PRAXIS PHARMACEUTICALS AUSTRALIA PTY
LIMITED
(ACN 082 811 630)
- and -
PRAXIS PHARMACEUTICALS INC.
- and -
PERPETUAL TRUSTEES NOMINEES LIMITED
(ACN 000 341 533)
- and -
ROTHSCHILD BIOSCIENCE MANAGERS LIMITED
(ACN 072 515 247)
SHAREHOLDERS AGREEMENT
XXXXXX XXXXX LEIBLER
Solicitors and Consultants
000 Xxxxxxx Xxxxxx
XXXXXXXXX XXX 0000
Tel:(00) 0000 0000
Ref:JCS:EVK:1073464
(L:\SEC\EVK\1073464\PRAXSHAG.DOC)
SHAREHOLDERS' AGREEMENT
THIS AGREEMENT is made the 15th day of October December 21, 1999
BETWEEN:
PRAXIS PHARMACEUTICALS AUSTRALIA PTY LIMITED (ACN 082 811 630)
of 00 Xxxxxx Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx Capital
Territory 2601 ("Company")
- and -
PRAXIS PHARMACEUTICALS INC. of 00 Xxxx Xxxxxxxx, Xxxx Xxxx
Xxxx, Xxxx, Xxxxxx Xxxxxx of America 84101 ("Praxis USA")
- and -
PERPETUAL TRUSTEES NOMINEES LIMITED (ACN 000 341 533) of 00
Xxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxx Xxxxx in its capacity as trustee for
The Australian Bioscience Trust constituted by a Trust Deed dated 20
August 1998 ("Trustee")
- and -
ROTHSCHILD BIOSCIENCE MANAGERS LIMITED
(ACN 072 515 247) of Xxxxx 00, 0 X'Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxx
Xxxxx ("RBML")
WHEREAS:
A The current Shareholder is Praxis USA who is the registered holder of
the entire 100 Class A Shares issued.
B It is intended that prior to the subscription by the Trustee, Praxis
USA will be the registered holder of 1,400,000 Ordinary Shares.
C RBML have agreed to procure the Trustee to subscribe, over two
tranches, for up to 2,000,000 Series A Preferred Shares, at a
subscription price of $1.00 per Share, on the terms and conditions set
out in this Agreement. The first tranche will be for 250,000 Series A
Preferred Shares for a total consideration of $250,000 and the second
tranche will be for 1,750,000 Series A Preferred Shares for a total
consideration of $1,750,000.
D The parties have agreed that their relationship shall be governed by
the terms and conditions set out in this Agreement.
NOW IT IS AGREED:
1 DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement, unless the context otherwise requires:
"Anutech" means Anutech Pty Ltd (A.C.N. 008 548 650) of
Anutech Court, corner Xxxxx Xxxxx xxx Xxxxx Xxxx, Xxxxxxxxxx
Xxxxxxx Xxxxxxxxx 0000;
"Associate" has the meaning ascribed to that term in the
Corporations Law;
"Board" or "the Directors" means the Board of Directors of the
Company as constituted from time to time;
"Business" means the drug development operations of the
Company;
"Business Day" means a day on which banks are open for
domestic business in Melbourne excluding Saturdays, Sundays
and public holidays;
"Business Plan" means the business plan of the Company in
place from time to time;
"Confidentiality Deed" means a deed substantially in the form
of the confidentiality deed set out in Schedule 1;
"Commencement Date" means the third Business Day after the
date on which the condition precedent set out in Clause 2.1 is
satisfied or such other date as the parties may agree;
"Constitution" means the constitution of the Company;
"Corporations Law" means the Corporations Law of Victoria or,
where applicable, any other Corporations Law of any State or
Territory;
"Deed of Accession" means a deed substantially in the form of
the deed of accession set out in Schedule 2;
"Dispose" means, in relation to any relevant property, to
sell, transfer, assign, create an Encumbrance over, declare
oneself a trustee of or part with a benefit of or otherwise
dispose of the relevant property (or any interest therein) and
includes, without limitation, in relation to a share to enter
into a transaction in relation to the share (or any interest
therein), other than a transaction permitted by this Agreement
or the Constitution, which results in a person other than the
registered holder of the share:
(a) acquiring any equitable interest in the share, including,
but not limited to, an equitable interest arising
pursuant to a declaration of trust, an agreement for sale
and purchase of or an option agreement or an agreement
creating a charge or other security interest in respect
of the share;
(b) acquiring any right to receive directly or indirectly any
dividends payable in respect of the share;
(c) acquiring any rights of pre-emption, first refusal or
like control over the disposal of the share;
(d) acquiring any rights of control over the exercise of any
voting rights or rights to appoint Directors attaching to
the share; or
(e) otherwise acquiring legal or equitable rights against the
registered holder of the share which have the effect of
placing the person in the same position as would exist if
the person had acquired a legal or equitable interest in
the share itself;
"Dividend" includes a bonus distribution in specie or in cash;
"Eligible Investee Company" has the meaning given to that term
in the IIF Program Guidelines No. 1 of 1998 established by the
Industry Research and Development Board acting under Part 2 of
the IIF Program, Policies and Practices Direction No. 1 of
1997 (as amended from time to time, whether generally or in
relation to any Licensed Fund);
"Employee Share Plan" means an employee share or option
incentive plan proposed to be introduced by the Company
pursuant to Clause 10;
"Encumbrance" means any mortgage, pledge, lien, hypothecation,
charge or other form of security interest or interest in the
nature of a security interest whatsoever;
"Group" means the Company and its subsidiaries (if any) for
the time being;
"IIF Management Licence" means an IIF Program management
licence executed between the Industry Research and Development
Board on behalf of the Commonwealth of Australia and a Party
to this Agreement;
"IIF Program" means the Innovation Investment Fund Program
established by the Commonwealth of Australia under the
Industry Research and Development Xxx 0000 (Clth.);
"Licence Agreements" means the licence agreements entered into
on or about the date of this Agreement between Anutech and
Praxis USA and between Anutech and the Company;
"Licence and Research & Development Agreements" means the
Licence and Research & Development Agreement entered into
between Anutech and Praxis USA on 27 October 1997 and the
Addendum to the Licence and Research & Development Agreement
dated 8 October 1998;
"Licensed Fund" means a fund of whatever nature, and whether
incorporated or not:
(a) which, or the manager of which, is to be or has been
granted an IIF Management License; and
(b) the manager or trustee of which is a Shareholder;
"Ordinary Shares" means the ordinary Shares of the Company
having the rights ascribed to them by the Constitution;
"Party" means a party to this Agreement and includes a person
who executes a Deed of Accession;
"Preferred Shareholder" means a Party who holds a Series A
Preferred Share and includes a Party who holds the beneficial
interest in a Series A Preferred Share registered in the name
of another person as nominee for that Party;
"Proposing Transferor" means a Shareholder that proposes to
Dispose of any Shares held by it;
"Related Body Corporate" has the meaning ascribed to that term
in the Corporations Law;
"Relevant Event" means, in relation to a Shareholder:
(a) that Shareholder making any arrangement or composition
with its creditors generally or any or all of them (other
than for the purposes of a bona fide scheme of solvent
amalgamation or reconstruction to which the other
Shareholders have consented in writing);
(b) that Shareholder becoming insolvent within the meaning of
that expression in the Corporations Law;
(c) a receiver, manager, receiver and manager, administrator
or trustee or other like custodian being appointed by any
person over all or a substantial part of that
Shareholder's undertaking or assets and such receiver,
manager, receiver and manager, administrator, trustee or
other like custodian is not discharged within 60 days of
being appointed;
(d) that Shareholder having a petition or summons lodged or
an order made or a resolution passed for its liquidation
or winding up (other than a voluntary liquidation for the
purposes of a
bona fide scheme of solvent amalgamation or
reconstruction to which the other Shareholders have
consented in writing) which is not discharged or revoked
within 30 days; or
(e) the power, whether held directly or indirectly and by
whatever means (whether or not enforceable at law or in
equity):
(i) to exercise or control the right to vote attached to
no less than 50% of the issued shares in that
Shareholder;
(ii) to Dispose of or exercise a right of disposal over
not less than 50% of the issued Shares of that
Shareholder;
(iii)to control the composition of the board of
directors of that Shareholder (which shall be
determined having regard to Section 47 of the
Corporations Law); or
(iv) to determine substantially the conduct of that
Shareholder's business activities,
shall reside in any persons other than those holding such
power on the date on which that Shareholder became a
Shareholder;
"Relevant Shares" means in relation to a transferee of Shares,
the Shares originally transferred to the Transferee and any
additional Shares issued or transferred to the Transferee by
virtue of the holding of those Shares or any of them;
"Second Tranche Date" means the date 10 Business Days after
the Investors have received a patent review satisfactory to
them from a patent attorney specified by the Investors
following the filing of a patent application in respect of new
compounds in accordance with the Business Plan;
"Senior Employee" means an employee whose rate of gross
contractual salary is $75,000 per annum or more;
"Series A Preferred Shares" means Series A Redeemable
Convertible Preferred Shares in the capital of the Company
having the rights ascribed to them by the Constitution;
"Share" means a share in the capital of the Company including,
without limitation, Ordinary Shares and Series A Preferred
Shares;
"Shareholder" means a Party who holds Shares and includes a
Party who holds the beneficial interest in Shares registered
in the name of another person as nominee for that Party;
"Specified Proportion" means, in relation to a Shareholder, a
fraction the numerator of which is the number of Shares held
by that Shareholder for the time being and the denominator of
which is
the total number of Shares (including the Shares held by the
said Shareholder) in issue for the time being (assuming that
in so calculating the number of Shares held by a Shareholder
and the total number of Shares in issue, all Series A
Preferred Shares have been converted in to Ordinary Shares);
"Subsidiary" has the meaning ascribed to that term by the
Corporations Law;
"Transfer Notice" means a Transfer Notice delivered by a
Shareholder pursuant to Clause 8.3(b);
"Transfer Shares" means the Shares that a Proposing Transferor
proposes to Dispose of;
"Trust" means the Australian Bioscience Trust constituted by a
deed of trust dated 20 August 1998 between Perpetual and RBML;
"Trust Deed" means the deed of trust constituting the Trust;
and
"Trustee" means Perpetual and any substitute or additional
trustee appointed to the Trust.
1.2 INTERPRETATION
In this Agreement, including the Recitals, except to the
extent that the subject or the context otherwise requires:
(a) reference to any legislation or to any provision of any
legislation shall include any modification or re-enactment of,
or any legislative provision substituted for, and all
legislation and statutory instruments issued under, such
legislation or such provision and shall include the
corresponding legislation in such other State or Territory of
the Commonwealth of Australia as may be relevant from time to
time;
(b) words (including words defined in this Agreement) denoting
the singular number shall include the plural and vice versa;
(c) words importing natural persons will include corporations,
firms, unincorporated associations, partnerships, trusts and
any other entities recognised by law and vice versa;
(d) words denoting any gender shall include all genders;
(e) the words "WRITTEN" and "IN WRITING" include any means of
visible reproduction of words in a tangible and permanently
visible form;
(f) reference to Clauses and Schedules are references to
clauses and schedules of this Agreement;
(g) where a word or phrase is defined, other parts of speech
and grammatical forms of that word or phrase shall have
corresponding meanings;
(h) reference to any document or agreement shall be deemed to
include references to such document or agreement as novated,
supplemented, varied or replaced from time to time;
(i) no rule of construction applies to the disadvantage of a
party because that party was responsible for the preparation
of this Agreement or any part of it; and
(j) a reference to the ownership of Shares by a Shareholder or
the Shares held by a Shareholder shall include, in relation to
a Party who holds the beneficial interest in Shares registered
in the name of another person as nominee for that Party, a
reference to the beneficial ownership of such Shares by that
Party or the Shares the beneficial interest in which is held
by that Shareholder.
1.3 HEADINGS
The headings to Clauses or Schedules are for the purposes of
more convenient reference only and do not form part of this
Agreement or effect its interpretation.
1.4 ACKNOWLEDGEMENT
RBML acknowledges the provisions of this Agreement and agrees
and undertakes that to the extent of its powers as manager of
the Trust that it shall exercise all such powers as are
available to it under the Trust Deed, do all such acts,
matters and things and sign, execute and deliver all such
instructions and documents to require the Trustee to comply
with its obligations under this Agreement.
2 CONDITION PRECEDENT
2.1 This Agreement and the performance of all obligations under this
Agreement (other than obligations under this Clause 2) are subject to
and conditional upon the Constitution being amended as set out in
Schedule 3.
2.2 The Company must ensure that the condition precedent in Clause 2.1
is satisfied on or before 31 October 1999.
2.3 If the condition precedent in Clause 2.1 is not satisfied on or
before 31 October 1999 (or such other date as the parties may agree),
this Agreement (other than this Clause 2) is automatically terminated
without any of the parties being liable to any other party pursuant to
this Agreement except under this Clause 2.
2.4 If the Second Tranche Date has not occurred on or before [ ], or
such other date as the Investors agree, the Investors' obligations
pursuant to Clause 3.2 are automatically terminated.
3 CAPITALISATION OF THE COMPANY AND OTHER MATTERS
3.1 On the Commencement Date RBML will procure that the Trustee
subscribe for a total of 250,000 fully paid Series A Preferred Shares at
a price of $1.00 per Share and shall accordingly complete, sign and
deliver to the Company an application form in respect of the Shares
being subscribed for by it accompanied by a cheque for the subscription
monies due.
3.2 On the Second Tranche Date, RMBL will procure that the Trustee
and/or such other persons as RBML determines subscribe for a total of
1,750,000 fully paid Series A Preferred Shares at a price of $1.00 per
share and shall accordingly complete sign and deliver to the Company an
application form in respect of the Shares being subscribed for by it
accompanied by a cheque for the subscription monies due. Any person
(other than the Trustee) who subscribes for Series A Preferred Shares
pursuant to this clause shall execute a Deed agreeing to become a Party
to this Agreement in a form acceptable to RBML.
3.3 The Company shall, upon each receipt from the applicant of its
respective applications, subscription monies or consideration in
accordance with Clauses 3.1 and 3.2, issue and allot Series A Preferred
Shares to the Trustee in accordance with each respective application and
issue the Trustee with share certificates for its respective Shares.
3.4 Unless otherwise agreed in writing between the Shareholders, the
subscription monies referred to in Clauses 3.1 and 3.2 shall be applied
by the Company solely for the purposes of the Business as detailed in
the Business Plan.
4 FURTHER FINANCING
4.1 Except as otherwise provided in this Agreement, none of the
Shareholders undertakes to provide any loan or Share capital to the
Company or to give any guarantee or indemnity in respect of any of the
Company's liabilities or obligations.
4.2 If, at any time prior to a public offering of any Shares, the
Company wishes to raise further funds, the Company must first offer the
right to provide to the Company all of the further funds to the
Preferred Shareholders in proportion to their respective holdings of
Series A Preferred Shares. If any Preferred Shareholder does not wish to
provide all or part of its proportion of the further funds, the other
Preferred Shareholders shall have the right to provide those further
funds in proportion to their respective holdings of Series A Preferred
Shares.
5 PUBLIC OFFERING
5.1 Each party (other than the Trustee) shall use its best endeavours to
ensure that an initial public offering of the Shares on the terms set
out in Clause 5.2, or any other means by which the Shareholders can
realise the value of their investment in the Shares, occurs within 36
months from the Commencement Date.
5.2 It is intended that the initial public offering raise at least $10
million by the offer of Shares at an issue price of at least $3.00 per
share.
6 DIVIDEND POLICY FOR ORDINARY SHARES
6.1 The Parties agree that there is no existing intention to declare
Dividends on any Ordinary Shares, and that no declaration of Dividends
on any Ordinary Shares shall occur until such time as the Company has
generated sufficient profits from the Business as would enable all
Dividends that have accrued on Series A Preferred Shares, pursuant to
the Constitution, to be met in full were those Dividends payable on the
day the Dividend on the Ordinary Shares is to be declared.
6.2 Subject to Clause 6.1, the Directors shall determine whether the
Company shall pay a Dividend on the Ordinary Shares in any year.
7 DISPOSAL AND ENCUMBRANCE OF SHARES
7.1 Subject to Clause 7.2, a Shareholder shall not Dispose of any legal
or equitable interest in any of its Shares except:
(a) by a transfer of the entire legal and beneficial interest
therein; and
(b) to a transferee permitted by the Constitution and this
Agreement.
7.2 A Shareholder may create an Encumbrance in respect of any of its
Shares if:
(a) BONA FIDE SECURITY
(i) such Encumbrance is granted bona fide as security
for a financing arrangement; and
(ii) in relation to the exercise or enforcement of any
power of sale or other right, power, authority,
remedy or discretion contained in or conferred under
or pursuant to the instrument creating the
Encumbrance or otherwise howsoever, it is a term or
condition that the person entitled to the benefit of
the Encumbrance ("the Chargee") and any person
(including any receiver or receiver and manager)
claiming through the Chargee ("an Administrator")
shall be required to:
(1) comply in all respects with the provisions of
this Agreement and the Constitution as if the
Chargee and the Administrator were each the
applicable Shareholder; and
(2) covenant with the Shareholders by a written
instrument in such form as the Shareholders may
require that if the Chargee and the
Administrator (or either of them) take
possession of the rights or benefits of the
applicable Shareholder under this Agreement,
which are subject to the Encumbrance, the
Chargee and the Administrator will each be
bound by the provisions of this Agreement and
the Chargee and the Administrator (or either of
them) will not exercise any power of sale
pursuant to the Encumbrance, except on terms
the same mutatis mutandis as those set forth in
this Agreement and the Constitution; or
(b) the prior written consent of all other Shareholders is
obtained.
8 TRANSFER OF SHARES
Notwithstanding anything to the contrary contained in this Agreement or
in the Constitution:
8.1 TRANSFER OF SHARES
(a) The Company shall refuse to register the transfer of any
Share unless the transferee has or the transferees have
entered into a Deed of Accession and:
(i) such transfer is permitted by, or is made pursuant
to and in accordance with, Clauses 8.3, 8.4, 8.5 or
8.6 or the provisions of any agreement in writing
between all the Shareholders; or
(ii) the proposed transferee is approved in writing by
all the Shareholders (other than the Transferor of
the Share) before any instrument is executed to give
effect to such
transfer and, subject to such approval being given,
Clause 8.3 shall not apply to such transfer.
(b) Subject to Clause 8.1(c), the Company shall not be
entitled to decline to register the transfer of any Share
which otherwise qualifies under Clauses 8.1(a)(i) or
8.1(a)(ii).
(c) For the purpose of ensuring that a particular transfer of
Shares is permitted under this Agreement or under the
provisions of any agreement in writing between all the
Shareholders, the Company may require the transferor or
the person named as transferee in any transfer lodged for
registration to furnish the Company with such information
and evidence as the Company may think necessary or
relevant. Failing such information or evidence being
furnished to the satisfaction of the
Company within a period of 28 days after such request, the
Company shall be entitled to refuse to register the transfer
in question.
8.2 PERMITTED TRANSFERS
(a) A Shareholder may at any time transfer any of the Shares
held by it to the ultimate beneficial owner of those
Shares at the time of transfer.
(b) A transfer of any Shares pursuant to this Clause shall
only be treated as a permitted transfer if it is a
transfer of the entire legal interest in such Share free
from all Encumbrances.
(c) If a transfer pursuant to Clause 8.2(a) is to more than
one ultimate beneficial owner, those Shares transferred
and the rights and obligations under this Agreement shall
be held by and bind them jointly.
8.3 PRE-EMPTIVE RIGHTS
(a) Except as provided in Clauses 8.1, 8.2, 8.5 and 8.6 no
Share may be Disposed of unless the procedure provided
for in this Clause is followed.
(b) A Proposing Transferor shall be obliged to give notice in
writing to the Company that the Proposing Transferor
desires to Dispose of such Shares. The Transfer Notice
shall specify:
(i) the number and class of the Transfer Shares;
(ii) the price at which the Proposing Transferor wishes
to Dispose of the Transfer Shares (the "Transfer
Price"); and
(iii)the identity of a person who has indicated a bona
fide willingness to purchase the Transfer Shares at
such price (the "Transferee").
(c) The Transfer Notice shall constitute the Company as the
agent of the Proposing Transferor empowered to sell the
Transfer Shares (together with all rights attaching
thereto at the date of the Transfer Notice or at any time
thereafter) at the Transfer Price on the terms of this
Clause 8.3.
(d) The Transfer Notice shall not be revocable except with
the prior written consent of all the Shareholders.
(e) Within 7 days after the receipt of any Transfer Notice
the Company shall serve a copy of that Transfer Notice on
all the Preferred Shareholders other than the Proposing
Transferor (if applicable). In the case of a deemed
Transfer Notice, the Company shall similarly serve notice
on all the Preferred Shareholders (including the
Proposing Transferor) notifying them that the same has
been deemed to have been given.
(f) Subject as provided otherwise in this Agreement, or in
any agreement in writing between all the Shareholders,
the Transfer Shares shall first be offered for purchase
at the Transfer Price by the Company to all the Preferred
Shareholders (other than the Proposing Transferor) in the
Specified Proportions of those Preferred Shareholders.
(g) Any offer made pursuant to Clause 8.3(f) shall be made by
notice in writing and shall specify:
(i) the number and class of the Transfer Shares;
(ii) the proportionate entitlement of the relevant
Preferred Shareholder;
(iii) the Transfer Price; and
(iv) a period of 14 days within which the offer must be
accepted or shall lapse.
(h) If the Company does not receive acceptances in respect of
all the Transfer Shares within the periods of the offers
referred to in Clause 8.3(g), the Company shall forthwith
give notice in writing of that fact to the Proposing
Transferor and the remaining Transfer Shares in respect
of which acceptances have not been received shall
thereafter be offered, pro-rata, to those Preferred
Shareholders who have accepted an offer within the
periods of the offers referred to in Clause 8.3(g). Any
offer made pursuant to this Clause 8.3(h) shall be made
in accordance with Clause 8.3(g), except that the period
within which all offers must be accepted before lapsing
shall be 14 days.
(i) Subject to Clause 8.4, if the Company does not receive
acceptances in respect of all the Transfer Shares within
the periods of the offers referred to in Clauses 8.3(g)
or 8.3(h), the Company shall forthwith give notice in
writing of that fact to the Proposing Transferor, and the
Proposing Transferor may within a period of 3 months
after the date of such notice sell the Transfer Shares to
the Transferee named in the Transfer Notice at any price
which is not less than the Transfer Price (after
deducting, where appropriate, any Dividend declared, paid
or made after the date of the Transfer Notice in respect
of the Transfer Shares and which has been or is to be
retained by the Proposing Transferor).
(j) If any person or persons (including any other
Shareholder) (the "Purchasers") agree within the periods
referred to in Clauses 8.3(g), (h) or (i) (as the case
may be) to purchase all of the Transfer Shares, the
Company shall forthwith give notice in writing to the
Proposing Transferor and to the Purchasers and the
Proposing Transferor shall thereupon become bound upon
payment of the Transfer Price to the Proposing Transferor
(whose receipt shall be a good discharge to the Purchaser
and the Company therefor none of whom shall be bound to
see the application thereof) to transfer to each
Purchaser those Transfer Shares accepted by them. Every
such notice shall state the name and address of each
Purchaser, the number of Transfer Shares agreed to be
purchased by it and the place and time appointed by the
Company for the completion of the purchase (being not
less than 7 days nor more than 28 days after the date of
the said notice and not being at a place outside New
South Wales). Subject to the giving of such notice, the
purchase shall be completed at the time and place
appointed by the Company.
(k) If a Proposing Transferor, having become bound to
transfer any Transfer Shares pursuant to this Clause 8.3,
makes default in transferring the same the Company may
authorise some person (who shall be deemed to be the
attorney of the Proposing Transferor for the purpose) to
execute the necessary instrument of transfer of such
Transfer Shares and may deliver it on its behalf and the
Company may receive the purchase money and shall
thereupon (subject to such instrument being duly stamped)
cause the Transferee to be registered as the holder of
such Transfer Shares and shall hold such purchase money
on behalf of the Proposing Transferor. The Company shall
not be bound to earn or pay interest on any money so
held. The receipt of the Company for such purchase money
shall be a good discharge to the Transferee (who shall
not be bound to see to the application thereof) and after
the name of the Transferee has been entered in the
register of Shareholders in purported exercise of
the power conferred pursuant to this Clause 8.3(k), the
validity of the proceedings shall not be questioned by
any person.
(l) Without limiting Clause 8.1(c), the Company may require
to be satisfied that any Shares being transferred by the
Proposing Transferor pursuant to Clause 8.3(i) are being
transferred in pursuance of a bona fide sale for the
consideration stated in the transfer and if not so
satisfied may refuse to register the instrument of
transfer.
8.4 TRANSFER ON A RELEVANT EVENT
(a) Upon the happening of a Relevant Event, the Shareholder
in question shall be deemed to have immediately given a
Transfer Notice in respect of all the Shares as shall
then be registered in the name of that Shareholder.
(b) In the case of a Transfer Notice being given pursuant to
Clause 8.4(a), the price per Transfer Share which is so
specified in the Transfer Notice shall be:
(i) such price as shall be agreed in writing between all
of the Shareholders; or
(ii) in the absence of such agreement within 14 days
after the date on which the Transfer Notice is
deemed to have been given, the price will be
determined by an independent Chartered Accountant
(the "Expert") nominated by agreement between all
the Shareholders or, failing such nomination within
14 days after the request of any Shareholder to the
others therefor, nominated at the request of any
Shareholder by the President or other head for the
time being of the Institute of Chartered Accountants
of Australia. The Expert shall act as an expert and
not as an arbitrator and his written determination
shall in the absence of manifest error be final and
binding on all the Shareholders. For the foregoing
purpose, the Expert shall have access to all books
of account and records and all vouchers, cheques,
papers and documents that in any way relate to the
Business or the Company.
(c) The Expert will certify in writing the sum that in his
opinion is the fair market value of the Transfer Shares.
The price per Share shall be the sum equal to the fair
market value of the Transfer Shares (of that class)
certified by that Expert divided by the number of
Transfer Shares (of that class). The Company will use its
best endeavours to procure that the Expert determines the
price per Share within 21 days of being requested to do
so.
The costs and expenses of the Expert in determining the
price per Share shall be borne as to one half by the
Proposing Transferor and as to the other half by the
Purchasers (as defined in Clause 8.3(j)) pro rata
according to the number of Transfer Shares purchased by
them.
8.5 CO-SALE
(a) If a Proposing Transferor is permitted under this Clause
8 to sell all or any of its Shares to a third party
purchaser and the provisions of Clause 8.3 have been
complied with or waived by the Preferred Shareholders,
each of the Preferred Shareholders will have the right to
require by notice in accordance with Clause 8.5(b) the
Proposing Transferor to procure that the third party
acquire Shares from each of the Preferred Shareholders
who delivers such a notice, the number of Shares to be
calculated by multiplying the number of Transfer Shares
by the Specified Proportion of that Preferred
Shareholder, at the same price per Share and on the same
terms and conditions as the third party purchaser is to
acquire the Proposing Transferor's Shares and, if any of
the other Preferred Shareholders gives notice pursuant to
this Clause 8.5, the Proposing Transferor will only be
permitted to sell its Shares to the third party purchaser
if the third party purchaser also acquires the relevant
number of the other Preferred Shareholders' Shares at the
same price per Share and on the same terms and
conditions.
(b) A notice for the purposes of Clause 8.5(a) shall be in
writing addressed to the Proposing Transferor and given
to the Proposing Transferor within 14 days of receipt by
the other Preferred Shareholder of a notice from the
Proposing Transferor specifying the identity of the third
party purchaser, price per Share and terms and conditions
on which the Proposing Transferor's Shares are to be
sold.
(c) A Preferred Shareholder other than the Proposing
Transferor may sell its Shares to the third party
purchaser in accordance with Clause 8.5(a) without the
need to comply with the procedure set out in Clause 8.3.
8.6 TRANSFER OF ENTIRE INTEREST
An obligation to transfer a Share under the provisions of this
Clause 8 shall be deemed to be an obligation to transfer the
entire legal and beneficial interest in such Share free from
any Encumbrance.
8.7 WAIVER OF PROVISIONS
The provisions of this Clause 8 may be waived in whole or in
part in any particular case with the prior written consent of
all the Shareholders.
8.8 SHAREHOLDER OBLIGATION
Each Shareholder shall do everything within its power and
shall not fail to do anything within its power to ensure that
Shares in itself are not Disposed of in order to overcome or
avoid the transfer provisions of Clause 8.
9 ALLOTMENT OF SHARES
9.1 If, at any time prior to a public offering of any Shares of
the Company, the Company issues any additional Shares or
securities convertible into Shares, the Company shall offer to
each Preferred Shareholder for subscription, at the same price
and on the same terms and conditions, sufficient of such
Shares or securities as will enable that Preferred Shareholder
to maintain its proportionate ownership of Ordinary Shares
after such issue, assuming that in so calculating the amount
of Shares or securities to be offered and each Shareholder's
proportionate ownership of Ordinary Shares, all issued Series
A Preferred Shares have been converted into Ordinary Shares.
9.2 Clause 9.1 shall not apply to Shares or securities issued to
employees, consultants or directors for incentive purposes.
10 EMPLOYEE SHARE OR OPTION INCENTIVE PLAN
The Parties acknowledge that it is intended that, after the completion
of certain milestones, the Company will create and maintain an employee
share or option incentive plan on the basis that if the shares were
issued or options were fully exercised, the shares so issued would
constitute up to 15% of the Ordinary Shares on issue determined as if
all shares, and securities convertible in to Ordinary Shares had been
converted, and on such other terms and conditions as are determined by
the Board.
11 WARRANTIES, UNDERTAKINGS AND OBLIGATIONS
11.1 The Company represents and warrants to each of the manager and
trustee of each Licensed Fund that it is an Eligible Investee
Company and there has been no material adverse change to the
financial position of the Company as at September 1999 as
described in the Business Plan; and
11.2 The Company shall:
(a) proactively inform the manager of each Licensed Fund and
respond to any requests from a manager of a Licensed Fund
in a timely and expeditious manner, of any information
concerning the status of the Company as an Eligible
Investee Company or a change in the status of an
Associate or Related Body Corporate of the Company, and
any information that a manager of a Licensed Fund may
require to comply with its obligations under the relevant
IIF Management Licence;
(b) provide to the manager of each Licensed Fund on the date
of this Agreement and thereafter within 14 days of
receiving a request from a manager of a Licensed Fund so
to provide (on at least an annual basis) the following
information:
(i) the names of all officers and senior executives of
the Company and its Related Bodies Corporate;
(ii) the names of all the Company's Related Bodies
Corporate;
(iii)confirmation that no moneys invested by, or on
behalf of, a Licensed Fund will be used to discharge
a debt to, or acquire an asset from, the manager or
trustee of a Licensed Fund or any of their officers
or Related Bodies Corporate;
(iv) confirmation that the Company will not be acquiring
any goods or services from the manager or trustee of
the Licensed Fund or any of their officers or
Related Bodies Corporate;
(v) confirmation that the Company does not owe any money
on any account whatever to the manager or trustee of
a Licensed Fund or any of their officers or Related
Bodies Corporate; and
(vi) confirmation that in respect of any other holder of
a IIF Management Licence or another Licensed Fund
("Other Relevant Party"), the Company:
(1) cannot Control, or influence materially, the
Other Relevant Party's activities or internal
affairs;
(2) is not a member or beneficiary of or partner in
the Other Relevant Party;
(3) is not in a position to cast, or to Control the
casting of, a vote at a meeting of the equity
holders in the Other Relevant Party or to
Control or influence
materially the Other Relevant Party's internal
affairs;
(4) has no power to dispose of, or to exercise
Control over the disposal of, a security in or
issued by the Other Relevant Party;
(5) is not owed a debt by and is not a creditor of
the Other Relevant Party; or
(6) does not act as agent for the Other Relevant
Party in any transaction or dealing,
(c) represent and warrant that the information provided by
the Company pursuant to clause 11.2(b) is true and
correct; and
(d) ensure that it does all matters and things as are
confirmed in the information provided by the Company
pursuant to clause 11.2(b).
(e) A reference in this Clause 11.2 to "Control" of a
corporation is a reference to the possession directly or
indirectly of the power whether or not having statutory,
legal or equitable force, and whether or not based on
statutory, legal or equitable rights, directly or
indirectly to:
(i) control more than 50% of the membership of the board
of directors of that corporation; or
(ii) control more than 50% of its voting shares; or
(iii)direct or cause the direction of the management and
policies of the manager,
whether by means of trusts, agreements, arrangements,
understandings, practices, the ownership of any interest in
shares or stock of that company or otherwise.
(f) A reference in this Clause 11.2 to "Control" of a
corporation or other person who is or proposes to act as
a trustee is a reference to the possession directly or
indirectly of the power to:
(i) control the trustee;
(ii) control any decisions of the trustee as trustee of
the relevant trust;
(iii) appoint, remove or replace the trustee;
(iv) appoint, remove or replace a majority of the
directors of the trustee; or
(v) direct the allocation of any benefits under the
relevant trust.
(g) A reference in this Clause 11.2 to "Control" of an event,
outcome or result or the exercise of a right, power,
authority, discretion or remedy means the possession,
directly or indirectly, of the power to bring about or
direct that event outcome or result or direct the
exercise of that right, power, authority, discretion or
remedy.
12 MANAGEMENT OF THE COMPANY
12.1 The Board shall be responsible for the overall direction and
control of the management of the Company and the formulation
of the polices to be applied in the conduct of the Business.
12.2 The Board will consist of 5 directors, namely:
(a) an independent Chairman appointed by simple majority of
all Shareholders;
(b) a managing director appointed by simple majority of all
Shareholders;
(c) two directors appointed by simple majority of all
Preferred Shareholders, at least one of whom shall at all
times be an appointee of RBML; and
(d) one director appointed by Praxis USA.
12.3 The persons who have appointed a director referred to in
Clause 12.2 shall have the right from time to time to remove
any such director and appoint another director in his place.
12.4 The Company will pay to its non-executive directors:
(a) such fees as are determined by majority of the Board; and
(b) reasonable travel and related expenses incurred in
attending Board meetings or conducting business on the
Company's behalf and as authorised by the Board.
12.5 Unless otherwise agreed in writing between the Shareholders
and save as otherwise provided or contemplated in this
Agreement the Shareholders shall exercise their powers in
relation to the Company so as to ensure that:
(a) the Company carries on and conducts its business and
affairs in a proper and efficient manner and for its own
benefit;
(b) the Company transacts all of its business on arm's length
terms;
(c) the Company shall maintain with a well-established and
reputable insurer adequate insurance coverage against all
risks usually insured against by companies carrying on
the same or a similar business and (without prejudice to
the generality of the foregoing) for the full replacement
or reinstatement value of all its assets of an insurable
nature;
(d) the Company allots and issues its Shares and other
securities at the best price reasonably obtainable in the
circumstances;
(e) the Company shall not acquire, dispose, hire, lease,
licence or receive licences of any assets, goods, rights
or services otherwise than at the best price reasonably
obtainable in the circumstances;
(f) the Company shall keep books of account and therein make
true and complete entries of all its dealings and
transactions of and in relation to its business;
(g) the Company fulfils its obligations under this Agreement;
(h) the Company shall prepare its accounts in accordance with
the Corporations Law and shall adopt such accounting
policies as may from time to time be generally accepted
in Australia;
(i) the Company shall prepare such accounts in respect of
each financial year as are required by statute and
procure that such accounts are audited as soon as
practicable and in any event not later than three months
after the end of the relevant financial year; and
(j) if the Company requires any approval, consent or licence
for the carrying on of its Business in the places and in
the manner in which it is for the time being carried on
or proposed to be carried on the Company will use its
best endeavours to obtain and maintain the same in full
force and effect.
The word "Company" where used in this paragraph shall be
deemed to include each of the other companies in the Group (if
any) from time to time to the intent and effect that the
provisions of this Clause 12.5 shall apply in relation to each
such company as they apply in relation to the Company.
12.6 The Company shall provide to each Preferred Shareholder:
(a) annual financial statements, certified by an accounting
firm of nationally recognised standing within 4 months of
the end of each financial year;
(b) regular financial statements (including income
statements, balance sheets and cash-flow statements) in a
form acceptable to the Shareholders;
(c) an annual operating and financial plan agreed to by the
Board prior to the beginning of each fiscal year and any
revisions thereof promptly upon their adoption by the
Board;
(d) quarterly technical summary updates measured against
milestones in such form as the Shareholders may
reasonably require within 14 days of the end of each
calendar quarter; and
(e) such other information as to its financial and business
affairs as any Preferred Shareholder may reasonably
require.
12.7 The Preferred Shareholders have the right at all times to
appoint and instruct an independent chartered accountant to
the Company for the purposes of reviewing the financial
statements and other records and books of account of the
Company, and the Company shall permit the independent
accountant reasonable access to its records and books of
account. The costs of the independent accountant shall be
borne by the appointing Preferred Shareholder.
13 MEETINGS OF DIRECTORS
13.1 The Company shall convene meetings of the Directors at least 9
times per year or as otherwise agreed from time to time by the
Board.
13.2 After a meeting of the Directors to be held in June of each
year the Company shall present to each of the Directors for
consideration:
(a) comprehensive financial operating budgets, capital
budgets and cashflow budgets in a form acceptable to the
Directors; and
(b) business financial plans for the Company and its
Subsidiaries (if any) in respect of the period of 3 years
to commence on the 1st day of July in that year.
13.3 The quorum for a meeting of directors will be 3
directors, at least one of whom shall at all times be an
appointee of a Preferred Shareholder.
14 MATTERS REQUIRING DIRECTORS APPROVAL
Unless this Agreement otherwise provides, the Company will not, and
none of the other companies in the Group (if any) will do any of the
following, without the prior approval of a resolution of at least 4 of
the Directors (one of whom was appointed by RBML):
14.1 enter into, vary or terminate any contract or arrangement
(whether legally binding or not) with any of its Directors or
any Shareholder or with any Related Body Corporate of a
Shareholder;
14.2 enter into any material contract or arrangement outside the
ordinary course of its Business or whereby any person would or
might receive remuneration calculated by reference to its
income or profits;
14.3 vary the terms of service (including compensation,
remuneration and emoluments) of a Director;
14.4 enter into any transaction or series of related transactions
(whether at one time or over a period of time) involving the
incurring of any capital expenditure or liability or the
disposal of any capital asset or assets and which involves a
total outlay or receipt, in any period of twelve consecutive
months, of more than $100,000 (or such larger sum as the
Shareholders may from time to time agree in writing) or a sum
equal to 10% of the net assets of the Company and its
Subsidiaries (if any) as shown in the latest audited
consolidated accounts of the Company and its Subsidiaries (if
any) or, if it has no Subsidiaries, in its latest audited
accounts, whichever amount shall be the higher, but excepting
transactions authorised expressly or impliedly in any current
capital expenditure budget; for these purposes expenditure
shall be deemed to be "Capital Expenditure" and an asset shall
be deemed to be a "Capital Asset" if, in either case, it would
be treated as such in accounts prepared in accordance with
accounting principles generally accepted in Australia;
14.5 borrow any money or obtain any advance, credit or financial
accommodation in any form (other than normal trade credit not
exceeding $50,000 or other than on normal banking terms for
unsecured overdraft facilities not exceeding $50,000) or vary
the terms and conditions of any borrowings or bank mandates;
14.6 create or allow to subsist any Encumbrance over all or a
substantial part of all of its assets;
14.7 lend any money to any person (other than by way of deposit
with a bank or other institution the normal business of which
includes the acceptance of deposits) or grant any credit to
any person (except to its customers in the normal course of
business) or give any guarantee, indemnity or security in
respect of the obligations of any other person;
14.8 enter into any death, retirement, profit sharing, bonus, share
option, employee incentive plan or other scheme for the
benefit of the officers or employees of the Company or any
material variation (including any increase in the percentage
amount of the contributions) of any such scheme;
14.9 commence any legal or arbitration proceedings other than
routine debt collection;
14.10 make any claim, disclaimer, surrender, election or consent of
a material nature for tax purposes;
14.11 make any early repayments of any of its indebtedness; or
14.12 permit any power or authority of its Directors to be delegated
to an executive officer or committee of Directors or to any
other person whatsoever.
15 MATTERS REQUIRING PREFERRED SHAREHOLDERS APPROVAL
15.1 Unless this Agreement otherwise provides, the Company will
not, and none of the other companies in the Group (if any)
will do any of the following, without the prior approval of
two thirds of the Preferred Shareholders:
(a) issue, allot, redeem, purchase or grant options over any
of its Shares, debentures or other securities or
reorganise its share capital in any way except:
(i) where the number of Shares, debentures or other
securities to be issued, allotted, redeemed or
purchased does not exceed, within any 12 month
period, 10% of the total number of Shares,
debentures or other securities of the same class;
(ii) in relation to an Employee Share Plan; or
(iii)in relation to all options currently on issue at
the Commencement Date;
(b) pay or make any Dividend or other distribution including
without limiting the foregoing make any distribution out
of capital profits or capital reserves (including any
share premium account or capital redemption reserve fund)
except pursuant to the provisions of Clause 5.1;
(c) amend the provisions of its Constitution or pass any
resolution for winding up;
(d) acquire or make any investment in another company or
business;
(e) change the nature or scope of its business to a material
extent or commence any material new business not being
ancillary or incidental to such business as defined in
the Company's current Business Plan;
(f) merge or amalgamate with any person;
(g) incur any material research and development expenditure
in excess of $250,000 in any 12 month period otherwise
than in accordance with the research and development
budget agreed to by the Shareholders for the year in
question; or
(h) modify or abrogate any rights for the time being attached
to any Shares.
15.2 If the Shareholders (or any of them) have been requested by
the Board or another Shareholder to provide their approval,
consent or determination in relation to any matter relating to
the Company, and the request:
(a) does not stipulate a time and date by which the approval,
consent or determination is to be given or made, the
Shareholder must give or withhold its approval or consent
or make the determination within 14 days after receiving
the request from the Board or other Shareholder; or
(b) stipulates a time and date by which the approval, consent
or determination is to be given or made, the Shareholder
must give or withhold its approval or consent or make the
determination within that timeframe.
If the Shareholder does not, it will be deemed to have given
its approval or consent, or made a favourable determination on
the expiry of the 14 day period or the stipulated timeframe.
16 MANAGEMENT AND PERSONNEL
16.1 Each Party, including the Company, shall keep all information
which it obtains concerning the Business, affairs or assets of
the Company strictly confidential and shall not, and shall
procure that their respective officers, employees, agents and
auditors do not, without the prior written consent of all the
other Parties, disclose any of the above information to any
third party except:
(a) if required to make such disclosure by any court of
competent jurisdiction or in order to enforce any rights
under this instrument in any proceedings;
(b) pursuant to any court order;
(c) pursuant to any law or regulation having the force of
law;
(d) pursuant to any requirements of the Australian Stock
Exchange Limited;
(e) in circumstances where the information has come within
the public domain otherwise than by reason of a breach by
one of the Parties of the provisions of this Clause;
(f) to a bona fide intending purchaser of at least 5% of any
class of Shares or to a bona fide intending director
provided such purchaser or director agrees to observe the
confidentiality provisions of this Clause;
(g) in the normal and ordinary course of the Business of the
Company;
(h) pursuant to any other contract or legal obligation upon
the Company;
(i) nothing in this Clause shall prohibit a Director from
providing information to his appointor; or
(j) nothing in this Clause shall prohibit any Shareholder
from disclosing the information, on a confidential basis,
to employees or officers of any Related Body Corporate of
that Shareholder to the extent as is reasonably required
to satisfy any reporting obligations that Related Body
Corporate has to the ultimate beneficial owner of the
Shares.
16.2 The Company shall ensure that the contract of employment
entered into with all employees of the Company contains
confidentiality obligations in a form reasonably acceptable to
the Preferred Shareholders, or if there is not such written
contract, that the employee executes a Confidentiality Deed.
16.3 The Company shall ensure that the contract of employment
entered into with all Senior Employees contains a restrictive
covenant in relation to future employment in a form reasonably
acceptable to the Preferred Shareholders or, if there is no
such written contract that each Senior Employee executes a
restrictive covenant in relation to future employment in a
form reasonably acceptable to the Preferred Shareholders.
16.4 The personnel requirements of the Company will be determined
by the Board.
17 SUBSCRIPTION COSTS
17.1 Subject to Clause 17.2 being met, the Company will bear all
reasonable legal expenses of the Preferred Shareholders
associated with the preparation, negotiation and completion of
this Agreement and the amendment to the Constitution to
include the terms of issue of the Series A Preferred Shares.
17.2 On or before the Commencement Date, each of the Company and
the Shareholders shall, where appropriate, duly and punctually
hold the meetings, give the notices and otherwise comply with
all the requirements of RBML regarding compliance with Section
260B of the Corporations Law so that to the extent required by
RBML any and all financial assistance, as referred to in
Clause 17.1 given by the Company is not prohibited by Section
260A of the Corporations Law.
17.3 If the Shareholders do not approve the giving of financial
assistance as referred to in Clause 17.1 pursuant to Section
260B of the Corporations Law, the Shareholders will bear, in
their Specified Proportions, all reasonable legal expenses of
RBML associated with the preparation, negotiation and
completion of this Agreement and the amendment to the
Constitution.
18 INDEMNITY FROM PRAXIS USA
Praxis USA indemnifies and agrees to keep indemnified each of the
Shareholders and the Company against all proceedings, claims, damages,
costs, expenses, losses and liabilities of whatever nature which may be
suffered, incurred, paid or sustained by any of the Shareholders or the
Company whether directly or indirectly as a result of any claim, action
or proceedings brought by any shareholder of Praxis USA against Praxis
USA or any of the Shareholders or the Company in relation to the
subscriptions and transactions contemplated by, or the conduct of the
Business in accordance with, this Agreement, including without
limitation, the Licence and Research & Development Agreements and the
Licence Agreements.
19 PUBLICITY
19.1 No public announcement of the holding of Shares as
contemplated in this Agreement shall be made by any of the
Parties otherwise than as a joint announcement in a form
approved by all the Parties.
19.2 Subject to Clause 19.1 and except to the extent required by
law or by the rules of any stock exchange, no Party shall make
any disclosure in relation to any other terms or conditions of
this Agreement.
20 NOTICES
Any notice required to be given under this Agreement by any Party to
another shall be:
20.1 in writing addressed to the address of the intended recipient
shown in this Agreement below or to such other address as has
been most recently notified by the intended recipient to the
Party giving the notice:
IN THE CASE OF THE COMPANY:
Xxxxx 0, 00 Xxxxxx Xxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx Capital Territory 2601
Facsimile:
Attention:
IN THE CASE OF PRAXIS USA:
00 Xxxx Xxxxxxxx, Xxxx Xxxx Xxxx, Xxxx,
Xxxxxx Xxxxxx of America 84101
Facsimile:
Attention:
IN THE CASE OF THE TRUSTEE:
00 Xxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxx Xxxxx
Facsimile: 02 9221 1889
Attention: Senior Manager, Unit Trusts: Xxxx Xxxxxx
IN THE CASE OF RBML:
Xxxxx 00, 0 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 0000
Facsimile: 03 9254 4940
Attention: Xx Xxxxx Xxxxxx
20.2 signed by a person duly authorised by the sender; and
20.3 deemed to have been given and served:
(a) where despatched by hand, at the time delivery;
(b) where despatched by facsimile transmission, 24 hours
after the time recorded on the transmission report
unless:
(i) within those 24 hours the intended recipient has
informed the sender that the transmission was
received in an incomplete or garbled form; or
(ii) the transmission result report of the sender
indicates a faulty or incomplete transmission; and
(c) where despatched by registered mail, on acknowledgment of
receipt by or on behalf of the recipient,
but if such delivery or receipt is on a day on which
commercial premises are not generally open for business in the
place of receipt or is later than 4.00 p.m. (local time) on
any day, the notice shall be deemed to have been given and
served on the next day on which commercial premises are
generally open for business in the place of receipt.
21 INCONSISTENCY WITH CONSTITUTION
In the event that there is any inconsistency between this Agreement and
the Constitution, this Agreement shall prevail.
22 FURTHER ASSURANCES
Each Party shall take all such steps, execute all such documents and do
all such acts and things as may be reasonably required by the other
Parties to give effect to any of the transactions contemplated by this
Agreement.
23 NON-WAIVER
Other than as otherwise specified in this Agreement, neither the
failure of any Party to enforce at any time any of the provisions of
this Agreement nor the granting of any time or other indulgence shall
be construed as a waiver of that provision or of the right of that
Party thereafter to enforce that or any other provision.
24 COSTS
Other than as otherwise specified in this Agreement, the Parties shall
bear their own costs arising out of the preparation of this Agreement
save that the Company shall bear any stamp duty chargeable on this
Agreement and on any instruments (other than a transfer of Shares)
required to be entered into pursuant to this Agreement and the Company
indemnifies the other Parties against the liability for all such stamp
duty.
25 AMENDMENT
This Agreement may not be amended except by the unanimous written
consent of all Parties.
26 TRUSTEES LIMITATION OF LIABILITY PROTECTION CLAUSE
26.1 The Trustee enters into this Agreement only in its capacity as
trustee of the Trust and in no other capacity. A liability
arising under
or in connection with this Agreement is limited to and can be
enforced against the Trustee only to the extent to which it
can be satisfied out of property of the Trust out of which the
Trustee is actually indemnified for the liability. This
limitation of the Trustee's liability applies despite any
other provision of this Agreement and extends to all
liabilities and obligations of the Trustee in any way
connected with any representation, warranty, conduct,
omission, agreement or transaction related to this Agreement.
26.2 The parties other than the Trustee may not xxx the Trustee in
any capacity other than as trustee of the Trust, including
seek the appointment of a receiver (except in relation to
property of the Trust), a liquidator, an administrator or any
similar person to the Trustee or prove in any liquidation,
administration or arrangement of or affecting the Trustee
(except in relation to property of the Trust).
26.3 The provisions of this Clause 26 shall not apply to any
obligation or liability of the Trustee to the extent that it
is not satisfied because under the Trust Deed establishing the
Trust or by operation of law there is a reduction in the
extent of the Trustee's indemnification out of the assets of
the Trust, as a result of the Trustee's fraud, negligence or
breach of trust.
26.4 It is acknowledged that RBML as the manager of the Trust is
responsible under the Trust Deed establishing the Trust for
performing a variety of obligations relating to the Trust,
including under this Agreement. No act or omission of the
Trustee (including any related failure to satisfy its
obligations or breach of representation or warranty under this
Agreement) will be considered fraud, negligence or breach of
trust of the Trustee for the purpose of this Clause 26.3 to
the extent to which the act or omission was caused or
contributed to by any failure by the manager or any other
person to fulfil its obligations relating to the Trust or by
any other act or omission of the manager or any other person.
27 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and such
counterparts together shall constitute one and the same instrument.
28 GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with
the laws for the time being in force in the State of Victoria and each
party submits to the non-exclusive jurisdiction of the Courts of or
exercising jurisdiction in that State.
IN WITNESS WHEREOF the parties have executed this Agreement on the date written
above.
THE COMMON SEAL of PRAXIS )
PHARMACEUTICALS AUSTRALIA PTY )
LIMITED (ACN 082 811 630) was hereto )
affixed in accordance with its Constitution )
in the presence of: )
/s/ Xxxxxxx X. Xxxxxx Director
Xxxxxxx X. Xxxxxx Name of Director (Print)
/s/ Xxxxx Xxxxxxxx Director/Secretary
Xxxxx Xxxxxxxx Name of Director/Secretary (Print)
EXECUTED by PRAXIS )
PHARMACEUTICALS INC. by its )
authorised officer in the presence of: )
)
/s/ Xxxxxxx X. Xxxxxx Authorised Officer
Xxxxxxx X. Xxxxxx Name of Authorised Officer (Print)
CEO Title
EXECUTED BY PERPETUAL
TRUSTEES NOMINEES LIMITED
(ACN 000 341 533)
PERPETUAL TRUSTEES NOMINEES LIMITED (CAN
000 341 533) By its Attorneys who
declare that they have no notice of
revocation of the Power of Attorney
under which this document is signed.
THE COMMON SEAL of ROTHSCHILD )
BIOSCIENCE MANAGERS LIMITED )
(ACN 072 515 247) was hereto affixed in )
accordance with its Constitution in the )
presence of: )
/s/ G.C.D. Brooke Director
G.C.D. Brooke Name of Director (Print)
/s/ M.D. Xxxxxxxxx /Secretary
M.D. Xxxxxxxxx Name of /Secretary (Print)
SCHEDULE 1
----------
CONFIDENTIALITY DEED
THIS CONFIDENTIALITY DEED is made the day of 1999
BETWEEN:
PRAXIS PHARMACEUTICALS AUSTRALIA PTY
LIMITED (ACN 082 811 630) of 00 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxx Capital Territory 2601
("the Company")
- and -
[##] of [##] ("the Employee")
WHEREAS:
A The Company has agreed to engage the Employee as an employee to
assist in the ongoing drug discovery operations (the "Business") of
the Company.
B In the course of the Employee's employment as an employee,
information concerning the Business, accounts, finance, contractual
arrangements, dealings, transactions or affairs of the Company,
including, without limitation, any information relating to
biotechnology, processes, products, specifications, inventions,
patents, copyright and designs owned or used by the Company, however
generated, recorded, stored or disseminated ("Confidential
Information") may be disclosed to or acquired by the Employee.
C In consideration of his engagement as an employee of the Company, the
Employee undertakes to preserve and maintain the confidentiality of
the Confidential Information on the terms and conditions contained in
this Deed.
D Each of the parties acknowledge that in order to protect the Business
of the Company and to secure the services of the Employee, the
Employee has, at the request of the Company, agreed to enter into the
restrictive covenants contained in this Deed.
THE PARTIES COVENANT AND AGREE as follows:
1 The Employee shall at all times:
1.1 treat the Confidential Information in strict confidence and
maintain strict secrecy about the Confidential Information in
its possession;
1.2 not disclose or provide, whether voluntarily or otherwise, any
Confidential Information to any person without the prior
written consent of the Company; and
1.3 not directly or indirectly make use of any Confidential
Information for any purpose except in the course of employment
with the Company and for the benefit or advantage of the
Company.
2
2 Nothing in Clause 1 prohibits the disclosure or use of any
Confidential Information which:
2.1 is or becomes publicly available through no fault of the
Employee;
2.2 was in the Employee's possession prior to his employment with
the Company and was not acquired by the Employee directly or
indirectly from the Company;
2.3 was rightfully received by the Employee from a third party
without a duty of confidentiality being owed by the Employee to
the third party and was not acquired by the Employee directly
or indirectly from the Company; or
2.4 the Employee is required to disclose by:
2.4.1 any law; or
2.4.2 an order of any Court of competent jurisdiction,
but only to the extent required by the law or order.
3 All Confidential Information shall be and remain the property of the
Company. The Employee acknowledges that all Confidential Information
developed in the course of the Employee's employment will vest in the
Company. The Employee agrees to execute any documents and supply any
information, data, models or programs required by the Company to
exploit, protect, register or assign ownership of such Confidential
Information.
4 The Employee acknowledges that the Company may suffer substantial
damage as a result of the disclosure of any of the Confidential
Information to any person other than a person authorised by the
Company to receive the Confidential Information. The Employee shall
at all times indemnify the Company against all and any loss, damages,
expenses or costs directly or indirectly sustained, suffered or
incurred (including special, consequential and economic damages) or
other claims howsoever arising (and legal and other professional
costs and disbursements necessarily incurred as a result thereof) in
consequence of the Employee failing for any reason to strictly
observe or perform any term or condition of this Deed.
5 The Employee releases the Company to the full extent permitted by law
from and against all claims, actions, damages, remedies and matters
arising from or which may arise from or in connection with the
provision, or any purported reliance upon the Confidential
Information.
6
6.1 The Employee agrees that it is reasonable and necessary for the
Company to have the benefit of the restrictive covenants set
out in this Clause 6 in order to protect the Business and the
confidentiality of information obtained by the Employee during
his employment with the Company.
3
6.2 The Employee covenants with the Company that he/she will not
during the course of his/her employment or for the periods
specified in Clause 6.3 and within the areas specified in
Clause 6.4, directly or indirectly, as sole proprietor, member
of a partnership or joint venture, shareholder, investor,
participant, consultant, officer, manager or director of a
corporation, or as an employee, agent, associate or consultant
of any person, firm or corporation or in any other capacity:
6.2.1 undertake, carry on or be engaged in or concerned with
or interested in any business in Australia or elsewhere
which is directly or indirectly competitive with the
Business;
6.2.2 canvass, solicit, interfere with or endeavour to entice
away from the Company any employee, customer or client
of the Company; or
6.2.3 counsel, procure or otherwise assist any person to do
any of the acts referred to in sub-clauses 6.2.1 and
6.2.2.
6.3 The periods referred to in Clause 6.2 are:
6.3.1 24 months after the end of his/her employment;
6.3.2 12 months after the end of his/her employment;
6.3.3 6 months after the end of his/her employment.
6.4 The areas referred to in Clause 6.2 are:
6.4.1 the World;
6.4.2 North America, Europe and Australia;
6.4.3 Australia;
6.4.4 Australian Capital Territory.
6.5 The Employee warrants that he/she has received independent
legal advice with respect to the provisions of this Clause 6.
6.6 The Employee agrees that if there is a breach or threatened
breach of the provisions of this Clause 6, the Company shall be
entitled to an injunction restraining the Employee from such
breach. Nothing in this Deed shall be construed as prohibiting
the Company for pursuing any other remedies in respect of such
breach or threatened breach.
6.7 Each of the periods referred to in Clause 6.3 and each of the
areas referred to in Clause 6.4 shall each be severable and
have an
4
independent operation from the other or others of them in the
order in which they appear in Clauses 6.3 and 6.4 respectively.
To the extent that if any one or more of such restrictions
constitutes an undue restraint of trade or is otherwise
contrary to public policy or public interest or is
unenforceable or illegal, such facts shall not affect the
subsequently mentioned period or area, as the case may be,
specified in the sub-Clause following the sub-Clause so severed
or the remainder of this Deed, which shall continue to operate
in full force and effect, provided always that unless and until
the provisions of this Clause 6.7 become operative the period
referred to in sub-Clause 6.3.1 and the area referred to in
sub-Clause 6.4.1 shall operate and be effective between the
parties. In this regard the Employee acknowledges that the
period specified in sub-Clause 6.3.1 and the area specified in
sub-Clause 6.4.1 are fair and reasonable.
7 The Employee shall continue to be bound by this Deed until the
Company gives the Employee an unconditional discharge in writing.
8 This Deed shall be governed by and interpreted in accordance with the
laws for the time being in force in the State of Victoria and each
party submits to the non-exclusive jurisdiction of the Courts of or
exercising jurisdiction in that State.
IN WITNESS WHEREOF the parties have executed this Deed on the date written
above.
THE COMMON SEAL of PRAXIS )
PHARMACEUTICALS AUSTRALIA PTY )
LIMITED (ACN 082 811 630) was hereto )
affixed in accordance with its Constitution )
in the presence of: )
Director
Name of Director (Print)
Director/Secretary
Name of Director/Secretary (Print)
5
SIGNED SEALED AND DELIVERED by )
[##] in the presence of: )
Witness
Name of Witness
(Print)
SCHEDULE 2
----------
DEED OF ACCESSION
THIS DEED is made the day of 2000
BETWEEN:
PRAXIS PHARMACEUTICALS AUSTRALIA PTY
LIMITED (ACN 082 811 630) of 00 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxx Capital Territory 2601
("Company")
- and -
PRAXIS PHARMACEUTICALS INC. of 00 Xxxx
Xxxxxxxx, Xxxx Xxxx Xxxx, Xxxx, Xxxxxx Xxxxxx
of America 84101 ("Praxis USA")
- and -
PERPETUAL TRUSTEES NOMINEES LIMITED
(ACN 000 341 533) of 00 Xxxxxx Xxxxxx, Xxxxxx, Xxx
Xxxxx Xxxxx in its capacity as trustee for The
Australian Bioscience Trust constituted by a Trust
Deed dated 20 August 1998 ("Trustee")
- and -
ROTHSCHILD BIOSCIENCE MANAGERS LIMITED
(ACN 072 515 247) of Xxxxx 00, 0 X'Xxxxxxx Xxxxxx,
Xxxxxx, Xxx Xxxxx Xxxxx ("RBML")
- and -
NEW SHAREHOLDER
WHEREAS:
A Praxis USA and the Trustee are Shareholders in the Company pursuant to
a Share Subscription and Shareholders' Agreement dated [##] (the
"Shareholders' Agreement").
B The New Shareholder wishes to acquire all [a portion] of the Shares of
[##] (the "Outgoing Entity").
C It is a condition under the Shareholders' Agreement that each of the
parties hereto execute this Accession Deed.
2
NOW THIS DEED WITNESSES AS FOLLOWS:
1 INTERPRETATION
1.1 For the purposes of this Deed:
1.1.1 terms which are defined in the Shareholders' Agreement
shall have the same meanings when used in this Deed;
and
1.1.2 the provisions of Clause 1.2 of the Shareholders'
Agreement shall apply in the interpretation of this
Deed, mutatis mutandis.
1.2 In this Deed (including the Recitals) unless inconsistent with
the subject matter or unless the context otherwise requires:
"Completion Date" means the date on which the sale of Shares
under the Shareholders' Agreement is completed between the
Outgoing Entity and the New Shareholder;
"Continuing Entities" means [##];
"Outgoing Entity" means [##];
2 The New Shareholder hereby:
2.1 ratifies and becomes a party to and agrees to be bound by the
Shareholders' Agreement and any other Agreement referred to in
Clause 2.2; and
2.2 takes and accepts the assignment and transfer to it of all
rights and benefits and assumes the obligations and agrees to be
bound by all of the terms, conditions, restrictions, covenants
and obligations of the Assignor under:
2.2.1 the Shareholders' Agreement; and
2.2.2 any other agreement between the Assignor and the other
parties or to which they are parties relative to the
Shareholders' Agreement,
which are subsisting at or incurred or arise on and from the
time of acquisition by the New Shareholder; and
2.3 indemnifies and keeps indemnified and saves harmless the
Outgoing Entity from and against all claims, demands, expenses,
losses and damages which may directly or indirectly arise in
respect of Clauses 2.1 and 2.2.
3
3 Each of the Continuing Entities and the Company hereby consent to the
transfer of Shares from the Outgoing Entity to the New Shareholder
pursuant to Clause 8 of the Shareholders' Agreement and agree to
execute all such further documents and take such further action as may
be necessary to give full effect to the terms thereof.
4 For the purposes of the Shareholders' Agreement the address of the New
Shareholder to which all notices, consents, requests and other
documents required to be given or sent shall be as follows:
[here insert the address of the New Shareholder].
5 This Deed shall be governed by and interpreted in accordance with the
laws for the time being in force in the State of New South Wales and
each party, including the New Shareholder, submits to the non-exclusive
jurisdiction of the Courts of or exercising jurisdiction in that State.
6 This Deed may be executed in any number of counterparts, each of which
shall be deemed an original but all of which shall constitute one and
the same instrument.
IN WITNESS WHEREOF the parties have executed this Deed on the date written
above.
THE COMMON SEAL of PRAXIS )
PHARMACEUTICALS AUSTRALIA PTY )
LIMITED (ACN 082 811 630) was hereto )
affixed in accordance with its Constitution )
in the presence of: )
-------------------------------------------- Director
-------------------------------------------- Name of Director (Print)
-------------------------------------------- Director/Secretary
-------------------------------------------- Name of Director/Secretary (Print)
4
EXECUTED by PRAXIS )
PHARMACEUTICALS INC. by its )
authorised officer in the presence of: )
--------------------------------------- Authorised Officer
--------------------------------------- Name of Authorised Officer (Print)
--------------------------------------- Title
EXECUTED BY PERPETUAL TRUSTEES
NOMINEES LIMITED (ACN 000 341 533)
THE COMMON SEAL of ROTHSCHILD )
BIOSCIENCE MANAGERS LIMITED )
(ACN 072 515 247) was hereto affixed in )
accordance with its Constitution in the )
presence of: )
---------------------------------------- Director
---------------------------------------- Name of Director (Print)
---------------------------------------- Director/Secretary
---------------------------------------- Name of Director/Secretary (Print)
EXECUTED BY NEW SHAREHOLDER
(ACN ### ### ###)
SCHEDULE 3
----------
AMENDMENT TO CONSTITUTION
A"
CORPORATIONS LAW
----------------
A COMPANY LIMITED BY SHARES
---------------------------
CONSTITUTION
------------
-- of --
PRAXIS PHARMACEUTICALS AUSTRALIA
--------------------------------
PTY. LIMITED
------------
I N D E X
---------
CLAUSE SUBJECT MATTER PAGE
------ -------------- ----
1. DEFINITIONS..........................................................3
2. INTERPRETATION.......................................................8
3. PROPRIETARY COMPANY..................................................8
4. EXERCISE OF POWERS...................................................9
5. SHARE CAPITAL........................................................9
6. BROKERAGE AND COMMISSION............................................21
7. OWNERSHIP OF SHARES.................................................22
8. VARIATION OF RIGHTS.................................................22
9. CERTIFICATES........................................................22
10. CALLS ON SHARES.....................................................23
11. FORFEITURE OF SHARES................................................24
12. LIEN................................................................25
13. TAXATION LIEN.......................................................26
14. TRANSFER OF SHARES..................................................27
15. TRANSMISSION OF SHARES..............................................30
16. CONVERSION AND REDUCTION OF SHARE CAPITAL...........................31
17. GENERAL MEETINGS....................................................31
2
18. PROCEEDINGS AT GENERAL MEETINGS.....................................33
19. VOTES OF MEMBERS....................................................34
20. PROXIES.............................................................35
21. BODY CORPORATE REPRESENTATIVE.......................................36
22. ATTORNEY OF MEMBERS.................................................37
23. MEETINGS OF CLASSES OF SHAREHOLDERS.................................38
24. DIRECTORS...........................................................38
25. DISQUALIFICATION OF DIRECTORS.......................................39
26. MANAGING DIRECTOR...................................................41
27. ALTERNATE OR SUBSTITUTE DIRECTORS...................................41
28. POWERS AND DUTIES OF DIRECTORS......................................42
29. PROCEEDINGS OF DIRECTORS............................................43
30. SECRETARY...........................................................45
31. MINUTES.............................................................45
32. SEAL AND EXECUTION OF DOCUMENTS.....................................46
33. DIVIDENDS...........................................................46
34. RESERVES AND PROVISIONS.............................................47
35. ACCOUNTS............................................................49
36. NOTICES.............................................................49
37. WINDING UP..........................................................50
38. INDEMNITY AND INSURANCE.............................................51
39. DEADLOCK............................................................52
CONSTITUTION OF PRAXIS PHARMACEUTICALS AUSTRALIA PTY.
-----------------------------------------------------
LIMITED
-------
1. DEFINITIONS
-----------
1.1 In this Constitution the following expressions shall unless there
is something in the subject or context inconsistent therewith have
the meanings hereunder set out --
1.1.1 "ALLOTMENT DATE" means in relation to a Series A Preferred
Share the date upon which that Series A Preferred Share is
issued;
1.1.2 "BOARD" means the Board of Directors of the Company from
time to time or any committee thereof;
1.1.3 "BUSINESS DAY" means a day on which trading banks are open
for business in Sydney, New South Wales;
1.1.4 "CALL" includes an instalment of a call payable upon a
Share;
1.1.5 "CLOSING DATE" means the date fixed by the Directors as
the date on which Shares or securities of the Company
pursuant to the Public Offering are issued;
1.1.6 "COMMENCEMENT DATE" means the date on which a special
resolution is passed by the Members to adopt this
Constitution;
1.1.7 "CONSTITUTION" shall mean this Constitution as
supplemented substituted or amended from time to time;
1.1.8 "CONVERSION DATE" means in relation to a Series A
Preferred Share the first to occur of the following dates
-
1.1.8.1 the date expiring seven (7) Business Days after
receipt by the Company of a Conversion Notice;
or
1.1.8.2 the Specified Conversion Date;
1.1.9 "CONVERSION NOTICE" means a notice given by a Preferred
Holder to the Company in accordance with the provisions of
Clause 5.7;
1.1.10 "CONVERSION PERIOD" means in relation to a Series A
Preferred Share the period commencing on the Allotment
Date and terminating on the Redemption Date;
1.1.11 "CONVERSION RATE" means in relation to each Series A
Preferred Share required to be converted on the Conversion
Date applicable thereto, one Ordinary Share subject
however to such adjustment (if any) as may be required
pursuant to the provisions of Clauses 5.7.8 or 5.7.9;
1.1.12 "DIRECTORS" means the Directors for the time being or such
number of them as have authority to act for the Company
acting as a body
4
and includes a person duly appointed and for the time
being acting as an attorney for a Director or as an
alternate Director;
1.1.13 "DIVIDEND" means -
1.1.13.1 in relation to each Ordinary Share, such
dividend as the Directors may from time to time
determine in accordance with the provisions of
Clause 33; and
1.1.13.2 in relation to each Series A Preferred Share,
the dividend calculated by reference to the
Dividend Rate and payable to each Preferred
Holder on the Dividend Payment Date;
and includes any bonus and interim Dividend;
1.1.14 "DIVIDEND PAYMENT DATE" in relation to each Series A
Preferred Share means the first to occur of the following
dates -
1.1.14.1 the date of the occurrence of a Liquidity Event;
or
1.1.14.2 the Redemption Date; or
1.1.14.3 the date of disposal of the whole of the
property, business and undertaking of the
Company; or
1.1.14.4 the date of voluntary merger or amalgamation of
the Company;
1.1.15 "DIVIDEND RATE" means in relation to a Series A Preferred
Share such rate as shall yield to the Preferred Holder
thereof a dividend equal to 10% per annum of the Issue
Price of that Share calculated from and including the
Allotment Date;
1.1.16 "FOUNDING SHAREHOLDER" means Praxis Pharmaceuticals, Inc.;
1.1.17 "FOUNDING SHARES" means Ordinary Shares in the capital of
the Company registered in the name of the Founding
Shareholder as at the Commencement Date;
1.1.18 "HOLDING COMPANY" has the same meaning as is ascribed to
that expression in Section 9 of the Law; ---------------
1.1.19 "ISSUE PRICE" means -
1.1.19.1 in respect of a Series A Preferred Share the sum
of $1.00; and
1.1.19.2 in respect of an Ordinary Share the sum of
$1.00;
1.1.20 "LAW" means the Corporations Law;
1.1.21 "LIQUIDITY EVENT" means -
5
1.1.21.1 a disposal of the whole or substantially the
whole of the property, business and undertaking
of the Company; or
1.1.21.2 Winding Up of the Company;
1.1.22 "MEMBER" means any person who qualifies as a member of the
Company and includes any person who is the holder of a
Share in the capital of the Company;
1.1.23 "MONTH" means calendar month;
1.1.24 "OFFICE" or "OFFICE OF THE COMPANY" means the registered
office of the Company for the time being;
1.1.25 "ORDINARY HOLDER" means each person who is registered as
the holder of an Ordinary Share in the capital of the
Company;
1.1.26 "ORDINARY SHARE" means a fully paid Ordinary Share in the
capital of the Company issued in accordance with the
provisions of Clause 5;
1.1.27 "PAID UP" includes credited as paid up;
1.1.28 "PREFERRED HOLDER" means each person who is registered as
the holder of a Series A Preferred Share in the capital of
the Company;
1.1.29 "PRESENT" when used in relation to a Member at a meeting
means present in person, or by proxy, or by attorney, or
if a corporation, by a representative appointed pursuant
to this Constitution or the Law;
1.1.30 "PROPOSING TRANSFEROR" means an Ordinary Holder or
Preferred Holder which proposes to dispose of any Shares
in the capital of the Company;
1.1.31 "PUBLIC OFFERING" means an offer to the public of Shares
or securities of the Company raising gross proceeds
(before costs) of not less than $10 million, at a minimum
price being three times the Issue Price of the Series A
Preferred Shares;
1.1.32 "REDEMPTION AMOUNT" means the aggregate of the following
amounts calculated in respect of each Series A Preferred
Share as at the Redemption Date namely -
1.1.32.1 the Issue Price; and
1.1.32.2 the Dividend;
1.1.33 "REDEMPTION DATE" means in respect of a Series A Preferred
Share the date expiring 60 Business Days after the date of
receipt by the Company of a Redemption Notice;
6
1.1.34 "REDEMPTION NOTICE" means a notice given by a Preferred
Holder to the Company in accordance with the provisions of
Clause 5.8;
1.1.35 "REGISTER" means the register of Members of the Company
maintained pursuant to the Law;
1.1.36 "RELEVANT EVENT" means, in relation to a Shareholder -
1.1.36.1 that Shareholder making any arrangement or
composition with its creditors generally or any
or all of them (other than for the purposes of a
bona fide scheme of solvent amalgamation or
reconstruction to which the other Shareholders
have consented in writing);
1.1.36.2 that Shareholder becoming insolvent within the
meaning of that expression in the Law;
1.1.36.3 a receiver, manager, receiver and manager,
administrator or trustee or other like custodian
being appointed by any person over all or a
substantial part of that Shareholder's
undertaking or assets and such receiver,
manager, receiver and manager, administrator,
trustee or other like custodian is not
discharged within 60 days of being appointed;
1.1.36.4 that Shareholder having a petition or summons
lodged or an order made or a resolution passed
for its liquidation or winding up (other than a
voluntary liquidation for the purposes of a bona
fide scheme of solvent amalgamation or
reconstruction to which the other Shareholders
have consented in writing) which is not
discharged or revoked within 30 days; or
1.1.36.5 the power, whether held directly or indirectly
and by whatever means (whether or not
enforceable at law or in equity) -
1.1.36.5.1 to exercise or control the right to
vote attached to no less than 50%
of the issued Shares in the
Shareholder;
1.1.36.5.2 to sell, transfer, assign or
otherwise dispose of or exercise
any such right over not less than
50% of the issued Shares of that
Shareholder;
1.1.36.5.3 to control the composition of the
board of directors of that
Shareholder (which shall be
determined having regard to section
47 of the Corporations Law); or
7
1.1.36.5.4 to determine substantially the
conduct of that Shareholder's
business activities,
shall reside in any persons other than those
holding such power on the date on which that
Shareholder became a Shareholder;
1.1.37 "RESTRICTED PERIOD" means in relation to a Series A
Preferred Share the period commencing on the Allotment
Date and expiring on the fifth anniversary of the
Allotment Date;
1.1.38 "SHARES OR SECURITIES" has the same meaning ascribed
thereto in the Law;
1.1.39 "SHAREHOLDER" means any person who is the registered
holder of a Share in the capital of the Company;
1.1.40 "SERIES A PREFERRED SHARE" means a Series A Redeemable
Convertible Preferred Share issued pursuant to and in
accordance with the provisions of Clause 5;
1.1.41 "SPECIFIED CONVERSION DATE" means the date expiring seven
Business Days after the date of a notice having been given
by the Company in accordance with Clause 5.7.11;
1.1.42 "SPECIFIED PROPORTION" means, in relation to a
Shareholder, a fraction the numerator of which is the
number of Shares held by that Shareholder for the time
being and the denominator of which is the total number of
Shares (including the Shares held by the relevant
Shareholder) on issue for the time being (assuming that in
so calculating the number of Shares held by a Shareholder
and the total number of Shares on issue, all Series A
Preferred Shares have been converted into Ordinary
Shares);
1.1.43 "TAX ACT" means the Income Tax Assessment Xxx 0000 and the
Income Tax Assessment Xxx 0000 of the Commonwealth of
Australia and all Acts encompassed thereby;
1.1.44 "TRANSFER NOTICE" means a notice given by a Preferred
Holder or Ordinary Holder to the Company in accordance
with the provisions of Clause 5.10.4 or Clause 14;
1.1.45 "TRANSFER SHARES" means Shares which a Proposing
Transferor proposes to sell, transfer, assign or otherwise
dispose of;
1.1.46 "WINDING UP" means -
1.1.46.1 an order being made for the winding up or
dissolution of the Company;
1.1.46.2 a liquidator or provisional liquidator being
appointed to the Company; or
8
1.1.46.3 the Company being otherwise wound up,
deregistered, dissolved or liquidated; and
1.1.47 "WRITING" or "WRITTEN" includes printed lithographed or
represented or reproduced in a visible form by any other
means.
2. INTERPRETATION
2.1 In this Constitution --
2.1.1 references to any officer of the Company include any
person acting for the time being as such officer;
2.1.2 words importing the singular include the plural and vice
versa;
2.1.3 words importing any gender shall mean and include all
other genders;
2.1.4 words importing persons include companies corporations
partnerships associations bodies and entities (whether
incorporated or not) and vice versa;
2.1.5 words or expressions defined in the Law but not defined in
this Constitution shall, if not inconsistent with the
subject or context, bear the same meaning in this
Constitution; and
2.1.6 all references in this Constitution to any statutory
enactment or law shall mean and be construed as references
to that enactment or law as amended or modified or
re-enacted from time to time and to the corresponding
provisions of any similar enactment or law of any other
relevant jurisdiction and includes regulations and
statutory instruments thereunder.
2.2 The headings to Clauses or groups of Clauses shall not affect the
construction or interpretation of this Constitution.
2.3 The replaceable rules contained in the Law shall not apply to the
Company.
3. PROPRIETARY COMPANY
3.1 The Company is a proprietary company.
3.2 The number of Members of the Company is limited to no more than
fifty (counting joint holders of Shares as one person and not
counting any person in the employment of the Company or any of its
subsidiaries or any person who was an employee of the Company or
any of its subsidiaries when he became a Member).
9
3.3 The Company shall not engage in any activity that would require
the lodgement of a prospectus under the Law save and except as
authorised by the Law.
4. EXERCISE OF POWERS
The Company may by resolution or special resolution as the Law requires
exercise from time to time any power which by the Law a company limited
by Shares may exercise if authorised by its constitution.
5. SHARE CAPITAL
5.1 Shares in the capital of the Company which are issued from time to
time shall be classified as either -
5.1.1 Ordinary Shares;
5.1.2 Series A Preferred Shares; or
5.1.3 such other classification as the Directors may, subject to
any agreement, arrangement or understanding existing
between the Company and all or any other Members of the
Company, determine at the time of issue.
5.2 Notwithstanding any other provisions of this Constitution but
subject always to any agreement, arrangement or understanding
existing between the Company and all or any other Members of the
Company, the Directors may issue Shares designated as Series A
Preferred Shares at such time and to such person or persons as the
Directors may, in their absolute discretion, think fit and, upon
issue, such Series A Preferred Shares shall confer on the
Preferred Holder thereof the rights contained in this Clause 5.
5.3 Series A Preferred Shares shall be issued at the Issue Price and
each Preferred Holder shall -
5.3.1 on the Dividend Payment Date (but not otherwise) - be
entitled in respect of each Series A Preferred Share until
the Conversion Date or Redemption Date (whichever shall
first occur but not otherwise) to a cumulative
preferential Dividend calculated by reference to the
Dividend Rate in respect of each Series A Preferred Share,
which Dividend shall be payable by the Company on the
Dividend Payment Date and all other Clauses of the
Constitution relating to the right of the Company in
general meeting or of the Directors to declare Dividends
shall be read subject to this provision;
5.3.2 in the event of an occurrence of a Liquidity Event or the
voluntary merger or amalgamation of the Company, be
entitled to receive an amount equal to the Redemption
Amount in respect of each Series
10
A Preferred Share in priority to the holders of all other
Shares or classes of Shares issued in the capital of the
Company but shall not otherwise participate in any further
or other distributions of surplus assets or profits of the
Company;
5.3.3 be entitled to receive:
5.3.3.1 notices of general meetings;
5.3.3.2 annual financial report certified and audited
by a nationally recognised accounting firm;
5.3.3.3 financial statements (including income
statements, profit and loss statements, balance
sheets and cash flow statements) on a regular
basis at times coinciding with each board
meeting;
5.3.3.4 an annual operating and financial plan agreed to
by the board prior to the beginning of each
financial year and any revisions to the plan
promptly upon their adoption by the board; and
5.3.3.5 quarterly technical summary updates measured
against milestones, within 14 days of the each
of each quarter;
5.3.4 have the same rights as holders of Ordinary Shares to
attend (whether in person, by proxy or attorney or, if a
corporation, by representative) and (subject to the
provisions of Clause 5.5) to vote at all general meetings.
5.4 For the purposes of Clause 5.3.1, if the Dividend Payment Date is
not a Business Day, then payment of the Dividend is to be made on
the preceding Business Day.
5.5 For the purposes of Clause 5.3.4, the written consent of the
holders of two-thirds of the Series A Preferred Shares or the
sanction of a resolution passed by the holders of two-thirds of
the Series A Preferred Shares shall be required at any general
meeting convened for the purpose of -
5.5.1 increasing the number of Directors beyond five members;
5.5.2 the issue of any Share or securities in the Company (other
than Shares or securities issued under a board approved
employee share option plan for incentive purposes;
5.5.3 reducing the capital of the Company;
5.5.4 Winding Up the Company;
5.5.5 sanctioning a disposal of the main undertaking of the
Company;
5.5.6 sanctioning a voluntary merger or amalgamation of the
Company; or
11
5.5.7 where the proposition or resolution before the meeting
directly or indirectly affects, varies or abrogates, in
any manner, any of the rights, privileges or conditions
attaching to the Series A Preferred Shares.
5.6 If, prior to the Conversion Date of a Series A Preferred Share,
there is made to any of the holders of Ordinary Shares an offer or
invitation by the Company to subscribe for Shares or other
securities in the Company (other than Shares or securities issued
under a board approved employee Share option plan for incentive
purposes) (whether by way of renounceable or non-renounceable
rights or otherwise), the Company shall procure that there is
extended to each Preferred Holder the same offer or invitation as
that Preferred Holder would have received if, immediately prior to
the relevant date for determining entitlements of the holders of
Ordinary Shares in respect of the offer or invitation, all of the
Preferred Holders had delivered to the Company a Conversion Notice
in accordance with the provisions of Clause 5.7.1.
5.7 The following provisions shall apply in respect of the conversion
of Series A Preferred Shares -
5.7.1 each Preferred Holder shall be entitled at any time during
the Conversion Period to require the Company to convert
all or any of the Series A Preferred Shares held by him in
the capital of the Company into Ordinary Shares by
delivering a Conversion Notice to the Company specifying
the number of Series A Preferred Shares required to be
converted;
5.7.2 on the Conversion Date each Series A Preferred Share
specified in a Conversion Notice shall be converted
(without any further action required by any Preferred
Holder) into such number of Ordinary Shares calculated in
accordance with the Conversion Rate and to the extent that
any fraction of a Series A Preferred Share would be
required to be converted, then the number of Ordinary
Shares shall be adjusted to the nearest whole Ordinary
Share and no cash adjustment will be made in respect of
any remaining fractional number of Series A Preferred
Shares and all such Series A Preferred Shares shall on the
Conversion Date cease to have any preference or priority;
5.7.3 each Ordinary Share issued on conversion of any Series A
Preferred Shares shall, as and from the Conversion Date,
rank in all respects pari passu with the Ordinary Shares
then on issue in the capital of the Company;
5.7.4 each Preferred Holder shall upon the Conversion Date be
bound to deliver to the Company the certificate for all of
the Series A Preferred Shares held by him and the Company
shall issue to each Preferred Holder a certificate for the
Ordinary Shares issued on conversion free of any charges
but the failure by any Preferred Holder to surrender a
certificate for any Series A Preferred Share
12
shall not preclude, prejudice or affect the conversion of
such Series A Preferred Share;
5.7.5 if a takeover bid (as defined in the Law) is made for all
of the Ordinary Shares at any time after the Allotment
Date of any Series A Preferred Shares and prior to the
Conversion Date, the Company shall give to each Preferred
Holder written notice of the takeover bid within 5
Business Days of receiving notice of the takeover bid from
the offeror;
5.7.6 where notice has been given by the Company pursuant to the
provisions of Clause 5.7.5, a Preferred Holder may, within
fourteen (14) Business Days from the date of receipt of
such notice, deliver a Conversion Notice and the
certificate or certificates relating to all of the Series
A Preferred Shares to the Company stating that he requires
the Company to convert all of the Series A Preferred
Shares held by him into Ordinary Shares in accordance with
the provisions of Clause 5.7.5;
5.7.7 upon receipt by the Company of a Conversion Notice from a
Preferred Holder in accordance with the provisions of
Clause 5.7.6 the Company shall, pursuant to a resolution
passed at a meeting of the Directors of the Company,
convert all of the Series A Preferred Shares specified in
the Conversion Notice into Ordinary Shares in accordance
with the provisions of Clause 5.7.2;
5.7.8 in the event of a reconstruction (including consolidation,
subdivision, reduction or return) of the issued capital of
the Company at any time prior to the Conversion Date, the
Company shall reconstruct the basis for conversion of the
Series A Preferred Shares, in the same proportion as the
issued capital of the Company is reconstructed and in a
manner which will not result in any additional benefits
being conferred on any Preferred Holder which are not
otherwise thereby conferred on the members of the Company
(subject to the same provisions with respect to rounding
of entitlements as sanctioned by the meeting of members
approving the reconstruction of capital) but in all other
respects the terms of the conversion of Series A Preferred
Shares shall remain unchanged;
5.7.9 any adjustment to the rights attaching to Series A
Preferred Shares in accordance with the provisions of
Clause 5.7.8 shall not take effect until the Conversion
Date and shall not be taken to be a modification of the
right of conversion hereby granted;
5.7.10 if after the Allotment Date the Company issues any new
Shares, options, warrants for, or other securities (other
than Shares or securities issued under a board approved
Share option plan for incentive purposes) of the Company
convertible into Shares at a price per Share or security
less than the Issue Price, the Conversion Rate shall be
adjusted so that the number of Ordinary
13
Shares issued on the conversion of the Series A Preferred
Shares will be calculated as follows -
IP
A = Cx --
B
where:
A = the number of Ordinary Shares to be issued on
the conversion of each Series A Preferred Share
C = the number of Ordinary Shares that would have
been issued on the conversion of each Series A
Preferred Share had it occurred immediately
prior to the issue of the new Shares or
securities
IP = the Issue Price
B = (SxIP) + (NxRP)
---------------
S + N
S = the number of Series A Preferred Shares on issue
N = the number of new Shares or securities to be
issued
RP = the price at which such new Shares or securities
are to be issued;
5.7.11 notwithstanding anything hereinbefore contained the
Company may, at any time after the Closing Date, by notice
in writing to each Preferred Holder require all of the
Series A Preferred Shares on issue to be converted into
Ordinary Shares; and
5.7.12 where notice has been given by the Company pursuant to the
provisions of Clause 5.7.11, the Company shall (without
any further action required of it) convert all of the
Series A Preferred Shares into Ordinary Shares in
accordance with the provisions of Clause 5.7.2.
5.8 The following provisions shall apply in respect of any redemption
of Series A Preferred Shares -
5.8.1 each Preferred Holder shall be entitled, on the occurrence
of a Liquidity Event or, at any time after the Restricted
Period, to require the Company to redeem all or any of the
Series A Preferred Shares held by him in the capital of
the Company by delivering a Redemption Notice to the
Company specifying the number of Series A Preferred Shares
required to be redeemed and a copy of such Redemption
Notice shall be delivered by such Preferred Holder to each
other Preferred Holder;
5.8.2 within 60 days after receipt of a copy of a Redemption
Notice pursuant to the provision of Clause 5.8.1 by each
other Preferred
14
Holder, such other Preferred Holders shall be entitled to
require the Company to redeem all or any of the Series A
Preferred Shares held by them in the capital of the
Company by delivering a Redemption Notice to the Company
specifying the number of Series A Preferred Shares
required to be redeemed and such Redemption Notice shall
be deemed to have been served on the Company on the same
date as the Redemption Notice referred to in Clause 5.8.1;
5.8.3 on the Redemption Date each Preferred Holder shall be
bound to surrender to the Company the certificate for the
Series A Preferred Shares to be redeemed and where any
certificate includes any Series A Preferred Shares which
are not specified in the Redemption Notice then the
Company shall issue to the Preferred Holder thereof a new
certificate therefor;
5.8.4 the failure by any Preferred Holder to surrender a
certificate in respect of any Series A Preferred Share
shall not prejudice or affect the redemption of any Series
A Preferred Shares specified in the Redemption Notice but
the Redemption Amount payable to the Preferred Holder in
accordance with the provisions of Clauses 5.8.5 and 5.8.6
shall, after the Redemption Date thereof, be paid by the
Company into a bank account established for the purpose of
holding such moneys and be held by the Company in trust
for that Preferred Holder and shall be paid to that
Preferred Holder forthwith after the relevant certificate
(or if it has been lost or misplaced, satisfactory
evidence of that fact and any indemnity and release in
favour of the Company in respect thereof) is delivered to
the Company;
5.8.5 upon receipt by the Company of a Redemption Notice
pursuant to the provisions of Clauses 5.8.1 and 5.8.2, the
Company shall redeem (out of any profits or moneys of the
Company or the proceeds of a new issue of Shares of the
Company made for that purpose) the Series A Preferred
Shares specified in each such Redemption Notice at the
Redemption Amount in accordance with the provisions of
Clause 5.8.6;
5.8.6 the Redemption Amount payable to any Preferred Holder in
accordance with the provisions of Clause 5.8.5 shall
(subject to the provisions of Clauses 5.8.7 and 5.8.8) be
satisfied as follows -
5.8.6.1 in the case of a Liquidity Event - in full on
the Redemption Date; and
5.8.6.2 after the Restricted Period - by ten (10) equal
instalments, the first of which shall become
payable by the Company on the Redemption Date
and thereafter on the first Business Day after
the expiration of each ensuing six month period;
15
5.8.7 notwithstanding the provisions of Clause 5.8.6, the
Company may at any time and from time to time pay to the
relevant Preferred Holder such sum or sums in reduction of
the Redemption Amount remaining unpaid;
5.8.8 if at the Redemption Date there are insufficient profits
or moneys available to the Company to pay the Redemption
Amount to any Preferred Holder in accordance with the
provisions of Clause 5.8.6, then the Company shall be
required to pay such amount as may be lawfully applied for
the purpose to each Preferred Holder pari passu and the
Company shall thereafter continue to apply funds of the
Company that may be lawfully applied for the purpose to
each Preferred Holder pari passu until the Redemption
Amount is paid in full;
5.8.9 upon payment of the Redemption Amount to the relevant
Preferred Holder, the Company shall cancel the Series A
Preferred Shares and shall cancel the certificate or
certificates relating to the Series A Preferred Shares so
redeemed.
5.9 For the purposes of this Constitution, any issue of further Series
A Preferred Shares ranking in priority, or any conversion of
existing Shares to Shares ranking equally or in priority to the
existing Series A Preferred Shares shall be deemed to be a
variation or abrogation of the rights attaching to the existing
Series A Preferred Shares.
5.10 Notwithstanding anything contained in the Constitution -
5.10.1 the Company shall refuse to register the transfer of any
Share unless the transferee has or the transferees have
entered into a deed, agreement, arrangement or
understanding with the Ordinary Holders, the Preferred
Holders and the Company, agreeing to be bound by such
agreement between the Ordinary Holders, Preferred Holders
and the Company (if any) as is then in force, and:
5.10.1.1 such transfer is permitted by, or is made
pursuant to and in accordance with, Clauses
5.10.4, 5.10.8 or 5.10.11 or the provisions of
any agreement in writing between all the
Ordinary Holders and all the Preferred Holders;
or
5.10.1.2 the proposed transferee is approved in writing
by all the Ordinary Holders and all the
Preferred Holders (other than the transferor of
the Share) before any instrument is executed to
give effect to such transfer and, subject to
such approval being given, Clause 5.10.2 shall
not apply to such transfer;
5.10.2 subject to Clause 5.10.3, the Company shall not be
entitled to decline to register the transfer of any Share
which otherwise qualifies under Clauses 5.10.1.1 or
5.10.1.2 or under the
16
provisions of any agreement in writing between all the
Ordinary Holders and all the Preferred Holders;
5.10.3 for the purpose of ensuring that a particular transfer of
Shares is permitted under this Constitution or under the
provisions of any agreement in writing between all the
Ordinary Holders and all the Preferred Holders, the
Company may require the transferor or the person named as
transferee in any transfer lodged for registration to
furnish the Company with such information and evidence as
the Company may think necessary or relevant and failing
such information or evidence being furnished to the
satisfaction of the Company within a period of 28 days
after such request, the Company shall be entitled to
refuse to register the transfer in question;
5.10.4 except as provided in Clauses 5.10.1 and 5.10.5, no Share
may be sold, transferred, assigned or otherwise disposed
of unless the following procedure is followed -
5.10.4.1 a Proposing Transferor shall be obliged to give
a notice in writing to the Company that the
Proposing Transferor desires to dispose of the
Transfer Shares and such Transfer Notice shall
specify:
5.10.4.1.1 the number and class of the Transfer
Shares;
5.10.4.1.2 the price at which the Proposing
Transferor wishes to dispose of the
Transfer Shares (the "Transfer
Price"); and
5.10.4.1.3 the identity of a person who has
indicated a bona fide willingness to
purchase the Transfer Shares at the
Transfer Price (the "Transferee");
5.10.4.2 the Transfer Notice shall constitute the Company
as the agent of the Proposing Transferor
empowered to sell the Transfer Shares (together
with all rights attaching thereto at the date of
the Transfer Notice or at any time thereafter)
at the Transfer Price on the terms of this
Clause 5.10.4;
5.10.4.3 the Transfer Notice shall not be revocable
except with the prior written consent of all the
Ordinary Holders and all the Preferred Holders;
5.10.4.4 within 7 days after the receipt of any Transfer
Notice, the Company shall serve a copy of that
Transfer Notice on all the Preferred Holders
other than the Proposing Transferor and in the
case of a deemed Transfer Notice, the Company
shall similarly serve notice on all
17
the Preferred Holders (including the Proposing
Transferor) notifying them that the same has
been deemed to have been given;
5.10.4.5 subject as provided otherwise in any agreement
in writing between all the Ordinary Holders and
all the Preferred Holders, the Transfer Shares
shall first be offered for purchase at the
Transfer Price by the Company to all the
Preferred Holders (other than the Proposing
Transferor) in the Specified Proportions of
those Preferred Holders;
5.10.4.6 any offer made pursuant to Clause 5.10.4.5 shall
be made by notice in writing and shall specify:
5.10.4.6.1 the number and class of the Transfer
Shares;
5.10.4.6.2 the proportionate entitlement of the
relevant Preferred Holder;
5.10.4.6.3 the Transfer Price; and
5.10.4.6.4 a period of 14 days within which the
offer must be accepted or shall
lapse;
5.10.4.7 if the Company does not receive acceptances in
respect of all the Transfer Shares within the
periods of the offers referred to in Clause
5.10.4.6, the Company shall forthwith give
notice in writing of that fact to the Proposing
Transferor and the remaining Transfer Shares in
respect of which acceptances have not been
received shall thereafter be offered, pro-rata,
to those Preferred Holders who have accepted an
offer within the periods of the offers referred
to in Clause 5.10.4.6 and any offer made
pursuant to this Clause shall be made in
accordance with the provisions of Clause
5.10.4.6, except that the period within which
all offers must be accepted before lapsing shall
be 14 days;
5.10.4.8 if the Company does not receive acceptances in
respect of all the Transfer Shares within the
periods of the offers referred to in Clauses
5.10.4.6 or 5.10.4.7, the Company shall
forthwith give notice in writing of that fact to
the Proposing Transferor, and the Proposing
Transferor may within a period of 3 months after
the date of such notice sell the Transfer Shares
to the Transferee named in the Transfer Notice
at any price which is not less than the Transfer
Price (after deducting, where appropriate, any
Dividend declared, paid or made after the date
of the Transfer Notice in
18
respect of the Transfer Shares and which has
been or is to be retained by the Proposing
Transferor);
5.10.4.9 if any person or persons (including any other
Shareholder) (the "Purchasers") agree within the
periods referred to in Clauses 5.10.4.6,
5.10.4.7 or 5.10.4.8 (as the case may be) to
purchase all of the Transfer Shares, the Company
shall forthwith give notice in writing to the
Proposing Transferor and to the Purchasers and
the Proposing Transferor shall thereupon become
bound upon payment of the Transfer Price to the
Proposing Transferor (whose receipt shall be a
good discharge to the Purchaser and the Company
therefor none of whom shall be bound to see to
the application thereof) to transfer to each
Purchaser those Transfer Shares accepted by them
and every such notice shall state the name and
address of each Purchaser, the number of
Transfer Shares agreed to be purchased by it and
the place and time appointed by the Company for
the completion of the purchase (being not less
than 7 days nor more than 28 days after the date
of the said notice and not being at a place
outside New South Wales) and subject to the
giving of such notice, the purchase shall be
completed at the time and place appointed by the
Company;
5.10.4.10 if a Proposing Transferor, having become bound
to transfer any Transfer Shares pursuant to this
Clause 5.10.4, makes default in transferring the
same the Company may authorise some person (who
shall be deemed to be the attorney of the
Proposing Transferor for the purpose) to execute
the necessary instrument of transfer of such
Transfer Shares and may deliver it on its behalf
and the Company may receive the purchase money
and shall thereupon (subject to such instrument
being duly stamped) cause the Transferee to be
registered as the holder of such Transfer Shares
and shall hold such purchase money on behalf of
the Proposing Transferor and the Company shall
not be bound to earn or pay interest on any
money so held and the receipt of the Company for
such purchase money shall be a good discharge to
the Transferee (who shall not be bound to see to
the application thereof) and after the name of
the Transferee has been entered in the register
of members in purported exercise of the power
conferred pursuant to this Clause, the validity
of the proceedings shall not be questioned by
any person;
5.10.4.11 without limiting the provisions of Clause
5.10.3, the Company may require to be satisfied
that any Shares
19
being transferred by the Proposing Transferor
pursuant to Clause 5.10.4.8 are being
transferred in pursuance of a bona fide sale for
the consideration stated in the transfer and if
not so satisfied may refuse to register the
instrument of transfer;
5.10.5 upon the happening of a Relevant Event, the relevant
Shareholder shall be deemed to have immediately given a
Transfer Notice in respect of all the Shares registered in
the name of that Shareholder;
5.10.6 in the case of a Transfer Notice being given pursuant to
the provisions of Clause 5.10.5, the price per Transfer
Share which is so specified in the Transfer Notice shall
be -
5.10.6.1 such price as shall be agreed in writing between
all of the Shareholders; or
5.10.6.2 in the absence of such agreement within 14 days
after the date on which the Transfer Notice is
deemed to have been given, the price will be
determined by an independent Chartered
Accountant (the "Expert") nominated by agreement
between all the Shareholders or, failing such
nomination within 14 days after the request of
any Shareholder to the others therefor,
nominated at the request of any Shareholder by
the President or other head for the time being
of the Institute of Chartered Accountants of
Australia; the Expert shall act as an expert and
not as an arbitrator and his written
determination shall, in the absence of manifest
error be final and binding on all the
Shareholders and for the foregoing purposes, the
Expert shall have access to all books of account
and records and all vouchers, cheques, papers
and documents which in any way relate to the
Company and the business of the Company;
5.10.7 the Expert will certify in writing the sum which in his
opinion is the fair market value of the Transfer Shares
and the price per Share shall be the sum equal to the fair
market value of the Transfer Shares (of that class)
certified by that Expert divided by the number of Transfer
Shares (of that class) and the Company will use its best
endeavours to procure that the Expert determines the price
per Transfer Share within 21 days of being requested to do
so and the costs and expenses of the Expert in determining
the price per Share shall be borne as to one half by the
Proposing Transferor and as to the other half by the
Purchasers (as defined under Clause 5.10.4.9) pro rata
according to the number of Transfer Shares purchased by
them;
5.10.8 if a Proposing Transferor is permitted under the
provisions of Clause 5.10 to sell all or any of its Shares
to a third party
20
purchaser and the provisions of Clause 5.10.4 have been
complied with or waived, each of the Preferred Holders
will have the right to require by notice in accordance
with Clause 5.10.9 the Proposing Transferor to procure
that the third party acquire Shares from each of the
Preferred Holders who delivers such a notice, the number
of Shares to be no greater than the number calculated by
multiplying the number of Transfer Shares by the Specified
Proportion of that Preferred Holder, at the same price per
Share and on the same terms and conditions as the third
party purchaser is to acquire the Proposing Transferor's
Shares and, if any of the other Preferred Holders gives
notice pursuant to Clause 5.10.9, the Proposing Transferor
will only be permitted to sell its Shares to the third
party purchaser if the third party purchaser also acquires
the relevant number of the other Preferred Holders Shares
at the same price per Share and on the same terms and
conditions;
5.10.9 a notice for the purposes of Clause 5.10.8 shall be in
writing addressed to the Proposing Transferor and given to
the Proposing Transferor within 14 days of receipt by the
other Preferred Holders of a notice from the Proposing
Transferor specifying the identity of the third party
purchaser, price per Share and terms and conditions on
which the Proposing Transferor's Shares are to be sold;
5.10.10 a Preferred Holder other than the Proposing Transferor may
sell its Shares to the third party purchaser in accordance
with Clause 5.10.8 without the need to comply with the
procedure set out in Clause 5.10.4;
5.10.11 an obligation to transfer a Share under the provisions of
this Clause shall be deemed to be an obligation to
transfer the entire legal and beneficial interest in such
Share free from any encumbrance; and
5.10.12 the provisions of this Clause 5.10 may be waived in whole
or in part in any particular case with the prior written
consent of all the Ordinary Holders and all the Preferred
Holders.
5.11 If there is any inconsistency between the provisions of this
Clauses 5.2 to 5.10 (inclusive) and any other Clauses, the
provisions of those Clauses shall prevail.
5.12 Subject to the provisions of Clauses 5.2 to 5.10 (inclusive) and
to the provisions of the Law with respect to the consent of the
Members affected and subject and without prejudice to any special
rights attached to any Shares for the time being issued, all
Shares shall be under the absolute control of the Directors who
may from time to time --
5.12.1 issue any Share;
5.12.2 create any class or new class of Ordinary Shares or
Preference Shares (including a class of Preference Shares
which are or at the
21
option of the Company are to be redeemed the terms and
manner of redemption being (subject to the Law) determined
by the Directors upon the issue of the Shares);
5.12.3 reclassify any Share;
5.12.4 allot or grant options in respect of or otherwise dispose
of any Shares to such persons on such terms and conditions
and at such times and subject or not to the payment of any
part of the amount of the Shares in cash as the Directors
may determine; 5.12.5 allot any new Shares as fully or
partly paid Shares as part payment for any property bought
by the Company or for services rendered to the Company;
5.12.5 allot any new Shares as fully or partly paid Shares as
part payment for any property bought by the Company or for
services rendered to the Company;
5.12.6 make any such issue and create any such new class with
such preferred deferred or other special rights or subject
to such rights of compulsory sale or pre--emption or
subject to such restrictions whether in regard to
Dividends, voting, return of Share capital or other
matters as the Directors may determine.
5.13 The Company may, in accordance with the provisions of the Law, buy
back its own Shares.
6. BROKERAGE AND COMMISSION
6.1 The Company may pay brokerage or commission to any person for
subscribing or agreeing to subscribe (whether absolutely or
conditionally) for any Shares or debentures of the Company or
procuring or agreeing to procure subscriptions (whether absolute
or conditional) for any Shares or debentures of the Company and so
that --
6.1.1 the statutory conditions and requirements for the time
being in force (if any) shall be observed and complied
with;
6.1.2 the brokerage or commission shall not exceed 10% of the
price at which the Shares or debentures are issued unless
otherwise determined by the Directors;
6.1.3 the brokerage or commission may be paid either in cash or
in fully paid Shares or debentures of the Company of any
class in such other manner as the Directors may determine;
and
6.1.4 the Company may grant to any person so subscribing or
agreeing to subscribe or procuring or agreeing to procure
subscriptions an option to require the Company to issue to
himself or his nominee any further Shares of the Company.
6.2 The powers conferred by Clause 6.1 upon the Company may be
exercised on its behalf by the Directors.
22
7. OWNERSHIP OF SHARES
Except as required by law no person shall (unless the Directors in any
case otherwise determine) be recognized by the Company as holding any
Share upon any trust and the Company shall not be bound by or be
compelled in any way to recognize (even when having notice thereof) any
equitable, contingent, future or partial interest in any Share or unit
of a Share or (except only as by this Constitution or by law otherwise
provided) any other rights in respect of any Share except an absolute
right to the entirety thereof in the registered holder.
8. VARIATION OF RIGHTS
8.1 Subject to the provisions of Clause 5, if at any time the issued
Share capital is divided into different classes of Shares the
rights attached to any class (unless otherwise provided by the
terms of issue of the Shares of that class) may be varied with
either -
8.1.1 the written consent of the holders of not less than 75%
of the issued Shares of that class; or
8.1.2 the sanction of a special resolution passed at a separate
general meeting of the holders of the Shares of that
class.
8.2 Without limiting the generality of Clause 5.9 the rights conferred
upon the holders of the Shares of any class issued with preferred
or other rights shall not, unless otherwise expressly provided by
the terms of issue of the Shares of that class, be deemed to be
varied by the creation or issue of further Shares ranking equally
therewith.
9. CERTIFICATES
9.1 Every person whose name is entered as a Member in the Register
shall without payment be entitled to a certificate (whether under
the common seal of the Company or not) in accordance with the Law.
9.2 In respect of a Share or Shares held jointly by several persons
the Company shall not be bound to issue more than one certificate
and delivery of a certificate for a Share to one of several joint
holders shall be sufficient delivery to all.
23
10. CALLS ON SHARES
10.1 The Directors may from time to time make calls upon the Members in
respect of any money unpaid on their Shares and not by the
conditions of issue thereof made payable at fixed times but so
that -
10.1.1 no call shall be payable earlier than one month from the
date fixed for the payment of the last preceding call; and
10.1.2 each Member shall (subject to receiving at least 14 days'
notice specifying the time or times and place of payment)
pay to the Company, at the time or times and place so
specified, the amount called on his Shares.
10.2 A call may be revoked or postponed as the Directors may determine.
10.3 A call shall be deemed to have been made at the time when the
resolution of the Directors authorizing the call was passed and
may be required to be paid by instalments.
10.4 The joint holders of a Share shall be jointly and severally liable
to pay all calls in respect thereof.
10.5 If a sum called in respect of a Share is not paid before or on the
day appointed for payment thereof, the person from whom the sum is
due shall pay interest on the sum from the day appointed for
payment thereof to the time of actual payment at such rate not
exceeding 8% per annum, as the Directors may determine but the
Directors shall be at liberty to waive payment of that interest
wholly or in part.
10.6 Any sum which by the terms of issue of a Share becomes payable on
issue or at any fixed date shall, for the purposes of this
Constitution, be deemed to be a call duly made and payable on the
date on which by the terms of issue the same becomes payable and
in the event of non--payment of interest and expenses, forfeiture
or otherwise shall apply as if the sum had become payable by
virtue of a call duly made and notified.
10.7 The Directors may on the issue of Shares, differentiate between
the holders as to the amount of calls to be paid and the times of
payment.
10.8 The Directors may if they think fit, receive from any Member
willing to advance the same all or any part of the money uncalled
and unpaid upon any Shares held by him and upon all or any part of
the money so advanced may (until the same would but for the
advance become payable) pay interest at such rate not exceeding
(unless the Company in general meeting shall otherwise direct) 8%
per annum as may be agreed upon between the Directors and the
Member paying the sum in advance.
10.9 On the trial or hearing of any action for the recovery of any
money due for any call it shall be sufficient to prove that--
24
10.9.1 the name of the Member sued is entered in the Register as
the holder or one of the holders of the Shares in respect
of which such debt accrued;
10.9.2 the resolution making the call is duly recorded in the
minute book; and
10.9.3 notice of such call was duly given to the Member sued in
pursuance of this Constitution
and it shall not be necessary to prove the appointment of the
Directors who made such call or that a quorum of Directors was
present at the meeting at which such call was made, nor any other
matters whatsoever and the proof of the matters aforesaid shall be
conclusive evidence of the debt.
11. FORFEITURE OF SHARES
11.1 If a Member fails to pay any call or instalment of a call on the
day appointed for payment thereof the Directors may, at any time
thereafter, during such time as any part of the call or instalment
remains unpaid, serve a notice on him requiring payment of so much
of the call or instalment as is unpaid, together with any interest
which may have accrued and all expenses which may have been
incurred by the Company by reason of non--payment.
11.2 The notice shall name a day (not earlier than 14 days from the
date of the notice) and a place or places on and at which the call
and interest and expenses are to be paid. The notice shall also
state that in the event of non--payment at or before the time and
at the place appointed the Shares in respect of which the call is
payable will be liable to be forfeited.
11.3 If the requirements of any such notice are not complied with, any
Shares in respect of which the notice has been given may at any
time thereafter, before the payment required by the notice has
been made, be forfeited by a resolution of the Directors to that
effect. Such forfeiture shall include all Dividends declared in
respect of the forfeited Shares and not actually paid before the
forfeiture.
11.4 When any Share has been so forfeited, notice of the resolution
shall be given to the Member in whose name it stood immediately
prior to the forfeiture and an entry of the forfeiture with the
date shall forthwith be made in the Register. The forfeiture of a
Share shall involve the extinction of all interest in and also of
all claims and demands against the Company in respect of the Share
and all other rights incident to the Share except only such of
those rights as by this Constitution are expressly waived.
11.5 A forfeited Share shall be deemed to be the property of the
Company and may be sold, re-issued or otherwise disposed of on
such terms and in such manner as the Directors think fit and at
any time before a sale, re--issue or disposition the forfeiture
may be cancelled on such terms as the Directors think fit.
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11.6 A person whose Shares have been forfeited shall cease to be a
Member in respect of the forfeited Shares but shall
notwithstanding remain liable to pay and shall forthwith pay to
the Company all money which at the date of forfeiture was payable
by him in respect of the Shares as set out in the notice
hereinbefore provided (together with interest at the rate of 8%
per annum from the date of forfeiture on the money for the time
being unpaid if the Directors think fit to enforce payment of such
interest) but his liability shall cease if and when the Company
receives payment in full of all such money in respect of the
Shares.
12. LIEN
12.1 The Company shall have a first and paramount lien on every Share
registered in the name of each Member (whether solely or jointly
with others) for all money (whether presently payable or not)
called or payable at a fixed time in respect of that Share or
presently payable by him or his estate to the Company and interest
and expenses thereon but the Directors may at any time declare any
Share to be wholly or in part exempt from the provisions of this
Clause 12.
12.2 The Company's lien on a Share shall extend to all Dividends
payable thereon.
12.3 Unless otherwise agreed the registration of a transfer of Shares
shall operate as a waiver of the Company's lien (if any) on those
Shares.
12.4 The Directors may sell in such manner as the Directors think fit
any Shares on which the Company has a lien but no sale shall be
made --
12.4.1 unless a sum in respect of which the lien exists is
presently payable; and
12.4.2 until the expiration of 14 days after written notice
stating and demanding payment of such part of the amount
in respect of which the lien exists as is presently
payable has been given to the registered holder for the
time being of the Share or the person entitled thereto by
reason of his death or bankruptcy.
12.5 To give effect to any sale pursuant to Clause 12.4 the Directors
may authorize some person to execute on behalf of the holders
thereof an instrument of transfer in order to transfer the Shares
sold to the purchaser thereof. The purchaser shall be registered
as the holder of the Shares comprised in any such transfer and
shall not be bound to see to the application of the purchase money
nor shall his title to the Shares be affected by any irregularity
or invalidity in the proceedings in reference to the sale.
12.6 The proceeds of the sale shall be received by the Company and
applied in payment of such part of the amount in respect of which
the lien exists as is presently payable and the residue if any
shall (subject to a like lien for sums
26
not presently payable as existed upon the Shares before the
sale) be paid to the person entitled to the Shares at the date of
the sale.
13. TAXATION LIEN
13.1 Whenever in respect of, or in connection with, any Shares
registered in the name of a Member (whether solely or jointly with
others) or with any Dividends or bonus thereon and whether in
consequence of his death or for any reason any law for the time
being of the Commonwealth of Australia or of any Australian State
or Territory or of any other country or place imposes or purports
to impose any immediate or future or possible liability upon the
Company to make any payments to any Government or taxing authority
--
13.1.1 the Company shall, in respect of any such liability, be
fully indemnified by the Member and his executors or
administrators wheresoever constituted or situated;
13.1.2 any moneys paid by the Company in respect of any such
liability imposed or purported to be imposed on the
Company may be recovered by action from the Member or his
executors or administrators wheresoever constituted as a
debt due by him or his estate to the Company with interest
at 8% per annum from the date when the moneys were paid
until repayment;
13.1.3 any such moneys and interest may be deducted by the
Company from any Dividend or other moneys payable by it to
the Member or his executors or administrators;
13.1.4 the provisions of Clause 12 with respect to the Company's
lien for debts of a Member and the Company's power of sale
to enforce any such lien shall apply with respect to
moneys paid by the Company in respect of any liability to
which this Clause 13 relates;
13.1.5 nothing herein contained shall prejudice or affect any
right or remedy which in respect of any such payment by
the Company any law may confer or purport to confer upon
the Company; and
13.1.6 it is hereby expressly declared that as between the
Company and the Member or his estate and his executors or
administrators wheresoever constituted, any such right or
remedy shall be enforceable by the Company and every
Member of the Company as between himself and the Company
shall be deemed to agree and bind his executors
administrators and estate to submit to the legislative
power and jurisdiction of the State Territory country or
place imposing such liability upon the Company.
13.2 If under the Tax Act or any other enactment the Company becomes
liable to pay additional tax with respect to any undistributed
amount of its profits then notwithstanding any other provisions of
this Constitution the Company in making any subsequent
distribution of its profits (whether out of that undistributed
amount or out of other profits) may if the Directors think fit but
27
not so as to affect any priority to which under this Constitution
the holders of any class of Shares are entitled determine to pay
Dividends at different rates with respect to the Shares of the
same class held by different Members so as to ensure, as nearly as
may be, that each Member bears his proper Share of the additional
tax which the Company has become liable to pay.
14. TRANSFER OF SHARES
14.1 An instrument of transfer of any Shares shall be in writing in any
usual or common form or in any other form which the Directors may
approve.
14.2 The instrument of transfer shall be -
14.2.1 executed by or on behalf of both the transferor and the
transferee; and
14.2.2 if required by law to be stamped, duly stamped
and the transferor shall remain the holder of the Shares
transferred until the transfer is registered and the name of the
transferee is entered in the Register in respect thereof.
14.3 Except as provided by this Constitution (in particular, Clause
##), there shall be no right of transfer of any Shares in the
Company whatsoever except with the approval of the Directors and
the Directors may, subject to the terms of issue of any Shares,
refuse to register any transfer of a Share without being bound to
give any reason for such refusal or without specifying any grounds
therefor.
14.4 Every instrument of transfer shall be left at the office for
registration accompanied by the certificate of the Shares to be
transferred and such other evidence as the Directors may require
to prove the title of the transferor or his right to transfer the
Shares.
14.5 All instruments of transfer which shall be registered shall be
retained by the Company but any instrument of transfer which the
Directors shall refuse to register shall, on demand, be returned
to the person depositing the same.
14.6 If the Directors refuse to register any transfer of Shares they
shall, within one month after the date on which the transfer was
lodged with the Company, send to the transferee notice of the
refusal but if within the said period of one month notice of
refusal shall not have been sent to the transferee then acceptance
of the transfer for registration shall be deemed to have occurred
at the expiration of the said period.
14.7 Any non--voting Share may be transferred by a Member to any child
or other issue, son--in--law, daughter--in--law, father, mother,
brother, sister, nephew, niece, widow or widower of the Member.
28
14.8 Except as provided in Clauses 5, 14.7 and 15 no transfer of Shares
shall be registered unless all Members of the Company so agree or
unless the following procedures are complied with --
14.8.1 a person proposing to transfer any Shares ("the Proposing
Transferor") shall give written notice to the Company ("a
Transfer Notice") that he desires to transfer the Shares
specified in the Transfer Notice and he shall specify in
the Transfer Notice the price per Share which he fixes as
the fair value thereof;
14.8.2 a Transfer Notice shall not be revocable except with the
sanction of the Directors except where the fair value has
been fixed by arbitration as provided in Clause 14.8.6 at
a price lower than the price fixed by the Member in which
case, the Proposing Transferor may revoke the Transfer
Notice by written notice to the Company within 7 days
after he has received notice of the result of such
arbitration;
14.8.3 a Transfer Notice may include several parcels of Shares
and in such case shall operate as if it were a separate
Transfer Notice in respect of each parcel;
14.8.4 the service of a Transfer Notice shall be deemed to
constitute the Company the agent of the Proposing
Transferor for the sale of the Shares to a purchaser to be
nominated by the Company as hereinafter provided at a
price equal to the fair value thereof;
14.8.5 subject to the provisions of Clauses 14.8.2 and 14.8.10,
within 28 days after being served with a Transfer Notice,
the Company may by written notice to the Proposing
Transferor nominate one or more Members or other persons
whom in the opinion of the Directors it is desirable in
the interests of the Company to admit to membership as
purchaser of the parcel of Shares referred to in the
Transfer Notice ("the Purchaser") whereupon the Proposing
Transferor shall be bound upon payment of the fair value
of the Shares to transfer the Shares to the Purchaser;
14.8.6 the Company may, by the same notice as is referred to in
Clause 14.8.5, require the fair value of the Shares to be
fixed by arbitration pursuant to the Commercial
Arbitration Act (1984) in lieu of the fair value fixed in
the Transfer Notice but in the event of the fair value so
fixed by arbitration exceeding the fair value fixed in the
Transfer Notice the Purchaser may, by written notice to
the Proposing Transferor not later than 14 days after the
determination, elect not to continue with the purchase;
14.8.7 if the Proposing Transferor having become bound pursuant
to Clause 14.8.5 makes default in transferring the Shares,
the Directors may authorise some person to execute on
behalf of the holder thereof an instrument of transfer of
and to transfer such Shares to the Purchaser and to
receive the purchase price on behalf of the Proposing
Transferor and the Purchaser shall be
29
registered as the holder of the Shares comprised in any
such transfer without production of the Share certificate
and shall not be bound to see to the application of the
purchase money;
14.8.8 after the Purchaser's name has been entered in the
Register in purported exercise of the power given by
Clause 14.8.7, the validity of the proceedings shall not
be questioned by any person;
14.8.9 if no purchaser is nominated by the Company pursuant to
Clause 14.8.5 in respect of the Shares specified in a
Transfer Notice within 28 days after the Company is served
with the Transfer Notice, or if the Purchaser elects not
to continue with the purchase pursuant to the provisions
of Clause 14.8.6, the Proposing Transferor shall be
entitled at any time within one month after the expiration
of the said period of 28 days or 14 days (as the case may
be) --
14.8.9.1 to sell and transfer the Shares to any person at
a price not less than the price fixed by him in
the Transfer Notice; or
14.8.9.2 to require the Company to be put into
liquidation in which case, notwithstanding
anything contained in this Constitution, he
shall in that event be entitled to require the
Directors to call and arrange to hold a general
meeting of the Company for the purpose of
considering a resolution that the Company be
wound up voluntarily and shall be entitled at
such meeting to exercise ten thousand votes for
every Share held by him in the Company;
14.8.10 any Shares specified in a Transfer Notice shall, forthwith
upon the giving thereof by a Proposing Transferor, be
offered to the other Members in proportion to the number
of Shares already held by them (and where any fraction of
a Share is involved the Shares offered shall be taken to
the next lowest whole number and any Shares left over
shall be offered to Members as determined by lot and the
Directors shall allot sufficient Shares to those who do
not draw the lots to enable the proportion to be exactly
maintained) and save as aforesaid the disposal of Shares
the subject of a Transfer Notice shall be at the
discretion of the Directors;
14.8.11 the Directors may exercise in the name of the Company all
the powers contained in this Clause 14.8 but if any
Director of the Company is the Proposing Transferor, or is
a director or member of or otherwise interested in any
Proposing Transferor, he shall not take part in any
deliberations of the Directors or exercise any vote on any
matter arising out of this Clause 14.8 and if there are
only two Directors of the Company, one Director shall be a
quorum in respect of any such matter;
30
14.8.12 the expression "parcel of Shares" in this Clause 14.8
means all the Shares of any one class referred to in a
Transfer Notice; and
14.8.13 in the event of a Member or Director in any capacity and
whether as creditor or otherwise presenting to the Court
any petition to wind up the Company on any ground
whatsoever, or instituting any proceedings against the
Company for the recovery of any moneys allegedly due by
the Company, the Member and in the case of a Director any
Member of the Company being his wife or child or trustee
for the family of such Director or a company of which such
Director is a director, shall be deemed on the day prior
to the presentation of the petition to have served a
Transfer Notice pursuant to this Constitution in respect
of all Shares in the Company owned by the Member or such
other person or company as the case may be.
14.9 The Directors may subject to the Law suspend the registration of
transfers for any time or times not exceeding in the aggregate 30
days in any year.
15. TRANSMISSION OF SHARES
15.1 The legal personal representatives of a deceased sole holder of a
Share shall be the only persons recognized by the Company as
having any title to the Share.
15.2 In the case of a Share registered in the names of two or more
holders the survivors or survivor or the legal personal
representatives of the deceased survivor shall be the only persons
recognized by the Company as having any title to the Share but
nothing herein contained shall release the estate of a deceased
joint holder from any liability in respect of any Share which had
been held jointly by him with other persons.
15.3 Any of the following persons that is to say --
15.3.1 either of the parents or the guardian of any infant
Member;
15.3.2 any person becoming entitled to a Share in consequence of
the bankruptcy of a Member;
15.3.3 the legal personal representative of a deceased Member;
15.3.4 the beneficiaries of a deceased Member becoming entitled
thereto under the deceased Member's will or the next of
kin of the deceased Member entitled on an intestacy;
15.3.5 any person having authority in law to manage the affairs
of a Member who by reason of mental or physical infirmity
is unable to manage his affairs --
shall, upon such evidence being produced as to his or their status
or authority as is from time to time properly required by the
Directors, have the
31
right either to be registered himself or themselves or to make
such transfer of the Share as the Member could have made and the
Directors shall have no right to decline or suspend registration
as they would have had in the case of a transfer of the Share by
the Member if the Member had been alive or capable of transferring
the Share.
15.4 The Shares standing in the name of the trustees of the will of any
deceased Member may be transferred upon any change of trustees to
the trustees for the time being of the will.
15.5 Where two or more persons are jointly entitled to be registered
pursuant to the provisions of this Clause 15 they shall, for the
purposes of this Constitution, be deemed to be joint holders of
the Share.
15.6 A person entitled to be registered as a Member in respect of a
Share pursuant to this Clause 15 shall be entitled to the same
Dividends and other advantages to which he would be entitled if he
were the registered holder of the Share except that he shall not,
before being registered as a Member in respect of the Share, be
entitled in respect of the Share to exercise any right conferred
by membership in relation to general meetings of the Company.
16. CONVERSION AND REDUCTION OF SHARE CAPITAL
16.1 The Company may (subject to the provisions of Clause 8 and the
Law) by resolution convert all or any of its Shares into a larger
or small number.
16.2 For the purposes of Clause 16.1, any amount unpaid on Shares to be
converted is to be apportioned equally among the replacement
Shares.
16.3 The Company may, subject to the provisions of the Law, reduce its
Share capital in any way which is not otherwise authorised by law.
17. GENERAL MEETINGS
17.1 All general meetings of the Company shall be held in accordance
with the provisions of the Law and this Constitution.
17.2 The Directors may whenever they think fit call a general meeting
and, in addition to any other general meetings the Directors may,
if they think necessary, call an annual general meeting in any
calendar year and all general meetings shall be called on such
requisition or, in default, may be called by such requisitionists
as provided by the Law.
17.3 If at any time there are not sufficient Directors capable of
acting to form a quorum for the purpose of calling a general
meeting, any Director or any Members of the Company with not less
than 5% of the votes that may be cast at general meetings may call
and arrange to hold a general meeting in the same manner, as
nearly as possible, in which general meetings may be called by the
Directors.
32
17.4 Subject to the provisions of the Law relating to resolutions and
special resolutions and agreements for shorter notice not less
than 21 days written notice (exclusive of the day on which the
notice is served or deemed to be served but inclusive of the day
for which notice is given) must be given of all general meetings
specifying -
17.4.1 the place, date and time for the meeting (and, if the
general meeting is to be held in 2 or more places, the
technology that will be used to facilitate this);
17.4.2 the general nature of the business of the general meeting;
17.4.3 if a special resolution is to be proposed -
17.4.3.1 an intention to propose the special resolution;
and
17.4.3.2 the special resolution itself;
17.4.4 if a Member is entitled to appoint a proxy, that -
17.4.4.1 the Member has a right to appoint a proxy;
17.4.4.2 the proxy does not need to be a Member of the
Company; and
17.4.4.3 that a Member who is entitled to cast 2 or more
votes may appoint 2 proxies and may specify the
proportion or number of votes each proxy is
appointed to exercise.
17.5 All business shall be deemed special that is transacted at a
general meeting and all business that is transacted at an annual
general meeting (if any) shall also be deemed special with the
exception of sanctioning a Dividend, the consideration of the
financial reports, Directors' reports and auditor's reports (if
any) and the appointment of the auditor (if any) and the fixing of
his remuneration and the election of Directors.
17.6 Subject to the Law, any resolution of the Company determined on
without any general meeting and evidenced in writing under the
hand of each Member of the Company who for the time being is
entitled to vote, or of his proxy, or of his attorney appointed as
provided in this Constitution or, if the Member is a corporation,
of its representative appointed as provided in this Constitution
or the Law, shall be as valid and effectual as a resolution duly
passed at a general meeting of the Company.
17.7 Any resolution passed in accordance with the provisions of Clause
17.6 may consist of identical copies of the document recording the
resolution and accompanying information, each signed by one or
more Members or their respective proxies, attorneys or, if any
Members are corporations, by their respective representatives.
33
18. PROCEEDINGS AT GENERAL MEETINGS
18.1 No business shall be transacted at any general meeting unless a
quorum is present at the time when the meeting proceeds to
business.
18.2 A quorum shall be constituted by --
18.2.1 where all of the issued voting Shares are held by a single
Member -- that Member;
18.2.2 where all of the issued Shares are held by a Holding
company - the person appointed to act as the
representative of the Holding company at general meetings
of the Company pursuant to Clause 21 and the Law; and
18.2.3 where all of the issued voting Shares are held by two or
more Members-- 2 Members.
18.3 If within 15 minutes from the time appointed for a general meeting
a quorum is not present--
18.3.1 the meeting if convened upon the requisition of Members
shall be dissolved; or
18.3.2 in any other case --
18.3.2.1 it shall stand adjourned to the same day, in the
next week, at the same time and place; and
18.3.2.2 if at the adjourned meeting a quorum is not
present within 15 minutes from the time
appointed for the meeting, the meeting shall be
dissolved.
18.4 The Chairperson (if any) elected by the Directors shall chair each
general meeting of the Company or if there is no such Chairperson,
or if at any meeting he is not present within 15 minutes after the
time appointed for holding the meeting or is unwilling to act, the
persons present and entitled to vote at a meeting shall choose
some one of their number to chair the meeting.
18.5 The Chairperson may, with the consent of any meeting at which a
quorum is present (and shall if so directed by the meeting),
adjourn the meeting from time to time and from place to place but
so that --
18.5.1 no business shall be transacted at any adjourned meeting
other than the business left unfinished at the meeting
from which the adjournment took place;
18.5.2 when a meeting is adjourned for 10 days or more at any one
time, notice of the adjourned meeting shall be given as in
the case of an original meeting;
34
18.5.3 save as aforesaid it shall not be necessary to give any
notice of an adjourned meeting or of the business to be
transacted at an adjourned meeting.
18.6 At any general meeting a resolution put to the vote of the meeting
shall be decided on a show of hands unless a poll is (before or on
the declaration of the results of the show of hands) demanded --
18.6.1 by the Chairperson; or
18.6.2 by at least three Members present having the right to vote
at the meeting; or
18.6.3 by any Member or Members present and representing not less
than 5% of the votes that may be cast on the resolution
on a poll
and unless a poll is so demanded, a declaration by the Chairperson
that a resolution has on a show of hands been carried or carried
unanimously or by a particular majority or lost and an entry to
that effect in the book containing the minutes of the proceedings
of the Company shall be conclusive evidence of the fact without
proof of the number or proportion of the votes recorded in favour
of or against the resolution.
18.7 The demand for a poll may be withdrawn.
18.8 If a poll is duly demanded it shall be taken in such manner and
either at once or after an interval or adjournment or otherwise as
the Chairperson directs and the result of the poll shall be the
resolution of the meeting at which the poll was demanded but a
poll demanded on the election of a Chairperson or on a question of
adjournment shall be taken forthwith.
18.9 In the case of an equality of votes whether on a show of hands or
on a poll the Chairperson of the meeting at which the show of
hands takes place or at which the poll is demanded shall not be
entitled to a second or casting vote.
19. VOTES OF MEMBERS
19.1 Subject to any special rights or restrictions imposed on or
attaching to any Shares or classes of Shares by the Directors on
the issue of those Shares or classes of Shares, each Member
present who holds one or more voting Shares shall be entitled to
vote at meetings of Members and on a show of hands every such
Member shall have one vote and on a poll every such Member shall
have one vote for each such Share he holds.
19.2 In the case of joint holders the vote of the Member whose name
appears first in the Register shall be accepted to the exclusion
of the votes of the other joint holders.
19.3 A Member who is of unsound mind or is a person whose person or
estate is liable to be dealt with in any way under any relevant
law relating to mental health may vote whether on a show of hands
or on a poll by his committee or
35
by the trustee or by such other person as properly has the
management of his estate and any such committee trustee or other
person may vote by proxy or attorney.
19.4 A Member who is an infant may vote by either of his parents or by
his guardian upon such evidence being produced of the relationship
or of the appointment of the guardian as the Directors may from
time to time properly require.
19.5 No Member shall be entitled to vote at any general meeting unless
all calls and other sums presently payable by him to the Company
in respect of Shares in the Company have been paid.
19.6 No objection shall be raised to the qualification of any voter
except at the meeting or adjourned meeting at which the vote
objected to is given or tendered and every vote not disallowed at
such meeting shall be valid for all purposes. Any such objection
made in due time shall be referred to the Chairperson of the
meeting whose decision shall be final and conclusive.
20. PROXIES
20.1 Each Member of the Company entitled to attend and cast a vote at a
general meeting may appoint an individual as his proxy to attend
and vote for that Member at the general meeting.
20.2 The instrument appointing a proxy shall be in writing under the
hand of the appointor or of his attorney duly authorized in
writing or, if the appointor is a corporation, in accordance with
the constitution of that corporation.
20.3 A proxy need not be a Member of the Company.
20.4 The instrument appointing a proxy and the power of attorney or
other authority (if any) under which it is signed or a notarially
certified copy of that power or authority must be received by the
Company not less than 48 hours before the time for holding the
general meeting or adjourned general meeting at which the person
named in the instrument proposes to vote (unless a shorter period
is specified in the notice of general meeting to which the proxy
relates) and in default the instrument of proxy shall not be
treated as valid unless otherwise determined by the Chairperson.
20.5 For the purposes of Clause 20.4, an instrument appointing a proxy
must be received by the Company at any of the following -
20.5.1 the office of the Company; or
20.5.2 a fax number at the office of the Company; or
20.5.3 a place, fax number or electronic address specified for
that purpose in the notice of meeting.
36
20.6 An instrument appointing a proxy may be in any usual form or in
any other form which the Directors may approve and if a Member is
entitled to cast two or more votes at the meeting, that Member may
appoint not more than two proxies.
20.7 Where a Member appoints two proxies, the appointment may specify
the proportion or number of votes that the proxy may exercise.
20.8 Any instrument appointing a proxy confers authority to demand or
join in demanding a poll.
21. BODY CORPORATE REPRESENTATIVE
21.1 Any body corporate which is a Member of the Company may by
resolution of its directors or other governing body appoint an
individual (whether a Member of the Company or not) whom it thinks
fit as its representative to exercise all or any of the powers
that the body corporate may exercise -
21.1.1 at general meetings of the Company or of any class of
Members of the Company; or
21.1.2 at meetings of creditors or debenture holders; or
21.1.3 in respect of resolutions to be passed without meetings.
21.2 The person so appointed shall be entitled to exercise the same
powers on behalf of the body corporate which he represents as that
body corporate could exercise (including the giving of any consent
and the signing of any resolution, appointment or other document)
if it were a natural person and also to exercise all the powers
mentioned in Clause 21.1 as are conferred by the instrument of
appointment.
21.3 A certificate executed in accordance with the constitution of the
body corporate, accompanied by such other evidence as the
Directors may properly require of any appointment of a
representative, must be received by the Company before the
commencement of the meeting or adjourned meeting at which the
person named in the certificate proposes to vote and, in the case
of a resolution to be determined on without any general meeting,
before the resolution or other document or statement in which the
resolution is set out is circulated for signing by the Members of
the Company entitled to vote on the resolution.
21.4 For the purposes of Clause 21.3, a certificate of appointment must
be received by the Company at any of the following -
21.4.1 the office of the Company; or
21.4.2 a fax number at the office of the Company; or
21.4.3 a place, fax number or electronic address specified for
that purpose in the notice of meeting.
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22. ATTORNEY OF MEMBERS
22.1 Any Member may appoint an attorney (whether a Member or not) to
act for him on his behalf at all general meetings of the Company
at which he is not present himself and to give any consent and
sign any appointment or resolution or other document which the
Member himself could give or sign.
22.2 Any appointment shall be made by power of attorney duly executed
by the Member and attested by one or more witness or witnesses or,
if the Member is a body corporate, then in accordance with its
constitution and the power of attorney must be received by the
Company not less than 48 hours before the attorney becomes
entitled to act thereunder (unless a shorter period is specified
in the notice of general meeting to which the power of attorney
relates) accompanied by such evidence of its due execution and
non--revocation as the Directors require.
22.3 For the purposes of Clause 22.2, the power of attorney must be
received by the Company at any of the following -
22.3.1 the office of the Company; or
22.3.2 a fax number at the office of the Company; or
22.3.3 a place, fax number or electronic address specified for
that purpose in the notice of meeting.
22.4 The power of attorney may be in any usual form or in any other
form which the Directors may approve.
22.5 The attorney so appointed may, during the absence of the Member
and while the power of attorney remains unrevoked, attend at and
take part in the proceedings and vote at all general meetings of
the Company and demand or join in the demand for a poll in the
same manner as the Member himself could do if personally present
and may give any consent and sign any appointment or resolution or
other document which the Member himself could give or sign.
22.6 A vote given or act done in accordance with the terms of an
instrument of proxy or attorney shall be valid notwithstanding the
previous death or mental incapacity of the principal or revocation
of the instrument or of the authority under which the instrument
was executed or the transfer of the Share in respect of which the
instrument is given if the Company has not received written notice
of such death, incapacity, revocation or transfer before the
commencement of the meeting or adjourned meeting at which the
instrument is used.
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23. MEETINGS OF CLASSES OF SHAREHOLDERS
At every separate meeting of holders of Shares of any class the
provisions of this Constitution relating to general meetings shall,
with such adaptations as are necessary, apply but so that (subject to
the provisions of Clause 8.1) --
23.1 the necessary quorum shall be two Members holding between them a
majority of the issued Shares of the class; or
23.2 where only one Member is the holder of Shares of the class - that
Member present shall for all purposes constitute a quorum; and
23.3 any holder of Shares of the class present at the meeting may
demand a poll.
24. DIRECTORS
24.1 The number of the Directors shall be not less than five comprising
-
24.1.1 an independent Chairperson;
24.1.2 the Managing Director appointed pursuant to Clause 26;
24.1.3 two persons appointed by Preferred Holders; and
24.1.4 one person appointed by the Founding Shareholder.
24.2 The Company may from time to time by resolution passed at a
general meeting, or by resolution passed without a meeting, fix
the number of Directors or increase or reduce the number of
Directors (but so that the number shall not be less than the
minimum number required by Clause 24.1 or the Law) and may also
determine in what rotation (if any) the increased or reduced
number is to go out of office.
24.3 Each Director shall hold office until he dies, or vacates office
in accordance with the provisions of Clause 25.1, or the term for
which he is appointed or elected expires as provided in this
Constitution.
24.4 The Company may, subject to Clause 24.1, by resolution --
24.4.1 appoint a person to be a Director;
24.4.2 remove a Director;
24.4.3 appoint another person as a Director in place of any
Director who dies, is removed or vacates office pursuant
to the provisions of Clause 25.1; and
24.4.4 may appoint additional Directors.
24.5 The Directors shall have power at any time and from time to time
to appoint any person to be a Director either to fill a casual
vacancy, or as an addition
39
to the existing Directors, but so that the total number of
Directors shall not at any time exceed the number fixed in
accordance with this Constitution.
24.6 If a person who is the only Director and the only Member of the
Company -
24.6.1 dies; or
24.6.2 vacates office pursuant to the provisions of Clauses
25.1.2 or 25.1.4
and a personal representative or trustee is appointed to
administer the person's estate or property then (subject to the
provisions of the Law) the personal representative or trustee (as
the case may be) shall have the power to appoint a person as the
Director of the Company or to appoint themselves to that office.
24.7 No Share qualification shall be required of a Director.
24.8 A Director may hold any other office or place of profit in the
Company in conjunction with his directorship and may be appointed
thereto upon such terms as to remuneration, tenure of office and
otherwise as may be arranged by the Directors.
24.9 The Directors shall be paid out of the funds of the Company by way
of remuneration for their services such sum as the Directors may
from time to time determine. The Directors shall also be entitled
to be paid any outlay or expenses properly incurred by them on
behalf of the Company in attending meetings of the Directors or of
any committee of Directors or general meetings of the Company and
in connection with the business of the Company as the Directors
may from time to time determine.
24.10 If any Director being willing shall be called upon to perform
extra services or to make any special exertions in going from his
usual residence or otherwise for any of the purposes of the
Company, the Company may remunerate the Director for so doing
either by a fixed sum or by a percentage of profits or otherwise
as may be determined by the Directors and such remuneration may be
either in addition to or in substitution for his or their
remuneration as herein provided.
25. DISQUALIFICATION OF DIRECTORS
25.1 The office of Director shall be vacated if the Director --
25.1.1 ceases to be a Director pursuant to any provision of the
Law; or
25.1.2 becomes bankrupt or makes any arrangement or composition
with his creditors generally; or
25.1.3 becomes prohibited from being a Director by reason of any
order made under the Law; or
40
25.1.4 becomes of unsound mind or a person whose person or estate
is liable to be dealt with in any way under any relevant
law relating to mental health; or
25.1.5 resigns his office by notice in writing to the Company; or
25.1.6 is removed from office pursuant to this Constitution.
25.2 Notwithstanding any rule of law or equity to the contrary but
subject to the provisions of the Law concerning disclosure of
interests by Directors --
25.2.1 a Director shall not be disqualified by his office from
contracting with the Company either as vendor, purchaser
or otherwise or from being employed or acting in any
capacity professionally or otherwise by or on behalf of
the Company;
25.2.2 if a Director has an interest in a contract or arrangement
or a proposed contract or arrangement with the Company
(other than as a Member of the Company) and the Director
discloses the nature and extent of the interest at a
meeting of Directors -
25.2.2.1 the Director may vote on whether the Company
enters into the contract or arrangement; and
25.2.2.2 the contract or arrangement may be entered into;
and
25.2.2.3 the Director may vote on matters involving the
contract or arrangement; and
25.2.2.4 if the disclosure is made before the contract or
arrangement is entered into -
25.2.2.4.1 the Director may retain benefits
under the contract or arrangement
even though the Director has an
interest in the contract or
arrangement; and
25.2.2.4.2 the Company cannot avoid the
contract merely because of the
existence of the interest;
25.2.3 it shall be the duty of the Secretary to record every
declaration under this Clause 25.2 in the minutes of the
meeting but failure to record such declaration shall not
in any way affect the validity of such contract or
arrangement; and
25.2.4 a Director may sign any contract or other document
relating to any contract or arrangement in which he is in
anyway interested (whether or not under common seal of the
Company).
25.3 The provisions of Clause 25.2.2 shall not apply to a Director -
25.3.1 if he is the only Director of the Company and is or
represents the only Member of the Company; or
41
25.3.2 if the interest of that Director consists only of being a
Member or creditor of a corporation that has an interest
in a contract or arrangement with the Company if that
interest may be regarded as not being a material interest;
or
25.3.3 where the contract or arrangement relates to a loan to the
Company - that Director has guaranteed or joined in
guaranteeing the repayment of the loan or any part of the
loan; or
25.3.4 where the contract or arrangement has been or will be made
with or for the benefit of or on behalf of a related body
corporate - that Director is a director of that related
body corporate.
26. MANAGING DIRECTOR
26.1 The Directors may from time to time appoint one or more of their
body to the office of Managing Director for such period and on
such terms as they think fit and subject to the terms of agreement
entered into in any particular case may revoke any such
appointment.
26.2 A Director appointed as Managing Director shall not, while holding
that office, be subject to retirement by rotation or be taken into
account in determining the rotation of retirement of Directors but
a person ceases to be a Managing Director if he ceases to be a
Director.
26.3 A Managing Director shall subject to the terms of any agreement
entered into in any particular case receive such remuneration
(whether by way of salary commission or participation in profits
or partly in one way and partly in another) as the Directors may
determine.
26.4 The Directors may entrust to and confer upon a Managing Director
any of the powers exercisable by them upon such terms and
conditions and with such restrictions as they may think fit and
either collaterally with or to the exclusion of their own powers
and may from time to time revoke withdraw alter or vary all or any
of those powers.
27. ALTERNATE OR SUBSTITUTE DIRECTORS
27.1 Any Director may, with the approval of the other Directors,
appoint any person (whether a Member of the Company or not) to be
an alternate or substitute Director in his place during such
period as he thinks fit.
27.2 Any person while he so holds office as an alternate or substitute
Director shall be entitled to notice of meetings of the Directors
and to attend and vote thereat accordingly and to exercise all the
powers of the appointor in his place.
27.3 An alternate or substitute Director shall ipso facto vacate office
if his appointor vacates office as a Director or removes the
appointee from office.
42
27.4 Any appointment or removal under this Clause 27 shall be effected
by notice in writing to the Company and to the person concerned
under the hand of the Director who makes the appointment or
removal.
28. POWERS AND DUTIES OF DIRECTORS
28.1 The business of the Company shall be managed by the Directors who
may exercise all the powers of the Company that are not by the Law
or by this Constitution required to be exercised by the Company in
general meeting subject nevertheless to any provision of this
Constitution and to the provisions of the Law.
28.2 No regulation made by the Company in general meeting shall
invalidate any prior act of the Directors which would have been
valid if that regulation had not been made.
28.3 Without limiting the generality of Clause 28.1 --
28.3.1 the Directors may in addition to all other general and
special powers possessed by them from time to time borrow
in the name and for all or any of the purposes of the
Company or in connection with its business any sum or sums
of money for such period and at such rate or rates of
interest and otherwise upon such terms and conditions as
the Directors may think fit and so that --
28.3.1.1 any sum or sums of money so borrowed may be
raised or secured by mortgage charge or pledge
of the whole or any part of the real or personal
estate revenues property undertaking choses in
action debts or effects of the Company including
unpaid calls and uncalled capital or by deposit
receipts debentures debenture stock bonds trusts
deeds personal covenant or otherwise as the
Directors may from time to time think fit
without such security;
28.3.1.2 every such mortgage charge or other security may
be in such form and contain such powers of sale
and other powers trusts and provisions and may
be accompanied by such collateral further and
other security as the Directors may think fit;
28.3.2 the Directors may pay out of the Company's funds all
expenses of the promotion, formation and registration of
the Company and the vesting in it of the assets acquired
by the Company; and
28.3.3 the Directors may from time to time by power of attorney
appoint any company firm or person or body of persons
whether nominated directly or indirectly by the Directors
to be the attorney or attorneys of the Company for such
purposes and with such powers authorities and discretions
(not exceeding those vested in or exercisable by the
Directors under this Constitution) and for
43
such period and subject to such conditions as they may
think fit and any such powers of attorney may contain such
provisions for the protection and convenience of persons
dealing with any such attorney as the Directors may think
fit and may also authorise any such attorney to delegate
all or any of the powers authorities and discretions
vested in him.
29. PROCEEDINGS OF DIRECTORS
29.1 The Directors shall meet at least nine times in each year for the
dispatch of business and may adjourn and otherwise regulate their
meetings as they think fit using any technology consented to from
time to time by all the Directors.
29.2 Questions arising at any meeting shall be decided by a majority of
votes cast by Directors entitled to vote.
29.3 The Chairperson shall have a deliberative vote but not a second or
casting vote.
29.4 A Director may and the Secretary on the requisition of a Director
shall at any time summon a meeting of the Directors.
29.5 Subject to the provisions of Clause 29.15 the quorum necessary for
transaction of the business of the Directors may be fixed by the
Directors and unless so fixed shall be three, one of whom must be
an appointee of the Preferred Holders.
29.6 In the case of a meeting of the Directors held in a State in which
any Director or Directors are not usually resident, it shall not
be necessary to give notice of such meetings to such Director or
Directors and the failure to give such notice shall not invalidate
the acts or proceedings of the Board done or carried out in the
absence of such Director or Directors.
29.7 Unless the Directors in any case otherwise determine the
provisions contained in Clauses 29.17 or 36 (as the case may be)
shall apply to the giving of notice pursuant to the provisions of
Clause 29.6.
29.8 The continuing Directors or Director may act notwithstanding any
vacancy in their body but if and so long as their number is
reduced below the number fixed pursuant to this Constitution as
the minimum number of Directors, the continuing Directors or
Director may act in the event of an emergency or for the purpose
of summoning a general meeting of the Company but for no other
purpose.
29.9 The Directors may elect a Chairperson of their meetings and
determine the period for which he is to hold office but if no
Chairperson is elected or if at any meeting the Chairperson is not
present within 15 minutes after the time appointed for holding the
meeting or declines to act, the Directors present may choose one
of their number to be Chairperson of the meeting.
44
29.10 The Directors may delegate any of their powers to a committee of
Directors. Any committee so formed must exercise the powers
delegated to it in accordance with any direction of the
Directors.
29.11 A committee may elect a Chairperson of its meetings but if no
Chairperson is elected or if at any meeting the Chairperson is
not present within 15 minutes after the time appointed for
holding the meeting or declines to act, the Members of that
committee present may choose one of their number to be
Chairperson of the meeting.
29.12 A committee may meet and adjourn as it thinks proper. Questions
arising at any meeting of a committee shall be determined by a
majority of votes of the Members of such committee present and
the Chairperson shall have a deliberative but not second or
casting vote.
29.13 The Directors may delegate any of their powers to one of their
number who shall, in the exercise of the powers so delegated,
conform to any regulations which may be imposed upon him by the
Directors and receive such remuneration as the Directors may
determine.
29.14 All acts done by any meeting of the Directors or of a committee
of Directors or by any person acting as a Director shall,
notwithstanding that it is afterwards discovered that there was
some defect in the appointment of any Director or person so
acting or that they or any of them were disqualified, be as
valid as if every Director or other person had been duly
appointed and was qualified to be a Director.
29.15 A resolution in writing signed --
29.15.1 where the Company has only one Director -- by that
Director; and
29.15.2 where the Company has two or more Directors -- by all
the Directors for the time being entitled to attend and
vote on the resolution
shall be as valid and effectual as if it had been passed at a
meeting of the Directors duly convened and held.
29.16 Any resolution passed in accordance with the provisions of
Clause 29.15 may consist of identical copies of the document
recording the resolution and accompanying information, each
signed by one or more Directors.
29.17 For the purpose of this Constitution the contemporaneous linking
together by telephone or by such other method of audio or audio
visual communication system of a number of the Directors not
less than the quorum specified in Clause 29.5 whether or not any
one or more of the Directors is out of Australia shall
constitute a meeting of the Directors and all the provisions in
this Constitution as to meetings of the Directors shall apply to
such meetings subject to the following conditions namely --
29.17.1 all the Directors for the time being entitled to
receive notice of a meeting of the Directors shall be
entitled to notice of a meeting by telephone or by such
other method of audio or audio visual
45
communication system and to be linked by telephone or
such other audio or audio visual communication system
for the purposes of such meeting;
29.17.2 each of the Directors taking part in the meeting by
telephone or by such other method of audio or audio
visual communication system must be able to hear each
of the other Directors taking part at the commencement
of the meeting; and
29.17.3 at the commencement of the meeting each Director must
acknowledge his presence for the purpose of a meeting
of the Directors of the Company to all other Directors
taking part.
29.18 A notice of a meeting of Directors may be given by telephone or
by such other method of audio or audio visual communication
system as the Directors may from time to time determine or as
provided in Clause 36.
29.19 For the purposes of Clause 29.17 a Director may not leave the
meeting by disconnecting his telephone or such other audio or
audio visual communication system unless he has previously
obtained the express consent of the Chairperson of the meeting
and a Director shall be conclusively presumed to have been
present and to have formed part of the quorum at all times
during the meeting unless he has previously obtained the express
consent of the Chairperson to leave the meeting as aforesaid.
29.20 A minute of the proceedings at meetings convened by telephone or
by such other method of audio or audio visual communication
system shall be sufficient evidence of such proceedings and of
the observance of all necessary formalities if certified to be a
correct minute by the Chairperson of the meeting.
30. SECRETARY
One or more Secretaries shall in accordance with the Law be appointed
as Secretary or Secretaries of the Company by the Directors for such
term at such remuneration and upon such conditions as they may think
fit and any Secretary so appointed may be removed by them.
31. MINUTES
31.1 The Directors shall cause minutes to be made --
31.1.1 of all appointments of officers;
31.1.2 of the names of the Directors present at each meeting
of the Directors and of any committee of the
Directors;
46
31.1.3 of all resolutions and proceedings at all meetings of
Members of the Company and of the Directors and of
committees of Directors and of all resolutions
determined on without meetings; and
31.1.4 of all other matters required by the Law.
31.2 Except in the case of documents deemed to constitute minutes in
accordance with the provisions of the Law and resolutions signed
in accordance with the provisions of Clauses 17.6 and 29.15, all
minutes shall be signed by the Chairperson of the meeting at
which the proceedings were held or by the Chairperson of any
succeeding meeting.
32. SEAL AND EXECUTION OF DOCUMENTS
32.1 The Company may have a common seal.
32.2 The Directors shall provide for the safe custody of the common
seal of the Company (and if they think fit of a Share seal which
is hereby authorized in accordance with the Law) which shall
only be used with the authority of the Directors and every
instrument to which the seal is affixed shall be signed by a
Director or by some other person or persons appointed by the
Directors to attest the affixing of the common seal.
32.3 All documents which of legal necessity need not be under common
seal and which the Company is capable in law of entering into
shall be legally binding on the Company if signed by one of the
Directors or by some other person or persons appointed by the
Directors in that behalf.
32.4 Promissory notes cheques or other negotiable instruments shall
be signed by or on behalf of the Company by one of the Directors
or in such other manner as the Directors may from time to time
determine.
33. DIVIDENDS
33.1 The profits of the Company, subject to any special rights
relating thereto created or authorized by this Constitution and
subject to the provisions of this Constitution as to reserves
and provisions, shall be divisible among the Members in such
proportion as the Directors may from time to time determine
(subject always to the terms on which the Shares in the Company
are issued) but so that all Dividends shall be paid according to
the amounts paid up on the Shares of the class in respect
whereof the Dividend is paid.
33.2 The Directors may (subject always to the terms on which the
Shares in the Company are issued) from time to time determine
that a Dividend is payable to the holders of one class of Shares
to the exclusion of any other class of Shares and may fix the
amount and the time for payment and the method of payment.
47
33.3 In making a determination that a Dividend is payable to the
holders of any class of Shares, the Directors shall not be bound
to consider the proportion of the paid up capital or
Shareholding of any class of Shares in relation to the total
paid up capital or Shareholding in the Company.
33.4 No Dividend shall be paid otherwise than out of profits nor bear
interest against the Company.
33.5 No amount paid on a Share in advance of calls shall while
carrying interest be treated for the purposes of Dividend as
paid up on the Share.
33.6 If several persons are registered as joint holders of any Shares
any one of them may give effectual receipts for any Dividends or
other moneys payable on or in respect of the Share.
33.7 Subject to the provisions of Clause 33.2, any Dividend may be
paid by cheque, sent through the post to the registered address
of the Member or person entitled thereto or in the case of joint
holders to any one of such joint holders at his registered
address, or to such person and such address as the Member or
person entitled or such joint holders (as the case may be) may
direct.
33.8 For the purposes of Clause 33.7 every cheque shall be made
payable to the person to whom it is sent or bearer and crossed
"not negotiable" or to such other person as the Member or person
entitled or such joint holders (as the case may be) may direct.
34. RESERVES AND PROVISIONS
34.1 The Directors may set aside out of the profits of the Company
such sums as they think proper as reserves which shall at the
discretion of the Directors be applicable for any purpose to
which the profits of the Company may be properly applied and
pending any such application may at the like discretion either
be employed in the business of the Company or be invested in
such investments (other than Shares of the Company) as the
Directors may from time to time think fit.
34.2 The Directors may, without placing the same to reserve, carry
forward any profits which they may think prudent not to divide.
34.3 The Directors may, subject to the Law, from time to time pass a
resolution to the effect that any money investments or other
assets available for distribution as Dividends but not required
for the payment or provision of any fixed preferential Dividend
whether standing to the credit of any reserve or provision or
not and --
34.3.1 forming part of the undivided profits of the business
of the Company; or
34.3.2 representing profits arising from an ascertained
accretion to capital or from a revaluation of the
assets of the Company; or
47
34.3.3 arising from the realisation of any capital assets of
the Company or any investments representing the same --
shall be capitalised and, subject to the terms on which the
Shares in the Company are issued, shall be distributed amongst
the holders of all of the Shares or any one or more classes of
Shares as the Directors think fit without making a distribution
among the holders of other classes of Shares or shall be
distributed in different proportions among the holders of
different classes of Shares.
34.4 For the purposes of Clause 34.3 --
34.4.1 a resolution may declare that all or any part of the
capitalised fund shall be applied in paying up in part
or in full any Shares or debentures of the Company and
that such application shall be accepted by the Members
entitled to Share in the distribution in part or full
satisfaction of their respective interests in the
capitalised sum;
34.4.2 when any such resolution has been passed, the Directors
may issue a sufficient number of Shares or may issue a
sufficient amount of debentures to the Members entitled
to Share in the distribution in satisfaction of their
respective interests in the capitalised sum and as
nearly as may be in proportion to the amounts paid up
on the Shares of the relevant class or classes held by
them; and
34.4.3 prior to such issue the Directors may authorize any
person on behalf of the holders of the Shares to whom a
distribution is to be made to enter into any agreement
with the Company for the issue to them of Shares to be
credited as fully paid up or partly paid up and in
satisfaction of the bonus or for the issue to them of
debentures in satisfaction of the bonus any agreement
made under such authority shall be effective.
34.5 For the purposes of giving effect to any resolution for
capitalisation and distribution of undivided profits or other
moneys or for satisfaction of a Dividend by distribution of
Shares or other assets of the Company, the Directors may --
34.5.1 settle as they think expedient any difficulty that may
arise in making the distribution and, in particular,
they may determine that fractions of less value than $1
may be disregarded in order to adjust the rights of all
parties;
34.5.2 fix the distribution value of any specific assets;
34.5.3 determine the amount of any cash payments to be made to
any Members upon the footing of the value so fixed;
34.5.4 vest any such cash or specific assets in trustees for
the persons entitled to the capitalised fund or
Dividend (as the case may be) upon such trusts as may
seem expedient to the Directors; and
49
34.5.5 where necessary, file a proper contract in accordance
with any statutory requirements and appoint any person
to sign the contract on behalf of the persons entitled
to the capitalised fund or Dividend (as the case may
be).
35. ACCOUNTS
The Directors shall keep proper books of account and shall distribute
copies of financial reports as required by the Law and shall from time
to time determine whether and to what extent and at what times and
places and under what conditions or regulations the records, accounts
and books of the Company or any of them shall be open to the inspection
of Members (not being Directors) and no Member (not being a Director)
shall have any right of inspecting any record, account, book or paper
of the Company except as conferred by statute or authorized by the
Directors or by the Company in general meeting.
36. NOTICES
36.1 A notice may be given by the Company to any Member -
36.1.1 personally; or
36.1.2 by sending it by post to him at his registered address
or to the address (if any) supplied by him to the
Company for the giving of notices to him; or
36.1.3 by sending it to the fax number or electronic address
(if any) nominated by the Member; or
36.1.4 by any other means determined by the Directors in
accordance with the provisions of Clause 36.3.
36.2 Where a notice is sent by post, service of the notice shall be
deemed to be effected by properly addressing prepaying and
posting a letter containing the notice and to have been
effected, in the case of a notice of a meeting, on the day after
the date of its posting and in any other case, at the time at
which the letter would be delivered in the ordinary course of
post. A notice of meeting sent by fax or other electronic means
is taken to be given on the business day after it is sent.
36.3 Notwithstanding the provisions of Clause 36.1, if the Directors
shall so determine, a notice may be given by any other means as
shall ensure expeditious receipt of the notice and service of
the notice shall be deemed to be effected if the mode of service
of the notice is properly addressed and paid for and lodged for
delivery or transmission with a competent authority or body and
to have been effected at the time at which in the ordinary
course that mode of service of the notice would be delivered.
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36.4 A notice may be given by the Company to the joint holders of a
Share by giving the notice to the joint holder first named in
the Register in respect of the Share.
36.5 A notice may be given by the Company to the persons entitled to
a Share in consequence of the death or bankruptcy of a Member by
sending it through the post in a prepaid letter addressed to
them by name or by the title of representatives of the deceased
or assignee of the bankrupt or by any like description at the
address if any supplied for the purpose by the persons claiming
to be so entitled or (until such an address has been so
supplied) by giving the notice in any manner in which the same
might have been given if the death or bankruptcy had not
occurred.
36.6 Notice of every general meeting shall be given in any manner
hereinbefore authorized to --
36.6.1 every Member except those Members who have not supplied
to the Company an address for the giving of notices to
them;
36.6.2 every person entitled to a Share in consequence of the
death or bankruptcy of a Member who but for his death
or bankruptcy would be entitled to receive notice of
the meeting;
36.6.3 the auditor for the time being of the Company; and
36.6.4 such other persons as required by the Law.
36.7 No person other than as referred to in Clause 36.6 shall be
entitled to receive notices of general meetings.
37. WINDING UP
37.1 If the Company is wound up the liquidator may with the sanction
of a special resolution of the Company divide amongst the
Members in kind the whole or any part of the assets of the
Company (whether they consist of property of the same kind or
not) and may, for that purpose, set such value as he deems fair
upon any property to be so divided and may determine how the
division shall be carried out as between the Members or
different classes of Members.
37.2 The liquidator may with the sanction of a special resolution
vest the whole or any part of any such assets in trustees upon
such trusts for the benefit of the contributories as the
liquidator with the like sanction thinks fit but so that no
Member shall be compelled to accept any Shares or other
securities whereon there is any liability.
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38. INDEMNITY AND INSURANCE
38.1 Subject to the Law, the Company may indemnify a person who is or
has been an officer of the Company, to the full extent
permissible by law, out of the property of the Company against
all losses or liabilities to another person which any one of
them has or may sustain or incur as such an officer of the
Company or of a related body corporate in the proper performance
of their duties at law or pursuant to the Constitution
including, but not limited to, any liability for negligence or
for reasonable costs and expenses incurred --
38.1.1 in defending proceedings, whether civil or criminal, in
which either judgment is given in favour of the person
or in which the person is acquitted or there is a non
suit of the trial, or the proceeding is otherwise
discontinued, dismissed or stayed or withdrawn before
judgment; or
38.1.2 in connection with an application in relation to such
proceedings in which the Court grants relief to the
person under the Law; or
38.1.3 in connection with any administrative proceedings
relating to the person's position with the Company,
except proceedings which give rise to civil or criminal
prosecutions against that person in which judgment is
not given in that person's favour or in which that
person is not acquitted or which arise out of conduct
involving a lack of good faith.
38.2 The Company may indemnify a person who is or has been an officer
of the Company, to the full extent permissible by law, out of
the property of the Company against any liability to another
person (other than the Company or related body corporate) as
such an officer unless the liability arises out of conduct
involving a lack of good faith.
38.3 Subject to the Law, each officer is entitled to enforce against
the Company any indemnity conferred by Clauses 38.1 and 38.2 for
a period of seven years after the officer ceases for any reason
(including but not limited to death or disability but excluding
removal from office because of conduct involving lack of good
faith) to be an officer of the Company as if at all times during
that period the officer was an eligible officer of the Company
within the meaning of the Law (whether or not that is in fact
the case).
38.4 The Company may pay a premium for a contract insuring a person
who is or has been an officer of the Company and its related
bodies corporate against --
38.4.1 any liability incurred by that person as such an
officer which does not arise out of conduct involving a
willful breach of duty in relation to the Company or a
contravention of sections 232(5) or (6) of the Law; and
38.4.2 any liability for costs and expenses incurred by that
person in defending proceedings relating to that
person's position with the Company, whether civil or
criminal, and whatever their outcome.
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39. DEADLOCK
39.1 In the event of an equality of votes for and against
any resolution proposed or submitted at any meeting of
the Directors that resolution shall be put to a meeting
of the Company called and held for that purpose.
39.2 In the event of an equality of votes for and against
any resolution proposed or submitted at any meeting of
Members of the Company, then that that resolution or
the question to be determined thereby, whether it be or
concern an issue of law or fact or policy or management
of the Company or any other matter or question
concerning the affairs of the Company, shall be
submitted to the arbitration of two arbitrators (one of
whom shall be nominated by the Members voting for the
resolution and one by the Members voting against the
resolution) and their umpire, if the arbitrators shall
not be able to agree upon an award and any such
reference, shall be subject to the provisions of the
Commercial Arbitration Act (1984).
39.3 On the making of an award, each of the Members and
Directors of the Company shall (so far as he may
legally do so) call and hold or cause to be called and
held a meeting of the Company for the purpose of
passing any resolution or resolutions necessary to give
effect to the award of the arbitrators or their umpire
(as the case may be) and each of the Members and
Directors of the Company shall (so far as he may
legally do so) vote in favour of each and every such
resolution and shall do or concur in doing all acts and
things necessary to give effect to such award.
EXHIBIT 27
FINANCIAL DATA SCHEDULE
