cross-purchase buy and sell agreement


cross-purchase buy and sell agreement
Under this type of arrangement, the surviving owners of a business agree to buy out the withdrawing owner. Assume, for example, R and S are equal shareholders in T Corporation. Under a cross-purchase buy and sell agreement, R and S would contract to purchase the other's interest should that person decide to withdraw from the business. Partnership insurance plan wherein each partner individually purchases and maintains enough insurance on the life or lives of other partners to fund the purchase of the others' equity.
See also buy and sell agreement

Black's law dictionary. . 1990.

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