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Roger
Roger, Attorney
Category: Business Law
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Try to bring in a new partner/investor. We agreed on the company

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Try to bring in a new partner/investor. We agreed on the company market value at 0.5M at $5 a share for total 100,000 shares. I am allocating additional share and selling to a new partner. The agreement is that the new partner will get 5,000 shares at $5 a share. The total consideration is $25,000, in which he will pay with $5000 in cash and the rest is the knowledge and service he will provide to the company.

I created a stock purchase agreement and shareholder agreement.

In my stock purchase agreement, here is what I stated. I am looking for some advices to make it better.

"Consideration and Payment of Purchase Price. 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 $5,000.00 in cash and the consulting service for introducing to 10 potential customers and obtaining one paying customer, such total consideration to be referred to in this Agreement as the "Purchase Price" "
Submitted: 1 year ago.
Category: Business Law
Expert:  Roger replied 1 year ago.
Hi - my name is XXXXX XXXXX I'm a Business litigation attorney. Thanks for your question.

The only thing that could be added is after the $5,000 in cash, you could say ....and good will, including, but not limited to, the consulting service for introducing 10 potential customers and obtaining one paying customer, such total consideration to be referred to in this Agreement as the "Purchase Price", having a value of not less than $25,000.

That likely covers your situation.
Customer: replied 1 year ago.

Great. If he doesn't meet the goals, can this language enables us to reduce the share he has?


 

Expert:  Roger replied 1 year ago.
Well, you could put a timeframe on him performing these tasks, and if he fails, he can either pay the balance OR have a reduced interest/ share.

You could say something like, "In the event that ______ fails to perform within ____ months from the date of this agreement, ______ shall (a) receive a reduced interest or share in the amount of _____, or he/she shall pay $______ to satisfy the original consideration.
Customer: replied 1 year ago.

Excellent. Since I have you here, can I ask another question? Do I have to establish a shareholder agreement? or I can just add some of his concern, such as dilution, in the purchase agreement.

Expert:  Roger replied 1 year ago.
I don't think that you must have a separate shareholder agreement. You can just make any provision or condition in the purchase agreement.
Roger, Attorney
Category: Business Law
Satisfied Customers: 26113
Experience: BV Rated by Martindale-Hubbell; SuperLawyer rating by West
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