Legal PC Document

LEGAL PC DOCUMENT

This Shareholders Agreement (the "Agreement") is made and entered into as of by and between Company Name: , a professional corporation duly organized under the laws of with principal office at (hereinafter "Company"), and Shareholder: of (hereinafter "Shareholder").

RECITALS

WHEREAS, Company is a professional corporation engaged in the practice of and holds capital stock in multiple classes as more particularly described herein;

WHEREAS, Shareholder is the owner of shares of Company common stock, representing percent of the issued and outstanding capital stock of Company;

WHEREAS, the parties desire to set forth their respective rights and obligations with respect to ownership, transfer, governance, and valuation of shares of Company.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below:

"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person.

"Fair Market Value" means the value of the shares determined in accordance with Section 4.3 of this Agreement.

2. ISSUANCE AND RECORD OF SHARES

2.1 Issuance. Company represents that the issued and outstanding shares of its capital stock are accurately reflected on its shareholder ledger as of the Effective Date. Any issuance of new shares shall require the affirmative vote or written consent of shareholders holding not less than of the outstanding voting power, unless otherwise required by law.

2.2 Stock Certificates; Legends. All certificates evidencing shares subject to restrictions under this Agreement shall bear appropriate legends referencing the transfer restrictions and rights of first refusal contained herein.

3. RESTRICTIONS ON TRANSFER

3.1 General Restriction. Except as otherwise provided in this Agreement, no Shareholder shall Transfer any shares of Company without the prior written consent of the other party or compliance with the procedures set forth in this Section 3. "Transfer" includes sale, assignment, pledge, encumbrance, or other disposition.

3.2 Right of First Refusal. Prior to any Transfer (other than to an Affiliate or by operation of Law), the transferring shareholder shall provide written notice to Company and the non-transferring Shareholder specifying the proposed transferee, the number of shares, and the price and terms. The Company and the non-transferring Shareholder shall have days to elect to purchase such shares on the same terms.

3.3 Permitted Transfers. Transfers to a spouse, estate planning vehicle, or controlled affiliate shall be permitted provided the transferee executes and delivers to Company and the non-transferring Shareholder a written agreement to be bound by the terms of this Agreement.

4. BUY-SELL AND VALUATION

4.1 Triggering Events. Upon the occurrence of a Triggering Event (including death, permanent disability, insolvency, or a material breach of this Agreement), the non-electing party shall have the option to purchase, or require the selling party to sell, the shares owned by the affected party in accordance with the procedures of this Section.

4.2 Purchase Price. The purchase price for shares subject to a buy-sell shall be Fair Market Value as of the date of the Triggering Event. Fair Market Value shall be determined by:

(a) agreement of the parties; or, if the parties cannot agree within days, an independent appraiser selected jointly by the parties. If the parties are unable to agree on an appraiser, each party shall select an appraiser and the two appraisers shall select a third appraiser whose determination shall be final and binding. The cost of appraisal shall be borne as determined by the appraisers, provided that such cost shall not be borne in a manner that is inequitable to any party.

5. MANAGEMENT AND BOARD COMPOSITION

5.1 Board Size. The board of directors shall consist of directors. Appointment rights shall be allocated as follows: Company-appointed directors ; Shareholder-appointed directors .

5.2 Major Decisions. Notwithstanding any other provision, the following actions shall require the prior written approval of shareholders holding at least of the voting power: (a) amendment of articles or bylaws that materially alters professional practice restrictions; (b) merger, consolidation or sale of substantially all assets; (c) incurrence of indebtedness beyond $.

6. REPRESENTATIONS AND WARRANTIES

6.1 Representations of Company. Company represents and warrants that (a) it is duly organized and in good standing under the laws of the jurisdiction referenced above; (b) it has all requisite authority to enter into and perform this Agreement; and (c) the execution and performance of this Agreement will not violate any material contract, agreement, or law applicable to Company.

6.2 Representations of Shareholder. Shareholder represents and warrants that (a) Shareholder has good and marketable title to the shares owned free and clear of liens and encumbrances (except as disclosed in writing to Company); (b) Shareholder has full power and authority to enter into and perform this Agreement; and (c) the execution and delivery of this Agreement constitutes a valid and binding obligation enforceable in accordance with its terms.

7. CONFIDENTIALITY

Each party acknowledges that, by reason of its relationship with Company, it will obtain Confidential Information concerning the business, affairs, clients, and financial condition of Company. Each party shall hold all Confidential Information in strict confidence, shall not disclose such information to any third party except as required by law, and shall use such Confidential Information solely for purposes consistent with the management and operation of Company.

8. INDEMNIFICATION

8.1 General Indemnity. Each party agrees to indemnify, defend and hold harmless the other party and Company from and against any and all losses, liabilities, damages, costs and expenses (including reasonable attorneys' fees) arising from any breach of the representations, warranties, covenants or agreements made by the indemnifying party in this Agreement.

8.2 Procedure. The indemnified party shall provide prompt written notice of any claim for which it seeks indemnification and shall permit the indemnifying party to assume the defense and settlement of such claim; provided that the indemnifying party shall not settle any claim without the indemnified party's prior written consent if such settlement would impose any obligation or liability on the indemnified party.

9. NOTICES

All notices, demands, and communications required or permitted under this Agreement shall be in writing and shall be deemed given when delivered personally, by nationally recognized overnight courier, or three (3) business days after deposit in the United States mail, postage prepaid, certified or registered mail, return receipt requested, to the addresses set forth below (or to such other address as either party designates by notice):

10. DISPUTE RESOLUTION

The parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement by negotiation between senior representatives. If the dispute is not resolved within thirty (30) days, the parties shall submit the dispute to binding arbitration before a single arbitrator in accordance with the rules agreed between the parties. The seat of the arbitration shall be in the county of in the State of . The decision of the arbitrator shall be final and binding and may be entered and enforced in any court of competent jurisdiction.

11. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to principles of conflicts of law that would require the application of the law of another jurisdiction.

12. ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the parties relating to such subject matter.

13. SEVERABILITY

If any provision of this Agreement is held to be invalid, illegal or unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect and shall be interpreted so as to give effect to the intent of the parties to the maximum extent permitted by law.

14. AMENDMENTS AND WAIVER

No amendment, modification or waiver of any provision of this Agreement shall be effective unless it is in writing and signed by both parties. No failure or delay by any party in exercising any right shall operate as a waiver of such right.

15. COUNTERPARTS; EXECUTION

This Agreement may be executed in counterparts, each of which when executed and delivered shall be an original, but all of which together shall constitute one and the same instrument. Signatures delivered by facsimile or electronic image shall be deemed original signatures for all purposes.

16. MISCELLANEOUS

16.1 Survival. The representations, warranties, covenants and agreements contained herein shall survive the execution and delivery of this Agreement to the extent such provisions are intended to survive by their terms.

16.2 Assignment. Except as expressly provided herein, no party may assign any of its rights or delegate any of its duties under this Agreement without the prior written consent of the other party.

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