Corporate Cross Purchase Agreement (Page 25 of 31) in pdf

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.

For purposes of this Article, the book value of life insurance policies on the lives of the partners

shall be the cash surrender values of such policies. The proceeds receivable by the partnership from

any insurance on the life of a deceased partner shall be allocated solely to the surviving partners in

the proportions in which they, in the aggregate, share in partnership profits. It is the express intent

of the partners in carrying the life insurance to facilitate the retirement of the interest of a deceased

partner. It is for this reason that the partners agree that the successor in intrest of a deceased partner

shall have no interest in the proceeds of a policy of insurance on the life of the deceased partner.

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 retiring, deceased, or expelled partner shall be paid within 90

days after the death, or withdrawal 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 of 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 policies listed in Schedule "B". Note to Attorney: This

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

TERMS OF PURCHASE. The Partnership upon receiving any 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 disability], of the

Partner must first apply the proceeds to the purchase price of the partner's interest. Any excess of

the proceeds over the purchase price shall be retained by the Partnership.

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

Partnership, and made part of this Agreement, are less than the purchase price, or in the event of a

sale of 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:

In the event of death of the Partner, within _____ days after the qualification of the

deceased Partner's legal representative.

In the case of a lifetime sale, within _____ days after the acceptance of an offer to sell any

Partnership interest pursuant to this Agreement.

DI1160

0108

Corporate Cross Purchase Agreement Page 25