Documents
Resources
Learning Center
Upload
Plans & pricing Sign in
Sign Out

Agreement to Redeem Stock

VIEWS: 739 PAGES: 6

This is an agreement for a company to repurchase a shareholder's stock in the event of the shareholder's death. Upon death of the shareholder named in the agreement, the company agrees to redeem the stock of the shareholder and pay the consideration to the shareholder's estate. The agreement is useful to individuals or corporations seeking to form an agreement for the company to redeem the stock of a deceased shareholder.

More Info
									This is an agreement for a company to repurchase a shareholder's stock in the event of
the shareholder's death. Upon death of the shareholder named in the agreement, the
company agrees to redeem the stock of the shareholder and pay the consideration to
the shareholder's estate. The agreement is useful to individuals or corporations seeking
to form an agreement for the company to redeem the stock of a deceased shareholder.
[Comment: Businesses seeking to use a stock redemption agreement should seek advice
from an account knowledgeable in this area to determine the cost and tax implications as
well as buy/sell planning. Further, as this Redemption Agreement only pertains to the
purchase of Shareholder’s Stock upon death, parties should have a stock redemption
agreement for all other purposes.]

    AGREEMENT TO REDEEM STOCK ON SHAREHOLDERS
                      DEATH
This agreement (the “Redemption Agreement”) is made as of the _____ day of
______________, 2________, [Instruction: Insert date.] amongst:



                  __________________________________,
                  an individual residing in the City of __________,
                  in the State of _____________,

                  (hereinafter called "Shareholder 1"),


                  and


                  __________________________________,
                  an individual residing in the City of __________,
                  in the State of ______________,

                  (hereinafter called "Shareholder 2"),


                  and


                  __________________________________,
                  a company duly incorporated under the laws
                  of the State of ________________,

                  (hereinafter called the "Company"),

[Instruction and Comment: Insert applicable information. Parties should consider whether
or not to include all Stockholders, spouses and Company as parties to Redemption
Agreement.]




© Copyright 2011 Docstoc Inc. registered document proprietary, copy not      2
    1. RECITALS

                  Whereas:

              A. The Company is a duly incorporated business company which as of the date of
                 this Redemption Agreement carries on the business of ________________
                 [Instruction: Insert type of business.] and such other businesses as are
                 necessarily incidental thereto;

              B. Shareholder 1 and Shareholder 2 (hereinafter collectively referred to as the
                 “Shareholders”) are the only shareholders of the Company owning the following
                 shares:

Shareholder 1                                                    -        __________ Shares
Shareholder 2                                                    -        __________ Shares;

              C. In the event of a Shareholder’s death, the Shareholders and the Company have
                 agreed on redemption of all of the issued and outstanding Stock owned by such
                 Shareholder; and

              D. The parties wish to execute this Redemption Agreement this date to evidence their
                 collective intent to be bound by and complete the redemption of a Shareholder’s
                 Stock in the Company owned at the date of such Shareholder’s death as further set
                 out herein and to execute, as and when required, all documentation required to
                 properly complete and document the said share redemption.


               NOW THEREFORE THIS REDEMPTION AGREEMENT WITNESSES that in
consideration of the respective covenants herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do
hereby agree as follows:


    2. RECITALS TRUE


              A. The recitals contained in Article 1 are true in substance and in fact and form an
                 integral part of this Redemption Agreement as though the recitals were hereinafter
                 recited again, in full.


    3. SHARE REDEMPTION UPON DEATH




© Copyright 2011 Docstoc Inc. registered document proprietary, copy not                        3
                  A.      The Stock owned by a Shareholder in the capital of the Company on the
                  date of their death shall be redeemed by the Company within _______ (___)
                  [Instruction: Insert time in which stock must be purchased.] days/years after
                  the death of such Shareholder.

                  B.    The Company shall take all actions necessary to ensure Stock of
                  Shareholder in the event of death is redeemed.

    4. CONSIDERATION

                  A.      The Company shall pay to the order of the Estate (except as otherwise set
                  forth in a valid will of such deceased Shareholder) of such deceased Shareholder
                  the sum equal to the then current fair market value of the Stock immediately
                  preceding the death of a Shareholder. [Comment: Parties should consider
                  whether stock to be redeemed at per-death value or value at redemption,
                  especially if redemption will be long after death.]

                  B.      Company shall have no liability to any person or entity in any will contest
                  or inheritance dispute as long as company duly pays according to this Redemption
                  Agreement.


    5. GENERAL PROVISIONS

                  A.      Each of the parties hereto confirm that they have read this Redemption
                  Agreement, in its entirety, and being of sound mind and that they understand fully
                  the nature and consequence of executing this Share Redemption Agreement. The
                  parties hereto understand and acknowledge that each is a sophisticated party and
                  has had the opportunity to avail him or herself of legal advice, if desired. Each of
                  the parties further acknowledge and declare that none of the parties hereto have
                  used any compulsion or made any threat or exercised any undue influence to
                  induce any other party to execute this Share Redemption Agreement.

                  B.      Each of the parties hereto retains all rights and remedies at law and in
                  equity to enforce this Redemption Agreement or to obtain relief for breach of this
                  Redemption Agreement. Each of the parties recognize and agree, however, that
                  the remedy at law for any breach of this Redemption Agreement may be
                  inadequate and agree that each shall in addition to such other remedies as may be
                  available to them at law or in equity, be entitled to enforce their rights by an
                  action for injunctive relief or specific performance, to the extent permitted by law.

                  C.     This Redemption Agreement constitutes the entire understanding and
                  agreement between the parties hereto relating to the specific subject matter hereof
                  and supersedes any previous agreements, understandings or negotiations in
                  connection with or related to the specific subject matter hereof. No variation or
                  modification of this Redemption Agreement or waiver of any of the terms or



© Copyright 2011 Docstoc Inc. registered document proprietary, copy not                    4
                  provisions hereof shall be binding unless in writing and signed by or on behalf of
                  all of the parties hereto.

                  D.      Each of the parties hereto acknowledges and agrees that this Redemption
                  Agreement now represents a firm and binding contract as between the parties
                  hereto.

                  E.      Shareholder shall provide for the redemption of all Shareholder’s issued
                  and outstanding stock pursuant to this Redemption Agreement in any and all
                  estate planning documents, as necessary and applicable in such a manner that this
                  Redemption Agreement may be carried out upon Shareholder’s death.



             IN WITNESS WHEREOF the parties hereto have executed this Redemption
Agreement as of the day and year first above written.




Witness:                                                         Shareholder 1



Witness:                                                         Shareholder 2


                                                                 (COMPANY)
                                                                 Per:


                                                                 _________________________________
                                                                 Name:
                                                                 Title:
                                                                 I have authority to bind the Company.
[Instruction: Parties to Redemption Agreement sign above. In the event Parties determine spouses should be added as
party to the Redemption Agreement, additional signature lines should be added for same.]




© Copyright 2011 Docstoc Inc. registered document proprietary, copy not                              5

								
To top
; ;