SPA
Share Purchase Agreement
Short definition
The share purchase agreement locks transfer terms, the price bridge, warranties and indemnities. It is the legal box around price; it writes who wears a cash miss versus the model.
Detailed explanation
Locks: closing conditions, MAC, locked box / completion, warranties, indemnity cap and duration, non-compete. Earn-out and key-person terms are separate schedules.
Warranties leave historic risk DD missed with the seller. Caps and baskets shrink real protection.
Why it matters for the CFO
If the model is right and the SPA is loose, the cash surprise stays with the buyer. Legal and finance must sign the same bridge.
How to read it
Cap × duration is economic protection. “Full warranties” with a low cap are not insurance.
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Definitions are educational. They are not investment, credit or tax advice.