Buy-Sell Agreement

THIS BUY-SELL AGREEMENT ("Agreement") is made this [DATE] day of [MONTH], [YEAR], by and between [PARTY 1 NAME], a [STATE] [ENTITY TYPE] ("Company"), and the following parties (collectively, the "Owners"):

• [OWNER 1 NAME], owning [PERCENTAGE]% interest
• [OWNER 2 NAME], owning [PERCENTAGE]% interest
• [ADDITIONAL OWNERS AS APPLICABLE]

1. RECITALS

WHEREAS, the Company is engaged in the construction and contracting business, including but not limited to [SPECIFIC CONSTRUCTION SERVICES];

WHEREAS, the Owners desire to establish procedures for the orderly transfer of ownership interests upon the occurrence of certain triggering events;

WHEREAS, the parties wish to establish valuation methods and funding mechanisms to facilitate such transfers;

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

2. TRIGGERING EVENTS

This Agreement shall be activated upon the occurrence of any of the following events with respect to any Owner:

1. Death: The death of an Owner
2. Permanent Disability: Permanent disability preventing the Owner from performing essential job functions for more than [NUMBER] consecutive months
3. Retirement: Voluntary retirement at age [AGE] or older with [NOTICE PERIOD] days written notice
4. Involuntary Termination: Termination for cause, including breach of fiduciary duty, criminal conviction, or violation of non-compete agreements
5. Voluntary Withdrawal: Voluntary departure with [NOTICE PERIOD] days written notice
6. Loss of Professional License: Loss of required contractor's license or professional certification necessary for business operations
7. Bankruptcy or Insolvency: Filing for bankruptcy or becoming insolvent
8. Attempted Unauthorized Transfer: Any attempt to transfer ownership interest without compliance with this Agreement

3. AUTOMATED VALUATION TRIGGERS

3.1 Automatic Valuation Events

The Company's valuation shall be automatically determined upon occurrence of triggering events according to the following priority system:

1. Recent Appraisal Method: If a professional business appraisal has been conducted within the preceding [12] months by a certified business appraiser, such valuation shall control.
2. Formula Valuation Method: If no recent appraisal exists, the following formula shall apply:
   • Book Value of Assets (including equipment, inventory, and accounts receivable)
   • Plus: Average of prior three (3) years' net income multiplied by [MULTIPLIER]
   • Plus: Fair market value of owned real estate and major equipment
   • Plus: Value of active contracts and backlog at [PERCENTAGE]% of remaining contract value
   • Less: All liabilities and debt obligations
   • Less: [DISCOUNT PERCENTAGE]% minority interest discount (if applicable)
3. Independent Appraisal: If the formula method is disputed, the parties shall jointly engage a certified business appraiser within [30] days.

3.2 Contractor-Specific Valuation Considerations

The valuation shall specifically account for:

• Value of contractor licenses and certifications
• Bonding capacity and surety relationships
• Equipment depreciation using construction industry standards
• Work-in-progress and retention receivables
• Customer relationships and repeat business factors
• Seasonal fluctuations typical in construction business

4. LIFE INSURANCE FUNDING ARRANGEMENTS

4.1 Life Insurance Requirements

Each Owner shall maintain life insurance coverage as follows:

Owner Name	Coverage Amount	Beneficiary	Policy Type
[OWNER 1]	$[AMOUNT]	Company/Co-Owners	[TERM/WHOLE LIFE]
[OWNER 2]	$[AMOUNT]	Company/Co-Owners	[TERM/WHOLE LIFE]

4.2 Premium Payment and Ownership

Life insurance premiums shall be paid by [COMPANY/INDIVIDUAL OWNERS]. The Company and/or remaining Owners shall be the beneficiaries of such policies to fund the purchase of the deceased Owner's interest.

4.3 Integration with Buy-Sell Provisions

Upon death of an Owner, life insurance proceeds shall be applied as follows:

1. First, to pay any outstanding Company debts or obligations
2. Second, to fund the purchase of the deceased Owner's interest at the determined valuation
3. Third, any excess shall be distributed according to ownership percentages

5. PURCHASE AND SALE PROVISIONS

5.1 Mandatory Purchase Events

Upon death, permanent disability, or involuntary termination, the Company or remaining Owners shall be required to purchase the departing Owner's interest.

5.2 Optional Purchase Events

Upon voluntary withdrawal or retirement, the Company or remaining Owners shall have the option, but not the obligation, to purchase the departing Owner's interest within [DAYS] days of notice.

5.3 Right of First Refusal

No Owner may transfer their interest to a third party without first offering such interest to the Company and remaining Owners at the same price and terms.

6. PAYMENT TERMS

6.1 Payment Structure

Unless otherwise funded by life insurance, the purchase price shall be paid as follows:

• [PERCENTAGE]% down payment within [DAYS] days of closing
• Remaining balance paid in [NUMBER] equal monthly installments
• Interest rate of [RATE]% per annum on unpaid balance
• Personal guarantee by purchasing Owners if applicable

6.2 Security for Payment

The Company may secure payment obligations through:

• Promissory note secured by Company assets
• Personal guarantees of remaining Owners
• Life insurance policies as collateral
• Retention of voting rights until payment completion

7. CONTRACTOR-SPECIFIC PROVISIONS

7.1 License and Certification Transfer

Upon transfer of ownership, the parties acknowledge that certain contractor licenses and certifications may be non-transferable and shall cooperate to:

• Obtain necessary new licenses and certifications
• Maintain bonding capacity during transition
• Preserve customer relationships and active contracts
• Ensure compliance with all regulatory requirements

7.2 Equipment and Asset Considerations

The valuation and transfer shall specifically address:

• Construction equipment and machinery
• Vehicle fleet and specialized tools
• Inventory of materials and supplies
• Office equipment and technology systems

7.3 Contract Assignment

Active construction contracts shall be reviewed for assignment provisions, and the parties shall cooperate to ensure continued performance and client satisfaction during ownership transitions.

8. DISPUTE RESOLUTION

Any disputes arising under this Agreement shall be resolved through binding arbitration in [CITY, STATE] under the rules of the American Arbitration Association. The prevailing party shall be entitled to reasonable attorney's fees and costs.

9. GENERAL PROVISIONS

9.1 Governing Law

This Agreement shall be governed by the laws of the State of [STATE].

9.2 Amendment

This Agreement may only be amended by written consent of all parties.

9.3 Severability

If any provision of this Agreement is deemed unenforceable, the remaining provisions shall remain in full force and effect.

9.4 Binding Effect

This Agreement shall be binding upon the heirs, successors, and assigns of all parties.