What is contained in a Stock Purchase Agreement

A stock purchase agreement typically contains the following information:

Parties: The names and addresses of the parties to the agreement, including the buyer and seller(s).
Securities: The type of securities being sold, such as common or preferred stock, and the number of shares being purchased.
Purchase Price: The price per share that the buyer will pay to the seller(s), and the total purchase price.
Investor Rights: The stock purchase agreement may also include specific provisions related to investor rights, such as the right to participate in future funding rounds, representation on the board of directors, and the right to certain information about the company's financial and operational performance.
Liquidation Preference: Preferred stock typically carries a liquidation preference, which gives the holder the right to receive a certain multiple of their investment in the event of a liquidation or sale of the company. The stock purchase agreement should clearly outline the liquidation preference terms and conditions.
Closing: The date and location of the closing of the transaction.
Representations and Warranties: The representations and warranties made by the seller(s) about the company and the securities being sold, such as the accuracy of financial statements and the absence of any material liabilities.
Indemnification: The protections and limitations on the liability of the parties in the event of a breach of the representations and warranties.
Governing Law: The state law that governs the agreement.
Confidentiality: The obligations of the parties to maintain the confidentiality of certain information related to the transaction.
Termination: The circumstances under which the agreement will terminate, such as if the closing does not occur by a certain date.
Remedies: The remedies available to the parties in the event of a breach of the agreement.
Amendments: The procedures for making changes to the agreement.

A stock purchase agreement is used to document the sale of securities in a private company and protect the interests of both the buyer and seller(s). It outlines the terms of the transaction, including the purchase price, representations and warranties, and closing date.