Option to sell and option of first purchase.

This agreement made and entered into this _________ day of _________, between A and B, parties of the first part, and C, party of the second part, provides that:

A and B have invested in the stock of _________ Company of _________ and are its principal shareholders and have made loans to the corporation evidenced by negotiable promissory notes of the corporation.

C is desirous that possible losses, arising out of the operation of the business of corporation to A and B jointly be minimized to the extent provided.

C is desirous of obtaining an option to purchase the investments of A and B jointly in corporation in the event that both elect to dispose of them jointly;

In consideration of the mutual promises and covenants contained and the payment of $_____ by each of the parties to each other party, the receipt and sufficiency of which consideration is acknowledged, it is agreed and covenanted by the parties as follows:

1. In the event that A and B jointly desire to dispose of all of their stockholdings in corporation, C shall have the option to purchase all stock at the highest price at which A and B jointly have a firm binding offer to buy all stock. C's option to purchase shall be for the period of _________ after receipt of notice in writing of the price offered for all the stock, the name of the person making the offer, and the terms and conditions of the offer. C, if he [she] chooses to exercise this option, shall notify A and B of the election to buy, in person, by telephone, telegraph, private messenger or mail. C shall have the option to make payment for all stock under the same terms and conditions of the above firm binding offer to purchase, or C may elect to make payment for all stock in cash within _________ after notice of the election to purchase under this option.

2. Providing that A and B together own all of the outstanding stock of corporation, at the option of A and B jointly, C shall purchase from A and B the entire stockholdings of A and B together with all outstanding obligations of the corporation to the parties as shall be evidenced by valid and enforceable negotiable promissory notes of the corporation, secured or unsecured, at a price not less than a sum arrived at as follows:

The total amount of money paid by A and B for their respective shares in the corporation plus the balance due A and B respectively on loans to the corporation as shall be evidenced by valid and enforceable negotiable promissory notes of the corporation, secured or unsecured.

Less: All sums paid by the corporation to A and B or either in excess of $_____ per month of the drawing accounts of A and B, all interest paid to A and B or either, and all other distributions or payments of any kind made by the corporation to A and B or either, which payments or distributions constitute income to either of the parties reportable by either or both of the parties in filing respectively their federal income tax returns;

Less: The total amount of actual capital losses or any other type of loss suffered by the corporation (liquidated at the time of purchase by C or unliquidated at that time but subsequently liquidated) which could have been insured against but either were not insured against at all or were only partially insured against by corporation. The extent of a reduction of the purchase price based upon this consideration shall be computed as of the time of loss;

Less: Conversion of capital assets to the extent distributed to A and B in excess of $_____ of the drawing accounts of A and B and not resulting in a reduction of the principal amounts due by the corporation to A and B or either, on loans made to corporation.

The option of A and B under this clause (2) shall expire _________.