Fill and Sign the Using a Buysell Agreement to Transfer Ownership the Tax Adviser Form

Buy Sell or Stock Purchase Agreement Covering Common Stock in a Closely Held Corporation with an Option to Fund the Purchase through Life Insurance This Agreement is made by and between ________________________ ( AShareholder) and ________________________ Corporation ( ACorporation) this the ______ day of _____________, 20_______. WHEREAS, Corporation was created and exists under the laws of the State of ________________________, with its principal place of business at ________________________________________________ (street address, city, and county); WHEREAS, Shareholder owns ______ shares of common stock ( AStock ) in the Corporation; and WHEREAS, the parties to this Agreement believe it is to their mutual best interests to provide for continuity and harmony in the management and policies of the Corporation; and WHEREAS, therefore, it is their mutual purpose (i) to provide for the purchase by the Corporation of Shareholder s Stock should the Shareholder desire to dispose of any of such Stock in the Corporation during his lifetime or should he terminate employment with the Corporation during his lifetime, and (ii) to set forth the terms and conditions under which the above and foregoing may be accomplished. NOW, THEREFORE, in consideration of their mutual agreements and covenants contained herein and for other valuable consideration, receipt of which is hereby acknowledged, it is mutually agreed by and between the parties to this Agreement as follows: I. Restriction on Transfer of Stock. Shareholder shall not sell, assign, transfer, pledge, or dispose of his Stock in the Corporation by operation of law or otherwise except as provided below. II. Purchase of Stock at Death of Shareholder. A. Purchase of Stock. Upon the death of the Shareholder, the estate of the deceased Shareholder shall sell and the Corporation shall purchase all of the deceased Shareholder s Stock in the Corporation, now owned or hereafter acquired. B. Purchase Price at the Death of Shareholder. The purchase price to be paid for the Stock of the deceased Shareholder shall be ________________________________________________. [Insert here either the purchase price per share or the formula method by which such a purchase price shall be determined. If a fixed purchase price per share is provided, additional provisions should be inserted providing for an annual re-valuation of the purchase price, which re-valuation should be set forth in Exhibit A to the agreement]. Notwithstanding the foregoing, however, the purchase price to be paid for the Stock of said deceased Shareholder shall be adjusted as set forth in Section C of this Paragraph II of this Agreement. The purchase price of the Stock shall be determined by the accounting firm for the Corporation, using the accounting principles generally applied to the Corporation, and said determination by the Corporations accounting firm shall be final and conclusive upon all parties to this Agreement. C. Insurance on the Shareholder s Lives. At the time of execution of this Agreement, the Corporation is the owner and beneficiary of certain life insurance policies described in Exhibit A attached hereto, insuring the life of the Shareholder. In the event of the death of Shareholder, the face value of the insurance policies shall be paid to the estate of the deceased Shareholder in full or partial payment of the purchase as soon after receipt by the Corporation of the face value of the insurance policies (as is reasonably practicable). In the event that any action, omission, or misstatement on the part of a deceased Shareholder results in the nonpayment by the insurance carrier of all or part of the face value of the insurance policies described in Exhibit A to this Agreement, then and in such events the purchase price set forth in Section B of this Paragraph II of the Agreement shall be reduced by a like amount and the Corporation shall have no liability to the deceased Shareholder s estate for that portion of the face value of the insurance policies which is not paid by the insurance carrier. The Corporation agrees to pay premiums on the insurance policies listed in Exhibit A to this Agreement and shall give proof of payment of premiums to the Shareholder whenever he requests. If a premium is not paid within 10 days after its due date, the insured Shareholder shall have the right to pay such premium and be reimbursed therefor by the Corporation. The Corporation shall have the right to purchase additional insurance on the life of the Shareholder. Such additional insurance shall be listed in Exhibit A to this Agreement, along with any substitution or withdrawal of life insurance policies subject to this Agreement. In the event that the Corporation decides to purchase additional life insurance on Shareholder, the Shareholder hereby agrees to cooperate fully by performing all of the requirements of the life insurer which are necessary conditions precedent to the issuance of life insurance policies. The Corporation shall be the sole owner of the policies issued to it and it may apply any dividends toward the payment of premiums. D. Payment of Balance of Purchase Price. In the event that the amount of insurance proceeds listed in Exhibit A to this Agreement as applied toward the purchase price of a deceased Shareholder s Stock in the Corporation shall exceed said purchase price as determined in Section B of Paragraph II of this Agreement, then the excess insurance proceeds shall be distributed to the deceased Shareholder s estate as an additional death benefit from the Corporation, payable to the estate of the deceased Shareholder in equal consecutive monthly installments over a period of months, with the first installment due on the first day of the month beginning no later than _______ days from the date of death. Said excess purchase price shall be evidenced by an installment note, bearing interest at ______%. The note shall provide for prepayment at any time without prepayment penalty. III. Purchase of Stock During Lifetime of Selling Stockholder A. Purchase of Stock of Stockholder While in the Employ of the Corporation. In the event that a Shareholder (the ASelling Shareholder ) desires to sell, assign, transfer, pledge, or dispose of any share of Stock in the Corporation owned by him at a time when the Selling Shareholder is in the employ of the Corporation, he shall first offer in writing to sell all of his Stock in the Corporation to the Corporation. The written offer by the Selling Shareholder shall state the name of the intended transferee (the AIntended Transferee ) and the terms and conditions of the intended transfer, including the proposed purchase price. At any time during the period of 30 days beginning with the day on which such written offer is received, the Corporation may purchase all of the shares of Stock of such Shareholder at a purchase price equal to the lesser of (i) the price offered by the Intended Transferee or (ii) the price determined in accordance with Section C of Paragraph III of this Agreement. Any shares not purchased by the Corporation within 30 days after receipt of such offer in writing shall be offered in writing at the same price to the other Shareholders, each of whom shall have the right to purchase such portion of the remaining Stock offered for sale as the number of shares of Stock owned by him at such date shall bear to the total number of shares of Stock owned by all of the other Shareholders excluding the selling Shareholder. If any of the Shareholders elect to purchase less than his pro rata proportion of the offered Stock, or elect to purchase none at all, then the purchasing Shareholders shall have the right to purchase the shares of Stock which the Shareholder declines to purchase in such proportion as the number of shares of Stock purchased by each Shareholder exercising his right to purchase bears to the total number of shares of Stock purchased by all Shareholders exercising their right to purchase. If the Corporation or the remaining Shareholder do not purchase all of the Stock owned by the Selling Shareholder in the Corporation within 60 days of the initial receipt of the offer to sell by the Corporation, the Selling Shareholder may sell the Stock to the Intended Transferee, but only on the same terms and conditions, including the same purchase price, as set forth in the written offer. If the sale to the Intended Transferee is not completed within 120 days of the initial receipt of the offer to sell by the Corporation, the right of the Selling Shareholder to sell his Stock to the Intended Transferee shall terminate and such Selling Shareholder must again comply with the requirements of this Section A in order to sell or otherwise transfer his Stock hereunder. B. Purchase of Stock of Shareholder While Not in the Employ of the Corporation. In the event that a Shareholder s employment with the Corporation is terminated prior to his Retirement (as such term is defined in Section D of Paragraph III of this Agreement) or his Total Disability (as such term is defined in Section B of Paragraph IV of this Agreement) the terminated Shareholder shall sell and the Corporation shall purchase all, but not less than all, of his Stock in the Corporation at a price determined in accordance with Section C of Paragraph III of this Agreement. C. Purchase Price During Lifetime Sale. The purchase price to be paid for the Stock of the Shareholder who desires to sell his Stock during his lifetime pursuant to the terms of Section A or Section B of Paragraph III of this Agreement shall be ________________________________________________ [Insert here either the purchase price per share or the formula method at which such a purchase price shall be determined. If a fixed purchase price per share is provided, additional provisions should be inserted providing for an annual re-valuation of the purchase price, which re-valuation should be set forth in Exhibit B to the Agreement.]. The purchase price of the Stock as set forth in this Section shall be determined by the accounting firm for the Corporation, using the accounting principles generally applied to the Corporation, and said determination by the Corporations accounting firm shall be final and conclusive upon all parties to this Agreement. D. Purchase and Purchase Price of Stock of Shareholder at or Following Retirement. In the event that a Shareholder s employment with the Corporation is terminated due to his Retirement, as such term is defined below, (and at such time or at any time thereafter the retired Shareholder desires to sell, assign, transfer, pledge, or dispose of any share of Stock in the Corporation owned by him), such retired Shareholder shall sell and the Corporation shall purchase all of his Stock in the Corporation at a price determined in accordance with this Section. The purchase price to be paid for the Stock of a retired Shareholder pursuant to the terms of this Section shall be ________________________________________________ [Insert here either the purchase price per share or the formula method at which such a purchase price shall be determined. If a fixed purchase price per share is provided, additional provisions should be inserted providing for an annual re-valuation of the purchase price, which re-valuation should be set forth in Exhibit B to the Agreement.]. The purchase price of the Stock as set forth in this Section shall be determined by the accounting firm for the Corporation, using the accounting principles generally applied to the Corporation, and said determination by the Corporation s accounting firm shall be final and conclusive upon all parties to this Agreement. For purposes of this Section, the term ARetirement  shall mean the termination of the Shareholder s employment with the Corporation on or after said Shareholder s having reached the age of 70 and with the then present intention on the part of the retired Shareholder neither to seek employment either with another employer nor to become self-employed and provide services or products similar in nature as those provided by the Corporation. Whether or not a Shareholder s termination of employment is on account of his Retirement (and, therefore, whether or not said Shareholder is entitled to the benefits of this Section of the Agreement) shall be made at the time of termination of employment. E. Installment Purchase of Stock. In the event of a sale of stock during the selling Shareholder s lifetime, _____ % of the purchase price shall be paid on the date falling ____ days after the close of the Corporation s fiscal year in which the Shareholder terminates employment or the written offer to sell or written notice of sale is first received by the Corporation. The balance of the purchase price shall be evidenced by an installment note executed by the Corporation, the purchasing Shareholders, or both, providing for ______ equal consecutive monthly installments, with the first installment due on the first day of the month following the initial percent payment, said note to bear interest at ______%. The note shall provide for prepayment at any time without prepayment penalty. F. Purchase of Life Insurance. In the event of a sale of Stock during the selling Shareholder s lifetime, or if this Agreement terminates before the death of a Shareholder, then such Shareholder shall have the right to purchase the policy or policies on his life owned by the Corporation by paying an amount in cash equal to the cash surrender value as of the date of transfer, less any existing indebtedness charged against the policy or policies. This right shall lapse if not exercised within 30 days after such sale or termination. IV. Purchase of Stock in the Event of DisabilityA. Purchase of Stock in the Event of Disability. In the event that anytime from and after the end of six months of continuous Total Disability, as defined in Section C of Paragraph IV of this Agreement, a disabled Shareholder desires to sell, assign, transfer, pledge, or dispose of any share of Stock in the Corporation owned by him, he shall sell and the Corporation shall purchase all, but not less than all, of the Stock of the disabled Shareholder in the Corporation at a price determined in accordance with Section B of Paragraph IV of this Agreement. The provisions of Sections E and F of Paragraph III shall apply in the event of a sale of Stock under this Paragraph IV. B. Purchase Price in the Event of Disability. The purchase price to be paid for the Stock following six months of continuous Total Disability, shall be ________________________________________________ [Insert here either the purchase price per share or the formula method at which such a purchase price shall be determined. If a fixed purchase price per share is provided, additional provisions should be inserted providing for an annual re-valuation of the purchase price, which re-valuation should be set forth in Exhibit B to the Agreement.] The purchase price of the Stock as set forth in this Section shall be determined by the accounting firm for the Corporation, using the accounting principles generally applied to the Corporation, and said determination by the Corporation s accounting firm shall be final and conclusive upon all parties to this Agreement. C. Definition of ATotal Disability. A Total Disability  shall have the same meaning as the term ATotally Disabled  (or any term of like import) has under any policy or plan of group disability insurance insuring the disabled Shareholder pursuant to a plan of insurance carried by the Corporation. In the event that a disabled Shareholder is not covered by any such plan of group disability insurance, then and in such event ATotal Disability  shall mean a physical or mental condition of the Shareholder resulting from bodily injury, disease, or mental disorder which renders him incapable of continuing his usual and customary employment with the Corporation. In the event that the preceding sentence shall apply, the disability of a Shareholder shall be determined by a licensed physician chosen by the Corporation. In the event that the disabled Shareholder shall disagree with the findings of the licensed physician chosen by the Corporation, the disabled Shareholder shall have the right to choose a second licensed physician and the licensed physician so chosen, together with the licensed physician chosen by the Corporation, shall agree upon a third licensed physician, and the decision of a majority of said three licensed physicians shall be binding upon the Corporation and the Shareholder. V. Endorsement on Stock Certificates The following endorsement shall be printed on each stock certificate subject to this Agreement: ATransfer is subject to the terms and provisions of a Stock Purchase Agreement on file with the Secretary of this Corporation.  VI. Execution of Instruments to Effect the Terms of this Agreement The selling Shareholder or the legal representative of a deceased or disabled Shareholder shall make, execute, and deliver any documents necessary to carry out the provisions of this Agreement. This Agreement shall be binding upon the Corporation, the Shareholder, their heirs, legal representatives, successors, and assigns. It is hereby agreed by the parties hereto that the Corporation shall not merge or consolidate with any other corporation, except and unless such successor corporation shall agree to the terms and conditions of this Agreement. VII. Termination of the Agreement This Agreement shall terminate upon the occurrence of any of the following events: 1. The bankruptcy, receivership or dissolution of the Corporation; or 2. Written agreement of the Shareholders and the Corporation. No modification, termination, or waiver shall be valid unless in writing and signed by the parties sought to be charged thereunder; or 3. Death or termination of employment of all of the Shareholders simultaneously, or within a period of 30 days. VIII. Corporate Restrictions on Purchase of Stock If the Corporation is unable to make any purchase required of it hereunder because of the provisions of the applicable statutes or of its articles of incorporation or bylaws, the Corporation agrees to take such action as may be necessary to permit it to make such purchase. IX. NOTICE All notices, including offers and acceptances, shall be deemed to have been given if delivered or mailed, by certified or registered mail, to all parties entitled thereto at t heir addresses as contained in the records of the Corporation. The date of such delivery, or the date of mailing by certified or registered mail, shall be the date of such notice for purposes of this Agreement. X. Prior Agreements This Buy Sell Agreement shall supersede and replace all prior buy sell or stock purchase agreements executed by any or all of the Shareholders or the Corporation regarding the Stock of the Corporation. Any such previously executed agreements shall have no effect upon the execution of this Agreement. XI. Governing Law This Agreement shall be governed by the laws of the State of ______________. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the____ day of _________, 20____. ____________________ Corporation By:_________________________ ___________________________ President Shareholder ATTEST: _______________________ Secretary Exhibit A to Buy Sell Agreement The following policies of life insurance are owned by and insure the life of John Shareholder for the purpose of this Agreement: Issuer: Policy Number: Restricted Face Amount 1 ___________________________ ___________________ ________________________ ___________________________ ___________________ ________________________ __________________ Corporation By:_________________________ ___________________________ President Shareholder Exhibit B to Buy Sell Agreement (Exhibit B should set forth the re-valuation procedures for setting a fixed purchase price for shares at death of a shareholder. See Paragraph II, Section B, Paragraph III, Section C, Paragraph III, Section D, and Paragraph IV, Section A). 1 Portion of the Face Amount of the Policy which Is Restricted for Payment Pursuant to Section C of Paragraph II of this Agreement