SHAREHOLDER AGREEMENT
THIS UNANIMOUS SHAREHOLDERS AGREEMENT made this _______ day of ______________,
20__.
BETWEEN:
XXX of XXX
OF THE FIRST PART
and
ZZZ of ZZZ
OF THE SECOND PART
and
XXX of XXX
OF THE THIRD PART
and
XXX INC. of XXX
(the "Corporation")
OF THE FOURTH PART
Background
A. The Corporation is incorporated in the Province of Ontario under the Business Corporations Act (the
"Act").
B. The Act permits the Shareholders to enter into a shareholder agreement in writing to restrict the
powers of the directors of the Corporation to manage the business and affairs of the Corporation and
to confer certain of the powers normally possessed by the directors of the Corporation on the
Shareholders.
C. The Shareholders have decided to enter into this agreement (the "Agreement") to govern their
respective interests, obligations, liabilities, ownership and rights in the Corporation and to provide
for the better government of the Corporation.
D. All of the Shareholders have executed this Agreement.
E. The Corporation has executed this Agreement for the purpose of acknowledging notice of this
Agreement and, where necessary, for the purpose of agreeing to give effect to the terms of this
Agreement.
IN CONSIDERATION OF the premises and mutual covenants and agreements in this Agreement, the
sufficiency of which is hereby acknowledged, the parties agree as follows:
Interpretation
1. In this Agreement
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a. "Articles" are the Corporation’s Articles of Incorporation or Articles of Amalgamation, as the
case may be;
b. "Board" means the board of directors of the Corporation;
c. "Business Day" means a day other than a Saturday or Sunday or statutory holiday;
d. "By-laws" means the by-laws of the Corporation as of the date of this Agreement and as may
be amended from time to time;
e. "Fair Market Value" means the fair market value as determined by a professional appraiser
selected by and paid for by the Corporation;
f. "Financial Statements" means the financial statements of the Corporation, prepared in
accordance with generally accepted accounting principles;
g. "Party" or "Parties" means all of the Shareholders and the Corporation;
h. "Share" or "Shares" refers to a share or shares in the capital of the Corporation;
i. "Shareholder" means any one of the Shareholders who is or later becomes a Shareholder in the
Corporation;
j. "Shareholders" mean any two or more of the Shareholders who are or later become
Shareholders in the Corporation.
Shareholder Agreement
2. This Agreement restricts the Board’s power to manage and supervise the Corporation to the extent
necessary to effect the Shareholders objectives as such objectives are set out in this Agreement and
transfers such powers to the Shareholders. The Shareholders acknowledge that to the extent the
Board’s powers are restricted and transferred to the Shareholders, the obligations and liabilities of the
Board, and the individual directors thereon, are also transferred to the Shareholders.
By-laws and Articles
3. The By-laws will be read as being subject to the provisions of this Agreement. The By-laws will not
be amended or repealed except by written Agreement of all of the Shareholders.
4. The Articles will be read as being subject to the provisions of this Agreement. The Articles will not
be amended or repealed except by written Agreement of all of the Shareholders.
Warranties
5. The Corporation warrants that as of the date of this Agreement, all issued and outstanding Shares are
owned as follows:
Page 3 of 2
Name Number of Shares Class
XXX; VOTING
XXX; VOTING
XXX;A" VOTING
6. Each Shareholder warrants that the Shareholder is the sole beneficial owner of the Shares identified
as being owned by that Shareholder in this Agreement.
7. The Corporation warrants that it has the necessary corporate power and authority to enter into this
Agreement and to perform its obligations under this Agreement.
8. Each Shareholder warrants that he or she is not prevented by reason of law or any other contractual
agreement from entering into this Agreement.
9. The Corporation warrants, and the shareholders agree that the company revenue structure is as
follows; 80% of profits made by the company shall be go to charity, 20 % of profits from the sale of
NFTs shall go towards running and maintenance costs related to the company, furthermore 2% of the
royalties from future resales. 40% of the royalties goes to company fund while the remaining 60% is
given as a bonus to company equity owners.
10. Each Shareholder warrants that they shall perform their duties as provided herein below to the best
of their ability, skill and in the best interests of the Corporation. Furthermore, each shareholder
warrants that if they fail in delivering their duties, the Corporation shall have the right to purchase all
their shares in and with regards to the corporation.
Management of the Corporation
11. The Shareholders will exercise any and all voting rights attached to all Shares owned by them to
elect the following individual as directors of the Corporation unless the person that the Shareholders
have agreed to elect is unable or unwilling to act as a director:
XXX
12. The following person will be appointed to the office of the Corporation shown beside that person’s
name:
Name Term Annual Salary
President: XXX_________
13. The following directors shall have the following responsibilities as regards the management of the
Corporation;
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XXX
1. [list duties and responsibilities]
XXX
1. [list duties and responsibilities]
14. The Corporation will not make capital expenditures in excess of $200,000.00 without the prior
written approval of majority of the Shareholders.
15. The Corporation will not sell, lease, exchange or dispose of any of the Corporation’s assets that have
an aggregate value in excess of $200,000.00 in any fiscal year, except for inventory that is disposed
of in the ordinary course of business, without the prior written approval of all of the majority of
Shareholders.
16. The Corporation will not give any financial assistance by way of gift, loan, guarantee or otherwise
to any Shareholder, director, officer or employee of the Corporation or to any person or entity
related to any Shareholder, director, officer or employee. For the purpose of this Agreement,
individuals connected by blood relationship, marriage or common-law partnership or adoption are
related. An individual is related to a corporation if the individual has effective or legal control of the
corporation, is part of a group that has effective or legal control of the corporation, or is related to
an individual or corporation that has effective or legal control of the corporation or is related to a
person who is part of a group that has effective or legal control of the corporation.
17. ALL VOTING AND APPROVAL WILL BE DONE BY MAJORITY SHAREHOLDER
PERCENT.
18. Drag-Along Rights. If, at any time, the founders jointly propose to transfer all of the Common
Shares owned by the founders in a single transaction to a third party (the “Proposed Acquiror”)
pursuant to a Qualified Sale (as defined below), and the Board of Directors of the Company has
approved such Qualified Sale, the Founders may cause to be included in such Qualified Sale all, but
not less than all, of the Common Shares held by each of the other Shareholders by providing to each
such other Shareholder a notice (a “Qualified Sale Notice”) of the proposed Qualified Sale at least
20 days prior to the date proposed for such Qualified Sale, stating the identity of the Proposed
Acquiror, the kind and amount of consideration proposed to be paid for the Common Shares to be
purchased by the Proposed Acquiror and the other material terms of such Qualified Sale. For
purposes of determining the number of Common Shares outstanding pursuant to the immediately
preceding sentence, Common Shares issuable upon the exercise of Warrants, options or other rights
to acquire Common Shares, or upon the conversion or exchange of any security outstanding as of
the time of delivery of the Qualified Sale Notice, shall not be deemed to be outstanding. In the event
the Founders so provide a Qualified Sale Notice with respect to a Qualified Sale, each other
Shareholder shall (i) be obligated to transfer all of the Common Shares owned by such Shareholder
to the Proposed Acquiror on the terms and conditions set forth in the Qualified Sale Notice and (ii)
execute and deliver such instruments of conveyance and transfer and take such other action,
including voting such Shareholder’s Common Shares in favor of such Qualified Sale and executing
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any purchase agreements, merger agreements, indemnity agreements, escrow agreements or related
documents, as the Founders or the Proposed Acquiror may reasonably require in order to carry out
the terms and provisions of this Section 2(c); provided, however, that such instruments of
conveyance and transfer and such purchase agreements, merger agreements, indemnity agreements,
escrow agreements and related documents shall not include any representations or warranties of
such Shareholder except such representations and warranties as are ordinarily given by a seller of
securities with respect to such seller’s authority to sell, enforceability of agreements against such
seller, such seller’s good title in such securities and the good title in such securities to be acquired at
closing by the Proposed Acquiror, provided further, however, that any indemnity provision included
in any such instrument, agreement or related document shall only indemnify the Proposed Acquiror
with respect to breaches of such representations and warranties by such Shareholder, without any
obligation or liability for contribution. The term “Qualified Sale” means a sale by the Founders to a
third party which is not an Affiliate of the Company or any Shareholder that meets all of the
following requirements: (i) the Common Shares owned in the aggregate by the Founders (assuming
for this purpose the exercise of all outstanding Warrants) to be sold in such sale equals or exceeds
25% of the total outstanding Common Shares (assuming for this purpose the exercise of all
outstanding Warrants), (ii) the terms of such sale were negotiated between the Founders and such
unaffiliated third party (or on their behalf by their respective agents or representatives) on a bona
fide arm’s-length basis, (ii) the terms of such sale provide that the sale of Common Shares pursuant
thereto by each Shareholder that is not a Founder shall be made for the same type and amount of
consideration for each such Common Share sold as is to be received by each Founder for each
Common Share sold (except with respect to Electing Shareholders as set forth below) and, subject
to the provisos in the third sentence of this Section 2(c), in all other respects in a manner such that
each term and condition applicable to such Shareholder is identical to, or no less favorable than,
each corresponding term and condition applicable to either Founder; and (iii) either (A) the
consideration to be received by each Shareholder pursuant to such Qualified Sale is solely cash or
(B) effective provision is made such that at the closing of such Qualified Sale each Electing
Shareholder (as defined below) will receive the Cash Equivalent (as defined below) of any
consideration other than cash proposed to be paid pursuant to the terms of such Qualified Sale. An
“Electing Shareholder” is a Shareholder (other than a Founder) that gives written notice, at least 10
days prior to the date proposed for a Qualified Sale, to the Selling Shareholders that provided the
Qualified Sale Notice of such Shareholder’s election to receive the Cash Equivalent of any non-cash
consideration proposed to be paid pursuant to the terms of such Qualified Sale. The term “Cash
Equivalent” means an amount in cash equal to the fair market value (as determined by a qualified
appraiser with experience in the appraising of properties and businesses in the relevant industry, to
be selected by the mutual agreement of the interested parties) of non-cash consideration to be paid
in a Qualified Sale; provided, however, that if no agreement can be reached, then any such
interested party may apply to the American Arbitration Association for the appointment of an
appraiser meeting the requirements of the preceding sentence, and any such appointment shall be
binding upon the parties; provided further, however, that in the event that such non-cash
consideration consists of publicly traded securities, then, in lieu of using an appraiser, the fair
market value of such non-cash consideration shall equal the average closing price of the publicly
traded security for the 10 Business Days ending on the trading day immediately preceding the
closing of the Qualified Sale. Any such appraiser shall be required to report its appraisal in writing,
within 60 days of its appointment, to each interested party. (d) Preemptive Rights. (A) Grant of
Preemptive Rights. If the Company shall, prior to an Initial Public Offering, issue, sell or distribute
Page 6 of 2
to any Shareholder any equity securities of the Company, or any option, warrant, or right to acquire,
or any security convertible into or exchangeable for, any equity securities of the Company (other
than (i) pursuant to an underwritten offering pursuant to an effective registration statement under
the Securities Act, (ii) pursuant to a dividend or distribution upon the Common Stock of stock or
other equity securities of the Company, (iii) in connection with any scheme of arrangement, merger
or consolidation by the Company or any Affiliate of the Company or the acquisition by the
Company or any such Affiliate of the shares or substantially all the assets of any other Person or
(iv) Warrant Shares) (any equity securities of the Company or options, warrants, rights to acquire or
securities convertible into or exchangeable for equity securities of the Company, the issuance of
which is not covered by clauses (i) through (iv) above, being “New Securities”), each Shareholder
shall be entitled to participate in such issuance, sale or distribution for up to such number of New
Securities (such number being such Shareholder’s “Preemptive Allotment”) as is equal to (x) the
total number of New Securities proposed to be issued, sold or distributed by the Company
multiplied by (y) a fraction, the numerator of which is the number of Common Shares owned by
such Shareholder and the denominator of which is the total number of Common Shares outstanding
(assuming, for purposes of all calculations of outstanding Common Shares in this clause (y), the
exercise of all outstanding Warrants.) (B) Company Notice; Procedures for Exercise of Preemptive
Rights. If the Company proposes to issue any New Securities, the Company shall, at least 20 days
prior to consummating the issuance of the New Securities, give written notice (the “Company
Notice”) to the Shareholders, stating the number of New Securities, the price per New Security, the
terms of payment and all other terms and conditions on which the issuer proposes to make such
issuance. In order for a Shareholder to exercise its preemptive rights under this Section 2(d), such
Shareholder must give written notice to the Company within 10 days after the receipt of the
Company Notice, stating the number of New Securities that such Shareholder desires to purchase
(which number shall not be greater than such Shareholder’s Preemptive Allotment). (C) Re-Set of
Preemptive Rights. If no option is exercised pursuant to this Section 2(d) for any of the New
Securities within 10 days after receipt of the Company Notice (or if the option is exercised in the
aggregate for less than all of the New Securities), the Company shall be free for a period of 180
days thereafter to sell the New Securities as to which such option has not been exercised to the
proposed offerees at no less than the sale price set forth in the Company Notice and on terms and
conditions that are no more favorable to the proposed offerees than those offered to the
Shareholders. If, however, at the expiration of such 180-day period, such New Securities have not
been issued in accordance with the terms set forth in the Company Notice, then any other issuance
or proposed issuance thereof shall be subject to all of the provisions of this Agreement.
Pre-Emptive Rights
19. Subject to the limitations on pre-emptive rights in the Act any Shares issued by the Corporation will
be offered and issued in accordance with the following provisions:
a. the Shares will be offered first to the Shareholders of the class of Share being issued (the "First
Offer") on a pro rata basis.
b. any Shares remaining after the First Offer will be offered on an equal basis to the other
Shareholders of that class (the "Second Offer") for not less than the subscription price specified
in the First Offer and on terms not more favorable than those in the First Offer.
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c. any Shares remaining after the Second Offer will be offered on an equal basis to all
Shareholders in the Corporation (the "Third Offer") for not less than the subscription price
specified in the Second Offer and on terms not more favorable than those in the First Offer.
d. any Shares remaining after the Third Offer may be offered to any person or persons (the "Final
Offer") for not less than the subscription price specified in the Third Offer and on terms not
more favorable than those in the First Offer.
20. The First Offer, the Second Offer, the Third Offer and the Final Offer (collectively and individually
the "Offer") will be in writing and will specify:
a. the subscription price at which the Shares are offered;
b. the date by which the Offer must be accepted, which will be not less than 10 Business Days
from the date on which the Offer is made;
c. the terms of the Offer; and
d. the closing date for the transaction, which will be between 30 and 90 Business Days from the
date on which the Offer is accepted.
21. If the Offer is not accepted within the time period specified for accepting the Offer, the Offer will
be deemed to be declined.
22. Shares will not be issued unless:
a. the subscriber is a party to this Agreement; or
b. the subscriber agrees to be bound by and to become a party to this Agreement and gives a
written and legally binding undertaking to be bound by and become a party to this Agreement.
23. Notwithstanding the above provisions with respect to the pre-emptive right of existing Shareholders
to acquire Shares, Shareholders will have no pre-emptive right in respect of Shares to be issued for
consideration other than money, as a Share dividend, or pursuant to the exercise of conversion
privileges, options or rights previously granted by the Corporation.
Restrictions on Transfer or other Disposal of Interest
24. Shareholders will not and will not agree to directly or indirectly sell, assign, transfer, give, pledge,
hypothecate or otherwise dispose of or in any other way encumber any Share or any interest in any
Share and will not create any security interest in or grant any option with respect to any Share or
any interest in any Share, except in accordance with the express provisions of this Agreement or
except with the prior written approval of all of the Shareholders.
Death or Incapacity of Shareholder
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25. If a Shareholder dies or becomes incapable (the "Incapacitated Shareholder") of performing duties
that the Shareholder is required to perform as a director or officer or as otherwise imposed by this
Agreement by reason of sickness, injury, mental or physical incapacity ("Incapacity") and it appears
as though the Incapacitated Shareholder will not recover so as to be able to perform those duties
within 90 days of the Incapacity:
a. The other Shareholders may purchase all of the Incapacitated Shareholder’s Shares at Fair
Market Value by delivering notice within 6 months of the Incapacity to the Incapacitated
Shareholder, any guardian or trustee appointed to care for the Incapacitated Shareholder’s
financial affairs, or the Incapacitated Shareholder’s estate, as appropriate in the circumstances.
If there is more than one other Shareholder purchasing the Incapacitated Shareholder’s Shares,
each Shareholder will, subject to the prior written agreement of the other purchasing
Shareholders, purchase an equal amount of the Incapacitated Shareholder’s Shares. Each
Shareholder may obtain insurance on the life of any other Shareholder in an amount not
exceeding the estimated Fair Market Value of that Shareholder’s Shares. The proceeds from
any such life insurance will be used for the sole purpose of purchasing a deceased
Shareholder’s Shares.
b. If the other Shareholders do not purchase the Incapacitated Shareholder’s Shares, the Shares
may be bequeathed, sold, given or transferred to any person, as appropriate in the
circumstances, provided that such person agrees to become and does become a party to this
Agreement.
Mediation
26. Mediation may be commenced by any of the Shareholders by the delivery of written notice to all
other Shareholders.
27. The notice will specify the dispute to be mediated, the issues of fact and law to be determined and the
proposed mediator (the "Notice of Dispute").
28. Any Shareholder who receives a Notice of Dispute may object to the proposed mediator and propose
an alternative mediator by delivering a written notice of objection to all other Shareholders within 15
Business Days of receiving the Notice of Dispute. All of the proposed mediators will jointly appoint
a mediator to determine the dispute. If the proposed mediators are unable to agree upon a mediator to
determine the dispute, any Shareholder may apply to the Court for the appointment of a mediator.
29. If no Shareholder objects by written notice to the proposed mediator within 15 Business Days of
receiving the Notice of Dispute, the proposed mediator will mediate the dispute.
30. The mediator and all proposed mediators will be at arm’s-length from every Party to this Agreement
and will not have any interest in the dispute.
31. The mediator, subject to applicable legislation, will determine the procedure for hearing the dispute
but will give written reasons for material findings of fact and a written decision.
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32. The mediator will determine the liability among the parties to the dispute for the cost of the
mediation and the payment of the mediator.
Shot Gun Provision
33. If any of the Shareholders have a dispute (a "Material Dispute") regarding:
a. the manner in which the affairs of the Corporation are to be conducted, or
b. the business in which the Corporation should engage, or
c. any other matter where the disagreement is of such a nature that it is likely to prejudice the
operations or profitability of the Corporation
and if the Material Dispute cannot be resolved after negotiation for a period of not less than thirty
(30) days or through the provisions for mediation within this Agreement, then any Shareholder (the
"Initiating Shareholder") may initiate a forced buy or sell agreement (the "Shot Gun Provision").
34. If there are only two Shareholders to this Agreement at the time this Shot Gun Provision is utilized,
the Initiating Shareholder will give a written offer (the "Offer") to the other Shareholder (the
"Offeree") specifying the price per Share (the "Price") at which the Initiating Shareholder is willing
to:
a. sell all of the Shares owned by the Initiating Shareholder, or
b. purchase all of the Shares owned by the Offeree.
35. The Offeree will, within 15 Business Days of receiving the Offer, give notice to the Initiating
Shareholder indicating that the Offeree has elected to either:
a. purchase the Initiating Shareholder’s Shares at the Price, or
b. sell the Offeree’s Shares at the Price.
36. If the Offeree does not respond to the Offer before 5 o’clock in the afternoon on the 15th Business
Day after the date on which the Offer was received, the Offeree will be deemed to have agreed to sell
the Offeree’s Shares to the Initiating Shareholder at the Price.
37. If the Offeree elects to purchase the Initiating Shareholder’s Shares, the Offeree will tender a certified
cheque for the Price within 10 Business Days of notifying the Initiating Shareholder that the Offeree
has elected to purchase the Initiating Shareholder’s Shares, and the Initiating Shareholder will
transfer or cause to be transferred to the Offeree all of the Initiating Shareholder’s Shares on receipt
of the Price.
38. If the Offeree elects or is deemed to elect to sell the Offeree’s Shares to the Initiating Shareholder, the
Initiating Shareholder will tender a certified cheque for the Price within 10 Business Days of either
the date on which the Initiating Shareholder receives notice that the Offeree has elected to sell the
Offeree’s Shares or the date on which the Offeree is deemed to have elected to sell the Offeree’s
Shares to the Initiating Shareholder, and the Offeree will transfer or cause to be transferred to the
Initiating Shareholder all of the Offeree’s Shares on receipt of the Price.
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39. Failure to make a payment required by this Shot Gun Provision or failure to transfer Shares as
required by this Shot Gun Provision will be deemed to be a breach of contract and the non-defaulting
party will, in addition to any other remedies available by statute or at law or equity, be entitled to and
may elect to, by written notice within 30 Business Days of the default, purchase the defaulting party’s
Shares at 75% of the Price.
40. If there are more than two Shareholders to this Agreement, the Initiating Shareholder may make an
Offer to one of the other Shareholders, and the procedure in this Shot Gun Provision will apply as if
there were only two Shareholders. The Initiating Shareholder may also make an offer to the other
Shareholders as a group, and the other Shareholders will either come to an agreement among
themselves to buy the Initiating Shareholder’s Shares or will, as a group, elect to sell all of the their
Shares to the Initiating Shareholder, and the procedure in this clause will apply.
Right of First Refusal
39. Shareholders are prohibited from selling, transferring or otherwise disposing of their Shares or any
interest in their Shares unless:
a. the Shares are first offered at not more than Fair Market Value to the Shareholders of the class
of Share being sold on a pro rata basis ("Offer One"); and
b. shares remaining after Offer One are offered to all other Shareholders on an equal basis ("Offer
Two") for not less than the price specified in Offer One and on terms not more favourable than
those in Offer One.
40. Shares remaining after Offer Two may be offered to any person or entity (the "Third Party Offer")
for a period of 180 days from the date on which Offer Two was made for not less than the price
specified in Offer Two and on terms not more favourable than those in Offer One.
41. Offer One, Offer Two and the Third Party Offer (collectively and individually the "Offer") will be in
writing and will specify:
a. the price at which the Shares are offered; and
b. the date by which time the Offer must be accepted, which will be not less than 10 Business
Days from the date on which the Offer is made; and
c. the terms of the Offer; and
d. the closing date for the sale of the Shares, which will be between 30 and 90 Business Days
from the date on which the Offer is accepted.
42. Any Offer not accepted within the time period specified for accepting the Offer will be deemed to be
declined.
Dividends
43. Subject to corporate law solvency requirements and to the extent permitted by law and after payment
of any shareholder loans and after establishing sufficient reserves for the normal operation of the
Page 11 of 2
Corporation’s business activities and debt serving requirements, 60 of the Corporation’s profits will
be distributed by way of dividend. Dividends will be distributed quarterly.
44. ALL SHARE HOLDERS AGREE TO RECEIVE 50% OF PROFITS IN THE FIRST YEAR AND
THE SECOND 50% IN THE FOLLOWING YEAR. THIS WILL BE DONE FOR THE FIRST 2
YEARS OF THE COMPANIE’S PROFITS. PROFITS WILL BE CALCULATED AFTER
TAKING DONATIONS AND COSTS OF BUISNESS ARE DEDUCTED . ROYALTIES FROM
SALES WILL BE DIVIDED WITH 66 PERCENT GOING TO PHASE 2 FUND AND
REMAINING 44% WILL GO TO THE COMPANY. 60 PERCENT OF THIS 44% WILL GO TO
SHAREHOLDERS AS A YEARLY BONUS.
45. ALL EQUITY PARTNERS WILL RECEIVE 20% OF THE PROFITS FROM THE 20% OF
SALES PROFITS THAT ARE RECEIVED BY THE CORPORATION. THE SUMS PAYABLE
SHALL BE AGREED UPON BY THE EQUITY PARTNER AND THE BOARD IN WRITING.
SEE EXHIBIT A OF THIS AGREEMENT.
Conflict of Opportunities and Non-Competition
45. Each Shareholder agrees any business opportunity that comes to the attention of the Shareholder
while the Shareholder is a Shareholder, director, officer or employee of the Corporation and that is
similar to or that relates to the current or anticipated business opportunities of the Corporation or that
arises out the Shareholder’s connection with the Corporation, belongs to the Corporation.
46. Each Shareholder agrees that while a Shareholder, director, officer or employee of the Corporation
and for a period of 6 months after ceasing to be a Shareholder, director, officer or employee of the
Corporation, the Shareholder will not, solely or jointly with others:
a. undertake, plan, organize or be involved in any way with any business or any business activity
that competes with the current or anticipated business of the Corporation in the geographic
area in which the Corporation carries on its usual business;
b. be directly or indirectly involved with a business that is in direct competition with the business
of the Corporation in the geographic area in which the Corporation carries on its usual
business; or
c. divert or attempt to divert from the Corporation any business the Corporation enjoyed,
solicited, or attempted to solicit from its customers, prior to the Shareholder ceasing to be a
Shareholder.
47. Each Shareholder agrees that for so long as the Shareholder is a Shareholder, director, officer or
employee of the Corporation, the Shareholder will not engage or participate in any other business
activities that conflict with the best interests of the Corporation.
Non-Solicitation
48. Each Shareholder agrees that while a Shareholder, director, officer or employee of the Corporation
and for a period of 6 months after ceasing to be a Shareholder, director, officer or employee of the
Corporation, the Shareholder will not in any way, directly or indirectly, induce any Shareholder,
Page 12 of 2
director, officer or employee of the Corporation to leave their position with the Corporation or to
compete in any way with the Corporation and will not interfere with the Corporation’s relationship
with its other Shareholders, directors, officers or employees. Such enticement or interference would
be harmful and damaging to the Shareholders and to the Corporation.
Notice of this Agreement on Shares
49. Share certificates will have subscribed on them the following notice or a notice that is substantially
similar to the following notice:
The Shares represented by this certificate are subject to the provisions of a Unanimous Shareholder
Agreement, made the _______ day of ______________, 20__, which restricts the right to sell,
transfer or encumber any share in the Corporation, including the shares represented by this
certificate. Notice of the said agreement is hereby given. A copy of the said agreement may be
obtained by sending a written request to the Board of Directors for the Corporation.
Effective Date and Term
50. This Agreement will come into effect on the date of its execution.
51. This Agreement will remain in effect until the earliest of
a. the date specified in a written agreement, signed by all of the Shareholders, terminating this
Agreement; or
b. the bankruptcy, winding-up or dissolution of the Corporation.
Address for Notice
52. Service of all notices under this Agreement will be sufficient if delivered personally or mailed
certified, return receipt requested, postage prepaid, to the following addresses:
XXX: XXX
XXX: XXX
XXX: XXX
XXX INC.: XXX
Any Shareholder may, on written notice to all other Shareholders and the Corporation, change the
Shareholder’s address for notice under this Agreement. If the Corporation’s registered address
changes, the Corporation may, on written notice to all Shareholders, change its address for notice
under this Agreement.
Severability
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53. If there is a conflict between any provision of this Agreement and its governing legislation (the
"Legislation"), the Legislation will prevail and this Agreement will be amended in order to comply
with the Legislation. Further, any provisions required by the Legislation are incorporated into this
Agreement.
54. If there is a conflict between any provision of this Agreement and any form of Agreement prescribed
by the Legislation, that prescribed form will prevail and such provisions of the Agreement will be
amended or deleted as necessary in order to comply with that prescribed form. Further, any
provisions that are required by that prescribed form are incorporated into this Agreement.
55. In the event that any of the provisions of this Agreement are held to be invalid or unenforceable in
whole or in part, those provisions to the extent enforceable and all other provisions shall nevertheless
continue to be valid and enforceable as though the invalid or unenforceable parts had not been
included in this Agreement and the remaining provisions had been executed by the Parties
subsequent to the expungement of the invalid provision.
General Provisions
56. This Agreement will not be amended or modified except by the written agreement of all the
Shareholders. All Shareholders, without the consent of the Corporation, may modify, amend or
rescind this Agreement.
57. This Agreement constitutes the entire agreement between the Parties and supersedes any previous
agreement or representation with respect to the matters set forth in this Agreement, and there are no
conditions, warranties, representations, agreements, express or implied, relating to such matters.
58. This Agreement will be construed in accordance with and governed by the laws of the Province of
Ontario.
59. Headings are inserted for the convenience of the Parties and for the purpose of interpreting this
Agreement. Words in the singular mean and include the plural and vice versa. Words in the
masculine mean and include the feminine and vice versa. Words in the neuter mean and include the
masculine and feminine and vice versa.
60. This Agreement will inure to the benefit of and be binding upon the respective heirs, executors,
administrators, successors and assigns, as the case may be, of the Parties.
61. This Agreement may be executed in counterparts. Facsimile signatures are binding and are
considered to be original signatures.
62. Time is of the essence in this Agreement.
63. The Parties will do all acts and things and execute all documents that are reasonably necessary or
advantageous to enforce this Agreement according to its tenor and intent and each Party will bear
that Party’s own expenses in connection with the same.
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64. All dollar amounts in this Agreement refer to Canadian dollars, and all payments required to be paid
under this Agreement will be paid in Canadian dollars unless the Parties agree otherwise.
65. No Party will be liable in damages or have the right to terminate this Agreement for any delay or
default in performance if such delay or default is caused by conditions beyond that Party’s control
including, but not limited to acts of God or government restrictions, wars, insurrections, natural
disasters, such as earthquakes, hurricanes or floods and/or any other cause beyond the reasonable
control of the Party whose performance is affected.
IN WITNESS WHEREOF the Parties have executed this Agreement on this _______ day of
______________, 20__.
XXX
XXXX
XXX
XXX INC.
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