Shareholders Agreement Template

COMPANY AND PURPOSE

The Company is incorporated in New Zealand under the Companies Act 1993 (CA 1993). The Company's registered office is at 12 Bowen Street, Wellington 6011. The Shareholders agree to operate the Company in accordance with the Companies Act 1993, the Company's constitution (if any), and this Agreement. This Agreement is supplemental to and shall prevail over the Company's constitution to the extent of any inconsistency, to the extent permitted by the CA 1993.

SHARE CAPITAL AND SHAREHOLDING

The Company's total issued share capital is 1000 ordinary shares. The Shareholders hold shares as follows: Shareholder 1 holds 500 shares (50%) and Shareholder 2 holds 500 shares (50%). All shares are fully paid and rank equally in all respects unless otherwise expressly stated in the Company's constitution. Each party represents and warrants that their shares are free and clear of any encumbrance, lien, or third-party claim.

GOVERNANCE AND BOARD OF DIRECTORS

The Company shall be governed by a board of directors comprising 4 directors. Shareholder 1 shall be entitled to nominate 2 directors and Shareholder 2 shall be entitled to nominate 2 directors. Directors shall serve until removed by the Shareholder who nominated them or until they resign. The board shall meet at least quarterly. Board meetings may be held by telephone or videoconference. The quorum for board meetings is 3 directors. Board decisions shall require a majority vote of directors present, except for Reserved Matters which require unanimous approval.

RESERVED MATTERS

The following matters ("Reserved Matters") shall require the written consent of all Shareholders (regardless of board decisions): (a) amendment of the Company's constitution; (b) issuance of new shares or rights to subscribe for shares; (c) material change to the Company's principal business; (d) incurring debt or financial obligations exceeding the agreed threshold; (e) entry into any related-party transaction; (f) appointment or removal of auditors; (g) winding up, liquidation, or restructuring of the Company; (h) acquisition or disposal of material assets outside the ordinary course of business; and (i) entry into any agreement for the sale of the Company or a majority of its assets.

DIVIDENDS AND FINANCIAL MATTERS

Dividends shall be declared at the discretion of the board, subject to the solvency test under the Companies Act 1993 (CA 1993, s 52). The board shall declare dividends as and when appropriate having regard to the Company's working capital requirements and growth strategy. The Company shall maintain accurate financial records in accordance with generally accepted accounting principles (GAAP) and the Financial Reporting Act 2013 (FRA 2013) as applicable. Each Shareholder shall have the right to inspect the Company's financial records at any reasonable time.

GOOD FAITH AND DUTIES

Each Shareholder shall act in good faith towards the Company and the other Shareholders. Shareholders who are also directors acknowledge their fiduciary duties under the Companies Act 1993 (CA 1993, ss 131–138), including duties of care, loyalty, and to act in the best interests of the Company. No Shareholder shall engage in any activity that materially competes with the Company without the prior written consent of the other Shareholders.

CONFIDENTIALITY

Each Shareholder agrees to keep confidential all non-public information relating to the Company and its business, including financial data, business plans, customer information, and trade secrets. This obligation shall survive the termination of this Agreement and shall apply during shareholding and for a period of three (3) years thereafter. A Shareholder may disclose confidential information to its professional advisers bound by equivalent confidentiality obligations or as required by applicable New Zealand law.

GOVERNING LAW AND JURISDICTION

This Agreement shall be governed by and construed in accordance with the laws of New Zealand, including the Companies Act 1993 (CA 1993) and the Contract and Commercial Law Act 2017 (CCLA 2017). Any dispute not resolved in accordance with this Agreement shall be subject to the exclusive jurisdiction of the courts of Wellington, New Zealand.

GENERAL PROVISIONS

Entire Agreement: This Agreement constitutes the entire agreement between the Shareholders in relation to the Company and supersedes all prior agreements and understandings. Amendment: This Agreement may only be amended by written instrument signed by all Shareholders. Severability: If any provision is found invalid or unenforceable, the remaining provisions continue in full force. Assignment: No Shareholder may transfer their interest under this Agreement without complying with the share transfer provisions. Electronic Execution: This Agreement may be executed electronically under the Contract and Commercial Law Act 2017 (CCLA 2017, Part 4).

SHARE TRANSFER AND PRE-EMPTION RIGHTS

Before any Shareholder (the "Selling Shareholder") may transfer any shares to a third party (other than a permitted transferee), the Selling Shareholder shall first offer those shares to the remaining Shareholders ("Pre-emption Rights") on the same terms and at the same price as proposed in the third-party transaction. The remaining Shareholders shall have twenty (20) business days to elect to purchase the offered shares pro rata to their existing shareholding. Pre-emption Rights apply to all proposed transfers, including any charge, encumbrance, or disposal of beneficial interest. Exempt transfers (to wholly-owned subsidiaries or affiliates) shall not trigger pre-emption rights, provided the shares are transferred back if the transferee ceases to be a subsidiary or affiliate. All share transfers require the prior written consent of all Shareholders. No shares may be transferred, charged, or otherwise encumbered without compliance with this clause.

TAG-ALONG, DRAG-ALONG AND EXIT MECHANISMS

Tag-Along Rights: If Shareholder 1 or Shareholder 2 (the "Selling Shareholder") proposes to transfer shares representing more than twenty-five percent (25%) of the total issued shares to a third party, the other Shareholders shall have the right ("Tag-Along Right") to require the third-party purchaser to also acquire their shares on the same terms, price, and conditions as the proposed transfer. The Selling Shareholder shall notify all other Shareholders of the proposed transfer and its terms before completion, and such Shareholders shall have ten (10) business days to elect to exercise their Tag-Along Right. Drag-Along Rights: If Shareholders holding in aggregate more than 75% of the total issued shares (the "Dragging Shareholders") agree to sell their shares to a bona fide third party purchaser, the Dragging Shareholders may require all remaining Shareholders (the "Dragged Shareholders") to sell their shares on the same terms, price, and conditions ("Drag-Along Right"). The Dragged Shareholders shall execute all documents and take all steps necessary to complete such sale. The drag-along price must not be less than fair market value. The Dragged Shareholders shall be given not less than twenty (20) business days' notice of the exercise of the Drag-Along Right. Put/Call Mechanism: In the event of a deadlock that remains unresolved for more than sixty (60) days, any Shareholder may invoke a put/call (Russian roulette) mechanism: the invoking Shareholder shall serve a written notice specifying a price per share at which it is willing to either sell all of its shares or purchase all of the other Shareholder's shares. The receiving Shareholder shall have twenty (20) business days to elect to either sell or purchase at the specified price. If no election is made, the invoking Shareholder shall purchase the other Shareholder's shares at the specified price. Any dispute regarding the exercise of tag-along, drag-along, or exit rights shall be resolved by binding arbitration under the Arbitration Act 1996 (ArA 1996) in Wellington, New Zealand.