THIS AGREEMENT is dated 3 February 2014
(1) The parties whose names and addresses are listed in columns 1 and 2 of Schedule 1 (the 'Shareholders').
(2) Biomimetics Health Industries Holdings UK Limited a private company incorporated and registered in England and Wales with company number 08085906 whose registered office is at Accurist House***** London, W1U 7AL (the 'Company'')
(A) The Company has an issued share capital of £10,256, divided into 10,256 ordinary shares of £1 each, all of which are issued and fully paid.
(B) Each Shareholder is the registered owner of the ordinary shares of £1 each in the capital of the Company as listed in column 3 of Schedule 1:
(C) The Shareholders have agreed to enter into this agreement for the purpose of controlling their capacity as shareholders of the Company.
1.1. The following definitions shall apply in this agreement.
Acting in Concert has the meaning given to it in the City Code
on Takeovers and Mergers published by the Panel
on takeovers and Mergers (as amended from time
the board of directors of the Company as constituted from time to time.
a day (other than a Saturday, Sunday or public holiday in the United Kingdom) when banks in the City of London are generally open for business.
has the meaning given in clause 4.4 and Continuing Shareholder means any of them.
means an interest in shares giving the holder or holders control of the Company within the meaning of section 1124 of the corporation Tax Act 2010.
Biomimetics Health Industries Group
in relation to the Company, the Company and any subsidiary or holding company as defined in Section 1159 of the Companies Act 2006.
has the meaning given in clause 2.3.
in relation to the Company, means a financial accounting period of 12 months.
the spouse or siblings of a Shareholder or any of his/her children (whether natural or adopted) or where the Shareholder is a Company, any member of its Group.
has the meaning given in clause 4.4.
the Proposed Sale Price or, following service of a Price Notice, the price per Sale Share determined in accordance with clause 4.5.
each of the parties from time to time to this agreement (including any person who becomes a party by executing a deed of adherence pursuant to clause 4.9.2), together with their respective successors and assigns and Shareholders means all of them together.
the auditors for the time being of the Company or, if they decline the instruction, an independent firm of accountants appointed by the Seller and by the Continuing Shareholders or, in the absence of agreement between them on the identity of the expert within five Business Days of the expiry of the ten Business Day period following service of a Price Notice, an independent firm of accountants appointed by the President, for the time being, of the Institute of Chartered Accountants of England and Wales (in each case acting as an expert and not as an arbitrator).
1.2. Clause headings do not affect the interpretation of this agreement.
1.3. A reference to a person includes a natural person, a corporate or unincorporated body (whether or not having a separate legal personality).
1.4. A reference to a particular law is a reference to it as it is in force for the time being taking account of any amendment, extension, application or re-enactment, and includes any subordinate legislation for the time being in force made under it.
1.5. A reference to Writing or written includes faxes but not e-mail.
1.6. Words in the singular include the plural and in the plural include the singular.
2. Business of the Company
2.1. The business of the Company is to act as a holding company for Biomimetics Health Industries Group, subject to variation from time to time in accordance with clause 3.1.1 (Business).
2.2. Each Shareholder shall use his reasonable endeavours to promote (so far as is lawfully possible in the exercise of his rights and powers as a shareholder of the Company) the success of anddevelop the Business, in each case for the benefit of its shareholders as a whole.
2.3. The Business Plan is an annual business plan for the Company prepared by the Company and it shall include in relation to the Financial Year to which it relates:
2.3.1. a cashflow statement giving:
220.127.116.11. an estimate of the working capital requirements; and
18.104.22.168. an indication of the amount (if any) that it is considered prudent to retain, for the purpose of meeting those requirements, out of those profits of the previous Financial Year that are available for distribution to Shareholders;
2.3.2. a monthly projected profit and loss account;
2.3.3. an operating budget (including capital expenditure requirements) and balance sheet forecast;
2.3.4. a management report giving business objectives for the Financial Year; and
2.3.5. a financial report which shall include an analysis of the estimated results of the Company for the previous Financial Year compared with the Business Plan for that year, identifying variations in sales revenues, costs and other material items.
2.4. The Business Plan for every Financial Year shall be:
2.4.1. prepared by the Board within 45 days of the end of the preceding Financial Year (the first day being the first day of the Financial Year to which the plan relates); and
2.4.2. adopted and approved by the parties at the annual general meeting of Shareholders as soon as possible after it has been prepared.
2.5 Julian Schild shall be entitled to attend all meetings of the Board as observer.
3. Matters requiring consent of 75% of the Shareholders
The Company shall not, without the prior written consent of 75% of all Shareholders:
3.1.1. cease to be a private company or change (by whatever means) the nature of the Business, as varied from time to time in accordance with this clause 3.1.1; or
3.1.2. amend its articles of association; or
3.1.3. change the name of the Company; or
3.1.4. sell or otherwise dispose of the whole or any part of its undertaking, property, assets, or any interest in them or contract to do so whether or not for valuable consideration; or
3.1.5. increase, reduce, sub-divide, consolidate, redenominate, cancel, purchase or redeem any of the capital of, or allot or issue any shares or other securities in the capital of, the Company; or
3.1.6. alter any rights attaching to any class of share in the capital of the Company, or create any option, warrant or any other right to acquire or subscribe for any shares or other securities in the capital of the Company; or
3.1.7. do, permit or allow to be done any act or thing whereby the Company may be wound-up, or enter into any compromise or arrangement under the Insolvency Act 1986; or
3.1.8. merge or amalgamate with any other company or undertaking, or acquire directly or indirectly any interest in any shares or other security convertible into shares of any other company, or form or acquire any subsidiary; or
3.1.9. give any guarantee, make any payment or incur any obligation or act as surety otherwise than in connection with the Company’s ordinary business for the time being; or
3.1.10. lend or agree to lend, grant any credit or make any advance to any person otherwise than in the ordinary course of the Business of the Company; or
3.1.11. appoint or remove any director; or
3.1.12. hold any meeting of the shareholders or purport to transact any business at such meeting, unless each Shareholder has been given notice of the meeting in accordance with the articles of the Company.
4. Transfer of shares
4.1. No Shareholder shall sell, transfer, assign, pledge, charge or otherwise dispose of any share or any interest in any share in the capital of the Company, except as permitted by this agreement
4.2. A Shareholder may at any time transfer its shares in the Company to a Permitted Transferee without being required to comply with the pre-emption procedure set out in this clause 4.
4.3. A Shareholder (Seller) wishing to transfer shares in the capital of the Company (Sale Shares) shall give notice in writing (Transfer Notice) to the other parties (Continuing Shareholders) specifying the details of the proposed transfer, including the number of Sale Shares comprised within the Transfer Notice, the identity of the proposed buyer(s), the proposed price for each Sale Share (Proposed Sale Price) and each Continuing Shareholder's proportionate entitlement to the Sale Shares, being the same proportion of the Sale Shares as the proportion that the number of ordinary shares held by him bears to the total number of ordinary shares held by the Continuing Shareholders (in respect of each Continuing Shareholder, his Entitlement).
4.4. The Continuing Shareholders (or any of them) may, by giving notice in writing (Price Notice) to the Seller at any time within ten Business Days of receipt of a Transfer Notice, notify the Seller that the Proposed Sale Price is too high. Following service of a Price Notice, the parties shall endeavour to agree a price for each of the Sale Shares. If the parties have not agreed such a price within ten Business Days of the Seller's receipt of a Price Notice, they (or any of them) shall immediately instruct the Valuers to determine the Fair Value of each Sale Share in accordance with clause 6.
4.5. If, following delivery to him of the Valuers' written notice in accordance with clause 6 the Seller does not agree with Valuers' assessment of the Fair Value of the Sale Shares, he shall be entitled to revoke the Transfer Notice by giving notice in writing to the Continuing Shareholders within five Business Days of delivery to him of the Valuers' written notice. If the Seller revokes the Transfer Notice, he is not entitled to transfer the Sale Shares except in accordance with this agreement.
4.6. Within 20 Business Days of receipt (or deemed receipt) of a Transfer Notice or, if later, within 20 Business Days of receipt of the Valuers' determination of the Fair Value (and provided the Seller has not withdrawn the Transfer Notice), a Continuing Shareholder shall be entitled (but not obliged) to give notice in writing (Acceptance) to the Seller stating that he wishes to purchase his Entitlement up to a maximum of his Entitlement to the Sale Shares at the Sale Price. A Continuing Shareholder may, in his Acceptance, indicate that he would be willing to purchase a particular number of Sale Shares in excess of his Entitlement (Extra Shares). No Continuing Shareholder shall be entitled to purchase less than his Entitlement to Sale Shares.
4.7. If, on the expiry of the relevant 20 Business Day period referred to in clause 4.6, the total number of Sale Shares applied for is greater than the available number of Sale Shares, each accepting Continuing Shareholder shall be allocated his Entitlement (or such lesser number of Sale Shares for which he has applied) and applications for Extra Shares shall be allocated in accordance with such applications or, in the event of competition, among those Continuing Shareholders applying for Extra Shares in such proportions as equal (as nearly as may be) the proportions of all the shares of the same class held by such Continuing Shareholders.
4.8. Completion of those Sale Shares accepted by Continuing Shareholders shall take place in accordance with clause 5.
4.9. In relation to any Sale Shares not accepted by Continuing Shareholders:
4.9.1. the Seller shall be entitled to transfer those Sale Shares to the third party buyer identified in the Transfer Notice at a price per Sale Share not less than the Sale Price; and
4.9.2. the Seller shall procure that any buyer of Sale Shares that is not, immediately prior to completion of the transfer in question, a party to this agreement shall, at completion, enter into a deed of adherence with the Continuing Shareholders, agreeing to be bound by the terms of this agreement, in such form as the Continuing Shareholders may reasonably require (but not so as to oblige the buyer to have any obligations or liabilities greater than those of the Seller).
4.10. If the holders of 75% of the Shares in issue for the time being (Selling Shareholders) wish to transfer all (but not some only) of their Shares (Sellers' Shares) to a bona fide purchaser on arm's length terms (Proposed Buyer), the Selling Shareholders may require all other Shareholders (Called Shareholders) to sell and transfer all their shares (Called Shares) to the Proposed Buyer (or as the Proposed Buyer directs) (Drag Along Option).
4.11. The Selling Shareholders may exercise the Drag Along Option by giving written notice to that effect to the Called Shareholders (Drag Along Notice) at any time before the transfer of the Sellers' Shares to the Proposed Buyer. The Drag Along Notice shall specify:
4.11.1. that the Called Shareholders are required to transfer all their Called Shares;
4.11.2. the person to whom the Called Shares are to be transferred;
4.11.3. the purchase price payable for the Called Shares which shall, for each Called Share, be an amount at least equal to the price per share offered by the Proposed Buyer for the Sellers' Shares; and
4.11.4. the proposed date of the transfer.
4.12. Once issued, a Drag Along Notice shall be irrevocable. However, a Drag Along Notice shall lapse if, for any reason, the Selling Shareholders have not sold the Sellers' Shares to the Proposed Buyer within thirty Business Days of serving the Drag Along Notice. The Selling Shareholders may serve further Drag Along Notices following the lapse of any particular Drag Along Notice.
4.13. Completion of the sale of the Called Shares shall take place on the Completion Date. Completion Date means the date proposed for completion of the sale of the Sellers' Shares unless:
4.13.1. all of the Called Shareholders and the Selling Shareholders agree otherwise in which case the Completion Date shall be the date agreed in writing by all of the Called Shareholders and the Selling Shareholders; or
4.13.2. that date is less than seven Business Days after the date on which the Drag Along Notice is served, in which case the Completion Date shall be the second Business Day after service of the Drag Along Notice.
4.14. The sale of the Called Shares by the Called Shareholders shall not be subject to those provisions.
4.15. On or before the Completion Date, the Called Shareholders shall execute and deliver stock transfer forms for the Called Shares, together with the relevant share certificates (or a suitable indemnity for any lost share certificates) to the Company. On the Completion Date, the Company shall pay the Called Shareholders, on behalf of the Proposed Buyer, the amounts due to the extent that the Proposed Buyer has put the Company in the requisite funds. The Company's receipt for the price shall be a good discharge to the Proposed Buyer. The Company shall hold the amounts due to the Called Shareholders in trust for the Called Shareholders without any obligation to pay interest.
4.16. To the extent that the Proposed Buyer has not, on the Completion Date, put the Company in funds to pay the purchase price due in respect of the Called Shares, the Called Shareholders shall be entitled to the return of the stock transfer forms and share certificates (or suitable indemnity) for the relevant Called Shares and the Called Shareholders shall have no further rights or obligations in respect of their Shares.
4.17. If any Called Shareholder does not, on or before the Completion Date, execute and deliver transfer(s) in respect of all of the Called Shares held by it, each defaulting Called Shareholder shall be deemed to have irrevocably appointed any person nominated for the purpose by the Selling Shareholders to be its agent to execute all necessary transfer(s) on its behalf, against receipt by the Company (on trust for such holder) of the purchase price payable for the Called Shares, and to deliver such transfer(s) to the Proposed Buyer (or as it may direct) as the holder thereof. After the Proposed Buyer (or its nominee) has been registered as the holder of the Called Shares, the validity of such proceedings shall not be questioned by any such person. Failure to produce a share certificate shall not impede the registration of shares.
4.18 If, as a consequence of one or a series of related transactions, one or more Sellers propose to transfer any of the Shares (Proposed Transfer) which would, if carried out, result in any person (Buyer), and any person Acting in Concert with the Buyer, acquiring a Controlling Interest in the Company. Before making a Proposed Transfer, a Seller shall procure that the Buyer makes an offer (Offer) to the other Shareholders to purchase all of the Shares held by them for a consideration in cash per Share that is at least equal to the highest price per Share offered or paid by the Buyer, or any person Acting in Concert with the Buyer, in the Proposed Transfer or in any related previous transaction in the six months preceding the date of the Proposed Transfer (Specified Price).
4.19 The Offer shall be made by written notice (Offer Notice), at least fourteen Business Days before the proposed sale date (Sale Date). To the extent not described in any accompanying documents, the Offer Notice shall set out:
(a) the identity of the Buyer;
(b) the Specified Price and other terms and conditions of payment;
(c) the Sale Date; and
(d) the number of Shares proposed to be purchased by the Buyer (Offer Shares).
4.20 If the Buyer fails to make the Offer to all of the holders of Shares in the Company, the Seller shall not be entitled to complete the Proposed Transfer and the Company shall not register any transfer of Shares effected in accordance with the Proposed Transfer.
4.21 If the Offer is accepted by any Shareholder (Accepting Shareholder) in writing within seven Business Days of receipt of the Offer Notice, the completion of the Proposed Transfer shall be conditional on completion of the purchase of all the Offer Shares held by Accepting Shareholders.
4.22 The purchase of Offer Shares from Accepting Shareholders shall not be subject to the pre-emption provisions in this clause 4.
5. Completion of share purchase
5.1 Completion of the sale and purchase of shares shall take place five Business Days after:
5.1.1 the date of delivery of the Transfer Notice to the Continuing Shareholders, unless the Continuing Shareholders (or any of them) have served a Price Notice; or
5.1.2the date of delivery of determination of the Sale Price.
5.2 At such completion:
5.2.1 the Seller shall deliver, or procure that there is delivered to each Continuing Shareholder who is to purchase Sale Shares, a duly completed stock transfer form transferring the legal and beneficial ownership of the relevant Sale Shares to him, together with the relevant share certificate(s) (or an indemnity in lieu thereof) and such other documents as the Continuing Shareholders or the Company may reasonably require to show good title to the shares, or to enable him to be registered as the holder of the shares;
5.2.2 each relevant Continuing Shareholder shall deliver or procure that there is delivered to the Seller a bankers' draft made payable to the Seller or to his order for the Sale Price for the Sale Shares being transferred to him (or such other method of payment agreed between a Continuing Shareholder and the Seller); and
5.2.3 if, following a sale of shares in accordance with this agreement, the Seller holds no further shares in the Company:
22.214.171.124 the Seller shall deliver, or procure that there are delivered to the Company, his resignation as a director of the Company and resignations from any directors appointed by him, such resignations to take effect at completion of the sale of the Sale Shares; and
126.96.36.199 the Seller shall automatically cease to be a party to this agreement, but without prejudice to any rights or obligations of the Seller which accrued before such cessation (including, without limitation, his obligations under clause 10 which shall survive such cessation), including in respect of any prior breach of this agreement.
5.2.4 Any transfer of shares by way of a sale that is required to be made under this agreement shall be deemed to include a warranty that the Seller sells the shares with full title guarantee.
5.2.5 If any Continuing Shareholder fails to pay the Sale Price payable by him on the due date, without prejudice to any other remedy which the Seller may have, the outstanding balance of that Sale Price shall accrue interest at a rate equal to 5% per annum above the base rate of HSBC Bank Plc from time to time.
5.2.6 Each of the Continuing Shareholders shall use his reasonable endeavours to procure (so far as is lawfully possible in the exercise of his rights and powers as a shareholder of the Company) the registration (subject to due stamping by the Continuing Shareholders) of the transfers of the Sale Shares and each of them consents to such transfers and registrations.
6. Fair value
The Fair Value for any Sale Share shall be the price per share determined in writing by the Valuers on the following bases and assumptions:
a) valuing each of the Sale Shares as a proportion of the total value of all the issued shares in the capital of the Company without any premium or discount being attributable to the percentage of the issued share capital of the Company which they represent;
b) if the Company is then carrying on business as a going concern, on the assumption that it will continue to do so;
c) the sale is to be on arms' length terms between a willing seller and a willing buyer;
d) the shares are sold free of all restrictions, liens, charges and other encumbrances; and
e) the sale is taking place on the date the Valuers were requested to determine the Fair Value.
7. Issue of further shares
7.1 If the Company wishes to issue further shares, each of the Shareholders shall use his reasonable endeavours to procure (so far as is lawfully possible in the exercise of his rights and powers as a shareholder of the Company) that the Company offers, by giving written notice to each respective Shareholder, that proportion of the shares proposed to be issued which the number of ordinary shares held by that Shareholder bears to the total number of ordinary shares in issue at the time the Company gives its notice. Such offer shall state the number of shares to be issued and the price of the shares.
7.2 Each Shareholder may accept the offer by giving notice to the Company, at any time within seven Business Days following the Company’s notice, accompanied by a banker's draft made payable to the Company in respect of full payment for the shares to be subscribed for.
7.3 Any shares referred to in the Company’s offer, for which the Shareholders do not subscribe, may be issued by the Company as it thinks fit, provided that any such issue is completed within twenty one Business Days after the Company’s notice of the offer.
8.1 This agreement terminates immediately upon the occurrence of any of the following events:
8.1.1 the passing of a resolution for the winding up of the Company; or
8.1.2 the appointment of a receiver, administrator or administrative receiver over the whole or any part of the assets of the Company or the making of any arrangement with the creditors of the Company for the affairs, business and property of the Company to be managed by a supervisor.
8.2 Termination of this agreement shall be without prejudice to the rights or obligations of any Shareholder accrued prior to such termination, or under any provision which is expressly stated not to be affected by such termination including in respect of any prior breach of this agreement.
8.3 Following the passing of a resolution for the winding-up of the Company, the Shareholders shall endeavour to agree a suitable basis for dealing with the interests and assets of the Company and shall endeavour to ensure that:
(a) all existing contracts of the Company are performed so far as resources permit;
(b) no new contractual obligations are entered into by the Company; and
(c) the Company is wound up as soon as practicable.
8.4 The following provisions of this agreement remain in full force after termination:
(a) this clause 8;
(b) Clause 10 (No partnership);
(c) Clause 11 (Confidentiality);
(d) Clause 12 (Notices);
(e) Clause 16 (Costs and expenses);
(f) Clause 17 (Entire agreement); and
(g) Clause 20 (Governing law and jurisdiction).
9. Status of this agreement and the parties’ obligations
9.1 Each Shareholder shall exercise all voting rights and other powers of control lawfully available to him as a shareholder of the Company so as to procure that, at all times during the term of this agreement, the provisions of this agreement are duly and promptly observed and given full force and effect according to its spirit and intention.
9.2 If any provisions of the memorandum or articles of association of the Company at any time conflict with any provisions of this agreement, this agreement shall prevail as between the parties to it and each of the Shareholders shall, whenever necessary, exercise all voting and other rights and powers lawfully available to him as a shareholder of the Company so as to procure the amendment, waiver or suspension of the relevant provision of the memorandum or articles of association to the extent necessary to permit the Company and its affairs to be administered as provided in this agreement.
10. No partnership
The Shareholders are not in partnership with each other, nor are they agents of each other.
Each Shareholder undertakes that he shall not at any time after the date of this agreement (or, if later, the date he became a party to it) use, divulge or communicate to any person (except to his professional representatives or advisers or as may be required by law or any legal or regulatory authority) any confidential information concerning the terms of this agreement, the business or affairs of the other Shareholders or the Company which may have (or may in future) come to his knowledge, and each of the Shareholders shall use his reasonable endeavours to prevent the publication or disclosure of any confidential information concerning such matters.
12.1 Any notice given under this agreement shall be in writing and shall be delivered by hand, transmitted by fax, or sent by pre-paid first class post or recorded delivery post to such address of the party notified to the other parties. A notice delivered by hand is deemed to have been received when delivered (or if delivery is not in business hours, 9.00 am on the first Business Day following delivery). A correctly addressed notice sent by pre-paid first class post or recorded delivery post shall be deemed to have been received at the time at which it would have been delivered in the normal course of post. A notice sent by fax to the fax number of the relevant party shall be deemed to have been received at the time of transmission.
12.2 The addresses for service of notices are set out in column 2 of Schedule 1.
13.1 If any provision (or part of a provision) of this agreement is found by any court or administrative body of competent jurisdiction to be invalid, unenforceable or illegal, the other provisions shall remain in force.
13.2 If any invalid, unenforceable or illegal provision would be valid, enforceable and legal if some part of it were deleted, the provision shall apply with whatever modification is necessary to give effect to the commercial intention of the parties.
14. Variation and waiver
14.1 Any variation of this agreement shall be in writing and signed by or on behalf of all the parties for the time being.
14.2 No failure or delay by a party to exercise any right or remedy provided under this agreement or by law shall constitute a waiver of that or any other right or remedy, nor shall it preclude or restrict the further exercise of that or any other right or remedy. No single or partial exercise of such right or remedy shall preclude or restrict the further exercise of that or any other right or remedy.
14.3 Unless specifically provided otherwise, rights and remedies arising under this agreement are cumulative and do not exclude rights and remedies provided by law.
15.1 No person may assign, or grant any encumbrance over, or deal in any way with, any of his rights under this agreement or any document referred to in it, or purport to do any of the same, without, in each case, the prior written consent of all the parties for the time being [(such consent not to be unreasonably conditioned, withheld or delayed).
15.2 Each person that has rights under this agreement is acting on his own behalf.
16. Costs and expenses
Each Shareholder shall pay the costs relating to the negotiation, preparation, execution and implementation by him of this agreement in the same proportion which his shares in the Company bears to the total number of shares in the Company held by all Shareholders.
17. Entire agreement
17.1 This agreement constitutes the whole agreement between the parties and supersedes any previous arrangement, understanding or agreement between them relating to the subject matter they cover.
17.2 Each party acknowledges that, in entering into this agreement, he does not rely on, and shall have no remedy in respect of, any statement, representation, assurance or warranty of any person other than as expressly set out in this agreement or those documents.
17.3 Nothing in this clause 18 operates to limit or exclude any liability for fraud.
18. Third party rights
A person who is not a party to this agreement shall not have any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this agreement.
This agreement may be executed in any number of counterparts, each of which when executed and delivered shall constitute an original of that agreement, but all the counterparts shall together constitute the same agreement. No counterpart shall be effective until each party has executed at least one counterpart.
20. Governing law and jurisdiction
20.1 This agreement and any disputes or claims arising out of or in connection with its subject matter or formation (including non-contractual disputes or claims) are governed by and construed in accordance with the laws of England.
20.2 The parties irrevocably agree that the courts of England have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this agreement or its subject matter or formation (including non-contractual disputes or claims).
This agreement has been entered into on the date stated at the beginning of it.