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STOCK PURCHASE AGREEMENT
THIS AGREEMENT, made [Date of agreement], by and between [Name of Company], a corporation authorized to do business in [State Authorized] [the Corporation] and the individual listed in Exhibit A attached hereto, each individually a Shareholder and collectively the Shareholders.
RECITALS
A. The issued and outstanding capital stock of the Corporation currently consists of [Current outstanding shares] shares of common stock, the Shares. The Shareholders currently own all the issued and outstanding Shares.
B. The Shareholders and the Corporation desire to make provisions for future disposition of the Shares in order to prevent interference with the orderly conduct of the business of the Corporation.
C. The Shareholders and the Corporation desire that each Shareholder shall be prohibited from engaging in any business or activity that competes with the business of the Corporation, as long as he holds Shares of the Corporation.
NOW THEREFORE, in consideration of the mutual promises and covenants made herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows: [Description of agreement].
I. RESTRICTIONS ON TRANSFER
1. Restrictions on Transfer . No Shareholder will sell, transfer, donate, exchange, pledge or assign or in any way alienate, encumber or dispose of its ownership of any of its Shares of capital stock of the Corporation, whether now owned or hereafter acquired, either voluntarily or by operation of law, without the prior written consent of the Corporation and all the Shareholders, unless such transfer is in accordance with the terms and conditions of this Agreement.
1.1 Void Transfers . The Corporation shall not transfer on its books any Shares sold or transferred other than pursuant to the terms and conditions of this Agreement. No transferee of Shares in violation of the terms and conditions of this Agreement shall be a record owner of such Shares nor will such transferee have the right to receive dividends or other distributions payable to the record owner of such Shares. Any transfer of Shares in violation of the terms and conditions of this agreement shall be void and without effect in transferring any interest in such Shares to the transferee.
1.2 Lifetime Transfers . Any Shareholder desiring to transfer Shares of the Corporation during his lifetime [the Transferring Shareholder] must give notice [the Notice] of intent to transfer in writing to the Corporation and to the remaining Shareholders at least ninety (90) days before the date of the proposed transfer. The Notice shall specifically name the proposed transferee, the number of Shares to be transferred and the proposed price and terms of the transfer. The following procedure shall be followed:
(a) Purchase By Corporation . Within thirty (30) days after receipt of the Notice, the Corporation may elect to purchase the Shares of the Transferring Shareholder at the price and terms indicated in the Notice, or, at the option of the Corporation, the price and terms indicated in paragraph 1.4 herein. The Transferring Shareholder shall abstain from participating in any decision of the Corporation to exercise or refrain from exercising the purchase options provided herein, except that at the direction of the holders of the majority in interest of the outstanding Shares not held by the Transferring Shareholder, the Transferring Shareholders will vote its Shares and take such other action as may be required by such majority.
(b) Purchase By Shareholders . In the event that the Corporation either affirmatively elects not to exercise the above-described option or allows the period for exercise of the option to lapse, the remaining Shareholders shall have an additional sixty (60) day period beginning with the end of the thirty-day period specified in subsection (a) above in which to elect to purchase all the Shares of the Transferring Shareholder at the price and terms indicated in the Notice, or at their option, the price and terms indicated in paragraph 1.4 herein. Any Shareholders so electing shall deliver to the president of the Corporation a written notice indicating the Shareholders intent to purchase such Shares and the number of Shares which such purchasing Shareholders exceed the number of Shares to be transferred by the Transferring Shareholder, the Shares of the Transferring Shareholder shall be allotted among the purchasing shareholders in any manner on which the purchasing Shareholder may agree; however, if they are unable to agree, the shares shall be allotted among them so that each Purchasing Shareholder shall purchase the fractional portion of the Shares to be transferred which is equal to the fractional portion of the total number of outstanding Shares held by the respective purchasing Shareholder [the Pro Rata Amount]. Should the Pro Rata Amount of a respective Shareholder exceed the Purchase Commitment of the respective Shareholder, the excess of each Pro Rata Amount exceeding the Purchase Commitment shall be allocated among the remaining Purchasing Shareholders in any manner on which the remaining Purchasing Shareholders may agree; however, if they are unable to agree, the Shares shall be allotted among them as equally as possible per capita, without creating fractional Shares, preference shall be given to the Purchasing Shareholders in order of their respective holdings of Shares of the Corporation, with the holder of the greatest number of shares receiving the first preference].
(c) Lapse or Refusal . If the options to purchase all the Shares of the Transferring Shareholder are not exercised by either the Corporation or the remaining Shareholders, the Transferring Shareholder may then transfer its shares pursuant to the terms and conditions described in the Notice, but such transfer must be to the original transferee at the purchase price and under the terms and conditions specified in the Notice within one hundred eighty [180] days following the original date of receipt of the Notice by the Corporation. Additionally, such transfer will not be effective unless the transferee executes and becomes bound by this Agreement prior to the transfer of the Shares to such transferee.
(d) Interim Death of Transferring Shareholder. In the event a Shareholder dies or dissolves after having sent the Notice but prior to the transfer of ownership of the Shares pursuant to the terms of this Agreement, this paragraph 1.2 shall cease to be effective and the provisions of paragraph 1.3 shall be in effect.
1.3 Death or Dissolution of a Shareholder. In the event of the death or dissolution of a Shareholder, the executor or personal representative or corporate representative of the deceased or dissolved Shareholder shall sell and the Corporation shall purchase all of the Shares then owned by the deceased or dissolved Shareholder at the price and terms provided in paragraph 1.4 of this Agreement. The Corporation may, however, at its option, assign the right to purchase such Shares to the surviving Shareholders on a basis proportional to their respective ownership of Shares in the Corporation.
1.4 Purchase Price and Closing. In the event of the purchase of Shares under paragraph 1.3, or at the option of the Corporation or the purchasing Shareholders under paragraph 1.2, the purchase price to be paid for each of the Shares shall be the net book value as of the end of the month preceding the month Shareholder notifies the Corporation of its desire to sell or dies or begins the process of dissolution. Net book value shall be determined from the Corporations regular financial statement as prepared in accordance with Section 1.5 by subtracting the total amounts of its liabilities from the total net book value of its assets and dividing the difference thereby obtained by the number of shares of capital stock of the Corporation issued and outstanding as of the date of valuation. Appropriate adjustments shall be made, however, for dividends and other distributions to Shareholders which occur after the valuation date.
The closing of the transfer of Shares pursuant to this Agreement [the Closing] shall take place within ten (10) days following the date on which the determination of the purchase price for the Shares to be transferred has been completed. The Closing shall take place at the principal office of the Corporation at 12:00 noon or at such time and place as may be mutually agreed upon by the parties. The selling Shareholder or its personal or corporate representative shall deliver to the purchaser at Closing the certificates representing the Shares being purchased along with such additional documentation and endorsements as the purchasers may reasonably request.
The purchase price for any shares purchased pursuant to this Agreement shall be paid in cash or by check payable to the selling Shareholder.
1.5 Financial Statements. The Corporation shall cause its financial condition and the results of its operations to be compiled at the end of each fiscal year by its accountant. The Corporation shall prepare or cause to be prepared financial statements as of the end of each month including the month that corresponds to the end of its fiscal year. These statements need not be audited and shall consist of a balance sheet and the profit and loss statement which shall contain all appropriate adjustments necessary to present fairly the financial condition and results of operations of the Corporation as of the end of each month and for the interim period then ended. Such year-end and monthly financial statements shall be prepared in accordance with generally accepted accounting principles consistently applied.
1.6 Company shall provide Shareholder with [Shares for shareholder] shares of the company's outstanding stock for the payment of $ [Amount paid for shares]. Shareholder shall relinquish his/her voting right and elect to represent Shareholders voting rights, excluding rights to dividends and other rights of holders of Shares. If [Name of shareholder] leaves the employment of the Corporation, for any reason, before one year from [Date to count year], the payment of $ [Payment penalty] could be returned to Shareholder by the company with [Interest on penalty] interest due [Days to pay] days after employees departure. Should a forfeiture result in the creation of fractional share(s), the number of share(s) to be forfeited shall be rounded out to prevent the creation of fractional share(s). All stock distributed under this agreement shall be adjusted to preserve the value of the bonus in the event of a stock dividend, stock split or reverse stock split, recapitalization, merger, consolidation, reorganization, cash or property dividend, exchange of share, repurchase of shares or any other change in corporate structure of or by company that in any such event materially effects the outstanding shares of stock.
Name of Company Here:
By:
Name, Title
Name of Purchaser
Attest:
Name, Title