Stock Agreement - Buy Sell Agreement Between Shareholders and Corporation

Stock Agreement – Buy Sell Agreement Between Shareholders and Corporation

This Stock Agreement (the Agreement) is made on the (date), between , a Company organized and existing under the laws of the state of , with its principal office located at , referred to herein as Company, of , referred to herein as First Stockholder, and , of , hereinafter called Second Shareholder.

Whereas, the above-named stockholders desire to assure continuity of ownership of the Company; and

Whereas, the stockholders, have agreed, in order to insure such continuity, to restrict the sale or transfer of shares of the Company, both during the lifetime and at the death of any of the stockholders.

Now, therefore, for and in consideration of the mutual covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Right of First Refusal

If any stockholder shall, during the stockholder’s lifetime, desire to sell or transfer all or any part of the stockholders shares of stock in the Company, the stockholder shall first offer to sell the above-mentioned shares to the Company at a price per share equal to the then book value of each of the shares as of the last day of the calendar month next preceding the date the shares are offered for sale. Book value shall be determined by the independent certified accountants for the Company and such valuation shall be in accordance with generally accepted accounting principles consistent with the method of accounting then employed by the Company and shall be binding on the parties.

2. Offer to Other Stockholders if Company does not Purchase

The offer to sell shall be communicated in writing by the selling stockholder to the Board of Directors of the Company and to all other stockholders, and the Company shall have a period of days after receipt of such notice in which to exercise its rights to purchase the shares at a price determined as specified in Section 1. If the Company shall refuse or neglect to notify the selling stockholder in writing of its intention to purchase the shares within the -day period, or the Company is prohibited by law from making such a purchase or redemption, the selling stockholder shall then notify in writing the other stockholders of the stockholder’s intention to sell and the number of shares offered for sale, and the other stockholders shall have an additional period of days within which to accept such purchasing stockholder’s proportionate ownership of the Company immediately prior to the receipt of such offer to sell.

3. Stockholder’s Rights if Neither Company nor Other Stockholder’s Exercise Option.

If neither the Company nor the other stockholders elect to purchase the shares within the time limited on the terms set forth above, the stockholder desiring to sell or transfer his or her shares shall be free to do so to any other person or Company free of any restrictions provided herein; provided, however, that such sale or transfer shall not be on terms less favorable to the selling stockholder unless the less favorable terms are re-offered to the Company and/or the other stockholders as herein provided. If the sale or transfer to any other such person or Company is not completed within days after the expiration of the periods of time set forth in this agreement, the selling stockholder must, before making any subsequent sale or transfer, re-offer the shares to the Company and/or the other stockholders as provided in this agreement.

4. Closing of Sale

The closing of the sale and transfer of such shares to the Company or to the other stockholders of the Company shall take place within days after the acceptance of the selling stockholder’s offer to sell, and the purchase price so determined shall be paid by the purchaser to the seller by means of a promissory note with interest on the unpaid principal amount of % per annum. Said Note shall be payable at , or at such other place as the holder may designate in writing, in consecutive monthly installments of $ , with the first of said installments being due and payable on the first day of the month following the sale (pro-rated accordingly), and on the first day of each subsequent month thereafter until the entire indebtedness evidenced by this Note is fully paid. Said promissory note shall permit prepayment at any time without penalty.

Simultaneously with such payment, the stock of the selling stockholder shall be delivered to the purchaser in such form as to effectively transfer such shares, at which time such selling stockholders rights as a shareholder of the Company shall cease to exist as to the shares so transferred.

5. Death of Stockholder

On the death of a stockholder named above, the Company shall purchase and the estate or personal representative of the deceased stockholder shall sell the decedent’s stock in the Company for a consideration equal to the book value of such stock as established by the accountants for the Company as herein provided above. In the event the Company is then prohibited by law from making such purchase or redemption of the decedent’s shares of stock in the Company, the then surviving stockholders of the Company shall purchase and the decedent’s estate shall sell all of the shares of stock owned by the decedent on the date of his or her death at the same price and on the same terms and conditions as set forth above. In the event of the survival of two or more stockholders of the Company, each shall be jointly and severally liable to the decedent’s estate for the purchase price, but, as between them they shall share such liability in the ratio that the number of the shares of stock respectively owned by them at the time of the decedent’s death bears to the aggregate number of such shares and the shares of stock owned by the decedent’s estate shall, in like manner, be apportioned between them based on their proportionate ownership of the shares of stock of the corporation at the date of the decedent death. The closing of the sale and purchase of the shares by the Company or, in the event of its inability to complete the purchase by the surviving stockholders shall be made within months after the date of the deceased stockholder’s death. In making the valuation of the shares, the accountants for the Company shall determine the book value as herein provided as of the end of the calendar month next preceding the date of the decedent’s death.

6. Legend on the Stock Certificate

No stockholder of the corporation shall sell or offer to sell to a person not a party to this agreement, nor transfer or assign any of his or her right, title, or interest in or to any stock owned by the stockholder during the stockholders lifetime nor shall a stockholders heirs, personal representatives, successors, or assigns make any such sale or transfer of such shares after the death of any of the stockholders except in accordance with the terms and conditions of this agreement. Certificates of stock subject to this agreement shall be endorsed as follows: “This certificate of stock is subject to a stock purchase agreement between its owners, the issuing corporation, and the other stockholders thereof, dated and is transferable only in accordance with the agreement”

7. Termination of Agreement

This agreement shall terminate and become null and void on the occurrence of any of the following events:

A. Cessation of the corporate business or enterprise during the lifetime of the stockholders;

B. Bankruptcy or receivership or dissolution of the corporation;

C. Death of the stockholders simultaneously or within a period of days, one from the other; or

D. Mutual agreement of termination executed by all of the stockholders of the Company and shown in the minute book.

WITNESS our signatures as of the day and date first above stated.