Sample Buy-Sell Agreement Template

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Sample Buy-Sell Agreement
Section 1: Introduction
The legal existence of the company shall not terminate upon the addition of a new owner
or the transfer of an owner's interest under this agreement, or the death, withdrawal,
bankruptcy, or expulsion of an owner.
Section 2: Limiting the Transfer of Ownership Interests
Right of First Refusal
(a)
No owner ("transferring owner") shall have the right to sell, transfer, or dispose of
any or all of an ownership interest, for consideration or otherwise, unless he or she
delivers to the company written Notice of Intent to Transfer the interest stating the
name and the address of the proposed transferee and the terms and conditions of the
proposed transfer. Delivery of this notice shall be deemed an offer by the
transferring owner to sell to the company and the continuing owners the interest
proposed to be transferred.
If the proposed transfer is a sale of the owner's interest, these terms shall include
the price to be paid for the interest by the proposed transferee, and a copy of the
offer to purchase the interest on these terms, dated and signed by the proposed
transferee, shall be attached to the notice.
(b)
The company and the non-transferring owners then have an option, but not an
obligation (unless otherwise stated in this agreement), to purchase the interest
proposed for transfer, and may do so within sixty (60) days after the date on which
the company receives notice or becomes aware of the event triggering the Option to
Purchase.
If the company and the non-transferring owners do not elect to purchase all of
the interest stated in the notice, the transferring owner may then transfer his or her
interest to the proposed transferee stated in the notice within sixty (60) days after
the non-transferring owners' purchase option ends.
Sample Buy-Sell Agreement
Sample Buy-Sell Agreement
Section 1: Introduction
The legal existence of the company shall not terminate upon the addition of a new owner
or the transfer of an owner's interest under this agreement, or the death, withdrawal,
bankruptcy, or expulsion of an owner.
Section 2: Limiting the Transfer of Ownership Interests
Right of First Refusal
(a)
No owner ("transferring owner") shall have the right to sell, transfer, or dispose of
any or all of an ownership interest, for consideration or otherwise, unless he or she
delivers to the company written Notice of Intent to Transfer the interest stating the
name and the address of the proposed transferee and the terms and conditions of the
proposed transfer. Delivery of this notice shall be deemed an offer by the
transferring owner to sell to the company and the continuing owners the interest
proposed to be transferred.
If the proposed transfer is a sale of the owner's interest, these terms shall include
the price to be paid for the interest by the proposed transferee, and a copy of the
offer to purchase the interest on these terms, dated and signed by the proposed
transferee, shall be attached to the notice.
(b)
The company and the non-transferring owners then have an option, but not an
obligation (unless otherwise stated in this agreement), to purchase the interest
proposed for transfer, and may do so within sixty (60) days after the date on which
the company receives notice or becomes aware of the event triggering the Option to
Purchase.
If the company and the non-transferring owners do not elect to purchase all of
the interest stated in the notice, the transferring owner may then transfer his or her
interest to the proposed transferee stated in the notice within sixty (60) days after
the non-transferring owners' purchase option ends.
Sample Buy-Sell Agreement
(c)
Price and terms:
[Check either Option 1a or Option 1b below.]
[ ] Option 1a: Price and terms in offer
The company and the non-transferring owners shall have the right to purchase
the interest of the transferring owner only at the purchase price and payment
terms stated in the Notice of Intent to Transfer submitted to the company by the
transferring owner. The price and terms in this notice override the general
Agreement Price selected in the "Agreement Price" and "Payment Terms"
sections of this agreement.
[ ] Option 1b: Price and terms in agreement
The company and the non-transferring owners shall have the right to purchase
the interest of the transferring owner at the Agreement Price and payment terms
selected in the "Agreement Price" and "Payment Terms" sections of this
agreement.
Section 3: Providing the Right to Force Buyouts
Scenario 1. When an Active Owner Retires or Quits the Company's Employ
[You may check Option 1, Option 2, both, or neither below.
Check Option 1 if you want the company and continuing owners to have the option
to buy a retiring owner's interest.]
[ ]
Option 1: Option of Company and Continuing Owners to Purchase a Retiring
Owner's Interest
An owner who voluntarily retires or quits the company's employ is deemed to have
offered his or her ownership interest to the company and the continuing owners for
sale. The company and the continuing owners shall then have an option, but not an
obligation (unless otherwise stated in this agreement), to purchase all or part of the
ownership interest within sixty (60) days after the date on which the company
receives notice or becomes aware of the event triggering the Option to Purchase.
Sample Buy-Sell Agreement
The price to be paid, the manner of payments, and other terms of the purchase shall
be according to the "Agreement Price" and "Payment Terms" sections of this
agreement. An owner who stops working for the company is referred to as a
"retiring owner" below.
[Check Option 2 if you want a retiring owner to be able to force the company to buy
his or her interest. This right can be in addition to Option 1 (company and
continuing owners' option to purchase) above.]
[ ]
Option 2: Right of Retiring Owner to Force a Sale
An owner who voluntarily retires or quits the company's employ can require the
company and the continuing owners to buy all, but not less than all, of his or her
ownership interest by delivering to the company at least sixty (60) days before
departing a notice of intention to force a sale ("Notice of Intent to Force a Sale").
The notice shall include the date of departure, the name and address of the owner, a
description and amount of the owner's interest in the company, and a statement that
the owner wishes to force a sale due to the owner's retirement as provided in this
provision. The price to be paid, the manner of payments, and other terms of the
purchase shall be according to this section and the "Agreement Price" and "Payment
Terms" sections of this agreement. An owner who requests that an interest be
purchased is referred to as a "retiring owner" below.
Scenario 2. When an Owner Becomes Disabled
[You may check Option 1, Option 2, both, or neither below.
Check Option 1 if you want the company and continuing owners to have the option
to buy a disabled owner's interest. If you check Option 1, insert the amount of time
an owner must be disabled before the company or the continuing owners can
purchase the available interest.]
[ ]
Option 1: Option of Company and Continuing Owners to Purchase a Disabled
Owner's Interest
An owner who becomes permanently and totally disabled, and such disability lasts
at least ____ months (the "waiting period"), either consecutively or cumulatively, is
Sample Buy-Sell Agreement
deemed to have offered his or her ownership interest to the company and the
continuing owners for sale. The company and the continuing owners shall then have
an option, but not an obligation (unless otherwise stated in this agreement), to
purchase all or part of the ownership interest within sixty (60) days after the date on
which the company receives notice or becomes aware of the event triggering the
Option to Purchase. The price to be paid, the manner of payments, and other terms
of the purchase shall be according to this section and the "Agreement Price" and
"Payment Terms" sections of this agreement.
An owner who is unable to perform his or her regular duties is considered
disabled. If disability insurance is used to fund a buyout under this provision, the
insurance company shall establish whether an owner is disabled; without disability
insurance, the owner's doctor will establish whether an owner is disabled. An owner
who becomes disabled according to this section is referred to as a "disabled owner"
below.
[Check Option 2 if you want a disabled owner to be able to force the company to
buy his or her interest. This right can be in addition to Option 1 (company and
continuing owners' option to purchase) above. If you check Option 2, insert the
amount of time an owner must be disabled before forcing the company to purchase
an interest.]
[ ]
Option 2: Right of Disabled Owner to Force a Sale
An owner who becomes permanently and totally disabled, and such disability lasts
at least ____ months (the "waiting period"), either consecutively or cumulatively,
can require the company and the continuing owners to buy all, but not less than all,
of his or her ownership interest by delivering to the company, within thirty (30)
days of the expiration of the waiting period, a notice of intention to force a sale
("Notice of Intent to Force a Sale") in writing. The notice shall include the name
and address of the owner, a description and amount of the owner's interest in the
company, and a statement that the owner wishes to force a sale due to disability as
provided in this provision. The price to be paid, the manner of payments, and other
terms of the purchase shall be according to this section and the "Agreement Price"
Sample Buy-Sell Agreement
and "Payment Terms" sections of this agreement.
An owner is who is unable to perform his regular duties is considered disabled.
If disability insurance is used to fund a buyout under this provision, the insurance
company shall establish whether an owner is disabled; without disability insurance,
the owner's doctor will establish whether an owner is disabled. An owner who
becomes disabled according to this section is referred to as a "disabled owner"
below.
Scenario 3. When an Owner Dies
[You may check Option 1, Option 2, both, or neither below.
Check Option 1 if you want the company and continuing owners to have the right to
buy a deceased owner's interest.]
[ ]
Option 1: Option of Company and Continuing Owners to Purchase a Deceased
Owner's Interest
An owner who dies and the executor or administrator of the estate or the trustee of a
trust holding the ownership interest are deemed to have offered the deceased
owner's interest to the company and the continuing owners for sale as of the date of
the notice of death received orally or in writing by the company. The company and
the continuing owners shall then have an option, but not an obligation (unless
otherwise stated in this agreement), to purchase all or part of the ownership interest
within sixty (60) days after the date on which the company receives notice or
becomes aware of the death. The price to be paid, the manner of payments, and
other terms of the purchase shall be according to the "Agreement Price" and
"Payment Terms" sections of this agreement. An owner who has died is referred to
as a "deceased owner" below.
[Check Option 2 below if you want the estate, trust, or inheritors of a deceased
owner to be able to force the company to buy his or her interest. This right can be
in addition to Option 1 (company and continuing owners' right to purchase)
above.]
[ ]
Option 2: Right of Estate, Trust, or Inheritors to Force a Sale
Sample Buy-Sell Agreement

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