A Stock Purchase Agreement is a legal contract in which a seller transfers ownership of stock in a corporation to the purchaser. Stock purchase agreements are used in a variety of situations, but they are most commonly drafted in conjunction with the sale of stock by a Company to an investor as part of a financing event as opposed to the sale of stock between two investors.
The stock purchase agreement (also know as a share purchase agreement) sets forth the terms of the purchase and sale of the stock to the investors, including but not limited to:
Ø Pricing and the number of shares to be purchased,
Ø Closing date,
Ø The Representations of both the Seller (usually the Company) and Buyer,
Ø Conditions to closing, and
Ø Other miscellaneous provisions, including the stock purchase agreement governing law clause
In cases where the stock purchase agreement is used in a funding event, the agreement will also identify other documents and agreements associated with the financing. These include:
Ø The Articles or Certificate of Incorporation, which sets forth the characteristics of the stock being sold, along with the other equity of the company,
Ø Registration Rights Agreements, Rights of First Refusal and Co-Sale, Voting Agreements, and other Investor Rights Agreements, etc. which define the relationship of the parties following the closing of the stock purchase
A service provided by www.RealDealDocs.com provides easy access to millions of these types of legal agreements and clauses from top law firms and public companies. For lawyers and other business professionals who work with and draft these types of agreements, it is extremely useful to be able to quickly find these types of legal documents to gain competitive intelligence while saving time and money in the research and drafting process.
