BC corporation purchases shares of minority shareholder for $2.4M
Jurisdiction:
BC
Lawyer:
In a complex commercial law transaction, a minority corporate shareholder (the “Shareholder”) owning shares in an operating company (the “OpCo”) sold some of its shareholdings back to the OpCo. The proposed agreement was first structured for an aggregate purchase price of $6.4M with $2.4M paid upon closing for all of the issued and outstanding shares held by the Shareholder with vendor financing over three years for the difference of $4.0M. Given the complexity and interplay of existing security interests, the parties renegotiated the deal at the eleventh hour to permit the OpCo to purchase a proportionate number of shares at a purchase price of $2.4M granting the OpCo an option to purchase the remainder of the shares held by the Shareholder for an aggregate purchase price of $4.0M within three years. Velletta Pedersen Christie acted for the Shareholder in this transaction with a team lead by Sankar Nair attended to negotiating and drafting the Share Purchase Agreement, Option Agreement, and ancillary closing documents, as well as drafting and negotiating a General Security Agreement, Promissory Note, Intellectual Property Pledge Agreement, and Escrow Agreement under the first proposed structure.