A buy-sell agreement is a legally binding contract between co-owners that governs the purchase or sale of their business if one co-owner dies or leaves the business, whether by force or by choice. The agreement stipulates how and to whom the business can be sold. A funded cross-purchase buy-sell agreement leverages life insurance to help fund the purchase of the remaining share of a business in the event that a co-owner dies. The life insurance payout is used to help the existing owner buy out the deceased owner’s share (typically from the deceased owner’s spouse, other family member, or creditors).