Shareholders Agreement Luxembourg

Shareholders Agreement Luxembourg

THIS SHAREHOLDERS AGREEMENT (the "Agreement") is entered into and made effective as of this [Day] day of [Month], [Year] (the "Effective Date"), by and among:

1. [Company Name], a société à responsabilité limitée (or société anonyme), having its registered office at [Registered Address], registered with the Luxembourg Trade and Companies Register (R.C.S. Luxembourg) under number [RCS Number] (the "Company");
2. [Shareholder 1 Name], [Legal Form/Individual], having its registered office / residential address at [Address], registered under [Registration/ID Number] ("Shareholder 1"); and
3. [Shareholder 2 Name], [Legal Form/Individual], having its registered office / residential address at [Address], registered under [Registration/ID Number] ("Shareholder 2").

(Shareholder 1 and Shareholder 2 are hereinafter collectively referred to as the "Shareholders" and individually as a "Shareholder", and together with the Company, the "Parties").

RECITALS

WHEREAS, the Company is duly incorporated and validly existing under the laws of the Grand Duchy of Luxembourg, with an issued share capital of [Capital Amount] divided into [Number] shares with a nominal value of [Nominal Value] each (the "Shares");

WHEREAS, the Shareholders are the registered and beneficial owners of all issued and outstanding Shares of the Company in the proportions set forth in Schedule A attached hereto; and

WHEREAS, the Parties wish to define their rights and obligations concerning the management, governance, operation, transfer of Shares, and the overall relationship inter se as shareholders of the Company, ensuring compliance with the Luxembourg law of 10 August 1915 on commercial companies, as amended (the "Luxembourg Company Law").

NOW, THEREFORE, in consideration of the mutual covenants, promises, and obligations contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

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SECTION 1: OPERATIONAL DEFINITIONS

1.1 "Affiliate" means, with respect to any Party, any entity that, directly or indirectly, controls, is controlled by, or is under common control with such Party, where "control" means the ownership of more than fifty percent (50%) of the voting rights or equity interests of an entity.

1.2 "Board of Managers" or "Board of Directors" means the management organ of the Company duly appointed from time to time in accordance with the Articles of Association and Luxembourg Company Law.

1.3 "Business Day" means any day, other than a Saturday, Sunday, or public holiday, on which banks are generally open for business in Luxembourg City, Luxembourg.

1.4 "Drag-Along Notice" has the meaning ascribed to it in Section 3.4 of this Agreement.

1.5 "Encumbrance" means any mortgage, pledge, lien, charge, security interest, encumbrance, option, preemptive right, proxy, voting trust, or any other third-party right of any kind whatsoever.

1.6 "Fair Market Value" means the cash price that a willing, informed buyer would pay to a willing, informed seller in an arm's-length transaction, as determined in good faith by the Board or, failing agreement, by an independent recognized valuation expert appointed jointly by the disputing Parties.

1.7 "Tag-Along Notice" has the meaning ascribed to it in Section 3.3 of this Agreement.

1.8 "Transfer" means any direct or indirect sale, assignment, transfer, conveyance, gift, exchange, pledge, hypothecation, or other disposition of any Shares (or any legal or beneficial interest therein), whether voluntary, involuntary, by operation of law, or otherwise.

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SECTION 2: SUBSTANTIVE TERMS & OBLIGATIONS

2.1 Governance and Board Representation

(a) The Company shall be managed and administered by its Board [of Managers / of Directors] comprising [Number] members. Each Shareholder holding at least [Percentage]% of the issued share capital shall be entitled to nominate [Number] representative(s) to the Board. (b) Quorum and Voting: Quorum for meetings of the Board shall require the presence of at least [Number] managers/directors. Resolutions of the Board shall be adopted by a simple majority of votes cast, except for Reserved Matters listed in Schedule B, which shall require the prior affirmative vote of [Supermajority/Unanimity requirements].

2.2 Capital Calls and Financing

(a) If the Company requires additional capital for its operations, as determined by the Board, the Shareholders may be requested to provide shareholder loans or subscribe to new capital increases pro rata to their existing shareholdings. (b) Nothing in this Agreement shall be construed as imposing a binding obligation on any Shareholder to advance funds to the Company beyond its initial subscribed capital unless explicitly agreed in a separate written instrument.

2.3 Representations and Warranties

Each Shareholder represents and warrants to the other Parties that: (a) It has full power, authority, and legal capacity to enter into, execute, and deliver this Agreement and to perform its obligations hereunder. (b) The execution and performance of this Agreement do not violate any applicable laws of Luxembourg, its constitutional documents, or any material contract to which it is a party. (c) Its Shares are free and clear of any and all Encumbrances whatsoever.

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SECTION 3: TRANSFER OF SHARES & RESTRICTIONS

3.1 General Restrictions on Transfer

Except as expressly permitted under this Agreement or with the prior unanimous written consent of all Shareholders, no Shareholder shall Transfer any Shares or any interest therein to any third party. Any Transfer made in violation of this Agreement shall be null and void ab initio, and the Company shall refuse to register any such invalid Transfer in the register of shareholders.

3.2 Right of First Refusal (ROFR)

(a) If a Shareholder (the "Transferring Shareholder") intends to Transfer any Shares (the "Offered Shares"), it shall deliver a written notice (the "Transfer Notice") to the Company and the non-transferable Shareholders (the "Other Shareholders"), detailing the identity of the proposed transferee, the purchase price, and all material terms of the proposed Transfer. (b) The Other Shareholders shall have the irrevocable right, exercisable within thirty (30) calendar days of receipt of the Transfer Notice, to purchase all (but not less than all) of the Offered Shares pro rata to their existing shareholdings on the same terms and conditions set forth in the Transfer Notice.

3.3 Tag-Along Rights (Co-Sale Right)

If the Other Shareholders do not exercise their ROFR rights regarding all Offered Shares, and the Transferring Shareholder intends to proceed with the Transfer to a third party, the Other Shareholders shall have the right (the "Tag-Along Right"), exercisable by written notice within fifteen (15) calendar days following the expiry of the ROFR period, to require such third-party purchaser to acquire their Shares on the exact same financial and operational terms and conditions.

3.4 Drag-Along Rights

If Shareholders holding at least [Percentage, e.g., 75]% of the voting shares (the "Dragging Shareholders") wish to sell all of their Shares to an independent bona fide third-party purchaser in an arm's-length transaction, the Dragging Shareholders may require all other Shareholders (the "Dragged Shareholders") to sell all of their Shares to such third party on the same terms and conditions, by issuing a written "Drag-Along Notice".

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SECTION 4: DEFAULT, TERMINATION, AND REMEDIES

4.1 Events of Default

A Shareholder shall be deemed in material default (a "Defaulting Shareholder") under this Agreement upon the occurrence of any of the following events: (a) Breach of any material obligation, representation, or warranty under this Agreement or the Articles of Association; (b) Insolvency, liquidation, dissolution, administration, bankruptcy, or filing of a voluntary petition under applicable bankruptcy or insolvency laws (including Luxembourg insolvency laws such as faillite, concordat préventif de faillite, or gestion contrôlée); or (c) Execution of an unauthorized Transfer of Shares in violation of Section 3.

4.2 Notice and Cure Period

Upon the occurrence of a default under Section 4.1(a), the non-defaulting Shareholders or the Company shall issue a written notice of default specifying the nature of the breach. The Defaulting Shareholder shall have thirty (30) Business Days from the date of receipt of such notice to cure the breach to the reasonable satisfaction of the non-defaulting Parties.

4.3 Remedies upon Default

If a default is not cured within the thirty (30) Business Day cure period (or immediately in the case of defaults under Section 4.1(b) or 4.1(c) where no cure is possible), the non-defaulting Shareholders may, by written notice to the Defaulting Shareholder, elect to: (a) Exercise specific performance to compel compliance with the terms hereof; (b) Require the Defaulting Shareholder to sell all of its Shares to the non-defaulting Shareholders at a purchase price equal to eighty percent (80%) of the Fair Market Value or the nominal value of the Shares, whichever is lower; and/or (c) Terminate this Agreement as to the Defaulting Shareholder, without prejudice to any claim for damages or other legal remedies available under Luxembourg law.

4.4 Termination

This Agreement shall terminate automatically upon: (a) The written agreement of all Shareholders; (b) The bankruptcy, winding up, or liquidation of the Company; or (c) The date on which only one Shareholder remains the sole owner of all issued Shares of the Company.

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SECTION 5: BOILERPLATE LEGAL PROVISIONS

5.1 Severability

If any provision of this Agreement is held to be invalid, illegal, or unenforceable by any court or tribunal of competent jurisdiction, such provision shall be deemed modified to the minimum extent necessary to make it valid and enforceable. The remaining provisions of this Agreement shall remain in full force and effect and shall not be affected hereby.

5.2 Entire Agreement

This Agreement, including any schedules and exhibits attached hereto, constitutes the entire agreement and understanding between the Parties with respect to the subject matter hereof and supersedes all prior oral or written agreements, understandings, negotiations, or representations between the Parties relating thereto.

5.3 Force Majeure

No Party shall be liable or responsible for any failure to perform, or delay in performance of, any of its obligations under this Agreement if such failure or delay is caused by acts of God, war, civil unrest, acts of terrorism, epidemic, pandemic, governmental restrictions, or any other unforeseen event beyond the reasonable control of the affected Party (a "Force Majeure Event"). The time for performance shall be extended for a period equal to the duration of the Force Majeure Event.

5.4 Governing Law

This Agreement, and all claims or causes of action (whether in contract, tort, or statute) based upon, arising out of, or related to this Agreement, shall be governed by, and enforced in accordance with, the laws of the Grand Duchy of Luxembourg, without regard to its conflict of laws principles.

5.5 Dispute Resolution

(a) In the event of any dispute, controversy, or claim arising out of or relating to this Agreement, including its formation, validity, breach, or termination, the Parties shall first attempt in good faith to resolve the dispute through amicable negotiations within thirty (30) calendar days of receipt of written notice of the dispute by one Party from another. (b) If the dispute is not settled through negotiations within such thirty (30) day period, it shall be submitted to the exclusive jurisdiction of the courts of Luxembourg-City, Grand Duchy of Luxembourg.

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SECTION 6: FORMAL EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties hereto have caused this Shareholders Agreement Luxembourg to be duly executed by their respective authorized signatories as of the Effective Date first written above.

The Company:

[Company Name]

By: ___________________________________
Name: [Signatory Name]
Title: [Signatory Title]
Date: [Date]

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Shareholder 1:

[Shareholder 1 Name]

By: ___________________________________
Name: [Signatory Name]
Title: [Signatory Title / Attorney-in-Fact]
Date: [Date]

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Shareholder 2:

[Shareholder 2 Name]

By: ___________________________________
Name: [Signatory Name]
Title: [Signatory Title / Attorney-in-Fact]
Date: [Date]

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SCHEDULE A: SHAREHOLDING STRUCTURE

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SCHEDULE B: RESERVED MATTERS

The following matters concerning the Company require the prior affirmative approval of Shareholders representing at least [Percentage, e.g., 80]% of the voting rights, or unanimous board approval, as mandated by Luxembourg law and this Agreement:

1. Any amendment to the Articles of Association of the Company.
2. Any increase or decrease of the issued share capital, creation of new classes of shares, or issuance of convertible bonds or warrants.
3. The liquidation, dissolution, merger, demerger, or reorganization of the Company.
4. The sale, lease, transfer, or disposal of all or substantially all of the Company's assets or intellectual property.
5. Approval of the annual budget and business plan.
6. Incurring indebtedness, loans, or financial commitments exceeding [Dollar Amount / Euro Amount] outside the ordinary course of business.
7. The appointment or removal of statutory auditors (réviseurs d'entreprises), if applicable.