Family partnership. BUY-SELL AGREEMENT FOR GENERAL FAMILY PARTNERSHIP TABLE OF CONTENTS RECITALS PART I—TRANSFER OF PARTNERSHIP INTERESTS UPON THE DEATH OF A PARTNER AND THIRD-PARTY PURCHASE OFFERS ARTICLE 1—RESTRICTIONS ON TRANSFER OF PARTNERSHIP INTERESTS 1.1 General Restrictions Against Transfer of Partnership Interests [Alternative No. 1—Long Form] 1.1 General Restrictions Against Transfer of Partnership Interests [Alternative No. 2—Short Form] 1.1 General Restrictions Against Transfer of Partnership Interests [Alternative No. 3— Modified Short Form] 1.2 Conditions to Pledge or Encumber Partnership Interests 1.3 Partner Default on Secured Debt 1.4 Partnership's Right of Cure 1.5 Partners' Right of Cure 1.6 Creditors' Remedies 1.7 Sale of Partnership Interests [Alternative No. 1] 1.7 Sale of Partnership Interests [Alternative No. 2] 1.8 Other Lifetime Transfers 1.9 Transfers at Death ARTICLE 2—PURCHASE PRICE 2.1 Purchase Price Defined [Alternative No. 1: Date of Death Valuation Determined by Competent Appraisal] 2.1 Purchase Price Defined [Alternative No. 2: Fixed Purchase Price Offset by Decedent's Share of Partnership Debts and Liabilities] 2.1 Purchase Price Defined [Alternative No. 3: Formula-Type Provision] 2.2 Partnership Accounts Conclusive ARTICLE 3—TERMS OF PAYMENT OF PURCHASE PRICE 3.1 Transfer of Partnership Interest at Death [Alternative No. 1] 3.1 Transfer of Partnership Interest at Death [Alternative No. 2] 3.1 Transfer of Partnership Interest at Death [Alternative No. 3] 3.2 Lifetime Purchase 3.3 Closing and Closing Date ARTICLE 4—TERMINATION OF BUY-SELL AGREEMENT 4.1 When This Buy-Sell Agreement Ends 4.2 Return of Partnership Certificates ARTICLE 5—CONTINUATION OF RESTRICTIONS 5.1 Continuation after Transfer 5.2 Conditions of Transfer ARTICLE 6—LIFE INSURANCE POLICIES AS FUNDING MECHANISM 6.1 Required Purchase of Insurance Policies [Alternative No. 1] 6.1 Required Purchase of Insurance Policies [Alternative No. 2] 6.2 Additional Policies [Alternative No. 1] 6.2 Additional Policies [Alternative No. 2] 6.3 Premiums 6.4 Right to Buy Policies ARTICLE 7—AGREEMENT DRAFTED BY COUNSEL FOR PARTNERSHIP 7.1 Acknowledgements by Partners ARTICLE 8—MISCELLANEOUS PROVISIONS 8.1 Binding Agreement 8.2 Governing Law 8.3 Severability 8.4 Notices 8.5 Headings 8.6 Records 8.7 Voting 8.8 Specific Performance 8.9 Waiver 8.10 Copies PART II—TRANSFER OF PARTNERSHIP INTERESTS UPON VOLUNTARY AND INVOLUNTARY TERMINATING EVENTS, INCLUDING DEATH, RETIREMENT, VOLUNTARY RETIREMENT, AND THIRD PARTY PURCHASE OFFERS ARTICLE 9—TERMINATION AND DISSOLUTION OF PARTNERSHIP 9.1 General Description of Terminating Events 9.2 Voluntary and Involuntary Terminating Events Distinguished 9.3 Retirement of Partner 9.4 Voluntary Withdrawal of Partner 9.5 Adjudication of Bankruptcy of Partner 9.6 Physical or Mental Incapacity of Partner 9.7 Death of Partner 9.8 Mutual Agreement of Partners ARTICLE 10—PROVISIONS APPLICABLE TO BOTH VOLUNTARY AND INVOLUNTARY TERMINATION 10.1 Article 10 Controls in Event of Conflict 10.2 Limitation of Claims Against Partnership Property 10.3 Restoration of Capital Accounts ARTICLE 11—CONSEQUENCES OF INVOLUNTARY TERMINATION 11.1 Liquidator 11.2 Title to Partnership Property 11.3 Capital Account Payments for Deceased or Incapacitated Partner 11.3 Disability of Partner and Continuation of Partner's Income [Alternative No. 2] 11.4 Contingent Payments by Remaining Partner(s) ARTICLE 12—CONSEQUENCES OF VOLUNTARY TERMINATION 12.1 Liquidator 12.2 Election to Continue the Partnership Business 12.3 Liquidation of the Business 12.4 Mutual Agreement of the Partners to Terminate SIGNATURE PAGE ACKNOWLEDGMENTS OF PARTNERS' SPOUSES SCHEDULE “A” THIS BUY-SELL AGREEMENT is made and entered into on _________[date], by and among Alice Green, Brian Green, and Carol Green (collectively called the "Partners" and individually called a "Partner"), all being residents of the State of _________, who have entered into a general partnership known as the ABC Green Family Partnership (the "Partnership"), evidenced by that certain Agreement of General Partnership dated _________, and validly existing in good standing under the laws of the State of _________, on the following terms and conditions: RECITALS: This Agreement shall amend and supplement that certain General Partnership Agreement entered into by and among the Partners by a written instrument dated _________(the "Partnership Agreement"); and The Partners collectively represent the owners of all Partnership Interests of the Partnership, which are owned by the Partners in the following percentage shares: Alice Green. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50% Brian Green. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25% Carol Green. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25% Inasmuch as the Partnership is engaged in the business of _________[insert brief description] and the Partners desire that it remain a family-owned business, the Partners believe that they will be able to deal easily and comfortably with each other and that it is in their best interests that the business of the Partnership be conducted by persons who deal comfortably with each other, without acrimony or distrust; and The Partners desire to assure the continued harmonious and profitable operations of the business of the Partnership, to restrict the ownership of Partnership Interests to persons with whom they may deal comfortably, and to prevent any transfer of Partnership Interests to any person or entity not a current Partner, or member of a Partner's immediate family; and The undersigned Partners wish to provide for a ready market for their Partnership Interests upon certain specified events, voluntary and involuntary, including death, disability, retirement, and third-party purchase offers; and The Partners believe it to be in their best interests to provide an efficient mechanism that will enable the Partnership Interests of any deceased, withdrawing, or selling Partner to be acquired by the original or remaining Partners, and not to permit the free transferability of Partnership Interests of a deceased, withdrawing, or selling Partner; and The Partners desire to avoid any disruption of Partnership business as a consequence of any Partner's death, disability, retirement or voluntary withdrawal, and the Partners intend that such events not cause the dissolution and liquidation of the Partnership, but that the business of the Partnership be continued under the management of the surviving Partner(s); and To achieve the foregoing objectives, the Partners desire and intend by this Agreement to define their rights to purchase Partnership Interests, to assure their financial ability to provide for the continuation of income to any voluntarily or involuntarily withdrawing Partner or to a deceased Partner's estate, and to provide an efficient mechanism for the sale of the Partnership Interest of a deceased or withdrawing Partner to the surviving or remaining Partner(s) upon a Partner's death, disability, retirement, or voluntary withdrawal, and to obtain for the withdrawing Partner or the estate of a deceased Partner the maximum realization of value for his or her Partnership Interests; and The Partners intend to purchase life insurance policies on the lives of each other in order to provide (in whole or in part) the funds necessary to acquire the Partnership Interests of a deceased or withdrawing Partner. NOW, THEREFORE, it is agreed as follows: PART I—GOVERNS THE TRANSFER OF PARTNERSHIP INTERESTS UPON THE DEATH OF A PARTNER AND THIRD-PARTY PURCHASE OFFERS ARTICLE 1—RESTRICTIONS ON TRANSFER OF PARTNERSHIP INTERESTS 1.1. General Restrictions Against Transfer (Alternative No. 1—Long Form). The undersigned Partners agree that the Partnership Interests should not be made generally available to persons other than the original Partners or members of their family. Therefore, each Partner hereby agrees and covenants not to sell, transfer, assign, pledge, encumber, give, bequeath, or otherwise dispose of in any manner, whether voluntarily or involuntarily, (collectively a "Transfer"), all or any portion of his or her Partnership Interests, whether now or hereafter acquired, except in strict accordance with the terms of this Agreement, unless to do so has been approved in advance with the written consent of all Partners. The Partners agree that no attempted Transfer of Partnership Interests that is not in strict compliance with this Article 1 shall be reflected on the books and records of the Partnership, and any non-complying transfer shall be void ab initio. For additional provisions relating to events other than death, see Articles 9 through 12 in Part II of this Agreement. 1.1. General Restrictions Against Transfer (Alternative No. 2—Short Form). Partnership Interests are strictly personal to the Partner. No Partner shall have the right to assign, transfer, sell, pledge, mortgage or otherwise dispose of or encumber all or any part of his or her Partnership Interest to any other person, whether or not an original Partner, except as provided hereinbelow. For additional provisions relating to events other than death, see Articles 9 through 12, in Part II of this Agreement. 1.1. General Restrictions Against Transfer (Alternative No. 3—Modified Short Form). Except as permitted elsewhere in this Agreement, no Partner shall have the right to sell, assign, donate, transfer, pledge, encumber, or otherwise dispose of all or any part of his or her Partnership Interest to any other person, without the prior written consent of all of the other Partners, which consent may be withheld for any reason or no reason. For additional provisions relating to events other than death, see Articles 9 through 12 in Part II of this Agreement. In all events, no Transfer may be made if: (a) to or in favor of a minor, or incapacitated or incompetent person; (b) it would cause a termination of the Partnership within the meaning of §708(b) of the Code; or (c) such sale, assignment, donation, transfer, disposition, or encumbrance would violate the Securities Act of 1933 and the regulations issued pursuant thereto or the applicable securities or blue sky laws of any state. 1.2. Conditions to Pledge or Encumber Partnership Interests. The parties acknowledge and agree that they do not wish to prevent any Partner from pledging or otherwise encumbering his or her Partnership Interests (for purposes of this Section 1.2, "Encumber" or "Encumbrance"), but that they also do not want any person not a party to this Agreement to become a Partner. Accordingly, the Partners agree that any Partner may Encumber any or all of his or her Partnership Interests, but any such Encumbrance shall be subject to all of the terms and conditions set forth in the Sections 1.3 through 1.6, below. 1.3. Partner Default on Secured Debt. If a Partner defaults on debt secured by his or her Partnership Interest, the secured creditor shall give written notice to the Partnership of such default. Such notice shall include the name, address (home and office) of the creditor, the amount of the debt, the date on which it was incurred, and a true and correct copy of the promissory note or other instrument evidencing the debt, and any documents by which the Encumbrance is established. 1.4. Partnership Right of Cure. The Partnership shall have 21 days from its receipt of the notice described in Section 1.3 to cure such default and thereby to receive the Encumbered Partnership Interests, and to prevent the secured creditor from taking legal or equitable title to the Partnership Interests. Each Partner agrees that, if so requested by the other Partners, he or she will vote (directly or by proxy) as a Partner in favor of the Partnership's curing such default pursuant to this Section 1.4 and in favor of any amendment to the Partnership Agreement, revaluation of any Partnership property, or any other action required to permit the Partnership to cure such default. 1.5. Partners' Right of Cure. If and to the extent the Partnership does not cure such default within said 21 day period, then the non-defaulting Partners shall have 21 days from the expiration of the Partnership's 21 day period within which to cure such default and thereby to receive such Encumbered Partnership Interests, and to prevent the secured creditor from taking legal or equitable title to such Partnership Interests. The non-defaulting Partners shall have the right to cure such default in proportion to his or her percentage ownership of all Partnership Interests, or in such other proportions as they shall otherwise agree upon. 1.6. Creditors' Remedies. If neither the Partnership nor the other Partners shall cure said default within the two above-described 21-day periods, the secured creditor may take legal or equitable title to such Partnership Interests, through whatever legal remedies said secured creditor may have. The provisions of this Section 1.6 are not intended to expand or affirm the legal rights of any such secured creditor. 1.7. Sale of Partnership Interests [Alternative No. 1]. All or a portion of the Partnership Interests of any Partner may be sold, transferred, assigned or otherwise disposed of for valuable consideration, but no such disposition shall be valid unless the transferring Partner complies with all of the provisions of this Section 1.7. (a) A Partner who receives and wishes to accept a "Qualified Offer" (as defined below in paragraph 1.7(e)) to buy his or her Partnership Interests must promptly send written notice to the Partnership and to each other Partner, expressly stating his or her offer (which shall be deemed automatically to have been made), to sell the Partnership Interests (hereinafter called the "Offered Partnership Interests") to the other Partners at the same price and upon the same terms as are contained in the Qualified Offer, or at Partnership's option or that of the other Partners (whoever buys such shares of the Partnership Interests under this Paragraph 1.7(a), at the Purchase Price specified in Article 2, and on such other terms set forth in Article 3. Such written notice shall contain a true copy of the Qualified Offer, including its price, terms and conditions, and the name, address (both home and office), and business or occupation of the person making such Qualified Offer. (b) The Partnership shall have thirty (30) days from its receipt of the notice described in paragraph 1.7(a) in which to buy all or any part of the Offered Partnership Interests, but its offer shall be ineffective if (1) the Partnership elects to buy less than all of the Offered Shares, and (2) none of the other Partners, individually and collectively, elect to buy the balance of the Offered Partnership Interests pursuant to this Section 1.7. Each Partner who is willing accept a Qualified Offer shall agree, if so requested by the other Partners, to vote (directly or by proxy) as a partner in favor of the Partnership's purchase of such Offered Shares pursuant to this Section 1.7, and in favor of any amendment to the General Partnership Agreement or any other action required to permit the Partnership's purchase of the Partnership Interests. (c) If and to the extent Partnership does not elect to buy all of the Offered Partnership Interests within such 30 day period, then the other Partners have 30 days from the expiration of Partnership's 30 day period (or from any earlier date on which Partnership elects, in writing, not to buy any of the Offered Partnership Interests), in which to buy all, but not less than all, of the Offered Partnership Interests. They may buy the Partnership Interests in proportion to their respective ownership of Partnership Interests, or in such other proportions as they shall unanimously agree. (d) If Partnership and the other Partners do not agree in the aggregate to buy all of the Offered Partnership Interests, the offering Partner can Sell all of such shares of the Partnership Interests pursuant to the Qualified Offer. If the sale pursuant to the Qualified Offer is not consummated within 90 days after the expiration of the Partner's 30 day option pursuant to paragraph 1.7(c), the provisions of this Agreement will again apply to the Partnership Interests as if no Qualified Offer had been made. A sale is consummated when the offering Partner has received full consideration. The receipt of a note is deemed to be the receipt of full consideration when the note is delivered, even if some installments are to be paid later. (e) A Qualified Offer is a legally enforceable written offer from an individual or entity financially capable of carrying out its terms, accompanied by a certified or cashier's check for at least 10% of the total Purchase Price. 1.7. Sale of Partnership Interests [Alternative No. 2]. Except as permitted in this Section 1.7, and subject always to the consent of the remaining Partner(s), which consent may be withheld for any reason or for no reason, no Partner may sell or assign all or any part of his Partnership Interest, except pursuant to a Bona Fide Offer. (a) A Bona Fide Offer is deemed to occur in the event that an offer in writing, signed by one or more offerors, and accompanied by certified or cashier's check for at least 10% of the price offered as a deposit towards such offer, shall have been made to a Partner for the purchase of all (or a portion) of the selling Partner's Partnership Interests. (b) Upon the receipt of such Bona Fide Order, the recipient shall forward a true copy of the Bona Fide Offer to each other Partner. (c) Each other Partner shall have the right, exercisable only by written notice to such effect within 20 days after receipt of a true copy of the Bona Fide Offer, to buy such Partnership Interest in equal portions as between and among themselves, upon the same terms and conditions (other than the Closing Date) as provided in the Bona Fide Offer. (d) Any Partner may exercise such right by delivery of a notice (the "Notice") to the Partner who proposes the transfer. The Notice shall set forth the Closing Date for settlement of the transaction, which shall not be a date beyond 30 days from the date of giving such Notice by such Partner. Such Notice shall also set forth the time and place of settlement. (e) In the event any Partner elects not to purchase his or her pro rata share of the Offered Partnership Interests, then the other non-selling Partner(s) may then purchase that portion. (f) In order to ensure a response to the Bona Fide Offer within the requisite period, the selling Partner shall establish interim deadlines within which the other Partners must notify the selling Partner of their decisions regarding purchase of the Partnership Interest. If more than one Notice is delivered, notwithstanding the closing dates specified in such Notices, the non-selling Partner may choose one of such dates, or the date specified in the Bona Fide Offer, as the date on which all purchases of a selling Partner's Partnership Interests by the other Partner may occur. (g) In the event the Partners do not acquire all of the transferring Partner's interests, or fractional portion thereof, pursuant to the provisions above, the Partner may dispose of his remaining Partnership Interests pursuant to the Bona Fide Offer to the offeror(s) at any time within six months from the date of the Bona Fide Offer. No transfer may be effected more than six months after the date of the Bona Fide Offer without again first offering such interests to the non-selling Partner(s) pursuant to this Section. 1.8. Other Lifetime Transfers. To more completely restrict the ownership of Partnership Interests to the immediate family members of the original Partners, in addition to the restrictions on encumbrances specified in Section 1.2 and the restrictions on sales provided in Sections 1.7, no Partner may effect any other form of lifetime transfer, whether voluntarily, involuntarily, or by operation of law (referred to, collectively, as a "Lifetime Transfer" for purposes of this Section 1.8) of any of his or her shares of the Partnership Interests unless he or she complies with this Section 1.8. (a) A Partner who wishes to effect any Lifetime Transfer, or who has any information which would reasonably lead him or her to expect that an involuntary transfer or a transfer by operation of law is foreseeable, must promptly send a written notice to the other Partners, and offer (or be deemed automatically to have offered) to sell his or her Partnership Interests (for purposes of this Section 1.8, referred to as the "Offered Partnership Interests") to them at the Purchase Price specified in Article 2 below, and on the terms set forth in Article 3 below. Such written notice shall contain a statement of the type of proposed transfer, the name, address (both home and office), and business or occupation of the person to whom such shares of the Partnership Interests would be transferred, and any other facts which are or would reasonably be deemed material to the proposed transfer. (b) Partnership shall have 30 days from its receipt of the notice described in paragraph 1.8(a) in which to buy all or any part of the Offered Partnership Interests, but its offer shall be ineffective if (i) it elects to buy less than all of the Offered Shares, and (ii) none of the other Partners, either individually or collectively, elect to buy the balance of the Offered Partnership Interests pursuant to this Section 1.8. Each Partner who proposes to make a Lifetime Transfer agrees, if so requested by the other Partners, to vote (directly or by proxy), as a general partner in favor of Partnership's purchase of such Partnership Interests pursuant to this paragraph 1.8(b) and in favor of any amendment to the General Partnership Agreement or any other action required to permit the Partnership to buy such shares of the Partnership Interests. (c) If and to the extent Partnership does not elect to buy all of the Offered Partnership Interests within such 30-day period, then the other Partners have 30 days from the expiration of Partnership's 30 day option (or from any earlier date on which Partnership elects, in writing, not to buy any of the Offered Partnership Interests), in which to buy all, but not less than all, of the Offered Partnership Interests. They may buy such shares of the Partnership Interests in proportion to their respective ownership of the Partnership Interests or in such other proportions as they shall agree upon. (d) If Partnership and the other Partners do not agree in the aggregate to buy all of the Offered Partnership Interests, such Lifetime Transfer may be completed. If a voluntary Lifetime Transfer is not consummated within 60 business days and an involuntary Lifetime Transfer or Lifetime Transfer by operation of law is not consummated within 90 business days following the expiration of the Partner's 30 day option pursuant to the above subparagraph 1.8(c), the provisions of this Agreement will again apply to the Partnership Interests as if no such Lifetime Transfer had been contemplated and no notice given. A Lifetime Transfer is consummated when Partnership has been given written notice that legal title to the shares of the Partnership Interests has been transferred, subject to recordation on Partnership's books. 1.9. Transfers at Death. On the death of any Partner, the estate of the deceased Partner shall immediately offer (or be deemed to have automatically offered) to sell all the deceased Partner's Partnership Interests to the surviving Partners for the agreed Purchase Price and on such other terms as are provided in Articles 2 and 3. The Partners will accept this offer and buy all of such Partnership Interests. Every Partner agrees to vote as a general partner in favor of any amendment to the General Partnership Agreement or any other action required to permit Partnership to buy such shares of the Partnership Interests. ARTICLE 2—PURCHASE PRICE 2.1. Purchase Price Defined [Alternative No. 1: Date of Death Valuation Determined by Competent Appraisal]. The Purchase Price shall be determined by a competent written appraisal obtained by the surviving Partners and the deceased Partner's estate. The appraisal shall state the fair market valuation of the deceased Partner's Partnership Interests, taking into account all facts and circumstances relevant to a competent appraisal of value of similar businesses organized in general partnership form, and taking into account the percentage ownership of the deceased Partner. The Partners acknowledge that the Purchase Price has not been fixed contemporaneously as of the date of this Agreement. 2.1. Purchase Price Defined [Alternative No. 2: Fixed Purchase Price Offset by Decedent's Share of Partnership Debts and Liabilities]. The purchase price of the Partnership Interests of a deceased Partner shall be $_____, less the deceased Partner's proportionate share of Partnership debts and liabilities, determined as of the date of death. The Partners agree that they may modify the Purchase Price, but only upon a subsequent written amendment to this Agreement. 2.1. Purchase Price Defined [Alternative No. 3: Formula-Type Provision]. The purchase price of the deceased Partner's Partnership Interests shall be an amount that equals the sum total of the following items: (a) the deceased Partner's capital account as shown on the Partnership accounts as of the end of the last tax year of the deceased Partner's death; plus (b) the decedent's share of Partnership profits, or less the deceased Partner's share of Partnership losses, computed from the beginning of the Partnership's tax year in which his or her death occurred to the last day of the month in which such death occurred, adjusted for all contributions and withdrawals by the decedent during such period; plus (c) an amount equal to _________ percent of the Partnership's average annual net income for the last five complete fiscal years of the Partnership prior to the year of death of the deceased Partner, which shall constitute the deceased Partner's share of Partnership goodwill. 2.2. Partnership Accounts Conclusive. For the purpose of the foregoing calculations, the Partnership books are deemed correct. All computations shall be made and certified by the Partnership's accountant as of the date of death, and when so certified shall be binding and conclusive. ARTICLE 3—TERMS OF PAYMENT OF PURCHASE PRICE 3.1. Transfer of Partnership Interest at Death [Alternative No. 1]. The Partnership Interests of a deceased Partner shall be paid to the deceased Partner's estate, as follows: (a) by cash or certified or cashier's check, to the extent of the proceeds received by the Partner (who owns the life insurance policy on the life of the deceased Partner) on any insurance policies required to be maintained under Article 7 of this Agreement, and (b) in installments, evidenced by a negotiable promissory note ("Promissory Note") to the extent the purchase price exceeds the insurance proceeds received on account of such Partner's death. (c) The Promissory Note shall provide for payment in full in _________ equal monthly installments beginning six months after the Closing Date specified in Section 3.3 below, together with interest added to each installment, computed against the outstanding principal balance at the prevailing prime interest rate then charged on the Closing Date as determined by the provisions of Section 3.3, below. The Partnership may prepay all or any part of the principal balance of the Promissory Note at any time without penalty or premium. 3.1. Transfer of Partnership Interest at Death [Alternative No. 2]. (a) Upon the death of any Partner, the surviving Partner(s) shall purchase, in an amount proportionate to their respective percentage ownership of all Partnership Interests, the Partnership Interests of the deceased Partner from his or her estate. The estate of the deceased Partner shall be obligated to sell such Partnership Interests to the surviving Partner(s). The executor or other personal representative of the deceased Partner shall proceed with probate and administration of the estate (in the event the deceased Partner died with a Last Will and Testament) or with intestate administration of the estate (in the event the deceased Partner died without a Last Will and Testament), and shall promptly transfer title to the deceased Partner's Partnership Interest to the surviving Partner(s) according to their respective proportionate shares. (b) The surviving Partner(s) shall collect the proceeds of the insurance policies on the life of the deceased Partner, and upon receipt of title to the deceased Partner's Partnership Interests, shall pay such proceeds, or so much thereof as may be necessary, to the deceased Partner's personal representative in payment of the deceased Partner's Partnership Interests. If the purchase price for the deceased Partner's Partnership Interests exceeds the insurance proceeds, then the surviving Partner(s) shall pay to the decedent's personal representative any additional amount necessary to pay the purchase price in full. 3.1. Transfer of Partnership Interest at Death [Alternative No. 3]. With respect to each insurance policy purchased pursuant to this Agreement, each Partner shall name an additional beneficiary of said policy, to be designated "additional direct beneficiary" whose rights shall be as specified in the endorsement on said policy. (a) Each Partner, by the provisions of his or her Last Will and Testament, shall bequeath his Partnership Interest, subject to all the terms and conditions of this Agreement, to the same additional designated beneficiary designated in the life insurance policies on his or her life and shall also provide that neither said Partnership Interest nor the consideration therefor shall be subject to the claims of creditors, taxes or other expenses of administration until all other assets of the estate have been exhausted. (b) Upon the death of any Partner, the executor or other personal representative of the deceased Partner and the additional designated beneficiary shall proceed with probate and administration of the deceased Partner's estate, and shall promptly transfer title to the deceased Partner's Partnership Interest to the surviving Partner(s). (c) Upon receipt of title to decedent's partnership interest within two years following decedent's death, the surviving Partner(s) shall release and relinquish all right, title and interest in and to the proceeds of insurance on the deceased Partner's life, or as much thereof as may be equal to the purchase price of decedent's Partnership Interest. The insurance proceeds so released shall be settled with the additional direct beneficiary as provided in the policy. The additional designated beneficiary and the estate shall receive and accept settlement of the insurance proceeds as herein provided and shall apply the same in payment of the purchase price of the decedent's Partnership Interest with the same force and effect as if the amount were paid in cash. (d) If, for any reason, a release of interest (in whole or in part) to the insurance proceeds payable by reason of a deceased Partner's death is not delivered to the insurance company within two years after the date of death, any proceeds not so released shall be paid in lump sum to each surviving Partner. Each such payment shall constitute a complete release and discharge of the insurance company on account of said proceeds. Thereafter, upon receipt of title to deceased Partner's Partnership Interest, the surviving Partner(s) shall pay such proceeds, or as much thereof as may be necessary, to the additional designated beneficiary in payment for the decedent's Partnership Interest. (e) In the event the purchase price exceeds the insurance proceeds, the surviving Partner(s) shall be obligated to pay such additional designated beneficiary any additional amount necessary to pay the purchase in full. (f) Upon the death of any Partner, the surviving Partner(s) shall have the right and authority to purchase, from the deceased Partner's executor or other personal representative, each policy of life insurance formerly owned by the deceased Partner on the life of the surviving Partner and held by the estate. The purchase price shall be the interpolated terminal reserve of the policy or policies as of the date of death, plus the proportionate part of the gross premiums last paid before the date of death, which cover the period extending beyond the date of death. In the event any permanent form policy to be transferred to the surviving Partner shall not have been in force for a period sufficient to obtain a value, as stated above, then the purchase price shall be an amount equal to all net premiums paid. This right of purchase shall be exercised within 90 days after the qualification of the executor or other personal representative of the deceased Partners; otherwise, such purchase right shall lapse irrevocably. 3.2. Lifetime Purchase. Any purchase price paid by Partnership or a Partner in connection with a lifetime purchase of a Partner's Partnership Interests will be paid in accordance with the following schedule and payment terms: (a) When the offer (or deemed offer) to sell is accepted, the buyer will pay the seller a down payment equal to at least 20% of the total purchase price. (b) The balance of the purchase price shall be paid in _________ equal monthly principal payments beginning six months after the Closing Date specified in Section 3.3. Simple interest shall be added to each installment, computed against the outstanding principal balance at the prevailing prime interest rate charged by the _________ Bank, on the Closing Date specified in Section 3.3. The buyer will tender to seller a negotiable promissory note as evidence of this debt. The buyer may prepay all or part of the principal balance of the Promissory Note at any time without penalty, premium or additional interest. 3.3. Closing and Closing Date. Any purchase of Partnership Interests shall occur at a settlement on the Closing Date. (a) The Closing Date will occur on the fifth business day after the earliest of: (1) the date on which the Partners purchase options, if any, all have expired; or (2) the earliest date on which the Partners in the aggregate exercise their purchase options, if any, to buy all of the shares of the Partnership Interests being offered (or deemed offered); or (3) the earliest date Partnership exercises its option to buy all of the shares of the Partnership Interests being offered (or deemed offered); or (4) the earliest date on which Partnership and the Partners have together exercised their purchase options to buy all of the shares of the Partnership Interests being offered (or deemed offered); or (5) the date the Offering Partner dies. (b) The Closing will be held at 1:00 p.m. on the Closing Date, at the offices of the law firm of _________, or at any other place to which the parties mutually agree. (c) At Closing, buyer shall pay for Partnership Interests and Offering Partner shall deliver evidence of all of his Partnership Interests to be sold, free and clear of all Encumbrances. (d) If the Offering Partner does not deliver the certificates at the Closing, the following events shall occur: (1) the person(s) who are to pay for such Partnership Interests shall deposit the Purchase Price by check, note, or both, as this Agreement requires, with the Partnership's accountant as escrow agent; (2) said accountant shall deposit such funds with the _________ Bank, payable to the Offering Partner as soon as is reasonably practicable, less an appropriate fee to Partnership (not to exceed $_____) for reasonable administrative costs; and (3) the Partnership will adjust its transfer books to reflect that these Partnership Interests have been canceled or transferred, as the case may be. (e) Each Partner appoints Partnership, through its Managing Partner as his or her or her attorney-in-fact to execute and deliver all documents needed to convey the Partnership Interests, if the Partner is not present at the closing. This power of attorney is coupled with an interest and does not terminate on the Partner's disability or death, and continues for as long as this Agreement is in effect. ARTICLE 4—TERMINATION OF AGREEMENT 4.1. When This Agreement Ends. This Agreement shall be terminated upon the dissolution of the Partnership, when the Partnership is put into receivership, when the Partnership becomes bankrupt, or whenever the parties may mutually agree in writing to terminate and dissolve the Partnership. 4.2. Return of Certificates. When this Agreement ends, the Partners may return all written evidence of their Partnership Interests to the Managing Partner. ARTICLE 5—CONTINUATION OF RESTRICTIONS 5.1. Continuation After Transfer. This Agreement shall continue to apply to Partnership Interests after transfer or assignment, and to any additional Partnership Interests if any are issued to original Partners or to any new Partners. 5.2. Conditions of Transfer. This Agreement shall continue to apply to any Partnership Interests transferred (whether or not for consideration) by any Partner, and Partnership may require as a condition for such a transfer that the transferee execute a Agreement substantially identical in form to this one, to which all of the Partnership Interests of the transferee will be subject, and which transferee agreement will be treated as a part of this Agreement. ARTICLE 6—LIFE INSURANCE POLICIES AS FUNDING MECHANISM 6.1. [Alternative No. 1] Required Purchase of Insurance Policies. Partnership will apply for, own and be the beneficiary of life insurance policies on the life of each Partner, in amounts listed on Schedule A. Partnership will take any actions required to maintain all of the insurance policies it is required to maintain under this Section 6, and will not cancel them or allow them to lapse without the prior written consent of each Partner. 6.1. [Alternative No. 2] Required Purchase of Life Insurance Policies. Each Partner shall purchase life insurance on the life of each other Partner in the amount(s) set forth in Schedule "A" attached hereto. No Partner shall, during the term of this Agreement, revoke or change the beneficiary designation or modify or impair any rights or values under the policies he or she has purchased. 6.2. [Alternative No. 1] Additional Policies. The Partnership may acquire any additional life insurance policies if deemed appropriate to implement this Agreement, and each Partner agrees to cooperate fully in purchasing any such additional insurance, including submitting to any physical examinations and providing any medical information required by the insurer. All additional policies will be listed on Schedule "A". 6.2. [Alternative No. 2] Additional Policies. Any Partner shall have the right to purchase additional life insurance on the life of any other Partner, if it is deemed necessary to fulfill his or her obligations under this Agreement. Any additional policies may be listed on Scheduled "A" and shall otherwise be subject to the terms of this Agreement. Each Partner shall name himself or herself as the direct beneficiary under the policies for which he is the applicant, and he shall be the sole owner of the policies so purchased. 6.3. Premiums. The Partnership will pay every premium on any life insurance policies listed on Schedule "A", and give each Partner proof of such payment within 15 days of the date the premium was due. If Partnership fails to supply such proof, any Partner may pay the premium and be reimbursed by Partnership for his or her payment. All dividends on any such policies will be applied to the payment of premiums. Such payment shall be considered a loan to the Partner in default, and the Partner making the payment shall be entitled to recover such amount with interest from the date of payment at _____% interest per annum. 6.4. Right to Buy Policies. When this Agreement ends pursuant to Article _________ or when any Partner sells his or her Partnership Interests to other Partners, other than on account of such Partner's death, such Partner may buy from Partnership any policies of life insurance maintained on his or her life pursuant to this Article. Such purchase shall be made upon the Partner's written notice to Partnership within 15 days from the date this Agreement ends or the Closing Date on which such Partner sells his or her shares of the Partnership Interests, as may be applicable. The purchase price for such policies shall be their interpolated terminal reserve, increased by the amount of any unearned premiums and reduced by the amount of any loans secured by such policies. ARTICLE 7—AGREEMENT DRAFTED BY COUNSEL FOR PARTNERSHIP 7.1. The Partners each acknowledge that Partnership's legal counsel, the law firm of _________, has prepared this Agreement on behalf of and in the course of its representation of the Partnership, as directed by the Managing Partner, and that he or she: (a) has been advised that a conflict of interest may exist between his or her interests and those of Partnership and the other Partners, (b) has been advised by Partnership's counsel to seek independent legal advice, (c) has had the opportunity to seek the advice of independent counsel, (d) has received no representations from Partnership's counsel about the tax consequences of this Agreement, (e) has been advised by Partnership's counsel that this Agreement may have tax consequences, (f) has been advised by Partnership's counsel to seek the advice of independent tax counsel, and (g) has had opportunity to seek the advice of independent tax counsel. ARTICLE 8—MISCELLANEOUS PROVISIONS 8.1. Binding Agreement. This Agreement is binding on and enforceable by and against the parties, their successors, legal representatives, and assigns. 8.2. Governing Law. This Agreement will be governed by and construed according to the laws of the State of _________. 8.3. Severability. No part of this Agreement will be affected if any other part of it is held invalid or unenforceable. 8.4. Notices. Any notices required or permitted to be given under this Agreement must be given in writing, and will be deemed given when personally delivered or, if earlier, when received after mailing by registered or certified United States mail, postage prepaid, with return receipt requested. Notice to the Partnership is valid if sent to its principal place of business and notice to any Partner is valid if sent to him or her at such Partner's address as it appears in Partnership's records. 8.5. Headings. The headings in this Agreement are inserted for convenience only and are not part of the Agreement. 8.6. Records. Partnership and Partners agree that Partnership's accountant acts for both Partnership and the Partners and that all of them will have free access to Partnership's books and records. Partnership's accountant may assert no privilege against any Partner and shall report to the Partners all information reported to Partnership and all matters of concern to them that comes to the accountant's attention in the course of his or her services for Partnership. 8.7. Voting. On the Closing Date with respect to the sale of any shares of the Partnership Interests, the Partner who offered (or who has been deemed to have offered) such shares of the Partnership Interests for sale will cease to have the right to vote such shares. 8.8. Specific Performance. The parties agree that the Partnership Interests is unique and that failure to perform the obligations under this Agreement will result in irreparable damage to the other parties and that specific performance of these obligations may be obtained by a suit in equity. 8.9. Waiver. Any party's failure to insist on compliance or enforcement of any provision of this Agreement shall not affect its validity or enforceability or constitute a waiver of future enforcement of that or any other provision herein. 8.10. Copies. More than one copy of this Agreement may be executed and all parties agree and acknowledge that each executed copy shall be a duplicate original, except that some Schedules may exist only on the original copy retained by Partnership. PART II—TRANSFER OF PARTNERSHIP INTERESTS UPON VOLUNTARY AND INVOLUNTARY TERMINATING EVENTS, INCLUDING DEATH, RETIREMENT, VOLUNTARY RETIREMENT, AND THIRD PARTY PURCHASE OFFERS ARTICLE 9—TERMINATION AND DISSOLUTION OF PARTNERSHIP 9.1. General Description of Terminating Events. The Partnership shall terminate for purposes of state law only (as distinguished from federal income tax law) on the effective date of the first to occur of the six Terminating Events that are listed below in Section 9.2. The effects upon the Partners of each Terminating Event, and the specification of the effective date of each Terminating Event, are more particularly described below in Sections 9.3 through 9.8. 9.2. Voluntary and Involuntary Terminating Events Distinguished. (a) As used in this Article 9, the term "Involuntary Terminating Events" refers to a death or incapacity (whether mental or physical in nature). (b) As used in this Article 9, the term "Voluntary Terminating Events" refers to any of the following: (i) the retirement of a Partner; (ii) voluntary withdrawal of a Partner; (iii) adjudication of bankruptcy of a Partner; or (iv) mutual agreement of the Partners to terminate and dissolve the Partnership. 9.3. Retirement of a Partner. (a) For purposes of this Article 9, the term "retirement of a Partner" means the voluntary withdrawal of a Partner from the business of the Partnership as of the end of the specified calendar month after the withdrawing Partner has attained the age of 60 and with not less than six months prior written notice to the other Partner(s). (b) The effective date of the retirement of a Partner for all purposes of this Agreement shall be the date specified by the retiree in a timely submitted written notice of retirement. 9.4. Voluntary Withdrawal of a Partner. (a) For purposes of this Article 9, the term "voluntary withdrawal of a Partner" has the following meaning: (i) the voluntary and unilateral cessation of activity of a Partner from the Partnership business as of a specific date announced by the withdrawing Partner to the remaining Partners in writing (otherwise than by retirement, physical or mental incapacity, or adjudication of bankruptcy), or (ii) the undeclared voluntary, unilateral and unequivocal abandonment by a Partner of his or her position and duties as a Partner (otherwise than by retirement, physical or mental incapacity, or adjudication of bankruptcy). (b) In either of the cases described in paragraphs (a)(i) or (a)(ii) of this Section 9.4, the voluntary withdrawal may occur with or without cause, and with or without notice to any Partner. (c) The effective date of the voluntary withdrawal of a Partner, in cases described in paragraph (a)(i) above, shall be the date of withdrawal as specified by the withdrawing Partner. Immediately upon the effective date, the withdrawing Partner's rights and responsibilities as a Partner shall be terminated completely, and the remaining Partner(s) shall be authorized to act alone or as a continuing Partnership thereafter. (d) [Alternative No. 1] The effective date of the voluntary withdrawal of a Partner, in cases described in paragraph (a)(ii) of this Section 9.4, shall be the last day of the calendar month in which the event of cessation by the withdrawing Partner occurred. (d) [Alternative No. 2] In cases described in paragraph (a)(ii) of this Section 9.4, for purposes of terminating the withdrawing Partner's rights and responsibilities under this Agreement, and empowering the remaining Partner(s) to act alone hereunder, the effective date of withdrawal is the date on which the remaining Partner(s), acting reasonably and in good faith, gives written notice to the withdrawing Partner that in the opinion of the former, the latter has withdrawn from the Partnership within the meaning of paragraph (a)(ii) of this Section 9.4. 9.5. Adjudication of Bankruptcy of Partner. (a) For purposes of this Article 9, an adjudication of bankruptcy of a Partner means either: (i) the granting by a federal bankruptcy court of an order for relief of a Partner under and within the meaning of Title 11 of the United States Bankruptcy Code (whether the adjudication was in fact voluntary or involuntary on the part of the bankrupt), or (ii) the seizure of a Partner's interest in the Partnership under a writ of execution or charging order that is not released within 30 days. (b) The effective day of a Partner's adjudication of bankruptcy, for all purposes hereunder, shall be the last day of the calendar month in which occurs the earlier of either (i) the order granting relief under Title 11 of the United States Bankruptcy Code, or (ii) the 30th day after service of an unreleased writ of execution or charging order. 9.6. Physical or Mental Incapacity of Partner. For purposes of this Article 9, the physical or mental incapacity of a Partner means the delivery by the unaffected Partner(s) to the wife and/or children of the incapacitated Partner (and his or her legal representative, if any), or vice versa, of either: (a) a certified copy of a final and unappealable judgment of a court of competent jurisdiction, declaring the incapacitated Partner incapacitated or incompetent, and incapable of managing his or her own affairs, or (b) written opinions of two licensed physicians, one of whom shall be the incapacitated Partner's attending physician, certifying that said Partner is incapacitated or incompetent, and incapable of managing his or her own affairs, and that such condition is likely to persist for more than 12 months, and has the effect or result of preventing the incapacitated Partner from fulfilling 80% or more of his or her usual and customary duties as a Partner. (c) Upon the occurrence of either of the events described above in paragraphs (a) and (b) of this Section 9.6, any Partner (or his or her legal representative, if any) shall have the right for a period of 30 days after the delivery of the applicable court order or medical opinions referred to above, to terminate the Partnership by written notice to the other Partner(s) (or his or her legal representative, if any) on the ground of physical or mental incapacity. (d) The effective date of any termination described in this Section 9.6 shall be the last day of the calendar month in which the notice of termination was received by the addressee (or his or her legal representative, if any). 9.7. Death of Partner. For purposes of terminating the deceased Partner's rights and responsibilities under this Agreement, and empowering the surviving Partner(s) acting alone or in continuation of the Partnership under this Agreement, the effective date of the termination of the Partnership by reason of the death of a Partner shall be the earlier of the following: (a) the date on which the death becomes known to the surviving Partner, or (b) the last day of the calendar month in which the death occurs. 9.8. Mutual Agreement of Partners. The effective date of the termination of the Partnership by mutual agreement shall be the date specified in a written agreement of all Partners. ARTICLE 10—PROVISIONS APPLICABLE TO BOTH VOLUNTARY AND INVOLUNTARY TERMINATIONS 10.1. Article 10 Controls in Event of Conflict. In the event of any direct conflict between the provisions of this Article 10 and any other provision set forth in this Agreement with respect to the termination or dissolution of the Partnership, then this Article 10 shall take precedence. 10.2. Limitation of Claims Against Partnership Property. After the effective date of any Voluntary or Involuntary Terminating Event, as defined in Article 9 above, no Partner nor the heirs, executors, administrators, or assigns of any Partner, shall have any claim or right to any property of the Partnership in exchange for or on account of the Partner's Partnership Interest, except as provided below. 10.3. Restoration of Capital Accounts. If a Partner has a deficit balance in his or her Capital Account on the effective date of any Terminating Event after making any appropriate adjustments in such Capital Account to reflect the Partner's pro rata share of income or loss of the Partnership, that Partner (or his or her legal representative) must pay to the Partnership the amount of the deficit. Upon liquidation and dissolution of the Partnership, the deficit amount shall be paid to the creditors of the Partnership first, and any excess shall then be distributed to the other Partner(s) in accordance with his or her positive Capital Account balance as described in §1.704-1(b)(2)(ii)(b)(3) of the Treasury Regulations. This payment must be made in immediately available funds not later than the end of the taxable year in which the liquidation and dissolution of the Partnership takes place (or, if later, within 90 days after the date of liquidation and dissolution). The Partners intend that the provision set forth above in this Section 10.3 will constitute an unconditional obligation to restore their respective deficit capital accounts, in accordance with the requirements described in §1.704-1(b)(2)(b)(ii)(b)(3) of the Treasury Regulations. The Treasury Regulations shall control in the case of any conflict between those Regulations and this Section 10.3. ARTICLE 11—CONSEQUENCES OF INVOLUNTARY TERMINATION 11.1. Liquidator. On the effective date of an Involuntary Terminating Event, the remaining Partner(s) shall automatically become the liquidator of the Partnership without bond or other security, and without the necessity of any authorization or court proceeding, and as such he or she shall be vested with all powers conferred on liquidators of partnerships under the applicable law of the State of _________. The liquidator shall not be obligated to exercise the powers conferred on him or her by the preceding sentence, however, and shall not exercise such powers to the extent they would conflict with (i) his or her ability to continue the conduct of the business of the Partnership as a sole proprietorship, (ii) any other specific right or power expressly conferred on the liquidator elsewhere in this Article 11, or (iii) any specific duty or obligation that may be owed to the deceased or incapacitated Partner (or to his or her legal representative) to which the remaining Partner is expressly subjected elsewhere in this Article 11; provided, however, that in all events the rights and powers of the liquidator and the deceased or incapacitated Partner (and his or her heirs, executors, successors, and assigns) in and to the Partnership and its property shall be subject to the rights of the creditors of the Partnership. 11.2. Title to Partnership Property. On the effective date of any Involuntary Terminating Event, the ownership of and title to all Partnership property (including but not limited to its securities, vehicles, accounts, inventory, receivables, furniture, fixtures, equipment, goodwill, intangible assets, and the sole and exclusive right to the use of name of Partnership for a period of _________ years in the County of _________) shall automatically be vested in the remaining Partner(s), free of all liens and encumbrances in favor of the deceased or incapacitated Partner (or his or her heirs, executors, successors, and assigns) on account of the Partnership Interest of the latter, without the necessity of any deed, act of sale, conveyance, assignment, agreement, stock or bond power, waiver, release, judicial proceeding, court order, or consent by the deceased or incapacitated Partner (or his or her heirs, executors, successors, or assigns); provided, however, that the remaining Partner(s) shall be personally liable to fulfill all obligations imposed on him or her by this Article 11 in favor of the deceased or incapacitated Partner, and his or heirs, executors, administrators, successors, and assigns. Further, in the event that the Partnership is then solvent in the bankruptcy sense, the remaining Partner(s) agree to be bound and obligated to use his or her best efforts in good faith in order to continue to operate the former business of the Partnership as a sole proprietorship (or as a new partnership without the incapacitated Partner) for a period of not less than _________ years after the effective date of the Involuntary Terminating Event, to the best of their ability and in substantially the same manner as it was being operated immediately prior to the termination of the Partnership. 11.3. Payment for Capital Account of Deceased or Incapacitated Partner [Alternative No. 1]. (a) Within 90 days after the effective date of an Involuntary Terminating Event, the remaining Partner(s) shall pay the deceased or incapacitated Partner (or his or her heirs, executors, or assigns, as their interests may appear) an amount equal to the positive Capital Account balance (if any) of the latter, after crediting allocations of income and debiting allocations of loss. The payment may be made entirely in cash or property, or a combination of the two. (b) If the deceased or incapacitated Partner had a positive Capital Account, and the Partnership is, as of the time of the payment required in paragraph (a) above, solvent in the bankruptcy sense, then the payment to the withdrawing Partner for his or her Capital Account must be accompanied by a written undertaking, signed by the remaining Partner(s) in favor of the withdrawing Partner (or legal representative), and reasonably satisfactory in form to their legal counsel, and in which the remaining Partner agrees to assume and to be solely liable for, and to discharge, fulfill, or pay when, as, and if lawfully due or required, the Beneficiaries' share of all then existing obligations and liabilities of the Partnership, and to indemnify and hold the Beneficiaries reasonable costs and expenses suffered, sustained, incurred, or required to be paid by any of the Beneficiaries because of: (i) claims asserted by any creditor of the Partnership against any Beneficiary seeking to recover from him, solely by reason of the deceased or incapacitated Partner's former status as a Partner, any portion of an indebtedness or liability owed or allegedly owed by the Partnership, and (ii) any liabilities of the Partnership of any nature, whether accrued, absolute, contingent, known, or unknown, existing at the effective date of the Involuntary Terminating Event. 11.3. Disability of Partner and Continuation of Partner's Income [Alternative No. 2]. (a) In the event that a Partner shall become totally disabled (as defined in paragraph 11.3(b) below, the disabled Partner shall, during the period of such disability, but not for more than _________ months from the commencement of the disability, receive the sum of $_____ per month, in lieu of any allocable share of Partnership profits. (b) The term "total disability" shall have the following meaning: [incorporate provisions in disability income insurance policy or otherwise as agreed to by the Partners]. (c) In the event that the period of disability continues for a period of more than _________ months, then the disabled Partner's monthly income payable under paragraph 11.3(a) above, shall be reduced to $_____ from $_____, and shall be in lieu of any share of the profits of the Partnership. (d) Purchase of Partnership Interest of Disabled Partner. (i) In the event that the disabled Partner remains totally disabled for a continuous period of _________ months, then and in that event the nondisabled Partner(s) shall purchase and the disabled Partner shall sell all title and interest of the disabled Partner in the latter's Partnership Interests, for the Purchase Price specified in this Agreement at Article 2. (ii) The Purchase Price shall be paid to the disabled Partner in equal monthly installments over a period of _________ months, the first installment to be paid on the first day of the month following the month in which the nondisabled Partner must act pursuant to the mandatory buy-out provisions of paragraph 11.3(d)(i) above. Each subsequent installment is to be paid on the first day of each month thereafter until the unpaid balance of the Purchase Price is fully paid. To secure the full payment of all monthly installments, the nondisabled Partner(s) shall execute and deliver to the disabled selling Partner a series of promissory notes payable to the disabled Partner, each such Promissory Note to be payable on the due date of each successive monthly installment. (iii) Upon delivery to the disabled selling Partner of the Promissory Notes described above in paragraph (ii), the purchasing Partner(s) shall be vested with complete title to the Partnership Interests of the selling Partner; and the disabled selling Partner shall execute and deliver to the nondisabled Partner(s) such instruments as may be necessary or property to evidence the transfer of full and complete title to such Partnership Interests. (e) In the event that the disabled selling Partner dies prior to the completion of payment of all installment payments required by the provisions of paragraph (ii), the nondisabled Partner(s) shall then use all or a portion of the proceeds of the life insurance policy or policies owned by the surviving Partner(s) on the life of the deceased Partner to pay the balance of the Purchase Price. 11.4. Contingent Payments by Remaining Partner(s). (a) Subject to the provisions of paragraph 11.4(b) below, upon the occurrence of an Involuntary Terminating Event at a time when the Partnership is solvent in the bankruptcy sense, and where the terminating Partner has a positive Capital Account, the remaining Partner(s) shall be bound and obligated to use his or her best efforts in good faith to continue to operate the former business of the Partnership as a sole proprietorship (or as a new partnership without the terminating Partner) for a period of not less than three years after the effective date of the Involuntary Terminating Event, to the best of his or her ability and in substantially the same manner as it was being operated immediately prior to the termination of the Partnership. The remaining Partner(s) shall be obligated to pay, on the three respective dates, indicated below, to the terminating Partner or his legal representative (if he or she is then living) or if he or she is then deceased to his or her spouse (if then living) or to his or her lawful descendants per stirpes (if the spouse is not then living), a sum of money in cash equal to the percentage set forth below, opposite the relevant date, of the Net Profits (defined in paragraph (b) below), if any, of the business conducted by the remaining Partner(s) under the name of the Partnership, earned during the most recently concluded fiscal year that commenced either on the effective date of the Involuntary Terminating Event or on the first or second anniversary thereof: 10%—date occurring 15 months after the Terminating Event 10%—date occurring 30 months after the Terminating Event 5%—date occurring 36 months after the Terminating Event (b) The calculation of the Net Profits of the business of the Partnership during each Fiscal Year as to which the remaining Partner is obligated under subsection (d)(i) to make payments to the terminated Partner or his or her surviving spouse or lawful descendants, shall be made by the accountant of the Partnership in accordance with generally accepted accounting principles and practices applied on a basis consistent with those used to determine the Net Profits of the Partnership immediately prior to the Terminating Event. This calculation shall be made not later than 60 days after the end of the Fiscal Year most recently ended, and a copy of the income statement and balance sheet of the Partnership as conducted by the remaining Partner, together with a written statement of the calculation of the relevant percentage referred to in paragraph (b), shall be delivered to those entitled to receive payment under paragraph (b) not later than 60 days after the end of such Fiscal Year, accompanied by a check drawn on good current funds for the relevant amount due under paragraph (b). The recipient of those financial records shall have the right to review them personally or through attorneys and accountants; to review the work papers of the accountants supporting the calculation; and to meet with the accountants and ask questions and receive answers concerning the financial statements and the calculations. Acceptance and negotiation of a check described in the preceding sentence by the payee(s) thereof shall not in and of itself constitute a release of any claims the payee(s) may have to enforce the terms of this Agreement. (c) The obligations of the remaining Partner(s) to make payments under paragraph (b) shall be null and void in the event either (i) both Partners die simultaneously or under circumstances in which it cannot be ascertained who died first, or (ii) the remaining Partner(s) should die or become physically or mentally incapacitated less than one year after the terminated Partner. In the event the remaining Partner should die or become physically or mentally incapacitated more than one year but less than three years after the terminated Partner, then the remaining Partner(s) shall be relieved of all obligation to make any payments under paragraph (b) that would otherwise have come due more than 90 days after the death or incapacity of the remaining Partner(s). ARTICLE 12—CONSEQUENCES OF VOLUNTARY TERMINATION 12.1. Liquidator. On the effective date of a Voluntary Terminating Event resulting from the retirement, voluntary withdrawal, or adjudication of bankruptcy of a Partner, the remaining Partner(s) shall automatically assume responsibility for liquidating the Partnership, without bond or other security, and without the necessity of any authorization or court proceeding. The remaining Partner(s), as liquidator, shall be vested with all the powers conferred on liquidators under the applicable law of the State of _________. The liquidator shall proceed to act either in the manner described in Section 12.2 or in the manner described in Section 12.3, at his option, subject to the rights of the creditors of the Partnership. The liquidator must make his election between these two methods of proceeding within ten days after the effective date of the Voluntary Terminating Event by delivering written notice thereof to the terminating Partner, and in default of such notice the liquidator shall be unconditionally obligated to proceed in the manner described in Section 12.3. 12.2. Election to Continue the Partnership Business. In the event the liquidator timely elects to proceed in the manner described in this Section 12.2, then the ownership of and title to all property of the Partnership, including but not limited to its securities, furniture, fixtures, equipment, goodwill, intangible assets, and the sole and exclusive right to the use of the name of the Partnership for a period of ten years in the City/County of _________, shall automatically be vested in the liquidator, free of all liens and encumbrances in favor of the terminating Partner on account of the Partnership Interest of the latter, without the necessity of any deed, act of sale, conveyance, assignment, agreement, stock or bond power, waiver, release, judicial proceeding, court order, or consent by the terminating Partner; provided, however, that the liquidator shall be personally liable to fulfill all obligations in favor of the terminating Partner. If the liquidator proceeds under this Section 12.2, then he shall not be obliged to exercise the powers conferred on him as a liquidator by Section 12.1, and he shall not exercise such powers to the extent that would conflict with (i) his ability to continue the conduct of the business of the Partnership, (ii) any other particularized right or power expressly conferred on him elsewhere in this Article, or (iii) any specific duty or obligation toward the terminating Partner to which the remaining Partner is expressly subjected elsewhere in this Article. 12.3. Liquidation of the Business. In the event that the liquidator does not timely elect to proceed in the manner described in Section 12.2, then he shall proceed to exercise his powers as liquidator by winding up the affairs of the Partnership and dissolving it as soon as is reasonably practicable, including but not limited to collecting the accounts receivable and other claims of the Partnership, and then applying the assets of the Partnership in the following order or priority: (a) to the payment and discharge of all the Partnership's debts and liabilities and the expenses of liquidation; (b) to the creation of any reserves the liquidator deems necessary for any contingent or unforeseen liabilities or obligations of the Partnership; (c) to the payment and discharge of all the Partnership's debts and liabilities owing to the Partners, but if the amount available for payment is insufficient, then pro rata in accordance with the amounts of these debts and liabilities; and (d) to the Partners with positive Capital Accounts in accordance with the ratio of their Capital Accounts. 12.4. Mutual Agreement of the Partners to Terminate. If the Partnership is terminated by the mutual agreement of the Partners, then the Partnership shall be liquidated and dissolved by a liquidator(s) designated by mutual agreement of the Partners, subject to such terms and conditions as they may fix. The liquidator(s) shall proceed in the manner stipulated by the mutual agreement of the Partners to collect and apply the assets of the Partnership as described in Sections 12.2 and 12.3. IT IS HEREBY AGREED, by each of the undersigned Partners of the ABC Partnership, on this _________ day of _________ 199_________. [Signatures of general partners, with acknowledgements] ACKNOWLEDGEMENTS OF PARTNERS' SPOUSES The undersigned hereby represent and acknowledge that each is not one of the undersigned Partners who has entered into the foregoing Buy-Sell Agreement of Family General Partnership, but rather is a spouse of a Partner. The undersigned hereby acknowledge that he or she has carefully read the foregoing Agreement and has had an opportunity to seek the advice of independent legal counsel, after having been advised to do so. Furthermore, each of the undersigned accepts and agrees with all terms and conditions of said Agreement, and with those provisions that impose restrictions on the transfer or assignment of Partnership Interests, and express the method for determining the value of Partnership Interests. _________ _________ _________ SCHEDULE “A”. REQUIRED INSURANCE COVERAGE FOR EACH PARTNER Partner Percentage Interest Insurance Insurer and Policy Number Alice Green 50% $500,000 .................................................... Brian Green 25% $750,000 .................................................... Carol Green 25% $750,000 ....................................................