Shareholder Agreement

Definitions & Interpretation

In this Agreement, unless the context requires otherwise:

• "Company" means [Company Name] Pty Ltd (ACN [ACN]), the SPV incorporated in Western Australia.
• "Business" means the development, construction, ownership, operation, and maintenance of a sub-5 MW power generation facility in Western Australia for the purpose of earning capacity credit revenue and related income from the Wholesale Electricity Market (WEM).
• "Shareholders" means the parties listed in Schedule 1 who hold Shares in the Company.
• "Shares" means fully paid ordinary shares in the capital of the Company.
• "Board" means the board of directors of the Company from time to time.
• "Capacity Credits" means capacity credits allocated to the facility under the WEM Rules as administered by AEMO.
• "SWIS" means the South West Interconnected System.
• "Western Power" means Western Power Corporation, the network operator.
• "Project" means the entire scope of the Business from site acquisition through to commercial operations.
• "Material Decision" means any decision listed in clause 5.2 (Reserved Matters).

Shareholdings & Capital Structure

2.1 Initial Shareholdings

The initial shareholdings in the Company are as follows:

2.2 Share Classes

Unless otherwise resolved by unanimous consent, the Company will have a single class of ordinary shares with equal rights to vote, receive dividends, and participate in a distribution of surplus assets on winding up.

2.3 No Issue Without Consent

The Company must not issue any new Shares, options, or convertible instruments without the prior written consent of all Shareholders. Any new issue must preserve existing Shareholders' rights to maintain their proportional interests (pre-emptive rights).

Business Purpose

The Company is established for the sole purpose of the Business. The Company must not, without the unanimous approval of all Shareholders, engage in any activity outside the scope of the Business or incur any liability not directly related to the Project.

The Business scope specifically includes:

1. Site identification, assessment, and acquisition (lease or purchase) in Western Australia.
2. Obtaining all necessary approvals, permits, and licenses (including Development Approval, environmental permits, and Western Power connection agreements).
3. Procurement of generating equipment (including generators, switchgear, protection systems, and metering).
4. Engineering, procurement, and construction (EPC) management.
5. Registration with AEMO and certification of Capacity Credits.
6. Ongoing plant operations, maintenance, and compliance.
7. Sale of capacity credits and any ancillary revenue streams (e.g., energy dispatch).

Board of Directors

4.1 Composition

The Board will comprise [3] directors. Each Shareholder holding at least [20]% of issued Shares is entitled to appoint one director (and remove and replace that director by notice in writing).

4.2 Meetings

The Board must meet at least quarterly. A quorum for Board meetings is [2] directors. Meetings may be held by telephone or video conference. At least 7 days' written notice must be given for Board meetings, together with an agenda and any relevant papers.

4.3 Chair

The Shareholders will appoint a Chair of the Board by majority resolution. The Chair will not have a casting vote.

4.4 Observer Rights

Any Shareholder not entitled to appoint a director may appoint one observer who may attend Board meetings (without voting rights) at that Shareholder's cost.

Decision Making & Reserved Matters

5.1 Ordinary Decisions

The Board may make decisions on day-to-day operational matters by simple majority vote of directors present at a quorate meeting.

5.2 Reserved Matters (Requiring Unanimous Shareholder Approval)

The following Material Decisions require the prior written approval of all Shareholders:

1. Changing the Company's constitution or business scope.
2. Issuing, cancelling, or buying back any Shares.
3. Admitting a new Shareholder.
4. Entering into debt agreements exceeding $[250,000] individually or $[500,000] in aggregate.
5. Making capital expenditures exceeding $[100,000] not included in the approved budget.
6. Entering into, amending, or terminating any contract for a term longer than 3 years.
7. Selling, leasing, or disposing of any significant Company asset.
8. Commencing, settling, or compromising any litigation or claim exceeding $[50,000].
9. Appointing or removing the Company's auditor, accountant, or legal counsel.
10. Changing the Company's banking arrangements.
11. Making any distributions or dividends outside the approved distribution policy.
12. Winding up or deregistering the Company.
13. Entering into transactions with related parties of any Shareholder.
14. Selecting or changing the equipment option for the power plant (e.g., Cat 3516C vs. Megapack).
15. Executing the Western Power connection agreement.

Funding & Capital Calls

6.1 Initial Contributions

Each Shareholder must contribute their Initial Capital as set out in clause 2.1 within [30] days of execution of this Agreement.

6.2 Additional Funding

If the Board determines that additional funding is required, it must first seek to obtain project finance debt on reasonable commercial terms. If debt funding is insufficient or unavailable, the Board may resolve to make a capital call on Shareholders, pro-rata to their shareholdings.

6.3 Failure to Fund

If a Shareholder fails to meet a capital call within [30] days of demand, the remaining Shareholders may:

1. Advance the defaulting Shareholder's share on terms to be agreed (which may include conversion to additional equity at a discount); or
2. Treat the default as a trigger event under clause 12 (Default & Remedies).

6.4 Shareholder Loans

Shareholders may make loans to the Company, which must be documented by a written loan agreement on arm's-length terms. Shareholder loans rank behind project finance debt.

Distributions & Dividend Policy

7.1 Distribution Waterfall

Available cash (after operating expenses, debt service, and maintenance reserves) will be distributed in the following priority:

1. Repayment of any Shareholder loans (principal + agreed interest).
2. Replenishment of the maintenance reserve fund (target: $[100,000]).
3. Dividends to Shareholders pro-rata to their shareholdings.

7.2 Frequency

Distributions will be considered quarterly, subject to the Company maintaining a minimum cash balance of $[150,000] and compliance with all debt covenants.

7.3 Reinvestment

By Board resolution, distributions may be deferred and retained for reinvestment, major maintenance, or asset replacement.

Transfer of Shares

8.1 Restriction

No Shareholder may sell, transfer, assign, charge, or otherwise deal with their Shares except in accordance with this clause.

8.2 Pre-emptive Rights

Before transferring Shares to a third party, the selling Shareholder must first offer the Shares to existing Shareholders, pro-rata to their holdings, at the same price and on the same terms as the proposed third-party sale.

8.3 Valuation

If the remaining Shareholders dispute the price, an independent valuer appointed by agreement (or by the President of the WA Division of CA ANZ) will determine fair market value. The valuation must use a DCF methodology consistent with the Financial Model.

8.4 Lock-up Period

No Shareholder may transfer Shares during the first [2] years from execution of this Agreement (the "Lock-Up Period"), except with unanimous Shareholder consent.

Tag-Along & Drag-Along Rights

9.1 Tag-Along

If a Shareholder holding more than [50]% of Shares proposes to transfer their Shares to a third party, each remaining Shareholder may require the buyer to purchase their Shares on the same terms (pro-rata).

9.2 Drag-Along

If Shareholders holding at least [75]% of Shares agree to sell all Shares to a bona fide third-party buyer, they may require all remaining Shareholders to sell their Shares on the same terms.

Non-Competition & Confidentiality

10.1 Non-Competition

During the term of this Agreement and for [12] months after ceasing to be a Shareholder, no Shareholder may directly or indirectly develop, own, or operate a competing power generation facility within the SWIS without the prior written consent of all other Shareholders.

10.2 Confidentiality

Each Shareholder must keep confidential all information relating to the Company, the Project, and the other Shareholders (other than information that is already public). This obligation survives termination of this Agreement for a period of [3] years.

Deadlock Resolution

If a Material Decision cannot be resolved after [30] days of good-faith negotiation:

1. The matter will be escalated to the principals of each Shareholder for a further [14] days.
2. If still not resolved, the parties will engage an independent mediator (appointed by agreement or by the Resolution Institute).
3. If mediation fails within [30] days, any Shareholder may initiate the buy-sell mechanism: the initiating Shareholder serves a notice offering to buy all remaining Shares at a stated fair price, and the receiving Shareholder(s) must either accept or counter-offer to buy the initiating Shareholder's Shares at that same price within [30] days.

Default & Remedies

12.1 Events of Default

The following constitute Events of Default:

1. Material breach of this Agreement not remedied within [30] days of written notice.
2. Failure to meet a capital call within the required timeframe (clause 6.3).
3. Insolvency, bankruptcy, or administration of a Shareholder.
4. A Shareholder being convicted of a criminal offence involving dishonesty.
5. Breach of the non-competition or confidentiality clauses.

12.2 Consequences

On an Event of Default, the non-defaulting Shareholders may, by notice, require the defaulting Shareholder to sell their Shares at fair market value less a [15]% discount, payable in [3] equal monthly instalments.

Termination & Winding Up

13.1 Term

This Agreement continues until the earlier of:

1. All Shareholders agree in writing to terminate.
2. Only one Shareholder remains.
3. The Company is wound up in accordance with the Corporations Act 2001 (Cth).

13.2 Winding Up

On winding up, after payment of all debts and liabilities, any surplus assets will be distributed to Shareholders in proportion to their shareholdings.

General Provisions

14.1 Governing Law

This Agreement is governed by the laws of Western Australia. The parties submit to the exclusive jurisdiction of the courts of Western Australia.

14.2 Entire Agreement

This Agreement constitutes the entire agreement between the parties relating to its subject matter and supersedes all prior agreements and understandings.

14.3 Amendments

This Agreement may only be amended by the written agreement of all Shareholders.

14.4 Notices

Notices must be in writing and delivered by email (with read receipt) or registered post to the address of each Shareholder as set out in Schedule 1.

14.5 Costs

Each party bears its own costs relating to the negotiation, preparation, and execution of this Agreement.

14.6 Severability

If any provision of this Agreement is found to be invalid or unenforceable, such provision will be severed and the remainder of the Agreement will continue in full force and effect.

Executed as an Agreement

Executed on [Date] by the following parties: