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Shareholder Agreement Buy-Sell Revised

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SHAREHOLDERS AGREEMENT

This Shareholders Agreement (the “Agreement”) is made and entered into this ___ day of _________________, 20__, by and between Samer Salka, M.D., an individual (“Salka”), Abedelrahim Asfour, M.D., an individual (“Asfour”) and Premier Cardiovascular Specialists, P.C., a Michigan corporation (the “Corporation”). Salka and Asfour shall be referred to in this Agreement collectively as “Shareholders” and may be referred to individually as “Shareholder.”

WHEREAS, Shareholders together are the owners of all of the issued and outstanding shares of Common Stock of the Corporation (the “Shares”) with Salka owning 65% of the Shares and Asfour owning 35% of the Shares.

WHEREAS the Shareholders desire by this Agreement to make provisions for the future disposition of the Shares and the management and operation of the Corporation.

NOW THEREFORE, the parties agree as follows:

1.        Restriction on Transfer of Shares.  Except as provided in this Agreement, no Shares owned by any Shareholder may be transferred, sold, assigned or hypothecated by that Shareholder or any other party, whether voluntarily or involuntarily on the part of that Shareholder and whether by sale, gift, court decree, operation of law or otherwise.  Any Shareholder may transfer Shares held by a Shareholder to any living trust for which the Shareholder is the sole trustee and over which the Shareholder maintains complete control provided that prior written notice is given to the Corporation of the transfer and, in conjunction with that transfer, a written affirmation (in form and substance satisfactory to the Corporation) is provided to the Corporation that the living trust is (and the Shares transferred remain) subject to all terms and conditions of this Section 1, that the purchase or redemption rights of the Corporation under Section 3 will arise with respect to the transferred Shares upon the occurrence of a Triggering Event irrespective of the fact that title to those Shares is held by the living trust, and that the transferor Shareholder and the transferee living trust will otherwise remain subject to all terms and conditions of this Agreement.  At no time shall any Shares be owned by any person who is not eligible to be a Shareholder of the Corporation pursuant to Chapter 2A of the Michigan Business Corporations Act, as amended or relocated in the Michigan compiled laws.

2.        Definitions.

(a)        The “Agreed Value” shall mean the value of a share of the common stock of the Corporation.  The Agreed Value shall be determined by the certified public accountant for the Corporation pursuant to a formula as set forth on Schedule 2(a).

(b)        A “Triggering Event" means, with respect to any Shareholder, the death, disability, incompetency, bankruptcy, or insolvency of such Shareholder, the cessation of such Shareholder’s employment with the Corporation for any reason, or any of the other events set forth in this Agreement that result in the purchase or redemption of the Shares of the common stock of the Corporation owned by the Shareholder experiencing the Triggering Event.

(c)        “Disability” means, with respect to any Shareholder, any mental or physical illness or incapacity of such Shareholder, excluding death, that causes such Shareholder to not provide medical services in accordance with his/her historical practice for a total of 365 consecutive days of employment. Moreover, the disability has to be determined by a qualified physician as permanent.

(d)        “Founder” means Samer Salka, M.D.

3.        Redemption of Shares.  The Shares held by the Shareholders shall be subject to mandatory purchase or redemption as follows:

(a)        Cause for Redemption.  A Shareholder experiencing a Triggering Event shall be subject to termination as a shareholder of the Corporation (the “Terminated Shareholder”).  Upon the occurrence of a Triggering Event, the Remaining Shareholder (defined below) shall purchase the Shares held by the Terminated Shareholder upon the terms stated in Section 3(b).  If the Remaining Shareholder refuses or cannot purchase the Shares of the Terminated Shareholder, the Corporation shall redeem the Shares held by the Terminated Shareholder upon the terms stated in Section 3(b).  The closing of the purchase or redemption shall take place at the offices of the Corporation within sixty (60) days following the effective date of termination of the Terminated Shareholder.

(b)        Price.  The price at which the Shares shall be redeemed (the “Purchase Price”) pursuant to Section 3(a) will be as follows:

(i)        The Purchase Price for the purchased or redeemed Shares will equal the number of Shares owned by the Terminated Member multiplied by the Agreed Value of the Corporation as of the last day of the calendar month immediately preceding the effective date of the Triggering Event (the “Valuation Date”).  The certified public accountant for the Corporation shall complete and shall deliver a written confirmation of that determination not more than thirty (30) days following the Triggering Event to the Terminated Shareholder or, in the case of death or disability to the Terminated Shareholder’s legal representative (the “Seller”) and the remaining Shareholder(s) (the “Remaining Shareholder(s)”).  The determination of the certified public accountant of the Purchase Price for the purchased Shares shall be conclusive and binding on the Corporation, the Seller and the Remaining Shareholder(s) and shall not be subject to any challenge or appeal.

(c)        Terms.  The Purchase Price shall be paid as follows:

  1. At closing, the Remaining Shareholder(s) or the Corporation (as applicable) shall deliver to the Terminated Shareholder or his legal representative an amount equal to ten percent (10%) of the full amount of the Purchase Price; and
  2. A promissory note (the “Note”) in the form as set forth in the attached Schedule 3(c) in the principal amount equal to the remaining balance of the Purchase Price, bearing interest at a fixed rate equal to the applicable federal rate as of the Valuation Date and the principal and interest shall be payable in thirty six (36) equal monthly installments, with the first such installment payable on the first day of the month immediately following the closing date.

(d)        Purchase or Redemption Resulting from Death.  If the Triggering Event is the death of a Shareholder, the Terminated Shareholder’s legal representative or estate shall receive the greater of the insurance proceeds, if any, from any life insurance policy insuring the life of the Terminated Shareholder held by the remaining Shareholders or the Corporation, or the Agreed Value.  If the Agreed Value is greater than the proceeds from the life insurance policy, the remaining Shareholder(s) or the Corporation (as applicable) shall pay to the Terminated Shareholder’s legal representative or estate, the proceeds of the life insurance policy and the remainder of the Purchase Price shall be paid in accordance with Sub-section 3(c)(ii) above.

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