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WHEREAS the Corporation was incorporated under the Canada Business Corporations Act, R.S.C. 1985, c. C-44 ("CBCA") on [DATE];
WHEREAS the Corporation carries on the business of developing and providing artificial intelligence software, intelligent dashboards, and data integration solutions to industrial, energy, and commercial enterprises, primarily in the Province of Alberta (the "Business");
WHEREAS the Shareholders are the sole shareholders of the Corporation and wish to enter into this Unanimous Shareholder Agreement ("USA") pursuant to Section 146 of the CBCA to restrict the powers of the directors to manage, or supervise the management of, the business and affairs of the Corporation, and to establish the rights and obligations of the Shareholders;
WHEREAS Andrés has developed substantial intellectual property prior to the incorporation of the Corporation and will assign such IP to the Corporation pursuant to a separate IP Assignment Agreement (Section 7.2);
WHEREAS Allen will contribute capital for the acquisition of hardware, equipment, and infrastructure necessary for the Corporation's operations (Section 3.1);
NOW THEREFORE, in consideration of the mutual covenants and agreements herein, and for other good and valuable consideration (the receipt and sufficiency of which are acknowledged), the parties agree as follows:
In this Agreement, unless the context otherwise requires:
The Corporation is authorized to issue an unlimited number of Class A Common Voting Shares (the "Shares"). As of the date hereof, the following Shares have been issued and are outstanding:
No additional Shares, convertible securities, options, warrants, or other equity instruments shall be issued, and no changes shall be made to the authorized or issued share structure of the Corporation, without the prior unanimous written consent of all Shareholders. Any purported issuance in violation of this Section 3.2 shall be void ab initio.
Allen shall contribute $50,000 CAD (the "Capital Contribution") toward the acquisition of hardware, equipment, and infrastructure, including but not limited to: computers, monitors, networking equipment, telecommunications devices, office furniture, and installation costs. Allen shall provide receipts for all expenditures within 30 days of purchase. This contribution shall be recorded as a shareholder loan bearing interest at the prescribed rate under the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), unless otherwise agreed.
Andrés contributes his pre-existing intellectual property portfolio, including but not limited to: software architectures, AI/ML systems, source code, neural training frameworks, dashboard frameworks, and technical expertise, as more particularly described in the IP Assignment Agreement. The parties agree that the value of this contribution is not less than [$50,000] CAD per the IP Assignment Agreement (Section 5 thereof).
Neither Shareholder shall be required to make additional capital contributions without their prior written consent. Any additional contributions shall be documented in writing and shall be treated as shareholder loans unless the parties agree otherwise in writing.
In consideration of Andrés's intellectual property contribution (Section 3.4) and his commitment to the Corporation's operations, Andrés shall be entitled to a signing bonus of $250,000 CAD (the "Signing Bonus"). The Signing Bonus constitutes a binding obligation of the Corporation.
The Signing Bonus shall be paid from revenue generated by the Corporation as follows:
Signing Bonus payments shall be made within 15 Business Days of the Corporation's receipt of revenue from each client contract. The Signing Bonus obligation ranks senior to any distributions to Allen beyond his salary (Section 5.2).
The Corporation shall maintain a transparent ledger tracking all payments toward the Signing Bonus, including the date, amount, and remaining balance. This ledger shall be accessible to both Shareholders at all times via the Corporation's financial records. Each payment shall be acknowledged in writing by both Shareholders.
If this Agreement is terminated for any reason, or if Allen's shares are Transferred (Section 9), the unpaid balance of the Signing Bonus shall become immediately due and payable by the Corporation, subject to the Corporation's ability to pay (Business Corporations Act, s. 42).
For each client contract, 30% of gross revenue shall be allocated to an Expense Pool (the "Expense Pool"), covering:
If the Expense Pool exceeds 30% of gross revenue in any given quarter, the excess shall be deducted from Net Profit before distribution. If the Expense Pool is under 30%, the surplus rolls into Net Profit.
Salary increases require unanimous Shareholder consent. Salaries constitute a priority obligation of the Corporation and rank senior to profit distributions. Each Shareholder shall be responsible for their own income tax obligations, including CPP self-employment contributions, in accordance with the Income Tax Act.
Remaining revenue after the Expense Pool deduction (70% of gross revenue, adjusted per Section 5.1) constitutes "Net Profit" and shall be distributed as follows:
Distributions shall be made quarterly within 30 days of quarter-end. The Corporation shall retain a reasonable operating reserve (not less than [$10,000–$25,000]) before making distributions.
Both Shareholders shall have full, unrestricted access to the Corporation's books and records at all times. The Corporation shall engage a Chartered Professional Accountant (CPA) licensed in Alberta for annual compilation and/or review engagement, and shall file all required corporate tax returns (T2) in a timely manner.
Both Shareholders shall devote substantially all of their professional time to the Corporation's Business. "Substantially all" means not less than 40 hours per week during normal business operations. Each Shareholder acknowledges that the startup phase may require additional hours, which shall not give rise to additional compensation claims. Andrés's 24/7 on-call responsibility (Section 6.2) shall not be counted toward base hours.
Each Shareholder may authorize expenditures up to $2,500 CAD per transaction within their area of responsibility without requiring the other Shareholder's approval. Expenditures exceeding $2,500 require mutual written approval (email sufficient).
All intellectual property created by either Shareholder in connection with the Corporation's Business, including software, inventions, trade secrets, processes, algorithms, designs, training data, and documentation (collectively, "Corporation IP"), shall be the sole and exclusive property of the Corporation. Each Shareholder hereby irrevocably assigns to the Corporation all right, title, and interest in any Corporation IP, including all rights under the Copyright Act, R.S.C. 1985, c. C-42, the Patent Act, R.S.C. 1985, c. P-4, and the Trademarks Act, R.S.C. 1985, c. T-13.
Andrés's pre-existing intellectual property shall be assigned to the Corporation pursuant to the IP Assignment Agreement executed concurrently herewith. The IP Assignment Agreement forms an integral part of this USA. See the IP Assignment Agreement for the complete schedule of assigned IP.
To the maximum extent permitted by the Copyright Act, each Shareholder irrevocably waives all moral rights (as defined in Section 14.1 of the Copyright Act) in any work created for the Corporation.
In the event a Shareholder exits the Corporation (whether by Transfer, termination, death, or incapacity), the departing Shareholder shall have no right to use, copy, modify, or create derivative works of any Corporation IP. This restriction survives termination of this Agreement indefinitely.
During the term of this Agreement and for twelve (12) months following a Shareholder's exit, the exiting Shareholder shall not, directly or indirectly:
Note: Geographic and temporal scope drafted in accordance with the enforceability principles established by the Supreme Court of Canada in Shafron v. KRG Insurance Brokers (Western) Inc., 2009 SCC 6.
For a period of eighteen (18) months following exit, the departing Shareholder shall not solicit, interfere with, or endeavour to entice away any person who was an employee, contractor, customer, or supplier of the Corporation within the preceding 12 months.
The board of directors shall consist of two (2) directors: Allen and Andrés. Pursuant to Section 146 of the CBCA, the Shareholders hereby restrict the powers of the directors as set out in this Agreement. The directors shall not take any action that is inconsistent with this Agreement.
The following decisions require the prior unanimous written consent of all Shareholders (each, a "Fundamental Decision"):
Each Shareholder shall have authority to make decisions within their designated area of responsibility (Section 6) without requiring consent of the other Shareholder, provided such decisions: (i) fall within the ordinary course of business; (ii) do not exceed the expense authorization limits in Section 6.4; and (iii) are not Fundamental Decisions.
The Shareholders shall meet not less than monthly to review the Corporation's financial performance, pipeline, and strategic direction. Meetings may be conducted in person or by video conference. Written minutes shall be maintained.
No Shareholder may Transfer any Shares except in accordance with this Section 9. Any purported Transfer in violation of this Section shall be void and the Corporation shall not register such Transfer on its books.
If a Shareholder receives a bona fide third-party offer to purchase their Shares, the other Shareholder shall have the right to participate in such sale on the same terms and conditions, pro rata to their shareholding.
If a Shareholder holding more than 50% of the Shares receives a bona fide offer from a third party to purchase all of the Corporation's Shares, the majority Shareholder may require the minority Shareholder to sell their Shares on the same terms and conditions, provided the sale price equals or exceeds the Fair Market Value as determined by an independent CBV.
If the parties cannot agree on a price in connection with any Transfer, the Fair Market Value shall be determined by an independent CBV mutually appointed by the Shareholders, or if they cannot agree, appointed by the President of the Calgary Chapter of the Canadian Institute of Chartered Business Valuators. The costs of the valuation shall be borne equally by the parties.
Upon the death of a Shareholder, the surviving Shareholder shall have the option (but not the obligation) to purchase all of the deceased Shareholder's Shares from the estate at Fair Market Value. The option must be exercised within 90 days of death by written notice to the executor or administrator. Closing shall occur within 120 days of exercise. If not exercised, the estate shall be bound by all terms of this Agreement.
"Permanent Incapacity" means the inability of a Shareholder to perform the duties set out in Section 6 for a continuous period of 180 days, as certified by two licensed physicians. Upon Permanent Incapacity, the surviving Shareholder shall have the same purchase option as in Section 10.1.
If a Shareholder becomes insolvent, makes an assignment for the benefit of creditors, or is subject to bankruptcy proceedings under the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, the other Shareholder shall have the right to purchase all Shares of the affected Shareholder at Fair Market Value.
The Corporation shall use commercially reasonable efforts to obtain and maintain key-person life insurance on each Shareholder in an amount of not less than [$250,000–$500,000] CAD each, naming the Corporation as beneficiary. Proceeds shall be used to fund the purchase of the deceased Shareholder's Shares under Section 10.1.
Any dispute arising out of or in connection with this Agreement shall first be the subject of good faith negotiation between the Shareholders for a period of 30 days from written notice of the dispute.
If not resolved through negotiation, the dispute shall be submitted to mediation in Edmonton, Alberta, administered by the ADR Institute of Alberta, in accordance with its Mediation Rules. Each party shall bear its own costs. The mediator's fees shall be shared equally.
If mediation fails to resolve the dispute within 60 days of commencement, either party may refer the dispute to binding arbitration under the Arbitration Act, R.S.A. 2000, c. A-43 (the "Arbitration Act"), conducted in Edmonton, Alberta. The arbitrator shall be a retired justice of the Court of King's Bench of Alberta or a lawyer with not less than 15 years of corporate/commercial practice experience. The arbitrator's award shall be final and binding and may be entered as a judgment in any court of competent jurisdiction.
A "Deadlock" arises when the Shareholders are unable to agree on a Fundamental Decision after good faith negotiation for a period of 60 days. Upon Deadlock, either Shareholder may invoke the Shotgun Clause (Section 9.3), notwithstanding the Lock-Up Period, OR submit the matter to arbitration (Section 11.3).
Notwithstanding Sections 11.1–11.3, either party may seek interim or injunctive relief from the Court of King's Bench of Alberta to prevent irreparable harm pending resolution of any dispute. This right applies particularly (but not exclusively) to breaches of Sections 7 (IP), 8 (Confidentiality), and the Non-Compete/Non-Solicitation provisions.
The Corporation shall obtain and maintain at its expense the following insurance:
The Corporation shall indemnify each Shareholder/Director against all costs, charges, and expenses, including legal fees, reasonably incurred in respect of any civil, criminal, or administrative action arising from their service as a director or officer, to the maximum extent permitted by Sections 124 and 124.1 of the CBCA.
This Agreement shall be governed by and construed in accordance with the laws of the Province of Alberta and the federal laws of Canada applicable therein. Subject to Section 11 (Dispute Resolution), the parties irrevocably attorn to the exclusive jurisdiction of the courts of the Province of Alberta, sitting in Edmonton.
This Agreement, together with the IP Assignment Agreement, constitutes the entire agreement between the parties with respect to its subject matter, and supersedes all prior agreements, negotiations, representations, and understandings, whether oral or written.
This Agreement may only be amended by a written instrument signed by all Shareholders. No oral modification shall be valid.
If any provision of this Agreement is found by a court or arbitrator to be invalid, illegal, or unenforceable, such provision shall be severed and the remainder of this Agreement shall continue in full force and effect. The parties agree to negotiate in good faith to replace the severed provision with a valid provision that achieves the same economic and legal effect to the greatest extent possible.
Each party shall execute and deliver such further documents and do such further acts and things as may be reasonably required to carry out the intent and purpose of this Agreement.
All notices under this Agreement shall be in writing and delivered by: (a) personal delivery; (b) registered mail; or (c) email with delivery confirmation, to the addresses set out above or as updated in writing. Notice is effective upon receipt, or three (3) Business Days after mailing if sent by registered mail. Electronic notices are valid pursuant to the Electronic Transactions Act, S.A. 2001, c. E-5.5.
This Agreement may be executed in counterparts, each of which is deemed an original, and all of which together constitute one agreement. Electronic signatures are valid pursuant to the Electronic Transactions Act, S.A. 2001, c. E-5.5.
Sections 4.5 (Acceleration), 7 (IP), 7.5 (Non-Compete), 7.6 (Non-Solicitation), 11 (Dispute Resolution), and 12.2 (Indemnification) shall survive the termination of this Agreement.