Legal SHA Document

LEGAL SHA DOCUMENT

This Shareholders Agreement ("Agreement") is made and entered into as of by and between , an entity of type , with registered address (hereinafter "Shareholder A"), and , an entity of type , with registered address (hereinafter "Shareholder B").

RECITALS

WHEREAS, the parties are shareholders of (the "Company"), which is engaged in the business described as ;

WHEREAS, the parties wish to set out their respective rights and obligations with respect to the management, transfer of shares and governance of the Company; and

WHEREAS, the parties desire to establish orderly procedures for transfers of Shares, to protect the value of their investment and to provide mechanisms for resolving deadlocks.

NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties agree as follows:

1. DEFINITIONS

In this Agreement, unless the context otherwise requires, the following words and expressions shall have the following meanings:

"Shares" means the ordinary shares of the Company held from time to time by the Shareholders.

"Transfer" means any sale, assignment, gift, pledge, charge, encumbrance or other disposal of legal or beneficial title to Shares.

2. SHARE CAPITAL AND OWNERSHIP

2.1 Share Register. The Company shall maintain a register of members reflecting the ownership of Shares. Each Shareholder shall provide to the Company all information reasonably required for maintenance of accurate records.

2.2 Initial Shareholdings. As of the date of this Agreement, the parties hold the following number of Shares:

3. RESTRICTIONS ON TRANSFER

3.1 Pre-Emptive Rights. If any Shareholder proposes to Transfer any Shares, such Shareholder shall first offer such Shares pro rata to the other Shareholder(s) on the same terms and conditions as those proposed to be given to a third party. The offer shall be in writing and shall remain open for acceptance for a period of 30 days from receipt.

3.2 Permitted Transfers. Transfers to affiliates, by gift to immediate family, or pursuant to intestacy or testamentary disposition shall be permitted, provided the transferee executes and delivers to the Company a deed of adherence agreeing to be bound by the terms of this Agreement.

4. TAG-ALONG AND DRAG-ALONG

4.1 Tag-Along. If a Shareholder (the "Selling Shareholder") proposes to sell more than of the voting Shares to a third party, the non-selling Shareholder(s) shall have the right to participate in the sale on a pro rata basis on the same price and terms.

4.2 Drag-Along. If Shareholders holding not less than of the Shares approve a Sale of the Company, they may require the remaining Shareholders to sell their Shares to the purchaser on the same terms and conditions.

5. GOVERNANCE AND BOARD

5.1 Board Composition. The Board of Directors shall be composed of directors. Shareholder A shall be entitled to nominate directors and Shareholder B shall be entitled to nominate .

5.2 Reserved Matters. The following matters shall require the prior written approval of Shareholders holding not less than the stated majority: amendment of constitutional documents, issuance of new Shares, incurrence of indebtedness exceeding , and sale of substantially all assets of the Company.

6. DIVIDENDS AND FINANCIAL MATTERS

6.1 Dividend Policy. Dividends shall be declared and paid only upon the unanimous recommendation of the Board and in accordance with applicable law. The Board shall establish and publish an annual distribution policy by no later than the end of each fiscal year.

6.2 Accounts and Audit. The Company shall keep proper accounting records, prepare annual financial statements in accordance with generally accepted accounting principles, and deliver audited financial statements to each Shareholder within days after fiscal year end.

7. CONFIDENTIALITY AND NON-COMPETE

7.1 Confidential Information. Each Shareholder shall keep confidential all non-public information concerning the business, affairs and financial condition of the Company and shall not disclose such information except as required by law or with the prior written consent of the Board.

7.2 Non-Compete. During the term of this Agreement and for a period of following termination, no Shareholder shall directly engage in any business substantially similar to the Company's business within the territory of .

8. DEADLOCK

8.1 Deadlock Procedure. In the event of a deadlock on any matter requiring Shareholder approval, the parties shall first attempt to resolve the disagreement by mediation. If mediation fails within 30 days, the matter shall be referred to arbitration under the dispute resolution clause below.

9. REPRESENTATIONS AND WARRANTIES

Each Shareholder represents and warrants to the other that: (a) it has full power and authority to enter into and perform this Agreement; (b) the execution and delivery of this Agreement and the performance of its obligations do not and will not conflict with any other agreement or law applicable to it; and (c) it owns the Shares recorded in the register free from any liens except as disclosed in writing to the other Shareholders.

10. TERM AND TERMINATION

10.1 Term. This Agreement shall commence on the date first written above and shall continue until terminated in accordance with this Agreement.

10.2 Termination. This Agreement may be terminated by written agreement of all Shareholders or upon the liquidation or winding up of the Company.

11. NOTICES

All notices, demands or other communications required or permitted under this Agreement shall be in writing and delivered personally or sent by certified mail, return receipt requested, to the addresses set forth below or to such other address as a party may designate by notice in accordance with this Section.

12. AMENDMENTS AND WAIVER

No amendment, modification, or waiver of any provision of this Agreement shall be effective unless in writing and signed by all Shareholders. No failure or delay by any party in exercising any right shall operate as a waiver of that right.

13. DISPUTE RESOLUTION

Any dispute arising out of or in connection with this Agreement shall first be referred to mediation. If mediation does not resolve the dispute within 45 days, the dispute shall be finally resolved by arbitration administered in accordance with the arbitration rules agreed by the parties. The decision of the arbitrator(s) shall be final and binding on the parties.

14. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the jurisdiction of , without regard to its conflict of laws principles.

15. ENTIRE AGREEMENT

This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral, relating thereto.

16. SEVERABILITY

If any provision of this Agreement is held to be invalid, illegal or unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect and the parties shall negotiate in good faith a valid provision that achieves the parties' original intent to the greatest extent possible.

17. COUNTERPARTS

This Agreement may be executed in counterparts, each of which when executed shall be an original, and all of which together shall constitute one and the same instrument. Signatures transmitted by electronic means shall be treated as original signatures.

SCHEDULES AND ADDITIONAL TERMS

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