A buy-sell agreement is an agreement between the owners (shareholders) of a firm, defining their mutual obligations, privileges, protections, and rights. This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.
A Washington Shareholders' Agreement between Two Shareholders of a Closely Held Corporation with Buy Sell Provisions is a legally binding contract that outlines the rights and obligations of two shareholders in a closely held corporation based in Washington state. This agreement contains provisions related to buy-sell arrangements, which govern the purchase and sale of shares between the shareholders. In Washington, there are two common types of Shareholders' Agreements with Buy Sell Provisions: 1. Cross-Purchase Agreement: This type of agreement allows one shareholder to purchase the shares of the other shareholder in the event of a triggering event, such as death, disability, retirement, or termination of employment. The remaining shareholder(s) or the corporation itself will buy the shares at an agreed-upon price or based on a predetermined formula. 2. Stock Redemption Agreement: In this type of agreement, the corporation agrees to purchase the shares of a shareholder in the event of a triggering event. The corporation may use corporate funds or obtain financing to carry out the redemption. The price for the shares may be determined through negotiation or by utilizing a predetermined formula. Key provisions commonly found in Washington Shareholders' Agreements with Buy Sell Provisions include: 1. Purchase Price: This provision specifies how the purchase price for the shares will be determined, whether through a specific amount, formula, or appraisal. 2. Triggering Events: The agreement should clearly define the events that trigger the buy-sell provisions, such as death, disability, retirement, termination, or voluntary sale. 3. Right of First Refusal: This provision grants the remaining shareholder(s) or the corporation the first opportunity to purchase the shares before they can be sold to a third party. This helps maintain control and continuity within the closely held corporation. 4. Funding: The agreement should address how the purchase of the shares will be funded, whether through corporate funds, insurance policies, or external financing arrangements. 5. Restrictive Covenants: This provision may limit the ability of shareholders to compete with the corporation or solicit clients or employees after the sale of their shares. 6. Dispute Resolution: The agreement should outline the process for resolving any disputes that may arise, including mediation, arbitration, or litigation. It is essential to consult with an attorney experienced in Washington corporate law to create a legally enforceable Shareholders' Agreement tailored to the specific needs and circumstances of the closely held corporation.
