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Stock Purchase Agreement for the United States

Stock Purchase Agreement Template for United States

A Stock Purchase Agreement is a legally binding contract governed by U.S. federal and state securities laws that documents the sale and transfer of shares of stock from a seller to a buyer. This agreement outlines the terms and conditions of the stock sale, including purchase price, number of shares, representations and warranties, and closing conditions. It provides legal protection for both parties and ensures compliance with applicable securities regulations, including federal Securities Acts and state Blue Sky laws. The agreement typically includes detailed provisions about payment terms, due diligence requirements, and post-closing obligations.

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What is a Stock Purchase Agreement?

A Stock Purchase Agreement is utilized when one party wishes to sell and another party wishes to purchase shares of stock in a corporation. This comprehensive agreement is essential for both private and public company transactions in the United States, though requirements vary based on whether the company is publicly traded. The document details critical aspects such as purchase price, payment terms, representations about the company's condition, and various closing conditions. It must comply with federal securities laws, including the Securities Act of 1933 and Securities Exchange Act of 1934, as well as applicable state securities laws. The agreement serves multiple purposes: documenting the transaction terms, protecting both parties' interests, ensuring regulatory compliance, and establishing a framework for the closing process and any post-closing obligations.

What sections should be included in a Stock Purchase Agreement?

1. Parties: Identification of buyer(s) and seller(s)

2. Background: Context of the transaction and purpose of agreement

3. Definitions: Key terms used throughout the agreement

4. Purchase and Sale: Core transaction terms including shares, price, and payment

5. Closing: Timing and mechanics of closing

6. Representations and Warranties: Statements of fact and assurances from both parties

7. Covenants: Ongoing obligations of the parties

8. Conditions to Closing: Requirements that must be met before closing

9. Indemnification: Protection against losses and liabilities

10. General Provisions: Standard legal provisions including governing law, notices, etc.

What sections are optional to include in a Stock Purchase Agreement?

1. Employee Matters: Required when transaction affects employees or involves employee shareholders

2. Tax Matters: Specific tax provisions and allocations for transactions with significant tax implications

3. Registration Rights: Rights to register shares for public sale, included when buyers require ability to sell shares publicly in future

What schedules should be included in a Stock Purchase Agreement?

1. Disclosure Schedule: Exceptions to representations and warranties

2. Capitalization Table: Details of company's share structure pre/post transaction

3. Required Consents: List of third-party approvals needed

4. Form of Stock Certificate: Template for new stock certificates

5. Financial Statements: Company's financial information

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Clauses
































Industries

Securities Act of 1933: Federal law governing registration and disclosure requirements for securities offerings, including requirements for public offerings and exemptions for private placements

Securities Exchange Act of 1934: Federal law regulating secondary trading of securities, establishing reporting requirements, and providing anti-fraud provisions for securities transactions

Regulation D: SEC rules providing exemptions from securities registration requirements for private placement offerings, including Rules 504, 506(b), and 506(c)

Rule 144: SEC rule governing the resale of restricted and control securities, providing safe harbor for their sale under certain conditions

Blue Sky Laws: State-specific securities laws governing registration, disclosure requirements, and investor protection provisions within each state's jurisdiction

Delaware General Corporation Law: Primary corporate law statute for Delaware corporations, governing corporate formation, operations, and stockholder rights

UCC Article 8: Uniform Commercial Code provisions governing investment securities, including transfer and holding of securities

Internal Revenue Code: Federal tax laws affecting stock transfers, including capital gains treatment, tax basis considerations, and reporting requirements

ERISA: Employee Retirement Income Security Act governing employee benefit plans and related stock purchase arrangements

IRC Section 409A: Tax code section regulating deferred compensation arrangements, including certain stock-based compensation

Hart-Scott-Rodino Act: Antitrust legislation requiring pre-merger notifications and waiting periods for large transactions

Exchange Rules: Regulations and requirements set by stock exchanges (NYSE/NASDAQ) or OTC markets governing listed securities and their transfer

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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