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Shareholder & Stock Agreement

This is an agreement between a company and its shareholders that restricts the transfer of shares in order to maintain continuity of corporate ownership. This agreement provides that if a shareholder desires to sell their shares in the company, they must first offer the shares to the corporation for purchase. In addition, this agreement covers what happens to the transferability of the shares upon the death of a shareholder. Ideal for small businesses, this agreement should be used by entities that want to restrict the transfer of shares.



Shareholder & Stock Agreement
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This is an agreement between a company and its shareholders that restricts the transfer
of shares in order to maintain continuity of corporate ownership. This agreement
provides that if a shareholder desires to sell their shares in the company, they must first
offer the shares to the corporation for purchase. In addition, this agreement covers
what happens to the transferability of the shares upon the death of a shareholder. Ideal
for small businesses, this agreement should be used by entities that want to restrict the
transfer of shares.
                      SHAREHOLDER'S / STOCKHOLDER’S AGREEMENT
                                          OF
                              [ENTER COMPANY NAME]

THIS SHAREHOLDER'S AGREEMENT (this “Agreement”), is made and entered into as of
this _____ day of ________, ______, by and between [Enter Company Name] (the
“Company”),a [Enter State] corporation herein referred to as the corporation, and the following
stockholders of the corporation, here referred to as the stockholders:

               Name                       Stockholder’s Residence         Number of Shares




SELECT only one of the following:

______ For purposes of this Agreement, the Shareholder is an employee
Shareholder (an “Employee Shareholder”) and is bound to all the provisions of this Agreement.
Shareholder's Initials: ______

______ For purposes of this Agreement, the Shareholder is not an Employee Shareholder and is
not bound to the provisions of this Agreement. Shareholder's Initials: ________

WHEREAS, the parties hereto deem it in their best interest to provide for ultimate ownership and
desire to assure continuity of ownership of the corporation and of the shares of the Company (the
“Stock”), or rights thereto;

The stockholders, after mutual consultations, have agreed, in order to ensure such continuity, to
restrict the sale or transfer of shares of the corporation, both during the lifetime and at the death
of any of the stockholders.

For the reasons above set forth, and in consideration of the mutual covenants and promises of the
parties hereto, the corporation and the stockholders agree as follows:

                                       FIRST RIGHT OF PURCHASE

If any stockholder shall, during the stockholder’s lifetime, desire to sell or transfer all or any part
of the stockholder’s shares of stock in the corporation, the stockholder shall first offer to sell the
above-mentioned shares to the corporation at a price per share equal to the then book value of
each of the shares. An independent certified accountant shall determine book value.

The Shareholder shall not dispose of any of his or her Stock except as permitted by this
Agreement, and any such attempted disposition shall be void and shall not be recognized or
registered upon the books of the Company.




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The Shareholder, or his or her personal representative, shall notify the Company immediately
upon the occurrence of an involuntary disposal of his or her Stock. The Company shall notify
the other shareholders of any such involuntary transfer.

In the event the Company purchases any Stock pursuant to this Agreement, the Company shall
set off against the purchase price for the Stock any indebtedness owed to the Company by such
Shareholder or his or her estate, whether or not such indebtedness is then due. If any shareholder
or other third party purchases any Stock pursuant to this Agreement, as a condition of the
purchase, the purchaser agrees, prior to making any payment to the transferring Shareholder, that
the purchaser shall pay to the Company that part of the purchase price equal to any indebtedness
owed by the seller or his or her estate to the Company, whether or not such indebtedness is then
due, and such payments shall be deemed payments on account of said purchase price or the
promissory note issued by such shareholder with respect thereto.

            OFFER TO OTHER STOCKHOLDERS IF CORPORATION DOES NOT
                                PURCHASE

The offer to sell must be communicated by the selling stockholder to the board of directors of the
corporation and to all other stockholders. If the corporation shall refuse or neglect to notify the
selling stockholder of its intention to purchase the shares or if the corporation is prohibited by
law from making such a purchase or redemption, the selling stockholder shall then notify the
other stockholders of the stockholder’s intention to sell and the number of shares offered for sale.
Each of the other stockholders having the right to purchase the number of shares owned by the
selling stockholder equal to such purchasing stockholders’ proportionate ownership of the
corporation immediately prior to the receipt of such offer to sell.

          STOCKHOLDER’S RIGHTS IF NEITHER CORPORATION NOR OTHER
                    STOCKHOLDERS EXERCISE OPTION

Should the corporation nor the other stockholders elect to purchase the shares the stockholder
desiring to sell or transfer his or her shares shall be free to do so to any other person or
corporation free of any restrictions provided herein; provided, however, that such sale or transfer
shall not be on terms less favorable to the selling stockholder unless the less favorable terms are
re-offered to the corporation and/or the other stockholders as herein provided in above section.

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