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Use our stock purchase agreement (SPA) template for business owners negotiating the sale and acquisition of stock in their company. Our free contract sample will help you identify the stock’s price and outline a roadmap for the transaction to avoid any risks. Customize this agreement to set all the terms and conditions related to the sale of stock in your business.

Stock Purchase Agreement

Image 1

Created by:

​[Seller.FirstName][Seller.LastName][Seller.Company]​

Prepared for:

​[Purchaser.FirstName][Purchaser.LastName]​

​[Purchaser.Company]​

Before using this stock purchase agreement sample, it’s crucial to distinguish between stocks and shares. Although often used interchangeably, they have different meanings. Stocks represent ownership in multiple organizations, while shares represent ownership in a single company involving smaller fractions of stocks. For share purchases, consider using our free Share Purchase Agreement Template.

This Stock Purchase Agreement (the “Agreement” or “Stock Purchase Agreement”) states the terms and conditions that govern the contractual agreement between [Purchaser.FirstName][Purchaser.LastName] having (pronoun) principal residence located at [Purchaser.StreetAddress][Purchaser.City][Purchaser.State][Purchaser.PostalCode] (the “Purchaser”), and [Seller.FirstName][Seller.LastName] having (pronoun) principal residence located at [Seller.StreetAddress][Seller.City][Seller.State][Seller.PostalCode] (the “Seller”) who agrees to be bound by this Agreement.

In the paragraph below, you need to specify what kind of stock you’re selling, i.e. if the stock is common or preferred.

WHEREAS, the Seller owns (Number of Shares) Shares of (Typr, i.e. shared or common) stock, (Price) par value, which amounts to (Percentage) of the outstanding shares of stock in (Company.Name), a (State) corporation (the “Company); and

Here, “par value” refers to the sale price of the stocks being sold.

WHEREAS, the Seller desires to sell the stock, as described below, to the Purchaser and the Purchaser agrees to purchase the stock, as described below, from the Seller subject to the terms and conditions herein.

NOW, THEREFORE, in consideration of the mutual covenants and promises made by the parties hereto, the Purchaser and the Seller (individually, each a “Party” and collectively, the “Parties”) covenant and agree as follows:

1. PURCHASE AND SALE

Subject to the terms and conditions of this Stock Purchase Agreement, the Seller agrees to sell to the Purchaser, and the Purchaser agrees to purchase from the Seller, (Number.Type) shares of the Company stock (the “Shares”).

This section should match the terms set out on the letter of intent (LOI).

2. CONSIDERATION

The Seller shall convey the Shares to the Purchaser for the purchase price of (Dollar.Amount) (WRITTEN) dollars (Dollar.Amount) (NUMERICAL).

Feel free to add a clause about an escrow fund if necessary. You can use these funds to indemnify the Buyer and Company.

Escrow funds will be deposited by the buyer into an escrow account managed by a third party pursuant to the terms set forth in an escrow agreement.

3. EXECUTION AND DELIVERY

Many investors no longer issue stock certificates when signing a stock buying agreement, but the seller can request a certificate if they want a hard copy. If requested, the seller must provide it.

This Agreement will be executed on (execution date, which can be the same as the date of this agreement or different).

Upon the execution and delivery of this Agreement, the Seller shall deliver to the Purchaser any documentation the Company reasonably requires to process the transfer of the Shares to the Purchaser.

The Shares shall be delivered to the Purchaser on or before (Date) (the “Closing Date”).

The Seller will deliver or cause to be delivered to the Buyer:

A. Stock certificates representing the Shares

B. A certificate certifying the Articles of Incorporation and Bylaws of the Company

C. Other documents and certificates as the Buyer requests

Add, edit, or remove as needed. If there are a lot of terms that need to be defined, feel free to create a new section just for definitions. You can also attach financial statements to prove some of your representations below, such as Clause G.

4. SELLER’S REPRESENTATIONS

The Seller represents, warrants and agrees to and with the Purchaser as follows as of the date of execution of this Agreement and on the Closing Date.

A. The Company is a corporation duly formed and organized under the laws of (State);

B. The Company is in good standing under the laws of (State) and requires action by the Purchaser to achieve compliance;

C. There is no proceeding, claim, or investigation pending against the Company or any of its subsidiaries by any third party or governmental agency, nor, to the Seller’s knowledge, has any such claim or investigation been threatened;

D. The Company does not own, directly or indirectly, any subsidiaries;

E. The Company does not have the right or obligation to acquire any equity interests or similar investment in any partnership, limited liability company, association, joint venture, trust, or other entity;

F. The Company will continue to operate the way it did when the Buyer was doing due diligence;

Remove Clause F if the buyer will not have a due diligence period. In the United States, private companies require buyers to have a due diligence period. Public companies, on the other hand, are protected under the Securities Act of 1933, so the transaction can happen immediately.

G. The Company has filed all tax returns and reports on time and has made all deposits required by law to be made with respect to employment taxes. “Taxes” means all taxes, tax liability, duties, charges, fees and other assessments imposed by any governmental body including unemployment compensation, real estate, income, franchise taxes, customs and more;

H. To the Seller’s knowledge, the Company is not infringing on any intellectual property;

I. The consummation of the transactions in this Agreement will not have a Material Adverse Effect on the Company’s relationship with any supplier or customer. Material Adverse Effect refers to a material adverse effect on the assets, business or financial condition of the Company except for any adverse effect resulting from general economic conditions that affect the banking and securities industry;

J. There are no indemnity, sharing, or tax allocation agreements or arrangements affecting the Company;

K. The Seller is the sole beneficial, legal and record owner of the Shares;

L. The Seller holds valid and marketable title to the Shares which are free and clear of all encumbrances, security interests, equities, restrictions on transfer or other charges and/or defects in the title of any kind;

M. The Seller has the right and authority to enter into and carry out the terms of this Agreement, including without limitation, the offer, sale and transfer of the Shares to the Purchaser and has taken all action necessary to validly do so; and

N. The Seller is not a party to any contract that remains in effect with respect to the Shares and there are no restrictions on the offer, sale, or transfer of the Shares other than applicable securities laws.

These statements are all seller’s standard guarantees of a stock purchase and sale agreement form. Feel free to add, edit, and remove them as needed.

5. EXPENSES

Each respective Party will pay all expenses and fees of (pronoun) legal counsel, accountants and other agents and advisers incurred pursuant to this Agreement regardless of whether the transactions contemplated in this Agreement are consummated.

According to this SPA agreement example, even if the sale is not completed, neither the purchaser nor the seller owes the other any reimbursement for any expenses paid in connection with the preparation for this transaction.

6. INDEMNIFICATION

Notwithstanding the foregoing or any other provision of this Agreement, the Purchaser and the Seller each hereby agree to defend, indemnify and hold harmless the other from and against any claim, damage, liability, loss, cost or expense (including reasonable attorneys fees) arising directly or indirectly out of:

A. Any failure to perform obligations set forth in this Agreement;

B. Any inaccuracy or breach of any representations or warranties made in this Agreement, and any and all actions, suits, litigation, arbitration, proceedings, investigations, claims or liabilities of whatever nature arising out of any of the foregoing.

According to this SPA agreement example, in the event any other person has a claim against the seller related to the shares (see 4(c)), the seller will cover any legal costs spent by the purchaser in defense of such a claim.

7. NO MODIFICATION UNLESS IN WRITING

No modification of this Agreement shall be valid unless in writing and agreed upon by both Parties.

8. VENUE

This Stock Purchase Agreement and the interpretation of the terms herein shall be governed by and construed in accordance with the governing laws of the State of (State), (Country). The Parties irrevocably submit to the exclusive jurisdiction of the federal and state courts located in (County), (State), (Country).

9. SEVERABILITY

If any term or part of this Agreement is determined by a court of competent jurisdiction to be illegal, invalid, or incapable of being enforced, all other provisions and conditions of this Agreement shall still remain in full force and effect as long as the legal and/or economic substance of the transactions discussed here are not affected in a manner that is adverse to any party. In any case, the Parties will follow the original intent as laid out in this Agreement as closely as possible.

10. NO WAIVER RELATED TO FRAUD

None of provisions in this Agreement shall be deemed a waiver by any party to this Agreement of any remedy or right which a party may have at law or equity based on any other party’s acts or omissions that constitute fraud.

11. ENTIRE AGREEMENT

This Agreement constitutes the entire agreement and understanding of the Parties relating to the subject matter hereof. It supersedes any prior agreements, negotiations, discussions, and understandings, whether oral or written, between the Parties with respect to the subject matter hereof.

IN WITNESS WHEREOF, each of the Parties has executed this Stock Purchase Agreement electronically or

in person, both Parties by its duly authorized officer, as of the day and year set forth below.

​[Seller.Company]

​

Signature
MM / DD / YYYY

​[Seller.FirstName][Seller.LastName]​

​[Purchaser.Company]

​

Signature
MM / DD / YYYY

​[Purchaser.FirstName][Purchaser.LastName]​

You might consider adding a force majeure clause to protect both parties if they cannot perform this stock buyout agreement due to unforeseen reasons beyond their control. These often include tornados, earthquakes, and riots.

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FAQ: Stock Purchase Agreement

  • A stock purchase agreement (also known as SPA and share purchase agreement) is a legally binding contract between a company and its shareholders. This document’s primary purpose is to state the stock price and mitigate risks, as it usually has a large section dedicated to various situations that might happen.

  • Restricted stocks are typically unregistered stocks that can only be transferred or sold once the buyer meets certain restrictions. This type of stock is often awarded to company employees and holds many of the same benefits as common stock but with certain conditions in place. On the other hand, common stock can be traded, and the owner has voting rights without restrictions.

  • You don’t have to file stock purchase agreements with any local or federal government. Still, it’s recommended that both parties keep a copy of the signed contract, along with any supporting documents and certificates. Certain businesses may still need to register the transfer with the Securities and Exchange Commission (SEC) if it meets specific criteria.

  • Once you’ve purchased stock, it cannot expire, and you’ll forever own a part of that company unless you sell or give it away. There may be an expiry date on stock options, but this is just the period in which you need to decide whether you want to buy said stock or not. In these cases, the listed end date for future stocks is usually the third of every month.

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Stock Purchase Agreement Template

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This stock agreement template helps you break down the value of shares and timeline for the sale, assuring both sides of the transaction are covered.

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