AccesDirect Financial Products

Buy-Sell Agreement

	Class________	Class________	Class________
(Name) __________________	____________	____________	____________
(Name) __________________	____________	____________	____________

AND WHEREAS

They desire to provide for their mutual protection if either dies or wishes to withdraw from the Corporation, for whatever reason.

The shareholders shall not transfer, assign, hypothecate, pledge, or otherwise alienate the shares that they hold or may hold in the Corporation, except as provided for in this Agreement.

DURING THE LIFETIME OF THE PARTIES
If one of the shareholders ("the Offeror") wishes to dispose of his or her shares in the Corporation, he or she shall first make an offer in writing ("the Offer") to this effect to the other shareholder, in accordance with the provisions of this Agreement.
The Offer shall be for all of the shares that the Offeror owns in the Corporation and shall include the following information:
1. the number and class of shares offered, as well as the price stipulated for each class;
2. a description of any particular terms of payment, including the breakdown of amounts payable at the time of sale and amounts payable at a later date;
3. an undertaking to buy all of the shares that the other shareholder owns in the Corporation at the same price and under the same terms, subject to Section 4;
4. an undertaking to close the transaction within ______ days from the service of the Offer ("the validity period").
If the price stipulated by the Offeror is less than 75% of the share value according to the most recent valuation performed by the shareholders according to Appendix A or, failing that, according to the most recent balance sheet of the Corporation and, if the shareholder receiving the Offer refuses to purchase the Offeror's shares, the Offeror shall not be required to purchase the shares of the other shareholder and the latter shall not be required to sell them.
If the shareholder receiving the Offer accepts it, the sale shall take place on the day agreed upon by the shareholders or, failing agreement, on the last day of the validity period.
If the shareholder receiving the Offer refuses it, he or she must, subject to Section 4, sell all of his or her shares in the Corporation to the Offeror at the price and on the terms stipulated in the Offer. The sale shall take place on the day agreed upon by the shareholders or, failing agreement, on the last day of the validity period.
Under no circumstances shall silence on the part of the shareholder to whom the Offer is made be construed as consent to any of the situations described in Sections 4, 5, and 6 above. If there is no sale under this Agreement and failing an agreement on the disposal of the shares, the shareholders agree to proceed with diligence in winding up the Corporation.
At the time set for closing, the vendor shall produce the following documents:
1. the certificates for the shares being sold, endorsed in blank for transfer;
2. a letter confirming his or her resignation from the Board of Directors and from the executive of the Corporation and, where applicable, a letter of resignation from his or her spouse and any person whom he or she may have appointed to the Board or to the executive;
3. at the purchaser's request, a letter confirming his or her resignation as an employee of the Corporation and, where applicable, a letter of resignation from his or her spouse and any member of his or her family who may be in the employ of the Corporation;
4. assignment to the purchaser of all debts owing by the Corporation to the vendor;
5. a release of any right of claim that he or she may have against the Corporation or the purchaser;
6. assignment of all insurance policies that he or she may hold on the life of the purchaser, as described in Appendix B;
7. a certified cheque payable to the purchaser, for an amount equal to the total cash surrender value of all insurance policies that the purchaser may hold on his or her life, as described in Appendix B;
8. all other documents necessary or desirable in order to carry out the true intent of this Agreement.
At the time set for closing, the purchaser shall produce the following documents, in exchange for the items set out in Section 8:
1. a certified cheque payable to the vendor, for the amount of ____% of the total selling price of the shares, if full payment is not required at the time set for closing, according to the terms set out in Section 3b);
2. if applicable, one or more promissory notes for the balance of the selling price of the shares, payable according to the terms set out in Section 3b);
3. a certified cheque payable to the vendor, for the full amount of any indebtedness owing by the Corporation to the vendor, as this indebtedness appears in the Corporation's financial statements audited by its chartered accountant;
4. a certified cheque payable to the vendor, for the full amount of the cash surrender value of all insurance policies that the vendor owns on the life of the purchaser, as described in Appendix B;
5. a release by the Corporation of all debts owing by the vendor to the Corporation;
6. a release of any right of claim that the Corporation or the purchaser may have against the vendor;
7. a release of all guarantees given by the vendor on behalf of the Corporation;
8. assignment of all insurance policies held by the purchaser on the life of the vendor, as described in Appendix B;
9. all other documents necessary or desirable in order to carry out the true intent of this agreement.
If, on the date set for delivery of the shares, the purchaser refuses or fails to make payment in full, the vendor shall be entitled to the following recourse, without prejudice to his or her rights to complete the transaction:
1. he or she may sell his or her shares to a third party;
  
  or
2. he or she may buy the purchaser's shares at a price equal to _____% of the selling price stipulated in the Offer.
No offer may be made under this Buy-Sell Agreement during the validity period of an existing offer.

AFTER THE DEATH OF A SHAREHOLDER
If one shareholder dies and the other shareholder survives him or her by more than 30 days, the surviving shareholder shall purchase from the estate of the deceased shareholder within _______ days of the death, all shares in the Corporation owned or controlled by the deceased at the time of his or her death.
Each shareholder recognizes that his or her heirs, legatees, and assigns shall be bound by the obligations arising from this Buy-Sell Agreement and shall have no rights other than those set out therein.
The sale shall take place on the date set by the executors of the deceased shareholder's estate. However, this date must be within 60 days of the shareholder's death.
The selling price of the shares shall correspond to the value that the shareholders established in Appendix A or, failing that, to the value established in the most recent balance sheet of the Corporation.
At the time set for sale of the shares, the executors of the deceased shareholder's estate shall produce the following items:
1. evidence of their authority as executors of the estate;
2. certificates for the shares being sold, endorsed for transfer in blank;
3. if applicable, a letter confirming that the spouse of the deceased shareholder, and any person that he or she may have appointed to the Board or the executive, have resigned from the Board of Directors and the executive of the Corporation;
4. if the purchaser so requests, a letter of resignation as an employee of the Corporation from the spouse of the deceased shareholder and from any family member in the employ of the Corporation;
5. assignment to the purchaser of all debts owing by the Corporation to the deceased shareholder or his or her estate;
6. a release of any right of claim that the deceased shareholder or his or her estate may have against the Corporation or the purchaser;
7. assignment to the purchaser of all life insurance policies on the life of the purchaser, as described in Appendix A;
8. all other documents necessary or desirable in order to carry out the true intent of this Agreement.
At the time set for sale of the shares, in exchange for the items set out in Section 16, the purchaser shall produce the following items:
1. a certified cheque payable to the estate of the deceased shareholder, for the full amount of the total selling price of the shares;
2. a certified cheque payable to the estate of the deceased shareholder, for the full amount of any indebtedness owing by the Corporation to the deceased shareholder or his or her estate, as this indebtedness appears in the Corporation's financial statements, audited by its chartered accountant;
3. a certified cheque payable to the estate of the deceased shareholder, for the full amount of the cash surrender value of all insurance policies on the life of the purchaser, as described in Appendix B;
4. a release by the Corporation of all debts that the deceased shareholder may have had against the Corporation;
5. a release by the purchaser of all debts that the deceased shareholder may have had against him or her;
6. a release of any right of claim that the Corporation or the purchaser may have had against the deceased shareholder or his or her estate;
7. a release of all guarantees given by the deceased shareholder on behalf of the Corporation;
8. all other documents necessary or desirable in order to carry out the true intent of this Agreement.
LIFE INSURANCE
In order to ensure that the surviving shareholder is able to pay the selling price of the deceased shareholder's shares, each shareholder agrees to take out and pay the premiums on an insurance policy on the life of the other shareholder. The sum insured shall be at least equal to the total value of his or her shares in the Corporation. This amount shall correspond to the value determined by the shareholders under Appendix A or, failing that, the value on the most recent balance sheet of the Corporation.
The shareholders acknowledge their mutual right to obtain any information with respect to the life insurance policies described in Appendix B from the insurers described therein.
In the event that the policy owner fails to pay his or her insurance premiums, the other shareholder or the Corporation shall have the right to pay these premiums on behalf of the policy owner, and to claim reimbursement of the amount so paid.
The shareholders agree, for themselves and for their estates, that upon the death of one of the shareholders, the other shall expedite payment of the sums insured under the insurance policies described in this Agreement.
The shareholders shall not assign, pledge, hypothecate, or otherwise prejudicially affect the integrity of the life insurance policies described in this Agreement.
The shareholders declare that they have read all of the sections of this Agreement; that they have examined, understood, and discussed them; and that these sections express their wishes. They also declare that they have had an opportunity to seek legal advice in order to obtain adequate representation.

PARTICIPATION OF THE CORPORATION

The Corporation, represented herein by (Name)_______________________________________ , duly authorized for this purpose, is a party to this Agreement and agrees to take whatever steps are necessary to carry out its true intent.

Signed in three copies at (City)__________________, this______ day of ____________ 19___.

__________________________________ __________________________________ (Shareholder) (Signature)

__________________________________ __________________________________ (Shareholder) (Signature)

__________________________________ __________________________________ (Representative of the Corporation) (Signature)

APPENDIX A: SHARE VALUATION

As of this day, and for the next 12 months or until a new valuation, the value of the common shares of the Corporation (Corporation's name) _______________________________________ is set at $_____________ per share.

Signed at (City)________________, this ______ day of _____________ 19___.

__________________________________ __________________________________ (Shareholder) (Signature)

__________________________________ __________________________________ (Shareholder) (Signature)

APPENDIX B: INSURANCE POLICIES

Life insurance policy on the life of:_________________________________________________

Policy owner:__________________________________________________________________

Insurer:_______________________________________________________________________

Policy number:___________________________ Sum insured:__________________________

Life insurance policy on the life of:_________________________________________________

Policy owner:__________________________________________________________________

Insurer:_______________________________________________________________________

Policy number:___________________________ Sum insured:__________________________

Life insurance policy on the life of:_________________________________________________

Policy owner:__________________________________________________________________

Insurer:_______________________________________________________________________

Policy number:___________________________ Sum insured:__________________________

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