This template is a Stock Purchase Agreement (Pro-Seller) (DE) for use in the acquisition of 100% of a private company's outstanding shares on a cash free, debt free basis. It contains an optional earn-out purchase price adjustment mechanism. This template includes practical guidance, drafting notes, alternate clauses and optional clauses. Click here to see recent examples of publicly filed stock purchase agreements in Market Standards. In a stock purchase agreement, a Buyer purchases the shares of a target Company from its stockholders. Unlike an asset acquisition, it does not buy the assets themselves. As a result, the Company continues to operate as it existed prior to the stock acquisition. It continues to exist as a separate entity, to remain a party to its contracts, and to hold title to its assets; only the ownership has changed. Structuring an acquisition as a stock purchase has benefits and drawbacks. It is generally simpler from a structuring and documentation standpoint. Unlike an asset purchase, the Parties do not need to identify specific assets and liabilities to be transferred, which may require extensive disclosure schedules and lengthy due diligence. Unlike a merger, there is no need to create a merger subsidiary entity or file a certificate of merger with state authorities. In addition, because the same entity will continue to hold the assets following the transaction, fewer third-party consents and transfer approvals will be required, which could further delay or complicate a transaction (other provisions known as "change of control" provisions may still be triggered, however). Stock purchase agreements are ideal when there are fewer stockholders, and if either all the stockholders agree to sell their shares or if minority stockholders can be compelled to sell their shares. For a discussion of how to compel minority stockholders to sell their shares, see the discussion of drag along rights in Stockholders' Agreements in M&A Deals. Stock purchase agreements often provide less flexibility. Because an entire company is being purchased, a Buyer cannot purchase only specific assets or portions of a business. Even more importantly, asset purchases allow Buyer to purchase only certain liabilities, which protects Buyer from unknown or undisclosed liabilities. To avoid such liabilities, consider using an Asset Purchase Agreement (Pro-Buyer) (DE). Further, unlike a merger, stock purchase transactions may not be possible if too many target Company stockholders oppose the transaction. Parties to a stock purchase agreement should always consider whether the offer and sale of the Company's shares by the Company's stockholders are exempt from registration under federal and state securities laws. The regulatory schemes that are addressed in this template are those that are generally applicable without regard to industry, such as anti-trust, tax, ERISA, environmental, anti-corruption and federal securities regulation. The template is generally pro-seller. For a pro-buyer stock purchase agreement, see Stock Purchase Agreement (Pro-Buyer) (DE). For more detailed discussion of the considerations in drafting a stock purchase agreement, see Stock Purchase Agreement Basics. For a full listing of related stock acquisition content, see Stock Acquisition Resource Kit. Market Standards - M&A enables users to search, compare, and analyze its comprehensive database of transactions using over 150 detailed data points to filter search results. You can customize any search to your needs by adding filters or modifying the search criteria. To compare selected state laws on asset sales and appraisal rights, see the Corporate and M&A section of the State Law Comparison Tool.