Shareholder Agreement

Amended and Restated Shareholders' Agreement

This AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT is effective as of the day of , , by and among , P.C. a professional service corporation (the "Corporation"), , , , , and .

WITNESSETH:

WHEREAS, and were the Founding Shareholders of the Corporation;

WHEREAS, , , , , , , and previously entered into a Stockholders' Agreement dated as of (the "Previous Agreement");

WHEREAS, the Existing Shareholders collectively own 100% of the issued and outstanding shares of the Corporation's common stock immediately prior to the execution hereof;

WHEREAS, simultaneously with the execution hereof, has acquired shares of Corporate Stock from the Corporation pursuant to a Stock Purchase Agreement, dated the date hereof, in the form attached hereto as Exhibit A (the "Purchase Agreement");

WHEREAS, the Existing Shareholders desire to make provision for to become a Shareholder and to modify, amend and restate the Previous Agreement as provided herein;

WHEREAS, the parties hereto recognize and confirm that upon the completion of such purchase of stock, shall constitute the holders of all of the issued and outstanding shares of stock of the Corporation;

WHEREAS, the Shareholders desire to provide for the continuity of the Corporation's management and to promote their mutual interests and the interests of the Corporation by imposing certain conditions, restrictions and obligations on themselves, on the Corporation, and on the shares of the Corporate Stock;

WHEREAS, the By-laws of the Corporation permit certain agreements to be entered into between and among the Shareholders and/or the Shareholders and the Corporation with respect to the operation and management of the Corporation and the transfer of the Corporate Stock, and contemplate that all shares of the Corporate Stock shall thereupon be subject to such agreements and transferable only upon compliance therewith; and

WHEREAS, the Shareholders and the Corporation desire to enter into such an agreement.

NOW, THEREFORE, the parties hereto, for and in consideration of the mutual covenants herein contained, and for Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, hereby agree as follows:

Article 1-Definitions

1.1. "Book Value" shall mean the aggregate amount of assets ... as of , divided by the number of outstanding shares of Corporate Stock ...

1.2. "Case in Progress" shall mean each case in which the Corporation shall actually have received in its possession a retainer or engagement agreement executed by the client on or prior to the date of withdrawal of the Shareholder.

1.3. "Concluded Case" shall mean each case in which an offer of settlement has been notified to the client on or prior to the date of withdrawal of the Shareholder and which offer has been or subsequently is accepted; and shall mean each case which has been tried to a conclusion in which a verdict has been rendered in favor of a client for monetary damages on or prior to the date of withdrawal of the Shareholder.

1.4. "Deferred Value" shall be computed by multiplying the ratio of the Total Resource Investment as of the applicable Valuation Date, to the Total Resource Investment after the Valuation Date, by the decimal equivalent of the Shareholder's percentage ownership of Corporate Stock on the Valuation Date, and multiplying the product by the total fee recovered.

1.5. "Former Shareholder" shall mean at any time each individual who shall have been a Shareholder under this Agreement, and whose status as such a Shareholder shall have terminated for any reason.

1.6. "Net Fee" shall mean the gross fee actually received by the Corporation on each case, less all disbursements, participation fees to other attorneys, and any and all other actual expenditures paid, incurred or accrued in connection with each case.

1.7. "Practice" shall mean the activities of the Corporation as authorized by this Agreement and by law, and shall include all those activities of the Shareholders, the income from which, by the terms hereof, belongs to the Corporation.

1.8. "Total Resource Investment" shall equal the total hours charged to any client matter at each timekeeper's standard hourly billing rate, plus all direct costs incurred by the Corporation and not reimbursed by the client.

Article 2-General

2.1. Correct Statements. All of the statements hereinabove contained are true and correct in all respects, and are incorporated herein by reference.

2.2. Termination of All Prior Agreements. The parties hereto hereby terminate, cancel and void any and all prior agreements ...

2.3. Purpose. The purpose of the Corporation is to engage in the general practice of law and to conduct all types of business incident thereto.

2.4. Location. The principal place of business of the Corporation shall be at .

2.5. Term. The Corporation shall continue until terminated in accordance with the terms of Article 12 of this Agreement.

2.6. Fiscal Year. The fiscal year of the Corporation shall be the calendar year.

Article 3-Duties of Shareholders

3.1. Full Time Efforts. Each Shareholder shall devote his full time, ability, energy and best endeavors, to be used and employed in common among the Shareholders, in furtherance of the Corporation, except as otherwise herein provided.

3.2. Vacations. Shareholders may take such reasonable vacations as may be agreed upon by the Board of Directors.

3.3. Outside Interests. Subject to the provisions of Section 3.1 and Section 8.1 hereof, any Shareholder may participate or be interested in any business venture or enterprise other than the Practice ...

3.4. Code of Professional Responsibility. Each Shareholder at all times shall comply with all of the applicable provisions of the Code of Professional Responsibility and with the statutes, rules and regulations covering all professional services that the Shareholder shall render.

3.5. Corporation Obligations. No Shareholder shall incur ... without the consent of the Board of Directors.

Article 4-Management

4.1. Board of Directors.

(a) The Corporation shall be managed by a Board of Directors ... each such member shall be elected by the affirmative vote of those Shareholders owning not less than Seventy Percent (70%) of the then issued and outstanding shares of Corporate Stock.

(b) In connection with the management of the business and activities of the Corporation, the election of the Board of Directors, and the election of officers, it is hereby specifically agreed as follows:

(i) So long as and/or are Shareholders ...

(ii) After such time as either or is not a Shareholder ...

(iii) Any person serving on the Board of Directors and any Shareholder shall have the right to serve as President and/or in any other office of the Corporation upon election by the Board of Directors.

4.2. Decisions and Determinations of the Board of Directors.

(a) To approve and incur capital expenditures exceeding $ but not exceeding $ in amount.

(b) To formulate and administer billing policies and practices and to formulate write-off policies and practices.

(c) To recommend to the Shareholders proposed amendments to this Agreement.

(d) To make recommendations to the Shareholders respecting major changes in the scope or nature of the Corporation ...

(e) The engagement of services of any and all attorneys as employees of the Corporation ... shall be subject to the approval of the Board of Directors.

4.3. Shareholder Matters.

(a) Additional shares of Corporate Stock may be authorized and/or issued only upon the approval of those Shareholders owning a simple majority of the then issued and outstanding shares of Corporate Stock.

(b) As long as the Founding Shareholders collectively own a majority of the issued and outstanding shares of Corporate Stock of the Corporation, they shall have the sole discretion as to salaries set for the ensuing fiscal year and bonuses to be awarded to Shareholders.

(c) The Shareholders agree to reaffirm the By-laws of the Corporation, giving effect to and fully carrying out the provisions of this Agreement and particularly the provisions of this Article 4.

Article 5-Operational Matters

5.1. Bank Accounts. All funds ... shall be deposited promptly in the account or accounts maintained by the Corporation in such bank or banks as shall be determined by the Corporation.

5.2. Gifts to Shareholders. It is the general policy of the Corporation that a gift of any value offered to a Shareholder in lieu of payment for services or disbursements shall not be accepted.

5.3. Books and Records. There shall be kept at all times ... accurate books of account ... Each Shareholder shall have the right ... to inspect the books and records of the Corporation ...

Article 6-Insurance

6.1. Insurance. The Shareholders and the Corporation may fund any and all death and/or disability purchases or redemptions of Corporate Stock provided hereunder by the purchase and maintenance of life insurance buy-out policies and/or disability insurance buy-out policies ...

(a) In the event of the termination of this Agreement or withdrawal of a Shareholder for any cause other than the death of a Shareholder, the insured Shareholder shall have an option ...

(b) Notwithstanding anything to the contrary contained herein ...

(c) In no event shall a Shareholder who is the owner of a life and/or disability insurance policy ... exercise any of the rights ... without the prior written consent of the insured Shareholder.

Article 7-Transfer of Shares

7.1. Restrictions on Transfer of Stock. Except as specifically herein provided, a Shareholder may not sell, assign, transfer, pledge, hypothecate or otherwise encumber or dispose of any Corporate Stock except with the prior written consent of all other Shareholders.

7.2. Voluntary Disposition: Rights: Restrictions.

(a) During the lifetime of a Shareholder and prior to a Shareholder's Disability Inception Date, such Shareholder may Transfer all but not less than all of his or her shares of Corporate Stock to a third party or parties who are licensed to practice law in the State of only upon the terms and conditions and subject to the restrictions herein set forth ...

(b) In the event of any proposed voluntary Transfer ...

(c) The Offeree Shareholders shall have the option to purchase all or a portion of their respective pro-rata amount of the Offered Stock ...

(d) Each Offeree Shareholder shall have a period of Sixty (60) days ...

7.3. Option Upon Involuntary Transfer.

(a) If, other than by reason of a Shareholder's death or Disability, shares of Corporate Stock are transferred by operation of law to any person ... such Shareholder must promptly provide written notice ...

(b) If any such Other Shareholder has not exercised the option ...

(c) If such Other Shareholders fail to exercise the option ...

(d) If all of the Transferred Shares are not purchased ...

7.4 Closing. Upon the exercise of any option to purchase shares ... the closing ... shall take place at the office of the Corporation within Fifteen (15) days ...

7.5 Transfer to Non-Shareholder Transferee. In the event that any shares ... are transferred to or in any manner acquired by any person or party who was not theretofore a Shareholder ...

Article 8-Disability

8.1 Determination of Disability. ... in the opinion and sole discretion of a physician selected by the Board of Directors ...

8.2 Disability Payments by Corporation. ... during the course of such Disability ...

8.3 Rights of Corporate Stock of Disabled Shareholder. During such period of Disability, such Shareholder shall nevertheless continue to be entitled to exercise any and all voting rights and to receive any Corporation distributions ...

8.4 Mandatory Purchase of Stock Upon Disability. If the Disability continues for a period of Twelve (12) consecutive months ...

Article 9-Mandatory Sale and Purchase of Corporate Stock Upon Death, Disability or Other Termination of Employment

9.1 Mandatory Transfer. A Shareholder ... shall sell and convey all of such Shareholder's shares of Corporate Stock ... upon the first occurrence of any one of the following events:

(a) Death of the Shareholder.

(b) The occurrence of a Date of Disability with respect to the Shareholder.

(c) The Shareholder's loss of his/her license ...

9.2 Purchase Price.

(a) The purchase price ... shall equal the Book Value ... plus the Deferred Value ...

(b) If the Corporation is the owner and/or beneficiary of any policy or policies of life insurance or disability insurance ... only the cash value of such insurance policy or policies ... shall be deemed an asset of the Corporation ...

(c) Notwithstanding any provisions herein to the contrary, the Purchase Price for the Corporate Stock of a Shareholder whose full-time employment ... is terminated ... shall be its Book Value ... plus the Deferred Value ...

9.3 Payment of Purchase Price.

(a) The receipt ... of the benefits or proceeds of any insurance policy ... shall be deemed a payment in redemption of the Shareholder's Corporate Stock ...

(b) After the application of all insurance proceeds ... any shares ... shall be purchased ... and shall be paid in Three (3) equal successive installments ...

9.4 Additional Provisions Applicable Upon a Mandatory Transfer.

(a) If ... such selling Shareholder ... is a personal guarantor ... then the Corporation and the remaining Shareholders shall use their best efforts to cause such selling Shareholder ... to be relieved ...

(b) In the event that a selling Shareholder ... owes any monies or other obligations to the Corporation ... such debts shall be deducted from the down payment ...

Article 10-Payment

10.1 Payment Default; Remedies. In the event that any purchaser of Corporate Stock under Article 9 shall default ... the entire amount of the then unpaid balance of the Purchase Price shall immediately become due and payable ...

10.2. Voting Shares Pending Full Payment. So long as a purchaser is not in default ... the purchaser ... shall have the right to vote said Corporate Stock ...

10.3. Dividends Pending Full Payment for Shares. So long as certificates ... are held by the Stock Transfer Agent ... each purchaser ... shall own all dividends declared and paid upon said Corporate Stock ...

10.4. Fees and Expenses. All fees and expenses ... incurred on behalf of the Corporation in enforcing the terms of this Agreement ... shall be paid or charged to the Corporation and the selling Shareholder ... on an equal basis.

Article 11-Termination of Employment

11.1. Termination of Employment; Restrictions. If the employment of any Shareholder as attorney-employee of the Corporation shall terminate ... then upon any termination of such Shareholder's employment ... the following shall be fully effective and applicable:

(a) If requested by the Corporation, such Terminating Shareholder shall vacate all premises of the Corporation immediately ...

(b) All clients who are first introduced to the services of the Corporation by the Shareholder ... shall be deemed to be clients of the Shareholder ("Shareholder Clients").

(c) Upon such termination, such Terminating Shareholder shall have no right to remove from any or all offices of Corporation any records, reports or files relating to any Corporation Clients ...

(d) It is hereby agreed that the Corporation has a proprietary right in all of its physical locations, telephone numbers and client files ...

(e) It is hereby agreed that upon any violation of any of the provisions of this Article 11, the Corporation ... shall have all rights in equity to compel specific performance ...

Article 12-Termination of the Agreement

12.1. Bankruptcy. The Agreement shall terminate upon the dissolution of the Corporation or upon the filing of a voluntary or involuntary petition ... under Chapter 7 or Chapter 11 ... or upon the appointment of a receiver for the Corporation.

12.2. Specific Shareholder. This Agreement shall terminate as to any specific Shareholder upon the date such Shareholder ceases to own all of his or her shares of Corporate Stock ...

Article 13-Miscellaneous

13.1. Endorsement Upon Share Certificates. Upon the execution of this Agreement, each certificate representing shares of Corporate Stock now or hereafter issued shall contain an endorsement substantially in the following form:

The shares of stock represented by this certificate shall not be sold, transferred, pledged, hypothecated, encumbered or disposed of in any manner whatsoever except in accordance with the terms and conditions of an agreement executed by the Shareholders of the Corporation, a copy of which is on file in the principal office of the Corporation.

13.2. Legal Proceedings. Any action instituted to enforce or to recover damages for breach of this Agreement shall be instituted in the Court of the State of , County of .

13.3 Notices. All notices ... shall be sent by registered or certified mail ... to the principal business office of the Corporation and to the last known address of each Shareholder ...

13.4 Further Acts and Assurances. Each of the parties hereto agrees to execute and deliver all authorizations, documents and instruments ...

13.5 Entire Agreement. This is the entire understanding and agreement of the parties. No alteration, amendment or future understanding shall be binding unless reduced to writing and signed by all of the parties hereto.

13.6 Persons Bound. This Agreement shall inure to the benefit of and be legally binding upon the parties hereto and their heirs, Personal Representatives, administrators, successors, assigns and transferees of them and each of them.

13.7 Applicable Law. This Agreement is being delivered and is intended to be performed in the State of and shall be construed and enforced in accordance with the substantive and procedural laws of such State.

13.8 Time of Essence. ...

13.9 Amendment. This Agreement may not be amended ... except by a written agreement ... signed by the holders of not less than Seventy Percent (70%) of the issued and outstanding shares of Corporate Stock.

13.10 Remedies. ... specific performance and equitable remedies in the nature of injunctive relief shall be available to any aggrieved party ...

13.11 Severability. ...

13.12 Construction.

(a) Wherever used herein, the singular shall include the plural and the plural shall include the singular ...

(b) Wherever used herein, the terms "shares of Stock" or "Stock Certificates" or "Share Certificates" shall include, where applicable, voting trust certificates and/or shares represented thereby ...

13.13 Counterparts. This Agreement may be executed in several counterparts and all of such counterparts, taken together, shall constitute one Agreement.

13.14 Headings. Any headings preceding the text of the several paragraphs hereof are inserted solely for the convenience of reference and shall not constitute a part of this Agreement ...

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first above written.

EXHIBIT A

Stock Purchase Agreement

This Stock Purchase Agreement, dated as of the day of , , by and between , P.C. a professional service corporation, and (the "Purchaser").

WHEREAS, the Corporation desires to issue and sell shares of the Corporation's common stock, par value $ per share upon the terms and conditions set forth herein;

WHEREAS, the Purchaser is licensed to practice law in the State of and desires to purchase the Shares from the Corporation upon the terms and conditions set forth herein; and

WHEREAS, simultaneously with the execution hereof, the Purchaser is entering into that certain Amended and Restated Shareholder's Agreement, dated the date hereof.

1. Recitals. All of the statements hereinabove contained are true and correct in all respects, and are incorporated herein by reference.

2. Defined Terms. All capitalized terms set forth herein and not otherwise defined shall have the meanings set forth in the Shareholders' Agreement.

3. Purchase and Sale of Shares.

(a) The purchase price of the Shares shall be an aggregate amount equal to the Book Value of the Shares, as of the last day of the calendar month immediately following the Corporation's decision to offer the Purchaser the right to purchase the Shares.

(b) The term "Book Value" shall mean ... divided by the number of outstanding shares of Corporate Stock after the sale of the Shares ...

4. Closing.

(a) The closing of the sale and purchase of the Shares shall take place at the offices of the Corporation no later than Forty Five (45) days from the date that the Purchase Price is determined ...

(b) Should the Purchaser no longer be employed by the Corporation within Two (2) years of the date of this Agreement, the Corporation shall repurchase the Shares from the Purchaser at an aggregate price equal to Dollars ($).

(c) Should the Purchaser purchase additional shares ... the purchase or redemption ... shall be on the same terms as for other Shareholders ...

5. Legend. The Purchaser understands that the certificate(s), representing the Shares will bear a legend thereon substantially as follows:

The shares of stock represented by this certificate shall not be sold, transferred, pledged, hypothecated, encumbered or disposed of in any manner whatsoever except in accordance with the terms and conditions of an agreement executed by the Shareholders of the Corporation, a copy of which is on file in the principal office of the Corporation.

6. Notices. All notices ... shall be sent by registered or certified mail ... to the principal business office of the Corporation and to the last known address of the Purchaser ...

7. Choice of Law. This Agreement is being delivered and is intended to be performed in the State of and shall be construed and enforced in accordance with the substantive and procedural laws of such State.

8. Counterparts. This Agreement may be executed in several counterparts and all of such counterparts, taken together, shall constitute one Agreement.

9. Binding Nature; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns, except that no party may assign or transfer its rights under this Agreement without the prior written consent of the other parties hereto.

EXHIBIT B

Acknowledgment and Consent

The undersigned is executing and delivering this Acknowledgment and Consent pursuant to the Amended and Restated Shareholders Agreement dated , 20__, among , P.C. a professional service corporation, and the Shareholders named therein.

By executing and delivering this Acknowledgment and Consent to the Corporation, the undersigned hereby agrees to become a party to, to be bound by, and to comply with the provisions of the Shareholders Agreement in the same manner as if the undersigned were an original signatory to such agreement.

Accordingly, the undersigned has executed and delivered this Acknowledgment and Consent as of the day of , .

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