Shareholders Buy Sell Agreement of Stock in a Close Corporation
with Agreement of Spouse
This Shareholders Agreement is made by and among Shareholder Alpha of
, referred to herein as Alpha , Shareholder Beta of
(Street Address, City, County, State, Zip Code)
, referred to herein as Beta, and Shareholder
(Street Address, City, County, State, Zip Code)
Gamma , of , Alpha, Beta and Gamma and any
(Street Address, City, County, State, Zip Code)
subsequent person or entity holding common stock of the Company hereinafter sometimes
referred to individually as a Shareholder and collectively as the Shareholders and
, a corporation organized and existing under the laws of the
(Name of Corporation)
state of , with its principal office located at
(Name of State)
, referred to herein as the Company.
(Street Address, City, County, State, Zip Code)
Whereas, in order to insure the harmonious and successful management and control of the
Company, and to provide for an orderly and fair disposition of shares of common stock of the
Company now or hereafter owned by any Shareholder;
Now, for and in consideration of the mutual covenants contained in this Agreement, and other
good and valuable consideration, the parties agree as follows:
I. Definitions.
A. Offering Shareholder means any Shareholder, or his personal representatives,
heirs, administrators, and executors, as the case may be, who pursuant to this Agreement
must or does offer all or any of his Shares to the Company or the Continuing
Shareholders.
B. Continuing Shareholders means all Shareholders other than an Offering
Shareholder.
C. Shares means shares of Common Stock of the Company now or hereafter owned
by any Shareholder.
D. Buyer means the Company or those Continuing Shareholders who purchase an
Offering Shareholder's Shares pursuant to this Agreement.
E. Management Shareholder means Alpha, Beta and Gamma.
F. Non-management Shareholder means any Shareholder other than a Management
Shareholder.
Shareholders Buy Sell Agreement Page 1 of 12
II. Purchase for Investment. Each Shareholder represents and warrants that he is acquiring
and has acquired his Shares for his own account for investment and not with a view to, or for
resale in connection with, any distribution thereof or with any present intent of selling any
portion thereof.
III. Transfers of Shares. A Shareholder may not transfer, give, convey, sell, pledge, bequeath,
donate, assign, encumber or otherwise dispose of any Shares except pursuant to this Agreement.
A. Transfers to the Company. Notwithstanding anything to the contrary contained in
this Agreement, a Shareholder may give, sell, transfer or otherwise dispose of all or any
of his Shares to the Company at such price and on such terms and conditions as such
Shareholder and the Board of Directors of the Company may agree.
B. Transfer to Others. Except as provided for in Paragraph III(A) above, a
Shareholder desiring to dispose of some or all of his Shares may do so only pursuant to a
bona fide offer to purchase (the Offer ) and after compliance with the following
provisions. Such Shareholder shall first give written notice to the Company and the other
Shareholders of his intention to dispose of his Shares, identifying the number of Shares
he desires to dispose of, the proposed purchase price per Share and the name of the
proposed purchaser and attaching an exact copy of the Offer received by such
Shareholder.
1. The Company's Right to Purchase. The Company shall have the exclusive
right to purchase all of the Shares which the Offering Shareholder proposes to sell
at the proposed purchase price per Share. The Company shall exercise this right to
purchase by giving written notice to the Offering Shareholder (with a copy thereof
to each of the Continuing Shareholders) within thirty (30) days after receipt of the
notice from the Offering Shareholder (the 30 Day Period) that the Company
elects to purchase the Shares subject to the Offer and setting forth a date and time
for closing which shall be not later than ninety (45) days after the date of such
notice from the Company. At the time of closing, the Offering Shareholder shall
deliver to the Company certificates representing the Shares to be sold, together
with stock powers duly endorsed in blank. The Shares shall be delivered by the
Offering Shareholder free of any and all liens and encumbrances. All transfer
taxes and documentary stamps shall be paid by the Offering Shareholder.
2. The Continuing Shareholders Right to Purchase. If the Company fails to
exercise its right to purchase pursuant to Subparagraph 1 above, the Continuing
Shareholders shall have the right for an additional period of thirty (30) days (the
Additional 30 Day Period) commencing at the expiration of the 30 Day Period to
purchase the Shares which the Offering Shareholder proposes to sell at the
proposed purchase price per Share. The Continuing Shareholders shall exercise
this right to purchase by giving written notice to the Offering Shareholder prior to
the expiration of the Additional 30 Day Period that they elect to purchase his
Shares and setting forth a date and time for closing which shall be not later than
ninety (90) days after the expiration of the Additional 30 Day Period. Any
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purchase of Shares by all or some of the Continuing Shareholders shall be made
in such proportion as they might agree among themselves or, in the absence of
any such agreement, pro rata in proportion to their ownership of Shares of the
Company (excluding the Offering Shareholder's Shares) at the time of such offer,
but in any event one or more of the Continuing Shareholders must agree to
purchase all the Shares which the Offering Shareholder proposes to sell. At the
time of closing, the Offering Shareholder shall deliver to Buyer certificates
representing the Shares to be sold, together with stock powers duly endorsed in
blank. Said Shares shall be delivered by the offering Shareholder free and clear of
any and all liens and encumbrances. All transfer taxes and documentary stamps
shall be paid by the Offering Shareholder.
3. Performance of Acceptance. When exercising the rights granted in
Paragraphs III(B)(1) and (2) hereof, Buyer must elect to purchase all Shares
which the Offering Shareholder proposes to sell for the price and upon the same
terms for payment of the price as are set forth in the Offer; provided, however,
that if said offer received by the Offering Shareholder shall provide for any act or
action to be done or performed by the party making such Offer at any time before
or within thirty (30) days after the last day for exercise of Buyer's right to
purchase pursuant to Paragraphs III(B)(1) and (2) hereof, then the Buyer shall be
deemed to have complied with the terms and conditions of such Offer if Buyer
does or performs such act or action within thirty (30) days after the last day for
exercise of Buyer's right to purchase pursuant to Paragraphs III(B)(1) and (2)
hereof.
4. Sale to Third Party. If either the Company or some or all of the Continuing
Shareholders do not elect to purchase all of the Shares which the Offering
Shareholder proposes to sell, the Offering Shareholder may accept the Offer
which the Offering Shareholder mailed with his notice to the Company pursuant
to Paragraph III(B) hereof and transfer all (but not less than all) of the Shares
which he proposes to sell pursuant thereto on the same terms and conditions set
forth in such Offer, provided that any transferee of such Shares shall be bound by
this Agreement as provided by Paragraph X hereof, and further provided that if
such sale is not completed within one hundred twenty (120) days after the date
notice is received by the Company under Paragraph III(B) hereof, all such Shares
shall again become subject to the restrictions and provisions of this Agreement.
5. Right of Co-Sale. Notwithstanding any other provision hereof, in the event
the Offering Shareholder receives an Offer from an unaffiliated third party (the
Offeror ) to purchase from such Shareholder not less than 20% of the Shares
owned by such Shareholder and such Shareholder intends to accept such Offer,
the Offering Shareholder shall, after complying with the provisions of Paragraph
III(B)(1) and (2) above and before accepting such Offer, forward a copy of such
Offer to the Company and each of the Continuing Shareholders. The Offering
Shareholder shall not sell any such Shares to the Offeror unless the terms of the
Offer are extended by the Offeror to the Continuing Shareholders pro rata in
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proportion to their ownership of Shares of the Company (excluding the Offering
Shareholder's Shares) at the time of such Offer. The Continuing Shareholders
shall have ten (10) days from the date of the foregoing Offer to accept such Offer.
C. Paragraphs III(B)(1) and (2) may each during their lifetimes transfer all, hut not
less than all, of their Shares to said Shareholder's spouse or a lineal descendant of such
Shareholder, so long as prior to such transfer (i) such person, the Company, and all the
Shareholders amend this Agreement to the reasonable satisfaction of such person, the
Company and all the Shareholders to provide the parties to this Agreement with the
rights, remedies and effect provided in this Agreement as if no such transfer had
occurred, and (ii) the proposed transferee agrees in a writing satisfactory to the Company
and all Shareholders that such person shall vote for Alpha, Beta and Gamma (or their
nominees) as directors of the Company in accordance with Paragraph XIV hereof and
shall be bound by all the terms and conditions of this Agreement.
IV. Right of First Refusal.
A. Except in the case of Excluded Securities (as defined below), the Company shall
not issue, sell or exchange, agree to issue, sell or exchange, or reserve or set aside for
issuance, sale or exchange, any (i) shares of Common Stock or any other equity security
of the Company which is convertible into Common Stock or any other equity security of
the Company, (ii) any debt security of the Company which is convertible into Common
Stock or any other equity security of the Company, or (iii) any option, warrant or other
right to subscribe for, purchase or otherwise acquire any equity security or any such debt
security of the Company, unless in each case the Company shall have first offered to sell
to each Shareholder, pro rata in proportion to such Shareholder's then ownership of
Shares of the Company, such securities (the Offered Securities ) (and to sell thereto such
Offered Securities not subscribed for by the other Shareholders as hereinafter provided),
at a price and on such other terms as shall have been specified by the Company in writing
delivered to such Shareholder (the Stock Offer ), which Stock Offer by its terms shall
remain open and irrevocable for a period of 10 days (subject to extension pursuant to the
last sentence of Subsection B below) from the date it is delivered by the Company to the
Shareholder.
B. Notice of each Shareholder's intention to accept, in whole or in part, a Stock Offer
shall be evidenced by a writing signed by such Shareholder and delivered to the
Company prior to the end of the 10-day period of such Stock Offer, setting forth such
portion of the Offered Securities as such Shareholder elects to purchase (the Notice of
Acceptance). If any Shareholder shall subscribe for less than his pro rata share of the
Offered Securities to be sold, the other subscribing Shareholders shall be entitled to
purchase the balance of that Shareholder's pro rata share in the same proportion in which
they were entitled to purchase the Offered Securities in the first instance (excluding for
such purposes such Shareholder), provided any such other Shareholder elected by a
Notice of Acceptance to purchase all of his pro rata share of the Offered Securities. The
Company shall notify each Shareholder within five (5) days following the expiration of
the ten (10)-day period described above of the amount of Offered Securities which each
Shareholder may purchase pursuant to the foregoing sentence, and each Shareholder shall
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then have ten (10) days from the delivery of such notice to indicate such additional
amount, if any, that such Shareholder wishes to purchase.
C. In the event that Notices of Acceptance are not given by the Shareholders in
respect of all the Offered Securities, the Company shall have 120 days from the
expiration of the foregoing 10-day or 25-day period, whichever is applicable, to sell all or
any part of such Offered Securities as to which a Notice of Acceptance has not been
given by the Shareholders (the Refused Securities ) to any other person or persons, but
only upon terms and conditions in all respects, including, without limitation, unit price
and interest rates, which are no more favorable, in the aggregate, to such other person or
persons or less favorable to the Company than those set forth in the Stock Offer. Upon
the closing, which shall include full payment to the Company, of the sale to such other
person or persons of all the Refused Securities, the Shareholders shall purchase from the
Company, and the Company shall sell to the Shareholders the Offered Securities in
respect of which Notices of Acceptance were delivered to the Company by the
Shareholders, at the terms specified in the Stock Offer.
D. In each case, any Offered Securities not purchased by the Shareholders or other
person or persons in accordance with Section IV(C) may not be sold or otherwise
disposed of until they are again offered to the Shareholders under the procedures
specified in Sections IV(A), (B) and (C).
E. The rights of the Shareholders under this Section IV shall not apply to the
following securities (the Excluded Securities):
1. Any (a) shares of Common Stock or any other equity security of the
Company which is convertible into Common Stock or any other equity security of
the Company, (b) debt security of the Company which is convertible into
Common Stock or any other equity security of the Company, or (c) option,
warrant or other right to subscribe for, purchase or otherwise acquire any equity
security or any such debt security of the Company (collectively, an Equity
Security) if the issuance of such Equity Security does not alter the respective
proportions of ownership (on a fully diluted basis) by Alpha, Beta and Gamma , as
among themselves, of Equity Securities immediately prior to the issuance of such
Equity Security;
2. Common Stock issued as a stock dividend or upon any stock split or other
subdivision or combination of the outstanding shares of Common Stock;
3. Securities issued pursuant to the acquisition by the Company of another
corporation to the stockholders of such other corporation by merger or purchase
of substantially all of the assets whereby the Company owns not less than 51% of
the voting power of such other corporation; and
4. Common Stock issued in connection with a firm underwritten public
offering of shares of Common Stock, registered pursuant to the Securities Act.
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V. Sale or Redemption upon Termination of Employment or Upon Disability or upon Death.
Upon the termination of a Management Shareholder's employment or other relationship with the
Company (including without limitation, any position as an officer, director, consultant, joint
venturer, independent contractor, or promoter to or of the Company) for whatever reason, the
Disability (as defined below) of a Management Shareholder, or the death of a Management or
Non-management Shareholder (any such event hereinafter a Triggering Event), such Shareholder
(or his heirs, executors, guardian or personal representative) within sixty (60) days after the
Triggering Event shall offer to sell all, but not less than all, of the Shares owned by the
Shareholder. Each offer shall be made to the Company in writing and shall exist for a period of
ninety (90) days after such offer has been received by the Company. If the Company fails to
purchase all of the Shares offered, the offer to sell shall be made in writing to all of the
Continuing Shareholders in such proportion as the Continuing Shareholders may agree among
themselves, or in the absence of agreement, pro rata in proportion to their then ownership of
Shares of the Company (excluding the Offering Shareholder's Shares), and shall exist for a
period of ninety (90) days after the offer has been received by all of the Continuing Shareholders.
For purposes of this Agreement, Disability of a particular person means the inability, due to a
physical or mental condition, of such person to maintain his employment or other relationship
with the Company (including without limitation, fulfilling his duties in any position as an officer,
director, consultant, joint venturer, independent contractor, or promoter to or of the Company) or
to conduct his normal daily activities on behalf of the Corporation for any six (6) consecutive
month period.
VI. Purchase Price. The purchase price for all Shares purchased pursuant to Paragraph V
hereof shall be determined as follows:
A. The Company or the Continuing Shareholders, as the case may be, within thirty
(30) days after receipt of any offer referred to in Paragraph V above, shall notify the
Offering Shareholder of the price at which the Company or the Continuing Shareholders,
as the case may be, are willing to purchase the Shares.
B. In the event the Offering Shareholder objects to the purchase price established in
accordance with Paragraph VI(A) above, the Offering Shareholder shall have the right to
solicit offers to buy the Shares in accordance with the provisions of Paragraph III(B) of
this Agreement. The right to solicit offers shall be subject to the terms and conditions of
Section III(B) and (C) hereof, including without limitation, the rights of first refusal and
co-sale and the period during which any right of first refusal must be exercised but shall
not be subject to the one hundred twenty (120) day period referred to in Paragraph III(B)
(4) of this Agreement.
VII. Payment of Purchase Price. The purchase price for all Shares purchased pursuant to
Paragraph V hereof shall be paid at the closing of the sale.
VIII. Put and Call Options.
A. Put and Call Options. Each Shareholder shall have the right and option upon the
written declaration (a Declaration) by such Shareholder to the other Shareholders and the
Company of the occurrence of an impasse (as defined below) to sell to the Continuing
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Shareholders all of his Shares, and the Continuing Shareholders shall have the obligation
to either (i) purchase all of such Shares owned by the offering Shareholder in such
proportion as the Continuing Shareholders may agree upon, and if they cannot so agree,
pro rata in proportion to their then ownership of Shares of the Company (excluding the
Offering Shareholder's Shares) or (ii) if the Continuing Shareholders are unable or
unwilling to purchase all of the Shares owned by the Offering Shareholder, sell all of
their Shares to the Offering Shareholder, and the Offering Shareholder shall have the
obligation to buy such Shares.
B. Impasse. An impasse shall be conclusively evidenced by (i) either Alpha, Beta and
Gamma , or their respective representative, voting opposite the others at a vote at a
shareholders meeting or at a vote at a meeting of the Board of Directors of the Company
(or failing to attend such meetings upon due notice if such failure results in the lack of a
quorum making such vote impossible), which vote is on a material issue, not in the
ordinary course of business, and affecting the business, assets or operations of the
Company, including, but not limited to, a proposal to merge, liquidate, consolidate or
dissolve the Company, or to sell, lease or dispose of all or substantially all of the assets of
the Company or to amend the substantive provisions of the Company's bylaws or articles
of incorporation, or to issue or redeem stock, or to declare dividends of any kind, and (ii)
either Alpha, Beta and Gamma notifying the others and the Company and any other
Shareholders within thirty (30) days after such meeting, proposed meeting or vote than an
impasse has occurred. The put and call rights granted to each Shareholder under this
Paragraph VIII are independent of the other rights granted to the Shareholders and the
Company under the other terms of this Agreement and such rights are not mutually
exclusive or inconsistent.
C. Exercise of Option. The Continuing Shareholders shall exercise any option
provided for in this Paragraph VIII within thirty (30) days after receipt of a declaration.
Any closing of the sale of Shares pursuant to such exercise shall occur within ninety (90)
days after receipt of a Declaration.
D. Purchase Price. Any purchase or sale of Shares sold pursuant to this Paragraph
VIII shall be at the price as set forth in the Declaration delivered by the Shareholder
exercising his right to sell his shares and shall be paid at the closing of the sale of the
Shares.
IX. Rights Upon Registration. In the event that the Company shall register or qualify any or
all of the common stock of the Company under the Securities Act of 1933, as amended (or any
similar statute then in force), on an appropriate registration statement, the Company shall give
the Shareholders written notice thereof, and upon written request of a Shareholder, received by
the Company not later than fifteen (15) days after receipt by the Shareholder of such notice, the
Company will include in the registration statement filed by the Company with the Securities and
Exchange Commission all Shares held by such Shareholder with respect to which the
Shareholder shall have so requested registration.
Shareholders Buy Sell Agreement Page 7 of 12
X. Agreement Binding on All Persons Interested in Shares. Each person who now or
hereafter acquires any legal or equitable interest in any Shares shall be bound by the terms of this
Agreement. No issuance or transfer of Shares shall be effective and the Company shall not enter
any issue or transfer upon the stock books of the Company or issue a certificate in the name of
any person unless the Company is satisfied that such person is, and in a manner satisfactory to
the Company has acknowledged being, bound by this Agreement.
XI. Closing. Except as otherwise agreed to or expressly provided for herein, closing pursuant
to the exercise of a right to purchase or sell Shares pursuant to this Agreement shall be held at the
principal executive offices of the Company.
XII. Entry of Legend Upon Stock Certificates. The following legend shall he immediately
entered on each stock certificate representing Shares owned by the Shareholders:
The gift, sale, mortgage, pledge, hypothecation or other encumbering or transfer of the
shares of the capital stock represented by this certificate is restricted in accordance with
the terms and conditions of a Shareholders Agreement dated the day of 1996, a copy of
which is on file at the principal executive offices of the Company. Said Shareholders
Agreement restricts the ability of the Shareholder to sell, give, pledge, bequeath or
otherwise transfer or dispose of this stock certificate and the shares of capital stock
represented by it.
XIII. After Acquired Shares -- Subsequent Shareholders. The terms and conditions of this
Agreement shall specifically apply not only to Shares owned by Shareholders at the time of
execution of this Agreement, but also to any Shares acquired by any Shareholder subsequent to
such execution.
XIV. Board of Directors. At each election of the Board of Directors of the Company, the
Shareholders shall vote their Shares to elect three directors of the Company, one director being
Alpha, or his nominee, one director being Gamma, or his nominee, and one director being Beta,
or his nominee.
XV. Community and Marital Property Laws. Notwithstanding anything to the contrary
contained herein, the following terms shall control to the extent community property laws or
other marital property laws apply to the Shares of any Shareholder:
A. Lifetime Transfers. The provisions of this Agreement regarding restrictions
against the transfer of Shares shall apply to any interest of the spouse of any Shareholder
in such Shares (said spouse is hereinafter referred to as a Spouse).
B. Transfers Upon Death of Spouse. If the Spouse of a Shareholder predeceases such
Shareholder and has failed to bequeath to such Shareholder the deceased Spouse's entire
marital property interest, if any, in the Shares held by the Shareholder, or if the Spouse of
a Shareholder is adjudicated to be bankrupt or insolvent, or makes an assignment for the
benefit of his or her creditors (collectively referred to herein as an Event), then to the
extent necessary to divest the Spouse of any interest in the Shares of such Stockholder,
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within three months after the date of the occurrence of the Event, the Shareholder shall
have the option to and must purchase such marital property interest of his or her Spouse
or the estate of the deceased Spouse, as the case may be, in the Shares held by the
Shareholder at a price equal to the lesser of either the value of the spouse's marital
property interest in such Shares or the book value of such Shares.
C. Marital Dissolution. Any decree of dissolution, separate maintenance agreement
or other property settlement between a Shareholder and his or her Spouse shall provide
that the entire marital property interest of the Spouse in the Shares of the Shareholder
shall be granted to the Shareholder as part of the division of the property of the marriage
and the Spouse shall release and the Shareholder shall accept any marital property
interest of such Spouse in the Shares. If payment for such Shares is ordered by the Court
or demanded by the Spouse, no consideration shall be required, but if the Shareholder
volunteers consideration for said release of interest it shall be no greater than the lesser of
either the value of the Spouse's marital property interest in such Shares or the book value
of the Spouse's marital property interest in such Shares.
D. Inclusion of Marital Property. Any purchase of the Shares of a Shareholder
pursuant to any provision of this Agreement shall include without limitation or condition
the entire marital property interest of the Spouse of such Shareholder in the Shares being
purchased.
E. Determination of Value. Book value and the value of a Spouse's interest in the
Shares of a Shareholder for purposes of this Paragraph XV shall be determined by the
Shareholder. The Company and the other Shareholders shall not be responsible for the
determination of the value of the marital property interest of any Spouse of a Shareholder,
the determination of book value, or the purchase of or payment for such Spouse's marital
property interest in the Shares of a Shareholder.
XVI. Insurance. The Company may, if it so desires, purchase insurance policies on the life of
any Management Shareholder for the purpose of payment for stock purchases or as key man
insurance. If any Shareholder on whose life the Company owns an insurance policy shall at any
time during his lifetime sell all of his Shares, then that Shareholder shall have the right to
purchase from the Company the insurance policy or policies on his life at the cash surrender
value, if any. The Company shall deliver the policy or policies on the life of such Shareholder
upon payment of the cash surrender value, if any, end shall execute any necessary instruments of
transfer and change of beneficiary forms.
XVII. Subchapter S Election. The Company may elect to be taxed as a small business
corporation under Subchapter S of the Internal Revenue Code, as amended from time to time (the
Code), or such other provisions of law as may hereafter be applicable to such an election, and for
state income tax purposes, if available (hereinafter, an Election). Each Shareholder and the
Company agree to execute and file the necessary forms for making and maintaining en Election,
and each Shareholder agrees to deliver to the Company the consent of the spouse of such
Shareholder if such consent is required for the Election under any community or marital property
laws or otherwise. The Shareholders and the Company agree that they will take such other
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actions as may be deemed necessary or advisable by counsel to the Company to exercise or
maintain the Election. The Shareholders shall maintain the Election unless the Management
Shareholders unanimously agree otherwise or in the event that the Board of Directors requests
that the Shareholders revoke the Election, in which case the Shareholders shall promptly execute
and deliver to the Company such documents as may be necessary to revoke the Election. None of
the Shareholders, without the consent of all of the Management Shareholders, shall take any
action or position, or make any transfer or other disposition of his shares of the Company which
may result in the termination or revocation of the Election. In the event of an inadvertent
termination of the Election as described in Section 1362(f) of the Code or other applicable law,
the Shareholders shall agree to make such adjustments as may be required to continue the
Election, as provided in Section 1362(f)(4) of the Code or other applicable law.
XVIII. Pro Rata Allocations. All items of income and loss of the Company shall be assigned pro
rata to each day throughout the year. However, the Shareholders hereby consent to make an
election pursuant to Section 1362(c)(3) of the Code or Section 1377(a)(2) of the Code in the
event that the Board of Directors determines such elections to be in the best interest of a majority
of the Shareholders.
XIX. Authorization. The Company is authorized to enter into this Agreement by virtue of a
resolution passed at a meeting of the Board of Directors.
XX. Notices. Notices and declarations under this Agreement shall be in writing and sent by
registered or certified mail, return receipt requested, postage paid, to the Company at its principal
executive offices and to Shareholders at their last address as shown on the records of the
Company or at such other address with respect to any party hereto as such party shall notify the
other Shareholders and the Company in writing in the manner specified herein.
XXI. Termination. The rights and obligations of the Company and the Shareholders under this
Agreement shall terminate upon written agreement of all then existing Shareholders or upon the
registration or qualification of any or all of the Common stock of the Company pursuant to
Paragraph IX hereof.
XXII. Severability. The various provisions of this Agreement are severable from each other and
from the other provisions of the Agreement, and in the event that any provision in this
Agreement shall be held to be invalid or unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall be fully effective, operative and enforceable.
XXIII. Free end Clear of Encumbrances. All Shares sold pursuant to the terms of this Agreement
shall be free of any and all liens and encumbrances and accompanied by stock powers duly
endorsed in blank.
XXIV. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, personal representatives, executors, administrators,
successors and assigns.
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XXV. Gender. Pronouns used herein are to be interpreted as referring to both the masculine and
feminine gender.
XXVI. Governing Law. This Agreement shall be governed by, construed, and enforced in
accordance with the laws of the State of .
(Name of State)
XXVIII. Attorney’s Fees. In the event that any lawsuit is filed in relation to this
Agreement, the unsuccessful party in the action shall pay to the successful party, in addition to
all the sums that either party may be called on to pay, a reasonable sum for the successful party's
attorney fees.
XXIX. Mandatory Arbitration. Notwithstanding the foregoing, and anything herein to the
contrary, 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.
XXX. 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.
WITNESS our signatures as of the day of , 20 .
By: By:
(Signature of Alpha) (Signature of Beta)
(P rinted Name of Alpha) (P rinted Name of Beta)
By:
(Signature of Gamma)
(P rinted Name of Gamma)
Spousal Consent to Shareholder Agreement
The undersigned being the spouse of Shareholder Alpha, one of the Shareholders named in the
foregoing Shareholders Agreement (the Agreement) , hereby acknowledges that:
I. I have read the foregoing Agreement in its entirety and understand that:
A. Upon the occurrence of certain events as specified in the Agreement, the
Company, my spouse, and the other Shareholders will have the right to and may be
obligated to purchase Shares owned by another Shareholder at a price and on terms and
conditions set forth in the Agreement;
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B. Any purchase of the Shares of any Shareholder will include his or her entire
interest in such Shares and any community property interest and other marital property
interest of the spouse of such Shareholder; and
C. The Agreement imposes certain restrictions on any attempts by me to transfer any
interest I may have in the Company or any Shares of the Company by virtue of my
marriage and confers on my spouse the right and obligation to purchase any interest I
may have in the Company or any Shares of the Company upon the occurrence of certain
events.
II. I hereby approve and agree to be bound to all of the terms of the Agreement and agree
that any interest (community property or otherwise) that I may have in the Company or any
Shares of the Company shall be subject to the terms of this spousal consent and the Agreement.
III. I agree that my spouse may join in any future amendments or modifications to the
Agreement without any notice to me and without any signature, acknowledgment, agreement or
consent on my part.
IV. I agree that I will transfer or bequeath any interest I may have in the Company or any
Shares of the Company by my will, outright and free of trust to my spouse.
V. I acknowledge that I have been advised and have been encouraged to seek independent
counsel of my own choosing to represent me in matters regarding the Shareholders Agreement
and my execution of this spousal consent.
VI. I hereby consent to the Company and my spouse making and maintaining the Subchapter
S Election (if applicable) under the Internal Revenue Code, as amended from time to time.
WITNESS my signatures as of the day of , 20 .
By:
(Signature of Spouse)
(Printed Name of Spouse)
Shareholders Buy Sell Agreement Page 12 of 12
