AGREEMENT, made this _(1)_ day of _____(2)_____,
19_(3)_, by and between _______(4)________, ____(5)_______, _____(6)______,
hereinafter separately referred to as "Stockholder",
and jointly as "Stockholders", and ________(7)_________,
a _____(8)______ corporation, hereinafter referred to as the
W I T N E S S E T H :
WHEREAS, the Stockholders together own 100%
of the outstanding shares of capital stock of the Corporation,
and WHEREAS, as used herein, the term "shares" shall
mean all shares of common stock, at $__(9)___ par value, of the
Corporation now owned or hereafter acquired by the parties, and
WHEREAS, the Stockholders are actively engaged in the conduct
of the business of the Corporation, and it is contemplated that
success or failure of the corporate enterprise will at all times
depend in large measure on the personal abilities of the Stockholders,
and WHEREAS, there is not now, nor is there likely in the future
to be a substantial market for the shares of the Corporation,
and WHEREAS, for the foregoing reasons, the parties desire to
provide for the purchase by another Stockholder or by the Corporation
of the stock of any party desiring to sell the same; and for
the purchase by the Corporation of the stock of a deceased party.
IT IS THEREFORE AGREED, in consideration of
the mutual promises and covenants hereinafter set forth, as follows:
1. Restriction During Life. No stockholder
shall transfer or encumber any of his shares of capital stock
of the Corporation during his lifetime to any person, firm or
corporation, without the consent of the Corporation and the other
Stockholder, unless the Stockholder desiring to make the transfer
or encumber (hereinafter referred to also as the "Transferor")
shall have first made the offer hereinafter described and such
offer shall not have been accepted.
- A. Offer by the Transferor: The offer shall
be given pro rata initially to the other Stockholder(s) and shall
consist of an offer to sell or encumber all of the shares of
the capital stock of the Corporation owned by the Transferor,
to which shall be attached a statement of intention to transfer,
the name and address of such prospective transferee, the number
of shares of capital stock involved, and the terms of such transfer
- B. Acceptance of Offer: Within thirty (30)
days after the receipt of such offer the other Stockholder(s)
may, at their option, elect to accept the offer. If such offer
is not accepted by the other Stockholder(s), the Corporation
may within thirty (30) days after the rejection of such offer,
at its option, elect to accept the offer. The Corporation shall
exercise its election to purchase by giving notice thereof to
the Transferor and to the other Stockholder(s). The other Stockholder(s)
shall exercise the election to purchase by giving notice thereof
to the Transferor and to the Corporation. In either event, the
notice shall specify a date for the closing of the transaction,
which shall not be more than thirty (30) days after the date
of the giving of such notice.
- C. Purchase Price: The purchase price for,
or the consideration for the encumbrance of the shares of the
capital stock of the Corporation owned by the Transferor shall
be set forth in paragraph 3 hereof.
- D. Closing of Transaction: The closing of
the transaction shall take place at the principal office of the
Corporation. The consideration shall be paid as provided for
in paragraph 3 hereof. Certificates for all shares sold or encumbered
hereunder, property endorsed to the Corporation or to the purchasing
Stockholder, as the case may be, shall be delivered by the transferor
not later than the date of closing.
- E. Release from Restriction: If the offer
is neither accepted by the Corporation nor by the other Stockholder(s),
the Transferor may make a bona fide transfer to the prospective
transferee named in the statement attached to the offer, such
transfer to be made only in strict accordance with the terms
therein stated. However, if the Transferor shall fail to make
such transfer within __(10)__ (___) days following the expiration
of the election period by the other Stockholder(s), such shares
of capital stock shall again become subject to all of the restrictions
of this Agreement, provided, however, that nothing contained
herein shall be construed as
- releasing any shares of this Corporation
from any restriction or requirement of law concerning transfer
of such shares.
- F. Termination of Employment: Any shareholder
whose employment in any capacity with the company or its subsidiaries
terminates for any reason whatsoever, voluntarily or involuntarily,
shall be considered as of the date of such termination of employment
to have made an offer of all of his shares of stock subject to
the terms of this Agreement, at the purchase price stated in
paragraph 3 hereof.
- G. Subchapter "S" Election: If
at the time of a transfer of stock permitted hereunder, the Corporation
then is an "S" corporation, the transferee and new
stockholder shall be required to consent in writing not to revoke
such "S" election without the unanimous approval of
all other stockholders. Such written consent shall be executed
and delivered prior to the delivery of the shares to the transferee
at the closing of such sale and transfer.
2. Purchase Upon Death. Upon the death of
a Stockholder (hereinafter referred to as Decedent), all of the
shares of the capital stock of the Corporation owned by him,
and to which he or his estate shall be entitled, shall be sold
and purchased as hereinafter provided:
- A. Obligation of the Corporation to Purchase:
It shall be for the Corporation to purchase from the Decedent's
Personal Representative, and the Decedent's Personal Representative
shall be obligated to sell to the Corporation, all of the shares
of the capital stock of the Corporation owned by the Decedent
and to which the Decedent or his Personal Representative shall
be entitled, at the price set forth in paragraph 3 hereof.
- B. Closing: The closing of such purchase
and sale shall take place at the offices of the Corporation,
at a date selected by the Corporation upon _(11)_ days notice
to the Transferor which date shall be not more than _(12)_ days
following the date of the qualification of the Personal Representative
and not less than _(13)_ days following such date.
- C. Insurance: To insure or partially insure
its obligation under this Agreement to purchase from the estate
of a deceased Stockholder the shares owned by him prior to his
death, the Corporation shall have the option to purchase policies
of insurance covering the lives of each Stockholder in any amount
deemed desirable. In the event any Stockholder ceases to be a
Stockholder of the Corporation, the Corporation shall terminate
any such insurance on such Stockholder's life and in the event
any Stockholder increases his holdings of the shares of the
- Corporation, the Corporation shall procure
and maintain, if so desired by it, additional insurance on the
life of such Stockholder proportionate to the increase in the
holdings of such Stockholder.
- If the corporation shall receive any proceeds
of any policy on the life of the Decedent, such proceeds shall
be used by the Corporation to pay the Decedent's Personal Representative
to the extent of the purchase price of the Decedent's stock,
such payment to be deemed made on account of such purchase price.
- D. Balance of Purchase Price: If the amount
of any insurance proceeds is insufficient to pay the purchase
price of any Decedent's shares, then the balance of the purchase
price remaining after credit for any insurance proceeds shall
be payable as follows: _(14)_% of the balance due to be paid
shall be paid in cash, and the balance shall be represented by
a promissory note executed by the purchaser payable in (15) (___)
installments, which note shall be secured by the stock of the
- E. "S" Election: If the corporation
is an "S" corporation at the time of the transfer and
sale of its stock, the transferee and new stockholder shall be
required to consent in writing not to revoke such "S"
election without the unanimous approval of all other stockholders.
Such written consent shall be submitted prior to the delivery
of the shares to the transferee.
- A. Unless the parties agree to another price
in writing, the price for each share of capital stock to be sold
under this Agreement shall be equal to its fair market value
as an on- going business concern as determined in the sole discretion
of the company's Certified Public Accountant, (CPA) and such
determination by the CPA shall be binding and conclusive upon
the parties hereto.
- B. Unless the parties agree otherwise, the
purchase price shall be paid as follows:
- i. __(16)__ percent (___) of the amount determined
to be due as the price to be paid at the closing in addition
to any insurance proceeds and the balance to be payable by the
execution of a promissory note in such amount to be repaid in
_(17)_ (___) installments, such note to be secured by the stock
- ii. The promissory note shall bear interest
until paid in full at the prime rate as determined from time
to time by Chase Manhattan Bank or any other bank as determined
by and agreed upon by the Stockholders.
- iii. In the event that suit shall be required
to collect on the promissory notes above referred to, then in
such event, the defaulting Stockholder or the Corporation shall
pay for attorney fees, and courts costs, incurred in such action.
4. Limitation on Stockholder's Right to Pledge
Stock. The restrictions of paragraph 1 above shall not apply
to encumbrances as collateral for a note or notes in favor of
the company or any one or more of the other Stockholders or in
favor of a recognized lending institution, but only if the proceeds
of such loan are used in their entirety to purchase shares of
the Corporation and the borrowing Stockholder delivers to the
Corporation and the other Stockholder(s) thewritten commitment
of the lender, in form acceptable to the Corporation that such
lender will not dispose of such shares without first affording
the Corporation and the other Stockholder(s) the right for a
period of _(18)_ days to purchase shares at a price satisfactory
to the Corporation and the other Stockholder(s).
5.Corporate Restrictions After Purchase. So
long as any part of the purchase price of shares of capital stock
sold in accordance with this Agreement remains unpaid, the Corporation
- A. declare or pay dividends on its capital
- B. reorganize its capital structure;
- C. merge or consolidate with any other corporation,
or sell any of its assets except in the regular course of business;
- D. increase the salary of any officer or
executive employee of the Corporation;
- E. allow any of its obligations to become
in default; or
- F. allow any judgments against the Corporation
or any liens against the Corporation's property to remain unsatisfied.
- So long as any part of such purchase price
remains unpaid, the Transferor, or the Personal Representative
of the Decedent shall have the right to examine the books and
records of the Corporation from time to time and to receive copies
of all accounting reports and tax returns prepared for the Corporation.
If the Corporation breaches any of its obligations under this
paragraph, the Transferor or the Personal Representative, in
addition to any other remedies available, may elect to declare
the entire unpaid purchase price due and payable forthwith.
6. Purchase By Stockholder. Whenever a Stockholder
purchases shares of capital stock under this Agreement, such
purchaser (unless he shall have paid the entire purchase price
in cash) shall, following the delivery of the purchased stock,
endorse the new certificates of stock issued to such purchaser,
execute a UCC-1 Financing Statement (for recording), and deliver
the same to the Seller as collateral security for the payment
of the unpaid purchase price; and such capital stock shall be
so held until the entire purchase price shall be paid. While
such capital shall be so held as collateral security and so long
as the Purchaser is not in default, the Purchaser shall be entitled
to all voting rights with respect thereto. Dividends paid shall
be applied to the indebtedness.
7. Purchase By Corporation. Whenever the Corporation
shall, pursuant to this Agreement, be required to purchase shares
of the capital stock of the Corporation, the Stockholders and
the Personal Representative of any Decedent shall do all things
and execute and deliver all papers as may be necessary to consummate
such purchase. Any note required to be given hereunder by the
Corporation as part of the purchase price shall be endorsed and
guaranteed by the remaining or surviving Stockholders, who shall
not be discharged from such liability by reason of the subsequent
extension, modification or renewal of any such note. Until all
amounts due are paid, the stock certificates and a UCC-1 Financing
Statement (to be recorded) shall be delivered to Seller.
8. Endorsement On Stock Certificates. Each
certificate representing shares of capital stock of the Corporation
now or hereafter held by the Stockholders shall contain with
a legend in substantially the following form: "The transfer
or encumbrance of the shares of stock represented by the within
certificate is restricted under the terms of an Agreement dated
____(19)______ a copy of which is on file at the Corporation
9. Value of Purchase Price for Tax Purposes.
It is understood that the purchase price, determined as set forth
hereinabove, shall be the value of the purchased shares for all
tax purposes. In the event such value is later increased by any
federal or state taxing authority, any tax liability resulting
from such increase shall be borne by the selling Stockholder
or his Personal Representative, as the case may be.
10. Amendments. This Agreement may be amended
or altered by execution of a written agreement authorized by
corporate resolution and signed by all the parties hereto.
11. Notices. Any and all notices, designations,
consents, offers, acceptances, or any other communication provided
for herein, shall be given in writing by registered or certified
mail addressed, in the case of the Stockholders, to his address
appearing on the stock books of the Corporation, or to his residence,
or to such other address as may be designated by him, and in
the case of the Corporation, to the principal office of the Corporation,
postage prepaid, by United States Mail, and shall be considered
to have been delivered on the 2nd day following the date stamped
by the post office.
12. Invalid Provision. The invalidity or unenforceability
of any particular provision of this Agreement shall not affect
the other provisions hereof and the Agreement shall be construed
in all respects as if such invalid or unenforceable provision
had been omitted.
13. Modification. It is understood between
the parties that this Agreement contains the entire understanding
of the parties and no change or modification of this Agreement
shall be valid unless the same be in writing and signed by all
the parties hereto.
14.Binding Effect. This Agreement shall bind
and, unless inconsistent with its provisions, shall inure to
the benefit of the Executor, Administrator or Personal Representative,
and the heirs and assigns of each of the Stockholders.
15. Prior Agreement. This Agreement supersedes
any prior Agreement of the parties.
16. Deadlock. If at any time the Stockholders
cannot agree on the Certified Public Accountant of the company
and therefore are unable to establish an acceptable price for
purchase, the matter shall be submitted to arbitration in the
- A. Each Stockholder shall, within __(20)___
(___) days after notice of such deadlock, appoint a Certified
Public Accountant, and the two accountants shall then appoint
a third Certified Public Accountant within __(21)__ (___) days
after the two accountants are selected, and the average of purchase
price determined by them shall be final, conclusive and binding
upon the Stockholders, their executors, administrators and personal
representatives, and a judgment on such determination may be
obtained in any court of proper jurisdiction. The cost of such
accounting shall be borne equally by the parties unable to reach
agreement hereunder.In the event any one of the Stockholders
shall fail within the given time to select a Certified Public
Accountant to represent him to resolve the dispute, then and
in such event, the remaining Stockholder shall have the right
to institute suit for specific performance under this Agreement,
and the defaulting Stockholder shall pay for all attorney fees
and court costs of such action.
17. Indebtedness of a Stockholder. In the
event that there is a purchase and sale of shares of stock or
interest therein, pursuant to the provisions hereinabove, and
there is any indebtedness owed by the selling Stockholder or
his estate to any party to this Agreement, then, notwithstanding
the said provisions relating to the payment of the purchase price,
and any amount to be paid for the stock being purchased shall
be applied first to reduce and satisfy any indebtedness owed
by the Selling Stockholder or his estate to any party under this
18. Default. In the event of a default in
the payment of any installment of the purchase price, the covenants
and conditions of this Agreement, or any Security Agreement given
to Sellers, Sellers may declare the entire unpaid portion of
the purchase price to be immediately due and payable, and may
proceed to enforce payment of same and to exercise any and all
rights and remedies provided by the Uniform Commercial Code as
well as any other rights and remedies either at law or in equity
available to them, and Seller may assign, sell or transfer all
or any part of the collateral in such manner, at such price,
and on such terms and conditions as Sellers, in their sole and
absolute discretion, may determine. Sellers or the Corporation
shall have the right to purchase any or all of the collateral,
apply any unpaid indebtedness on account thereof, and have a
claim against Purchaser for the balance of such indebtedness
in addition to any and all remedies available to them at law
or in equity.
19. Voting. It is understood and agreed that
until the purchase price shall have been paid in full, the Purchaser
shall have no voting rights whatsoever.
20. Termination of Agreement. This Agreement
shall terminate upon the occurrence of one of the following events:
- A. The written agreement of the parties hereto
or their successors in interest to that effect;
- B. The bankruptcy, receivership, or dissolution
of the Corporation;
- C. The disposal of all the shares of stock
of any Stockholder during his lifetime or by his Personal Representative
or estate upon his death, shall terminate this Agreement as to
such retiring or deceased Stockholder; or
- D. All of the issued and outstanding stock
of the Corporation becoming owned by one of the Stockholders
of the Corporation.
21. Laws Governed By. This Agreement is executed
in and shall be construed by and governed under the laws of the
State of ______(22)______.
22. Withdrawal from Corporation. Any Shareholder
may withdraw from participation in the Corporation at any time
in accordance with the following provisions:
- A. Notice to Corporation. Such Stockholder
("Withdrawing Stockholder") shall give notice to the
Corporation at least _____(23)_______ (____) days prior to the
date (he)(she) wants to withdraw ("Withdrawal Date")
which notice shall set forth the Withdrawal Date.
- B. Offer to Corporation. Within _____(24)_____
(___) days after receipt of such notice, the Corporation may,
at its option, elect to purchase all, but not less than all,
of the Withdrawing Stockholder's shares. The Corporation shall
exercise its option to purchase by giving written notice thereof
to the Withdrawing Stockholder within said ______(25)_______
(___) day period. Such written notice shall specify a date for
the closing of the purchase, which shall not be more than ___(26)____
(___) days after the date of the giving of such notice. The purchase
price for the shares to be paid by the Corporation and terms
of payment therefor shall be as set forth in Paragraph 3 hereof.
- C. Acceptance by Stockholders. If the Corporation
fails to exercise said option within said _____(27)_______ (____)
day period, then for a ______(28)_______ (____) day period thereafter
the other Stockholder(s) of the Corporation shall have the option
to purchase such shares, such option to be exercised in the same
manner as that of the Corporation, and the purchase price and
terms of payment to be the same for the Stockholder(s) as for
the Corporation as set forth in Paragraph 3 hereof. The option
may be exercised by the Stockholders pro rata (based on that
proportion which the number of shares owned by each other Stockholder
bears to the total number of shares then outstanding, not counting
the shares proposed to be sold), and if one (or more) of the
Stockholders does not desire to exercise his option, then his
option shall be exercisable on a pro rata basis by the other
Stockholders (not counting for any purpose, the shares proposed
to be sold or the shares owned by any Stockholder who does not
desire to exercise his option); or the option may be exercised
by the other Stockholders on such basis as they may agree upon.
- D. Dissolution and Liquidation. In the event
that neither the Corporation nor the other Stockholder(s) purchase
the shares of the Withdrawing Stockholder, the other Stockholder(s)
agree to execute a consent voluntarily dissolving the Corporation.
In addition, the Stockholder(s) agree to liquidate the assets
of the Corporation as soon as practicable thereafter.
IN WITNESS WHEREOF, the parties hereto have
hereunto set their hands and seals the day and year first above
written. Signed, Sealed and Delivered in the Presence of:
President of the Corporation
Secretary of the Corporation
The information in this document is designed
to provide an outline that you can follow when formulating business
or personal plans. Due to the variances of many local, city,
county and state laws, we recommend that you seek professional
legal counseling before entering into any contract or agreement.
Reprinted with permission from Home Business Online
You are welcome to use any forms found at our site and
any parts of them. We only ask that you give credit to us as
the source in any of your references, with a link to HomeBusinessOnline.
AGREEMENT TO SELL BUSINESS
Agreement made this _________day of _________, 19__ by and
between [name]and [name](doing business as [name].) of [address]
(hereinafter referred to as "Seller") and [name] (hereinafter
referred to as the "Buyer").
Whereas the Seller desires to sell and the Buyer desires to buy
the business now being operated at [address] and known as [business
name] and all assets thereof as contained in Schedule "A"
attached hereto, the parties hereto agree and covenant as follows:
1. The total purchase price for all fixtures, furnishings and
equipment is $______ Dollars payable as follows:
(a) $________ paid in cash; certified or bank checks, as a deposit
upon execution of this Agreement, to be held by [name].
(b) $________ additional to be paid in cash, certified or bank
checks, at the time of passing papers.
(c) $________ to be paid by a note of the Buyer to the Seller,
bearing interest at the rate of _____ percent per annum with
an option of the Buyer to prepay the entire outstanding obligation
without penalty. Said note shall be secured by a chattel mortgage
and financing statement covering the property to be sold hereunder,
together with any and all other property acquired during the
term of said note and placed in or within the premises known
as [describe fully].
2. The property to be sold hereunder shall be conveyed by a standard
form Bill of Sale, duly executed by the Seller.
3. The Seller promises and agrees to convey good, clear, and
marketable title to all the property to be sold hereunder, the
same to be free and clear of all liens and encumbrances. Full
possession of said property will be delivered in the same condition
that it is now, reasonable wear and tear expected.
4. Consummation of the sale, with payment by the Buyer of the
balance of the down payment and the delivery by the Seller of
a Bill of Sale, will take place on or before _____________,19__.
5. The Seller may use the purchase money, or any portion thereof,
to clear any encumbrances on the property transferred and in
the event that documents reflecting discharge of said encumbrances
are not available at the time of sale, the money needed to effectuate
such discharges shall be held by the attorneys of the Buyer and
Seller in escrow pending the discharges.
6. Until the delivery of the Bill of Sale, the Seller shall maintain
insurance on said property in the amount that is presently insured.
7. Operating expenses of [business name] including but not limited
to rent, taxes, payroll and water shall be apportioned as of
the date of the passing of papers and the net amount thereof
shall be added to or
deducted from, as the case may be, the proceeds due from the
Buyer at the time of delivery of the Bill of Sale.
8. If the Buyer fails to fulfill his obligations herein, all
deposits made hereunder by the Buyer shall be retained by the
Seller as liquidated damages.
9. The Seller promises and agrees not to engage in the same type
of business as the one being sold for_______ years from the time
of passing, within a [# of blocks/miles] radius of [location].
10. A Broker's fee for professional services in the amount of
__________($____) Dollars is due from the Seller to_________,
provided and on the conditions that papers pass.
11. The Seller agrees that this Agreement is contingent upon
the following conditions:
(a) Buyer obtaining a Lease on the said premises or that the
existing Lease be assigned in writing to the Buyer.
(b) Buyer obtaining the approval from the proper authorities
(Town and State) of the transfer of all necessary licenses to
(c) The premises shall be in the same condition, reasonable wear
and tear expected, on the date of passing as they are currently
12. All of the terms, representations and warranties shall
survive the closing. This Agreement shall bind and inure to the
benefit of the Seller and Buyer and their respective heirs, executors,
successors and assigns.
13. If this Agreement shall contain any term or provision which
shall be invalid or against public policy or if the application
of same is invalid or against public policy, then, the remainder
of this Agreement
shall not be affected thereby and shall remain in full force
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed in triplicate on the day and year first above
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BILL OF SALE OF BUSINESS
For good and sufficient consideration, receipt of which is hereby
acknowledged, the undersigned ("Seller") hereby sells,
transfers and conveys to ("Buyer"):
1. All and singular, the goods and chattels, property and effects,
listed in Schedule "A" annexed hereto, which is incorporated
herein and made a part hereof; and
2. The whole of the good will of the ______________ business
formerly operated by the undersigned which is the subject of
The undersigned warrants that said goods and chattels are free
and clear of all encumbrances, that it has full right and title
to sell the same, and that it will warrant and defend the same
against the claims and
demands of all persons.
The undersigned hereby warrants and covenants that I shall not
within ______ years of the date of this instrument engage in
the business of ________________ within __________________.
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