Corporate Cross Purchase Agreement (Page 15 of 31) in pdf

sale price and the terms of payment for such stock shall be determined in accordance with the

provisions of Articles 5. and 6. of this Agreement.

VALUATION. The value of an interest in the partnership of a deceased or withdrawing partner

shall be the amount of said partner's capital account as maintained for financial accounting purposes

adjusted to reflect appraised values as provided below and reduced by said partner's share of

partnership liabilities, plus said partner's proportionate share of accrued net income of the

partnership to the date of death, or withdrawal, not previously credited to said partner's capital

account except as included in said partner's drawing account.

All partnership assets shall be valued at book value except that the appraised value of machinery,

equipment and real property shall be substituted for book value. The difference between total

appraised value of machinery, equipment, and real property and their said depreciated book value

shall increase or decrease the partners capital accounts so maintained in the proportion of their

interest in profits or losses of the partnership. The appraised value shall be determined as of the

date of death or withdrawal of a partner and shall be made by an appraiser selected by agreement

between the continuing partners and the withdrawing partner or the personal representative of the

deceased partner. If they cannot agree upon an appraiser, the appraiser shall be chosen in

accordance with the rules of the American Arbitration Association then in effect. No value in

excess of book value shall be attributed to partnership goodwill.

The balance, positive or negative, in the drawing account of a deceased, or withdrawing partner is

to be treated as an obligation of the partnership to the partner or an obligation of the partner to the

partnership, as the case may be. Any amount owed, whether to the partner or to the partnership, as

reflected in the drawing account of a deceased, or withdrawing partner, shall be paid within 90 days

after the retirement, death, or expulsion of the partner.

The continuing partners agree that they will proceed as expeditiously as possible to determine the

value, pursuant to this Article, of the interest in the deceased, or withdrawing partner.

[In the event the buy-out is triggered by the total disability of a Partner, the valuation method

described above in this Article shall be applied as of the expiration of the waiting period specified

in the individual disability buy-out polices listed in Schedule "B". Note to Attorney: This

paragraph should be included only if optional Article 3. has been included in the Agreement.]

TERMS OF PURCHASE. Any Partner upon receiving life insurance proceeds (from the policy or

policies listed in Schedule "A" of this Agreement) [or disability proceeds (from the policy or

policies listed in Schedule "B" of this Agreement)] by reason of the death [or total disability] of a

Partner must first apply the proceeds to the purchase price of the Partnership interest. Any excess

of the proceeds over the purchase price shall be retained by the surviving Partner(s).

In the event that the proceeds of any life insurance [or disability buy-out insurance] owned by the

surviving Partner(s) and made part of this Agreement, are less than the purchase price, or in the

event of a sale of the Partnership interest during the selling Partner's lifetime, the balance of the

purchase price shall be paid in _____ consecutive quarterly installments.

The installments shall begin as follows:

DI1159

0108

Corporate Cross Purchase Agreement Page 15