CONTENTS PAGE - Koskie

1 SHAREHOLDERS' AGREEMENT of and General Contract and Nature of Shareholders' of Affairs of on Transfer/Right of First Buy-Out (Shotgun Clause).. to Join in to and Discharge of on of 1 1 1 2 3 3 8 of agreement. OF shareholders (all shareholders must beparties, including non-voting shareholders). shareholder is company, consider adding itsshareholders as parties to covenant regardingcontrol of shareholder company.

2 Statement of legal relationship amongparties. particulars, which provide backgroundPage 2 of 19 Shareholders Agr. Checklistinformation needed to understand terms ofshareholders' agreement, such as:a)Business that will be carried on. b)Authorized capital, including list of sharesissued to each shareholder.

3 C)Reasons for entering into agreement. AND GENERALCONTRACT - define all terms as needed. of agreement. clause. procedure. documents. is of essence.

4 Agreement. for convenience only. law. of time. references. Page 3 of 19 Shareholders Agr. meaning of shares. of prior agreements.

5 Clause. , such as:a)Certificate of Incorporation. b)Articles of Incorporation. c)Bylaws. d)Life insurance policies. e)Pro forma budget. AND NATURE OF SHAREHOLDERS' governs dealings. shareholder has power to bind any others exceptas expressly permitted.

6 OF AFFAIRS OF that, except as provided in agreement,conduct of company's business shall be governed byarticles and The Business Corporations Act. :a)Number. b)Appointment ( each shareholder toappoint one or more nominees, allshareholders to agree on appointment of Page 4 of 19 Shareholders Agr.

7 Checklistnominee to break any deadlocks). c)Resignation. d)Filling vacancies. e)Removal ( cause for removal, procedure,replacement). f)Right of director to appoint alternate. for transaction of business:a)Number constituting a quorum, and whethernominee for each shareholder is required tobe present. b)What happens when there is not a quorum( adjournment, with whoever attendsadjourned meeting constituting a quorum).

8 C)Procedure for breaking a deadlock. ' meetings:a)Place and time. b)Calling a meeting, including noticerequirements. ' meetings:a)Place and time. b)Calling a meeting, including noticerequirements.

9 C)Quorum and voting. and employees:a)Positions. Page 5 of 19 Shareholders Agr. Checklistb)Duties. c)Appointment ( shareholder nominees tobe appointed). decisions requiring unanimous approval orspecial approval of directors or shareholders, suchas:a)Sale, lease, transfer, mortgage, pledge orother disposition of undertaking of companyor subsidiary: see The BusinessCorporations Act, s.

10 183. b)Increase or reduction in capital of company;issue of additional shares in capital ofcompany. c)Consolidation, merger or amalgamation ofcompany with any other legal entity. d)Capital expenditures or commitmentsexceeding specified amount.