Corporate Buy-Sell Agreement Template

This Buy-Sell Agreement ("Agreement") is made as of [Date], by and among [Corporation Name], a [State] corporation (the "Company"), and the shareholders listed on Schedule A (each a "Shareholder").

1. Purpose

• Provide mechanism for orderly transfer of shares upon specified triggering events and protect continuity of ownership.

2. Triggering Events

• Death of shareholder.
• Permanent disability.
• Voluntary transfer or sale to third party.
• Involuntary transfer (bankruptcy, divorce, creditor claims).
• Termination of employment.

3. Purchase and Sale Obligation

• Upon occurrence of triggering event, Company and/or remaining shareholders have option or obligation to purchase affected shares.
• Priority: Company right of first purchase, followed by other shareholders pro rata.

4. Valuation and Purchase Price

• Determine fair market value using: [Fixed price, formula (EBITDA multiple), appraisal process, insurance proceeds].
• Appraisal procedure: appointment of independent appraiser(s), timeline, cost allocation.

5. Payment Terms

• Lump sum or installment payments (e.g., [20%] down payment, remainder over [Number] years at [Interest Rate]%).
• Security for deferred payments (promissory note, collateral pledge).

6. Funding Mechanisms

• Life insurance policies on shareholders naming Company as beneficiary.
• Disability buyout insurance.
• Accumulated reserves or bank financing.

7. Restrictions on Transfer

• No shareholder may transfer shares without compliance with Agreement.
• Any prohibited transfer is null and void and subject to Company redemption.

8. Closing Procedures

• Closing date within [Number] days after determination of purchase price.
• Delivery of share certificates, assignments, and payment documentation.

9. Shareholder Covenants

• Non-compete and non-solicitation provisions (optional).
• Confidentiality obligations.

10. Tax Matters

• Election under IRC § 302/303 (if applicable).
• Allocation of purchase price among stock basis and personal goodwill.

11. Dispute Resolution

• Mediation followed by arbitration/litigation in [Venue].

12. Miscellaneous

• Governing law: [State].
• Amendments require written consent of Company and shareholders holding [Percentage]% of outstanding shares.
• Binding upon successors, assigns, estates.
• Notices, waiver, severability, counterparts.

Schedule A – Shareholders

• Names, addresses, number of shares, ownership percentage.

Signatures

Company: [Corporation Name]
By: ________
Name: [Officer Name]
Title: [Title]

Shareholders:
- [Name] – Signature: ____ Date: _
- [Name] – Signature: ____ Date: _

Customize triggers, valuation methods, and funding strategies to fit corporate structure and shareholder objectives.