A common stock purchase agreement (CSPA) is a legal document that outlines the terms and conditions of a stock purchase between a buyer and a seller. This agreement is commonly used in the sale of a privately-held company or in the issuance of new common stock by a corporation. It is an important document that should be carefully reviewed and negotiated by both parties before signing.

The CSPA typically includes details about the buyer and seller, the number of shares being purchased, the purchase price, and the payment terms. It may also include representations and warranties by the seller regarding the company`s financial condition, legal compliance, and ownership of the shares being sold. The agreement may also include provisions related to the transfer of ownership, restrictions on the sale or transfer of the shares, and any conditions or contingencies that must be met before the sale is completed.

One key consideration in a CSPA is the valuation of the company. The purchase price may be based on a multiple of earnings, revenue or assets, or may be determined through negotiations between the parties. It is important for the buyer to conduct due diligence on the company`s financial statements and other relevant information to determine a fair purchase price.

Another important consideration is the ownership structure of the company. If the company has multiple classes of stock, the CSPA may need to address the rights and preferences of each class of stock when it comes to dividend payments, voting rights, and other matters.

In addition to the above considerations, a CSPA should also address any regulatory requirements or filings that may be necessary for the sale to be completed. For example, the sale of stock in a privately-held company may require compliance with state securities laws or other regulations.

Overall, a common stock purchase agreement is a complex legal document that requires careful attention to detail. Engaging a qualified attorney to assist with the drafting and negotiation of the agreement is highly recommended. By doing so, both the buyer and seller can be confident that the agreement properly reflects their intentions and protects their respective interests.