OF PURCHASE PRICE. The total consideration and method of payment thereof are fully set out in Exhibit "A" attached hereto and made a part hereof.

3) REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby warrants and represents:

a) Organization and Standing : The Company is duly organized, validly existing and in good standing under the laws of the State of Andhra Pradesh registered under the companies act of 1956 and has the corporate power and authority to carry on its business as it is now being conducted.

b) Restrictions on Stock: There are no restrictions on the Equity shares presently being issued to the buyer and all the shares being allotted rank pari pasu with the existing share holders of the company in respect of Voting rights, dividend rights and liquidations rights.

c) This is a private subscription for the equity shares in ________ ___________(p) limited by invitation only for the friends and relatives of the founders, associates and management of the company and NOT for outsiders and general public.

d) The applicant is deemed to have read the private information memorandum of the company, understand its objectives, business opportunity, risks and threats associated with it and agreed for the same.

e) ___________ _____________ (p) Ltd would use the entire proceeds from the equity subscription by the purchaser in _________ _________ ______deploying ________ _______ as per the schedule and terms of the IM.

f) ________ __________ business is dynamic in India and it would be the sole prerogative of the Board of Directors of _________ ___________ _Ltd to ensure the exit rout to the Equity Share holders. The company after deployment of its services in the Indian market may in future conduct a IPO & list the shares on Stock exchange and/or offer equity to Venture Capitalists and/or joint Venture partners at a later date. The existing equity shareholders at that date shall also participate in the exit rout if they wish to and would be offered the terms and conditions of the exit along with the valuations attached to it. As on date the equity shares are transferable amongst its members only as governed by the company’s articles of association.


g) _________ _________ ________p) Ltd has developed and owns path breaking telecom technology, revolutionizing the _________ space. Taking to products and services and their potential to generate substantial revenue in the coming years, the company has estimated and valued the enterprise as per ____ ________ _________method @ Rs ________ Crores in the Phase 1 and Rs _______ Crores in Phase III. Thus valuation of 1 equity share of a face value of Rs 1/- each in Phase 1 is at Rs __/- per share of Rs 1/- each and Rs ___/- per Share of Rs 1/- each within next 36 months i.e. in Phase III. These valuations though measured in a scientific method are susceptible to the risks & external threats mentioned in the IM document.

h) The purchaser would give proper information as required under Income Tax laws in the country.

i) ________ __________is registered as per companies act in Andhra Pradesh and all AGM’s and EGM,s would be held in Hyderabad. Proper notices of the Meetings shall be dispatched to the Equity Share holders with 21 days clear notice as per the addresses given on the Application form.

j) Being private and confidential share placement by invitation only, there are no intermediaries or brokers for this transaction. The Face Value of the Equity shares of _______ ________ _Ltd is Rs 1/- per equity share.

k) The purchaser has gone thru the Memorandum and Articles of association of the company for the details of the Management of the company and its procedures.

4) REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER.

(i) Seller and Purchaser hereby represent and warrant that there has been no act or omission by Seller, Purchaser or the Corporation which would give rise to any valid claim against any of the parties hereto for a brokerage commission, finder's fee, or other like payment in connection with the transactions contemplated hereby.
(ii) Seller is the lawful owner of the Stock, free and clear of all security interests, liens, encumbrances, equities and other charges.
(iii) There are no existing warrants, options, stock purchase agreements, redemption agreements, restrictions of any nature, calls or rights to subscribe of any character relating to the stock, nor are there any securities convertible into such stock.




5) GENERAL PROVISIONS
(a) Entire Agreement. This Agreement (including the exhibits hereto and any written amendments hereof executed by the parties) constitutes the entire Agreement and supersedes all prior agreements and understandings, oral and written, between the parties hereto with respect to the subject matter hereof.

(b) Sections and Other Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

(c) Governing Law. This agreement and all transactions contemplated hereby, shall be governed by, construed and enforced in accordance with the preview of the hih Court of Andhra Pradesh, India.

IN WITNESS WHEREOF, this Agreement has been executed by each of the individual parties hereto on the date first above written.

Signed, sealed and delivered in the presence of:

By: ____________________ By: ____________________




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EXHIBIT "A” AMOUNT AND PAYMENT OF PURCHASE PRICE

(a) Consideration. As total consideration for the purchase and sale of the company’s Equity shares to this Agreement, the Purchaser shall pay to the Seller the sum of INR ___________/- ( Indian rupees ____________ only), such total consideration to be referred to in this Agreement as the "Purchase Price".

(b) For the consideration received the company shall within 30 days of receipt of money shall allot and deliver __________,- ( ) Equity Shares of Rs 1 /- each with a premium of Rs _/- each per share referred to in this agreement as the “number of shares”. Shares shall be allotted in paripasu tranches within the closing date as per the receipt of the money from the buyer.

(c) Payment. The Purchase Price shall be paid as follows:

(i) The sum of INR ____________ - ( Rupees __ ____e ) delivered to Seller upon the execution of this Agreement this day vide Chq No on dated.

(ii) The sum of INR _________ ( Rupees ) delivered to Seller on or before __- ________.
(iii) The sum of INR _______________ (Rupees ) to be delivered to Seller on or before __________ .

By: ____________________