STOCKHOLDERS AGREEMENT
THIS AGREEMENT is made and entered into this _____ day of __________________, 20 ___, by , and between, (hereinafter separately referred to as "Stockholder" and together as "Stockholders"), and __________________________, a corporation organized and existing under the laws of the State of ________________, (hereinafter referred to as the "Corporation"). WITNESSETH: WHEREAS, the Stockholders own all of the outstanding shares of the Corporation; and WHEREAS, the parties believe that it is in the best interests of the Stockholders and the Corporation to make provision for the future disposition of the shares of the Corporation. NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements contained in this Agreement, and in order to consummate the purchase and sale of the stock aforementioned, it is hereby agreed as follows: 1. RESTRICTION ON SHARES. So long as all the Stockholders are alive, each shall not transfer or encumber, in any manner, the shares of the Corporation which he now owns or may hereafter acquire, except as follows: a. Sale. Any Stockholder who desires to transfer or encumber all or any part of his shares shall first offer such shares for sale to the other Stockholders who are parties to this Agreement at the same price offered by a bonafide prospective purchaser, or transferee, as the case may be. The right to purchase in such case shall be ratable to the respective holdings of such other Stockholders, but if any such Stockholder, entitled to purchase shares, fails to accept the offer, either in whole or in part, the other Stockholders may purchase the shares not so accepted. If such other Stockholders fail to purchase the shares within ten (10) days after written notice from the selling Stockholder, the Corporation may elect to purchase the remaining shares; otherwise, the restrictions upon such shares, imposed by this paragraph, shall automatically terminate at the end of twenty (20) days. Any Stockholder who is employed in any capacity with the Corporation, who terminates his employment for any reason, 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 set out in paragraph 3 hereinafter. 2. OPTION TO PURCHASE STOCK ON DEATH. Upon the death of a Stockholder, the remaining Stockholders shall have the option to purchase all the shares of stock of the Corporation owned by the deceased Stockholder, upon the following terms: a. Right to Purchase. The right to purchase in such case shall be ratable to the respective holdings of the remaining Stockholders, but if any such Stockholder fails to exercise his option, either in whole or in part, the other Stockholders may purchase such shares. The option to purchase the shares of the decedent shall be exercised by serving written notice on the personal representative of the decedent within fifteen (15) days after the qualification of such representative. In the event the remaining Stockholders fail to purchase all the stock of the deceased Stockholder, the Corporation may elect to purchase the remaining stock. b. Purchase Price. The purchase price shall be determined according to paragraph 3 of this Agreement. Closing. The closing of such purchase and sale shall take place at the offices of the Corporation, on a date selected by the Corporation, upon five (5) days notice to the Transferror, which date shall not be more than one hundred eighty (180) days from the date of the qualification of the personal representative and not less than ninety (90) days following such date. Payment of Purchase Price. The purchase price shall be payable as follows:
c.
d.
i. ii.
_____ (___%) percent to be paid in cash. _____ (___%) percent to be represented by a promissory note executed by the surviving Stockholders, payable in __________ (___) equal monthly installments, such note to be secured by the stock and payable with interest thereon at the rate of __________ (___%) percent per annum.
e.
Security. 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 Security Agreement and appropriate UCC-l Financing Statements, 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. So long as the purchaser is not in default, he shall have all voting and dividend rights in the stock. Upon full payment of the purchase price, the stock shall be transferred to the purchaser. Failure to Exercise Option. Upon the failure of the survivors and/or the Corporation to exercise the option to purchase all the shares of stock of the Corporation owned by the decedent w