Unitholder Agreement – [Name of Trust]
UNITHOLDER AGREEMENT
[NAME OF TRUSTEE COMPANY] (ACN XXX XXX XXX)
ATF [NAME OF TRUST]
[MONTH] [YEAR]
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THIS AGREEMENT is made on the Signing Date set out in the Schedule between the Company, the entities described as Unitholders in the Schedule and the Representatives described in the Schedule and it applies from the Commencement Date.
RECITALS:
A. The Company specified in the Schedule runs the enterprise described in the Schedule ("the Enterprise") at the premises described in the Schedule (“the Premises”), operating the medical practice described in the Schedule (“the Practice”).
B. The Company runs the Enterprise as the trustee of the trust named in the Schedule (“the Trust”).
C. The units in the Trust are owned by the entities named as the Unitholders in the Schedule.
D. Each Unitholder wishes to delegate certain powers and discretions which it has under this Agreement to its Representative.
E. The Unitholders, the Company and the Representatives agree to be bound by this Agreement.
NOW IT IS AGREED as follows:
1. RESTRICTIONS ON TRANSFERS
1. 1 Restriction on Transfer
A Unitholder may not transfer Units except as permitted by this Agreement.
1.2 Permitted Transfers
A Unitholder may transfer Units to a Permitted Transferee with the unanimous prior written consent of all Unitholders and provided that the Permitted Transferee agrees in writing to be bound by this Agreement.
1.3 Transfers to Other Unitholders
A Unitholder may transfer Units to another Unitholder with the unanimous prior written consent of all Unitholders.
2. TRANSFERS TO UNRELATED PARTIES
A Unitholder may only transfer Units to a party who is not a Permitted Transferee of another Unitholder with the prior written consent of all Unitholders.
OR
A Unitholder may only transfer Units to an unrelated party who is not a Permitted Transferee or a Unitholder in accordance with the following process:-
(a) The Units to be transferred must first be offered, in writing, to the existing Unitholders for the Purchase Price in proportion to their existing unitholdings (the First Offer).
(b) The existing Unitholders will have 90 days from the date of the written offer by the transferor in which to accept the offer. If any of the existing Unitholders do not accept the offer within the 90 days, their proportion of the Unit allocation to be transferred must be offered to the remaining Unitholders, in writing, in proportion to their existing unitholdings (the Second Offer). The remaining Unitholders have 7 days from the date of the Second Offer in which to accept.
(c) If there are any Units being offered that remain unaccepted by the existing Unitholders at the expiration of the Second Offer, the Units will be capable of being transferred to an unrelated party who is not a Permitted Transferees or a Unitholder within 7 days from the date of expiration of the Second Offer.
(d) A transfer to an unrelated party in accordance with Clause 2(c) of this Agreement must be passed by a prior resolution of the Majority of the existing Unitholders.
(e) If a dispute arises with respect to any proposed transfer as a result of this clause, that dispute must be dealt with in accordance with clause 6 of this Agreement.
(f) Any new Unitholder proposed to be admitted must first satisfy the requirements in sub-clause 3.1 of this Agreement.
3. ENTRY / EXIT OF UNITHOLDERS
3.1 Entry
(a) A new Unitholder may be admitted by way of the process outlined in clause 2 of this Agreement or by purchasing new Units issued by the Trust.
(b) A new Unitholder will be required to pay the Purchase Price for the Units it receives upon admission.
(c) The Purchase Price will be distributed to the existing Unitholders on a pro-rata basis in accordance with their respective unitholdings as set out in the Schedule or, alternatively, it will be retained by the Trust, as the existing Unitholders so determine by resolution of the Majority.
(d) Upon entry, a new Unit Holder must, if it is not a medical practitioner practicing in the Practice, nominate a Unitholder's Representative who must be appointed by resolution of the Majority of the Unitholders.
(e) Upon entry, a new Unitholder or that Unitholder’s Representative must be a legally qualified medical practitioner who meets the Criteria defined in the Schedule.
(f) Upon entry and if directed to do so by unanimous resolution of the existing Unitholders, the new Unitholder (and its Representative, if applicable) must:
(i) execute a document acceding to this Agreement and agreeing to be bound by its terms; or
(ii) enter into a replacement Unitholder Agreement with the parties to this Agreement on substantially similar terms to this Agreement.
3.2 Exit or Retirement
A Unitholder may exit or retire by giving the Trustee and the remaining Unitholders not less than six (6) months written notice. This notice must include any intention of the retiring Unitholder to transfer its Units in accordance with clauses 1 or 2 of this Agreement or, alternatively, its intention to have the Units redeemed by the Trust. Any redemption of Units in this case must be agreed in writing by the Trustee and all remaining Unitholders. The exiting or retiring Unitholder will receive the Exit Price from the Trust for redemption of their Units.
3.3 Death and Total Permanent Disability
In the event of death or permanent disability of a Unitholder’s Representative or a Unitholder, the affected Unitholder (or their personal legal representative, including executor(s) of their estate) will have one hundred and eighty (180) days to transfer the Units in accordance with clauses 1 or 2 of this Agreement, unless this time limit is extended by agreement of all remaining Unitholders. If the Units are not transferred in accordance with clause 1 or 2, and are instead to be redeemed, the Unitholder will receive the Exit Price from the Trust for redemption of their Units.
4. NON-COMPETITION
4.1 Restriction
(a) No Unitholder or its Representative may have an interest in any enterprise that competes with the Trust or conducts a similar enterprise to the Trust without the prior written consent of each Unitholder.
(b) In the event that a Unitholder transfers its Units to another party, neither that Unitholder nor its Representative may, without the permission of all Unitholders:
(i) compete with the Trust directly or indirectly as a principal, as a partner, an employee or otherwise; or
(ii) contact any patient, client or employee of the Trust or try to persuade that person to not deal with the Trust or to deal with any other person,
within the area, and for the period, specified in the Schedule.
(c) The parties agree that this clause is reasonably necessary to protect the Practice, the Enterprise and the legitimate commercial interests of the Company and the Unitholders.
4.2 Confidential Information
(a) All information, trade secrets or intellectual property ("Company Information") in relation to the Enterprise shall be kept confidential.
(b) Neither a Unitholder nor its Representative may disclose Company Information to any person or use Company Information in a way that may or will damage the Company.
(c) This clause will not apply to any information that is in the public domain (other than as a result of breach of this clause).
4.3 Reasonableness and Survival
(a) The Unitholders agree that this clause is reasonably required to protect the Trust’s value and goodwill.
(b) This clause shall survive this Agreement.
5. RELATIONSHIP AND OBLIGATIONS OF THE UNITHOLDERS
No Unitholder nor its Representative may commit another Unitholder or its Representative to any other agreement without the written consent of that other Unitholder or Representative (as the case may be) and such other agreement must not in any way conflict with or prejudice the purpose, value or goodwill of the Trust.
6. DISPUTE RESOLUTION
(a) In the event of a dispute relating to this Agreement, a Unitholder(s) must not commence any court proceedings relating to the dispute unless it has first complied with this clause 6.
(b) The affected Unitholder(s) must give written notice to the other Unitholder(s) specifying the nature of the dispute.
(c) Upon receipt of written notice, the Unitholder(s) must endeavour, in good faith, to resolve the dispute expeditiously and, if requested by any Unitholder, shall commence mediation.
(d) In the event of mediation, the Unitholders must appoint a mediator and agree on the mediator’s remuneration. Should the Unitholders fail to agree on the appointment of a mediator, one will be appointed by the President of the Law Institute of Victoria or the President’s nominee.
(e) During mediation, the Unitholders must observe the mediator’s instructions regarding the conduct of the mediation
(f) Should the dispute fail to resolve within ten (10) days after the appointment of the mediator (or any other time which the Unitholders agree to in writing), the mediation will cease.
(g) The costs of the mediation will be shared equally between the respective Unitholders to the dispute and the Unitholders agree to indemnify the mediator against liability in respect of mediation of the dispute.
(h) If the dispute is resolved, the terms of the resolution are binding on the Unitholders and override the terms of this Agreement to the extent that there is any conflict.
(i) The mediation, including any discussions between the mediator and the Unitholders, and between Unitholders themselves during or before the mediation (including accompanying written statements prepared for mediation), are confidential and cannot be used in any legal proceedings.
7. DURATION
This Agreement shall apply from the Commencement Date until all Unitholders unanimously agree in writing to terminate it.
8. ACCESS TO INFORMATION
Each Unitholder and its Representative has a right of access to all Trust records, including all correspondence between the Trust and the Unitholders and all correspondence between the Trust and any other person.
9. DISTRIBUTION OF NET INCOME
The Trustee shall distribute the Trust’s net income in accordance with the terms of the Trust Deed unless all Unitholders, by prior unanimous resolution, otherwise agree.
OR
9 Distribution of Net Income at Year-End
The Unitholders agree that at 30 June each year, each Unitholder shall be presently entitled to a share of the Trust’s net income as follows (unless otherwise agreed unanimously in writing by the Unitholders):
(i) each Unitholder shall (after provision has been made for the payment of costs of the Trust by the Unitholders in equal shares or as otherwise agreed between the Unitholders in writing) be entitled to receive such proportion of the balance of the net income of the Trust as has been generated by each respective Unitholder’s Representative; and
(ii) the balance of the monies received by the Trust (including PIP payments) shall be distributed equally between the Unitholders.
10. EXPENSES
Unless otherwise agreed by prior unanimous resolution of all Unitholders, each Unitholder (or its Representative) shall bear the liability and pay for:
(a) a proportionate or equal share, with the other Unitholders, of all expenses involved in running the Practice. These expenses shall include, but are not limited to, the rent of the Premises pursuant to a lease entered into by the Unitholders, costs for shared use of equipment, insurance premiums, charges for cleaning and maintenance of equipment in connection with the Premises and utility and telephone charges in relation to the Premises;
(b) a proportionate or equal share with the other Unitholders of the cost of the medical materials and supplies used in the conduct of the Practice and wages (including superannuation payments) of assistant staff (for example administrative staff and practice nurses) employed or engaged in the Practice;
(a) their own and their Representative’s motor vehicle expenses and leasing and other payments for their personal equipment; and
(b) their own and their Representative’s personal expenses (for example, continuing professional education).
11. SECURITY FOR UNITHOLDER’S LOANS
A Unitholder must not use Units as security for any loans or similar obligations without a prior written unanimous resolution of the Unitholders.
12. CHANGES TO CONSTITUTION OR TRUST DEED
The Unitholders must not allow any change to the Company’s Constitution or the Trust’s Deed without a prior written unanimous resolution of the Unitholder’s and such change must also occur in accordance with the relevant terms of the Company’s Constitution and the Trust’s Deed.
13. THE TRUST'S ASSETS AND LIABILITIES
The Unitholders acknowledge the Trust does not have any liabilities except as disclosed in writing by the Trust to the Unitholders prior to execution of this Agreement.
14. INTELLECTUAL PROPERTY
(a) The Trust owns all intellectual property connected with the Enterprise in the possession of the Trust or the Unitholders.
(b) No payment will be made by the Trust to any Unitholder for intellectual property.
15. DECISIONS OF UNITHOLDERS
15.1 Decisions
Any decision made by the Unitholders or the Unitholder’s Representatives (as the case may be) under this Agreement shall be determined as provided for in this Agreement or, where not provided for, by the Majority specified in the Schedule.
15.2 Unitholders’ Representatives
Each Unitholder hereby:
(a) delegates all of its rights, powers and remedies under this Agreement to its Representative;