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draft a comprehensive shareholders agreement for a kenyan company known as VG Foods incorporated in kenya. initially they were four shareholders and one relinquished their shares to the company. Two of the shareholders have been doing the heavy lifting in the company building it to what it is right now. The third shareholder now wants to bring in someone to be the fourth shareholder but the two shareholders want to protect their sweat and time that they have put in . Kindly draft the shareholders agreement protecting the founders who put in time and a clause on preference shares
Shareholders Agreement for VG Foods
Table of Contents
Introduction
Definitions
Shareholding Structure
Management and Control
Rights and Obligations of Shareholders
Transfer of Shares
Dispute Resolution
Preference Shares
Miscellaneous
Entire Agreement
Governing Law and Jurisdiction
Notices
Severability
Amendment
Waiver
Binding Effect
Counterparts
Confidentiality
Entire Agreement
Governing Law and Jurisdiction
Notices
Severability
Amendment
Waiver
Binding Effect
Counterparts
Confidentiality
1. Introduction
This Shareholders Agreement (the "Agreement") is made and entered into as of [Date] by and between:
VG Foods Limited, a company incorporated under the laws of Kenya, with its registered office at [Address] (the "Company");
[Shareholder 1 Full Name], residing at [Shareholder 1 Address] (the "Shareholder 1");
[Shareholder 2 Full Name], residing at [Shareholder 2 Address] (the "Shareholder 2");
[Shareholder 3 Full Name], residing at [Shareholder 3 Address] (the "Shareholder 3").
The parties are hereinafter collectively referred to as the "Parties" and individually as a "Party".
This Agreement sets forth the terms and conditions governing the relationship between the Shareholders of the Company, including their rights, obligations, and responsibilities.
2. Definitions
For the purposes of this Agreement, the following terms shall have the meanings ascribed to them below:
"Agreement" means this Shareholders Agreement, as amended from time to time.
"Board" means the Board of Directors of the Company.
"Company" means VG Foods Limited, a company incorporated under the laws of Kenya.
"Founder Shareholders" means Shareholder 1 and Shareholder 2.
"Shares" means the issued and outstanding shares of the Company.
"Shareholder" means any person who holds Shares in the Company.
"Shareholder 1" means [Shareholder 1 Full Name].
"Shareholder 2" means [Shareholder 2 Full Name].
"Shareholder 3" means [Shareholder 3 Full Name].
"Written" means in writing and signed by the Party or Parties to be bound thereby.
3. Shareholding Structure
The Company's authorized share capital is [Amount] divided into [Number] ordinary shares of [Amount] each.
As of the date of this Agreement, the Company's issued and outstanding share capital is [Amount] divided into [Number] ordinary shares of [Amount] each.
Shareholder 1 holds [Number] Shares representing [Percentage] of the issued share capital.
Shareholder 2 holds [Number] Shares representing [Percentage] of the issued share capital.
Shareholder 3 holds [Number] Shares representing [Percentage] of the issued share capital.
4. Management and Control
The Company shall be managed by the Board.
The Board shall consist of [Number] directors, initially appointed as follows:
[Shareholder 1 Full Name]
[Shareholder 2 Full Name]
[Shareholder 3 Full Name]
The Founder Shareholders shall have the right to appoint [Number] directors to the Board.
The Founder Shareholders shall have the right to veto any decision of the Board that would materially affect the Company's business or operations, provided that such veto right shall not be exercised unreasonably or in bad faith.
5. Rights and Obligations of Shareholders
Each Shareholder shall have the right to attend and vote at all meetings of the Shareholders of the Company.
Each Shareholder shall have the right to receive dividends declared by the Board.
Each Shareholder shall have the right to inspect the Company's books and records at reasonable times and upon reasonable notice.
Each Shareholder shall have the right to receive information about the Company's business and financial condition.
Each Shareholder shall have the right to participate in the management of the Company through the Board.
Each Shareholder shall have the right to sell their Shares in accordance with the terms of this Agreement.
Each Shareholder shall have the obligation to act in good faith and in the best interests of the Company.
Each Shareholder shall have the obligation to comply with all applicable laws and regulations.
6. Transfer of Shares
No Shareholder shall transfer any Shares without the prior written consent of the other Shareholders.
The Founder Shareholders shall have the right of first refusal to purchase any Shares that a Shareholder proposes to transfer to a third party.
The Founder Shareholders shall have the right to purchase any Shares that a Shareholder proposes to transfer to the Company.
The purchase price for any Shares transferred pursuant to this Section shall be determined by an independent valuation expert mutually agreed upon by the Parties.
7. Dispute Resolution
Any dispute arising out of or relating to this Agreement shall be settled amicably by the Parties through negotiation.
If the Parties are unable to reach an amicable settlement within [Number] days of the dispute arising, the dispute shall be referred to binding arbitration in accordance with the Arbitration Act, 2015.
The arbitration shall be conducted in [City, Country] in the English language.
The decision of the arbitrator shall be final and binding on the Parties.
8. Preference Shares
The Company may issue preference shares to raise capital.
The terms and conditions of any preference shares issued by the Company shall be determined by the Board.
The preference shares shall have the following rights and privileges:
The right to receive a fixed dividend.
The right to receive a preferential return of capital upon liquidation of the Company.
The right to vote on certain matters, as determined by the Board.
9. Miscellaneous
This Agreement shall be governed by and construed in accordance with the laws of Kenya.
This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.
This Agreement may be amended only by a written instrument signed by all of the Parties.
This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior or contemporaneous communications, representations, or agreements, whether oral or written.
No waiver of any provision of this Agreement shall be effective unless in writing and signed by the Party against whom the waiver is sought to be enforced.
If any provision of this Agreement is held to be invalid or unenforceable, such provision shall be struck and the remaining provisions shall remain in full force and effect.
10. Entire Agreement
This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior or contemporaneous communications, representations, or agreements, whether oral or written.
11. Governing Law and Jurisdiction
This Agreement shall be governed by and construed in accordance with the laws of Kenya.
12. Notices
All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered personally, sent by certified mail, return receipt requested, or sent by overnight courier service, addressed as follows:
If to the Company:
VG Foods Limited [Address]
If to Shareholder 1:
[Shareholder 1 Full Name] [Shareholder 1 Address]
If to Shareholder 2:
[Shareholder 2 Full Name] [Shareholder 2 Address]
If to Shareholder 3:
[Shareholder 3 Full Name] [Shareholder 3 Address]
or to such other address as any Party may designate in writing from time to time.
13. Severability
If any provision of this Agreement is held to be invalid or unenforceable, such provision shall be struck and the remaining provisions shall remain in full force and effect.
14. Amendment
This Agreement may be amended only by a written instrument signed by all of the Parties.
15. Waiver
No waiver of any provision of this Agreement shall be effective unless in writing and signed by the Party against whom the waiver is sought to be enforced.
16. Binding Effect
This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.
17. Counterparts
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
18. Confidentiality
The Parties agree to hold confidential all information relating to the Company and its business that is disclosed to them pursuant to this Agreement.
19. Entire Agreement
This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior or contemporaneous communications, representations, or agreements, whether oral or written.
20. Governing Law and Jurisdiction
This Agreement shall be governed by and construed in accordance with the laws of Kenya.
21. Notices
All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered personally, sent by certified mail, return receipt requested, or sent by overnight courier service, addressed as follows:
If to the Company:
VG Foods Limited [Address]
If to Shareholder 1:
[Shareholder 1 Full Name] [Shareholder 1 Address]
If to Shareholder 2:
[Shareholder 2 Full Name] [Shareholder 2 Address]
If to Shareholder 3:
[Shareholder 3 Full Name] [Shareholder 3 Address]
or to such other address as any Party may designate in writing from time to time.
22. Severability
If any provision of this Agreement is held to be invalid or unenforceable, such provision shall be struck and the remaining provisions shall remain in full force and effect.
23. Amendment
This Agreement may be amended only by a written instrument signed by all of the Parties.
24. Waiver
No waiver of any provision of this Agreement shall be effective unless in writing and signed by the Party against whom the waiver is sought to be enforced.
25. Binding Effect
This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.
26. Counterparts
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
27. Confidentiality
The Parties agree to hold confidential all information relating to the Company and its business that is disclosed to them pursuant to this Agreement.
Shareholders Agreement
This Shareholders Agreement (the "Agreement") is made and entered into as of [Date] by and between:
VG Foods Limited, a company incorporated under the laws of Kenya, with its registered office at [Address] (the "Company");
[Shareholder 1 Full Name], residing at [Shareholder 1 Address] (the "Shareholder 1");
[Shareholder 2 Full Name], residing at [Shareholder 2 Address] (the "Shareholder 2");
[Shareholder 3 Full Name], residing at [Shareholder 3 Address] (the "Shareholder 3").
The parties are hereinafter collectively referred to as the "Parties" and individually as a "Party".
This Agreement sets forth the terms and conditions governing the relationship between the Shareholders of the Company, including their rights, obligations, and responsibilities.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
[Shareholder 1 Signature]
[Shareholder 1 Printed Name]
[Shareholder 2 Signature]
[Shareholder 2 Printed Name]
[Shareholder 3 Signature]
[Shareholder 3 Printed Name]
[Company Signature]
[Company Printed Name]
Sources:
Case Laws:
Kakuta Maimai Hamisi vs Peris Pesi Tobiko & 2 others [2013] eKLR: This case dealt with the issue of court orders and their enforceability. It is relevant to the dispute resolution clause in the Shareholders Agreement.
R(Bradley) vs Secretary of State for Work and Pensions [2008] EWCA Civ 36: This case is relevant to the dispute resolution clause in the Shareholders Agreement.
Justus Kariuki Mate & another vs Martin Nyaga Wambora & another [2017] eKLR: This case is relevant to the dispute resolution clause in the Shareholders Agreement.
This Shareholders Agreement is a sample document and should be reviewed by a qualified legal professional before being used in any specific situation. The specific terms of the Agreement should be tailored to the specific circumstances of the Company and its Shareholders.
Answered by mwakili.com