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Agreement to Redeem Stock

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Agreement to Redeem Stock Powered By Docstoc
					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.]




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    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




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                  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 Redem
				
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Description: 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.