Sample Buy-Sell Agreement Page 5
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10The "Purchase Price" shall be determined in accordance with the provisions of this
Article II, and the payment terms are set forth in Article III.
1. Book Value / Purchase Price. The "Purchase Price" shall be one times the "book
value" of the Offered Units on the last day of the month most recently ended prior to the
date of any deemed offer.
2. Calculation by CPA. The book value of the Offered Units shall be calculated by the
independent certified public accountant ("CPA") regularly employed by the Company. If
the Company does not have a regularly employed independent CPA, the determination
shall be made by an independent CPA selected by the Company for this purpose. The
book value shall be calculated in a manner consistent with the Company's regular
financial statements and in accordance with generally accepted accounting principles,
consistently applied. The Company shall provide such data as the CPA deems necessary
or useful to make such determination.
3. Costs. The fees and reimbursed expenses charged by the CPA for the valuation shall
be the Company's obligation.
Article III - Payment Terms
1. Type of Payment. The Purchase Price paid for the Offered Units of a deceased Owner
shall be paid in cash to the extent of the face amount of the life insurance policies that
any Owner buying such Units has maintained under Article V of this Agreement. The
remaining portion of the Purchase Price shall be paid in cash. However, at the option of
each other Owner, the remaining portion may be paid in sixty (60) equal monthly
installments of principal and interest. Such installment payments shall begin on the date
of the closing and shall include interest compounded annually at the prime rate as listed
in the Wall Street Journal on such closing date. Each other Owner shall give the Seller a
negotiable promissory note as evidence of this debt. Such note shall permit the other
Owner to prepay all or any part of the principal balance of the note at any time without
penalty or premium. Payments shall first be applied to interest.
2. The Closing. The purchase of the Offered Units will take place at a closing at the
Company's primary place of business or at any other place and time to which the parties
agree. In the case of the death or voluntary retirement of the Seller, the closing shall be
held 180 days after the date of the Owner's death or the effective date of retirement. In all
other cases, the closing shall be held within thirty days after the date on which (i) the last
option to buy is exercised or lapses, or (ii) the other Owners last become obligated to buy.
a. Delivery of Certificates. At the closing, the other Owners will pay for the Offered
Units. The Seller will deliver certificates (if any have been issued) representing all of
the Offered Units, duly endorsed, free and clear of all encumbrances, and with
evidence of payment of all necessary transfer taxes and fees.
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