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SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (this "Agreement") is made and entered into as
of the ______ day of _____, 20____, by and between _________, a ______________ corporation
("________"), and ___________ STATE MEDICAL ASSOCIATION, a ___________ not-for-
profit corporation ("___________").
In consideration of the premises and the mutual terms and provisions set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE ONE
ACQUISITION AND EXCHANGE OF SHARES
Section 1.1. Acquisition of the ___________ Shares. Subject to the terms and conditions
hereof, on the Closing Dale (as hereinafter defined), ___________ agrees to assign, transfer,
deliver and convey unto ___________, and ___________ agrees to acquire from ___________ for
retirement, all of ___________'s right, title and interest in and to the _______ shares of
___________'s authorized and outstanding Class B Common Stock now owned by ___________
(the "___________ Shares").
Section 1.2. Exchange of Shares: Nomination and Endorsement Agreement
(a) In exchange for the transfer of the ___________ Shares, on the Closing Dale,
___________ agrees to issue to ___________, subject to the terms and conditions hereof, _______
shares of ___________s Class A Common Stock and ________ shares of its Class C Common
Stock When exchanged, the shares issued to ___________ hereunder shall be duly authorized and
validly issued, filly paid and non-assessable, and not issued in violation of any preemptive rights.
(b) The shares of ___________'s Class A Common Stock issued to ___________ in
connection herewith (the "Class A Shares") shall, once issued, have the same dividend rights,
conversion rights, voting powers, preferences, priorities and other special rights and powers as all
other issued and outstanding shares of ___________'s Class A Common Stock
(c) The shares of ___________'s Class C Common Stock issued to ___________ in
connection herewith (the "Class C Shares") shall be non-voting. ___________ shall have an option
to sell (i.e. "put") the Class C Shares to ___________, and ___________ shall be required to
purchase such shares, at any time from and after the Closing Date, in the maximum quantities set
forth on Schedule attached hereto and incorporated herein by this reference and for the per share
cash consideration hereinafter described. On the second and third anniversaries of the Closing Date,
___________ shall have an option to purchase (i.e. "call") those Class C Shares not yet put to
___________ in the maximum quantities set forth on Schedule A and for the per share cash
consideration hereinafter described. The put or call cash consideration payable for the Class C
Shares pursuant to this Section 1.2(c) shall be $_____ per share (for an aggregate cash
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consideration not to exceed $600,000) plus an interest factor which shall accrue from the Closing
Date through the date of sale or purchase pursuant to a put or call provided for in this Section
1.2(c). The interest shall be a fixed annual rate equal to the prime rate announced by The Boatmen's
National Bank of St. Louis on the Closing Date plus one percent (1%). Any party exercising its
rights to a put or call hereunder shall give written notice thereof to the other party in accordance
with the provisions of Section 7.1 hereof. The notice shall specify the number of shares covered,
the purchase price of such shares (including the interest factor to the date of payment and delivery)
as well as the date of payment and delivery which shall be a date not less than seven (7) nor more
than thirty (30) days following the date such notice shall be deemed to have been given or made as
in Section 7.1 provided. On the delivery date, ___________ shall surrender to ___________, or its
duly authorized designee, possession of all certificates representing the Class C shares covered by
the put or call notice, endorsed in blank or accompanied by duly executed stock powers, and such
Class C shares shall be free and clear of any claims, liens, charges, encumbrances or other
restrictions or commitments of any nature whatsoever(d) In the event of any voluntary or involuntary liquidation, dissolution or winding up of
___________, the holders of the Class C Shares shall be entitled to receive out of the assets of
___________ available for distribution to the stockholders, before any distribution of assets shall
be made to the holders of other shares of ___________ capital stock, an amount equal to the value
of any unexercised put or call rights provided for in Section 1.2(c) above. Except for this preference
payment, the holders of the Class C Shares shall have no other rights to share in the assets of
___________ upon the liquidation, dissolution or winding up of ___________.
(e) Concurrently with the exchange of the ___________ Shares far the Class C Shares, (i)
___________ and ___________ shall enter into a five (5) year nomination agreement substantially
in the form of Exhibit A attached hereto (the "Nomination Agreement"), and (ii) ___________ and
the Select Stockholders (as hereinafter defined) shall enter into a five (5) year voting agreement
substantially in the form of Exhibit B attached hereto (the "Voting Agreement"). Section 1.3. Exchange Procedures: Surrender of Certificates.
On the Closing Date, ___________ shall surrender to ___________, or its duly authorized
designee, possession of all certificates representing the ___________ Shares, endorsed in blank or
accompanied by duly executed stock powers effectively transferring the ___________ Shares to
___________, together with a duly executed letter indicating ___________'s intent to have the
surrendered shares canceled (substantially in the form of Exhibit C attached hereto). Once the
certificates representing the ___________ Shares have been surrendered to ___________, those
certificates shall be marked "canceled" and, together with all other authorized but unissued shares
of ___________ Class B Common Stock, shall be deemed retired. Thereupon. ___________ shall
issue, in the name of ___________, certificates representing the Class A Shares and the Class C
Shares. Section 1.4. The Closing. The closing of the transactions contemplated hereunder (the
"Closing") shall take place at ___________s principal executive office, _____________________
_________, ________, ___________ _____________, at _____ p.m. ______ time on __________;
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_______,20____, or at such other date, time or place upon which the parties may mutually agree
(the "Closing Date").Section 1.5. Actions At Closing.
At the Closing, the following deliveries shall be made, each to be deemed concurrent with
all others:
(a) ___________ shall deliver the following documents to ___________: (1) A certificate signed by an authorized officer of ___________ stating
that each of the representations and warranties contained in Article Two is true and
correct in all material respects at the time of Closing with the same force and effect
as if such representations and warranties had been made at Closing;
(2) A copy of the resolutions duly adopted by the Board of Directors and
stockholders of ___________ authorizing the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, duly
certified, as of the Closing Date, by the secretary of ___________;
(3) Certificates representing the Class A Shares and the Class C Shares
registered in the name of ___________; and
(4) The Nomination Agreement duly executed by ___________ and the
Voting Agreement duly executed by ___________ ____________ M.D.,
___________ and ______________., M.D. (collectively referred to as the "Select
Stockholders"); and
(5) The opinion of ___________'s counsel substantially in the form of
Exhibit D attached hereto.
(b) ___________ shall deliver the following documents to ___________: (1) A certificate signed by an authorized officer of ___________ stating
that each of the representations and warranties contained in Article Three is true and
correct in all material respects at the time of Closing with the same force and effect
as if such representations and warranties had been made at Closing;
(2) A copy of the resolutions duly adopted by the Executive Committee of
___________ authorizing the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, duly certified, as of the
Closing Date, by the secretary of ___________;
(3) The certificates representing the ___________ Shares, endorsed in
blank or accompanied by duly executed stock powers effectively transferring the
___________ Shares to ___________ for retirement, together with a duly executed
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letter indicating ___________'s intent to have the surrendered shares canceled
(substantially in the form of Exhibit C attached hereto); and (4) The Nomination Agreement and the Voting Agreement, each duly
executed by ___________.
ARTICLE TWO
REPRESENTATIONS AND WARRANTIES OF ___________
Section 2.1. Corporate Organization and Capital Stock.
(a) ___________ is a corporation duly organized, validly existing and in good standing
under the law of the State ___________ with full power and authority to carry on its business as
now being conducted.
(b) The authorized capital stock of ___________, consists of (i) 500,000 shares of
Class A Common Stock, of which, as of the date hereof, 219,881 shares are issued and outstanding,
and (ii) 125,000 shares of Class B Common Stock, of which, as of the date hereof, 24,185 shares
are issued and outstanding. All of the issued and outstanding shares of ___________'s capital stock
are duly and validly issued and outstanding and are fully paid and non-assessable. None of the
outstanding shares of ___________'s capital stock has been issued in violation of any preemptive
rights of the current or past stockholders of ___________.
(c) The Class A Shares and the Class C Shares that are to be issued to
___________ hereunder, when so issued in accordance with the terms of this Agreement, will be
validly issued and outstanding, fully paid and non-assessable.
Section 2.2. Authorization. On the Closing Date, (i) there will be no provision in
___________'s Restated Articles of incorporation or in its By-Laws, as amended, which prohibits
or limits ___________'s ability to consummate the transactions contemplated hereby, (ii)
___________ shall have the right, power and authority to enter into this Agreement and to
consummate all of the transactions and fulfill all of the obligations contemplated hereby and (iii)
the execution and delivery of this Agreement and the due consummation by ___________ of the
transactions contemplated hereby will have been duly authorized by all necessary corporate action
of the Board of Directors and stockholders of ___________. This Agreement constitutes a legal,
valid and binding agreement of ___________ enforceable against ___________ in accordance with
its terms.
Section 2.3. No Conflict or Violation. Subject to the fulfillment of all of the conditions set
forth in Article Five hereof, neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby in accordance herewith, nor compliance by
___________ with any of the provisions hereof will result in, as of the Closing Date: (i) a violation
of or a conflict with any provision of ___________'s Restated Articles of Incorporation or By-
Laws, as amended, (ii) a breach of or default under any term, condition or provision of any
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obligation, agreement or undertaking, whether oral or written to which ___________ is a party, or
an event which, with the giving of notice, lapse of time, or both, would result in any such breach,
(iii) a violation of any applicable law, rule, regulation, order, decree or other requirement having
the force of law, or order, judgment, writ, injunction, decree or award, or an event which, with the
giving of notice, lapse of time, or both, would result in any such violation, or (iv) any person
having the right to enjoin, rescind or otherwise prevent or impede the transactions contemplated
hereby or to obtain damages from ___________ or to obtain any other judicial or administrative
relief as a result of any transaction carried out in accordance with the provisions of this Agreement.Section 2.4. Litigation and Proceedings. There is no action, suit, proceeding or investigation
pending or, to the knowledge of ___________, threatened which challenges the validity of this
Agreement or the transactions contemplated hereby, or otherwise seeks to prevent, directly or
indirectly the consummation of such transactions.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES OF ___________
Section 3.1. Corporate Organization. ___________ is a not-for-profit corporation duly
organized, validly existing and in good standing under the laws of the State ___________ with full
power and authority to carry on its business as it is now being conducted.
Section 3.2. Authorization. ___________ has full right, power and authority to enter into
this Agreement and to consummate or cause to be consummated all of the transactions and to fulfill
all of the obligations contemplated hereby The execution and delivery of this Agreement and the
due consummation by ___________ of the transactions contemplated hereby have been duly
authorized by all necessary corporate action of the Executive Committee of ___________. This
Agreement constitutes a legal, valid and binding agreement of ___________ enforceable against
___________ in accordance with its terms.
Section 3.3. No Conflict or Violation. Neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated hereby nor compliance by ___________
with any of the provisions hereof will result in: (i) a violation of or a conflict with any provision of
the Articles of Incorporation or By-Laws of ___________, (ii) a breach of or default under any
term, condition or provision of any obligation, agreement or undertaking, whether oral or written to
which ___________ is a party, or an event which, with the giving of notice, lapse of time, or both,
would result in any such breach, (iii) a violation of any applicable law, rule, regulation, order,
decree or other requirement having the force of law, or order, judgment, writ, injunction, decree or
award, or an event which, with the giving of notice, lapse of time, or both, would result in any such
violation, or (iv) any person having the right to enjoin, rescind or otherwise prevent or impede the
transactions contemplated hereby or to obtain damages from ___________ or to obtain any other
judicial or administrative relief as a result of any transaction carried out in accordance with the
provisions of this Agreement.
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Section 3.4. Litigation and Proceedings. There is no action, suit, proceeding or investigation
pending or, to the knowledge of ___________, threatened which challenges the validity of this
Agreement or the transactions contemplated hereby, or otherwise seeks to prevent, directly or
indirectly, the consummation of such transactions.
Section 3.5. Title to ___________ Shares. ___________ possesses good and marketable
title to the ___________ Shares and has full right to transfer the same as contemplated herein. The
___________ Shares are, and will be as of the Closing Date, free and clear of any claims, lien,
charges, encumbrances or other restrictions or commitments of any nature whatsoever.
Section 3.6 Sale of Substantially All Assets. The ___________ Shares do not constitute all
or substantially all of the assets of ___________.
ARTICLE FOUR
AGREEMENTS OF PARTIES
Section 4.1. Agreements of ___________.
(a) ___________ shall, in the event it has knowledge of the occurrence, or impending or
threatened occurrence, of any event or condition which would cause or constitute a breach (or
would have caused or constituted a breach had such event occurred or been known prior to the date
hereof) of any of its representations, warranties or agreements contained or referred to herein, give
prompt written notice thereof to ___________ and use reasonable efforts to prevent or promptly
remedy the same.
(b) ___________ shall submit the following matters for the approval of the ___________
stockholders at the next annual meeting of such stockholders, or at any adjournment or
adjournments thereof: (I) This Agreement, (ii) The Nomination Agreement; (iii) An amendment to
___________'s Restated Articles of incorporation authorizing the issuance of a new class of non-
voting common stock to be designated "Class C Common Stock" with the rights and preferences set
forth in Section 1.2 above, and (r,) Such other amendments to ___________'s Restated Articles of
Incorporation and By-Laws, as amended, as may be required to effect this Agreement and the
transactions contemplated hereby The Board of Directors of ___________ shall (subject to
compliance with its fiduciary duties as advised by counsel) recommend to its stockholders the
approval of such matters and shall use reasonable efforts to obtain such stockholder approval
(c) ___________ shall use reasonable efforts to perform and fulfill all conditions and
obligations on its part to be performed or fulfilled under this Agreement and to effect the exchange
contemplated hereby in accordance with the terms and conditions hereof. Section 4.2. Agreements of ___________.
(a) ___________ shall, in the event it has knowledge of the occurrence, or impending or
threatened occurrence, of any event or condition which would cause or constitute a breach (or
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would have caused or constituted a breach had such event occurred or been known prior to the date
hereof) of any of its representations, warranties or agreements contained or referred to herein, give
prompt written notice thereof to ___________ and use reasonable efforts to prevent or promptly
remedy the same.(b) At the next annual meeting of ___________ stockholders, or at any adjournment or
adjournments thereof, ___________ shall, as record holder of all 24,185 shares of the issued and
outstanding ___________ Class B Common Stock, vote all such shares of ___________ Class B
Common Stock in favor of this Agreement, the Nomination Agreement, an amendment to
___________'s Restated Articles of Incorporation authorizing the issuance of a new class of non-
voting common stock to be designated `Class C Common Stock" with the rights and preferences set
forth in Section 1.2 above, and such other amendments to ___________'s Restated Articles of
Incorporation and By-laws, as amended, as may be required to effect this Agreement and the
transactions contemplated hereby
(c) ___________ shall use reasonable efforts to perform and fulfill all conditions and
obligations on its part to be performed or fulfilled under this Agreement and to effect the exchange
contemplated hereby in accordance with the terms and conditions hereof.
ARTICLE FIVE
CONDITIONS PRECEDENT TO THE EXCHANGE
Section 5.1. Conditions to the Obligations of ___________. ___________'s obligations to
effect the exchange shall be subject to the satisfaction (or waiver by ___________) of the following
conditions prior to or on the Closing Date:
(a) The representations and warranties made by ___________ in this Agreement shall be
true in all material respects on and as of the Closing Date with the same effect as though such
representations and warranties had been made or given on and as of the Closing Date;
(b) ___________ shall have performed and complied in all material respects with all of its
obligations and agreements required to be performed prior to the Closing Date under this
Agreement;
(c) No temporary restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the exchange contemplated herein shall be in effect, nor shall any proceeding by
any authority or other person seeking any of the foregoing be pending. There shall not be any
action taken, or any statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the exchange which makes the consummation of the exchange illegal; and
(d) All necessary approvals, consents and authorizations required by law for
consummation of the exchange including, without limitation, (i) approval by the ___________
stockholders of this Agreement, all other agreements required to be submitted to such stockholders
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in connection herewith, and those amendments to ___________'s Restated Articles of Incorporation
as are required to effect the transactions herein contemplated, and (II) approval by the
___________ Executive Committee of this Agreement on or before _______,20____, shall have
been obtained.(e) ___________ shall have received all executed documents required to be received from
___________ on or prior to the Closing Date; all in form and substance reasonably satisfactory to
___________, including, without limitation, the Nomination Agreement duly executed by
___________ and the Voting Agreement duly executed by ___________ and the Select
Stockholders.
Section 5.2. Conditions to the Obligations of ___________. ___________'s obligations to
effect the exchange shall be subject to the satisfaction (or waiver by ___________) of the following
conditions prior to or on _______, 20____:
(a) The representatives and warranties made by ___________ in this Agreement shall be
true in all material respects on and as of the Closing Date with the same effect as though such
representations and warranties had been made or given on and as of the Closing Date;
(b) ___________ shall have performed and complied in all material respects with all of its
obligations and agreements required to be performed prior to the Closing Date under this
Agreement;
(c) No temporary restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the exchange contemplated herein shall be in effect, nor shall any proceeding by
any authority or other person seeking any of the foregoing be pending. There shall not be any
action taken, or any statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the exchange which makes the consummation of the exchange illegal; and
(d) All necessary approvals, consents and authorizations required by law for
consummation of the exchange including, without limitation, approval by the ___________
Executive Committee of this Agreement on or before _______, 20____, shall have been obtained.
(e) ___________ shall have received the opinion of ___________'s counsel substantially
in the form of Exhibit D attached hereto.
(f) ___________ shall have received all executed documents required to be received from
___________ on or prior to the Closing Date; all in form and substance reasonably satisfactory to ___________.
ARTICLE SIX
TERMINATION OR ABANDONMENT
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Section 6.1. Mutual Agreement. This Agreement may be terminated by the mutual written
consent of the parties at any time prior to the Closing Date, regardless of whether stockholder
approval of this Agreement and the transactions contemplated hereby shall have been previously
obtained.
Section 6.2. Breach of Agreements. In the event there is a material breach in any of the
representations and warranties or agreements of ___________ or ___________, which breach is
not cured within thirty (30) days after notice to cure such breach is given by the non-breaching
party, then the non-breaching party, regardless of whether stockholder approval of this Agreement
and the transactions contemplated hereby shall have been previous obtained, may terminate and
cancel this Agreement by providing written notice of such action to the other party hereto.
Section 6.3. Failure of Conditions. In the event any of the conditions to the obligations of
either party are not satisfied or waived as specified in Article Five hereof, and if any applicable
cure period provided in Section 6.2 hereof has lapsed, then the party for whose benefit such
conditions were imposed may, regardless of whether stockholder approval of this Agreement and
the transactions contemplated hereby shall have been previously obtained, terminate and cancel this
Agreement by delivery of written notice of such action to the other party on such date.
Section 6.4. Authorization of ___________ Class C Common Stock. In the event that the
___________ stockholders are unable or fail to take such action as may be required to authorize the
transactions herein provided, then ___________ may terminate this Agreement by giving written
notice to ___________. The Board of Directors of ___________, by its approval of the execution
and delivery hereof, agrees to use all reasonable efforts to cause the stockholders of ___________
to vote in favor of the transactions herein contemplated.
ARTICLE SEVEN
MISCELLANEOUS PROVISIONS
Section 7.1. Notices. Any notice or other communication shall be in writing and shall be
deemed to have been given or made on the date of delivery in the case of hand delivery, or three (3)
business days after deposit in the United States Registered Mail, postage prepaid, or upon receipt if
transmitted by facsimile telecopy or any other means, addressed (in any case) as follows:
(a) if to ___________:
___________ Holding Co. _____________________________________________________, _________
Attention: _____________
with a copy to:_______________________
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_______________________ _______________________
Attention: _______________
and
(b) if to ___________:
___________ State Medical Association __________________________________________________________________
Attention: ______________
with copies to:_______________________ ______________________________________________
Attention: _______________
or to such other address as any party may from time to time designate by notice to the others. Section 7.2. Liabilities. In the event that this Agreement is terminated pursuant to the
provisions of Section 6.2 or Section 6.3 hereof on account of a breach of any of the representations
and warranties set forth herein or any breach of any of the agreements set forth herein or any failure
of conditions precedent to the exchange herein contained, then the non-breaching party or the party
for whose benefit such conditions were imposed shall be entitled to recover appropriate damages
from the breaching party; provided, however, that notwithstanding the foregoing. in the event this
Agreement is terminated by reason of a failure of a condition precedent set forth in Sections 5.1(c)
or (d), or Sections 5.2(c) or (d), no party hereto shall have any liability to any other party for costs,
expenses, damages or otherwise.
Section 7.3. Entire Agreement. This Agreement constitutes the entire agreement between
the parties and supersedes and cancels any and all prior discussions, negotiations, undertakings and
agreements between the parties relating to the subject matter hereof.
Section 7.5. Headings and Captions. The captions of Articles and Sections hereof are for
convenience only and shall not control or affect the meaning or construction of any of the
provisions of this Agreement.
Section 7.6. Waiver. Amendment or Modification. The conditions of this Agreement which
may be waived may only be waived by notice to the other party waiving such condition. The
failure of any party at any time or times to require performance of any provision hereof shall in no
manner affect the right at a later time to enforce the same. This Agreement may not be amended or
modified except by a written document duly executed by the parties hereto.
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Section 7.7. Rules of Construction. Unless the context otherwise requires: (a) a term has the
meaning assigned to it; (b) an accounting term not otherwise defined has the meaning assigned to it
in accordance with generally accepted accounting principles; Cc) "or" is not exclusive; and (d)
words in the singular may include the plural and in the plural include the singular
Section 7.8. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which shall be deemed one and the same
instrument.
Section 7.9. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, administrators, successors and assigns,
including any successor by merger, reorganization or acquisition of substantially all the assets of a
party hereto. There shall be no third part'. beneficiaries hereof.
Section 7.10. Governing Law; Assignment. This Agreement shall be governed by the law of
the State of ___________. This Agreement may not be assigned by either of the parties hereto.
Section 7.11. Severability. Ant' provision of this Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction is, as to such jurisdiction, ineffective to the
extent of any such prohibition, unenforceability or nonauthorization without invalidating the
remaining provisions hereof, or affecting the validity enforceability or legality of such provision in
any other jurisdiction, unless the ineffectiveness of such provision would result in such a material
change as to cause completion of the transactions contemplated hereby to be unreasonable.
IN WITNESS WHEREOF, the undersigned have set their hand on the date first above
written.
___________ HOLDING CO.
By: _____________________________
______________________ and
Chief Executive Officer
___________ STATE MEDICAL ASSOCIATION
By:______________________________
_________________________________, President
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Schedule A
Closing through day prior to 1st 4,031 0
anniversary of closing
1st anniversary of Closing through 4,031 (up to 8,062 if no prior 0
day prior to 2nd anniversary of puts)
Closing
2nd anniversary of Closing through 8,062 (up to 16,124 if no prior 24,185 (if
no prior
day prior to 3rd anniversary of puts)
puts)
Closing
3rd anniversary of Closing and 8,061 (up to 24,185 if no prior 24,185
(if no prior thereafter puts or call)
Call or puts)
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Exhibit ANOMINATION AGREEMENT
THIS NOMINATION AGREEMENT (this "Agreement") is made and entered into as of the
____ day of _______, 20____, by and between ___________ HOLDING CO, a ___________
corporation ("___________"), and ___________ STATE MEDICAL ASSOCIATION, a
___________ not-for-profit corporation ("___________").
RECITALS
A. ___________ and ___________ entered into that certain Share Exchange Agreement
dated _______, 20___ (the "Share Exchange Agreement"), wherein ___________ has agreed to
transfer to ___________ the 24,185 shares of ___________'s Class B Common Stock owned by
___________ and ___________ has agreed to issue to ___________ 24,185 shares of
___________'s Class A Common Stock and 24,185 shares of its Class C Common Stock
B. In connection with the Share Exchange Agreement, ___________ desires to assist
___________ in directly participating in the management of ___________ through the nomination
of at least one (1) ___________ representative at each annual election of Directors of ___________.
C. The Board of Directors of ___________ has determined that it is in the best interests of
___________ to include on the Board an otherwise qualified representative of ___________, all on
the terms and conditions set forth in this Agreement.
In consideration of the prentices and the mutual terms and provisions set forth in this
Agreement, the parties hereto agree as follows:
1. Nomination Covenants. During the term of this Agreement, the ___________ Council
shall submit annually in writing, on or before December 1 of each year, the name of a candidate
(the "___________ Candidate") to the ___________ Nominating Committee for election to the
___________ Board of Directors. The ___________ Candidate must be, or must have been, an
active officer or member of the ___________ Council or other person reasonably acceptable to
___________. Subject to the exercise in good faith of its responsibilities to ___________ and its
shareholders, giving due consideration to ___________'s relationship with ___________ and the
intent of this Agreement, the ___________ Nominating Committee shall include the name of the
___________ Candidate so submitted as one of its nominees for election to the ___________
Board of Directors that year, and shall, in each war, nominate only that number of candidates for
election to the ___________ Board of Directors as shall equal the total number of Directors to be
elected for such year. The ___________ Nominating Committee shall place no name in opposition
to the ___________ Candidate.
2. Proxy Materials. The name of the ___________ Candidate shall be included as a
management nominee in the Proxy Statement circulated in advance of the annual meeting of the
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___________ shareholders (the "Annual Meeting"). During the Term of this Agreement, all proxies
relating to the election of ___________ Directors that are distributed to ___________ shareholders
in connection with each Annual Meeting shall contain a statement notifying the ___________
shareholders that if a proxy is returned without express directions from the shareholder to the
contrary ___________ management will vote the proxy cumulatively "For" all named nominees in
such manner as ___________ management shall determine. ___________ management shall vote
such proxies cumulatively in such manner as in the opinion of ___________ management will
assure the election of the ___________ Candidate.3. Composition of the ___________ Board. During the term of this Agreement, each
member of the ___________ Board of Directors shall serve a term of three (3) years. At least five
(5) but no more than six (6). Directors shall be elected to the ___________ Board of Directors at
each Annual Meeting, and the size of the ___________ Board of Directors shall not be permitted to
exceed eighteen (18) Directors.
4. Issuance of Additional Shares. ___________ may issue additional shares, warrants,
rights or options during the term of this Agreement, provided that the effect of such issuance,
taking into account the Voting Agreement of even date herewith (the "Voting Agreement") among
___________, ___________ and certain shareholders of ___________, does not dilute
___________'s right to elect one (1) Director to the ___________ Board of Directors each term.
___________ shall not issue additional shares, warrants, rights or options which dilute the right of
___________ (taking into account the Voting Agreement) to elect one (1) Director to the
___________ Board of Directors each term without the prior written consent of the ___________
Executive Committee, which consent shall be timely and shall not be unreasonably withheld, it
being the intent and agreement of the parties that ___________s right to elect one (1) Director for
each term, as provided herein, shall not be diluted.
5. Limitation of ___________ Ownership. During the term of this Agreement, including
any extensions or renewals hereof, ___________ shall not, without the consent of a majority of the
___________ Board of Directors, directly or indirectly, acquire additional shares of the Class A
Common Stock of ___________ so as to increase its percentage ownership of the outstanding Class
A Common Stock of ___________ to more than fifteen percent (15%). In the event that
___________'s percentage ownership of the ___________ Class A Common Stock should be
increased on account of any redemption of outstanding stock by ___________, a reorganization of
the capital structure of ___________ or any other action of ___________ or its shareholders (other
than ___________), ___________ shall not be deemed in default of this Paragraph 5.
6. Term. The term of this Agreement shall begin on the closing of the transactions
contemplated in the Share Exchange Agreement and shall expire sixty (60) months thereafter, but
may be renewed or extended by agreement of ___________ and ___________. Any renewal or
extension of this Agreement must be agreed upon, in writing, at least six (6) months prior to the end
of the term of this Agreement. Failure to renew or extend this Agreement as provided in this
Paragraph 6 shall cause this Agreement to automatically expire and to be of no further force or
effect.
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7. Shareholder Approval. This Agreement shall, with the full support of ___________
management, be presented to the ___________ shareholders for approval at the 20____ Annual
Meeting of Shareholders.
8. Severability. Any provision of this Agreement which is prohibited, unenforceable or
not authorized in any jurisdiction is, as to such jurisdiction, ineffective to the extent of any such
prohibition, unenforceability or non-authorization without invalidating the remaining provisions
hereof, or affecting the validity, enforceability or legality of such provision in any other
jurisdiction, unless the ineffectiveness of such provision would result in such a material change as
to cause completion of the transactions contemplated hereby to be unreasonable.
9. Entire Agreement. This Agreement constitutes the entire agreement between the
parties and supersedes and cancels any and all prior discussion, negotiations, undertakings and
agreements between the parties relating to the subject matter hereof.
10. Captions. The captions used herein are for convenience only and shall not control or
affect the meaning or construction of any of the provisions of this Agreement.
11. Waiver, Amendment or Modification. The conditions of this Agreement which may be
waived may only be waived by notice to the other party waiving such condition. The failure of any
party at any time or times to require performance of any provision hereof (other than by written
waiver) shall in no manner affect the right at a later time to enforce the same. This Agreement
may not be amended or modified except by a written document duly executed by all of the parties
hereto.
12. Rules of Construction. Unless the context otherwise requires: (a) a term has the
meaning assigned to it; (b) an accounting term not otherwise defined has the meaning assigned to it
in accordance with generally accepted accounting principles; (c) "or" is not exclusive; and (d)
words in the singular may include the plural and in the plural include the singular.
13. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which shall be deemed one and the same instrument.
14. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. There shall be no third
party beneficiaries hereof.
15. Governing Law; Assignment. This Agreement shall be governed by the laws of the
State of ___________. This Agreement may not be assigned by any of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
date first above written.
___________ HOLDING CO.
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By______________________________
_____________________, President and
Chief Executive Officer
___________ STATE MEDICAL ASSOCIATION
By:__________________________
_____________________, President
- 17 -
Exhibit BVOTING AGREEMENT
THIS VOTING AGREEMENT is made and entered into as of the ___ day of _______,
20____, by and between ___________ HOLDING CO., a ___________ corporation
("___________") and ___________ STATE MEDICAL ASSOCIATION, a ___________ not-for-
profit corporation ("___________"), ________________, M.D., ________________ and
____________________, MD. (hereinafter collectively referred to as the "Select Shareholders").
RECITALS
A. The Select Shareholders are the record and beneficial owners and have the
power to vote the respective number of shares of ___________ Class A Common Stock, $1.00 par
value, (the "___________ Class A Common Stock") set forth on Schedule A hereto (collectively,
the "Shares").
B. The Select Shareholders desire that ___________ and ___________ enter into
a Share Exchange Agreement (the "Share Exchange Agreement") and a Nomination Agreement
(the "Nomination Agreement").
C. The Select Shareholders are executing this Voting Agreement as an inducement to
___________ to enter into and execute the Share Exchange Agreement and the Nomination
Agreement.
In consideration of the premises and the mutual terms and provisions set forth in this
Agreement, the parties hereto agree as follows:
1. Covenants of the Select Shareholders.
a. At any meeting of ___________ shareholders called to vote upon the Share Exchange
Agreement and the Nomination Agreement or at any adjournment thereof or in any other
circumstances in which a vote or other approval of the shareholders of ___________ of the Share
Exchange Agreement and the Nomination Agreement is sought, the Select Shareholders severally
shall vote (or cause to be voted) the Shares in favor of the Share Exchange Agreement and the
Nomination Agreement as well as in favor of such amendments to the Restated Articles of
incorporation of ___________ as may be necessary or appropriate to effectuate the terms of any
thereof.
b. At any meeting of ___________ shareholders or at any adjournment thereof or in any
other circumstances in which a vote or other approval of the shareholders of ___________ is
sought, the Select Shareholders severally shall vote (or cause to be voted) the Shares against any
transaction or proposal which would in any manner impede, frustrate, prevent, impair or nullify the
Share Exchange Agreement or the Nomination Agreement or any of the other transactions
contemplated by such agreements.
- 18 -
c. During the term of this Voting Agreement, at any meeting of ___________
shareholders called to vote upon the election of Directors to the ___________ Board of Directors or
at any adjournment thereof, the Select Shareholders severally shall vote (or cause to be voted) all
Shares owned by them, as set forth opposite their respective names in Schedule A hereto,
cumulatively in such manner as shall be necessary to elect as a Director the ___________ nominee
whose name shall appear on the proxy materials distributed by or on behalf of ___________.
d. During the term of this Voting Agreement, each of the Select Shareholders severally
agrees that this Voting Agreement and the obligations hereunder shall attach to the Shares and shall
be binding upon any person or entity to whom legal or beneficial ownership of the Shares shall
pass' whether by operation of law or otherwise, including without limitation its respective heirs,
guardians, administrators or successors and to notify such transferee or prospective transferee of the
existence of this Voting Agreement. In the event of any stock split, stock dividend, merger,
reorganization, recapitalization or other change in the capital structure of ___________ affecting
the ___________ Class A Common Stock, or acquisition of additional shares of ___________
Class A Common Stock by any of the Select Shareholders, the number of Shares listed in Schedule
A beside the name of each such Select Shareholder shall be revised or adjusted appropriately and
this Voting Agreement and the obligations hereunder shall attach to any such additional shares of
___________ Class A Common Stock.
2. Representations and Warranties. Each of the Select Shareholders severally represents
and warrants to ___________ that such Select Shareholder is the beneficial and record owner of,
and has full power and authority to dispose of and the unrestricted right to vote, the number of
shares of ___________ Class A Common Stock set forth opposite such Select Shareholder's name
in Schedule A hereto.
3. Legends. The Shares shall be legended to indicate that such Shares are subject to the
terms and conditions of this Voting Agreement.
4. Limitation of ___________ Ownership. During the term of this Voting Agreement,
including any extensions or renewals hereof, ___________ shall not, without the consent of a
majority of the ___________ Board of Directors, directly or indirectly, acquire additional shares of
the Class A Common Stock of MOMS) so as to increase its percentage ownership of the
outstanding Class A Common Stock of ___________ to more than fifteen percent (15%). In the
event that ___________'s percentage ownership of the ___________ Class A Common Stock
should be increased on account of any redemption of outstanding stock by ___________, a
reorganization of the capital structure of ___________ or any other action of ___________ or its
shareholders (other than ___________), ___________ shall not be deemed in default of this
Paragraph 4.
5. Term. The term of this Voting Agreement shall begin on the closing of the
transactions contemplated in the Share Exchange Agreement and shall expire sixty (60) months
thereafter, but may be renewed or extended by agreement of the parties hereto. Any renewal or
extension of this Voting Agreement must be agreed upon, in writing, at least six (6) months prior to
the end of the term of this voting Agreement. Failure to renew or extend this Voting Agreement as
- 19 -
provided in this Paragraph 5 shall cause this Voting Agreement to automatically expire and to be of
no further force or effect.6. Severability. Any provision of this Voting Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction is, as to such jurisdiction, ineffective to the
extent of an',' such prohibition, unenforceability or nonauthorization without invalidating the
remaining provisions hereof, or affecting the validity, enforceability or legality of such provision in
any other jurisdiction, unless the ineffectiveness of such provision would result in such a material
change as to cause completion of the transactions contemplated hereby to be unreasonable.
7. Entire Agreement. This Voting Agreement constitutes the entire agreement between the
parties and supersedes and cancels any and all prior discussion, negotiations, undertakings and
agreements between the parties relating to the subject matter hereof.
8. Captions. The captions used herein are for convenience only and shall not control or
affect the meaning or construction of any of the provisions of this Voting Agreement.
9. Waiver. Amendment or Modification. The conditions of this Voting Agreement which
may be waived may only be waived by notice to the other party waiving such condition. The failure
of any party at any time or times to require performance of any provision hereof (other than by
written waiver) shall in no manner affect the right at a later time to enforce the same. This Voting
Agreement may not be amended or modified except by a written document duly executed by all of
the parties hereto.
10. Rules of Construction. Unless the context otherwise requires: (a) a term has the meaning
assigned to it; (b) an accounting term not otherwise defined has the meaning assigned to it in
accordance with generally accepted accounting principles; (c) "or" is not exclusive; and (d) words
in the singular may include the plural and in the plural include the singular.
11. Counterparts. This Voting Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which shall be deemed one and the same
instrument
12. Successors and Assigns. This Voting Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, administrators, successors and assigns.
There shall be no third party beneficiaries hereof
13. Governing Law Assignment. This Voting Agreement shall be governed by the laws of
the State of ___________. This Voting Agreement may not be assigned by any of the parties
hereto.
IN WITNESS WHEREOF, the parties hereto have duly executed this Voting Agreement as
of the date first above written.
___________ HOLDING CO.
- 20 -
_______________________, President
and Chief Executive Officer
___________ STATE MEDICAL ASSOCIATION
By
________________________, President ________________________, MD. ___________________________________________________, M.D.
- 21 -
Schedule AShares of Common
Stock Owned with Percentage of Total
Shareholder Power to Vote Shares Outstanding
____________, M.D. 12,025 5.4%
_____________ 2,500 1.12%
_____________, M.D. 13,062 5.9%
- 22 -
Exhibit C
[___________ State Medical Association Letterhead ] ______________, 20_____
___________ Holding Co. __________________________________________________, ___________ _______
Re: Share Exchange Agreement dated as of ________, 20_____ between ___________ Holding
Co. and ___________ State Medical Association
Ladies and Gentlemen:
In accordance with the requirements of that certain Share Exchange Agreement dated as of
_________, 20___ (the Share Exchange Agreement") by and between ___________ Holding Co., a
___________ corporation ("___________") and ___________ State Medical Association, a
___________ not-for-profit corporation ("___________"), ___________ hereby surrenders to
___________ possession of the enclosed certificates representing all 24,185 shares of the issued
and outstanding ___________ Class B Common Stock ___________ intends that these certificates,
and the shares represented thereby be marked "canceled".___________ STATE MEDICAL ASSOCIATION
By:
___________ M.D., President
- 23 -
Exhibit D __________, 20_____
___________ State Medical Association ________________________________________________________________________________________________
RE: Share Exchange Agreement dated as of _________, 20____ between ___________ Holding
Co. and the ___________ State Medical Association and certain related documents
Ladies and Gentlemen:We have acted as counsel to ___________ Holding Co., a ___________ corporation
("___________") and its wholly owned subsidiary ___________ Medical Insurance Co., a
___________ corporation ("______________________") in connection with the execution and
delivery of, and consummation of the transactions contemplated by (i) that certain Share Exchange
Agreement dated as of ______, 20___ (the "Share Exchange Agreement") by and between
___________ and ___________ State Medical Association, a ___________ not-for-profit
corporation ("___________") pursuant to which ___________ is issuing and delivering to
___________ 24,185 shares of ___________ Class A Common Stock, par value $1.00 per share,
(the "Class A Shares") and 24,185 shares of ___________'s non-voting Class C Common Stock,
par value $1.00 per share, (the Class C Shares") in exchange for 24,185 shares of ___________
Class B Common Stock, par value $25.00 per share, (the "Class B Shares") owned by
___________, (ii) that certain Nomination Agreement dated as of _______, 20___ (the
"Nomination Agreement" and together with the Share Exchange Agreement the "___________
Documents") by and between ___________ and ___________, (iii) that certain license Agreement
dated as of _____, 20__ (the "license Agreement") by and between ______________________ and
___________, and (iv) that certain Reciprocal Assistance Agreement dated as of _____, 20___ (the
"Reciprocal Assistance Agreement" and together with the License Agreement the
"______________________ Documents") by and between ______________________ and ___________.
- 24 -
As such counsel, we have examined executed copies of the ___________ Documents and
the ______________________ Documents, the Amended and Restated Articles of Incorporation of
___________ and the By-Laws of ___________, as amended, the Articles of Incorporation and By-
laws of ______________________ and such other laws, corporate records, documents and
agreements as we deemed necessary to render the opinions expressed herein.
Based thereon, we are of the opinion that
1. ___________ and ______________________ are corporations duly organized, validly
existing and in good standing under the laws of the State of ___________.
2. Each of ___________ and ______________________ has the requisite corporate
power and authority to execute, deliver and perform its obligations, in the case of ___________,
under the ___________ Documents and, in the case of ______________________, under the
______________________ Documents.
3. The ___________ shareholders and directors have taken all action necessary to
authorize the execution and delivery by ___________ of the MOMS) Documents and
consummation of the transactions contemplated thereby and the ___________ Documents have
been duly authorized, executed and delivered by ___________ and constitute the valid and legally
binding obligations of MOMS).
4. The ______________________ shareholders and directors have taken all action
necessary to authorize the execution and delivery by ______________________ of the
______________________ Documents and consummation of the transactions contemplated
thereby and the ______________________ Documents have been duly authorized, executed and
delivered by ______________________ and constitute the valid and legally binding obligations of ______________________.
5. The Class A Shares and the Class C Shares, when delivered by ___________ to
___________ in exchange for the Class B Shares owned by ___________, will be duly authorized,
validly issued and outstanding, fully paid and non-assessable, with no personal liability attached to
the ownership thereof.
Very truly yours,
- 25 -
INFORMATION ABOUT THIS FORM
This is one of 1,048 legal forms and agreements that are included in a 12 volume, 15,000 page
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Anti-Takeover Officers and Employees
Changes Affecting Capital Stock Pairing
Corporate Indebtedness and Financial
Restructuring Reimbursement of Expenses
Reincorporation
Corporate Restructuring Retirement Plans
Directors Sale or Purchase of Capital Stock
Disclosures and Notices Stock Options
Employee Savings (Thrift) Plans
Employee Stock Purchase Plans Stockholder Proposals and Corporation
Responses
Incentive Compensation Plans Stockholders and Stockholders’ Meetings
Indemnification
Investment Companies and Real Estate
Investment Trusts Transactions with Officers, Directors or
“Insiders”
Liquidation and Dissolution
Loans to Employees Misc. Amendment to Articles of
Incorporation & By-laws
Mergers and Acquisitions
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