a) Definition

A stock purchase agreement is a contract to transfer ownership of stocks from the seller to the purchaser. The key provisions of a stock purchase agreement have to do with the transaction itself, such as the date of the transaction, the number of stock certificates, and the price per share. In addition, the agreement should specify the name of the corporation whose stock is being sold in the transaction. A stock purchase agreement also contains certain terms and conditions that outline the nature of the contractual agreement. At the close of the transaction, the seller will transfer and deliver all certificates representative of the stocks sold and the purchaser will pay the price specified in the agreement as consideration for the stocks being bought. The key provisions that make up a stock purchase agreement are:

Date. The opening recital gives the date of the agreement as well as the name of the parties, the seller and purchaser, who are entering into the agreement. Number and price of shares. This provision states the name of the corporation that issued the stock, the number of shares involved in the transaction, and the dollar value of each share of common stock. Purchase and sale. At the end of the transaction, the seller conveys ownership of the certificates of stock to the purchaser. All certificates will be endorsed as needed for transfer and the seller will pay any transfer taxes. Representations and warranties of the seller. Warrants the corporation as being legally able to issue the stock, and that the corporation is in good standing. This provision also validates that the seller owns the stock and, as such, is able to sell the stock to the purchaser. Representations and warranties of seller and purchaser. All parties stipulate that there have been no omissions by the corporation, seller, or purchaser. Everything has been disclosed. General provisions. These provisions include the entire agreement clause and a statement that the agreement complies with the governing laws of the location where the contract is being executed. Witnesses. This is the section where witnesses sign the document. You must have witnesses for the agreement to be legally binding. Amount and payment of purchase price. Sets the exact terms of when the purchaser will pay the consideration to the seller for the purchase of the stocks.

This is often a percentage paid upon signing with the remainder paid when the contract is executed.

b) Differences Between Common and Preferred Stock

There are significant differences between common and preferred stock. Generally, you will want to issue common stock to founders and employees through the employee stock option program and offer preferred stock to investors. Common stock should be thought of as a vehicle for issuance in exchange for effort, or "sweat equity." Preferred stock has preferential rights in matters such as liquidation and board representation. These are rights generally reserved for those who have invested cash in the business. So why take on this complexity when you're just a startup? Having common and preferred stock is the simplest way to give preferred investors the protections they'll insist on. You may need to provide these investors the right to co-invest in additional rounds of financing and the right to a co-sale if a shareholder sells their ownership in the business. Investors may also ask for antidilution protection. This provision protects early investors from having their share of ownership reduced or diluted if subsequent investors invest in the company at a lower price. This essentially guarantees corporate tax investors' investments. All of these provisions can be incorporated into the rights of the preferred stock without requiring complex side agreements. There are also tax advantages to having two kinds of stock. You want the lowest price per share attributed to the common stock in order to issue it with the least tax consequences to those who work to earn the stock. You want the highest price per share associated with the stock you issue to cash investors. This distinction is important, because investors want the highest possible tax basis without paying more for the investment than its fair value. The common investors want the lowest value attributed so they don't get stuck with a tax liability for the shares they receive. This is one of the key issues for employee stock-ownership programs. It's not uncommon for the value of preferred-stock shares to be 10 times that of commonstock shares, although ultimately, both types of stock are converted into common shares at the time of the public offering.

SAMPLE AGREEMENT (1)

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 "Corporation", WITNESSETH: 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 or encumbrance. 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 deceased Stockholder. 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. 3. Consideration. 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 ongoing 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 being sold. 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) the written 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 shall not: A. declare or pay dividends on its capital stock; 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 office." 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

stockbooks 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 following manner: 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 Agreement.

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: "STOCKHOLDERS" __________(29)______________ __________(35)_________________ __________(30)______________ __________(31)______________ __________(36)_________________ __________(32)______________ "CORPORATION" __________(33)______________ By:___________(37)________________ President of the Corporation __________(34)______________

ATTEST: _________(38)________ Secretary of the Corporation (CORPORATE SEAL) NOTICE 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.

Sample Agreement (2)

THIS AGREEMENT is made and entered into this _(1)_ day of ________(2)_______, 19_(3)_, by and between _________(4)_________, (hereinafter referred to as "Seller") and ________(5)___________, (hereinafter referred to as "Purchaser"); W I T N E S S E T H: WHEREAS, the Seller is the record owner and holder of the issued and outstanding shares of the capital stock of ____(6)____, (hereinafter referred to as the "Corporation"), a ___(7)___ corporation, which Corporation has issued capital stock of _(8)_ shares of $___(9)___ par value common stock, and WHEREAS, the Purchaser desires to purchase said stock and the Seller desires to sell said stock, upon the terms and subject to the conditions hereinafter set forth; NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and in order to consummate the purchase and the sale of the Corporation's Stock aforementioned, it is hereby agreed as follows: 1. PURCHASE AND SALE: Subject to the terms and conditions hereinafter set forth, at the closing of the transaction contemplated hereby, the Seller shall sell, convey, transfer, and deliver to the Purchaser certificates representing such stock, and the Purchaser shall purchase from the Seller the Corporation's Stock in consideration of the purchase price set forth in this Agreement. The certificates representing the Corporation's Stock shall be duly endorsed for transfer or accompanied by appropriate stock transfer powers duly executed in blank, in either case with signatures guaranteed in the customary fashion, and shall have all the necessary documentary transfer tax stamps affixed thereto at the expense of the Seller.

The closing of the transactions contemplated by this Agreement (the "Closing"), shall be held at ________(10)_________, on ______(11)______, at ______(12)______, or such other place, date and time as the parties hereto may otherwise agree. 2. AMOUNT AND PAYMENT OF PURCHASE PRICE. The total consideration and method of payment thereof are fully set out in Exhibit "A" attached hereto and made a part hereof. 3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby warrants and represents: (a) Organization and Standing. Corporation is a corporation duly organized, validly existing and in good standing under the laws of the State of ____(13)____ and has the corporate power and authority to carry on its business as it is now being conducted. (b) Restrictions on Stock. i. The Seller is not a party to any agreement, written or oral, creating rights in respect to the Corporation's Stock in any third person or relating to the voting of the Corporation's Stock. ii. Seller is the lawful owner of the Stock, free and clear of all security interests, liens, encumbrances, equities and other charges. iii. There are no existing warrants, options, stock purchase agreements, redemption agreements, restrictions of any nature, calls or rights to subscribe of any character relating to the stock, nor are there any securities convertible into such stock. 4. REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER. Seller and Purchaser hereby represent and warrant that there has been no act or omission by Seller, Purchaser or the Corporation which would give rise to any valid claim against any of the parties hereto for a brokerage commission, finder's fee, or other like payment in connection with the transactions contemplated hereby. 5. GENERAL PROVISIONS (a) Entire Agreement. This Agreement (including the exhibits hereto and any written amendments hereof executed by the parties) constitutes the entire Agreement and supersedes all prior agreements and understandings, oral and written, between the parties hereto with respect to the subject matter hereof.

(b) Sections and Other Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. (c) Governing Law. This agreement, and all transactions contemplated hereby, shall be governed by, construed and enforced in accordance with the laws of the State of ____(14)_____. The parties herein waive trial by jury and agree to submit to the personal jurisdiction and venue of a court of subject matter jurisdiction located in ______(15)____ County, State of ___(16)____. In the event that litigation results from or arises out of this Agreement or the performance thereof, the parties agree to reimburse the prevailing party's reasonable attorney's fees, court costs, and all other expenses, whether or not taxable by the court as costs, in addition to any other relief to which the prevailing party may be entitled. IN WITNESS WHEREOF, this Agreement has been executed by each of the individual parties hereto on the date first above written. Signed, sealed and delivered in the presence of: ______________(17)______________ _____________(18)______________ ______________(17)______________ ______________(17)______________ _____________(19)______________ ______________(17)______________ EXHIBIT "A" AMOUNT AND PAYMENT OF PURCHASE PRICE (a) Consideration. As total consideration for the purchase and sale of the Corporation's Stock, pursuant to this Agreement, the Purchaser shall pay to the Seller the sum of _______(20)_______ Dollars ($__________), such total consideration to be referred to in this Agreement as the "Purchase Price". (b) Payment. The Purchase Price shall be paid as follows: i. The sum of ______(21)_______ Dollars ($_________) to be delivered to Seller upon the execution of this Agreement.

ii. The sum of ______(22)_______ Dollars ($_________) to be delivered to Seller at Closing. NOTICE 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.

Sample agreement (3)

Stock Purchase Agreement

AGREEMENT made this ___________ day of __________ 199 , by and between [specify seller] (hereinafter referred to as "Seller"); and [specify buyer] (hereinafter referred to as the "Corporation"). WITNESSETH WHEREAS Seller is hereby selling his ten (10) shares of stock representing his one-half (1/2) stock interest in the Corporation; and WHEREAS the Corporation is hereby purchasing and redeeming said shares from the Seller; and WHEREAS Seller is hereby resigning as an officer and Director of the Corporation effective as of [specify date]; NOW, THEREFORE, it is mutually agreed as follows: FIRST: Seller is hereby selling and transferring back to the Corporation all of Seller's shares of stock in the Corporation, as evidenced by ten (10) shares of common stock, and the Corporation is hereby purchasing same under the terms and conditions set forth in this Agreement. SECOND: The purchase price is the sum of [specify amount] Dollars, and shall be paid at the rate of [specify rate] Dollars per week over a period of [specify term] consecutive weeks commencing [specify date]. Payments are to be made on Wednesday of each week and includes.findlaw interest at the rate of seven (7%) percent per annum, and are evidenced by a Non-Negotiable Promissory Note being signed and delivered simultaneously herewith. THIRD: The entire purchase price shall become immediately due and payable upon any of the following occurrences: A. B. C. D. In the event there is a default in any payment thereunder and such default continues over a period of five (5) days after notice is given to the Corporation of such default; all of the remaining Shareholders of the Corporation sell all or substantially all of the shares of stock owned by them to any third party; or all or substantially all of the assets of the Corporation are sold; or the Corporation is liquidated or substantially liquidated. In the event of a liquidation, the obligation due to Seller shall have priority over any and all liquidating dividends given to Shareholders, as well as any and all accrued bonuses in excess of normal salaries that are made to the existing Shareholders.

FOURTH: Simultaneously herewith the Corporation is assigning to Seller all life insurance policies owned by the

Corporation on the life of the Seller. The Corporation shall sign any and all further documents that may be required by the life insurance companies to effectuate the transfer of said policies including any Cash Surrender Value which may have accumulated. FIFTH: Simultaneously herewith Seller is signing and delivering back to the Corporation a Stock Certificate for ten (10) shares, duly endorsed in blank for transfer. SIXTH: Seller warrants and represents as follows: A. B. C. Stock sold hereby is fully paid for, non-assessable and is owned by Seller free and clear of any liens and encumbrances of any nature whatsoever. Seller hereby waives any and all dividends, interests, increments and claims which may be due him from the Corporation from the shares of stock being sold hereby. Seller has incurred no liabilities, obligations or commitments of any nature, kind or description on behalf of the Corporation, except such liabilities or commitments which may be listed on the books and records of the Corporation.

SEVENTH: Seller is hereby resigning as an officer and Director of the Corporation effective [specify date]. However, Seller shall continue to remain as an employee of the Corporation under a separate Employment Agreement. General Releases are being signed simultaneously herewith between Seller, the Corporation, and Seller is hereby released from all personal liability he may have incurred on behalf of the Corporation. EIGHTH: The parties hereto agree that all contracts heretofore existing between them, or all contracts which may be construed as continuing to exist in the future between them, either orally or in writing, of whatsoever kind, nature and description, hereinafter or by operation of law (except this Agreement and any other Agreement being signed simultaneously herewith), are hereby cancelled and declared null and void between the within parties and are of no effect. NINTH: Each and all of the covenants and conditions of this Agreement shall be binding and inure to the benefit of the parties hereto, their respective heirs, legal representatives, successors and assigns, and shall not be changed or modified except in writing, signed by each of the parties hereto. IN WITNESS WHEREOF the parties hereto have hereunto set their hands and seals the day, month and year first above written. By: By: DATE: DATE: NON-NEGOTIABLE PROMISSORY NOTE FOR GOOD AND VALUABLE CONSIDERATION, the undersigned agrees to pay to the order of [specify] at such place or places as may be designated by [specify] the sum of [specify amount] Dollars, payable at the rate of [specify rate] Dollars per week, on the Friday of each and every week commencing [specify date] for a period of five hundred (500) consecutive weeks thereafter. Said sum includes.findlaw interest at the rate of seven (7%) percent per annum. This Note is being paid pursuant to a Stock Purchase Agreement being signed simultaneously herewith, and in the event there is a default in any of the payments hereunder as set forth in Article "THIRD" of said Stock Purchase Agreement, then and in such event interest shall accrue on the unpaid balance thereof as of date of default at the rate of one (1%) percent per month, and the maker hereof agrees to pay all costs of collection including, but not limited to, reasonable attorneys' fees. By: DATE:

Sample agreement (4)

STOCK PURCHASE AGREEMENT THIS AGREEMENT is made and entered into this ____ day of , 20 , by and between , hereinafter collectively referred to as the "Seller" and and/or assigns and/or nominees, hereinafter collectively referred to as the "Purchaser" (the term "Purchaser" shall extend to in the first instance the original Purchaser named herein and also the assigns of such Purchaser); WITNESSETH: WHEREAS, the Seller is the record owner and holder of the issued and outstanding shares of the capital stock of , hereinafter referred to as the "Corporation", a corporation, which Corporation has issued capital stock of shares of $ par value common stock, and WHEREAS, the Purchaser desires to purchase all of the issued and outstanding capital stock of the Corporation (referred to as the "Corporation's Stock"), and the Seller desires to sell or cause to be sold all of the Corporation's stock, upon the terms and subject to the conditions hereinafter set forth; NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and in order to consummate the purchase and the sale of the Corporation's Stock aforementioned, it is hereby agreed as follows: 1. PURCHASE AND SALE: CLOSING. a. Purchase and Sale of Corporation's Stock. Subject to the terms and conditions hereinafter set forth, at the closing of the transaction contemplated hereby, the Seller shall sell, convey and transfer, or cause to be sold, conveyed or transferred, all of the Corporation's Stock and deliver to the Purchaser certificates representing such stock, and the Purchaser shall purchase from the Seller the Corporation's Stock in consideration of the purchase price set forth in Section 2 and Exhibit "A" of this Agreement. The certificates representing the Corporation's Stock shall be duly endorsed for transfer or accompanied by appropriate stock transfer powers duly executed in blank, in either case with signatures guaranteed in the customary fashion, and shall have all the necessary documentary transfer tax stamps affixed thereto at the expense of the Seller. b. Procedure for Closing. The closing of the transactions contemplated by this Agreement (the "Closing"), shall be held at , on the day of , 19 , at or such other place, date and time as the parties hereto may otherwise agree (such date to be referred to in this Agreement as the "Closing Date"). 2. AMOUNT AND PAYMENT OF PURCHASE PRICE. The total consideration and method of payment thereof are fully set out in Exhibit "A" attached hereto and made a part hereof.

3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby warrants and represents: a. Organization and Standing. Corporation is a corporation duly organized, validly existing and in good standing under the laws of the State of and has the corporate power and authority to carry on its business as it is now being conducted. A true and correct copy of: i. its Certificate of Incorporation and all amendments thereto to date certified by the Secretary of State of the State of , and ii. its Bylaws as now in effect, will be delivered by Seller to the Purchaser prior to the Closing Date. The Corporation's minute books will be made available to the Purchaser and its representatives at any reasonable time or times prior to the Closing for inspection and will be complete and correct as of the date of any such inspection. b. Capitalization. The authorized capital stock of the Corporation consists of shares of $ par value common stock. c. Restrictions on Stock. i. Neither the Corporation nor Seller is a party to any agreement, written or oral, creating rights in respect to the Corporation's Stock in any third person or relating to the voting of the Corporation's Stock. ii. Seller is the lawful owner of all the Corporation's Stock, free and clear of all security interests, liens, encumbrances, equities and other charges. iii. There are no existing warrants, options, stock purchase agreements, redemption agreements, restrictions of any nature, calls or rights to subscribe of any character relating to the capital stock of the Corporation, nor are there any securities convertible into such stock. d. Subsidiaries. The Corporation has no subsidiaries. e. Authority Relative to this Agreement. Except as otherwise stated herein, the Seller has full power and authority to execute this Agreement and carry out the transactions contemplated by it and no further action is necessary by the Seller to make this Agreement valid and binding upon Seller and enforceable against it in accordance with the terms hereof, or to carry out the actions contemplated hereby. The execution, delivery and performance of this Agreement by the Seller will not : I. constitute a breach or a violation of the Corporation's Certificate of Incorporation, By-Laws, or of any law, agreement, indenture, deed of trust, mortgage, loan agreement or other instrument to which it is a party, or by which it is bound; ii. constitute a violation of any order, judgment or decree to which it is a party or by which its assets or properties are bound or affected; or iii. result in the creation of any lien, charge or encumbrance upon its assets or properties, except as stated herein.

f. Financial Statements. Seller is furnishing financial statements of the Corporation as an inducement to Purchaser to purchase the Corporation's Stock and accordingly, Seller warrants and represents the financial operating history or condition of the Corporation as indicated by the financial statements turned over to Purchaser. Moreover, Seller warrants and represents that at closing the Corporation and the Corporation's Stock will not be subject to any liability save and except those specifically enumerated in Exhibit "B" attached hereto and made a part hereof. To the extent that liabilities are discovered by Purchaser after Closing which relate to events prior to Closing, Seller shall be responsible to forthwith pay such liabilities, including income tax liabilities in cash within fifteen (15) days thereof, or alternatively, if Seller objects to such liabilities in good faith, litigate the issue and indemnify and save harmless Purchaser from any claim for such liability. This indemnification as it relates to income tax liabilities of the Corporation shall terminate on the tenth (10th) day after the expiration of the applicable period of limitations on assessments and collections applicable to such taxes under the Internal Revenue Code. Moreover, the aforementioned indemnity shall not apply to any tax liability which may occur by reason of actions taken by the Purchaser including, but not limited to, the liquidation of the Corporation. g. Tax Matters. The Corporation has timely prepared and filed all federal, state and local tax returns and reports as are and have been required to be filed and all taxes shown thereon to be due have been paid in full. h. Litigation. The Corporation is not a party to any litigation, proceeding or administrative investigation and to the best knowledge of the Seller none is pending against the Corporation or its properties. I. Properties. The Corporation has good and merchantable title to all of its properties and assets which are those properties and assets set out in Exhibit "C" attached hereto and made a part hereof. At closing, such properties and assets will be subject to no mortgage, pledge, lien, conditional sales agreement, security agreement, encumbrance or charge, secured or unsecured, except for real estate taxes and tangible personal property taxes which shall be prorated as of the date of closing, or those specifically set out in Exhibit "B". j. Compliance with Applicable Laws. None of the Corporation's actions are prohibited by or have violated or will violate any law in effect on the date of this Agreement or on the date of closing. None of the actions of the Corporation shall conflict with or result in any breach of any of the provisions of, or constitute a default under, or result in the creation of any lien, security interest, charge or encumbrance upon the capital stock of the Corporation, or upon any of the assets of the Corporation, under the provisions of the Certificate of Incorporation or Bylaws or any indenture, mortgage, lease, loan agreement or other agreement to which the Corporation and/or the Seller is a party or by which the capital stock or properties and assets of the Corporation are bound to effect it. The Corporation is in compliance with all applicable laws, including, but not limited to, corporate laws, zoning regulations, restaurant and beverage laws and regulations, if applicable, city, and/or county and state

occupational laws and regulations, internal revenue laws, and any and all other laws which may effect the operation or liability of the Buyers herein. k. Documents for Review. The Corporation's documents enumerated in Exhibit "D", attached hereto and made a part hereof, are true, authentic, and correct copies of the originals, or, if appropriate, the originals themselves, and no alterations or modifications thereof have been made. 4. REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER. Seller and Purchaser hereby represent and warrant that there has been no act or omission by Seller, Purchaser or the Corporation which would give rise to any valid claim against any of the parties hereto for a brokerage commission, finder's fee, or other like payment in connection with the transactions contemplated hereby. 5. TRANSACTIONS PRIOR TO THE CLOSING. Seller hereby covenants the following: a. Conduct of Corporation's Business Until Closing. Except as Purchaser may otherwise consent in writing prior to the Closing Date, Seller will not enter into any transaction, take any action or fail to take any action which would result in, or could reasonably be expected to result in or cause, any of the representations and warranties of Seller contained in this Agreement, to be not true on the Closing Date. b. Resignations. Seller will deliver to Purchaser prior to the Closing Date the resignation of each director and officer of the Corporation, each such resignation to be effective on the Closing Date. c. Satisfactions. Seller will deliver to Purchaser on the Closing Date a satisfaction from any mortgage and lien holder of the Corporation's property, satisfactory in form and substance to the Purchaser and his counsel indicating that the then outstanding unpaid principal balance of any promissory note secured thereby has been paid in full prior to or simultaneously with the Closing. d. Advice of Changes. Between the date hereof and the Closing Date, Seller will promptly advise Purchaser in writing of any fact which, if existing or known at the date hereof, would have been required to be set forth herein or disclosed pursuant to this Agreement, or which would represent a material fact the disclosure of which would be relevant to the Purchaser. 6. EXPENSES. Each of the parties hereto shall pay its own expense in connection with this Agreement and the transactions contemplated hereby, including the fees and expenses of its counsel and its certified public accountants and other experts. 7. GENERAL. a. Survival of Representations and Warranties. Each of the parties to this Agreement covenants and agrees that the Seller's representations, warranties, covenants and statements and agreements contained in this Agreement and the exhibits hereto, and in any documents delivered by Seller to Purchaser in connection herewith, shall survive the Closing Date and terminate on the second anniversary of such date. Except as set forth in this Agreement, the exhibits hereto or in the documents and

papers delivered by Seller to Purchaser in connection herewith, there are no other agreements, representations, warranties or covenants by or among the parties hereto with respect to the subject matter hereof. b. Waivers. No action taken pursuant to this Agreement, including any investigation by or on behalf of any party shall be deemed to constitute a waiver by the party taking such action or compliance with any representation, warranty, covenant or agreement contained herein, therein and in any documents delivered in connection herewith or therewith. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach. c. Notices. All notices, requests, demands and other communications which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered or mailed, first class mail, postage prepaid: To Seller: To Purchaser: or to such other address as such party shall have specified by notice in writing to the other party. d. Entire Agreement. This Agreement (including the exhibits hereto and all documents and papers delivered by Seller pursuant hereto and any written amendments hereof executed by the parties hereto) constitutes the entire Agreement and supersedes all prior agreements and understandings, oral and written, between the parties hereto with respect to the subject matter hereof. e. Sections and Other Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. f. Governing Law. This agreement, and all transactions contemplated hereby, shall be governed by, construed and enforced in accordance with the laws of the State of . The parties herein waive trial by jury and agree to submit to the personal jurisdiction and venue of a court of subject matter jurisdiction located in County, State of . In the event that litigation results from or arises out of this Agreement or the performance thereof, the parties agree to reimburse the prevailing party's reasonable attorney's fees, court costs, and all other expenses, whether or not taxable by the court as costs, in addition to any other relief to which the prevailing party may be entitled. In such event, no action shall be entertained by said court or any court of competent jurisdiction if filed more than one year subsequent to the date the cause(s) of action actually accrued regardless of whether damages were otherwise as of said time calculable. g. Conditions Precedent. The Conditions Precedent to the enforceability of this Agreement are outlined in Exhibit "E", attached hereto and made a part hereof. In the event that said Conditions Precedent are not fulfilled by the appropriate dates thereof, this Agreement shall be deemed null and void and any deposits paid shall be returned to the Purchaser forthwith. h. Treasury Stock. It is understood and agreed by the Purchaser that none of the consideration furnished by Purchaser hereunder ($ ) shall be for treasury stock and such consideration, subject to the terms hereof,

shall be the sole property of Seller. I. Contractual Procedures. Unless specifically disallowed by law, should litigation arise hereunder, service of process therefor may be obtained through certified mail, return receipt requested; the parties hereto waiving any and all rights they may have to object to the method by which service was perfected. IN WITNESS WHEREOF, this Agreement has been executed by each of the individual parties hereto and signed by an officer thereunto duly authorized and attested under the corporate seal by the Secretary of the corporate party hereto, all on the date first above written. Signed, sealed and delivered in the presence of: (CORPORATE SEAL) ______________________________ By:___________________________ Witness It's President ______________________________ Attest: ______________________ Witness It's Secretary ______________________________ ______________________________ Witness Seller ______________________________ Witness ______________________________ ______________________________ Witness Buyer ______________________________ Witness EXHIBIT "A" AMOUNT AND PAYMENT OF PURCHASE PRICE a. Consideration. As total consideration for the purchase and sale of the Corporation's Stock, pursuant to this Agreement, the Purchaser shall pay to the Seller the sum of Dollars ($ ), such total consideration to be referred to in this Agreement as the "Purchase Price". b. Payment. The Purchase Price shall be paid as follows: I. Check of Purchaser in the sum of Dollars ($ ) to be delivered to Seller upon the execution of this Agreement. ii. Check of Purchaser in the sum of Dollars ($ ) to be delivered to Seller upon Seller's examination and approval of the books and records of the Corporation. iii. Check of Purchaser in the sum of Dollars ($ ) to be delivered to Seller's attorney as escrow agent at closing to be held by said agent for a period of sixty (60) days to insure that the Corporation's liabilities have been fully satisfied and liquidated. iv. Check of Purchaser in the sum of to Seller at Closing. Dollars ($ ) to be delivered

c. In the event that the Purchaser, after a complete review of the Corporation's books, records, financial statements, sales tax receipts, bank statements, check books , and any other document required by Purchaser to verify the standing, status or performance of the Corporation, does not approve said purchase, then, in that event, all deposits paid to that date shall be returned to Purchaser with no further liability, responsibility or obligation. EXHIBIT "B" LIABILITIES OF CORPORATION EXHIBIT "C" PROPERTIES AND ASSETS OF CORPORATION EXHIBIT "D" DOCUMENTS FOR REVIEW i. Corporate Articles of Incorporation ii. Corporate Bylaws iii. Corporate Minutes and Resolutions iv. Financial and Operating Statements v. Sales Tax Returns vi. Alcoholic Beverage Returns (If applicable) vii. Income Tax Returns viii. Accounts Payable Ledgers ix. Accounts Receivable Ledgers x. Leasehold Agreement(s) (If applicable) xi. Warranty Deeds (If applicable) xii. Bills of Sale (If applicable) EXHIBIT "E" CONDITIONS PRECEDENT

Buy/Sell Agreement Checklist

Buy/Sell Agreements - Has Your Company Addressed the Critical What If's? The time to prevent disputes is before they occur. Our experience is that owners anxieties created in dealing with one another, are inversely proportional to the effort they spend addressing business problems in the event that they should happen. Dealing with these contingencies before they manifest themselves is the secret to a harmonious business relationship with other owners. Legal fees as well as sleepless nights will be minimized if you agree to the "What If's" now. Use the checklist below to determine areas where you may need assistance. Answer Yes or No to each question. Applicability

Should the agreement apply only to the current owners or should it be binding on all owners throughout the life of the business entity? Should the agreement provide that it supersedes all other agreements to redeem a business interest? Is the agreement being reviewed annually? (Changes of price or terms should require a unanimous vote of the owners.)

Type of Agreement

Should the agreement be structured as a redemption agreement or as a crosspurchase agreement? Should the agreement be structured: o To require the seller to sell and the buyer to buy? o To give the buyer an option to require the seller to sell? o To give the seller an option to require the buyer to buy? o To give a right of first refusal to the buyer? o As a combination of any of the above? Should the death of an owner cause an automatic buyout of the owners interest or should his/her family be allowed to remain as an owner?

Buyout Price and Time for Payout

Should the buyout price from the estate or heirs of a deceased owner be addressed? If yes, when should it be paid?________ What interest rate should the obligation bear?_________ Should the buyout price to a disabled owner be addressed? If yes, when would it be paid?_______ Should the buyout price to an owner who resigns or is dismissed be addressed? If yes, when should it be paid?________ Should there be a difference in price if there is an amiable parting of ways? If yes, when should it be paid? ________ Should the buyout price to an owner who goes bankrupt be addressed? If yes, when should it be paid? _________ Should the price reflect the fact that you are selling to a long time business associate rather than an outsider?

Funding

Should the agreement provide that the buyout be funded by life insurance or some other investment vehicle? If funded with life insurance: Should the type of life insurance used be addressed (i.e. term life, ordinary life, last to die, paid-up life, universal life or an endowment policy?) Should a life insurance trust be used? Should all of the policy proceeds be required to be used to redeem the interest?

Can part of the proceeds be used to help the entity recover from the loss of the owner? Should whole life insurance policies with cash values be transferred to the owner at termination or retirement?

Security

Should the agreement be guaranteed or secured? If so, should the security be in the form of: o A pledge of business assets? o A personal guarantee by the other owners? o An agreement obligating the entity to refrain from increasing salaries, paying dividends or making loans until all outstanding liabilities to the beneficiaries are paid?

Loans

Should the disposition of owners' loans, whether receivables or payables, in the event of termination because of death or disability be addressed? Should the disposition of owners' loans in the event of termination other than because of death or disability be addressed?

Covenant Not to Compete

Should there be a covenant not to compete? If so, should there be geographic and time limitations?

Other

Should there be a period of disability before the other owners of the business have the right to buy out a disabled owner? Should an owner have the right to transfer or assign to a trust, for estate-tax planning purposes, their rights and interests in the business? Should the spouses of the owners sign the buy/sell agreement? Do other family members presently own any stock?