A Share Purchase Agreement (SPA) is the definitive contract documenting the sale and purchase of shares in a company — typically the central legal instrument in an M&A transaction structured as a share deal (as distinct from an asset deal, which is documented through an Asset Purchase Agreement). The SPA codifies the commercial bargain reached between buyer and seller(s), allocating risk through representations, warranties, indemnities, covenants, and closing mechanics, and serves as the operational blueprint executed at closing.
SPA architecture typically includes: (i) parties and recitals (identifying buyer, seller(s), target company, and transaction background); (ii) purchase price and payment mechanics (cash, equity, deferred consideration, escrow, working-capital adjustment, earn-outs); (iii) representations and warranties (factual statements by sellers about the target, breach of which creates indemnification liability); (iv) pre-closing covenants (operational restrictions during the signing-to-closing gap); (v) closing conditions (regulatory approvals, third-party consents, no MAC, accuracy of reps); (vi) indemnification framework (caps, baskets, deductibles, survival periods); (vii) termination rights (drop-dead date, mutual termination, breach termination); and (viii) boilerplate (governing law, dispute resolution, notice, amendment).
SPAs vary materially by transaction structure: simultaneous sign-and-close SPAs (no gap between signing and closing — typical for smaller deals without regulatory approvals or third-party consents); delayed-closing SPAs (a gap between signing and closing during which conditions precedent must be satisfied — typical for deals requiring antitrust clearance, change-of-control consents, or other approvals); and conditional SPAs (closing subject to satisfaction of due diligence, financing, or other contingencies — less seller-friendly).
Negotiating leverage in SPA terms varies by deal dynamics. Seller-favorable terms include: limited representations with materiality and knowledge qualifiers, short survival periods (12–18 months), tight indemnification caps (10–25% of purchase price), high deductibles, broad disclosure schedules, MAC clauses with high quantitative thresholds, and no working-capital adjustment. Buyer-favorable terms include: fundamental representations with extended survival (3–6 years or indefinite), high indemnification caps (50–100% of purchase price), low deductibles, narrow disclosure schedules, broad MAC clauses, working-capital adjustment with sophisticated dispute mechanics, and substantial escrow holdbacks.
For Turkish founders selling to international acquirers, SPA negotiation often involves coordination of U.S./UK-style market-standard terms (NVCA/ABA template architecture) with Turkish-side requirements (TTK share-transfer formalities, notarization, share-ledger registration, KAP/MASAK reporting where applicable). Vircon Legal advises founders selling Turkish startups to international acquirers, and corporate clients acquiring Turkish targets, on SPA negotiation — representations scope, indemnification architecture, closing-condition design, escrow/holdback structuring, and the coordination of common-law SPA structures with Turkish corporate-law execution requirements.