Complete all fields marked with [BRACKETS] before use.
SHAREHOLDER AGREEMENT
This Shareholder Agreement (this “Agreement”) is entered into as of [DATE] (the “Effective Date”), by and among:
(i) [COMPANY NAME], a [STATE OF INCORPORATION] corporation (the “Company”);
(ii) The persons and entities listed on Exhibit A attached hereto (each, an “Investor” and collectively, the “Investors”); and
(iii) The persons listed on Exhibit B attached hereto (each, a “Founder” and collectively, the “Founders”).
The Investors and the Founders are sometimes referred to herein individually as a “Shareholder” and collectively as the “Shareholders.” The Company and the Shareholders are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, the Company has authorized capital stock consisting of [NUMBER] shares of Common Stock, par value $[PAR VALUE] per share (the “Common Stock”), and [NUMBER] shares of Preferred Stock, par value $[PAR VALUE] per share (the “Preferred Stock”), of which [NUMBER] shares have been designated as Series [SERIES DESIGNATION] Preferred Stock (the “Series [DESIGNATION] Preferred Stock”);
WHEREAS, the Investors hold or are acquiring shares of the Company’s capital stock as set forth on Exhibit A, and the Founders hold shares of the Company’s Common Stock as set forth on Exhibit B;
WHEREAS, the Parties desire to enter into this Agreement to set forth their agreements regarding the governance of the Company, the rights and obligations of the Shareholders with respect to their shares in the Company, and certain restrictions on the transfer of shares; and
WHEREAS, the execution and delivery of this Agreement is a condition to the closing of the transactions contemplated by that certain [Series [DESIGNATION] Preferred Stock Purchase Agreement] dated as of [DATE] (the “Purchase Agreement”);
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the meanings set forth below:
“Affiliate” — means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person. For purposes of this definition, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise.
“Board” — means the Board of Directors of the Company.
“Change of Control” — means (a) the consummation of a merger, consolidation, or reorganization of the Company with or into another Person (other than a merger, consolidation, or reorganization in which the holders of the Company’s capital stock immediately prior to such transaction continue to hold at least fifty percent (50%) of the voting power of the surviving entity); (b) the sale, transfer, exclusive license, or other disposition of all or substantially all of the assets of the Company; or (c) the acquisition by any Person or group of Persons of beneficial ownership of more than fifty percent (50%) of the combined voting power of the then-outstanding securities of the Company.
“Common Stock” — means the Common Stock of the Company, par value $[PAR VALUE] per share.
“Equity Securities” — means (a) any Common Stock, Preferred Stock, or other equity interests in the Company; (b) any securities convertible into or exchangeable for any equity interests in the Company; and (c) any options, warrants, or other rights to acquire any equity interests in the Company.
“Investor Director” — means a director designated by the Investors pursuant to Section 2.1.
“Founder Director” — means a director designated by the Founders pursuant to Section 2.1.
“Key Holder” — means each Founder and any other Person who becomes a party to this Agreement and is designated as a Key Holder on the signature pages hereof or on a joinder agreement.
“Person” — means any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organization, governmental authority, or other entity.
“Shares” — means all shares of the Company’s capital stock now or hereafter held by the Shareholders, including Common Stock, Preferred Stock, and any shares of capital stock issued or issuable upon conversion, exchange, or exercise thereof.
“Transfer” — means any sale, assignment, transfer, pledge, hypothecation, encumbrance, gift, or other disposition or encumbrance, whether direct or indirect, voluntary or involuntary, by operation of law or otherwise.
2. Board Composition
2.1 Board Size and Composition. The Board shall consist of [NUMBER] directors, designated as follows:
(a) Investor Directors. [NUMBER] director(s) shall be designated by the holders of a majority of the then-outstanding shares of Series [DESIGNATION] Preferred Stock, voting as a separate class (each, an “Investor Director”). The initial Investor Director(s) shall be [INVESTOR DIRECTOR NAME(S)];
(b) Founder Directors. [NUMBER] director(s) shall be designated by the holders of a majority of the then-outstanding shares of Common Stock held by the Founders, voting as a separate class (each, a “Founder Director”). The initial Founder Director(s) shall be [FOUNDER DIRECTOR NAME(S)];
(c) Independent Director. [NUMBER] director(s) shall be designated by the mutual consent of the Investor Director(s) and the Founder Director(s) (each, an “Independent Director”). The initial Independent Director shall be [INDEPENDENT DIRECTOR NAME]; and
(d) CEO Director. The then-serving Chief Executive Officer of the Company shall serve as a director of the Company for so long as such individual serves in such capacity. The initial CEO Director shall be [CEO NAME].
2.2 Removal and Vacancies. Each director designated pursuant to Section 2.1 may be removed, with or without cause, only by the Person(s) entitled to designate such director. Any vacancy created by the removal, resignation, or death of a director shall be filled only by the Person(s) entitled to designate such director pursuant to Section 2.1.
2.3 Observer Rights. [INVESTOR NAME / INVESTOR ENTITY] shall have the right to designate one (1) representative to attend all meetings of the Board and any committees thereof in a non-voting, observer capacity (the “Observer”). The Observer shall be entitled to receive all notices, agendas, board packages, and other materials provided to members of the Board at the same time and in the same manner as such materials are provided to the directors. The Company may exclude the Observer from any meeting or portion thereof if, upon advice of counsel, the attendance of the Observer would adversely affect the attorney-client privilege between the Company and its legal counsel or would result in a conflict of interest.
2.4 Board Meetings. The Board shall meet at least [quarterly / monthly], and the Company shall provide each director and the Observer with not less than [NUMBER] business days’ prior written notice of each meeting, together with an agenda and any materials to be discussed at such meeting. Meetings may be held in person, by telephone, or by videoconference. A majority of the total number of directors shall constitute a quorum for the transaction of business.
3. Voting Agreements
3.1 Election of Directors. Each Shareholder agrees to vote all Shares over which such Shareholder has voting control, and to take all other necessary or desirable actions within such Shareholder’s control (whether in such Shareholder’s capacity as a shareholder, director, member of a board committee, or officer of the Company, and including attendance at meetings in person or by proxy for purposes of obtaining a quorum and execution of written consents in lieu of meetings), to ensure that the composition of the Board is as set forth in Section 2.1.
3.2 Protective Provisions. So long as any shares of Preferred Stock are outstanding, the Company shall not, without the prior written consent of the holders of at least [THRESHOLD — e.g., a majority / sixty-six and two-thirds percent (66 2/3%)] of the then-outstanding shares of Preferred Stock (voting as a single class on an as-converted basis), directly or indirectly, whether by amendment, merger, consolidation, or otherwise:
(a) Alter or change the rights, preferences, or privileges of the Preferred Stock in a manner that adversely affects the holders thereof;
(b) Increase or decrease the authorized number of shares of Common Stock or Preferred Stock, or create or authorize any new class or series of shares having rights, preferences, or privileges senior to or on parity with the Preferred Stock;
(c) Redeem, repurchase, or otherwise acquire any Equity Securities of the Company (other than repurchases of Common Stock from former employees, consultants, or other service providers at cost or pursuant to the Company’s equity incentive plan);
(d) Declare or pay any dividend or make any distribution on any Equity Securities of the Company;
(e) Consummate a Change of Control, liquidation, dissolution, or winding up of the Company;
(f) Incur any indebtedness in excess of $[THRESHOLD AMOUNT] (other than trade payables and equipment financing in the ordinary course of business);
(g) Enter into any transaction with any Founder, director, officer, or Affiliate of any of the foregoing, except for transactions on arms-length terms approved by a majority of the disinterested members of the Board;
(h) Increase the size of the Board beyond [NUMBER] directors;
(i) Change the Company’s principal line of business or enter into any new line of business materially different from the Company’s current business; or
(j) Amend, modify, or repeal any provision of the Company’s Certificate of Incorporation or Bylaws in a manner that adversely affects the holders of Preferred Stock.
4. Information Rights
4.1 Financial Statements. The Company shall deliver to each Investor holding at least [THRESHOLD — e.g., [NUMBER] shares of Preferred Stock (or Common Stock issued upon conversion thereof)] (each, a “Major Investor”):
(a) As soon as practicable, but in no event later than ninety (90) days after the end of each fiscal year, audited annual consolidated financial statements of the Company, prepared in accordance with generally accepted accounting principles (“GAAP”), consistently applied, audited by a nationally recognized or regionally recognized independent public accounting firm approved by the Board;
(b) As soon as practicable, but in no event later than forty-five (45) days after the end of each fiscal quarter (other than the last quarter of the fiscal year), unaudited quarterly consolidated financial statements of the Company, including a balance sheet, income statement, statement of cash flows, and a capitalization table, prepared in accordance with GAAP, consistently applied, and certified by the Company’s Chief Financial Officer;
(c) As soon as practicable, but in no event later than thirty (30) days after the end of each fiscal month, unaudited monthly consolidated financial statements, including a comparison to the Company’s annual operating budget and plan;
(d) As soon as practicable, but in no event later than thirty (30) days prior to the end of each fiscal year, an annual operating budget and business plan for the succeeding fiscal year, as approved by the Board; and
(e) Such other information relating to the financial condition, business, prospects, or corporate affairs of the Company as any Major Investor may from time to time reasonably request.
4.2 Inspection Rights. Each Major Investor shall have the right to inspect the Company’s properties and facilities, and to inspect and copy the Company’s books and records, upon reasonable notice and during normal business hours, at the expense of such Major Investor.
4.3 Termination. The obligations of the Company under this Section 4 shall terminate upon the earliest to occur of: (a) an initial public offering of the Company’s Common Stock pursuant to an effective registration statement under the Securities Act of 1933, as amended; (b) a Change of Control; or (c) the dissolution or winding up of the Company.
5. Transfer Restrictions
5.1 General Restriction. No Shareholder shall Transfer any Shares except in compliance with this Agreement, applicable securities laws, and any other agreement between such Shareholder and the Company. Any purported Transfer of Shares in violation of this Agreement shall be null and void and of no force or effect, and the Company shall not register or give effect to any such Transfer on its books and records.
5.2 Right of First Refusal. If any Shareholder (the “Selling Shareholder”) proposes to Transfer any Shares to any third party (the “Proposed Transferee”), the Selling Shareholder shall first deliver a written notice (the “Transfer Notice”) to the Company and each other Shareholder, specifying (a) the identity of the Proposed Transferee, (b) the number and class of Shares proposed to be Transferred (the “Offered Shares”), (c) the price per share and aggregate consideration (the “Offer Price”), and (d) all other material terms and conditions of the proposed Transfer. The Company shall have the first right, exercisable within [COMPANY ROFR PERIOD — e.g., fifteen (15)] days after receipt of the Transfer Notice, to purchase all or any portion of the Offered Shares at the Offer Price and on the same terms. To the extent the Company does not exercise its right to purchase all of the Offered Shares, each Investor shall have the right, exercisable within [INVESTOR ROFR PERIOD — e.g., fifteen (15)] days after the expiration of the Company’s exercise period, to purchase its pro rata share (based on relative equity holdings) of the remaining Offered Shares at the Offer Price and on the same terms.
5.3 Lock-Up Period. Each Founder agrees that, without the prior written consent of the holders of a majority of the then-outstanding shares of Preferred Stock (on an as-converted basis), such Founder shall not Transfer any Shares during the period commencing on the Effective Date and ending on the date that is [LOCK-UP PERIOD — e.g., one (1) year / eighteen (18) months / two (2) years] after the Effective Date (the “Lock-Up Period”); provided, however, that the foregoing restriction shall not apply to (a) Transfers to Permitted Transferees (as defined below), (b) Transfers pursuant to a Change of Control, or (c) Transfers approved by the Board.
5.4 Permitted Transfers. Notwithstanding any provision of this Agreement to the contrary, a Shareholder may Transfer Shares without compliance with the right of first refusal provisions of Section 5.2 to: (a) any Affiliate of such Shareholder; (b) in the case of an individual, to or for the benefit of any member of such Shareholder’s immediate family, or to a trust, partnership, or limited liability company for the benefit of such Shareholder or such Shareholder’s immediate family members; provided, in each case, that (i) the Transferee executes a joinder agreement agreeing to be bound by the terms of this Agreement and (ii) such Transfer is made in compliance with applicable securities laws (each, a “Permitted Transferee”).
6. Tag-Along Rights
6.1 Tag-Along Right. If any Founder proposes to Transfer Shares to a Proposed Transferee (other than a Permitted Transfer under Section 5.4), each Investor shall have the right (the “Tag-Along Right”) to participate in such Transfer by selling a pro rata portion of such Investor’s Shares (on an as-converted to Common Stock basis) on the same terms and conditions as the Founder’s proposed Transfer.
6.2 Tag-Along Notice. The Founder shall deliver a written notice (the “Tag-Along Notice”) to each Investor at least [TAG-ALONG NOTICE PERIOD — e.g., twenty (20)] days prior to the consummation of the proposed Transfer, setting forth the terms and conditions of the proposed Transfer, including the identity of the Proposed Transferee, the number of Shares to be Transferred, the price per share, and the anticipated closing date.
6.3 Exercise of Tag-Along Right. Each Investor who wishes to exercise its Tag-Along Right shall deliver a written notice to the Founder within [TAG-ALONG EXERCISE PERIOD — e.g., fifteen (15)] days after receipt of the Tag-Along Notice, specifying the number of Shares (not to exceed such Investor’s pro rata share) to be included in the Transfer. If the Proposed Transferee is unwilling to purchase all Shares tendered by the participating Investors, the Founder shall reduce the number of the Founder’s Shares included in the Transfer so that the participating Investors may sell their full pro rata share.
6.4 Closing. The Transfer contemplated by this Section 6 shall be consummated on the terms set forth in the Tag-Along Notice, and the participating Investors shall receive the same form of consideration, at the same price per share (on an as-converted basis), and shall be subject to the same terms, conditions, representations, warranties, and indemnification obligations as the Founder.
7. Drag-Along Rights
7.1 Drag-Along Right. If (a) the holders of at least [DRAG-ALONG THRESHOLD — e.g., a majority / sixty-six and two-thirds percent (66 2/3%)] of the then-outstanding shares of Preferred Stock (on an as-converted basis) (the “Dragging Investors”), and (b) the Board, approve a Change of Control (the “Approved Sale”), then the Dragging Investors shall have the right (the “Drag-Along Right”) to require each other Shareholder (each, a “Dragged Shareholder”) to: (i) vote in favor of, consent to, and not object to, the Approved Sale; (ii) tender or sell all of such Dragged Shareholder’s Shares in the Approved Sale on the same terms and conditions as the Dragging Investors; (iii) execute and deliver all agreements and documents required in connection with the Approved Sale; and (iv) take all other actions necessary or desirable to consummate the Approved Sale.
7.2 Drag-Along Notice. The Dragging Investors shall deliver a written notice (the “Drag-Along Notice”) to each Dragged Shareholder at least [DRAG-ALONG NOTICE PERIOD — e.g., twenty (20)] days prior to the anticipated closing date of the Approved Sale, setting forth the material terms thereof, including the identity of the acquirer, the consideration to be received, and the anticipated closing date.
7.3 Conditions. In connection with any Approved Sale, (a) each holder of Preferred Stock shall receive the same form and amount of consideration per share (on an as-converted basis) as each holder of Common Stock, subject to any applicable liquidation preferences; (b) no Shareholder shall be required to make representations, warranties, or indemnification obligations that are more burdensome than those applicable to the Dragging Investors (except for individual representations regarding title to shares and authority); and (c) no Shareholder shall be required to provide indemnification in excess of the net proceeds received by such Shareholder in the Approved Sale.
7.4 Irrevocable Proxy. If any Dragged Shareholder fails to comply with the provisions of this Section 7, such Dragged Shareholder hereby grants to the Dragging Investors an irrevocable proxy (coupled with an interest) to vote such Dragged Shareholder’s Shares in favor of the Approved Sale and to execute all documents and instruments necessary to consummate the Approved Sale on behalf of such Dragged Shareholder.
8. Preemptive Rights
8.1 Right of First Offer. The Company shall not issue or sell any Equity Securities (an “Issuance”) unless the Company first offers to each Major Investor the opportunity to purchase such Major Investor’s pro rata share of such Equity Securities on the same terms and conditions as the proposed Issuance. For purposes of this Section 8, a Major Investor’s “pro rata share” means the ratio of (a) the number of shares of Common Stock held by such Major Investor (on an as-converted basis) to (b) the total number of shares of Common Stock then outstanding (on a fully-diluted basis).
8.2 Issuance Notice. The Company shall deliver a written notice (the “Issuance Notice”) to each Major Investor at least [PREEMPTIVE RIGHTS NOTICE PERIOD — e.g., fifteen (15)] days prior to the proposed Issuance, specifying the number and class of Equity Securities to be issued, the price per security, and the material terms of the Issuance.
8.3 Exercise. Each Major Investor who wishes to exercise its preemptive right shall deliver a written notice to the Company within [PREEMPTIVE RIGHTS EXERCISE PERIOD — e.g., fifteen (15)] days after receipt of the Issuance Notice, specifying the number of Equity Securities such Major Investor wishes to purchase (not to exceed such Major Investor’s pro rata share, unless oversubscription is available as set forth below).
8.4 Oversubscription. If any Major Investor fails to exercise its preemptive right in full, each Major Investor who exercised its preemptive right in full shall have the right to purchase its pro rata share of the unsubscribed Equity Securities on the same terms.
8.5 Exceptions. The preemptive rights set forth in this Section 8 shall not apply to: (a) shares of Common Stock issued upon conversion of Preferred Stock; (b) Equity Securities issued pursuant to the Company’s equity incentive plan approved by the Board; (c) Equity Securities issued in connection with any stock split, stock dividend, or recapitalization; (d) Equity Securities issued in connection with a bona fide strategic transaction approved by the Board; (e) Equity Securities issued in connection with an initial public offering; or (f) Equity Securities issued in connection with a Change of Control.
9. Representations and Warranties
9.1 Company Representations. The Company represents and warrants to each Shareholder that: (a) the Company is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of [STATE OF INCORPORATION]; (b) the Company has all requisite corporate power and authority to execute, deliver, and perform its obligations under this Agreement; (c) the execution and delivery of this Agreement has been duly authorized by all necessary corporate action on the part of the Company; (d) this Agreement constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors’ rights generally and to general principles of equity; and (e) the execution and delivery of this Agreement do not conflict with or result in a breach of the Company’s Certificate of Incorporation, Bylaws, or any material agreement to which the Company is a party.
9.2 Shareholder Representations. Each Shareholder, severally and not jointly, represents and warrants to the Company and to each other Shareholder that: (a) such Shareholder has full power, authority, and legal capacity to execute, deliver, and perform its obligations under this Agreement; (b) this Agreement constitutes a valid and binding obligation of such Shareholder, enforceable against such Shareholder in accordance with its terms; (c) such Shareholder is the sole legal and beneficial owner of the Shares set forth opposite such Shareholder’s name on Exhibit A or Exhibit B, as applicable, free and clear of all liens, encumbrances, and restrictions (other than restrictions under this Agreement and applicable securities laws); and (d) the execution and delivery of this Agreement do not conflict with or result in a breach of any agreement or obligation to which such Shareholder is a party or by which such Shareholder is bound.
10. Termination
10.1 Termination Events. This Agreement shall terminate and be of no further force or effect upon the earliest to occur of: (a) the closing of a firm commitment underwritten initial public offering of the Company’s Common Stock pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in aggregate gross proceeds to the Company of not less than $[IPO THRESHOLD] (a “Qualified IPO”); (b) the consummation of a Change of Control; (c) the dissolution, liquidation, or winding up of the Company; or (d) the written agreement of (i) the Company, (ii) the holders of a majority of the then-outstanding shares of Preferred Stock (on an as-converted basis), and (iii) the holders of a majority of the then-outstanding shares of Common Stock held by the Founders.
10.2 Effect of Termination. Upon termination of this Agreement, the rights and obligations of the Parties hereunder shall cease, except that (a) Sections 12 (Confidentiality), 13 (Governing Law), and 15 (Entire Agreement) shall survive any termination of this Agreement, and (b) termination shall not relieve any Party of any liability for breach of this Agreement prior to such termination.
11. Confidentiality
11.1 Confidentiality Obligation. Each Shareholder agrees to maintain in confidence and not to disclose to any third party, without the prior written consent of the Company, any non-public information regarding the Company’s business, financial condition, operations, or affairs that such Shareholder receives or has access to by virtue of such Shareholder’s status as a shareholder, director, or observer of the Company (“Confidential Information”). Each Shareholder shall use Confidential Information solely for the purpose of monitoring and managing such Shareholder’s investment in the Company.
11.2 Exceptions. The obligations of Section 11.1 shall not apply to information that: (a) is or becomes generally available to the public other than as a result of a disclosure by a Shareholder in violation of this Agreement; (b) is or becomes available to a Shareholder from a source other than the Company that is not bound by a confidentiality obligation to the Company; (c) is independently developed by a Shareholder without use of or reference to Confidential Information; or (d) is required to be disclosed by applicable law, regulation, or legal process, provided that the disclosing Shareholder gives the Company prompt written notice thereof and cooperates with the Company in seeking a protective order or other appropriate remedy.
11.3 Permitted Disclosures. Notwithstanding Section 11.1, each Investor may disclose Confidential Information to its partners, members, stockholders, employees, legal counsel, accountants, and other professional advisors (collectively, “Representatives”), provided that such Representatives are bound by confidentiality obligations no less protective than those set forth in this Section 11, and the disclosing Investor shall be responsible for any breach by its Representatives.
12. Governing Law; Dispute Resolution
12.1 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of [GOVERNING LAW STATE], without regard to any conflict of laws principles that would require the application of the laws of any other jurisdiction.
12.2 Jurisdiction. Each Party irrevocably submits to the exclusive jurisdiction of the state and federal courts located in [COUNTY, STATE] for the purpose of any action, suit, or proceeding arising out of or relating to this Agreement, and each Party waives any objection to the laying of venue in such courts, including any claim that any such action, suit, or proceeding has been brought in an inconvenient forum.
12.3 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
12.4 Specific Performance. Each Party acknowledges that a breach of this Agreement would cause irreparable harm for which monetary damages would be an inadequate remedy, and each Party agrees that, in addition to any other remedies available at law or in equity, any Party shall be entitled to seek specific performance and injunctive relief to enforce the terms of this Agreement without the necessity of proving actual damages or posting any bond.
13. Amendment; Waiver
13.1 Amendment. This Agreement may not be amended, modified, or supplemented except by a written instrument signed by (a) the Company, (b) the holders of a majority of the then-outstanding shares of Preferred Stock (on an as-converted basis), and (c) the holders of a majority of the then-outstanding shares of Common Stock held by the Key Holders; provided, however, that no amendment that disproportionately and adversely affects the rights of any Shareholder under this Agreement shall be effective against such Shareholder without such Shareholder’s prior written consent.
13.2 Waiver. No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by the Party against whom enforcement of such waiver is sought. No waiver of any breach shall constitute a waiver of any subsequent breach, whether of the same or a different provision.
14. Entire Agreement; Miscellaneous
14.1 Entire Agreement. This Agreement, together with the Purchase Agreement and the exhibits and schedules hereto and thereto, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements, negotiations, representations, warranties, and understandings, whether written or oral, relating to such subject matter.
14.2 Notices. All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given: (a) upon delivery, if delivered personally; (b) three (3) business days after deposit in the United States mail, if sent by certified or registered mail, return receipt requested, postage prepaid; (c) one (1) business day after deposit with a nationally recognized overnight courier service, prepaid for next-business-day delivery; or (d) upon transmission, if sent by electronic mail with confirmation of receipt. Notices shall be addressed to the applicable Party at the address set forth on the signature pages hereof or on the applicable exhibit, or at such other address as such Party may designate by written notice to the other Parties.
14.3 Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, such provision shall be modified to the minimum extent necessary to make it valid, legal, and enforceable, and the remaining provisions of this Agreement shall continue in full force and effect.
14.4 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, assigns, heirs, executors, administrators, and legal representatives. No Party may assign any of its rights or obligations under this Agreement except in connection with a Transfer of Shares made in compliance with this Agreement.
14.5 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart by electronic transmission (including PDF) shall be effective as delivery of a manually executed counterpart.
14.6 Further Assurances. Each Party agrees to execute and deliver such additional documents, instruments, and certificates, and to take such further actions, as may be reasonably necessary or advisable to carry out the purposes and intent of this Agreement.
14.7 Joinder. The Company shall not issue any Equity Securities to any Person who is not a party to this Agreement unless such Person executes a joinder agreement, in a form approved by the Board, agreeing to be bound by the terms of this Agreement as a Shareholder.
14.8 Legend. Each certificate or book-entry statement representing Shares held by any Shareholder shall bear a legend substantially in the following form: “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A SHAREHOLDER AGREEMENT DATED [DATE], AS AMENDED FROM TIME TO TIME, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. THE SALE, TRANSFER, PLEDGE, OR ENCUMBRANCE OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF SUCH AGREEMENT.”
SIGNATURES
IN WITNESS WHEREOF, the Parties have executed this Shareholder Agreement as of the date first written above.
COMPANY:
[COMPANY NAME]
By: ___________________________________
Name: [AUTHORIZED SIGNATORY NAME]
Title: [TITLE]
Date: [DATE]
INVESTORS:
[INVESTOR ENTITY NAME 1]
By: ___________________________________
Name: [AUTHORIZED SIGNATORY NAME]
Title: [TITLE]
Address: [INVESTOR ADDRESS]
Email: [INVESTOR EMAIL]
Shares: [NUMBER AND CLASS OF SHARES]
Date: [DATE]
[INVESTOR ENTITY NAME 2]
By: ___________________________________
Name: [AUTHORIZED SIGNATORY NAME]
Title: [TITLE]
Address: [INVESTOR ADDRESS]
Email: [INVESTOR EMAIL]
Shares: [NUMBER AND CLASS OF SHARES]
Date: [DATE]
FOUNDERS:
___________________________________
Name: [FOUNDER NAME 1]
Address: [FOUNDER ADDRESS]
Email: [FOUNDER EMAIL]
Shares: [NUMBER] shares of Common Stock
Date: [DATE]
___________________________________
Name: [FOUNDER NAME 2]
Address: [FOUNDER ADDRESS]
Email: [FOUNDER EMAIL]
Shares: [NUMBER] shares of Common Stock
Date: [DATE]