A Texas Buy Sell Agreement Between Shareholders and a Corporation is a legally binding document that outlines the terms and conditions under which shareholders of a corporation can buy or sell their shares to one another. This agreement helps protect the interests of both the corporation and its shareholders by establishing clear guidelines for the transfer of ownership. There are several types of Texas Buy Sell Agreement Between Shareholders and a Corporation, including: 1. Cross-Purchase Agreement: This type of agreement is used when there are only a few shareholders in the corporation. Each shareholder agrees to buy the shares of the other shareholders in the event of their retirement, disability, death, or voluntary exit. This ensures continuity in ownership and prevents unwanted third-party ownership. 2. Redemption Agreement: In this type of agreement, the corporation itself has the option to buy back the shares of a shareholder. This can be triggered by retirement, death, disability, or a specified event. The corporation may choose to use its own funds or obtain financing to repurchase the shares. 3. Hybrid Agreement: A hybrid agreement combines elements of both the cross-purchase and redemption agreements. It allows both the shareholders and the corporation to buy back shares in specific circumstances. This type of agreement is useful in situations where there are multiple shareholders with varying levels of ownership. The Texas Buy Sell Agreement Between Shareholders and a Corporation typically includes the following key provisions: 1. Purchase Price: The agreement should clearly specify the method for determining the purchase price of the shares, such as a formula based on the book value, fair market value, or a pre-determined price. 2. Triggering Events: The agreement should outline the specific events that would trigger the buy-sell provisions, such as retirement, death, disability, bankruptcy, divorce, or voluntary exit. 3. Terms of Payment: The agreement should define the terms of payment for the shares, whether it is a lump sum payment, installments, or through the use of insurance policies or financing arrangements. 4. Right of First Refusal: The agreement may include a right of first refusal clause, which gives the remaining shareholders the right to purchase the shares before they can be sold to a third party. 5. Non-Compete and Non-Disclosure Clauses: The agreement may include provisions that restrict shareholders from competing directly with the corporation or disclosing confidential information after the sale of their shares. 6. Dispute Resolution: The agreement should outline the process for resolving any disputes that may arise between the shareholders and the corporation, such as mediation or arbitration. It is crucial for shareholders and corporations in Texas to consult with legal professionals experienced in corporate matters to draft a comprehensive and tailored Buy Sell Agreement that meets their specific needs and complies with Texas state laws and regulations.