Encumbrance

Any third-party right over an asset — a mortgage, charge, pledge, lien, option or right of pre-emption. Buyers insist the shares come "free from all Encumbrances": no one else may have a claim on what they are paying for. SPA definition

As defined in the training share purchase agreement

any mortgage, charge, pledge, lien, option, right of pre-emption, right of first refusal, third-party right or interest, or security interest of any kind, or any agreement to create any of them;

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Where this term lives

Every chapter of M&A Foundations is free to read, including the full training share purchase agreement. It is part of one complete fictional deal, with every document attached and a test after every chapter. Open M&A Foundations → · All terms A–Z →