2.4. Trust Fund. On the balance date, the buyer must pay the trust fund into a trust account in a form that must be mutually agreed between the parties, in accordance with the terms and provisions of a trust agreement (the “fiduciary agreement” dated from the closing date. The trust fund shall be used to fulfil the seller`s obligations to exempt the buyer and the enterprise in accordance with Article VII of this Agreement. Prior to the conclusion of the agreement, a Memorandum of Understanding will be established to explain the planned sale. A buyer must have due diligence and ensure that the sales contract and the memorandum of understanding have the same conditions. The seller should specifically look at the sales and purchasing section and the guarantees and insurance section. The period of sale and purchase should have exactly the same conditions as the declaration of intent. If differences are found, this is likely due to the buyer`s due diligence and must be negotiated before the share purchase agreement is concluded. How the seller receives the trust fund is often a point of negotiation for the parties. Is it paid, for example, by lump sum or in instalments over a period of months or years? Will periodic payments be based on specific events or goals? A lawyer can help negotiate the terms and design the fiduciary agreement.2 These definitions are illustrative and should be adapted to reflect the unique characteristics of each share sale agreement.
A lawyer can check these definitions and advise whether or not they apply in a given situation. The counterpart of the shares is usually cash, shares or a combination of cash and shares….