This Agreement is made this day between [CORPORATION'S NAME], a [STATE] corporation ("Corporation") and [SHAREHOLDER'S NAME] ("Shareholder").
WHEREAS, the Shareholder is the owner of [NUMBER] shares of the Corporation's common stock ("Shares"); and
WHEREAS, the Corporation this day has a net worth in excess of $[AMOUNT TO BE PAID FOR THE STOCK]; and
WHEREAS, the Corporation desires to repurchase the Shares owned by the Shareholder.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
Section 1. Repurchase of Shareholder's Stock. The Corporation hereby agrees to purchase from the Shareholder all [NUMBER] shares of common stock in the Corporation now owned by the Shareholder for the aggregate price of $[AMOUNT], payable as follows:
A. $[AMOUNT] this day;
B. $[AMOUNT], payable 90 days from this date; and
C. [NUMBER] monthly payments of $[AMOUNT] each, payable on the last day of each month, beginning on the last day of the month falling 90 days from this date and ending on the last day of the month falling [NUMBER] months after the month falling 90 days from this date.
[ALTERNATIVE #1] All such payments shall be made through the Escrow Agent [LIST NAME & ADDRESS].
[ALTERNATIVE #2] All such payments shall be made to the Shareholder as follows: [DESCRIBE].
Section 2. Representations and Warranties of Shareholder. The Shareholder hereby represents and warrants that Shareholder is the sole owner of the Shares and that Shareholder is free to transfer the Shares to the Corporation and that there are no liens, security interests or other encumbrances on the Shares.
Section 3. Grant of Security Interest. The Corporation hereby grants the Shareholder a security interest in the Shares of the Corporation transferred herein. Until all of the purchase price described in Section 1 herein has been paid, the certificate(s) representing said [NUMBER] Shares in the Corporation shall be delivered to [NAME] ("Escrow Agent"), with instructions to deliver said certificate(s) to the Corporation upon payment of all the payments described in Section 1 herein, or, alternatively, in the event of a default as described in Section 5 herein, to the Shareholder. A copy of the instructions to the Escrow Agent are attached hereto, as Exhibit "A". Any fee payable to the Escrow Agent for acting as escrow agent shall be paid by the Shareholder. Any successor Escrow Agent must be approved by both parties hereto.
Section 4. No Right to Vote Shares. The arrangement described in Section 3 above is for security purposes only and is intended to constitute a perfection within the meaning of Article 9 of the [STATE] Uniform Commercial Code. While said Shares are held by the Escrow Agent, and as long as no event of default has occurred and is continuing, neither the Escrow Agent nor the Shareholder shall be entitled to any of the indices of ownership of said Shares including, but not limited to, voting rights and distributions. In any shareholder vote, the shares represented by said certificate(s) shall abstain in such voting and any distributions attributable to said Shares shall be retained by the Corporation.
Section 5. Resignation as Officer/Director. The Shareholder hereby agrees to submit Shareholder's resignation as an officer and director of the Corporation, effective upon acceptance by the board of directors of the corporation.
Section 6. Events of Default. The Corporation shall be in default under this Agreement if it shall fail to make any payment within 20 days after said sum is due and payable and such failure shall continue for 10 days after written notice from the Shareholder to the Corporation.
Section 7. Remedies. When any event of default by the Corporation has occurred and is continuing, the Shareholder may, at the Shareholder's option and without further notice, declare this Agreement to be in default and exercise any or all of the following remedies:
A. Notify Escrow Agent to deliver said certificates to the Shareholder to be sold in a manner in conformity with Article 9 of the [STATE] Uniform Commercial Code;
B. Accelerate the balance of all payments and make such immediately due and payable;
C. Proceed, by appropriate action, to recover damages and expenses for the breach hereof.
Section 8. Additional Documents. The parties shall execute and deliver all other appropriate supplemental agreements and other instruments and take any other action necessary to make this Agreement fully and legally effective, binding and enforceable, as between the parties, and as against third parties.
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