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Shareholders Agreement (Two Shareholders)

Shareholders Agreement (Two Shareholders)



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Published by: Legal Forms on Jan 19, 2008
Copyright:Attribution Non-commercial


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made as of among , of ("
"), and , of (" ") and , with its principal place of business at (the "Corporation").
the Corporation was incorporated under the laws of ;
the Shareholders own all of the issued and outstanding Common Shares in thefollowing proportion: 
the Shareholders have agreed to execute and deliver this Agreement as aShareholders’ Agreement as they are desirous of entering into certain arrangements regarding the purchase and sale of their Common Shares and to restrict in part the powers of the Directors tomanage the business and affairs of the Corporation in the manner hereinafter described.
that in consideration of therespective covenants and agreements of the parties herein contained, it is agreed by and betweenthe parties as follows:
Article 1Definitions
1.1In this Agreement, the following words and phrases shall have the following respectivemeanings unless the context otherwise provides:(a)
” means this Agreement and any Schedules hereto;(b)
Common Share
” means a common share in the capital of the Corporation;(c)
” means any director of the board of directors of the Corporation and
Board of Directors
” means the board of directors of the Corporation;(d)
Prime Rate
” means a revolving rate of interest commonly known as the primerate of interest announced from time to time by as a reference rate then ineffect for determining interest rates;(e)
Proportionate Shareholdings
” when used in connection with any Shareholder,means a fraction the numerator of which is the number of Common Shares held bysuch Shareholder and the denominator of which is the total number of issued andoutstanding Common Shares;(f)
” and “
” refer to a section or subsection of this Agreement;
means any of , and any person who becomesthe holder of one or more Common Shares in accordance with the provisions of this Agreement;(h)
Shareholder’s Loan
” means any loan made by a Shareholder to the Corporationin accordance with the provisions of this Agreement;
Article 2Purpose and Intent
2.1The parties shall cause the Corporation to carry on the business of a and togenerally carry on all ancillary and related activities which in the mutual opinion of the parties will enhance the Corporation’s income and profit.2.2The parties agree that the Corporation shall operate under the name of “
“.2.3The Shareholders will irrevocably instruct their nominees and representatives at all themeetings of the Shareholders and insofar as permitted by law their nominees or representatives on the Board of Directors always to vote and act in accordance with theterms of this Agreement so as to give this Agreement full force and effect and to carry outits intent.
Article 3Organization
3.1The Corporation shall be organized as follows:(a)There shall be two (2) Directors on the Board of Directors, consisting of one (1)nominee of each Shareholder. The first members of the Board of Directors shall beas nominee of and as nominee of .(b)The Corporation shall have three (3) officers, namely, President, Secretary andTreasurer. The parties agree that the following persons will be appointed to holdthe following offices of the Corporation:President -Secretary -Treasurer -(c)All cheques and other banking documents, deeds, transfers, contracts, agreementsand other documents that are required to be executed by the Corporation fromtime to time shall be executed on its behalf by any one of the Shareholders.(d)All share certificates issued or to be issued by the Corporation shall be endorsedwith a memorandum as follows:Page 2
“This certificate is subject to a Shareholders’ Agreement dated , a copy of which is filed with the Secretary of theCorporation, and the shares represented by this certificate cannot be sold, transferred, assigned or otherwise disposed of or mortgaged, pledged, hypothecated, charged or otherwiseencumbered except pursuant to the terms of the said Shareholders’  Agreement.”
(e)The by-laws of the Corporation shall provide or shall be deemed hereby to beamended to provide amongst other things, as follows:(i)the presence of two (2) Directors shall be required to constitute a quorumat any meeting of the Board of Directors;(ii)any resolution of the Board of Directors shall require affirmative votes of at least two (2) Directors;(iii)the presence of two (2) Shareholders holding Common Shares, havingvoting rights and representing in person or by proxy one hundred percent(100%) of all issued Common Shares shall be required to constitute aquorum at any meeting of Shareholders;(iv)any resolution of the Shareholders shall require the affirmative votes of onehundred percent (100%) of all issued Common Shares entitled to votingrights at the meeting at which such resolution is being passed;(v)each Director shall have the right at any time and from time to time to calla meeting of the board of directors on not less than seven (7) days’ notice;(vi)any Shareholder shall have the right at any time or from time to time to calla meeting of the Shareholders on not less than seven (7) days’ notice;(vii)the Chairman presiding at meetings of the Board of Directors shall have theright to vote in his capacity as Director in the first instance, but shall haveno second or casting vote in case of an equality of votes;(viii)the Chairman presiding at meetings of the Shareholder shall have the rightto vote in the first instance in his capacity as a Shareholder and as a proxyif so appointed but shall have no second or casting vote in case of anequality of votes.
Article 4Conduct of Business
4.1The parties agree that the powers of the directors will be restricted and, except with thewritten consent of all of the Shareholders:Page 3

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