Contract for Purchase of Corporate Stock

Contract for Purchase of Corporate Stock 1. Names Seller: ______________________ ______________________ ______________________ Buyer: ______________________ The above-listed Seller and Buyer agree to the terms of this contract. 2. Sale of Corporate Stock. Seller is selling to Buyer and Buyer is buying from Seller all the issued and outstanding stock of ___________________, a ___________________ corporation, free of encumbrances. This sale includes the corporate assets listed in attached Schedule A. The corporation has issued ___________ shares of common stock, which are owned as follows: Name of Shareholder _________________________ _________________________ _________________________ Shares of Common Stock Owned _________________________ _________________________ _________________________ 3. Purchase Price. The purchase price is $______ per share, for a total of $______. At closing, Buyer will pay the purchase price to each shareholder by cashier's check. [Optional clause:] [ ] 4. Provision for Payment of Undisclosed or Unpaid Liabilities. At closing, to provide for payment of undisclosed or unpaid liabilities incurred prior to closing but which have not yet been determined: Contract for Purchase of Corporate Stock Page 1 [ ] A. Seller and Buyer will place an agreed upon portion of the purchase price in escrow for 90 days with [ ] ______________________. [ ] a person to be agreed upon. [ ] B. Buyer will withhold an agreed upon portion of the purchase price for 90 days. Any portion of these funds not used to pay undisclosed or unpaid liabilities will be returned to Seller at the end of the 90 days. [End optional clause] 5. Closing. The closing will take place: Date: ______________________ Time: ______________________ Location: ______________________ 6. Documents for Buyer. At closing, Seller will deliver these signed documents to Buyer: A. Stock certificates for all the corporation's stock endorsed for transfer by shareholders. Stock certificates will be coendorsed by the spouse of each married shareholder. B. The written resignations of the corporation's officers and directors. C. The corporation's minute book and business records. D. The corporation's contracts and leases. E. The landlord's written consent to the assignment of the lease, if such consent is required. F. The written consent of any other party, if such consent is required. G. All other documents reasonably needed to transfer the corporation to Buyer. 7. Seller's Representations. Each shareholder warrants and represents that: A. Shareholders listed above own all of the issued and outstanding shares of the Contract for Purchase of Corporate Stock Page 2 corporation's stock. The shares are free of any liens or encumbrances. B. The corporation has good and marketable title to the assets listed in attached Schedule A. The assets will be free from liens or encumbrances at closing. C. The debts and liabilities of the corporation are listed in attached Schedule B. There will be no other debts or liabilities at closing. D. At closing, the corporation will have paid all taxes affecting the business and its assets, to the extent known at closing. E. Any judgments, claims, liens, or proceedings pending against the corporation or its assets have been disclosed to Buyer in writing. No others will be pending at closing. F. Seller has given Buyer, in writing, complete and accurate information about the earnings of the corporation, its assets and liabilities, and its financial condition. G. The corporation is properly incorporated and is in good standing. H. The corporation will not enter into any new contracts or incur any new obligations from now until closing and will continue to conduct its business in a normal manner. I. The corporation owes no outstanding dividends and will declare no dividends from now until closing. J. Between now and closing, the corporation will not increase the compensation of any employee, consultant, independent contractor, director, or officer, or hire any new employee, consultant, independent contractor, director, or officer. These warranties and representations will survive the closing. [Optional clause:] [ ] 8. Covenant Not to Compete. For ___ [choose one: years/months] following the closing, the shareholders of the corporation being sold ("former owners") and the spouses of former owners who sign this contract will not directly or indirectly participate in a business that is similar to a business now or later operated by Buyer in the same geographical area. This includes participating in former owner's own business or in former owner's spouse's business or acting as a co-owner, director, officer, consultant, Contract for Purchase of Corporate Stock Page 3 independent contractor, employee, or agent of another business. In particular, the former owners and the spouses of former owners who sign this contract will not: (a) solicit or attempt to solicit any business or trade from Buyer's actual or prospective customers or clients (b) employ or attempt to employ any employee of Buyer (c) divert or attempt to divert business away from Buyer, or (d) encourage any independent contractor or consultant to end a relationship with Buyer. The former owners and the spouses of former owners acknowledge and agree that if any former owner or spouse of a former owner breaches or threatens to breach any of the terms of this paragraph 8, Buyer will sustain irreparable harm and will be entitled to obtain an injunction to stop any breach or threatened breach of this paragraph 8. Each former owner and each spouse of a former owner, by signing this agreement, accepts and agrees to be bound by this covenant not to compete. At closing, Buyer will pay each former owner and each spouse of a former owner $_________ for this covenant not to compete. [End optional clause] 9. Risk of Loss. Until closing, Seller assumes the risk of loss or damage to the corporation's physical assets caused by fire or other casualty. If corporate assets are lost or destroyed by fire or other casualty before closing, Buyer may cancel this contract. 10. Disputes [ ] Litigation. If a dispute arises, either party may take the matter to court. [ ] Mediation and Possible Litigation. If a dispute arises, the parties will try in good faith to settle it through mediation conducted by [ ] ______________________. [ ] a mediator to be mutually selected. Contract for Purchase of Corporate Stock Page 4 The parties will share the costs of the mediator equally. Each party will cooperate fully and fairly with the mediator and will attempt to reach a mutually satisfactory compromise to the dispute. If the dispute is not resolved within 30 days after it is referred to the mediator, either party may take the matter to court. [ ] Mediation and Possible Arbitration. If a dispute arises, the parties will try in good faith to settle it through mediation conducted by [ ] _________________. [ ] a mediator to be mutually selected. The parties will share the costs of the mediator equally. Each party will cooperate fully and fairly with the mediator and will attempt to reach a mutually satisfactory compromise to the dispute. If the dispute is not resolved within 30 days after it is referred to the mediator, it will be arbitrated by [ ] _________________ [ ] an arbitrator to be mutually selected. Judgment on the arbitration award may be entered in any court that has jurisdiction over the matter. Costs of arbitration, including lawyers' fees, will be allocated by the arbitrator. 11. Additional Agreements. Seller and Buyer additionally agree that: ______________________. 12. Required Signatures. This contract is valid only if signed by all the persons owning shares in the ___________________ corporation. 13. Entire Agreement. This is the entire agreement between the parties. It replaces and supersedes any and all oral agreements between the parties, as well as any prior writings. 14. Successors and Assignees. This agreement binds and benefits the heirs, successors, and assignees of the parties. 15. Notices. All notices must be in writing. A notice may be delivered to a party at the address that follows a party's signature or to a new address that a party designates in writing. A notice may be delivered: Contract for Purchase of Corporate Stock Page 5 (1) in person (2) by certified mail, or (3) by overnight courier. 16. Governing Law. This agreement will be governed by and construed in accordance with the laws of the state of _____________. 17. Counterparts. This agreement may be signed by the parties in different counterparts and the signature pages combined will create a document binding on all parties. 18. Modification. This agreement may only be modified by a written agreement signed by all the parties. 19. Waiver. If one party waives any term or provision of this agreement at any time, that waiver will only be effective for the specific instance and specific purpose for which the waiver was given. If either party fails to exercise or delays exercising any of its rights or remedies under this agreement, that party retains the right to enforce that term or provision at a later time. 20. Severability. If any court determines that any provision of this lease is invalid or unenforceable, any invalidity or unenforceability will affect only that provision and will not make any other provision of this lease invalid or unenforceable. Instead, the court shall modify, amend, or limit the provision to the extent necessary to render it valid and enforceable. BUYER By: _________________________ Dated: _________________ Printed Name: ___________________ Address: ______________________ ______________________ Contract for Purchase of Corporate Stock Page 6 SELLER (Shareholders) By: __________________________ Dated: _________________ Printed Name: ___________________ Address: ______________________ ______________________ By: __________________________ Dated: _________________ Printed Name: ___________________ Address: ______________________ ______________________ [ ] SPOUSES OF SHAREHOLDERS By: __________________________ Dated: _________________ Printed Name: ___________________ Address: ______________________ ______________________ By: __________________________ Dated: _________________ Printed Name: ___________________ Address: ______________________ ______________________ Contract for Purchase of Corporate Stock Page 7