THIS AGREEMENT, dated [AGREEMENT DATE] is entered into amongst the

following individuals constituting all of the current shareholders of

[CORPORATION] (“Corporation”):

[SHAREHOLDER 1]

[SHAREHOLDER 2]

[SHAREHOLDER 3]

[SHAREHOLDER 4]

(referred to collectively as “Shareholders” and individually as “Shareholder”) and

the Corporation.

Article 1 – Purpose of Agreement

1.1 The Shareholders are all the shareholders of the Corporation, a [STATE
OF INCORPORATION] corporation and are the sole Directors and Officers of the
Corporation.

1.2. The Shareholders are entering into this Shareholder Agreement to

provide for the management and control of the affairs of the Corporation,
including management of the business, division of profits, disposition of shares,
and distribution of assets on liquidation.

Article 2 – Shares Subject to Agreement

2.1. The Shareholders listed above own the number of shares of common
stock, and approximate percentage of company ownership, as listed below:

Name Number of Shares Percentage of

Ownership

[SHAREHOLDER 1] [SHARES 1] [PERCENT 1]

 [SHAREHOLDER 2] [SHARES 2] [PERCENT 2]

[SHAREHOLDER 3] [SHARES 3] [PERCENT 3]

[SHAREHOLDER 4] [SHARES 4] [PERCENT 4]

2.2. The shares listed above constitute all of the issued and outstanding
capital stock of the Corporation. The Corporation acknowledges receipt from
each Shareholder of the full consideration for the respective shares listed above,
and each Shareholder acknowledges receipt of certificates representing his or
her shares. All of the shares listed above and any additional shares of the capital
stock of the Corporation that may be acquired by the Shareholders in the future
shall be subject to this Agreement.

Article 3 – Management and Control

3.1. Board of Directors. Subject to termination in accordance with this

Agreement, each Shareholder to this Agreement will be a director of the
Corporation.

3.2. Authority of Directors. During the term of this Agreement, the directors
will, when appropriate, perform the following acts:

3.2.1. Determine in good faith the “current assets” of the Corporation for
purposes of corporate distributions as required by the California Corporations
Code;

3.2.2. Cause an quarterly report to be sent to the Shareholders not later than
30 days after the close of the quarter year, such quarterly report will be used to
identify and approve any distributions in accordance with this Agreement;

3.2.3. After filing the Corporation’s original Articles of Incorporation, file any
informational certificates that may be required by the California Secretary of
State;
3.2.4. Cause the Corporation to maintain the books, records, and other
documents required by California law;

3.2.5. Use best efforts to cause the business of the corporation in accordance
with sound business practices.

3.3. President. Subject to the limitations in Section 3.7, the President of the
Corporation will be its managing officer. The President will control the day-to-
day operations of the business and affairs of the Corporation, including the
following: [PRESIDENT ACTIONS W/O APPROVAL].

3.4. Vice President. Subject to the limitations in Section 3.7, the Vice President
of the Corporation will [VICE PRESIDENT DUTIES].

3.5. Treasurer. Subject to the limitations in Section 3.7, the Treasurer of the
Corporation will [TREASURER DUTIES].

3.6. Secretary. Subject to the limitations in Section 3.7, the Secretary of the
Corporation will [SECRETARY DUTIES].

3.7. Limitations on actions of officers. The following actions shall not be made
by any one Officer without the approval of all Officers of the
Corporation: [JOINT APPROVAL REQUIRED ACTIONS].

3.8. Approval of All Shareholders. Notwithstanding any contrary provisions

in this Shareholder Agreement, the written consent of all of the Shareholders is
required to approve the following actions: mergers or consolidations involving
the Corporation; amendment or repeal of the Articles of Incorporation of the
Corporation; issuance of shares of any class or other rights relating to the
issuance of shares of the Corporation; transfer of all, or substantially all, the
assets of the Corporation; amendment of this Shareholder Agreement; or
voluntary dissolution of the Corporation.

3.9. Employment of Shareholders. Shareholders may be employed as officers

of the Corporation, as long as they hold shares of stock of the Corporation, are
active in its business, and, in a satisfactory manner, perform their duties and
responsibilities as set forth in this Agreement, the Articles of Incorporation and
the Bylaws of the Corporation. The title, duties, and the other terms of
employment, including the annual salary, will be memorialized in a separate
document and must be both approved, and only may be subsequently altered,
only by the unanimous written consent of the Shareholders.

Article 4 – Noncompetition and Trade Secrets

4.1. Noncompetition. Each Shareholder agrees that as long as he or she is

the owner, or in control of, any of the Corporation’s shares, the Shareholder will
not be employed, concerned, or financially interested, either directly or
indirectly, in the same or a similar business as that conducted by the
Corporation, or compete with the Corporation.

4.2. Trade Secrets. Each Shareholder acknowledges that the customer lists,
trade secrets, processes, methods, and technical information of the Corporation
and any other matters designated by the President or by the written consent of
all Shareholders are valuable assets. Unless he or she obtains the written
consent of each of the other Shareholders, each Shareholder agrees never to
disclose to any individual or organization, except in authorized connection with
the business of the Corporation, any customer list, or any name on that list, or
any trade secret, process, or other matter referred to in this paragraph while the
Shareholder holds, or has the control of, any shares of the Corporation, or at
any later time.

Article 5 – Distributions of Income and Losses

5.1. Determination of Net Income and Loss. The net profits or net losses of
the Corporation for each fiscal year will be determined on an accrual basis in
accordance with generally accepted principles of accounting.

5.2. Retaining Net Income. The Corporation will retain [RETAINED INCOME
THRESHOLD] ($[RETAINED INCOME DOLLAR AMOUNT]) of its net income, plus
any additional amount the Shareholders reasonably believe necessary to meet
financial needs of the Corporation, including, but not limited to the
development or expansion of its business.
 5.3. Regular Distributions of Net Income. Subject to any retained earnings
and to the statutory requirements related to corporate distributions, the net
income of the Corporation may be distributed quarterly to the Shareholders in
proportion to the number of shares of the Corporation owned by them. Such
distributions shall be approved by all Shareholders. Shareholders may elect to
not take a distribution, but instead offer the moneys as a loan to the
Corporation.

Article 6 – Shareholder Loans To The Corporation

6.1. Loan conditions. A Shareholder may issue a loan to the Corporation

upon approval by all Shareholders and only under the following conditions,
unless otherwise agreed upon. [SHAREHOLDER LOAN CONDITIONS].

6.2. Repayment. Repayment of Shareholder loans by the Corporation shall

occur when the Shareholders agree that there are enough corporate funds to
pay the loan. Loans to Shareholders shall be paid in order of priority with the
oldest loan being paid first, unless the Shareholder waives such write to first
payment.

Article 7 – Dissolution of Corporation

7.1. Unanimous consent required. All Shareholders must consent to

voluntary dissolution.

7.2. Procedures for dissolution. On commencement of dissolution

proceedings (either by election of all Shareholders or otherwise), the
Corporation will cease to carry on business except as necessary to wind up its
business and distribute its assets. The President, or any Shareholder or
Shareholders appointed by the President, will perform the following acts, as
necessary, to wind up the affairs of the Corporation:
 Continue the business as necessary for the winding up of the affairs of the
Corporation;
 Carry out contracts and collect, pay, compromise, and settle debts and claims
for or against the Corporation (including participating in litigation, whether as
plaintiff or defendant relating to the same);
 Sell at public or private sale, exchange, convey, or otherwise dispose of all or
any part of the assets of the Corporation for cash in an amount considered
reasonable by the President, or his or her appointee(s);
 Make contracts and take any steps in the name of the Corporation that are
necessary or convenient in order to wind up the affairs of the Corporation;
and/or
 Employ agents and attorneys to liquidate and wind up the affairs of the
Corporation.

7.3. Distribution of assets. As part of the dissolution process, the President,

or the President’s appointee(s), will apply the assets of the Corporation in the
following order:
 To all debts and liabilities of the Corporation in accordance with the law,
including the expenses of dissolution and liquidation, but excluding any
Shareholder loans;
 To all Shareholder loans, with unpaid interest;
 To undistributed net profits of the Corporation;
 To repayment of the purchase price of the shares of the Corporation actually
paid by each Shareholder; and, finally, should any assets remain;
 To the Shareholders in proportion to the number of shares of the Corporation
held by each.

Article 8 – Transfer of Shares

8.1. Shares Acquired for Investment. Each of the Shareholders acknowledges

and represents that he or she has obtained and accepted his or her shares in
good faith, for investment and for his or her own account, and not with a view
to distribution or resale.

8.2. Restrictions on Transfer. To accomplish the purposes of this Agreement,

any transfer, sale, assignment, or encumbrance of any of the shares of the
Corporation, other than according to the terms of this Shareholder Agreement
is void.

8.3. Buy-Sell Upon Death of Shareholder. Upon the death of a Shareholder,

the Corporation shall purchase, and the deceased Shareholder’s estate or
successor or successors in interest (the ”Deceased Shareholder”), shall sell, all
the Corporation’s stock presently owned by such Stockholder. This sale will be
made within sixty (60) days after the appointment of a legal representative for
the Deceased Shareholder’s estate.

8.4. Buy-Sell for Other Reasons. A Shareholder may voluntarily sell all the
Corporation’s stock presently owned by such Shareholder (“Departing
Shareholder”). Any and all sales hereunder with respect to the Departing
Shareholder shall be made within sixty (60) days after written notice of intent to
sell served on the Corporation and the remaining Shareholders.

8.5. Right of First Refusal. In the event of mandatory or voluntary buy-sell

under this Section, the non-departing or surviving Shareholder shall have the
right of first refusal to purchase all shares that would otherwise be repurchased
by the Corporation at the purchase price set forth above. To exercise this right,
the non-departing or surviving Shareholders provide written notice to the
Corporation no later than ten (10) days prior to the effective date of sale.

Article 9 – Dispute Resolution

9.1. Any dispute relating to this Shareholder Agreement, or arising out of or

relating to operations of the Corporation, or the rights or obligations of the
Shareholders, shall be settled by: [RESOLUTION OPTIONS].

Article 10 – Miscellaneous Provisions

10.1. Necessary Acts. All parties to this Shareholder Agreement will perform
any acts, including executing any documents, that may be reasonably necessary
to fully carry out the provisions and intent of this Agreement.

10.2. Notices. All notices, demands, requests, or other communications

required or permitted by this Shareholder Agreement (other than routine
communication relative to business operations) will be in writing sent to the
following:

[CORPORATION]
[CORPORATION ADDRESS]

[CORPORATION CITY], [CORPORATION STATE], CORPORATION ZIP]

[SHAREHOLDER 1]

[SHAREHOLDER 1 ADDRESS]

[SHAREHOLDER 1 CITY], [SHAREHOLDER 1 STATE], [SHAREHOLDER 1 ZIP]

[SHAREHOLDER 2]

[SHAREHOLDER 2 ADDRESS]

[SHAREHOLDER 2 CITY], [SHAREHOLDER 2 STATE], [SHAREHOLDER 2 ZIP]

[SHAREHOLDER 3]

[SHAREHOLDER 3 ADDRESS]

[SHAREHOLDER 3 CITY], [SHAREHOLDER 3 STATE], [SHAREHOLDER 3 ZIP]

[SHAREHOLDER 4]

[SHAREHOLDER 4 ADDRESS]

[SHAREHOLDER 4 CITY], [SHAREHOLDER 4 STATE], [SHAREHOLDER 4 ZIP]

10.3. Attorneys’ Fees. In the event of any litigation concerning this

Shareholder, the prevailing party shall be entitled, in addition to any other relief
that may be granted, to reasonable attorneys’ fees.

10.4. Binding on Successors and Assigns. This Agreement will be binding on

the parties to the Agreement and on each of their heirs, executors,
administrators, successors, and assigns.
10.5. Severability. If any provision is unenforceable or invalid for any reason,
the remaining provisions shall be unaffected by such a holding.

10.6. Governing Law. This Agreement shall be construed according to and

governed by the laws of the State of California.

10.7. Entire Agreement. This document constitutes the entire Shareholder

Agreement of the Corporation and correctly sets forth the rights, duties, and
obligations of each Shareholder and of each Shareholder to the other. Any
modifications must be in writing and approved by all Shareholders.

Executed on [DATE OF SIGNING] at [CITY AND STATE OF SIGNING].

THE SHAREHOLDERS

_______________________________ _______________________________

[SHAREHOLDER 1] [SHAREHOLDER 2]

_______________________________ _______________________________

[SHAREHOLDER 3] [SHAREHOLDER 4]