Series A Spa

Series A Stock Purchase Agreement

Drafts a market-standard Series A SPA governing preferred stock sales in early-stage venture financings. Follows NVCA model document conventions unless the term sheet specifies otherwise.

Prerequisites

Gather before drafting:

• Term sheet — executed, with economic and governance terms
• Cap table — all outstanding equity, options, warrants, convertibles
• Org docs — COI, Bylaws, prior financing documents
• Investor details — legal names, entity types, jurisdictions, addresses
• Transaction specifics — share count, price per share, aggregate raise, closing structure
• Ancillary agreement terms — Amended COI, IRA, Voting Agreement, ROFR/Co-Sale
• Due diligence materials — financials, IP, material contracts, litigation, employment agreements

Quick Start

1. Search client repository for term sheet, cap table, prior financing docs, correspondence, and org docs
2. Determine: (a) primary-only vs. primary + secondary; (b) single vs. multiple closings; (c) concurrent ancillary agreements
3. Draft articles I–X per the workflow below
4. Run the validation checklist before delivering

Core Workflow

Art. I — Definitions & Preamble

• Full legal names, entity types, jurisdictions for Company and each Purchaser
• If secondary: separately identify each Selling Stockholder
• Schedule of Purchasers: name, share count, purchase price
• Cross-reference all concurrent Transaction Documents
• Verify figures reconcile with aggregate totals

Art. II — Purchase & Sale

• Purchasers severally (not jointly) purchase; Company issues
• Payment: wire of immediately available funds; specify account mechanism
• Delivery: stock certificates or book-entry; registered in Purchaser names
• If multiple closings: deadline, min/max amounts, price parity, extension/termination rights
• Shares: validly issued, fully paid, non-assessable
• If secondary: parallel transfer mechanics with separate seller delivery obligations

Art. III — Company Reps & Warranties

Draft with disclosure schedules. Fundamental reps (organization, authorization, capitalization) take no knowledge or materiality qualifiers. Other reps use knowledge qualifier limited to actual knowledge of named officers after reasonable inquiry.

• Organization & standing (unqualified)
• Authorization — board/stockholder approval, binding obligation (unqualified)
• Capitalization — by class, option pool, no undisclosed equity rights (unqualified; attach schedule)
• No conflicts — COI/Bylaws, contracts, laws; consents obtained
• Financial statements — GAAP, fair presentation
• No undisclosed liabilities
• IP — ownership/licenses, no infringement claims, employee IP assignments
• Material contracts — above threshold, affiliate transactions, no defaults
• Litigation — no pending/threatened actions
• Compliance with laws — employment, environmental, export, anti-corruption
• Tax — returns filed, paid, no audits
• Employee matters — agreements, wage/hour, labor, IP assignments
• Data privacy & security (tech companies) — privacy law compliance, reasonable security, no breaches

Define "Material Adverse Effect" excluding general economic/industry conditions and transaction-related changes.

Art. IV — Seller Reps (Secondary Only)

• Good title, free of liens (except Transaction Documents and securities laws)
• Authority and capacity
• No conflicting agreements or restrictions waived
• Securities law compliance
• No finder's fees payable by Company or Purchasers
• Independent evaluation; reliance on own advisors

Art. V — Purchaser Reps

• Authority, organization, binding obligation
• No conflicts; all consents obtained (investment committees, LPs, regulators)
• Investment intent — own account, no distribution intent
• Accredited investor status per Rule 501(a) — specify basis
• Non-U.S. purchasers: Reg S or applicable exemption
• Risk acknowledgment — illiquidity, potential total loss
• Transfer restriction acknowledgment — legends, no registration obligation
• ERISA compliance (fund purchasers)

Art. VI — Covenants

Pre-closing (Company): Ordinary course; no action without Purchaser consent (specify % threshold):

• Amend COI/Bylaws, issue equity (except ordinary-course options), incur debt above threshold
• Create liens, acquisitions, material asset dispositions, dividends, affiliate transactions
• Change accounting methods, settle litigation above threshold

Ongoing:

• Confidentiality — all parties; 2–3 year survival; standard exceptions
• Information rights — annual audited, quarterly unaudited, annual budget, material developments
• Share reservation for full conversion
• Corporate maintenance — existence, good standing, insurance, compliance
• Rule 144 cooperation

Art. VII — Conditions Precedent

To Purchasers' obligations:

• Reps true and correct in all material respects at closing
• Covenants performed; no Material Adverse Change
• Delivery: Amended COI (SOS-certified), Bylaws, IRA/Voting/ROFR agreements, stock certificates, legal opinion, officer/good standing certificates, resolutions
• Regulatory approvals (HSR if applicable); no governmental prohibition

To Company's obligations:

• Purchaser reps true; covenants performed
• Delivery: purchase price, executed Transaction Documents, accredited investor documentation

Waiver requires written consent of benefited party only.

Art. VIII — Indemnification

Procedure: Prompt written notice (failure relieves only to extent of material prejudice) → indemnifying party may assume third-party defense if it acknowledges obligation → no settlement without consent if non-monetary obligations or liability admission → set-off only after final determination → offset by insurance/tax recoveries.

Art. IX — Termination

Surviving provisions: confidentiality, expenses, governing law, dispute resolution, pre-termination breach liability. No relief for willful breach or fraud.

Art. X — Miscellaneous

Governing law: Delaware (no conflicts-of-law). Exclusive jurisdiction: Delaware Chancery / D. Del. Jury waiver. Written notices (personal delivery, email with confirmation, overnight courier +1 BD, certified mail +3 BD). Amendment: Company + majority/⅔ of purchased shares. Written waivers only. Severability. Entire agreement. Electronic counterparts. No assignment without consent (except affiliates/M&A). No third-party beneficiaries (except indemnified parties). Each party bears own expenses; Company pays filing/transfer taxes. Mutual consent for publicity.

Validation Checklist

• Securities law compliance — Reg D exemption (506(b) or 506(c)), blue sky filings, Form D
• Ancillary doc consistency — cross-references match Amended COI, IRA, Voting Agreement, ROFR/Co-Sale
• Disclosure schedules — every rep flagged; none left empty without "to be completed by Company"
• Secondary sales — parallel but separate provisions; no commingled Company/Seller obligations
• Multiple closings — subsequent investor terms, initial investor pro rata rights specified
• Defined terms — capitalized consistently, defined on first use or in Art. I, all used
• Internal consistency — share numbers, dollar amounts, percentages, dates reconcile across body and schedules
• Uncertain citations marked [VERIFY]
• Non-Delaware incorporation flagged for provision adjustments