Shareholder Agreement

This Shareholder Agreement (the "Agreement") is entered into as of effective_date (the "Effective Date") by and among company_name (the "Company"), shareholder_a ("Shareholder A"), and shareholder_b ("Shareholder B"), collectively referred to as the "Parties." Shareholder A and Shareholder B are each referred to as a "Shareholder" and collectively as the "Shareholders."

WHEREAS, the Company is a corporation duly organized and existing under the laws of its state of incorporation; and WHEREAS, the Shareholders are the holders of all the issued and outstanding shares of capital stock of the Company; and WHEREAS, the Shareholders desire to set forth their agreements regarding the governance, management, and operation of the Company, and the rights and obligations of the Shareholders with respect to their shares; NOW, THEREFORE, in consideration of the mutual covenants herein, the Parties agree as follows:

1. Capitalization

1.1 Authorized and Issued Shares

As of the Effective Date, the Company's authorized capital stock, and the number and class of shares issued and outstanding, are as set forth in the attached capitalization table (Exhibit A). Each Shareholder's ownership interest is as specified in Exhibit A. The capitalization table shall be updated from time to time to reflect any issuances, transfers, or cancellations of shares.

1.2 Additional Issuances

The Company shall not issue any additional shares of capital stock, options, warrants, convertible securities, or other equity interests without the prior written consent of Shareholders holding at least two-thirds (2/3) of the outstanding shares. Any such issuance shall be subject to the preemptive rights described in Section 6.

1.3 Share Certificates

All shares of the Company shall bear a legend indicating that they are subject to the restrictions on transfer and other provisions of this Agreement. The Company shall maintain a stock ledger reflecting the ownership of all shares.

2. Governance and Management

2.1 Board of Directors

The Company shall be managed by a board of directors (the "Board"). The initial Board shall consist of three (3) directors. Shareholder A shall have the right to appoint one (1) director, Shareholder B shall have the right to appoint one (1) director, and the third director shall be an independent director mutually agreed upon by both Shareholders. Each Shareholder may replace its appointed director at any time by providing written notice to the Company and the other Shareholder.

2.2 Board Meetings

The Board shall meet at least quarterly, or more frequently as reasonably requested by any director. Board meetings may be held in person or by telephone or video conference. A quorum for Board meetings shall consist of a majority of the directors then in office. Except as otherwise provided in this Agreement, actions of the Board shall require the affirmative vote of a majority of the directors present at a meeting at which a quorum is present.

2.3 Board Supermajority Matters

The following actions shall require the affirmative vote of all directors or, if applicable, the written consent of Shareholders holding at least two-thirds (2/3) of the outstanding shares ("Supermajority Matters"): (a) any amendment to the Company's charter documents or bylaws; (b) any merger, consolidation, acquisition, or sale of all or substantially all of the Company's assets; (c) any issuance of equity securities; (d) any incurrence of debt in excess of a threshold specified in Exhibit C; (e) any transaction with a related party; (f) any change in the Company's line of business; (g) the declaration or payment of dividends or distributions; (h) any filing for bankruptcy or dissolution; and (i) the hiring, termination, or compensation of executive officers.

2.4 Officers

The Board shall appoint officers of the Company, including a Chief Executive Officer, Chief Financial Officer, and such other officers as the Board deems necessary. The officers shall serve at the pleasure of the Board and shall have the duties and responsibilities customary for their respective positions, as well as any additional duties assigned by the Board.

2.5 Shareholder Meetings

The Company shall hold an annual meeting of Shareholders. Special meetings may be called by the Board or by Shareholders holding at least twenty-five percent (25%) of the outstanding shares. Each Shareholder shall be entitled to one vote per share held. The Company shall provide at least fifteen (15) days' prior written notice of all Shareholder meetings.

2.6 Deadlock Resolution

If the Board or the Shareholders are unable to reach agreement on a Supermajority Matter after good-faith negotiations, the deadlock shall be resolved through the following process: (a) the matter shall be escalated to the Chief Executive Officers (or equivalent principals) of each Shareholder for resolution within thirty (30) days; (b) if the deadlock persists, the matter shall be submitted to mediation; and (c) if mediation is unsuccessful within sixty (60) days, either Shareholder may invoke the buy-sell provisions described in Section 5.

3. Financial Matters

3.1 Fiscal Year

The Company's fiscal year shall begin on January 1 and end on December 31 of each year, unless otherwise determined by the Board.

3.2 Financial Statements

The Company shall prepare and deliver to each Shareholder: (a) annual audited financial statements within one hundred twenty (120) days after the end of each fiscal year; (b) quarterly unaudited financial statements within forty-five (45) days after the end of each fiscal quarter; and (c) monthly unaudited financial statements within thirty (30) days after the end of each month.

3.3 Annual Budget

The Company shall prepare an annual operating budget and business plan for each fiscal year, which shall be presented to the Board for approval no later than thirty (30) days before the beginning of such fiscal year. The budget shall include projected revenues, expenses, capital expenditures, and cash flow. Material deviations from the approved budget shall require Board approval.

3.4 Dividends and Distributions

The Company shall distribute dividends to the Shareholders pro-rata in accordance with their respective ownership interests, at such times and in such amounts as determined by the Board, subject to applicable law and the Company's cash flow requirements. The Board shall make distributions at least annually to enable each Shareholder to satisfy its tax obligations arising from its ownership of Company shares, to the extent permitted by law and the Company's financial condition.

3.5 Bank Accounts

All Company funds shall be deposited in bank accounts maintained in the Company's name at financial institutions approved by the Board. Withdrawals and disbursements from Company accounts shall require the signatures or authorizations of persons designated by the Board.

3.6 Accounting and Audit

The Company shall maintain accurate books and records in accordance with generally accepted accounting principles (GAAP). The Company's annual financial statements shall be audited by an independent accounting firm selected by the Board. Each Shareholder shall have the right to review the Company's books and records upon reasonable notice.

4. Transfer Restrictions

4.1 General Restriction

No Shareholder shall sell, transfer, assign, pledge, encumber, or otherwise dispose of any shares of the Company (a "Transfer") except in accordance with the provisions of this Agreement. Any purported Transfer in violation of this Agreement shall be void and of no effect, and the Company shall not register any such Transfer on its books.

4.2 Right of First Refusal

If a Shareholder (the "Selling Shareholder") receives a bona fide offer from a third party to purchase all or any portion of its shares and desires to accept such offer, the Selling Shareholder shall first offer such shares to the Company and then to the other Shareholders on the same terms and conditions (the "ROFR Notice"). The Company shall have thirty (30) days to exercise its right of first refusal, and if the Company declines, the other Shareholders shall have an additional thirty (30) days to exercise their right of first refusal on a pro-rata basis.

4.3 Tag-Along Rights

If a Shareholder proposes to Transfer shares to a third party and the other Shareholders do not exercise their right of first refusal, the non-selling Shareholders shall have the right to participate in the Transfer on the same terms and conditions, pro-rata based on their ownership interests ("Tag-Along Rights"). The Selling Shareholder shall include the non-selling Shareholders' shares in the transaction.

4.4 Drag-Along Rights

If Shareholders holding at least two-thirds (2/3) of the outstanding shares approve a sale, merger, or change of control transaction, such Shareholders may require all other Shareholders to participate in and consent to the transaction on the same terms and conditions ("Drag-Along Rights"). Each Shareholder shall take all actions necessary to facilitate the transaction, including voting in favor of the transaction, executing transaction documents, and delivering shares.

4.5 Permitted Transfers

Notwithstanding the foregoing restrictions, a Shareholder may Transfer shares to: (a) a trust established for the benefit of the Shareholder or the Shareholder's immediate family members; (b) an entity wholly owned by the Shareholder; or (c) the Shareholder's spouse, children, or other immediate family members, provided that the transferee agrees in writing to be bound by all terms of this Agreement.

4.6 Involuntary Transfers

In the event of an involuntary Transfer, including a Transfer resulting from death, divorce, bankruptcy, or legal judgment, the Company and the remaining Shareholders shall have the right to purchase the affected shares at fair market value, as determined by the valuation methodology specified in Section 5.4. The purchase right shall be exercised within sixty (60) days of the Company's receipt of notice of the involuntary Transfer.

5. Buy-Sell Provisions

5.1 Triggering Events

The buy-sell provisions of this Section shall be triggered upon the occurrence of any of the following events (each, a "Triggering Event"): (a) a deadlock that cannot be resolved under Section 2.6; (b) a material breach of this Agreement by a Shareholder that remains uncured after the applicable cure period; (c) the death or permanent disability of a Shareholder who is an individual; (d) the bankruptcy or insolvency of a Shareholder; or (e) the mutual agreement of the Shareholders to invoke the buy-sell provisions.

5.2 Buy-Sell Process

Upon the occurrence of a Triggering Event, either Shareholder may initiate the buy-sell process by delivering a written notice to the other Shareholder specifying a price per share at which it is willing to buy the other Shareholder's shares or sell its own shares (the "Offer Price"). The receiving Shareholder shall have thirty (30) days to elect either to: (a) sell all of its shares to the offering Shareholder at the Offer Price; or (b) buy all of the offering Shareholder's shares at the Offer Price. If the receiving Shareholder fails to make an election within the thirty-day period, it shall be deemed to have elected to sell its shares.

5.3 Closing of Buy-Sell

The closing of the buy-sell transaction shall occur within sixty (60) days of the receiving Shareholder's election (or deemed election). The purchasing Shareholder shall pay the total purchase price in cash at closing, unless the Parties agree to installment payments. At closing, the selling Shareholder shall deliver its shares free and clear of all liens and encumbrances, together with all necessary transfer documents.

5.4 Valuation

If the Parties are unable to agree on the fair market value of the shares, the valuation shall be determined by an independent, qualified business appraiser mutually selected by the Shareholders. If the Shareholders cannot agree on an appraiser within fifteen (15) days, each Shareholder shall select one appraiser, and the two appraisers shall select a third appraiser. The fair market value shall be the average of the three appraisals. The costs of the appraisal process shall be borne equally by the Shareholders.

5.5 Funding

The Company shall maintain key-person life insurance and disability insurance on each Shareholder who is an individual, in amounts sufficient to fund the Company's or the remaining Shareholders' purchase obligations under the buy-sell provisions. The Company shall be the owner and beneficiary of such insurance policies, and the insurance proceeds shall be used to fund the purchase of the deceased or disabled Shareholder's shares.

6. Preemptive Rights

If the Company proposes to issue additional shares or other equity securities, each Shareholder shall have the right to purchase a pro-rata portion of such securities on the same terms and conditions offered to other purchasers, to maintain its percentage ownership interest in the Company. The Company shall provide each Shareholder with at least thirty (30) days' written notice of any proposed issuance, including the terms and conditions thereof.

If a Shareholder does not exercise its preemptive rights within the notice period, the Company may issue the securities to third parties on terms no more favorable than those offered to the Shareholders.

7. Non-Competition and Non-Solicitation

7.1 Non-Competition

During the term of this Agreement and for a period of two (2) years following the termination of a Shareholder's ownership interest, each Shareholder agrees not to, directly or indirectly, engage in, own, manage, operate, or have a financial interest in any business that competes with the Company's business within the geographic markets served by the Company. This restriction shall not prohibit passive ownership of less than five percent (5%) of the outstanding securities of a publicly traded company.

7.2 Non-Solicitation

During the term of this Agreement and for a period of two (2) years following termination, each Shareholder agrees not to solicit, recruit, or hire any employee, contractor, or consultant of the Company, or to solicit or divert any customer, client, or supplier of the Company.

8. Confidentiality

Each Shareholder shall maintain the confidentiality of all non-public information regarding the Company, including financial information, business plans, trade secrets, customer data, and the terms of this Agreement. No Shareholder shall disclose such information to any third party without the prior written consent of the other Shareholders and the Company, except as required by law or to the Shareholder's professional advisors who are bound by confidentiality obligations.

This confidentiality obligation shall survive the termination of this Agreement and the termination of a Shareholder's ownership interest for a period of five (5) years.

9. Representations and Warranties

9.1 Company Representations

The Company represents and warrants that: (a) it is duly organized and in good standing; (b) it has the authority to enter into this Agreement; (c) the capitalization table is true and complete; and (d) it is in compliance with all applicable laws.

9.2 Shareholder Representations

Each Shareholder represents and warrants that: (a) it has the authority to enter into this Agreement; (b) it owns its shares free and clear of all liens; (c) the execution of this Agreement does not conflict with any other agreement; and (d) it is not subject to any legal proceedings that would affect its ability to perform under this Agreement.

10. Indemnification

10.1 Company Indemnification

The Company shall indemnify each Shareholder and its officers, directors, employees, and agents from and against any claims, damages, losses, and expenses arising from: (a) the Company's breach of this Agreement; (b) the Company's negligence or willful misconduct; or (c) any third-party claims arising from the Company's business operations.

10.2 Shareholder Indemnification

Each Shareholder shall indemnify the Company and the other Shareholders from and against any claims, damages, losses, and expenses arising from: (a) such Shareholder's breach of this Agreement; (b) such Shareholder's breach of the non-competition or non-solicitation provisions; or (c) such Shareholder's negligence or willful misconduct.

11. Term and Termination

11.1 Term

This Agreement shall be effective as of the Effective Date and shall continue in effect until: (a) all Shareholders except one have transferred all of their shares; (b) the Company is dissolved or wound up; (c) the Company's shares become publicly traded; or (d) the Shareholders unanimously agree in writing to terminate this Agreement.

11.2 Survival

The provisions relating to confidentiality, non-competition, non-solicitation, indemnification, and any provisions that by their nature are intended to survive, shall survive the termination of this Agreement.

12. Dispute Resolution

12.1 Negotiation

Any dispute shall first be submitted to good-faith negotiation between the Shareholders for a period of thirty (30) days.

12.2 Mediation

If negotiation is unsuccessful, the dispute shall be submitted to mediation administered by a mutually agreed mediator. Mediation costs shall be shared equally.

12.3 Arbitration

If mediation is unsuccessful within sixty (60) days, the dispute shall be submitted to binding arbitration. The arbitration shall be conducted by a single arbitrator in accordance with the rules of the American Arbitration Association, and the decision shall be final and binding.

13. General Provisions

13.1 Entire Agreement

This Agreement constitutes the entire agreement among the Parties regarding the subject matter hereof.

13.2 Amendments

This Agreement may be amended only by written instrument signed by all Parties.

13.3 Assignment

No Shareholder may assign its rights under this Agreement except in connection with a permitted Transfer of shares as described herein.

13.4 Governing Law

This Agreement shall be governed by the laws of the state of the Company's incorporation, without regard to conflict of laws principles.

13.5 Severability

If any provision is held invalid, the remaining provisions shall continue in full force and effect.

13.6 Waiver

No failure or delay in exercising any right shall constitute a waiver. Waivers must be in writing and signed by the waiving Party.

13.7 Notices

All notices shall be in writing and deemed given when delivered personally, by confirmed email, or by overnight courier.

13.8 Counterparts

This Agreement may be executed in counterparts. Electronic signatures shall be deemed original signatures.

IN WITNESS WHEREOF, the Parties have executed this Shareholder Agreement as of the Effective Date.

Company

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Shareholder A

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Shareholder B

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