SHAREHOLDERS AGREEMENT – TEMPLATE TEMPLATE THIS AGREEMENT made made at Pune Pune on this this .......... ...... ....day day of.................... of... ........................ .......,, 2013 by and between between:: 1.
2.
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ABC Limited Limited,, a company incorporated under the laws of the British Virgin slands and ha!ing its
registered registered office at British British Virgin Virgin slands "hereinaf "hereinafter ter referred to as # ABC,$ which e%pression shall be deemed to mean and include include its successors and permitted assigns&' ass igns&' AND DEF Pharmae!tia"# Pharmae!tia"# Limited, a company incorporated under the (ompanies )ct, 1*+ and ha!ing its registered registered office at ------ Pune "hereinafter "hereinafter referred to as # DEF,$ which e%pression shall be deemed to mean and include its successors and permitted assigns&' %&' Bi(teh Limited, a company incorporated under the ndian (ompanies )ct, 1*+ and ha!ing its registered office at---------Pune "hereinafter referred to as # the C(m)a*+ ,$ which e%pression shall be deemed to mean and include its successors and AND
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Mr. P, ./., a (anadian national, aged -- years, residing at est est Vancou!er, Vancou!er, (anada, "hereinafter "hereinafter
referred to as # Mr. P$, which e%pression shall be deemed to mean and include his permitted assigns and e%ecutors&. -HEREAS
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/ is in the business of manufacturing and dealing in healthcare products. )B( is in the business of research de!elopment, process de!elopment and technology transfer for recombinant proteins for human and animal use. r. P is the chief e%ecuti!e and principal shareholder of )B(. / and )B( ha!e caused the (ompany to ser!e as their 4oint !enture !ehicle for manufacturing, import, distribution, research an de!elopment, e%port and selling the Products in the 5erritory "# the Pr(/et$&.
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/ and )B( ha!e agre ed that their respe cti! e righ ts and obli gati ons as 6har 6hareh ehol olde ders rs in the the (ompany shall be regulated by the pro!isions of this )greement and the )rticles.
IT IS AGREED as follows: 1. DEFINITIONS AND INTERPRETATIONS 1.1
De0i*iti(*#
n this )greement "including the 7ecitals& # At$ means the ndian (ompanies )ct, 1*+' #Areeme*t$ means means this this 6har 6hareh ehold olders ers )greem greement ent and and all the the )nne%ur nne%ures es to this this )greement' #Arti"e#$ means )rticles of )ssociation of the (ompany' #A00i"iate $ means : "a& any entity, which controls, is controlled by, or is under the common control of any of the Parties and8or "b& any 7elati!e or associate or ac9uaintance ac9uaintance of any of the Parties. 5he term # (*tr("$ being used in the sense of beneficial ownership, of more than +0 of the !oting securities, and power to elect, appoint or remo!e either singly by itself or together with other )ffil )ffiliates iates a ma4ority of its directors directors or to direct and control the management management of an entity whether whether through the ownership of !oting capital, capital, by contract or oth otherwis erwise' e' #Areed F(rm$ means, in relation to any document, the form of that document which has been mutually mutually agreed agreed betwee between n the Parties Parties and initialed initialed for the purpose of identifi identificati cation on by or on behalf behalf of the Partie Parties' s' #B(ard$ means Board of /irectors of the (ompany' #B(ard Meeti*$ means meetings of the Board held pursuant to (lause ;.;' #B!#i*e## $ means manufacture, import, distribution, research and de!elopment, sale and e%port of the Products' #B!#i*e## Da+$ means a day on which ban
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#E!it+ Share#$ means the e9uity shares of the (ompany, presently ha!ing a face !alue of 7s. 10 per e9uity share' #E00eti3e Date $ means the date of e%ecution of this )greement' #Fai"it+ $ means the manufacturing plant and facility of the (ompany at----------Pune and8or any other location decided by the (ompany at a later date for , research and de!elopment, manufacturing, storage, selling, mar
how, how, software programs, right to creati!e or origin original al worlaws, regulations, notifications, guidelines, policies, directi!es and orders of any Ao! Ao!ernm ernment, ent, statutor statutory y authori authority ty,, regulat regulatory ory agency agency,, tribun tribunals, als, board, board, court court or recognised stoc< e%change' #Materia" Breah$ means any breach of this )greement )greement or the 7elated )greements )greements by any of the Parties and so determined and held by an arbitral tribunal or court or any other 4udicial or 9uasi>4udicial authority. #Partie#$ shall mean )B(, /, the (ompany and r. P collecti!ely, and #Party$ shall mean )B(, /, the (ompany and r. P singly. 6Per#(*7 includes any legal or natural person, any association thereof, partnership, firm, trust, company company,, go!ernm go!ernment, ent, local local authori authority ty,, depart departmen mentt or other other body "wheth "whether er corpor corporate ate or unincorporated&. #Pr(d!t#$ shall mean bio>pharmaceutical preparations8biogenerics based on recombinant proteins using biotechnology biotechnology for uman and )nimal ealthcare, ealthcare, as listed in )nne%ure )nne%ure /, which list may be amended amended from time to time time by mutual mutual consent consent of the the Parties Parties e%pressed e%pressed in writin writing. g. 6Pr()r 6Pr()rieta ietar+ r+ 9*(8"ede7 9*(8"ede7 shall shall mean mean the e%clus e%clusi!e i!e 5echni echnical cal ?no ?nowho whow w and full full ownership rights of r. P and )B(, 4ointly and se!erally , in respect of the technology in!ol! i n!ol!ed ed in composing and culti!ating the cell line, production of proteins, purification and !ialing for the following: i. 5C?>ase8 5issue Plasminogen )cti!ator "5C?>tP)& "5C?>tP)& ii. Aranulocyte acrophage (olony 6timulating actor "A>(6& #Rei#tered O00ie$ means the registered office of the (ompany as stated in (lause 2, or as may be changed from time to time in accordance with Daw. #Re"ated Areeme*t#$ means the Dicence 5echincal ?nowhow and 6upply )greement e%ecuted betwee between n )B(, )B(, r. r. P and the (ompany (ompany.. #Ma*aeme*t P("i+ $ means the management policy, guidelines and practices of the (ompany as may be decided by the Board from time to time, by simple ma4ority. =Re"ati3e = means =re"ati3e= as defined by sub>section ";1& of 6ection 2 of the )ct. #Seretar+$ means a person appointed as the company secretary by the Board. = Se!rit+ = means mortgage, charge, "whether fi%ed or floating&, pledge, lien, hypothecation, or assignment with pro!ision for re>assignment and any other security interest or arrangement ha!ing the same legal or economic or commercial effect as any of the foregoing. #Share#$ shall include 9uity 6hares of the (ompany. #Shareh("der$ means the holder of any 9uity 6hares. 6S)ei0ied Matter$ in the conte%t of any action, decision or resolution by the Board or the 6hareholders, means any of the matters listed in )nne%ure ) hereto. #:a"!er$ shall mean a reputed national or international international firm of chartered accountants accountants to be decided d ecided by the the Boar Board. d. )B(, 4ointl 4 ointly y 6Teh*ia" 6Teh*ia" ;*(8h(87 means the technical
I*ter)retati(*
Cothin Cothing g containe contained d herein herein shall be constr construe ued d to pro!id pro!ide, e, create create,, transfe transferr or assign any benefit, benefit, rights, or pri!ileges to any party not a party to this )greement )greement sa!e and e%cept e%cept as e%pre e%pressly ssly pro!i pro!ide ded d for here herein in.. ords ords importing the singular include the plural' words importing the masculine shall import the feminine' feminine'
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and !ice !ersa, unless contrary to the terms, conditions and conte%t of usage. 7eference to days, months and years are to calendar days, calendar months and calendar years respecti!ely. respecti!ely. 5he words =include= and =including= are to be construed without limitation, unless contrary to the terms, conditions and conte%t of usage. n addition to the terms defined in this (lause 1, certain other terms are defined elsew elsewhe here re in this this )greeme )greement nt and whene!e whene!err such terms terms are used in this )gree )greement ment they shall ha!e their respecti!e respecti!e defined meanings, unless the conte%t e%pressly or by necessary implication otherwise re9uires.
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5he 7ecitals and )nne%ures contained herein shall constitute an integral operati!e part of this )greement. 2. REGISTERED OFFICE 5he Parties agree that the registered office of the (ompany shall be----------------------Pune, ndia. $. THE B "a& the (ompany performs and complies with all obligations on its part under this )greement and
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complies with the restrictions imposed upon it under the )rticles. "b& the Business is conducted in the best interests of the (ompany on sound commercial principles, in accordance with the anagement Policy "or any amendment or modification of the same&, in accordance with Daw, on armEs length terms and in accordance with the highest standards of corporate go!ernance. THE MANAGEMENT OF THE COMPAN& B(ard (0 Diret(r# 5he Board shall be r esponsible for, establish ing the policy, goals and organisational structure of the (ompany, for allocating resources and delegating authority to and monitoring the performance of the (ompanyFs management, to ta
;.2.1 5he Board shall comprise of se!en /irectors or such other number as may be decided by the Board from time to time.
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;.2.2 )s long as )B( continues to hold at least 2+ of the 9uity 6hares of the (ompany, one>third of the total number of /irectors "i.e. 2 /irectors& shall be nominated by )B(. ;.2.3 5he )rticles shall pro!ide for the appointment of remaining two>thirds of the total number of /irectors "i.e. + /irectors& by the 6hareholders in a general meeting according to the principle of proportional representation by a system of cumulati!e !oting, such that + nominees of / are so elected as /irectors. ;.2.; 5he appointment 8 nomination of all /irectors pursuant to (lauses ;.2.2 and ;.2.3 abo!e shall be for a period of 3 "5hree& years from the date of the general meeting of the (ompany and will thereafter be repeated e!ery three years. ;.2.+ / and )B( shall be entitled by notice in writing to the (ompany to remo!e or replace its nominee /irector"s& appointed pursuant to (lauses ;.2.2 and ;.2.3. )ny such appointment or remo!al shall taofficio (hairman at the general meetings of the (ompany in accordance with applicable pro!isions of the )ct and the )rticles. )t all Board eetings if the (hairman is present he shall preside, and in his absence, the Board may elect one of them to be the chairman for that meeting. ;.3.2 6a!e and e%cept if it relates to a 6pecified atter, in the e!ent of a tie, the (hairman shall ha!e a casting or a second !ote at any meeting of the Board or at any meeting of the 6hareholders. ;.3.3 ) nominee of / shall be appointed as the anaging /irector8(hief %ecuti!e Hfficer "(H& of the (ompany, and shall draw such remuneration as is appro!ed by the Board.
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B(ard Meeti*#
;.;.1 Board eetings shall be held not less than four times in e!ery year and at not more than three monthly inter!als. Inless otherwise agreed by the /irectors, G "6e!en& daysE written notice shall be gi!en to each of the /irectors of all meetings of the Board, at the address notified from time to time by each /irector to the 6ecretary. ach such notice shall contain, inter alia, an agenda specifying in reasonable detail the matters to be discussed at the rele!ant meeting, and shall be accompanied by all rele!ant papers8documents for discussion at such meeting and shall be sent by courier or by telefa% or any other form of recorded deli!ery. ) matter shall not be ta
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C(mmittee# (0 the B(ard
;.+.1 5he Board may delegate all or any of the BoardEs authorities and powers in relation to the day>to>day management of the (ompany "other than those "a& which it is prohibited by Daw from so delegating and8or b& the 6pecified atters& to a committee or committees consisting of either /irectors or a combination of directors and management personnel. ;.+.2 )ll committees of the Board shall be constituted in the same proportion as the Board. )ll meetings of the (ommittee8s shall be held at the place agreed by the members from time to time and failing agreement at the registered office of the (ompany. ) committee meeting may be held by teleconference8!ideoconference. ;.+.3 5he (ommittee or (ommittees shall report to the Board at the times and in the manner from time to time re9uired by the Board. .? Rer!itme*t a*d Ora*i#ati(* Str!t!re 5he Parties agree that they shall cause the (ompany to sign employment agreements with .
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scope of accountability8responsibility. SHAREHOLDER MEETINGS Cot less than 21 "twenty one& clear days written notice of e!ery general meeting shall be gi!en to all 6hareholders. ) meeting of the (ompany may be called by gi!ing shorter
notice in the manner pro!ided in the )ct. +.2 !ery notice con!ening a meeting of the 6hareholders shall set out the agenda in full and with sufficient details of the business to be transacted thereat and no item or business shall be transacted at such meeting unless the same has been stated in full and in sufficient details in the notice con!ening the meeting. ) copy of any documents to be re!iewed or discussed at such meeting shall accompany such notice. Pro!ided howe!er, sub4ect to applicable Daw, any other matter +.2.1
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arising out of emergency may be raised with the prior appro!al of the (hairman. 5he 9uorum for all general meetings of the (ompany shall include at least one authorised representati!e of / and )B( f within half an hour of the time appointed for the meeting, a 9uorum is not present, the meeting shall be ad4ourned to the same day 2 "two& wee
later at the same time and place. f at any such ad4ourned meeting, a !alid 9uorum is not present within half an hour of the time appointed for such ad4ourned meeting, the members present shall constitute a 9uorum. FINANCIAL AND OTHER MATTERS .1 5he (ompany shall maintain and prepare accounts in compliance with accounting standards as may be re9uired under Daw. .2 5he financial year of the (ompany shall be )pril 1 of each year to arch 31 of the following year. .3 5he (ompany shall prepare and submit to all /irectors within ; "our& weeflow
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statement. FINANCE FOR THE COMPAN& E!it+
G.1.1 5he authorised share capital of the (ompany shall be C7 +0 "fifty& million consisting of + "fi!e& million 9uity 6hares of 7s.10 each. 5he issued subscribed and paid>up share capital of the (ompany shall be C7 ;0 "forty& million consisting of ; "four& million 9uity 6hares of 7s.1 0 each, which shall be subscribed to for cash, at par, in the following manner:> / and its in di!idua l nomin ees G+ "se! enty>fi! e per cent& aggregating to 3 a& "three& million 9uity 6hares "# DEF Share#$&. b& )B( and its indi!idual nominees 2+ "twenty>fi!e per cent& aggregating to 1 "one& million 9uity 6hares "# ABC Share#$&. G.1.2 5he Parties shall subscribe to the / 6hares and )B( 6hares for cash at par by ma
Pr(/et Fi*a*e
G.2.1 5he Parties estimate that the total finance for the Pro4ect shall be C7. +00 "i!e hundred& million as more particularly set out in )nne%ure "# Fi*a*ia" O!t"a+ $&. t is clarified for the a!oidance of doubt that / shall ha!e the right to !ary the inancial Hutlay without pre4udice to the 9uality, suitability and sustainability of the Pro4ect, in which e!ent the Pro4ect inance shall stand modified accordingly.
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G.2.2 6ub4ect to (lause J.1, the Parties intend that the Pro4ect shall be financed by the Parties subscribing to the e9uity shares of the (ompany and by the (ompany issuing con!ertible 8 redeemable preference shares to /, with a di!idend of 300 basis points below the prime lending rate of the 6tate Ban< of ndia, from time to time and on such other terms and conditions as shall be agreed by the Parties. n the e!ent / fails to arrange for the inancial Hutlay, the same shall constitute a aterial Breach of this )greement by /. t is clarified for the a!oidance of doubt that for any financing of the Pro4ect, )B( shall not be re9uired to pro!ide any security or guarantee. t is further clarified for the a!oidance of doubt that any redemption of preference shares issued to / by the (ompany shall be as per applicable Daw, internal accruals of the (ompany, PH proceeds and8or by further e9uity funding. @.$ ADOPTION OF ARTICLES
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ithin 30 days from the ffecti!e /ate, the (ompany will hold an A, where the )rticles "substantially in the form of )nne%ure & shall be adopted by the 6hareholders. INCREASE IN SHARE CAPITAL F!rther Share I##!e#
Inless the 6hareholders agree otherwise, the (ompany shall not issue or allot 6hares "or any right to subscribe for, or con!ert securities into 6hares in the (ompany& on any terms to any Person unless it has first made an offer to / and )B( to allot to them on the same or more fa!ourable terms, those 6hares or rights e9ual to the proportion of all the 6hares held by them and the period during which any such offer may be accepted has e%pired or the (ompany has recei!ed notice of the acceptance or refusal of e!ery offer so made. 6uch offer shall not include a right to renounce the 6hares offered, pro!ided howe!er, / shall ha!e the right to renounce the 6hares in fa!our of its )ffiliate. f a 6hareholder does not subscribe to its entitlement, the Board shall offer the same to the other 6hareholder"s&, pro!ided it has accepted its own entitlement in full, and if such other 6hareholder"s& also does not accept such additional 6hares, the Board may dispose of them in such manner as it thin
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.2 P(#iti(* (0 )art+# riht# (* di"!ti(*
n case any Party is unable or unwilling to subscribe to its rights in such further issues of 6hares
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within the stipulated period, then its percentage shareholding shall stand diluted accordingly. 5he Board may offer such 6hares to the other Party or to any other Person as they deem fit. TRANSFER OF SHARESLOC; IN PERIOD Inless all the 6hareholders agree otherwise in writing, no 6hareholder shall in any e!ent do any of the following acts "the # Tra*#0er At#$& at any time for a period of 3 "5hree& years from the (ommencement /ate "# L(9I* Peri(d7&: *.1.1 create any 6ecurity in respect of or otherwise encumber its legal or beneficial interest in its 6hares' or *.1.2 sell, transfer or otherwise dispose of any of such 6hares "or any legal or beneficial interest therein&' or *.1.3 enter into any agreement in respect of the !oting rights attached to the 6hares, or do any act or omission which results in any Person other than the Parties and8or their wholly owned subsidiaries ac9uiring any rights in respect of the 6hares. *.1.; agree, whether or not sub4ect to any condition precedent or subse9uent, to do any of the foregoing. Pro!ided howe!er, nothing contained herein shall apply "a& to / or )B( transferring any 6hares in fa!our of its )ffiliates or any such transfer inter se between its )ffiliates. or the purposes of this (lause an )ffiliate of )B( shall be a body corporate within the meaning of the )ct. n the e!ent an )ffiliate of either Party holding 6hares of the (ompany ceases to be an )ffiliate of either Party for any reason whatsoe!er, such Party shall ensure that such )ffiliate re>transfers all its 6hares to such Party forthwith.
.2 Creati(* (0 Se!rit+ a*d Tra*#0er At#
)fter the e%piry of the Doc<>in Period, )B( shall not do any of the 5ransfer )cts without first obtaining the prior written consent of / "which consent shall not be unreasonably withheld& unless it follows the procedure set out in (lause 10 below.
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1. PREEMPTION RIGHTS 1.1
Tra*#0er (0 Share# =+ ABC
10.1.1 6ub4ect to (lause *, if )B( "# Tra*#0er(r$& wishes to sell or otherwise transfer any of its 6hares"#Sa"e Share#$&, but not e%ceeding 20 "5wenty percent& of the fully paid>up e9uity share capital of the (ompany, it shall offer the same to / by not ice in wri tin g "# Tra*#0er N(tie $& to / "# Re ma i* i* Shareh("der#7& of the number of 6ale 6hares proposed to be sold or transferred by the 5ransferor and the terms and conditions of the 5ransfer, including price "K O00er PrieF&. 10.1.2 6ub4ect to (lause 10.2 )B( shall not sell or otherwise transfer its 6hares in any manner that results in )B( holding less than + "i!e Percent& of the fully paid>up e9uity share capital of the (ompany "#Mi*im!m Thre#h("d $&. 10.1.3 ithin 21 days of receipt of such 5ransfer Cotice, the 7emaining 6hareholder may agree to or refuse to buy the 6ale 6hares at the Hffer Price, and shall communicate the same to the 5ransferor. ailure by the 7emaining 6hareholder to communicate its decision to buy the 6ale 6hares within the said 21 days period shall be deemed to be a refusal to buy the 6ale 6hares. f the 7emaining 6hareholder fails to so communicate or otherwise communicate refusal to buy the 6ale 6hares, the 5ransferor shall be free and fully entitled to sell and transfer the 6ale 6hares to a third party at not less than the Hffer Price. 6uch sale and transfer of the 6ale 6hares to a third party shall be completed within 0 days thereafter. 5he sale shall be sub4ect to applicable appro!als of Ao!ernment of ndia, 7eser!e Ban< of ndia, if applicable. n the e!ent of a failure to so consummate the sale within the stipulated 0 days period or 10 days of the necessary appro!als being obtained, whiche!er is later, the sale shall again be sub4ect to the pro!isions of this (lause 10. 10.1.; ithin 21 days of receipt of such 5ransfer Cotice, if the 7emaining 6hareholder communicates its agreement to buy the 6ale 6hares from the 5ransferor at the Hffer Price, the sale of the 6ale 6hares should be completed by the 5ransferor within 0 days. 5he sale shall be sub4ect to applicable appro!als of Ao!ernment of ndia, 7eser!e Ban< of ndia, if applicable. 5he sale of the 6ale 6hares should be completed by the 5ransferor within 0 days or 10 days of the necessary appro!als being obtained, whiche!er is later. )t such closure, the 5ransferor shall deli!er such lien free title to the 6ale 6hares being sold and the 7emaining 6hareholder shall pay the Hffer Price in cash. n the e!ent the 7emaining 6hareholder fail"s& to pay the Hffer Price before the scheduled date of closure as aforesaid, the 7emaining 6hareholder shall be deemed to ha!e refused to buy the 6ale 6hares and the
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5ransferor shall be free and fully entitled to sell and transfer the 6ale 6hares to a third party at not less than the Hffer Price. 6uch sale and transfer of the 6ale 6hares to the proposed purchaser shall be completed within 0 days thereafter. n the e!ent of a failure to so consummate the sale within the stipulated 0 days period or 10 days of the necessary appro!als being obtained, whiche!er is later, the sale shall again be sub4ect to the pro!isions of this (lause 10. 1.2 Tra*#0er (0 Mi*im!m Thre#h("d
10.2.1 f )B( wishes to sell or otherwise transfer its inimum 5hreshold , it shall offer the same to / by notice in writing "# Tra*#0er N(tie$& to / "# Remai*i* Shareh("der#7& of the number of 6ale 6hares proposed to be sold or transferred by the 5ransferor and the terms and conditions of the 5ransfer. 10.2.2 ithin 21 days of receipt of such 5ransfer Cotice, the 7emaining 6hareholder may agree to or refuse to buy the 6ale 6hares at the fair mar
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shall be deemed to ha!e refused to buy the 6ale 6hares and the 5ransferor shall be free and fully entitled to sell and transfer the 6ale 6hares to the proposed buyer at not less than the Hffer Price. 6uch sale and transfer of the 6ale 6hares to the proposed purchaser shall be completed within 0 days thereafter. n the e!ent of a failure to so consummate the sale within the stipulated 0 days period or 10 days of the necessary appro!als being obtained, whiche!er is later, the sale shall again be sub4ect to the pro!isions of this (lause 10. 10) Tra*#0er (0 Share# =+ DEF 10).1 6ub4ect to (lause *, if / "# Tra*#0er(r$& wishes to sell or otherwise transfer any or all of its 6hares "#Sa"e Share#$& it shall offer the same to )B( by notice in writing "# Tra*#0er N(tie$& to )B( "#Remai*i* Shareh("der#7& of the number of 6ale 6hares proposed to be sold or transferred by the 5ransferor and the terms and conditions of the 5ransfer, including price "K O00er PrieF&. 10).2 ithin 21 days of receipt of such 5ransfer Cotice, the 7emaining 6hareholder may agree to or refuse to buy the 6ale 6hares at the Hffer Price and shall communicate the same to the 5ransferor. ailure by the 7emaining 6hareholder to communicate its decision to buy the 6ale 6hares within the said 21 days period shall be deemed to be a refusal to buy the 6ale 6hares. f the 7emaining 6hareholder fails to so communicate or otherwise communicate refusal to buy the 6ale 6hares, the 5ransferor shall be free and fully entitled to sell and transfer the 6ale 6hares to a third party at not less than the Hffer Price. 6uch sale and transfer of the 6ale 6hares to a third party shall be completed within 0 days thereafter. 5he purchase shall be sub4ect to applicable appro!als of Ao!ernment of ndia, 7eser!e Ban< of ndia, if applicable. 5he sale of the 6ale 6hares should be completed by the 5ransferor within 0 days or 10 days of the necessary appro!als being obtained, which e!er is later. n the e!ent of a failure to so consummate the sale, the sale shall again be sub4ect to the pro!isions of this (lause 10). 10).3 ithin 21 days of receipt of such 5ransfer Cotice, if the 7emaining 6hareholder communicates its agreement to buy the 6ale 6hares from the 5ransferor at the Hffer Price, the purchase of the 6ale 6hares should be completed by the 5ransferor within 0 days thereafter. 5he purchase shall be sub4ect to applicable appro!als of Ao!ernment of ndia, 7eser!e Ban< of ndia, if applicable. 5he purchase of the 6ale 6hares should be completed by the 5ransferor within 0 days or 10 days of the necessary appro!als being obtained, which e!er is later. )t such closure, the 5ransferor shall deli!er such lien free title to the 6ale 6hares being sold and the
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7emaining 6hareholder shall pay the Hffer Price in cash. n the e!ent the 7emaining 6hareholder fail"s& to pay the Hffer Price before the scheduled date of closure as aforesaid, the 7emaining 6hareholder shall be deemed to ha!e refused to buy the 6ale 6hares and the 5ransferor shall be free and fully entitled to sell and transfer the 6ale 6hares to a third party at not less than the Hffer Price. n the e!ent of a failure to so consummate the sale, the sale shall again be sub4ect to the pro!isions of this (lause 10). 10B. Cotwithstanding anything contained in this )greement, )B( shall not transfer or otherwise dispose its 6hares to a third party that is directly or indirectly engaged in the manufacture or distribution of the Products or other similar products, unless the prior written consent of / is obtained for the same. 10(. 5he (ompany shall ensure that at all times the share certificates or other documents or e!idence representing )B( 6hares shall bear the following legend: #5ransfer of any of the 6hares represented by this certificate shall be sub4ect to the co!enants and obligations stated in the)rticles of the (ompany, 11. NE- SHAREHOLDERS 5he Parties shall ensure that no person other than /, /Fs nomineeFs or )B( ac9uires 6hares in the (ompany "whether by transfer or allotment& unless it co!enants in writing with the other 6hareholders "by e%ecuting the /eed of )dherance& to obser!e this )greement and, in the case of a transferee, to perform all the obligations of the transferor under this )greement, to the e%tent modified to reflect the re!ised shareholding of the Parties and the new shareholder and thereupon each such transferee or allottee shall be treated as a 6hareholder for the purposes of this )greement. !ery 6hareholder who is the beneficiary of any such co!enant shall pro!ide a copy thereof to the other Party. 12 PROTECTION OF PARTIES INTELLECTto>
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a!ailable such ntellectual Property 7ights to the (ompany relying e%pressly upon this assurance of the (ompany. 1$.
n the e!ent of a aterial Breach by any of the Parties the non>breaching Party shall ha!e an unrestricted right, but not an obligation, e%ercisable by the non>breaching Party within a period of *0 "Cinety& Business /ays from the happening of such aterial Breach, "# Ca"" Peri(d$& to purchase from the breaching Party, all "but not less than all& the 6hares of the breaching Party, at the face !alue of such 6hares "#O)ti(* Prie$&. t is clarified for the a!oidance of doubt that in this (lause, a breach by r. P shall be deemed to be a breach by )B(. 1.2 O)ti(* N(tie 5he (all Hption may be e%ercised by the non>breaching Party at any time during the (all Period by a written notice to the breaching Party "the # O)ti(* N(tie$&. 5he Hption Cotice shall specify a date within 1+ "ifteen& Business /ays from the date of receipt of the Hption Cotice "# Eeri#e Date$&, for completing the purchase, the manner and the location of closing in respect of such purchase and sale of 6hares. 1.$ Sa"e a*d C(m)"eti(*
1;.3.1 Ipon the receipt of the Hption Cotice, the breaching Party shall sell the breaching PartyFs 6hares to the non>breaching Party "or to such Person as the non>breaching Party may direct& on the rele!ant %ercise /ate for the Hp tion Pric e fre e fro m all 6ecu rit y, mo rt ga ge s, li en s, ch ar ge s, encumbrances, pledges, options and ad!erse e9uities or interests of any
1;
to all di!idends or distributions declared on or after the rele!ant %ercise /ate. 1;.3.2 (ompletion of the sale and purchase of the 6hares pursuant to this (lause shall occur on the %ercise /ate and at the time and place specified in the Hption Cotice sub4ect to receipt of all re9uired statutory and regulatory appro!als "n the e!ent of non>receipt of such appro!als, the %ercise /ate shall automatically stand e%tended to G"6e!en& Business /ays from the date of receipt of the last of such appro!als&. 1>. NON COMPETE 1>.1 )B( and r. P underta
1>.2
the Products or similar products while )B( either 4ointly or se!erally are 6hareholders and for a period of + years thereafter. )B( achow and other !aluable ntellectual Property 7ights. )B( further achow and other ntellectual Property 7ights of the (ompany or ntellectual Property 7ights of / made a!ailable to the (ompany by /, in any manner not related to the business and affairs of the (ompany or /, / and8or the
1?
(ompany shall ha!e the right to a!ail of in4uncti!e reliefs against )B( , without pre4udice to the other rights and remedies a!ailable to / and8or the (ompany under Daw. IPO )t anytime prior to the PH, upon mutual agreement, the Parties shall formulate a suitable scheme of amalgamation between / and the (ompany, such that / is the amalgamated entity, sub4ect to obtaining re9uisite appro!als as may be re9uired under Daw. Ipon the amalgamation of / and the (ompany, )B( will be allotted shares in the share capital of / based on the !aluation of the (ompany and )B(Fs 6hareholding in the (ompany carried out by a reputed "national& firm of auditors to be appointed by the Parties. 5he decision of the reputed "national& firm of auditors appointed by the Parties shall be final and binding on the Parties.
1+
1@ . NON SOLICITATION
Cotwithstanding anything contained in this )greement, no Party shall without the prior written consent of the other Parties: "a& directly or indirectly in any manner whatsoe!er, employ, hire, appoint as agent, appoint as sub>agent, or appoint as employee or ser!ant, any employee of the (ompany or / while )B( is a 6hareholder and for a period of G years thereafter. "b& directly or indirectly in any manner whatsoe!er, approach, can!ass, solicit, or otherwise entice using any incenti!e whatsoe!er, whether such incenti!e be in cash,
Additi(*a" <*derta9i*#
%cept as otherwise e%pressly pro!ided herein, each Party underta 1J.2.1 promptly e%ecute and deli!er all such documents as are re9uired, or reasonably re9uested by such other Party, arising out of, in furtherance of, or as are re9uired by, the terms of this )greement. 1J.2.2 promptly notify the other Parties of all significant consents recei!ed by it in relation to any of the (ompanyFs business, assets or property. 1J.2.3 use and e%ercise the !oting rights controlled by it in respect of its 6hares at all meetings of the (ompany "Board or (ommittee or 6hareholders eetings& in order to uphold and ensure the obser!ance of the terms of this )greement' and
1
1J.2.; perform and comply with all restrictions imposed on it under the )rticles. 1J.2.+ fully comply with all Daws. 1. E%IT AND TERMINATION OF AGREEMENT 1.1 5his )greement may be terminated by the consent of all the Parties e%pressed in writing. 1.2 5his )greement shall stand terminated at the option of / upon )B(Fs
aggregate shareholding in the (ompany reducing below 1+ per cent of the paid> up e9uity share capital of the (ompany. 1.$ 5his )greement shall stand terminated upon /Fs shareholding in the (ompany reducing below 1+ "ifteen& per cent of the paid>up e9uity share capital of the (ompany. 1. f any of the Parties commit any act of insol!ency and8or the (ompany goes into li9uidation or dissolution or if the (ompany is placed in the hands of a recei!er, trustee, custodian or li9uidator, or if a winding up petition is admitted against it, then upon any Party gi!ing written notice of termination, at the option of the Parties, this )greement shall forthwith terminate. 1.> 5his )greement shall stand terminated in the e!ent of a breach by any Party of any term or condition of this )greement or the 7elated )greements, which breach is not cured by the defaulting Party within 1+ "ifteen& Business /ays of receipt of notice of such breach from the non>defaulting Party by such defaulting Party, which notice shall set forth in reasonable detail the facts and e!ents forming the basis of the breach. t is clarified for the a!oidance of doubt, that upon the occurrence of a aterial Breach, either PartyFs right to e%ercise its call option under (lause 1; of this )greement shall sur!i!e the termination of this )greement.. 1.? )ll rights which ha!e accrued to a Party prior to the termination of this )greement and the pro!isions
contained in (lauses 13, 1;, 1+, 1G, 23, 2; ,2J, 30 shall sur!i!e the termination of this )greement. 2. GO:ERNING LA-
1G
5his )greement shall be go!erned by and construed in accordance with the laws of ndia 21. ARBITRATION 21.1 f any dispute arises between / and )B( in connection with the !alidity, interpretation, implementation or the purported termination of this )greement, / and )B( hereto shall endea!our to settle the dispute amicably. 5he attempt to bring about an amicable settlement shall be considered to ha!e failed as soon as one of / or )B( after reasonable attempts "which attempts shall continue for not less than 0 days&, gi!es 1+ days notice thereof to the other Party in writing. 21.2 n case of such failure, the dispute shall be referred to the arbitration of three arbitrators, one selected by each of / and )B( and the third selected by the Dondon (ourt of nternational )rbitration "# LCIA$&. 5he arbitration shall be held in umbai , in accordance with the 7ules of the D(), which are deemed to be incorporated herein by reference. t is clarified, for the a!oidance of doubt, that the (ompany shall not be entitled to appoint an arbitrator, e!en if the (ompany is 4oined as a party in the arbitration. 21.$ 5he successful Party in any arbitration proceedings shall be entitled to reco!er its costs "including, without limitation, its legal costs&. 21. Ludgment upon any award rendered by the arbitrators may be entered in any court ha!ing competent 4urisdiction in relation thereto, or application may be made to such court for a 4udicial acceptance or recognition of the award and an order of enforcement "including specific performance&, as the case may be. 21.
DEADLOC;
22.1 n the e!ent that either / or )B( in good faith considers that as a
result of disagreement between / and )B(, no satisfactory decision or resolution relating to any of the 6pecified atters can be achie!ed despite good faith negotiations for a period of 30 days "including, during such period, if either / or )B( so desires, non>binding mediation by a mediator to be appointed by mutual consent of / and )B(&, from the date of commencement of such disagreement, a deadloc< "a # Dead"(9 $& shall be deemed to ha!e occurred. n the e!ent of such /eadloc< occurring, either Party may, at its option, ser!e upon the other Party a notice of termination "#N(tie (0 Termi*ati(*$&. 22.2 Ipon a Cotice of 5ermination being ser!ed, / shall ha!e the right, but not the obligation, to e%ercise its (all Hption in the same manner as pro!ided under (lause 1;. Pro!ided howe!er the #Hption Price$ for the )B( 6hares shall be the boo< !alue as shall be determined by the Valuer.
1J
t is clarified, for the remo!al of doubt, that in the e!ent of a /eadloc<, and / not e%ercising its (all Hption within 1+ "ifteen& days from the occurrence of the /eadloc<, then either / or )B( shall be, at liberty, to refer such /eadloc< as a dispute to arbitration in accordance with the arbitration pro!isions contained in (lause 21 herein. 2$. E
RIGHTS TO INFORMATIONJ CONFIDENTIALIT&J 2.1 Riht# t(
i*#)eti(* a*d i*0(rmati(*
5he (ompany shall permit )B(, at )B(Fs e%pense, to discuss the affairs, finances and accounts of the (ompany with the (ompanyFs officers and other principal e%ecuti!es at such time as may reasonably be re9uested, and all boo "i& "ii& "i& "iii& 2.$
the pro!isions of this )greement' the negotiations relating to this )greement the sub4ect matter of this )greement' or the other Parties. )ny Party may disclose information which would otherwise be confidential if and to the e%tent:> "i& re9uired by law' "ii& re9uired by any securities e%change or regulatory or go!ernmental body to which such Party is sub4ect or submits, where!er situated, whether or not the re9uirement for information has the force of law'
1*
"iii& "i!&
re9uired to !est the full benefit of this )greement in such Party' "sub4ect to the prior written agreement of any such Person to .
ANNO.1
2>.2
2>.$
2>.
6ub4ect to sub>clauses 2+.2 and 2+.3, each Party undertaclause 2+.3, the (ompany may maclause 2+.;, the prior written appro!al of a 6hareholder to an announcement by the (ompany shall be re9uired if the announcement relates to such 6hareholder thereof or if it contains information which the (ompany is aware is sub4ect to restrictions on disclosure or re9uirements as to disclosure imposed by any applicable stoc< e%change or regulatory authority. Co consent shall be re9uired in any pro!ision of this (lause in relation to an y announcement re9uired to be made by a Party by any law or directi!e of any authority "including, without limitation, any rele!ant stoc< e%change or other regulatory authority& to which it is sub4ect pro!ided that before ma
2> .
CONTIN
5he obligations of the Parties under (lauses13, 1;, 1+, 1G, 23, 2; ,2J, 30 shall
20
2@. [email protected]
continue in full force and effect notwithstanding termination of this )greement. NOTICES N(tie# I* -riti* )ny notice or other communication gi!en or made under this )greement shall, e%cept where e%pressly stated otherwise, be in writing and in the nglish language.
[email protected] Meth(d (0 (mm!*iati(*
)ny such notice or other communication shall be addressed as pro!ided in (lause 2G.3, shall be sent by personal deli!ery, registered post, courier ser!ice, facsimile or any other means of recorded deli!ery and shall be effecti!e upon actual receipt. f any notice or other communication is sent by facsimile, on confirmation of receipt of the same, the original shall be sent by personal deli!ery, registered post or courier ser!ice. 2@.$
Addre## detai"#
5he rele!ant addressee, address and facsimile number of each Party for the purposes of this )greement are:> Came of Party )B( Dimited
)ddress
acsimile Co.
21
/ Pharmaceuticals Dimited.
22
/ Biotech Dimited /r. P 2@. Cha*e (0 Addre## ) Party may notify the other Parties of a change to its name, rele!ant addressee, address or facsimile number pro!ided that such notification shall only be effecti!e on:> ")& the date specified in the notification as the date on which the change is to ta
23
place' or "B& if no date is specified or the date specified is less than se!en Business /ays after the date on which notice is recei!ed, the date falling se!en Business /ays after notice of any such change has been recei!ed. REMEDIES Co remedy conferred by any of the pro!isions of this )greement is intended to be e%clusi!e of any other remedy which is otherwise a!ailable at law, in e9uity, by statute or otherwise, and each and e!ery other remedy shall be cumulati!e and shall be in addition to e!ery other remedy gi!en hereunder or now or hereafter e%isting at law, in e9uity, by statute or otherwise. 5he election of any one or more of such remedies by any of the Parties shall not constitute a wai!er by such Party of
2 .
the right to pursue any other a!ailable remedy. 2.
SE:ERANCE
f any pro!ision of this )greement or part thereof is rendered !oid, illegal or unenforceable in any respect under any law, the !alidity, legality and enforceability of the remaining pro!isions shall not in any way be affected or impaired thereby. S
2 .
$ F .
2. $2.1
$2.2
C O S T S
5he Parties shall bear their respecti!e costs and e%penses in connection with the preparation, negotiation, e%ecution and deli!ery of the )greement. ENTIRE AGREEMENT 5his )greement "together with the 6chedules& and the 7elated )greements, constitutes the whole and only agreement as at the date hereof between the Parties with respect to the sub4ect matter described herein. %cept to the e%tent repeated in this )greement, this )greement supersedes and e%tinguishes any p rior drafts, agreements, underta
2;
$2.$
$$. $$.1
pertaining to the sub4ect matter of this )greement, whether or not in writing, relating thereto, including the non>binding emorandum of Inderstanding e%ecuted on 20 th ay, 2002, between the Parties.. ach Party ac
5his )greement shall be binding on the respecti!e successors and permitted assigns of / and )B( and on the permitted assigns of r. P. $$.2
Re#triti(* (* a##i*me*t
Cone of the Parties shall be entitled to assign this )greement or any of its rights and obligations hereunder e%cept with the prior written consent of the other Parties. $$. $.1
$.2 $,.
$,. $?.1
CO
5his )greement may be e%ecuted in any number of counterparts, by the Parties as separate counterparts, but shall not be effecti!e unless each Party has e%ecuted at least one counterpart. ach counterpart shall constitute an orig inal of this )greement but all counterparts shall together constitute but one and the same instrument. PARTNERSHIP Cothing in this )greement shall be deemed to constitute a partnership between the Parties, nor sa!e as may be e%pressly set out herein, constitute any Party as the agent of any other Party for any purpose. CONFLICT -ITH ARTICLES
5he pro!isions of this )greement shall be reproduced in the )rticles, to the e%tent practicable. 6uch alteration of the )rticles shall be effected at the A.
2+
$?.2 n the e!ent of any conflict between the pro!isions of this )greement and the (onstitutional
/ocuments, the pro!isions of this )greement shall pre!ail as between the Parties. 5he Parties shall e%ercise all !oting and other rights and powers a!ailable to them so as to gi!e effect to the pro!isions of this )greement and shall further "if necessary& procure any re9uired amendment 8 alteration to the (onstitutional /ocuments. $@. GENERAL
")& Co amendment, !ariation or wai!er of this )greement or any pro!ision of this )greement shall be effecti!e unless it is in writing and duly e%ecuted by or on behalf of all Parties. "B& n gi!ing any opinion, appro!al, consent or wai!er or refusing any opinion, appro!al, consent or wai!er under this )greement, each /irector may act entirely at his discretion and shall ha!e no liability or responsibility whatsoe!er to any person. IN -ITNESS -HEREOF the Parties hereto ha!e e%ecuted this )greement the day and year first herein abo!e written.
2
6igned and deli!ered for and behalf of DEF Pharmae!tia"# Limited Name KKKKKKKK Tit"e
6igned and deli!ered for and behalf of the C(m)a*+ NameKKKKKKK Tit"e Diret(r
6igned and deli!ered for and behalf of ABC Limited NameKKKKKKKK Tit"e Chairma*
Ma*ai*
Diret(r
2G
6igned and deli!ered by Mr. P Name Mr. P
A**e!re A S)ei0ied Matter#
1. 2. 3. ;. +.
)lteration of the (onstitutional /ocuments. ssue of new shares or instruments con!ertible into e9uity shares. PH /eclaration of /i!idend. )ppointment of a Valuer.
2J
A**e!re B Territ(r+
%clusi!e
Bangladesh ndia auritius 6ri Dan
Con>%clusi!e
thiopia Ahana ?enya 6udan 5an@ania Iganda Mambia Mimbabwe Cigeria ast 5imor Vietnam
Philippines 6outh )frica ra9 (ambodia ndonesia Daos yanmar alaysia 6ingapore Brunei 5hailand
2*
A**e!re C
30
Deed (0 Adhere*e
56 // H )/7C( is made this -------------------- day of -------------- at . B5C: , ndian inhabitant residing at -------------------------------------"57)C67& "hereinafter referred to as the C(3e*a*t(r which e%pression shall be deemed to mean and include its nominees and permitted assigns& to whom shares of the (ompany ha!e been transferred by - 1. "5 57)C677CA 6)7HD/7&'
31
)C/
32
2. ABC Limited a company incorporated under the laws of the British Virgin slands and ha!in g its
registered office at -------------------------------- British Virgin slands "hereinafter referred to as #ABC,$ which e%pression shall be deemed to mean and include its successors and permitted assigns&' )C/ $. DEF Pharmae!tia"# Limited, a company incorporated under the (ompanies )ct, 1*+ and ha!ing its registered office at----------------------------------Pune "hereinafter referred to as #DEF,$ which e%pression shall be deemed to mean and include its successors and permitted assigns&' )C/ ,. %&' Bi(teh Limited, a company incorporated under the ndian (ompanies )ct, 1*+ and ha!ing its registered office at ----- Pune "hereinafter referred to as # the C(m)a*+,$ which e%pression shall be deemed to mean and include its successors and permitted assigns&. AND
33
+. r. P, a (anadian national, aged --- years, residing at (anada "hereinafter referred to as #Mr. P$, which e%pression shall be deemed to mean and include its permitted assigns&. n this /eed of )dherance ---------------, ------------and---------------- shall collecti!ely be referred to as the # C(*ti*!i* Shareh("der#$ 5 6 / / 6 6 IP PD C 5)D t o t he 6 ha re ho ld e rs ) gr e em en t d at ed b e t w e e n " 1 & / ' " 2 & ) B ( ' " 3 & t h e ( o m p a n y ' a n d " ; & r . P " # t h e Areeme*t$& )C/ 5C666 as follows : n consideration of the "57)C67H7& ha!ing transferred its 6hares to the (o!enantor, the (o!enantor hereby agrees and underta
2.
(o!enantor to the intent and effect that the (o!enantor shall be deemed with effect from the date on which the (o!enantor is registered as a member of the (ompany to be a 6Part+7 to the )greement ab initio. 5he (o!enantor hereby co!enants that it shall do nothing that derogates from the pro!isions of the )greement or the )rticles of the (ompany.
3. ;.
5his /eed shall be go!erned in all respects by the laws of ndia. (apitalised words and e%pressions used in this /eed of )dherence but not defined herein shall ha!e the same meaning as in the )greement. N(I5/ as a deed the day and year first before written. 6igned and deli!ered for and behalf of
6igned and deli!ered for and behalf of ABC
DEF
6igned and deli!ered by C(m)a*+
6igned and deli!ered by Mr. P
6igned and deli!ered by 4the C(3e*a*t(r5
A**e!re D 6Pr(d!t#7
A**e!re E F(rm (0 Arti"e# t( =e ad()ted at EGM =+ #hareh("der# (0 the C(m)a*+
A**e!re F
3;
