A Stock Exchange Agreement is a written contract, signed and executed by representatives of two or more companies, whereby the participants in the agreement agree to exchange stock, usually as a precursor to the signing of a merger or acquisition agreement by and between the parties. When one person or entity owns more than 50% of a company’s outstanding stock, that person or entity is said to be the “controlling shareholder” of the company. Typically, stock exchange agreements will involve more than 50% of one of the companies’ outstanding stock, so that the other party becomes a controlling shareholder. Also known as “share exchange agreements”, these contracts are common in the world of corporate law and finance and are generally governed by the laws of Delaware or state where the two corporations maintain their headquarters or principal place of business.

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