SHAREHOLDERS AGREEMENT

SHAREHOLDERS AGREEMENT

THIS AGREEMENT made this _______(1)_________ day of _____(2)______, ______

(3)_______, by and between _______(4)________, hereinafter "Shareholders" of ________(5)

___________, hereinafter "Corporation".

W I T N E S S E T H:

WHEREAS, the parties believe it is in their best interest to unanimously agree to terms

below related to the operation, management and control of the Corporation in order to achieve

harmonious balance and direction.

NOW THEREFORE, the parties agree to the following:

1. The Shareholders agree to maintain "S" status of the Corporation for federal tax

purposes throughout a period of five (5) years from the date hereof unless seventy-five percent

(75%) of outstanding stock of the Corporation is voted in such a manner as to consent to the

revocation of such status.

2. The parties hereto agree to execute a Buy-Sell Agreement between and mutually

acceptable by the parties.

3. For a period of five (5) years from the date of this Agreement, the Shareholders as Directors

shall, unless one is either no longer a Shareholder, or unable or unwilling to perform, vote for the

following officers:

____________(6)____________ President

____________(7)____________ Vice President/Treasurer

____________(8)____________ Secretary

4. Restrictive Endorsements shall be set forth on all the stock certificates for the

Corporation which shall set forth that such stock is subject to the Buy-Sell Agreement terms as

well as to the voting restrictions contained herein.

5. The Corporation shall do its banking business at ________(9)________ or at such

bank or banks as determined in the sole discretion of the Directors. The signature of any one

officer of the Corporation shall be sufficient for checks or drafts up to the amount of One

Thousand Dollars ($1,000.00). The joint signature of either ______(10)______ or _______(11)

_____ as one party, and _______(12)________ as the other party will be necessary for any

check over the amount of One Thousand Dollars ($1,000.00).

6. The Shareholders consent that upon the occurrence of a situation whereby the

operating capital of the Corporation is not sufficient to meet operating expenses and upon a

majority vote by the Shareholders each Shareholder shall make the required contribution as to

such total request within thirty (30) days of request of a Shareholder in the proportion of their

stock ownership interest in the Corporation. Failure to make such contribution within said thirty

(30) days will result in the then remaining Shareholders having the right to purchase the prorata

share of the stock held by the Shareholder who has failed to make his capital contribution by

purchasing the capital contribution together with interest at prime (as determined by Chase

Manhattan Bank) plus one percent (1%).

7. The parties hereto agree that the Corporation shall lease certain real property for its

corporate purposes.

8. The Corporation shall utilize the accrual method of accounting with a year ending in

December of any given year.

9. Corporate books shall be kept in the offices of the Corporation unless the

Shareholders agree otherwise. The books are to be maintained under generally accepted

accounting standards with sufficient controls and audit trail necessary for easy outside review. A

monthly financial operating statement shall be sent to each Shareholder not later than seven (7)

working days after the last day of the previous month. Such financial report shall include current

month and year to date results of operation and balance sheet information. Furthermore, at the

request of any Shareholder, the parties agree to an annual financial review for a previous year

of business. Any such annual review shall be performed by someone other than the CPA who is

utilized for day to day operations by the Corporation.

10. For transactions involving up to and including the amount of One Thousand Dollars

($1,000.00), any officer of the Corporation is authorized to enter into in the future any and all

contracts and leases for the improvements, purchase, maintenance, sale, lease or other

disposition of corporate property in the form customary for such agreements. Furthermore, to the

extent of the above stated limit an officer may borrow money on behalf of the Corporation at

commercially reasonable terms. Any transaction of whatever kind, over and above the amount of

One Thousand Dollars ($1,000.00) shall be agreed to in writing prior to the binding the

Corporation to the same by Shareholders holding a minimum of seventy-five percent (75%) of the

outstanding shares of the Corporation. Furthermore, each Director must sign each agreement,

lease, contract or other document in which any corporate obligation is created to signify their

consent to approving the same.

11. The Shareholders hereof shall be respectively entitled to reimbursement from the

Corporation for all personal out-of-pocket direct costs, including on-site costs incurred by them in

furthermore of the Corporation's business. Such Shareholders shall furnish written receipts

relative to the same upon request. It is expressly understood that no cost over and above One

Thousand Dollars ($1,000.00) shall be incurred without the written consent of the Shareholders

holding a minimum of seventy-five (75%) of the outstanding shares of the Corporation.

12. The parties hereto agree to execute any and all necessary documents required to

carry out the terms of this Agreement.

13. This Agreement shall be binding upon, and inure to the benefit of the parties thereto,

their legal representatives, successors and assigns. However, no assignment shall be made of

the rights hereunder without the prior written consent of the other parties.

14. This Agreement shall be governed by and construed in accordance with the laws of

the State of _____(13)_____.

15. This Agreement embodies and constitutes the entire understanding between the

parties with respect to the transactions contemplated herein. All prior or contemporaneous

agreements, understandings, representations, oral or written, are merged into this Agreement.

Neither this Agreement nor any provision hereof may be waived, modified, amended, discharged

or terminated except by an instrument in writing signed by the party against which the

enforcement of such waiver, modification, amendment, discharge or termination is sought and

then only to the extent set forth in such instrument.

16. In the event a party to this Agreement must employ an attorney to enforce the

provisions hereof or to secure performance by a defaulting party under the terms herein stated,

the prevailing party in litigation arising therefrom shall be entitled to an award of its reasonable

attorney's fees both on trial and the appellate level incurred in enforcing this Agreement and/or

securing performance of the terms herein stated.

17. This Agreement shall have an initial term of five (5) years and shall be renewed for

additional five (5) year terms automatically and perpetually thereafter unless a Shareholder

decides to terminate the same within sixty (60) days of the end of a term, whereupon such

Shareholder shall be deemed to have offered his stock under the Buy-Sell Agreement described

above as amended. This Agreement shall terminate upon the earlier of the following:

a. Dissolution of the Corporation;

b. Mutual agreement of the parties hereto;

c. Bankruptcy of the Corporation or of any Shareholder.

18. All notices that the parties hereto may desire or be required to give hereunder shall

be deemed to have been properly given and shall be effective when and if sent by U.S. regular

mail, postage prepaid, U.S. certified mail and/or by personal delivery or by courier, addressed to

the following:

NAME ADDRESS

_________(14)_______________ ____________(15)______________

_________(16)_______________ ____________(17)______________

_________(18)_______________ ____________(19)______________

This Agreement has been entered into on the date set forth above.

___________(20)_______________

Shareholder

___________(21)_______________

Shareholder

___________(22)_______________

Shareholder

Acceptance, ratification and acknowledgment of the above terms:

___________(23)_______________

Director

___________(24)_______________

Director

___________(25)_______________

Director

ATTEST: ________(26)_________

Secretary

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.


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