Massachusetts Buy Sell or Stock Purchase Agreement Covering Common Stock in Closely Held Corporation with Option to Fund Purchase through Life Insurance

• Category: Contracts - Buy Sell - Stock Purchases
• State: Multi-State
• Control #: US-00455BG
• Format: Word; Rich Text

Description

This form is set up as a Buy Sell Agreement between the Corporation and a key shareholder. It applies in the case of the death, disability, retirement or offer of shareholder to sell the stock during his lifetime. A Massachusetts Buy Sell or Stock Purchase Agreement Covering Common Stock in a Closely Held Corporation with Option to Fund Purchase through Life Insurance is a legal document that outlines the terms and conditions for the sale and purchase of common stock in a closely held corporation in the state of Massachusetts. This agreement provides an option for the purchaser to fund the stock purchase through a life insurance policy. The agreement typically begins with a preamble that identifies the parties involved, including the corporation, the selling shareholders, and the purchasing shareholder(s). It also includes the date of the agreement and a recital of the corporation's status as a closely held corporation. The agreement contains various provisions that define the rights and obligations of the parties involved. These provisions cover important aspects such as the purchase price of the stock, the payment terms, the method of valuation, and the allocation of rights and responsibilities between the parties. One key component of this type of agreement is the provision related to the use of life insurance to fund the stock purchase. This provision outlines the requirement for the purchasing shareholder(s) to obtain and maintain life insurance policies on the lives of the selling shareholder(s). The face value of these policies is typically equal to the agreed-upon purchase price of the stock. In the event of the death of a selling shareholder, the proceeds from the life insurance policy can be used to fund the stock purchase from the deceased shareholder's estate. In addition to the standard provisions, there may be variations of this agreement. Some possible variations include: 1. Cross-Purchase Agreement: This type of agreement allows each shareholder to individually purchase the stock of a deceased shareholder. Each shareholder maintains a life insurance policy on the life of every other shareholder. In the event of a shareholder's death, the surviving shareholders use the life insurance proceeds to purchase the deceased shareholder's stock. 2. Stock Redemption Agreement: In this agreement, the corporation is responsible for purchasing the stock of a deceased shareholder. The corporation maintains life insurance policies on the lives of the shareholders, and in the event of a shareholder's death, the corporation uses the life insurance proceeds to repurchase the deceased shareholder's stock. 3. Hybrid Agreement: This type of agreement combines elements of both the cross-purchase and stock redemption agreements. Depending on the circumstances, the purchasing shareholder(s) and the corporation can both be involved in the purchase of the stock. These variations provide flexibility in structuring the agreement based on the specific needs and preferences of the shareholders and the corporation. Overall, a Massachusetts Buy Sell or Stock Purchase Agreement Covering Common Stock in a Closely Held Corporation with Option to Fund Purchase through Life Insurance is a comprehensive legal document that helps protect the interests of the shareholders and ensure the smooth transfer of ownership in a closely held corporation.

A Massachusetts Buy Sell or Stock Purchase Agreement Covering Common Stock in a Closely Held Corporation with Option to Fund Purchase through Life Insurance is a legal document that outlines the terms and conditions for the sale and purchase of common stock in a closely held corporation in the state of Massachusetts. This agreement provides an option for the purchaser to fund the stock purchase through a life insurance policy. The agreement typically begins with a preamble that identifies the parties involved, including the corporation, the selling shareholders, and the purchasing shareholder(s). It also includes the date of the agreement and a recital of the corporation's status as a closely held corporation. The agreement contains various provisions that define the rights and obligations of the parties involved. These provisions cover important aspects such as the purchase price of the stock, the payment terms, the method of valuation, and the allocation of rights and responsibilities between the parties. One key component of this type of agreement is the provision related to the use of life insurance to fund the stock purchase. This provision outlines the requirement for the purchasing shareholder(s) to obtain and maintain life insurance policies on the lives of the selling shareholder(s). The face value of these policies is typically equal to the agreed-upon purchase price of the stock. In the event of the death of a selling shareholder, the proceeds from the life insurance policy can be used to fund the stock purchase from the deceased shareholder's estate. In addition to the standard provisions, there may be variations of this agreement. Some possible variations include: 1. Cross-Purchase Agreement: This type of agreement allows each shareholder to individually purchase the stock of a deceased shareholder. Each shareholder maintains a life insurance policy on the life of every other shareholder. In the event of a shareholder's death, the surviving shareholders use the life insurance proceeds to purchase the deceased shareholder's stock. 2. Stock Redemption Agreement: In this agreement, the corporation is responsible for purchasing the stock of a deceased shareholder. The corporation maintains life insurance policies on the lives of the shareholders, and in the event of a shareholder's death, the corporation uses the life insurance proceeds to repurchase the deceased shareholder's stock. 3. Hybrid Agreement: This type of agreement combines elements of both the cross-purchase and stock redemption agreements. Depending on the circumstances, the purchasing shareholder(s) and the corporation can both be involved in the purchase of the stock. These variations provide flexibility in structuring the agreement based on the specific needs and preferences of the shareholders and the corporation. Overall, a Massachusetts Buy Sell or Stock Purchase Agreement Covering Common Stock in a Closely Held Corporation with Option to Fund Purchase through Life Insurance is a comprehensive legal document that helps protect the interests of the shareholders and ensure the smooth transfer of ownership in a closely held corporation.