Right of First Refusal and Co-Sale Agreement

Right of First Refusal to Purchase All Shares of Corporation from Sole Shareholder

This Right of First Refusal is made on the (date),

between of , referred to herein as Purchaser, and of , referred to herein as Seller;

Whereas, Purchaser desires to obtain a right of first refusal or first option to purchase all shares of from Seller, who is the sole shareholder;

Whereas, Seller agrees to grant Purchaser a right of first refusal or first option to purchase all shares of from Seller pursuant to the terms of this agreement;

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. Grant of Right of First Refusal

The Seller does hereby grant unto the Purchaser the exclusive and irrevocable right, during the term of this agreement, of first refusal and first option to purchase, upon the terms and conditions hereinafter set forth, all of Seller's common stock in , which consists of shares and which constitutes 100% of the said corporation’s outstanding common stock.

2. Exercise of First Option

This right of first refusal or first option to purchase may only be exercised by Purchaser within days from notification by Seller that Seller has received a bona fide offer to purchase said stock at an acceptable price (the Price). Seller is obligated to provide such notice to Purchaser prior to selling said stock to the third party making said offer.

3. TERMS OF PURCHASE

In the event Seller elects to sell and Purchaser desires to exercise his first refusal rights granted under the terms of this agreement, the terms of purchase shall be as set forth as follows:

A. On the terms and subject to the conditions set forth in this agreement, Seller agrees to sell, transfer, assign and deliver to Purchaser, and Purchaser agrees to purchase, all of the outstanding shares of capital stock of , hereafter called Corporation, consisting of shares of common stock.

B. Consideration for Stock

On the terms and subject to the conditions set forth in this agreement, Purchaser agrees to pay to Seller, as the purchase price of the shares of said capital stock, the following:

1. $ cash payable at closing; or

2. $1.00 more than any bona fide offer to purchase received by Seller from any third party; whichever is higher.

C. Conduct of Business Before Closing

Seller agrees that, from the date of this agreement until the date of closing, Corporation will at all times conduct its business in the usual and ordinary course and will not, without the written consent of Purchaser, (a) purchase, sell, or otherwise dispose of any property or services of any kind, other than purchases and sales in the ordinary course of business; (b) mortgage, pledge, create security interests in or otherwise encumber any of its properties or assets; (c) make or incur any capital commitment or expenditure or any unusual or long term commitment; (d) grant any increase in salary or other increased compensation to any of its employees; (e) declare or pay any dividend or make any other distribution to shareholders; (f) reveal to third persons any trade secrets, customer lists, or other confidential or proprietary information, or act otherwise in any manner that may adversely affect its rights, interests, assets, or business; or (g) issue or sell any additional stock or other securities, or grant any rights to subscribe for or to purchase, or any options or warrants for the purchase of, any additional stock or other securities.

D. Closing

The closing of the purchase and sale provided for in this agreement shall take place at , at , or at such other time and place as may be mutually agreed on by the parties, the time and date being referred to in this agreement as the Closing Date. At the Closing, Seller shall deliver to Purchaser all share certificates, assignments, and other instruments that may be necessary, desirable, or appropriate to transfer and assign to Purchaser all of the outstanding shares of Corporation, all in form and substance satisfactory to counsel for Purchaser..

E. Representations and Warranties of Seller

Seller represents and warrants to and agrees with Purchaser as follows:

1. Corporation is a corporation duly organized, validly existing, and in good standing under the laws of , with full corporate power to carry on its business as now being conducted and to own and operate the properties and assets now owned and operated by it. Corporation is duly qualified to transact business and in good standing in each jurisdiction where the ownership of its properties or the conduct of its business requires it to be licensed or qualified to do business. Corporation has delivered to Purchaser a copy of its certificate of incorporation and all amendments to the certificate, certified by the Secretary of State of , together with a copy of its bylaws as amended, certified by its secretary.

2. Corporation has no subsidiaries.

3. The authorized capital stock of Corporation consists of shares of common stock, of which shares are issued and outstanding as of the date of this agreement. All of the outstanding shares of Corporation are validly issued, fully paid, and non-assessable. There are no options, warrants, or other agreements or commitments obligating Corporation to issue any additional shares of capital stock or other securities.

4. Corporation has delivered to Purchaser a balance sheet for the year ending , and financial statements for the years . The financial statements are complete and accurate, have been prepared in accordance with generally accepted principles of accounting consistently applied, and fairly present the financial condition of Corporation as of and the results of its operations for the Corporation as of , together with statements of income and surplus for the years then ended. Corporation has no liabilities, whether absolute, accrued, contingent, or otherwise, other than (a) liabilities disclosed or adequately provided for on the balance sheet as of ; (b) liabilities incurred in the ordinary course of business since which, individually and in the aggregate, are not material in amount; and (c) liabilities disclosed in the Schedule referred to in Paragraph 5 of this Section.

5. Corporation has delivered to Purchaser a complete and accurate Schedule, identified by reference to this Paragraph 5 of this Section, listing all liens, encumbrances, licenses, leases, employment agreements (including any pension, profit-sharing, bonus or severance pay commitments), collective bargaining agreements, and other contracts, undertakings, and commitments to which Corporation is a party or by which it is bound or to which any of its properties are subject. Corporation has performed all obligations required to be performed by it under such liens, encumbrances, licenses, leases, contracts, agreements, and other undertakings and commitments and is not in default under any of them.

6. Corporation has delivered to Purchaser a complete and accurate Schedule, identified by reference to this paragraph of this Section, listing all equipment, furniture, fixtures, and other physical assets owned by Corporation as of the date of this agreement.

7. Corporation has delivered to Purchaser a complete and accurate Schedule, identified by reference to this paragraph of this Section, listing any trademark registrations, trademark applications, trade names, copyrights, and licenses owned or held by Corporation. Corporation owns or holds all trademarks, copyrights, licenses, and other rights necessary for the conduct of its business. The conduct of Corporation's business does not conflict with or infringe any patent, trademark, trade name, copyright, or other rights of others. No patents, inventions, trademarks, or other rights that are used, useful, or relate to the business of Corporation are owned by Seller.

8. Corporation has good and marketable title to all properties and assets used in its business, including all properties and assets reflected in the balance sheet as of , and all properties and assets acquired by it after that date, subject to no liens, mortgages, pledges, encumbrances, or charges of any kind, except as disclosed in the Schedule referred to in Paragraph 5 of this Section. The equipment and other facilities of Corporation are in good operating condition and repair.

9. Corporation has delivered to Purchaser a complete and accurate Schedule, identified by reference to this Paragraph of this Section, listing and briefly describing all policies of fire, liability, life, and other insurance maintained by Corporation. These policies are in amounts and provide coverages customarily maintained by similar businesses similarly situated and are in full force and effect on the date of this agreement.

10. Corporation has delivered to Purchaser complete and accurate Schedules, identified by reference to this Paragraph of this Section, listing (a) all employees of Corporation and their respective rates of compensation, including fringe benefits; and (b) the principal customers of Corporation and the current fee schedule with those customers, as of .

11. Attached as Exhibit A, and incorporated by reference, is a list of all bank accounts and safe deposit boxes presently maintained by Corporation, showing the names of all persons authorized to make withdrawals or sign checks on those accounts or have access to them, and any powers of attorney, presently in effect, granted by Corporation.

12. No litigation, proceeding, or controversy is pending against Corporation before any court or any governmental agency and, to the knowledge of Seller no such litigation, proceeding, or controversy is threatened or anticipated. Corporation has not violated any laws, regulations, or orders applicable to its business or activities, and the conduct of the present business of Corporation at its present location is in conformity with all zoning and building code requirements.

13. All accounts receivable of Corporation shown on its balance sheet as of , and all accounts receivable later acquired by it have been collected or are collectible in the amounts at which they are carried on its books.

14. Since , there has been no adverse change in the condition (financial or otherwise), assets, liabilities, capitalization, or business of Corporation, no dividend or other distribution declared, paid, or made on any shares of its capital stock, no direct or indirect redemption, purchase, or other acquisition on any shares of its capital stock, no decrease in its net worth [other than losses incurred in the ordinary course of business not exceeding $ in the aggregate, assuming a Closing Date of not later than ], no damage, destruction, or loss (whether or not covered by insurance) adversely affecting its properties, business or prospects; no increase in the rate of compensation payable or to become payable to any officer or other employee of Corporation (except as disclosed in the Schedule referred to in Paragraph 10 of this Section or approved in writing by Purchaser); no significant labor dispute; and no other event or condition which has adversely affected the business of Corporation.

15. Since , the business of Corporation has been conducted diligently and in the ordinary course, Corporation has not sold or transferred any of its property or assets, and no employment or other contracts have been entered into by Corporation except as disclosed in the schedule furnished pursuant to Paragraph 5 of this Section.

16. Corporation has filed all federal, state, and other tax returns that are required to be filed by it and has paid or made provision for the payment of all taxes due pursuant to those returns or pursuant to any assessment that is not being contested. The provision made for taxes on the balance sheet as of is sufficient for the payment of all accrued and unpaid federal, state, county, municipal, and local tax liabilities of Corporation for the period then ended and for all years prior to that period. Federal income tax returns of Corporation have not been audited by the United States Internal Revenue Service and Corporation has not waived any statute of limitations governing federal or state income tax claims.

17. Neither the execution nor the delivery of this agreement by Seller, nor the performance of any of their respective obligations under this agreement by Seller or Corporation, will result in a breach or violation of any term or provision of or constitute a default under any indenture, mortgage, or other agreement or instrument to which either of them is a party.

18. Seller has good title to all shares of capital stock of Corporation to be sold by Seller, with full right, power, and authority to sell and deliver the shares pursuant to this agreement. On delivery of the shares pursuant to this agreement, Purchaser will receive good and marketable title to the shares, free and clear of all liens, encumbrances, restrictions, equities, and any claims.

F. Representations and Warranties of Purchaser (if a Corporation)

Purchaser represents and warrants to and agrees with Seller as follows:

1. Purchaser is a corporation duly organized, validly existing, and in good standing under the laws of .

2. The execution, delivery, and performance of this agreement by Purchaser has been duly authorized by its board of directors, and will not result in any breach of or violate or constitute a default under the articles of incorporation or bylaws of Purchaser or any indenture, mortgage, or other agreement or instrument to which it is a party.

G. Conditions to Obligations of Purchaser

The conditions contained in this Section are included in this agreement for the benefit of Purchaser and, without constituting a waiver of any of his rights under this agreement, may be waived, in whole or in part, by Purchaser. The obligations of Purchaser under this agreement are subject to the fulfillment, at or prior to the Closing Date, of the following conditions:

1. All representations and warranties of Seller contained in this agreement and in any certificate or other instrument delivered pursuant to the provisions of this agreement, or in connection with the transactions contemplated by this agreement, shall be true on the Closing Date with the same force and effect as though the representations and warranties had been made on the Closing Date.

2. Seller shall have performed and complied with all the terms, covenants, and conditions of this agreement to be performed or complied with on or before the Closing Date.

3. Seller shall have delivered to Purchaser a certificate, dated as of the Closing Date, certifying such detail as Purchaser may reasonably request to the fulfillment of the conditions specified in this Section.

4. There shall have been delivered to Purchaser an opinion, dated as of the Closing Date, of , counsel for Seller, satisfactory in form and substance to counsel for Purchaser, to the effect that: (a) Corporation is a corporation duly organized, validly existing, and in good standing under the laws of , with full corporate power and authority to carry on its business as now being conducted; (b) all corporate proceedings of Corporation necessary to authorize the transaction contemplated by this agreement have been duly taken; (c) Corporation is duly qualified to do business and in good standing in each jurisdiction where the ownership of its properties or the conduct of its business requires such qualification; (d) this agreement has been duly executed and delivered by Seller and constitutes the legal, valid, and binding obligations of Seller in accordance with its terms; (e) all assignments and other documents necessary to effect the transfer and assignment of all outstanding shares of capital stock of Seller in Corporation to Purchaser as contemplated by this agreement have been duly executed and delivered and are adequate to transfer and assign the shares to Purchaser; (f) so far as is known to counsel, Corporation has good and unencumbered title to its assets and properties, except as set forth in the Schedule referred to in Paragraph 5 of Section E; (g) counsel is not aware of any litigation, proceeding, or controversy pending or threatened against Seller or Corporation; and (h) neither the execution nor the performance of this agreement will violate any applicable law of any jurisdiction, or any order, judgment, or decree of any court or governmental agency, or any agreement, indenture, or other instrument known to counsel.

5. No damage, destruction, or loss (whether or not covered by insurance), and no other event or condition materially and adversely affecting the properties, business, or prospects of Corporation shall have occurred.

H. Conditions to Obligations of Shareholder

The conditions contained in this Section are included for the benefit of Seller and, without constituting a waiver of any of Seller rights under this agreement, may be waived, in whole or in part, by Seller. The obligations of Seller under this agreement are subject to the fulfillment, on or before the Closing Date, of the following conditions:

1. All representations and warranties of Purchaser contained in this agreement, and in any certificate or other instrument delivered pursuant to the provisions of this agreement, or in connection with the transactions contemplated by this agreement, shall be true on the closing date with the same force and effect as though the representations and warranties had been made on the Closing Date.

2. Purchaser shall have performed and complied with all the terms, covenants, and conditions of this agreement to be performed or complied with by it on or before the Closing Date.

I. Indemnification

Seller agrees to indemnify Purchaser and Corporation against and in respect of any and all liabilities or obligations of or claims against Seller or Corporation of any nature, whether accrued, absolute, contingent, or otherwise, existing or asserted to exist as of the Closing Date to the extent the liability, obligation, or claim is not disclosed on or reserved against in full on the balance sheet of Corporation as of ; is not incurred in the ordinary course of business by Seller or Corporation subsequent to ; and any and all losses, damages, costs, and expenses incurred by Corporation or Purchaser in defending against any of those matters or by reason of any breach of any of the representations and warranties of Seller made in this agreement or in any certificate or other instrument delivered pursuant to this stock purchase agreement.

J. Expenses

Each of the parties to this agreement shall bear the party's own expenses in connection with the transactions contemplated by this agreement.

L. Survival of Warranties

The warranties, representations, and covenants set forth in this agreement shall continue in full force and effect and shall survive the closing.

4. No Waiver

The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditions of this Agreement, shall not be construed as subsequently waiving any such terms and conditions, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred.

5. Governing Law

This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of .

6. Notices

Any notice provided for or concerning this Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or registered mail if sent to the respective address of each party as set forth at the beginning of this Agreement.

7. Mandatory Arbitration

Any dispute under this Agreement shall be required to be resolved by binding arbitration of the parties hereto. If the parties cannot agree on an arbitrator, each party shall select one arbitrator and both arbitrators shall then select a third. The third arbitrator so selected shall arbitrate said dispute. The arbitration shall be governed by the rules of the American Arbitration Association then in force and effect.

8. Entire Agreement

This Agreement shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement.

9. Modification of Agreement

Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if placed in writing and signed by each party or an authorized representative of each party.

10. Assignment of Rights

The rights of each party under this Agreement are personal to that party and may not be assigned or transferred to any other person, firm, corporation, or other entity without the prior, express, and written consent of the other party.

11. Counterparts

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument.

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