Exhibit 99.1
EXECUTION COPY
THIS SHAREHOLDERS' AGREEMENT is made on 18 January 2007
BETWEEN:
(1) ALLIANCE UNICHEM GROUP LIMITED a company established under the laws of
England and whose registered office is at 0 Xxx Xxxxxxx, Xxxxxxxxxx,
Xxxxxxxxx, Xxxxxx, XX00 ONY ("AB");
(2) BEIJING MED-PHARM CORPORATION, a company established under the laws of the
State of Delaware, USA and whose registered office is at 600 W. Germantown
Pike, Suite 400, Plymouth Meeting, PA 19462, USA ("BMP"); and
(3) ALLIANCE BMP LIMITED a company established under the laws of England and
whose registered office is at 0 Xxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxxx, Xxxxxx,
XX00 ONY (the "INVESTMENT VEHICLE").
WHEREAS:
(A) The Investment Vehicle is a newly incorporated private company limited by
shares registered in England. The details of the Investment Vehicle as at
the time immediately prior to the execution of this agreement are set out
in Schedule 1.
(B) AB and BMP wish to invest in the Investment Vehicle to carry on business in
the manner set out in this agreement and for that purpose have agreed to
subscribe for Shares in the Investment Vehicle in the manner set out in
this agreement.
(C) AB and BMP are entering into this agreement in order to establish the
manner in which the Investment Vehicle is to be financed, operated and
managed and to set out the terms governing their relationship as
shareholders in the Investment Vehicle.
IT IS AGREED as follows:
1. INTERPRETATION
DEFINITIONS
1.1 In this agreement, the following terms shall (unless the context
requires otherwise) have the following respective meanings:
"ACCOUNTING PRINCIPLES" means the accounting principles and policies to
be adopted by the Investment Vehicle;
"ACQUISITION" means the acquisition of 50% equity interest in
GPC by the Investment Vehicle;
"AB DIRECTORS" means the directors of the Investment Vehicle
from time to time appointed by the AB
Shareholder pursuant to clause 7.2;
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"AB GROUP" means AB, AB's ultimate holding undertaking
from time to time and their Subsidiaries from
time to time;
"AB SHARES" means the Shares held by a member of the AB
Group;
"AB SHAREHOLDER" means the holder for the time being of the AB
Shares;
"ARTICLES OF ASSOCIATION" means the articles of association of the
Investment Vehicle as they may subsequently be
altered from time to time;
"BMP DIRECTORS" means the directors of the Investment Vehicle
from time to time appointed by the BMP
Shareholder pursuant to clause 7.2;
"BMP GROUP" means BMP and its Subsidiaries from time to
time;
"BMP SHARES" means the Shares held by a member of the BMP
Group;
"BMP SHAREHOLDER" means the holder for the time being of the BMP
Shares;
"BOARD" means the board of directors of the Investment
Vehicle or any duly appointed committee
thereof;
"BUDGET" means a budget for the Investment Vehicle for a
particular Financial Year in a format approved
from time to time by the Board;
"BUSINESS" means the business intended to be carried on by
the Investment Vehicle, as described in clause
3;
"BUSINESS DAY" means a day on which banks generally are open
in London and Beijing for a full range of
business (excluding Saturdays and Sundays);
"CHAIRMAN" means the chairman from time to time of the
Board;
"COMPANY" includes any body corporate, wherever
incorporated;
"COMPETITOR" means any company that engages in the business
of manufacturing of pharmaceutical
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products which is, or reasonably could be, a
supplier of AB or of wholesale or retail
distribution of pharmaceutical products in the
geographic areas in which a party or any of its
Subsidiaries substantially conducts business
and which substantially competes with the
business of a party or any of its Subsidiaries;
"COMPLETION" means completion of the matters referred to in
clause 5;
"CONTROLLING INTEREST" means (i) the ownership or control (directly or
indirectly) of more than fifty per cent (50%)
of the voting share capital of the relevant
undertaking; or (ii) the ability to direct the
casting of more than fifty per cent (50%) of
the votes exercisable at general meetings of
the relevant undertaking on all, or
substantially all, matters; or (iii) the right
to appoint or remove directors of the relevant
undertaking holding a majority of the voting
rights at meetings of the board on all, or
substantially all, matters;
"DEED OF ADHERENCE" means a deed in the form attached as Schedule 2
pursuant to which a transferee or allottee of
Shares agrees to be bound by all the terms of
this agreement as if it had been a signatory;
"DIRECTORS" means directors of the Investment Vehicle;
"EXPERT" means the person appointed pursuant to clause
19;
"FAIR PRICE" means the fair value of the relevant Shares
between a willing seller and a willing third
party buyer in the open market without any
premium or discount being attributable to the
percentage of the issued share capital of the
Investment Vehicle constituted by the relevant
Shares or for the rights or restrictions
applying to the Shares under this agreement or
the Articles of Association and on the
assumption that the Investment Vehicle's
business shall continue to be carried on as a
going concern and the Shares are sold free of
all liens, charges and other encumbrances;
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"FINANCIAL YEAR" means a financial period of the Investment
Vehicle (commencing, other than in the case of
its initial financial period, on 1 April and
ending on 31 March);
"GPC JV CONTRACT" means the Joint Venture Contract to be signed
between the Investment Vehicle and GPCL in
connection with the Investment Vehicle's
investment in GPC, including any subsequent
amendments thereto;
"GPC" means Guangzhou Pharmaceuticals Corporation, a
limited liability company established under the
laws of the PRC with its registered address at
Xx. 00-000 Xxxxxx Xxxx, Xxxxx Xxxxxxxx,
Xxxxxxxxx, XXX;
"GPCL" means Guangzhou Pharmaceutical Company Limited,
a shareholder of GPC and owning 90.09% of the
equity interest of GPC as of the date of this
agreement;
"GROUP" means, in relation to a party, that company and
its holding undertaking, its Subsidiaries or
any Subsidiaries of its holding undertaking for
the time being;
"LIBOR" means, in relation to any relevant sum and any
relevant period, the LIBOR rate per annum at
which Pound Sterling deposits are offered for a
period equal or comparable to such period at or
about 11:00 a.m. (London time) by the British
Bankers' Association on the second Business Day
before the first day of such period as reported
in the Financial Times;
"MEMORANDUM" means the memorandum of association of the
Investment Vehicle as it may subsequently be
altered from time to time;
"PARTIES" means the parties to this agreement and "PARTY"
means any one of them including any other
person who becomes a shareholder of the
Investment Vehicle and who agrees to be bound
by the provisions of this agreement by
executing a Deed of Adherence;
"PERCENTAGE INTERESTS" means the respective proportions in which the
issued ordinary share capital of the Investment
Vehicle is held from time to time
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by the AB Shareholder and the BMP Shareholder,
initially being, in the case of the AB
Shareholder, 80% and, in the case of the BMP
Shareholder, 20%;
"PRC" means the People's Republic of China, excluding
Taiwan, Hong Kong and Macau Special
Administrative Regions for the purpose of this
agreement;
"REGULATORY ACTION" means any order of a court of competent
jurisdiction or any order, decision or
conclusive view made, given or expressed by a
competent governmental or regulatory authority
or agency or an enactment of a legislative
body:
(a) which materially prohibits or restricts
Completion or the transactions
contemplated hereby or requires it to be
delayed beyond the date referred to in
clause 5; or
(b) which after Completion would materially
prohibit or restrict the carrying on of
the business of the Investment Vehicle as
contemplated by this agreement; or
(c) in consequence of which, any of the
parties would incur fines or a liability
in damages were this agreement to be
performed in accordance with its terms;
"SHAREHOLDERS" means AB and BMP (and SHAREHOLDER shall be
construed accordingly);
"SHAREHOLDER MATTERS" means the matters so defined in clause 8.2;
"SHARES" means ordinary shares in the capital of the
Investment Vehicle together with all rights
attaching thereto;
"SUBSIDIARY" means, in relation to an undertaking (the
HOLDING UNDERTAKING), any other undertaking in
which the holding undertaking (or persons
acting on its or their behalf) for the time
being directly or indirectly holds or controls,
or is controlled by, or under common control
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of the holding undertaking either by having:
(a) a majority of the voting rights
exercisable at general meetings of the
members of that undertaking on all, or
substantially all, matters; or
(b) the right to appoint or remove directors
having a majority of the voting rights
exercisable at meetings of the board of
directors of that undertaking on all, or
substantially all, matters,
and any undertaking which is a Subsidiary of
another undertaking shall also be a Subsidiary
of any further undertaking of which that other
is a Subsidiary; (provided that, for the
purposes of this agreement, neither the
Investment Vehicle nor any Subsidiary of the
Investment Vehicle shall be regarded as a
Subsidiary of AB or BMP or any other member of
the AB Group or BMP Group); and SUBSIDIARY
shall be construed accordingly;
"TRANSACTION DOCUMENTS" means the documents to be executed by the
Investment Vehicle and relevant parties
necessary for the consummation of the
Acquisition, including a capital increase
contract, a contract for the transfer of
capital contribution, the GPC JV Contract and
amended, restated articles of association of
GPC, and a memorandum of understanding;
"UNDERTAKING" means a body corporate or partnership or an
unincorporated association carrying on trade or
a business with or without a view to profit
(and, in relation to an undertaking which is
not a company, expressions in this agreement
appropriate to companies shall be construed as
references to the corresponding persons,
officers, documents or organs (as the case may
be) appropriate to undertakings of that
description).
CLAUSES AND SCHEDULES
1.2 Except where the context requires otherwise, references to clauses or
schedules are to clauses of or schedules to this agreement and references
to sub-clauses are to sub-clauses of the clause in which the reference
appears.
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HEADINGS
1.3 Headings are inserted for convenience only and shall not affect the
construction of this agreement or the schedules.
EXERCISE OF POWERS OF CONTROL
1.4 Where any obligation pursuant to this agreement is expressed to be
undertaken or assumed by any party, such obligation shall be construed
as requiring the party concerned to exercise all rights and powers of
control over the affairs of any other person which that party is able
to exercise (whether directly or indirectly) in order to secure
performance of such obligation.
SUCCESSORS AND PERMITTED ASSIGNS
1.5 The expressions "AB", "AB GROUP", "BMP", "BMP GROUP", "SHAREHOLDERS"
and "INVESTMENT VEHICLE" shall, where the context permits, include
their respective successors and permitted assigns.
2. CONDUCT PRIOR TO COMPLETION
The parties shall procure that prior to Completion, the Investment Vehicle
shall not carry on any business and shall have no assets or liabilities of
any nature whatsoever save for the negotiation and execution of the
Transaction Documents and the undertaking of all acts that are necessary
for and/or incidental to the consummation of the Acquisition.
3. BUSINESS OF THE INVESTMENT VEHICLE
BUSINESS
3.1 The business of the Investment Vehicle shall be to invest in and
manage its investment in GPC and to exercise all rights as a
shareholder of GPC. The main business of GPC will be the distribution
of medicinal products inside and outside the PRC. The parties shall do
or cause to be done all reasonable acts necessary or desirable for the
consummation of the Acquisition.
COMMERCIAL PRINCIPLES
3.2 The business of the Investment Vehicle shall be conducted in the best
interests of the Investment Vehicle on sound commercial profit-making
principles with the aim of generating the maximum achievable
maintainable profits available for distribution.
4. CONDITIONS PRECEDENT
CONDITIONS PRECEDENT
4.1 Completion shall be conditional upon each of the following conditions
having first been satisfied (or waived):
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4.1.1 all consents (which for this purpose shall include the expiry of
any period following a notification such that consent is deemed
to be given or no consent is required) of any government or
governmental body or regulatory authority (including any stock
exchange) which are required for the actions contemplated by this
agreement having been obtained in terms satisfactory to each of
AB and BMP;
4.1.2 no material Regulatory Action (or action, proceeding or proposal
which if successfully pursued by the person initiating the same
would result in a Regulatory Action) having been taken which has
not been revoked, annulled, withdrawn, discontinued, abandoned,
repealed, discharged or otherwise ceased to have effect;
4.1.3 all of the conditions precedent under the respective Transaction
Documents have been satisfied (or waived by the Investment
Vehicle) in accordance with the terms thereof.
ENDEAVOURS TO FULFIL CONDITIONS PRECEDENT
4.2 Each party shall use all reasonable endeavours to procure (so far as
it lies within its respective powers so to do) that each of the
conditions precedent set out in clause 4.1 (to the extent that such
conditions are not waived) are fulfilled as soon as possible but in
any event prior to the Long Stop Date as set forth in the GPC JV
Contract.
NON-FULFILMENT OF CONDITIONS PRECEDENT
4.3 If each of the conditions set out in clause 4.1 shall not have been
fulfilled (or waived) by the Long Stop Date as set forth in the GPC JV
Contract, this agreement shall, unless the parties otherwise agree in
writing, thereupon automatically cease and terminate and no party
shall have any claim of any nature whatsoever against the other
parties, save in respect of any prior breach of the provisions of this
agreement.
5. COMPLETION
COMPLETION
5.1 Subject to the satisfaction (or waiver) of the conditions set forth in
clause 4, Completion shall take place at the offices of AB on the date
falling on five (5) Business Days after all of the conditions
precedent under each of the Transaction Documents have been satisfied
(or waived by the Investment Vehicle) in accordance with the terms
thereof or at such other place and time as shall be mutually agreed in
writing between the parties when all of the events set out below shall
take place:
5.1.1 AB shall subscribe unconditionally for 399,992 Shares for the
Pound Sterling equivalent of Renminbi 440,000,000 in cash,
payment for which shall be made in cleared funds for the account
of the Investment Vehicle;
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5.1.2 BMP shall subscribe unconditionally for 99,998 Shares for the
Pound Sterling equivalent of Renminbi 110,000,000 in cash,
payment for which shall be made in cleared funds for the account
of the Investment Vehicle;
5.1.3 the parties shall procure that the Investment Vehicle allots and
issues credited as fully paid:
399,992 Shares to AB; and
99,998 Shares to BMP;
and that the names of AB and BMP are entered in the register of
members of the Investment Vehicle as the respective holders of
the Shares subscribed by them and that share certificates are
issued to AB and BMP in respect of such Shares; and
5.1.4 the parties shall cause the Directors to hold a meeting of the
Board at which the Directors shall pass resolutions to approve
the registration of AB as the owner of the 399,992 Shares and BMP
as the owner of the 99,998 Shares.
RESCISSION
5.2 If either Shareholder ("DEFAULTING SHAREHOLDER") shall fail or be
unable to comply with any of its obligations under clause 5.1 (time
being of the essence), the other Shareholder ("NON-DEFAULTING
SHAREHOLDER") shall, at its sole discretion:
5.2.1 defer Completion by ten (10) Business Days (and so that the
provisions of this clause shall apply to Completion so deferred);
or
5.2.2 rescind this agreement without liability on its part (for the
avoidance of doubt, the non-defaulting Shareholder shall not be
obliged to perform any of its obligations under clause 5.1); or
5.2.3 pay to the Investment Vehicle in cleared funds the amount for
the Shares to have been subscribed by the Defaulting Shareholder
as set forth in clause 5.1.2 or 5.1.3, as the case may be.
In event of the occurrence of clause 5.2.3, the Defaulting Shareholder
shall forthwith transfer all Shares it owns to the Non-Defaulting
Shareholder. The Non-Defaulting Shareholder shall pay the Defaulting
Shareholder a sum equivalent to the amount it paid for those Shares
and rescind this agreement.
5.3 Save as set forth in clause 5.2, neither Shareholder shall be entitled
to rescind this agreement, whether before or after Completion, for any
reason whatsoever.
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6. CAPITAL AND FURTHER FINANCE
ISSUE OF NEW SHARES
6.1 The issued share capital of the Investment Vehicle may from time to
time be increased by such sum as shall be mutually agreed between the
parties in accordance with this clause 6 but so that (unless the
parties agree otherwise) no Shares shall be issued other than to a
member of the AB Group and BMP Group.
FUNDING SUPPORT BY THE PARTIES
6.2 It is the intention of the parties that the Investment Vehicle should
be self-financed from the cash contribution of AB and BMP made from
time to time. It is also the intention of the parties that the initial
contributions of AB and BMP shall be sufficient to fund 50% of the
post-money investment in GPC. Notwithstanding anything contrary
herein, if as a result of any appreciation of Renminbi against Pound
Sterling, the aggregate sum of the subscription monies paid by AB and
BMP pursuant to clauses 5.1.1 and 5.1.2 is less than Renminbi
436,035,600, then each of AB and BMP shall timely make additional
capital contribution or extend a loan to the Investment Vehicle in the
proportion of their respective Percentage Interest to cover such
shortfall so as to enable the Investment Vehicle to duly fulfill its
payment obligations with respect to the Acquisition under the relevant
Transaction Documents. The Shareholders acknowledge their intention to
support the Investment Vehicle in duly complying with its obligations
under the GPC JV Contract and in the acquisition of additional equity
in GPC in accordance with the terms of any written agreement(s)
between the Investment Vehicle and GPCL. Subject to clause 6.4, in the
event the Investment Vehicle is required to inject additional capital
into GPC, and/or to provide shareholders' loans to GPC, and/or to
provide guarantee for loans borrowed by GPC, all in accordance with
the terms and conditions of the GPC JV Contract or if the Investment
Vehicle is required to fund the acquisition of additional equity in
GPC in accordance with the written agreement(s) between the Investment
Vehicle and GPCL, the Shareholders shall provide such guarantees and
undertakings as may reasonably be required to ensure the adequate
funding of the Investment Vehicle so that the Investment Vehicle can
duly comply with its funding and other obligations under the GPC JV
Contract or under the written agreement(s) with GPCL, as the case may
be.
FURTHER FINANCE
6.3 If the Board considers at any time that further finance is required
for the Business, the Board must submit such matter to a Shareholders'
meeting for approval. The Shareholders shall discuss in good faith
whether to provide such further finance, and if so, the method and
timing by which such finance is to be provided. Any further
contribution of finance to the Investment Vehicle (whether by way of
subscription for Shares, stock or debentures or by way of loan or
otherwise) shall, unless otherwise agreed between the Shareholders, be
made by each of them in the proportion of the Percentage Interests, at
the same time and on the same terms.
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COMMITMENTS OF THE PARTIES
GUARANTEES
6.4 Unless approved in a Shareholders' meeting, neither Shareholder (nor
any member of its respective Group) shall be obliged to participate
for the benefit of the Investment Vehicle in any financing arrangement
with any bank or financial institution, whether as a guarantor or in
any other capacity whatsoever. If and to the extent that the parties
agree to participate (or agree to procure that members of their
respective Groups participate) in any such financing arrangement then,
unless the parties otherwise agree, any liability or obligation to be
assumed by them in relation to any such financing shall be borne in
their Percentage Interests. Any such liability or obligation shall,
unless otherwise agreed, be several and not joint or joint and
several.
DEFAULT
6.5 If either Shareholder shall (without the consent of the other) fail to
subscribe for additional Shares or provide its share of such further
finance in accordance with clause 6.3 within the period agreed to by
the Shareholders at a Shareholders' meeting, then the non-defaulting
Shareholder shall have the right (and without prejudice to any other
remedies available to it), at its option:
(a) to subscribe for additional Shares in any amount equal to the
amount to have been subscribed by the defaulting Shareholder and
the Shareholders shall procure that the necessary authorisations
are given and steps taken for such Shares to be allotted and
issued to the non-defaulting Shareholder; and/or
(b) make the loan which the defaulting Shareholder should have made
in whole or in part and the defaulting Shareholder must repay on
demand to the other Shareholder the total amount of the loan paid
on its behalf together with interest at the rate of 3% over LIBOR
calculated on a daily basis from the date of the contribution
until it repays the other Shareholder in full, failing which, the
defaulting Shareholder hereby agrees to assign to the
non-Defaulting Shareholder the right to receive all dividends and
distributions which the defaulting Shareholder would otherwise
have been entitled under this agreement or the Articles of
Association and to apply such dividends and distributions in
repaying the aforesaid amount (together with accrued interest).
6.6 If either Shareholder shall (without the consent of the other) fail to
provide the guarantee or other security as required pursuant to clause
6.4, the non-defaulting Shareholder may (without prejudice to any
other remedies available to it) provide such guarantee or other
security which the defaulting Shareholder should have provided in
whole or in part. The defaulting Shareholder must pay on demand to the
other Shareholder interest on the amount of the guarantee or other
security provided on its behalf at the rate of 3% over LIBOR
calculated on a daily basis from the date of the provision of such
guarantee or other security by the other Shareholder until it provides
such guarantee or other security in place of the other Shareholder. If
the defaulting
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Shareholder fails to pay the aforesaid interest, the defaulting
Shareholder hereby agrees to assign to the non-Defaulting Shareholder
the right to receive all dividends and distributions which the
defaulting Shareholder would otherwise have been entitled under this
agreement or the Articles of Association and to apply such dividends
and distributions in repaying the aforesaid amount.
7. DIRECTORS AND MANAGEMENT
SUPERVISION BY THE BOARD
7.1 Overall direction, supervision and management of the Investment
Vehicle shall be the responsibility of the Board. In addition, the
Board shall be responsible for approving the annual Budget of the
Investment Vehicle. The Board shall not, however, take any decision in
relation to any of the Shareholder Matters without the prior approval
of the Shareholders.
BOARD OF DIRECTORS
7.2 The Board shall be comprised of AB Directors and BMP Directors. Until
otherwise agreed by the parties, there shall be a maximum of four (4)
Directors of which for a period of two (2) years from Completion and
thereafter for so long as BMP is the holder of not less than 10% of
the total issued Shares, BMP shall be entitled to appoint or remove
one (1) director from time to time. AB shall have the right to appoint
and remove three (3) Directors provided it holds between 50% and 90%
of the total issued Shares. If at any time BMP holds more than 50% of
the total issued Shares, each of AB and BMP shall be entitled to
appoint or remove such proportion of the total number of Directors
with reference to its respective Percentage Interest. The initial
appointments to the Board are as follows:
AB DIRECTORS BMP DIRECTORS
--------------- -------------
Xxxxx Xxxxx Xxxxx Xxx
Xxxxxxx Xxxxxxx
Xxxxx Xxxxxxxx
APPOINTMENT AND REMOVAL OF DIRECTORS
7.3 Any appointment or removal of a Director nominated by a Shareholder
shall be effected by notice in writing to the Investment Vehicle
signed by or on behalf of the Shareholder in question and shall take
effect, subject to any contrary intention expressed in the notice,
when the notice effecting the same is delivered to the Investment
Vehicle. Any such removal shall be without prejudice to any claim
which a Director so removed may have under any contract between him
and the Investment Vehicle, provided that in the case of a claim made
by a Director in respect of such removal then the Shareholder so
removing such Director shall indemnify the Investment Vehicle in
respect of any liability arising in respect of such removal. Each
Shareholder shall
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consult with the other prior to any appointment or removal of a
Director. If a Shareholder ceases to hold Shares, it will procure the
resignation of all the Directors appointed by it and will indemnify
the other Shareholders and the Investment Vehicle against any claims
which may be brought by such Directors.
7.4 Each Director shall be entitled to appoint any person to be his
alternate and each alternate shall have one vote for every Director
whom he represents provided that if such alternate is himself a
Director then he shall have one vote for every Director whom he
represents in addition to any vote of his own.
7.5 BMP shall be entitled to appoint an observer to attend any duly
convened meeting of the Board in addition to the BMP Director during
any period in which there is only one BMP Director. Such observer
shall have all such rights of information and obligations as to
confidentiality as if he were a BMP Director appointed as such but
shall not be entitled to vote on any matter whatsoever. BMP shall be
liable to AB and the Investment Vehicle for any breach of the
aforesaid confidentiality obligations by the observer.
QUORUM
7.6 The quorum for the transaction of business at any meeting of the Board
shall be two (2) Directors with at least one (1) AB Director and at
least one (1) BMP Director present at the time when the relevant
business is transacted. If such a quorum is not present within thirty
(30) minutes from the time appointed for the meeting or if during the
meeting such a quorum ceases to be present, the meeting shall be
adjourned, until the same time and place, for seven (7) Business Days.
If at such adjourned meeting a quorum is not present within thirty
(30) minutes from the time appointed for such adjourned meeting (or
such longer interval as the chairman of the meeting may think fit to
allow), any two (2) or more Directors present in person or by his
alternate shall constitute a quorum.
BOARD MEETINGS
7.7 The parties intend there to be a board meeting at least once every 3
months.
NOTICE AND AGENDA
7.8 At least fourteen (14) Business Days written notice shall be given to
each of the members of the Board of any meeting of the Board, provided
always that a shorter period of notice may be given with the written
approval of at least one AB Director and at least one BMP Director.
Any such notice shall contain, inter alia, an agenda identifying in
reasonable detail the matters to be discussed at the meeting and shall
be accompanied by copies of any relevant papers to be discussed at the
meeting. Any matter which is to be submitted to the Board for a
decision which is not identified in reasonable detail as aforesaid
shall not be decided upon, unless otherwise agreed in writing by all
of the members of the Board.
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BOARD VOTING
7.9 Except as provided herein, matters for decision by the Board shall be
decided by simple majority vote. Each Director shall have one vote.
For the avoidance of doubt, the Chairman shall not have a casting
vote. Directors may participate in a meeting of the Board by means of
conference telephone or similar communications equipment whereby all
persons participating in the meeting can hear each other and such
participation shall constitute presence in person. Resolutions of the
Board may be passed by circular resolution signed by all the
Directors.
GPC BOARD
7.10 The Directors shall also serve as directors of GPC to be appointed by
the Investment Vehicle ("IV GPC DIRECTORS") under the GPC JV Contract.
All IV GPC Directors shall vote as a single block at all board of
directors meetings of GPC based on the decisions made by the Board.
XXXXX XXX
7.11 For so long as Xxxxx Xxx remains an employee of BMP and for the period
in which BMP shall be entitled to appoint Directors pursuant to clause
7.2, BMP shall procure that Xxxxx Xxx will provide such services to
the Investment Vehicle that may be reasonably requested by the Board
from time to time. The provision of such services shall be at no
charge to the Investment Vehicle or the AB Shareholder. In the event
that BMP ceases at any time to have any interest in the Investment
Vehicle (including without limitation if it becomes a Defaulting
Shareholder under clause 5.2), BMP shall continue to provide the
aforesaid services of Xxxxx Xxx to the Investment Vehicle for twelve
(12) months thereafter. This clause 7.11 shall survive the termination
or rescission of this agreement.
7.12 In the event that Xxxxx Xxx ceases to be involved with BMP (in any
capacity, whether as employee, director, chairman, consultant or
otherwise) BMP agrees not to prevent Xxxxx Xxx'x continuing
involvement with the Investment Vehicle.
NO REMUNERATION FOR DIRECTORS
7.13 For the avoidance of doubt no Director (acting in that capacity) shall
at any time be entitled to any form of remuneration whether fees,
salary, options, shares or otherwise from the Investment Vehicle.
DIRECTORS' EXPENSES
7.14 The Investment Vehicle shall reimburse a Director for all reasonable
expenses incurred by the Director in the due and proper performance of
his/her duties as a director of the Investment Vehicle upon the
presentation of written receipts of such expenses by the Director.
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NON-SOLICITATION
7.15 Each of the Shareholders undertakes that it will not for the duration
of this agreement solicit or entice away from the employment of the
other Shareholder or any of its Subsidiaries any senior employee who
has been employed by such Shareholder or Subsidiary for a period of at
least six months prior to Completion.
8. SHAREHOLDER MATTERS
USE OF POWERS
8.1 The parties shall use their respective powers to procure, so far as
they are legally able, that so long as the Percentage Interest of a
Shareholder is not less than 15%, no decision relating to any of the
matters specified in clause 8.2 (SHAREHOLDER MATTERS) shall be taken
(whether by the Board, the Investment Vehicle or any of the officers
or managers within the Investment Vehicle) unless approved by
unanimous vote of all the Shareholders at a duly constituted
Shareholders' meeting.
SHAREHOLDER MATTERS
8.2 The Shareholder Matters are the following:
change in nature of Business
8.2.1 any material change in the nature or scope of the Business (as
described in clause 3.1) of the Investment Vehicle other than any
disposal or increase of any equity interest in GPC;
charges
8.2.2 subject to compliance with the provisions of clause 6, the
creation of any mortgage, charge, encumbrance or other security
interest of whatsoever nature in respect of all or any material
part of the undertaking, property or assets of the Investment
Vehicle involving an amount in excess of Pound Sterling 5,000,000
or its equivalent or such other sum as may be agreed between the
Shareholders from time to time;
winding-up
8.2.3 any proposal that the Investment Vehicle be wound-up.
METHOD OF APPROVAL BY SHAREHOLDERS
8.3 The approval of the Shareholders to any of the Shareholder Matters (or
to any variation thereof) shall be given either in writing by AB and
BMP by their authorised representatives for this purpose or by
representatives of the Shareholders at a meeting of the Shareholders.
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MEETINGS OF SHAREHOLDERS
8.4 Meetings of Shareholders shall take place in accordance with the
applicable provisions of the Articles of Association on the basis
(inter alia) that:
8.4.1 subject to clause 8.5, a quorum shall be one (1) duly authorised
representative of the AB Shareholder and one (1) duly authorised
representative of the BMP Shareholder;
8.4.2 the notice of meeting shall (unless otherwise agreed by each of
the Shareholders) set out an agenda identifying in reasonable
detail the matters to be discussed;
8.4.3 questions arising at any Shareholders' meeting shall be decided
by a simple majority vote except where a greater majority is
required by the Articles of Association, this agreement or under
relevant corporate laws;
8.4.4 a decision to approve any of the Shareholder Matters shall
require a unanimous vote of all the Shareholders.
8.5 If a quorum at a meeting of the Shareholders is not present within
thirty (30) minutes from the time appointed for the meeting or if
during the meeting such a quorum ceases to be present, the meeting
shall be adjourned, until the same time and place, for seven (7)
Business Days. If at such adjourned meeting a quorum is not present
within thirty (30) minutes from the time appointed for such adjourned
meeting, the duly authorised representative of a Shareholder present
in person shall constitute a quorum.
8.6 Shareholders may participate in a meeting of the Shareholders by means
of video conference or similar communications equipment whereby all
persons participating in the meeting can see and hear each other and
such participation shall constitute presence in person. Resolutions of
the Shareholders may be passed by circular resolution signed by all
the Shareholders.
Any matters requiring a meeting of or approval by the Shareholders under
relevant corporate laws, but not covered by the Shareholder Matters, shall
be dealt with in accordance with the Articles of Association.
9. DEADLOCK
9.1 There is a deadlock if a resolution in respect of any Shareholder
Matters is proposed at a properly convened meeting of Shareholders or
of the Board of Directors and one of the following applies:
9.1.1 where it is a meeting of Directors, of the Directors present,
all AB Directors or all BMP Directors, vote against or abstain
from voting on the resolution (unless one of their number
proposed the resolution); or
9.1.2 where it is a meeting of Shareholders, all the Shareholders of
the AB Shares or all the Shareholders of the BMP Shares vote
against or
Page 16
abstain from voting on the resolution (unless one of their number
proposed the resolution).
9.2 There is no deadlock if a meeting, or adjournment, is inquorate
because the person who proposed the resolution does not attend.
9.3 Either Shareholder may within twenty eight (28) Business Days of the
meeting at which the deadlock arises (the first day being the day
after the meeting) serve notice on the other Shareholder (Deadlock
Notice):
9.3.1 stating that in its opinion a deadlock has occurred; and
9.3.2 identifying the matter giving rise to the deadlock.
9.4 The parties undertake that after service of the Deadlock Notice they
shall:
9.4.1 immediately refer the matter giving rise to the deadlock to the
senior representative of the holding undertaking of each
Shareholder's Group; and
9.4.2 use all reasonable endeavours in good faith to resolve the
dispute.
10. RESOLUTION OF DEADLOCK
10.1 A Deadlock Resolution Notice is a notice served by one Shareholder on
the other in which the server offers, at the price for each Share
specified in the notice (in cash and not on deferred terms), either to
sell all its Shares in the Investment Vehicle to the recipient of the
notice or to buy all the recipient's Shares in the Investment Vehicle.
10.2 A Deadlock Resolution Notice:
10.2.1 may not be revoked; and
10.2.2 may not be served before the second anniversary of the date of
Completion.
10.3 If the Shareholders are unable to resolve the deadlock within sixty
(60) days from the date the deadlock matter is referred to the senior
representatives under clause 9.4 then either Shareholder may within
twenty eight (28) Business Days of the expiry of the fourteen (14)
Business Day period (the first day is the day after the day of expiry)
serve a Deadlock Resolution Notice on the other.
10.4 The recipient of a Deadlock Resolution Notice may choose to do either
of the following, at the price for each Share specified in the
Deadlock Resolution Notice, by serving a counter-notice within twenty
eight (28) Business Days of receiving the Deadlock Resolution Notice
(the first day is the day after the day of receipt):
10.4.1 to buy all the Shares of the server of the Deadlock Resolution
Notice; or
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10.4.2 to sell all its Shares to the server of the Deadlock Resolution
Notice.
10.5 If no counter-notice is served within the period of twenty eight (28)
Business Days available, the recipient of the Deadlock Resolution
Notice is deemed to have accepted the offer in the Deadlock Resolution
Notice at the expiry of that period.
10.6 The service of a counter-notice or deemed acceptance of the Deadlock
Resolution Notice shall bind the parties to buy and sell the Shares
(as the case may be) on the terms set out in clause 21.
10.7 References in this clause to all the Shares of a Shareholder in the
Investment Vehicle are to all the Shares in the Investment Vehicle
held by that Shareholder and not some only of those Shares.
11. FINANCIAL MATTERS
ACCOUNTING PRINCIPLES
11.1 The Investment Vehicle shall, in relation to its financial statements,
adopt accounting principles under the International Financial
Reporting Standards and in accordance with the accounting principles
applicable to Subsidiaries of AB.
AUDITORS
11.2 Unless otherwise agreed by the Shareholders, the auditors of the
Investment Vehicle shall be such other firm of accountants of
recognised international standing as may be nominated by AB.
FINANCIAL YEAR
11.3 The Financial Year of the Investment Vehicle (and any change thereto)
shall be such financial year as may be determined by AB.
12. INFORMATION AND REPORTING
INSPECTION AND INFORMATION
12.1 Each of the Shareholders shall be entitled to examine the separate
books, records and accounts to be kept by the Investment Vehicle and
to be supplied with all information, including monthly management
accounts and operating statistics and other trading and financial
information, in such form as the Board shall determine to keep it
properly informed about the business and affairs of the Investment
Vehicle Group and generally to protect its interests as a Shareholder.
ACCOUNTS AND BUDGETS
12.2 The Shareholders shall, in any event and without prejudice to the
generality of clause 12.1, be supplied by the Investment Vehicle with
copies of:
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12.2.1 audited accounts of the Investment Vehicle (complying with all
relevant legal requirements);
12.2.2 revenue and capital Budgets for each Financial Year and showing
all material proposed acquisitions, disposals and other
commitments for such Financial Year; and
12.2.3 quarterly management accounts of the Investment Vehicle (such
accounts to include a profit and loss account, balance sheet and
cash flow statement).
13. CONFIDENTIALITY
CONFIDENTIALITY OBLIGATION
13.1 Each Shareholder undertakes with the other that it shall use (and
shall procure that each of its Subsidiaries shall use) all reasonable
endeavours to keep confidential (and to ensure that its officers,
employees, agents and professional and other advisers keep
confidential) any information:
13.1.1 which it may have or acquire (whether before or after the date
of this agreement) in relation to the customers, business, assets
or affairs of any member of the Investment Vehicle or the
Investment Vehicle itself (including, without limitation, any
information provided pursuant to clause 12);
13.1.2 which, in consequence of the negotiations relating to this
agreement or being a shareholder in the Investment Vehicle or
having appointees on the Board or the exercise of its rights or
performance of its obligations under this agreement, it may have
or acquire (whether before or after the date of this agreement)
in relation to the customers, business, assets or affairs of any
member of the AB Group (if the Shareholder is BMP) or of any
member of the BMP Group (if the Shareholder is AB); or
13.1.3 which relates to the contents of this agreement (or any
agreement or arrangement entered into pursuant to this agreement.
Neither Shareholder shall use for its own business purposes or
disclose to any third party any such information (collectively,
CONFIDENTIAL INFORMATION) without the consent of the other
Shareholder, save that a Shareholder can use information relating to
the Investment Vehicle for its own internal business purpose.
EXCEPTIONS FROM CONFIDENTIALITY OBLIGATION
13.2 The obligation of confidentiality under clause 13.1 shall not apply
to:
13.2.1 the disclosure (subject to clause 13.3) on a "need to know"
basis to a company which is another member of the AB Group or BMP
Group (as the case may be) where such disclosure is for a purpose
reasonably relevant to this agreement;
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13.2.2 information which is independently developed by the relevant
Shareholder or acquired from a third party to the extent that it
is acquired with the right to disclose the same;
13.2.3 the disclosure of information to the extent required to be
disclosed by law, any stock exchange regulation or any binding
judgment, order or requirement of any court or other competent
authority;
13.2.4 the disclosure of information to the extent required to be
disclosed under the corporate policies of the Shareholder who
needs to disclose the information;
13.2.5 the disclosure of information to any tax authority to the
extent reasonably required for the purposes of the tax affairs of
the Shareholder concerned or any member of its Group;
13.2.6 the disclosure (subject to clause 13.3) in confidence to a
Shareholder's professional advisers of information reasonably
required to be disclosed for a purpose reasonably incidental to
this agreement;
13.2.7 information which becomes within the public domain (otherwise
than as a result of a breach of this clause 13); or
13.2.8 any announcement made in accordance with the terms of clause
28.
EMPLOYEES, ADVISERS ETC
13.3 Each Shareholder shall inform (and shall procure that any Subsidiary
shall inform) any officer, employee or agent or any professional or
other adviser advising it in relation to the matters referred to in
this agreement, or to whom it provides Confidential Information, that
such information is confidential and shall instruct them:
13.3.1 to keep it as confidential; and
13.3.2 not to disclose it to any third party (other than those persons
to whom it has already been disclosed in accordance with the
terms of this agreement).
The disclosing party shall remain responsible for any breach of this
clause 13 by the person to whom it is disclosed.
INVESTMENT VEHICLE'S CONFIDENTIALITY OBLIGATION
13.4 The Investment Vehicle shall observe a similar obligation of
confidence in favour of the Shareholders and each of their
Subsidiaries.
SURVIVAL AFTER TERMINATION
13.5 The provisions of this clause 13 shall survive any termination of this
agreement.
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14. REGULATORY MATTERS
CO-OPERATION
14.1 The parties shall respectively co-operate with each other to ensure
that all information necessary or desirable for the making of (or
responding to any requests for further information consequent upon)
any notifications or filings made in respect of this agreement, or the
transactions contemplated hereunder, is supplied to the party dealing
with such notifications and filings and that they are properly,
accurately and promptly made.
REGULATORY ACTION
14.2 If any material Regulatory Action is taken or threatened, the parties
shall promptly meet to discuss the situation and the action to be
taken as a result and whether any modification to the terms of this
agreement (or any agreement entered into pursuant to this agreement)
should be made, in order that any requirements (whether as a condition
of giving any approval, exemption, clearance or consent or otherwise)
of the Commission of the European Communities or other relevant
regulatory authority may be reconciled with, and within the intended
scope of, the business arrangement contemplated by this Agreement. The
parties shall co-operate in giving effect to any modifications so
agreed upon.
15. RELATIONSHIP WITH AB GROUP AND BMP GROUP
CONTRACTS
15.1 Each Shareholder shall procure that (without prejudice to clauses 8
and 9) any contracts between members of the Investment Vehicle and
members of that Shareholder's Group shall be made on an arm's length
commercial basis and on terms that are not unfairly prejudicial to the
interests of either Shareholder. Each Shareholder undertakes to the
other to use all reasonable endeavours to ensure that such terms are
negotiated and settled in good faith and that, subject to such terms,
any orders placed are fulfilled in a prompt and efficient manner.
15.2 The parties acknowledge that BMP may negotiate with GPC for GPC to
distribute medicinal products represented by BMP in the PRC. AB will
provide reasonable support to assist BMP in such negotiations with GPC
provided that (a) the distribution arrangement would present a
reasonable business opportunity beneficial to GPC and not prejudicial
to AB Group's interest, (b) the terms of the relevant agreement(s)
between GPC and BMP will be made on an arms-length commercial basis,
and (c) such support from AB does not involve any financial
obligations on the part of AB.
PROMOTION OF THE INVESTMENT VEHICLE'S INTEREST
15.3 The parties confirm their intention to promote the best interests of
the Investment Vehicle and to consult fully on all matters materially
affecting the development of the business of the Investment Vehicle.
Each Shareholder
Page 21
shall act in good faith towards the other in order to promote the
success of the Investment Vehicle.
16. TRANSFER OF SHARES
16.1 BMP shall not transfer, grant any security interest over, or otherwise
dispose of or give any person any rights in or over any Share or
interest in any Share unless it is permitted or required under this
agreement.
16.2 BMP may do anything prohibited by this clause if AB has consented to
it in writing.
16.3 BMP may transfer all of its Shares to a member of its Group which is
100% owned by BMP or which is 100% owned by BMP's current holding
undertaking without following the steps in this clause if at the time
of the transfer and in relation to the Shares being transferred, BMP:
16.3.1 procures that the transferee executes and delivers to the AB
and the Investment Vehicle a Deed of Adherence; and
16.3.2 guarantees all the obligations and any liability of the
transferee under this agreement.
16.4 BMP may transfer all its Shares to any person who is (i) not a
Competitor of any member of the AB Group or (ii) not otherwise
connected with BMP through ownership or contract for cash
consideration only provided that BMP follows the steps in this clause.
16.5 If BMP wishes to transfer its Shares, it shall give an irrevocable
notice ("TRANSFER NOTICE") to AB of the details of the proposed
transfer including, in particular, the identity of the buyer, the
price of the Shares and details of any material terms or circumstances
known to BMP which may affect the offer.
16.6 If AB gives notice to BMP within twenty eight (28) Business Days of
receiving the Transfer Notice (the first day being the day after it
receives the Transfer Notice) that it wishes to buy all BMP Shares, AB
shall have the right to do so at the price specified in the Transfer
Notice.
16.7 AB is bound to buy all of BMP's Shares when it gives notice to BMP
under clause 16.6 that it wishes to do so. The sale and purchase of
Shares shall take place on the terms set out in clause 21.
16.8 If at the expiry of the period specified in clause 16.6, AB has not
notified BMP that it wants to buy the Shares, BMP may transfer all its
Shares to the buyer identified in the Transfer Notice at a price not
less than the price specified in that notice provided that it does so
within three (3) months of the expiry of the period specified in
clause 16.6.
16.9 BMP shall procure that, in relation to the Shares being sold in the
Investment Vehicle, any buyer of the Shares who is not already a party
to this agreement, shall execute and deliver to AB and the Investment
Vehicle a Deed of Adherence at completion.
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16.10 References in this clause to Shares held by BMP are to all the Shares
held by any member of the BMP Group and not to some only of those
Shares.
17. OBLIGATORY TRANSFER EVENT
17.1 If anything mentioned in this clause happens to a Shareholder it is an
Obligatory Transfer Event in respect of that Shareholder:
17.1.1 the liquidation (voluntary or otherwise) of the Shareholder or
the AB Shareholder or BMP Shareholder, other than a genuine
solvent reconstruction or amalgamation in which the new company
assumes (and is capable of assuming) all the obligations of the
Shareholder or the AB Shareholder or BMP Shareholder;
17.1.2 a change of Controlling Interest of BMP where the acquirer of
the Controlling Interest is a Competitor of AB;
17.1.3 an order is made by a court of competent jurisdiction, or a
resolution is passed for the administration of a Shareholder, or
documents are filed with the court for the appointment of an
administrator, or notice of intention to appoint an administrator
is given by the Shareholder, or its directors or by a qualifying
floating charge holder;
17.1.4 any step is taken by any person other than a member of the
other Shareholder's Group (and is not withdrawn or discharged
within ninety (90) Business Days to appoint a receiver,
administrative receiver or manager in respect of the whole or a
substantial part of the assets or undertaking of the Shareholder
or the AB Shareholder or BMP Shareholder;
17.1.5 the Shareholder or the AB Shareholder or BMP Shareholder being
unable to pay its debts as they fall due;
17.1.6 the Shareholder or the AB Shareholder or BMP Shareholder
entering into a composition or arrangement with its creditors;
17.1.7 any chargor enforcing any charge created over any of its
Shares; or
17.1.8 if a process has been instituted that could lead to the
Shareholder being dissolved and its assets being distributed
among the party's creditors, shareholders or other contributors.
18. TRANSFER FOLLOWING OBLIGATORY TRANSFER EVENT
18.1 Where an Obligatory Transfer Event happens to a Shareholder it shall
give notice of it to the other Shareholder as soon as possible and, if
it does not, is deemed to have given notice of it on the date on which
the other Shareholder becomes aware of the Obligatory Transfer Event.
18.2 The Shareholder receiving notice of an Obligatory Transfer Event
("RECIPIENT") has the right, within sixty (60) days of receiving the
notice (the first day is the day after it received notice), to demand
the other Shareholder
Page 23
("OTHER SHAREHOLDER") to transfer all of the Other Shareholder's
Shares to the Recipient at a specified price for cash and not on
deferred terms by serving a written notice to the Other Shareholder
("DEMAND NOTICE").
18.3 The party receiving a Demand Notice pursuant to clause 18.2 may with
sixty (60) days of receipt of the Demand Notice:
(a) accept the price offered for the Shares in the Demand Notice; or
(b) request that a Fair Price for the Shares is determined by the
Expert
but shall be deemed to have accepted the price stated in the Demand
Notice if it does not expressly accept or request a Fair Price
determination within the period specified herein.
18.4 The price for the Shares the subject of the Demand Notice shall be the
price stated in the Demand Notice if by the expiry of the period
referred to in clause 18.3 if it has been so accepted or deemed to
have been accepted under clause 18.3 or the Fair Price determined by
the Expert.
18.5 Where the price is referred to the Expert pursuant to clause 18.3,
within ten (10) Business Days of the date of such referral:
(a) the purchaser of the Shares shall pay in escrow a sum equivalent
to the price set out in the Demand Notice ("ESCROW MONIES") to an
escrow agent jointly appointed by the selling party and the
purchasing party pursuant to an escrow agreement in such form and
substance satisfactory to them ("ESCROW AGENT"); and
(b) the seller of the Shares shall deposit with the Escrow Agent a
share transfer form and all other documents necessary to effect
the transfer of the Shares to the purchasing party, all undated
and duly executed by the selling party ("SHARE TRANSFER
DOCUMENTS").
Upon the parties' receipt from the Expert of the Fair Price determined
by the Expert and subject to clause 21:
(x) if the Fair Price determined by the Expert is equal to the price
for the Shares set out in the Demand Notice, the Escrow Agent
shall respectively release the Share Transfer Documents to the
purchasing party and the Escrow Monies to the selling party; or
(y) if the Fair Price determined by the Expert exceeds the price for
the Shares set out in the Demand Notice, the Escrow Agent shall
respectively release the Share Transfer Documents to the
purchasing party and the Escrow Monies to the selling party; and
the purchasing party shall, on the same date thereof, pay to the
selling party a sum equivalent to the difference between the Fair
Price determined by the Expert and the price for the Shares set
out in the Demand Notice; or
(z) if the Fair Price determined by the Expert is less than the price
for the Shares set out in the Demand Notice, then at the same
time the Escrow
Page 24
Agent releases the Share Transfer Documents to the purchasing
party, the Escrow Agent shall release to the selling party a sum
equivalent to the Escrow Monies less the difference between the
Fair Price determined by the Expert and the price for the Shares
set out in the Demand Notice and shall refund the balance of the
Escrow Monies to the purchasing party.
The costs of the Escrow Agent shall be equally borne by the selling
party and the purchasing party.
18.6 Subject to the foregoing acceptance or deemed acceptance of the price
stated in the Demand Notice or the price determined by the Expert
shall bind the Shareholders to buy and sell the Shares of the selling
party in accordance with clause 21.
19. EXPERT
19.1 An Expert is a person appointed in accordance with this clause to
resolve a matter under this agreement.
19.2 The Shareholders shall endeavour to agree on the appointment of an
independent Expert.
19.3 If the Shareholders are unable to agree on an Expert within seven (7)
Business Days of either Shareholder serving details of a suggested
expert on the other, either Shareholder shall then be entitled to
request the president of the Institute of Chartered Accountants in
England and Wales to appoint an Expert who is an accountant of repute
with experience in the valuation of companies in the pharmaceutical
distribution sector.
19.4 The Expert is required to prepare a written decision and give notice
(including a copy) of the decision to the parties within a maximum of
three (3) months of the matter being referred to the Expert.
19.5 If the Expert dies or becomes unwilling or incapable of acting, or
does not deliver the decision within the time required by this clause
then:
19.5.1 Either Shareholder may apply to the president of the Institute
of Chartered Accountants in England and Wales to discharge the
Expert and to appoint a replacement Expert with the required
expertise.
19.5.2 This clause applies in relation to the new Expert as if he were
the first Expert appointed.
19.6 All matters under this clause shall be conducted, and the Expert's
decision shall be written, in the English language.
19.7 The parties are entitled to make submissions to the Expert including
oral submissions and shall provide (or procure that others including
the Investment Vehicle provide) the Expert with such assistance and
documents as the Expert reasonably requires for the purpose of
reaching a decision.
Page 25
19.8 To the extent not provided for by this clause, the Expert may in his
reasonable discretion determine such other procedures to assist with
the conduct of the determination as he considers just or appropriate.
19.9 Each Shareholder shall with reasonable promptness supply (and procure
that the Investment Vehicle supply) each other with all information
and give each other access to all documentation and personnel as the
other Shareholder reasonably requires to make a submission under this
clause.
19.10 The Expert shall act as an expert and not as an arbitrator. The
Expert's written decision on the matters referred to him shall be
final and binding in the absence of manifest error or fraud.
Each Shareholder shall bear its own costs in relation to the reference to
the Expert. The Expert's fees and any costs properly incurred by him in
arriving at his determination (including any fees and costs of any advisers
appointed by the Expert) shall be borne by the parties equally or in such
other proportions as the Expert shall direct.
20. TERMINATION AND LIQUIDATION
20.1 Except for the provisions which this clause states shall continue in
full force after termination, this agreement shall terminate:
20.1.1 when one Shareholder or any member of its Group ceases to hold
any Shares;
20.1.2 when a resolution is passed by shareholders or creditors, or an
order made by a court or other competent body or person
instituting a process that shall lead to the Investment Vehicle
being wound up and its assets being distributed among the
Investment Vehicle's creditors, shareholders or other
contributors; or
20.1.3 when the GPC JV Contract terminates or expires.
20.2 The following provisions of this agreement remain in full force after
termination:
20.2.1 clause 1 (interpretation);
20.2.2 this clause;
20.2.3 clause 13 (confidentiality);
20.2.4 clause 29 (costs);
20.2.5 clause 30 (entire agreement);
20.2.6 clause 32 (notice);
20.2.7 clause 35 (governing law); and
Page 26
20.3 Termination of this agreement shall not affect any rights or
liabilities that the parties have accrued under it.
20.4 Within fourteen (14) Business Days of the termination date the parties
shall appoint an Expert in accordance with the provisions of clause 19
to determine the value of the Shares at the termination date. Within
fourteen (14) Business Days of the delivery by the Expert of its
valuation of the Shares, either (a) AB shall pay to BMP a sum
equivalent to the value of the Shares held by the BMP Shareholder at
the termination date (and BMP shall transfer the Shares in accordance
with clause 21) such payment to be satisfied (at AB's discretion)
either by a cash sum or in shares in AB or in its parent undertaking
if such shares are listed on a recognised stock exchange or (b) if the
parties so agree, BMP shall pay to AB a sum equivalent to the value of
the Shares held by the AB Shareholder at the termination date (and AB
shall transfer the Shares in accordance with clause 21) such payment
to be satisfied in cash.
20.5 If this agreement terminates (other than by reason of a transfer of
Shares pursuant to clause 18.2) each Shareholder shall, if requested
by the other, procure that the name of the Investment Vehicle is
changed to avoid confusion with the name of the Shareholder making the
request.
21. COMPLETION OF SALE AND PURCHASE OF SHARES
21.1 This clause applies only to transfers between the Shareholders
pursuant to clause 10 (resolution of deadlock), clause 16 (transfer of
Shares) and clause 18 (transfer following obligatory transfer event).
21.2 The sale of Shares under this agreement shall complete at the offices
of AB within thirty (30) days:
21.2.1 after the deemed acceptance of a Deadlock Resolution Notice
under clause 10.5 or receipt of a counter-notice to a Deadlock
Resolution Notice under clause 10.4; or
21.2.2 after AB (having received a Transfer Notice) gives notice to
BMP that it wishes to buy all the Seller's Shares under clause
16.6; or
21.2.3 after the 28th Business Day from the date the Demand Notice is
issued by the Recipient to the Other Shareholder under clause
18.2.
21.3 At completion the Shareholder selling the Shares shall:
21.3.1 transfer the Shares free from all encumbrances by way of a duly
completed share transfer form transferring the legal and
beneficial ownership in the Shares to the buyer together with the
relevant share certificate and such other documents as the buyer
may reasonably require to show good title to the Shares or enable
it to be registered as the holder of the Shares;
21.3.2 deliver the resignations of any Directors appointed by the
selling Shareholder to take effect at completion and
acknowledging that they have no claims against the Investment
Vehicle;
Page 27
21.3.3 warrant that it has no right to require the Investment Vehicle
to issue any share capital or other securities and that no
encumbrance affects any unissued shares or other securities of
the Investment Vehicle;
21.3.4 warrant that no commitment has been given to create an
encumbrance affecting the Shares being sold (or any unissued
Shares or other securities of the Investment Vehicle) and that no
person has claimed any rights in respect thereof; and
21.3.5 undertake to do all it can, at its own cost, to give the buyer
the full legal and beneficial title to the Shares.
21.4 At completion the buying Shareholder shall pay the purchase price by
immediately available funds to the selling Shareholder.
21.5 At or before completion the Investment Vehicle shall repay any loans
made by the selling Shareholder to the Investment Vehicle (together
with any interest accrued thereon) and the Shareholders shall use
their best endeavours to procure that the selling Shareholder is
released from any guarantees, security arrangements and other
obligations that it has given in respect of the Investment Vehicle and
its business.
21.6 The Shareholders shall procure the registration (subject to due
stamping by the buyer) of the transfer of Shares pursuant to this
clause and each of them consents to such transfer and registration
pursuant to this agreement and the articles of association.
21.7 The Shares shall be sold with all rights that attach, or may in the
future attach, to them (including the right to receive all dividends
and distributions declared, made or paid on or after the events
referred to in clause 21.2.1, clause 21.2.2, and clause 21.2.3).
21.8 The Shareholder buying the Shares is not obliged to complete the
purchase of any of the Shares being sold unless the purchase of all
the Shares is completed simultaneously.
21.9 If the Shareholder selling the Shares fails to complete the transfer
of Shares as required under this clause, the Investment Vehicle:
21.9.1 is irrevocably authorised to appoint any person to transfer the
Shares on the selling Shareholder's behalf and to do anything
else that the Shareholder buying the Shares may reasonably
require to complete the sale; and
21.9.2 may receive the purchase price in trust for the Shareholder
selling the Shares, giving a receipt that shall discharge the
Shareholder buying the Shares.
Page 28
22. HOLDING UNDERTAKING ASSURANCES
EXERCISE OF RIGHTS AND POWERS
22.1 Each Shareholder undertakes with the other that (so far as it is
legally able) it will exercise all voting rights and powers, direct
and indirect, available to it in relation to the Investment Vehicle
(and its Subsidiaries) so as to ensure the complete and punctual
fulfilment, observance and performance of the provisions of this
agreement (and the other agreements referred to in this agreement) and
generally that full effect is given to the principles set out in this
agreement.
PERFORMANCE BY SUBSIDIARIES
22.2 Each Shareholder shall reasonably procure the performance by its
Subsidiaries of all obligations under this agreement which are
expressed to relate to members of its respective Group (whether as
Shareholders or otherwise) and of all obligations under any agreement
entered into by any of its Subsidiaries pursuant to this agreement.
The liability of a Shareholder under this clause 22.2 shall not be
discharged or impaired by any amendment to or variation of this
agreement any release of or granting of time or other indulgence to
any of its Subsidiaries or any third party or any other act, event or
omission which but for this clause would operate to impair or
discharge the liability of such Shareholder under this clause 22.2.
TWO OR MORE SHAREHOLDERS WITHIN GROUP
22.3 Each Shareholder shall procure that, if Shares are held by any other
members of its Group, each such other member shall appoint the
relevant Shareholder its attorney with authority (or otherwise
authorise the relevant Shareholder) at any time or from time to time
to execute such proxies, mandates, written resolutions and other
documents as are required to enable that Shareholder to exercise the
voting rights attaching to the Shares held by such other member or its
Group.
23. NON-ASSIGNMENT
BMP may not assign any of its rights or obligations under this agreement in
whole or in part (otherwise than pursuant to a transfer of Shares by BMP to
a third party in accordance with the terms of this agreement).
24. WAIVER OF RIGHTS
No waiver by a party of a failure by the other parties to perform any
provision of this agreement shall operate or be construed as a waiver in
respect of any other or further failure whether of a like or different
character.
25. AMENDMENTS
This agreement may be amended only by an instrument in writing signed by
duly authorised representatives of each of the parties, provided that the
amendment of any provision of this agreement solely affecting any of the
respective rights or obligations
Page 29
of the Shareholders or either of them inter se shall not require the
agreement of the Investment Vehicle.
26. INVALIDITY
If any of the provisions of this agreement is or becomes invalid, illegal
or unenforceable, the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or impaired. The parties shall
nevertheless negotiate in good faith in order to agree the terms of a
mutually satisfactory provision, achieving so nearly as possible the same
commercial effect, to be substituted for the provision so found to be void
or unenforceable.
27. NO PARTNERSHIP OR AGENCY
27.1 Nothing in this agreement (or any of the arrangements contemplated
hereby) shall be deemed to constitute a partnership between the
parties nor, save as may be expressly set out herein, constitute any
party the agent of the other parties for any purpose.
27.2 In addition, unless otherwise agreed in writing between the
Shareholders, neither of them shall enter into contracts with third
parties as agent for the Investment Vehicle or for the other
Shareholder nor shall either Shareholder describe itself as agent as
aforesaid or in any way hold itself out as being an agent as
aforesaid.
28. ANNOUNCEMENTS
28.1 No formal public announcement or press release in connection with the
signature or subject matter of this agreement shall (subject to clause
28.2) be made or issued by or on behalf of either Shareholder or any
of its Subsidiaries without the prior written approval of the other
Shareholder (such approval not to be unreasonably withheld or
delayed).
28.2 If a Shareholder has an obligation to make or issue any announcement
required by law or by any stock exchange or by any governmental
authority, the relevant Shareholder shall give the other Shareholder
every reasonable opportunity to comment on any such announcement or
release before it is made or issued and the approval of that other
Shareholder shall be required to any specific references therein to
that party, its affairs or to the Investment Vehicle including its
management (provided always that this shall not have the effect of
preventing the Shareholder making the announcement or release from
complying with its legal and stock exchange obligations.)
29. COSTS
Each of the Shareholders shall pay its own costs, charges and expenses
incurred in connection with the preparation and implementation of this
agreement and the transactions contemplated by it. The costs of and
incidental to the incorporation and establishment of the Investment Vehicle
shall be borne and paid by the Investment Vehicle.
30. ENTIRE AGREEMENT
Page 30
This agreement sets out the entire agreement and understanding between the
parties with respect to the subject matter hereof. It is agreed that:
30.1.1 no party has entered into this agreement in reliance upon any
representation, warranty or undertaking of the other parties
which is not expressly set out or referred to in this agreement;
30.1.2 a party may claim in contract for breach of warranty under this
agreement but otherwise shall have no claim or remedy in respect
of misrepresentation (whether negligent or otherwise) or untrue
statement made by the other parties.
30.1.3 this clause shall not exclude any liability for fraudulent
misrepresentation.
31. CONFLICT WITH THE ARTICLES OF ASSOCIATION
SUPREMACY OF THIS AGREEMENT
31.1 In the event of any conflict between the provisions of this agreement
and the Articles of Association or other constitutional document of
the Investment Vehicle, the provisions of this agreement shall prevail
as between the parties. The parties shall exercise all voting and
other rights and powers available to them so as to give effect to the
provisions of this agreement and shall further (if necessary) procure
any required amendment to the Articles of Association or other
constitutional document of the Investment Vehicle (as may be
necessary).
32. NOTICES
ADDRESS OF NOTICES
32.1 Any notice or other communication to be given hereunder shall either
be delivered by hand or sent by first class post or facsimile
transmission (provided that, in the case of facsimile transmission,
the notice is confirmed by being delivered by hand or sent by first
class post within forty-eight (48) hours thereafter) as follows:
32.1.1 AB
Address: 0 Xxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxxx, Xxxxxx, XX00 ONY
Fax No: 00-0000-000-000
Addressed for the personal attention of: Company Secretary
32.1.2 BMP
Address: 000 X. Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx Xxxxxxx, XX
00000, XXX
Fax No: 0-000-000 1676
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Addressed for the personal attention of: Chief Financial Officer
32.1.3 Investment Vehicle
Address: 0 Xxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxxx, Xxxxxx, XX00 ONY
Fax No: 00-0000-000-000
Addressed for the personal attention of: Company Secretary
CHANGES
32.2 A party may change the address, fax number or the name of the person
for whose attention notices are to be addressed by serving a notice on
the other parties in accordance with this clause 32.
DEEMED SERVICE
32.3 All notices given in accordance with clause 32.1 shall be deemed to
have been served as follows:
32.3.1 if delivered by hand, at the time of delivery;
32.3.2 if posted, at the expiration of five (5) Business Days after
the envelope containing the same was delivered into the custody
of the postal authorities;
32.3.3 if communicated by facsimile, at the time of transmission;
PROVIDED that where, in the case of delivery by hand or transmission
by telex or facsimile, such delivery or transmission occurs after 6
p.m. on a Business Day or on a day which is not a Business Day,
service shall be deemed to occur at 9 a.m. on the next following
Business Day. References to time in this clause are to local time in
the country of the addressee.
PROOF OF SERVICE
32.4 In proving such service it shall be sufficient to prove that the
envelope containing such notice was properly addressed and delivered
either to the address shown thereon or into the custody of the postal
authorities as a pre-paid first class letter, or that the telex
transmission was made and the recipient's answerback received or that
the facsimile transmission was made after obtaining in person or by
telephone appropriate evidence of the capacity of the addressee to
receive the same, as the case may be.
33. SETTLEMENT OF DISPUTES
LEGAL DISPUTES
33.1 In the event of any dispute between AB and BMP arising in connection
with this agreement or any associated agreement entered into pursuant
to this Agreement (a LEGAL DISPUTE), they shall use all reasonable
endeavours to
Page 32
resolve the matter on an amicable basis. If one Shareholder serves
formal written notice on the other that a material dispute of such a
description has arisen and the Shareholders are unable to resolve the
dispute within a period of thirty (30) Business Days from the service
of such notice, then the dispute shall be referred to the respective
senior representatives of AB and BMP. No recourse to arbitration by
one Shareholder against the other Shareholder under this agreement
shall take place unless a period of not less than thirty (30) Business
Days has expired after such referral. This shall not affect a
Shareholder's right, where appropriate, to seek an immediate remedy
for an injunction, specific performance or similar court order to
enforce the obligations of the other Shareholder.
MANAGEMENT DISPUTES
33.2 Any failure to agree upon a policy matter affecting the Investment
Vehicle and/or to agree any matter referred to in clause 9 (a
MANAGEMENT DISPUTE) shall not, of itself, constitute a dispute capable
of reference to arbitration pursuant to clause 33.3.
ARBITRATION
33.3 If the senior representatives of AB and BMP shall have been unable to
resolve any legal dispute referred to them under clause 33.1 within
sixty (60) days after the referral, that dispute shall be referred to
and finally settled by arbitration under and in accordance with the
Rules of Conciliation and Arbitration of the International Chamber of
Commerce by one (1) arbitrator appointed in accordance with those
rules. The place of arbitration shall be London, United Kingdom. The
language of arbitration proceedings shall be English.
34. COUNTERPARTS
This agreement may be executed in one or more counterparts each signed by
one of the parties and such counterparts shall together constitute one
agreement.
35. GOVERNING LAW
This agreement shall be governed by and construed in accordance with the
laws of England and Wales.
The remainder of this page is intentionally left blank.
Page 33
This agreement has been signed by the duly authorised representatives of the
parties the day and year first before written.
SIGNED by XXXXX XXXXXXX )
for and on behalf of )
AB )
SIGNED by XXXX XXXXXX )
for and on behalf of )
BMP )
SIGNED by XXXXX XXXXXXXX )
for and on behalf of )
THE INVESTMENT VEHICLE )
Page 34
SCHEDULE 1
DETAILS OF THE INVESTMENT VEHICLE
Name: Alliance BMP Limited
Registered number: 6056032
Registered office: 0 Xxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxxx, Xxxxxx, XX00 ONY
Date of incorporation: 17 January 2007
Authorised share capital: L500,000 divided into 500,000 ordinary shares of L1
each
Issued share capital: L10
Shareholder Number of Shares
----------- ----------------
AB 8
BMP 2
Directors: Xxxxx Xxxxx, Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxxx, Xxxxx Xxx
Secretary: Xxxxx Xxxxxxxx
Page 35
SCHEDULE 2
DEED OF ADHERENCE
DATE:
-------------------
By this Deed we
having our registered office at
of
intending to become a shareholder of Alliance BMP Limited (the "Investment
Vehicle") hereby agree with the Investment Vehicle and each of its shareholders
to comply with and to be bound by all of the provisions of a Shareholders'
Agreement dated 18 January 2007 between Alliance UniChem Group Limited, Beijing
Med-pharm Corporation and the Investment Vehicle, (a copy of which has been
delivered to us and which we have initialled and attached hereto for
identification) in all respects as if we were a party to such agreement and were
named therein as a Shareholder and a Party and on the basis that references
therein to each of Shareholder and Party include a separate reference to us.
IN WITNESS WHEREOF this Deed has been executed by us and is intended to be and
is hereby delivered on the date appearing at the head hereof.
THE [COMMON][CORPORATE SEAL )
of [_______________________] )
was affixed to this Deed in the )
presence of: )
---------------------------------------------
Director
---------------------------------------------
Director/Secretary
Page 36
