When a business becomes a company/corporation, or a private legal person as defined in the Civil Code of Quebec, the transfer of the business can be achieved either by the sale of its business (see series Y02 of the Business Precedents) or by the sale of at least a majority of the issued and outstanding voting shares of the latter to a new buyer.

Such block of shares can belong to one or more owners who agree to sell their shares for consideration. Although this transfer could theoretically be evidenced simply by endorsing the share certificates representing a majority of such registered holders in favour of the new owner in exchange for the agreed payment, the commercial practice, when the business sold is a private issuer, is usually the execution of a sale of shares agreement, which can be more or less detailed depending on the wishes of the parties.

Our document template has been designed for the event in which the corporation sells its shares to one of its shareholders and when this sale implies a change of control of the corporation that now lies between the hands of this shareholder.

We recommend that you pay close attention to the legal provisions that may influence the interpretation of some sections of this contract, in particularly the law under which the corporation is constituted 9CBCA or QBCA), the provisions of the Civil code of Quebec concerning service agreements and mandates, and the applicable provisions of the Quebec Securities Act and its regulations.

0.00 INTERPRETATION
0.01 Definitions
0.01.01 Agreement
0.01.02 Closing Date
0.01.03 Shares
0.02 Entire Agreement
0.03 Applicable Laws
1.00 PURPOSE
2.00 CONSIDERATION
3.00 TERMS OF PAYMENT
3.01 Initial Instalment
3.02 Balance of Price
3.03 Advance Payment
3.04 Loss of Term
4.00 SECURITY
5.00 MUTUAL REPRESENTATIONS AND WARRANTIES
5.01 Authority and Binding Agreement
5.02 Exempt Transaction
6.00 REPRESENTATIONS AND WARRANTIES OF VENDOR
6.01 Ownership
6.02 Encumbrances
6.03 Assignability
6.04 Dividend
6.05 Dilution
7.00 REPRESENTATIONS AND WARRANTIES OF PURCHASER
8.00 MUTUAL DUTIES AND OBLIGATIONS
9.00 DUTIES AND OBLIGATIONS OF VENDOR
9.01 Closing Session
9.02 Resignation
9.03 Non-Competition
9.03.01 Undertaking
9.03.02 Exclusions
a) Balance of Sale Price
9.03.03 Penalty
a) Amount
b) Reduction of Sale Price of Shares
c) Preventive Remedies
9.03.04 Assignment of Rights
9.03.05 Reasonableness of Clause
9.04 Non-Solicitation
9.04.01 Personnel
a) Scope
b) Penalty
i) Automatic Penalty
ii) Payment of Penalty
iii) Preventive Remedies
9.04.02 Clients
a) Scope
b) Penalty
i) Automatic Penalty
ii) Payment of Penalty
iii) Preventive Remedies
9.05 Release
10.00 DUTIES AND OBLIGATIONS OF PURCHASER
10.01 Closing Date
11.00 SPECIAL PROVISIONS
12.00 GENERAL PROVISIONS
12.01 Notice
12.02 Election
12.03 Amendment
12.04 No Waiver of Rights
12.05 Language
13.00 TERMINATION
14.00 EFFECTIVE DATE
15.00 DURATION
16.00 SCOPE


SCHEDULE 9.04.02 – NON-SOLICITATION OF CLIENTS (INCL. GOODS AND SERVICES)