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Buy-Sell Agreement Funded With Insurance

(No Trustee)

AGREEMENT made [date] by and among [partner's name], residing at [address], [partner's name], residing at [address] and [partner's name], residing at [address] (collectively referred to as "the Partners").

WHEREAS, the parties to this Agreement are all the Partners of the [name of partnership], having its principal place of business at [address] (hereinafter referred to as "the Company'); and

WHEREAS, the Partners wish to provide for (1) the purchase by the surviving Partners of a deceased Partner's interest in the Company; (2) the purchase by the other Partners of a partner's interest in the Company should the latter desire to withdraw from the Company; and (3) the funds necessary to carry out any such purchase.

NOW THEREFORE, in consideration of the mutual agreements and covenants contained herein, and for other valuable consideration, receipt of which is hereby acknowledged, it is mutually agreed by the parties to this Agreement as follows:

1. None of the parties shall, while all of them are living, transfer or encumber all or any portion of their partnership interest in the Company by sale or otherwise except as provided in this Agreement.

2. Upon the death of a Partner the surviving Partners shall purchase the partnership interest in the Company now owned or hereafter acquired by the deceased Partner. The purchase or sales price of such partnership interest shall be determined in accordance with the provisions of Section 5 of this Agreement. Each surviving Partner shall purchase that portion of the partnership interest owned by the deceased Partner that is represented by the ratio of such surviving Partner's partnership interest to the total partnership interest owned by all the survivors.

3. To ensure that funds will be available to pay for the partnership interest of a deceased Partner, insurance on the life of each of the parties to this Agreement has been obtained from the ---------- Insurance Company by each of the other parties to this Agreement as follows: [List each policy and state by whom owned, whose life is insured, and the face amount of the policy]. Each of the parties will pay the premiums on the policies owned by him as they become due. To make payment of the premiums certain, they will be paid by the partnership and charged to each respective Partner's drawing account.

Each policy shall be the sole and absolute property of the applicant, provided however, that each such owner hereby collaterally assigns each policy owned by him to the insured therein as security, but only for the performance of each such owner of the obligations on his part to be performed pursuant to this Agreement. Any dividends paid on the policies prior to maturity by the death of the insured shall be paid to the owner of each policy in cash or disposed of as the owner elects. This Agreement shall extend to and include all additional insurance policies issued pursuant to this Agreement, such additional policies to be listed in Schedule A [omitted] attached hereto and made a part hereof.

4. If a party wished to sell his partnership interest during his lifetime, such party must give the other parties written notice of such desire and the other parties shall have the right to purchase such partnership interest at any time within [number] days [or weeks] after such notice at the price determined in accordance with the provisions of Section 5. Each party shall have the right to purchase a proportion of such partnership interest equal to the ratio of the partnership interest owned by that party to the total partnership interest owned by all the parties excluding the seller. If a party is unable or unwilling to buy the portion allotted to him, the remaining party shall have the right to purchase the entire partnership interest of the selling party. The sales price shall be paid as follows: ---------- percent (----------%) of the purchase price no later than [number] weeks following the determination of the price in accordance with the provisions of Section 5 and the balance by a series of ---------- equal monthly promissory notes, the first of which shall be due one month from the day on which the down payment is made, with interest at the rate of ---------- percent (----------%) per annum. The notes shall give the holder the right to accelerate payment of any balance due in the event of default in the payment of any one note and the maker the right to prepay the balance then due, in whole or in part.

5. Unless and until changed as hereinafter provided, the value of the total partnership interest in the Company shall be ---------- dollars ($----------) and the value of each party's partnership interest in the Company shall be: [set out the value of each party's interest, the total of which should be equal to the total partnership interest set above]. Within [number] days following the end of each of the Company's fiscal years, the parties shall redetermine the value of the total partnership interest in the Company and of each party's partnership interest in the Company and shall indicate such value by endorsement on Schedule C [omitted] attached hereto and made a part hereof. Such endorsement shall take the following form: "The undersigned mutually agree on this ---------- day of ----------, 19----------, that for the purpose of this Buy-Sell Agreement the total partnership interest in the Company has a value of ---------- dollars ($----------) and each party's partnership interest in the Company has a value of [set out each party's interest]." The endorsement shall be signed by all of the parties who are then living and are Partners in the Company.

If for any reason the parties fail to redetermine the values of the partnership interests for any particular year, the last previously stipulated values shall control, provided however, that if no values are agreed upon within [number] weeks [or months] following the end of the Company's fiscal year, the value of a deceased party's partnership interest shall be agreed upon by the decedent's representative and the surviving Partners. If the decedent's representative and the surviving Partners do not agree upon a value within [number] weeks [or months] following the death of the decedent party, the value of the decedent party's partnership interest shall be determined by arbitration in the City of ---------- in accordance with the rules of the American Arbitration Association then in force.

If the purchase price exceeds the proceeds of the insurance policies, the balance of the purchase price shall be paid by a series of [number] equal monthly promissory notes, the first of which shall be due one month from the day on which the insurance proceeds were turned over to the decedent Partner's personal representative, with interest at the rate of ---------- percent (----------%) per annum. The notes shall give the holder the right to accelerate payment of any balance due in the event of default in the payment of any one note and the makers the right to prepay the balance then due in whole or in part. If the insurance proceeds exceed the purchase price the balance shall be paid to the owner of the matured policy.

For the purpose of this Agreement, the price at which a living party's partnership interest in the Company shall be bought and sold shall be determined in accordance with the provisions of this Section 5.

6. If a party during his lifetime sells all or any part of his partnership interest pursuant to the provisions of Sections 4 and 5 above, the party or parties purchasing such partnership interest may purchase the policies of life insurance on his life owned by the withdrawing Partner for a price not to exceed [insert limit on price, e.g., the cash surrender value of the policies as of the date of the sale or the sum of the net premium payments made on each policy]. On payment of the purchase price, the owner of the policies shall assign the policies to the respective purchasers thereof and shall execute such assignments or releases as may reasonably be required to effectuate a complete transfer of the policies to the purchasers thereof. The party selling his partnership interest may purchase the policies of life insurance on his life owned by the remaining Partners for a price not to exceed [insert price]. On payment of the purchase price, the owners of the policies shall assign the policies to the purchaser thereof and shall execute such assignments or releases as may reasonably be required to effectuate a complete transfer of the policies to the purchaser thereof.

Upon the death of one of the parties, each surviving party shall have the right to purchase from the deceased party's estate, and the deceased party's executor or administrator shall have the duty to sell, any policies of life insurance upon the life of such surviving party, for a price not to exceed [insert price]. Upon payment of the price the deceased party's executor or administrator shall assign the policies to the respective purchasers thereof and shall execute such assignments or releases as may reasonably be required to effectuate a complete transfer of the policies to the purchasers thereof. If the insured does not purchase the policies on his life within [number] days [or weeks] from the date of the sale of the deceased party's partnership interest, the deceased party's executor or administrator may surrender the policy for its cash surrender value and the insured will sign such releases as reasonably may be required to effectuate such surrender of the policies and receipt of their cash surrender values.

7. This Agreement shall terminate on:

a. The written agreement of all the surviving parties;

b. The dissolution, bankruptcy, or insolvency of the Company; or

c. The death of all the parties simultaneously or within a period of [number] weeks [or months].

Upon the termination of this Agreement, each party may at his or her option, within [number] days following the occurrence of the event that causes the termination, purchase the policies of life insurance on his life but owned by the other parties for a price not to exceed [insert price]. Upon payment of the purchase price the sellers of the policies shall assign them to the purchaser thereof and shall execute such assignments or releases as may reasonably be required to effectuate a complete transfer of the policies to the purchaser.

8. The executor, administrator, or personal representative of a deceased party shall execute and deliver any documents or instruments necessary or desirable to carry out the provisions of this Agreement. This Agreement shall be binding upon the parties, their heirs, legal representatives, and assigns.

9. This Agreement may be amended or altered in any provision and such change shall be effective when reduced to writing and signed by all the parties to this Agreement.

10. Notwithstanding the provisions of this Agreement, any life insurance company that has issued a policy of life insurance that is subject to the provisions of this Agreement is hereby authorized to act in accordance with the terms of such policy as if this Agreement did not exist, and the payment or performance of its contractual obligations by any such life insurance company in accordance with the terms of such life insurance policy shall completely discharge such company from all claims, suits, and demands of all persons.

IN WITNESS WHEREOF, the parties have signed this Agreement on the day and year first above written.

[signature]

Partner

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Partner

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Partner