Stock Purchase Agreement Template

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A stock purchase agreement (SPA) is a legal document required to transfer shares from a business to a new buyer. When one business purchases stock from another company, a stock purchase agreement legally documents the sale. If you intend on purchasing stocks from another corporation, you may be interested in editing this stock purchase agreement template on Loio and getting a complete PDF document.
STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (the "Agreement") is entered into on   (the "Effective Date") by and between

 , an individual having their usual place of living at   (the "Seller"), and

 , an individual having their usual place of living at   (the "Purchaser"), collectively referred to as the "Parties" and individually as the "Party"

WHEREAS the Seller owns shares of capital stock (the "Stock") of the corporation   (the "Company") and intends to sell these shares to the Purchaser at the agreed price under the terms and conditions set forth below;

WHEREAS the Purchaser desires and intends to acquire the shares from the Seller at an agreed price under the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the mutual promises and obligations set forth herein, and upon other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties have agreed as follows:

SUBJECT OF THE AGREEMENT. According to the terms and conditions of this Agreement, the Seller shall sell, convey, transfer, and assign to the Purchaser   common shares (the "Shares") of the Stock, free and clear of all liens, pledges, claims, and encumbrances of every kind, nature, and description. The Purchaser shall accept from the Seller the Shares and pay the Seller   (the "Purchase Price"). This Purchase Price represents the agreed-upon consideration for transferring the Shares from the Seller to the Purchaser.

The Purchaser acknowledges that access to complete information regarding the Company, including the current financial condition of the Company and the risks associated therewith, has been obtained. This access has been utilized to the Purchaser's satisfaction for the purpose of obtaining information about the Company.

PAYMENT TERMS AND PROCEDURE. The Purchase Price should be paid in full on   (the "Due Date"). 

The Purchaser shall pay a deposit of   to the Seller within   days after the Effective Date. This deposit shall serve as a demonstration of the Purchaser's commitment to the transaction and shall be applied toward the total Purchase Price. The remaining balance of the Purchase Price, after deducting the deposit made upon execution of this Agreement, shall be paid by the Purchaser to the Seller at the Due Date.

All payments will be made on or before the Due Date by cash.

The Parties agree to appoint an independent escrow agent to manage the payment process under this Agreement. The escrow agent must be a reputable, licensed company, attorney, or other qualified professional with experience in financial transactions. The Parties must provide the escrow agent with written escrow instructions detailing the specific requirements, terms, and conditions for releasing funds and documents. The escrow instructions must comply with the terms of this Agreement and any applicable laws and regulations. The Parties shall be liable for any fees or expenses related to the services provided by the escrow agent, as specified in a separate escrow agreement or as agreed by the Parties.

Each Party shall be responsible for the costs related to the payment process, including wire transfer fees, bank charges, and any expenses incurred in connection with the escrow agent.

CLOSING PROCEDURE. The closing of this transaction shall take place within   days after receiving the payment in full (the "Closing Date"). On the Closing Date, the Seller shall sell, convey, transfer, and deliver the share certificates to the Purchaser, and the Purchaser shall purchase the Shares from the Seller.

All Shares transferred as of the Closing Date will be duly authorized, validly issued, fully paid, and nonassessable, and issued in compliance with all applicable federal, state, and local laws.

The Seller shall deliver the necessary stock certificates or other documentation evidencing the transfer of the Shares to the Purchaser. The Purchaser shall provide a written payment confirmation upon request by the Seller.

The issuance and transfer of the Shares shall adhere to all federal and state securities laws, along with any applicable requirements stipulated by the stock exchange listing the Seller's Shares. Share transfers must comply with applicable securities laws and regulations, such as registration requirements or exemptions under securities laws. These compliance obligations can restrict or regulate the transferability of the Stock.

The Parties shall exchange any ancillary documents related to the transaction, including any necessary consents, assignments, or releases.

RIGHTS OF SHAREHOLDER. The Purchaser shall not be entitled to any rights of a shareholder for the Shares unless and to the extent the Purchaser fulfills payment obligations in full and receives the Certificate.

The Shares transferred to the Purchaser upon exercise of the Agreement shall be subject to all of the terms and provisions of the Shareholder Agreement, if any, to the extent applicable to the Shares. In the event of any conflict between this Agreement and the Shareholder Agreement, the terms of the Shareholder Agreement shall prevail.

RESTRICTIONS ON SHARES. The Shares transferred under this Agreement have the following restrictions:

 

TAXES AND COSTS. The Parties are responsible for paying all taxes related to the Shares under the Agreement following the requirements of the applicable laws and regulations.

Except as expressly stated in this Agreement, each Party shall cover their respective costs and expenses related to the negotiation, preparation, execution, and implementation of this Agreement.

The Purchaser consents to the Company withholding the required federal, state, and local taxes associated with the compensation amount considered part of that individual's gross income. At the Company's discretion, the required amount may be withheld in cash from such remuneration or in kind from the Shares. The Purchaser further agrees that if the Company fails to withhold an adequate amount from the Purchaser's remuneration to meet the Company's income tax withholding obligation, the Purchaser shall reimburse the Company in cash for the under-withheld amount upon request.

SELLER'S WARRANTIES AND REPRESENTATIONS. The Seller represents and warrants that:

  • The Seller is the lawful owner of the Shares, with full power and authority to sell, transfer, and deliver the Shares to the Purchaser;
  • The Seller has not entered into any agreements, contracts, or commitments that would restrict or impair the Seller's ability to sell the Shares to the Purchaser;
  • All information provided regarding the Shares, including financial statements, is true, accurate, and complete;
  • The Shares will not be offered, sold, or transferred without registration or exemption under applicable securities laws.

PURCHASER'S WARRANTIES AND REPRESENTATIONS. The Purchaser represents and warrants that:

  • The Purchaser has the full authority to enter into this Stock Purchase Agreement and to consummate the transaction proposed herein;
  • The Purchaser has carried out the investigation of the Company and the Shares, relying on the Purchaser's judgment and the advice of the Purchaser's professional advisors in deciding to purchase the Shares;
  • The Purchaser is in a financial position to acquire and hold the Shares and can bear the economic risk and withstand a complete loss of the Purchaser's investment in the Shares;
  • The Purchaser understands that the Shares may be subject to the terms and conditions of existing shareholder agreements, which may include specific restrictions or obligations upon the sale or transfer of the Shares to the Purchaser;
  • The Purchaser understands the risks associated with the ownership of the Shares and acknowledges that the Seller has provided no guarantees or assurances regarding the future performance of the Shares or the Company.

NO CONFLICT. The execution, delivery, and performance of this Agreement and the closure of the transactions stipulated in it shall not:

  • Cause a breach or violation of any provision of the Company's articles of incorporation or by-laws;
  • Violate, conflict with, result in any breach of, or constitute a default, or events that, with notice or lapse of time or both, would constitute a default under any contract or judgment to which the Seller is part of or is bound by or that relates to the Company's business or assets;
  • Result in the creation of any encumbrance, security interest, mortgage, lien, charge, option, license, adverse claim, or restriction of any kind on any of the assets of the Company or upon any Shares or other securities of the Company;
  • Violate any applicable law, statute, rule, ordinance, or regulation of any governmental body;
  • Invalidate or adversely affect any permit, license, authorization, or status used in the Company's operations.

DEFAULT. Either Party shall be deemed to be in default under this Agreement upon the occurrence of any of the following events:

  • Failure to make any payment due under this Agreement in time, continuing for   days;
  • Failure to deliver the certificates representing the Shares upon the Closing Date;
  • Breach of warranties made by any Party within this Agreement;
  • Occurrence of any voluntary or involuntary proceedings against either Party arising under bankruptcy or insolvency law.

Upon the occurrence of any event of default, the non-defaulting Party shall have the right, in addition to any other rights established in this Agreement or at law or in equity, to terminate this Agreement by providing written notice to the defaulting Party. The non-defaulting Party shall be entitled to recover all damages incurred due to such default.

 

TERM AND TERMINATION. This Agreement shall commence on the Effective Date and continue until the Closing Date unless terminated earlier under the terms of this Agreement.

Either Party may terminate this Agreement upon providing written notice to the other Party if the other Party becomes insolvent or files for bankruptcy.

This Agreement may be terminated in the event of liquidation, dissolution, or winding up of the Seller that results in the transfer or acquisition of at least a majority of the Company's voting power.

This Agreement shall terminate upon a valid transfer of the Shares to the Purchaser in accordance and full compliance with this Agreement. This Agreement shall not prejudice any rights any other party may have before termination.

 .

OTHER TERMS.  .

FORCE MAJEURE. Neither Party shall be liable for any failure to perform or delay in performing the obligations under this Agreement if such failure or delay is caused by events of force majeure, including but not limited to acts of God, war, terrorism, strikes, lockouts, labor disputes, pandemics, epidemics, governmental regulations, or any other similar causes beyond the reasonable control of the affected Party.

In the case of force majeure, the affected Party shall immediately notify the other Party in writing and provide reasonable proof of the cause of the delay or inability to perform the obligations. The Party affected by force majeure shall endeavor to mitigate the consequences of such circumstances and resume the performance of obligations as soon as possible after the circumstances cease to exist.

If the force majeure circumstances last more than   days, either Party may terminate this Agreement by providing written notice to the other Party. In this case, neither Party shall be liable to the other Party for any damages arising from the termination of this Agreement.

 

NOTICE. Any notice or communication required or permitted under this Agreement shall be sufficiently given if delivered personally or by certified mail, return receipt requested, to the address specified in the opening paragraph, or to such other address as one Party may have furnished to the other Party in writing, or to emails set forth below:

If to the Purchaser:  

If to the Seller:  .

 

Either Party may change their registered mail or email address for receipt of notices by giving written notice to the other Party. Notices shall be deemed received on the day of delivery if sent by hand or courier service or after a period of   business days from the date of posting if sent by registered mail or email.

MEDIATION. If a dispute arises in connection with this Agreement, the Parties shall seek to resolve it amicably through mutual consultation. If the dispute is not resolved within   days, then any or all outstanding issues may be submitted to mediation following any statutory rules of mediation. If the dispute is not resolved through mediation, this Agreement shall be governed by and interpreted under the laws of the State of  , and any disputes shall be exclusively resolved by the courts of the State of  .

CONFIDENTIALITY. The Parties agree to keep all information disclosed during this Agreement confidential and not to share such information with any third party unless required by law or any governmental or regulatory body. In order to fulfill the Parties' obligations under this Agreement, they agree not to use the confidential information for any purpose unrelated to this Agreement.

This confidentiality clause shall remain in effect after the termination or expiration of this Agreement.

SEVERABILITY. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

ENTIRE AGREEMENT. This Agreement constitutes the entire understanding between the Parties and supersedes any prior oral or written agreements.

WAIVER. The failure of any Party to enforce a particular provision of this Agreement shall not constitute a waiver of their right to enforce that provision in the future.

AMENDMENTS. This Agreement may be amended or modified only by a written agreement signed by both Parties and certified, if necessary, according to the federal, state, and local law requirements.

BINDING EFFECT. This Agreement shall be binding upon the Parties hereto and their respective successors and assigns according to the federal, state, and local law requirements.

ASSIGNMENT. Neither Party may assign this Agreement or any of its rights or obligations hereunder without obtaining prior written consent from the other Party, which consent shall not be unreasonably withheld.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

THE SELLER

THE PURCHASER

 

 

 ,  ,  

 

 

_____________________

(Place for signature)

 

 

 

 ,  ,  

 

 

_____________________

(Place for signature)

 

 

Written by Karyna Pukaniuk - Reviewed by Jonathan McGill

Template Description

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Paper titled "Stock Purchase Agreement"; diagrams, bank notes, women talking

A stock purchase agreement (SPA) is a legal contract that outlines the terms and conditions of selling shares of a corporation. These terms include the number of shares sold, the agreed price, and legal protections for both the buyer and the seller. A well-drafted stock purchase agreement template can ensure the seamless transfer of ownership rights, presenting safeguards for both contracting parties and mitigating potential conflicts.

The stock share purchase agreement document ensures a smooth transaction, documenting every vital detail legally binding both parties to the agreement. It protects the interests of both the buyer and the seller, fortifying the clause of rights, transfers, and ownership.

When to Use Stock Purchase Agreement

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The stock purchase agreement sample comes into use when shares of a company are being bought or sold. This is either for a full buy-out or partial sale or when a private company is orchestrating an investment round. A key example is a stock purchase agreement private companies use to onboard new investors.

We recommend employing an SPA agreement template in situations where stakes in the company are transferred from the current shareholders to new ones. Also, certain situations call for this document to execute deals based on agreed terms and conditions, which provide a binding legal framework.

  • Seller –– It is the individual or entity who owns the shares initially. They are responsible for ensuring that all essential information regarding the shares being sold is accurate and up-to-date, as per the terms of the original purchase agreement sample. Once the transaction is complete, the seller often provides a written confirmation, signifying that the shares have been fully transferred, granting the buyer full and unencumbered share ownership.

  • Buyer –– It is the individual, investor, or another company intending to purchase the shares from the seller. Within the execution of the stock purchase agreement, the buyer is responsible for confirming that the shares have been fully received and transferring the agreed-upon purchase price to the seller. Upon completing these tasks, the buyer provides a formal acceptance, often accompanied by an acknowledgment receipt. These documents, typically acknowledged by both parties, stand to confirm the successful execution of the transactions as per the sample stock purchase agreements.
  1. Closing Date: This refers to the date when the transaction will be finalized and ownership rights are transferred.

  2. Indemnification: It is the obligation of one party to compensate the other for specific future potential losses.

  3. Representations and Warranties: These are assurances provided by the seller about the status and value of the shares in question.

  4. Covenants: These are promises by both parties to either perform or refrain from certain actions.

  5. Confidentiality: This term commits both parties to maintain secrecy about confidential information.

How to Write a Stock Purchase Agreement

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A stock purchase agreement is an essential legal contract that outlines the specific terms and conditions for buying and selling shares in a company. You can find an SPA agreement example from reliable online resources or engage with legal professionals to assist you in drafting one.

Here's how to create a stock purchase agreement template Word or PDF, whether you are the buyer or the seller:

Buyer
  1. Supply the precise details of all parties involved, including their legal names and contact information. 
  2. Clearly state the total number of shares you intend to purchase, along with each share's price.
  3. Detail the description of the company, including its legal name, type of business, and headquarters location.
  4. Prepare all necessary transaction details, such as the mode of payment and the closing date.
Seller
  1. Provide the name of the company whose shares are being sold.
  2. Declare the governing state or federal law that backs the sample stock purchase agreement.
  3. Assert that you have the legal right to sell the shares and that the shares are free from any liens or encumbrances.
  4. Describe any transfer of rights, titles, or interests in the company with the sale of these shares.
  5. Determine how the stock purchase agreement will be finalized, who will handle the finalization process, and where it will take place.

All parties should review the agreement with legal advice to safeguard their interests. Please remember that achieving a prior understanding of critical elements of the document is crucial to guarantee a seamless process when preparing a stock purchase and sale agreement form.

A stock purchase agreement is a pivotal tool for executing the sale or purchase of shares seamlessly and securely. It helps with the clear delineation of responsibilities and expectations while protecting the interests of both the sellers and the buyers. Employing a stock purchase agreement PDF as a guide can grant you ample perspective for creating a personalized agreement.

Remember, each transaction is unique, requiring specific details to be included in the agreement. Making use of a well-drafted stock purchase agreement form can ensure that any such unique concerns and specifications are well incorporated, shielding you from potential future disagreements or disputes.