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02843686_MTIzNjA1MTkwYWRpcXprY3g_SoA.txt
ASYICE
1997
DATED Va mavok
LW. SMITH ESQ.
and
S.C.FREEMAN ESQ.
and
J.C. FREEMAN ESQ.
and
TMH TELEMEDIA SERVICES LIMITED
SHAREHOLDERS AGREEMENT
MH
relating to
TELEMEDIA SERVICES LIMITED &
WE CERTIFY THIS TO BE A TRUE
COPY OF THE ORIGINAL.
Agowpasavrersan
VA
THOMPSON SM IT H & PUXON
/ SOLICITORS | COLCHESTER}
THOMPSON SMITH & PUXON
Solicitors
4&5 North Hill,
Colchester,
Essex
CO1 1EB
Telephone:01206 574431
Facsimile:01206 578033
DX 3617 COLCHESTER
File Reference:
+ Document No:
Version Date:
Date Printed:
MJW/T308009
TMH.AG1
10 March 1997
10 March 1997 PTA
CauPANIES HOUSE 037047397
VAR wravecky 1997
pate:
parties:
: (1) ‘Mr.L.W.Smith’ : IAN WILLIAM SMITH of 19 Valley Crescent, West Bergholt,
Colchester, Essex CO6 3ED
: STUART CARL FREEMAN of Fern Lodge, 7 Fernhill,
* (2) 'Mr S.C.Freeman’
Glemsford, Near Sudbury, Suffolk CO10 7PR
: JASON CARL FREEMAN of 1 Proctor Close, Langenhoe,
(3) ‘Mr. J.C. Freeman’
Colchester, Essex
(4) ‘TMH’ : TMH TELEMEDIA SERVICES LIMITED whose registered
office ig at Stane House, Salmons Corner, Near Coggeshall,
Essex CO6 1RX.
|
Recitals:
on the 10th day of August
(A) TMH was incorporated under the Companies Acts 1985 to 1989
autho rised share capital of
4993 and has, at the time of execution of this Agreement, an
Shares of £1 each 100 of which have been issued and are
£100,000 divided into 100,000
beneficially owned as follows:
Mr.1L.W.Smith - 50 Shares
Mr S.C.Freeman - 32 Shares
Mr J.C.Freeman - 18 Shares
d by Mr.1.W.Smith and
(B) TMH and its general management has for some time past been controlle
Mr S.C.Freeman
of setting out the
(C) The Shareholders have agreed to enter into this Agreement for the purposes
the future
basis and terms upon which TMH and its management will be controlled in
conditions of this
(D) TMH has agreed with the Shareholders that it will comply with the terms and
Agreement insofar as they relate to TMH
(Company !
(E) TMH has one subsidiary at the date hereof namely TMH Promotions Limited
registered office is at Stane House, Salmons Corner,
Registration Number 3182851) whose
Near Coggeshall, Colchester, Essex CO6 1RX
of this Agreement are Mr LW.Smith, Mr
(F) The Directors of TMH at the time of execution
S.C.Freeman and Mr J.C.Freeman
Operative provisions:
1 Interpretation
apply:
14 In this Agreement, unless the contrary intention appears, the following definitions
“~’ Shares’ : means the ‘A’ Shares of £1 each in the share capital of TMH
from time to time
-
Thompson Smith & Puxon - 10 March 1997 - TMH.AG1
‘Agreed Terms’ means the terms of an annexed draft agreed between the
parties or their respective legal advisers
‘Agreed Proportions’ : means 50 per cent in respect of Mr.!.W.Smith and 50 per cent
in respect of Mr S.C.Freeman or (if different) such other
proportions as equal, at the time when any liability arises
under clause 9, the percentages which the nominal value of
the Shares beneficially owned by Mr.l.W.Smith and Mr
S.C.Freeman respectively in the Equity Share Capital of TMH
bears to the combined nominal value of the Equity Share
Capital (taken as a whole)
‘Auditors’ means the auditors from time to time of TMH
“B’ Shares’ means the ‘B’ Shares of £1 each in the share capital of TMH
from time to time
‘Board’ means the board of directors for the time being of TMH
‘Board Minutes’ means the minutes of a meeting of the Board in the form set
out in Schedule 1 hereto
‘Business’ means the business of TMH as described in clause 2(1) and
such other business as the Major Shareholders may agree in
writing should be carried on by TMH and its subsidiaries
‘Control’ has the same meaning as in section 840 of the Taxes Act
‘Director’ a director of TMH, including where applicable an alternate
director
‘Equity Share Capital’ : has the same meaning as in section 744 of the Companies
Act 1985
‘Guarantees’ means all guarantees, indemnities and covenants referred to
in clause 9(1), as varied, extended or renewed
‘Holding Company’ has the same meaning as in section 736 of the Companies
Act 1985
‘Major Shareholders’ : means Mr.|.W.Smith and Mr $.C.Freeman together
‘the Notice of
Meeting’ means the notice of an extraordinary general meeting of TMH
in the form set out in Schedule 2 hereto
‘Person’ means a person firm company or other body of persons
‘Prescribed Price’ means such sum in respect of the Shares in question as may
be agreed between the parties to the transaction in question
or, in the absence of agreement, which the Auditors (acting
as experts and not as arbitrators) at the request at any time
of any party to the transaction in question certify to be in their
opinion the fair value of the Shares in question as between a
willing seller and a willing buyer contracting on arm’s length
Thompson Smith & Puxon - 10 March 1997 - TMH.AG1
+
t |
terms, having regard to the fair value of the business of TMH
and its Subsiduaries as a going concern but without taking
into account (if it be the case) that the Shares in question
constitute a minority interest
'
‘Shareholders’ : means Mr.L.W.Smith, Mr S.C.Freeman and Mr J.C.Freeman
together and, where appropriate, regard shall be had to
:
clause 23.2
‘Shares’ : means shares of TMH
‘Subsidiary’ : has the same meaning as in section 736 of the Companies
Hl
Act 1985
1
‘Taxes Act’ : means the Income and Corporation Taxes Act 1988
:
‘Territory’ : means any area in the world in which TMH sells its products
includes a reference to it as from time to time
4.2 Reference to a statute or statutory provision
amended, extended or re-enacted.
gender include the other genders and words denoting the singular
4.3 Words importing one
number only include the plural and vice versa. i
is to a clause of or :{
1.4 Unless the context otherwise requires, reference to a clause or schedule
i
schedule to this Agreement. if
only and do not affect its : “|
1.5 The headings in this Agreement are inserted for convenience |
construction.
{
a
i i
2 Objects of the company
is to carry on the business of supplying media services.
2.1 The primary object of TMH
on sound commercial profit ii
2.2 The Business shall be conducted in the best interests of TMH
achievable maintainable profits available for i
making principles so as to generate the maximum
distribution.
attention to the interests
2.3 Each of the Major Shareholders shall devote such of their time and
serve and be employed as full-time
of TMH as shall be necessary for the wellbeing of TMH and shall
working directors during the continuance of this Agreement.
2.4 The central management and control of TMH shall be exercised in the UK. The Shareholders
purposes in the
ia use their best endeavours to ensure that TMH is treated as resident for taxation
K.
3 Completion
and TMH shall, so far as they
34 ‘Immediately after executing this Agreement the Shareholders
are each able, take or procure the following steps:
esas RBC
w
Thompson Smith & Puxon - 10 March 1997 - TMHAGI
1
ss referred to in the Board Minutes shall be
3.1.1. a Board Meeting shall be held at which the busine
transacted and the documents and forms referred to therein shall be executed and signed
shall be held on short notice at which a special
3.1.2 an extraordinary general meeting of TMH
;
g shall be passed
! resolution in the form set out in the Notice of Meetin
n up and:
3.1.3. the Register of Members of TMH shall be writte
s of £1 each in the share capital of TMH shall
3.1.3.1 share certificates in respect of fifty of ‘A’ Share
Mr.I.W.Smith;
be issued in favour of and delivered to
l of TMH
two of ‘B’ Shares of £1 each in the share capita
3.1.3.2 share certificates in respect of thirty reeman, and
d in favour of and delivered to Mr S.C.F
shall be issue
and
the ‘B’ Shares shall be issued in favour of
3.1.3.3 share certificates in respect of eighteen of
delivered to Mr J.C.Freeman.
the
shall not take place within two hours after
3.2 If all the events referred to in clause 3.1 of the Share holde rs
ment shall have no effect and none
execution of this Agreement, then this Agree other than for breach of his
any other party hereunder
shall have any claim against, or liability to,
obligation under clause 3.1.
those
the time limits prescribed by statute,
3.3 The Shareholders shall procure that within with the Regis trar of
Board Minutes which require filing
documents and forms referred to in the
Companies shall be so filed.
4 Appointment of directors
at any time shall be six unless otherwise
41 The maximum number of Directors holding office
agreed in writing by the Major Shareholders.
ed to appoint one Director for each part of its
4.2 Each of the Major Shareholders shall be entitl
nominal value of the issued share capital of TMH
shareholding which represents 15 per cent in nted
his removal or replacement. The Directors appoi
(regardiess of class) and at any time to require reema n
ors and the Directors appointed by Mr S.C.F
by Mr.1.W.Smith shall be designated as ‘A’ Direct
shall be designated as ‘B’ Directors.
5 Conduct of the company’s affairs
in
ble to them in relation to TMH and (except
5.4 The Shareholders shall exercise all rights availa do
necessary to procure (so far as they are able to
relation to clause 5.1.7) TMH shall do everything
so) that during the term of this Agreement:
vely of the Business;
5.1.1. the business of TMH and its Subsidiaries consists exclusi
ne the books and accounts kept by TMH
5.1.2 the Shareholders are given full opportunity to exami
all relative information, including monthly
and its Subsidiaries and are supplied with
and such other trading and financial information
management accounts and operating statistics
each of them properly informed about the
in such form as they reasonably require to keep
to protect their interests;
business of TMH and its Subsidiaries and generally
are (and in the case of any Subsidiaries shall be) Christopher Thomas
5.1.3. the auditors of TMH
hall, Essex CO6 1RX or such other firm
& Co.of Stane House, Salmons Corner, Near Cogges
-
Thompson Smith & Puxon - 10 March 1997 - TMH.AG1
of chartered accountants as the Major Shareholders agree in writing;
5.1.4 the bankers of TMH are (and in the case of any Subsidiaries shall be) Lloyds Bank ple of
Colchester Business Centre, Management Suite, Charter Court, Newcomen Way, Severalls
Park, Colchester, Essex CO4 4YA or such other bankers as the Major Shareholders agree in
writing;
5.1.5 the registered office of TMH is (and in the case of any Subsidiaries shall be) at Stane House,
Salmons Corner, Near Coggeshall, Essex CO6 1RX or at such other place as the Major
Shareholders agree in writing;
TMH complies with the provisions of its memorandum and new articles of association (as
adopted in accordance with the Notice of Meeting);
the memorandum and new articles of association of TMH are not altered and no further
articles or resolutions inconsistent with them are adopted or passed unless the Major
Shareholders agree in writing;
any company which becomes a Subsidiary of TMH adopts new articles of association in a form
approved by the Major Shareholders in writing;
all cheques drawn by TMH and each of its Subsidiaries in excess of £10,000.00 are signed
by both of the Major Shareholders;
Board meetings of TMH (and board meetings of any Subsidiaries) are convened, at regular
intervals not exceeding two months, by not less than forty eight hours’ notice in writing
accompanied by an agenda specifying the business to be transacted; and
5.1.11 the Board determines the general policy of TMH (and any Subsidiaries) (subject to the express
provisions of this Agreement), including the scope of their respective activities and operations
and that the Board reserves to itself all matters involving major or unusual decisions.
the Chairman of TMH shall be Mr S.C.Freeman
the Managing Director of TMH shall be Mr 1.W.Smith
Matters requiring consent of both of the Major Shareholders
6.1 The Shareholders shall exercise all rights available to them in relation to TMH so as to procure
(so far as they are able) that neither TMH nor any of its Subsidiaries without the prior written consent
of the Major Shareholders:
6.1.1 creates any fixed or floating charge, lien (other than a lien arising by operation of law) or other
encumbrance over the whole or any part of its undertaking, property or assets, except for the
purpose of securing indebtedness to its bankers for sums borrowed in the ordinary and proper
course of the Business;
borrows any money (except from TMH’s bankers in the ordinary and proper course of the
Business); ,
6.1.3 makes a loan or advance of any amount or gives credit (other than normal trade credit) in
excess of £1,000.00 to any Person, apart from deposits with bankers which are repayable
upon the giving of not more than 7 days’ notice;
Thompson Smith & Puxon ~ 10 March 1997 - TMH.AG1
gives a guarantee or indemnity to secure the liabilities or obligations of any Person (other than
a wholly-owned Subsidiary of TMH);
sells, transfers, leases, assigns, or otherwise disposes of a material part of its undertaking,
property or assets (or any interest in them), or contracts to do so otherwise than in the
ordinary and proper course of the Business;
enters into a contract, arrangement or commitment involving expenditure on capital account
or the realisation of capital assets if the amount or the aggregate amount of the expenditure
or realisation by TMH and all of its Subsidiaries would exceed £1,000.00 in any one year or
in relation to any one project; for the purpose of this paragraph the aggregate amount payable
under an agreement for hire, hire purchase or purchase on credit sale or conditional sale terms
is to be treated as capital expenditure incurred in the year in which the agreement is entered
into;
6.1.7 engages a new employee;
increases the remuneration of an employee;
appoints or dismisses a Director except in accordance with the rights conferred on the Major
Shareholders under clause 4 to appoint and remove Directors;
appoints a committee of the Directors or a local board or delegates any of the powers of the
Directors to a committee or local board;
takes or agrees to take a leasehold interest in or licence over land;
issues any shares or creates any new shares, except as expressly permitted by TMH’s articles
of association;
alters the rights attaching to any class of shares of TMH;
consolidates, sub-divides or converts any of TMH’s share capital;
issues renounceable allotment letters or permits any Person entitled to receive an allotment
of shares to nominate another Person to receive the allotment except on terms that no
renunciation or nomination shall be registered unless the renouncee or Person nominated is
approved by the Board;
creates or acquires a Subsidiary or disposes of any shares in a Subsidiary;
enters into a partnership, agency or profit sharing agreement;
does or permits to be done any act or thing whereby TMH may be wound up (whether
voluntarily or compulsorily),otherwise than in accordance with the terms of this Agreement;
respect
issues securities convertible into Shares or debentures, or share warrants or options in
of Shares;
6.1.20 enters into a contract or transaction except in the ordinary and proper course of the Business
on arm’s length terms;
or subscribes for shares, debentures, mortgages or securities (or any
6.1.21 acquires, purchases
interest in any of them) in any Person;
-
Thompson Smith & Puxon - 10 March 1997 - TMH.AG1
6.1.22 creates a contract or obligation or renews or varies the terms of an existing contract or
obligation, to pay money or money’s worth to any member of TMH or to the Holding Company
of a member or to any other Subsidiary of a Holding Company or to any Person as a nominee
of a member or a relevant Holding Company or Subsidiary;
6.1.23 holds a meeting of Shareholders or purports to transact any business at a meeting untess
there are present duly authorised representatives or proxies for each of the Major
Shareholders. .
7 Staff
TMH shall recruit and employ such staff as the Board considers necessary for the proper conduct of
the Business.
8 Loan finance
8.1 The Major Shareholders shall each use reasonable endeavours to procure that the
requirements of TMH (and any Subsidiaries) for working capital to finance the Business are met by
borrowings from banks and other similar sources on the most favourable terms reasonably obtainable
as to interest, repayment and security, but without allowing a prospective lender a right to participate
in the Equity Share Capital of TMH as a condition of making the loan.
9 Guarantees given by the shareholders
9.1 The aggregate amount of liability arising under guarantees, indemnities and covenants given
by the Major Shareholders, whether jointly or severally, to secure the indebtedness and obligations of
TMH (and any Subsidiaries) for the proper purposes of the Business shall be shared by them in the
Agreed Proportions. The liability referred to includes legal and other costs which the relevant Major
Shareholder may be ordered to pay or otherwise incurs in any action brought to enforce the
guarantees, indemnities or covenants irrespective of whether or not the Major Shareholders are liable
as co-sureties and whether or not they are liable jointly or severally and by the same or different
instruments.
9.2 Where one of the Major Shareholders has made a payment or provided other consideration
‘either: -
9.2.1 in consequence of a judgment or an order made by a court of competent jurisdiction in any
action brought to enforce any of the Guarantees; or
9.2.2 in bona fide satisfaction or compromise of any demand made under any of the Guarantees
{including a payment into court which has been accepted); and the payment exceeds or would
exceed his Agreed Proportion of the sum for which judgment has been entered or the claim
satisfied or compromised, he shall be entitled (as appropriate) to be indemnified by or to
recover a contribution from the other Major Shareholder to the extent specified in clause 9.1
irrespective of whether or not the satisfaction or compromise was well-founded in law. If a
judgment is varied or reversed on appeal the amount of the final judgment (including any costs
awarded) shall be borne by the Major Shareholders in the Agreed Proportions insofar as the
amount exceeds the amount of any earlier judgment in the relevant action which has been
borne by the Major Shareholders in the Agreed Proportions. No payment shall be made by
either of the Major Shareholders in satisfaction or compromise of a demand and no steps shall
be taken to appeal. against a judgment or to recover from TMH (whether by right of indemnity
or subrogation’ or otherwise) any sum of money paid or other consideration provided to a
Thompson Smith & Puxon - 10 March 1997 - TMH.AG1
y,
claimant under any of the Guarantees, without prior consultation with the other Major
Shareholder.
9.3 Any sum payable under clause 9.2 shall be paid within 30 days of receipt of written notice
requesting payment together with evidence of payment or provision of other consideration under the
Guarantees. If the Major Shareholder from whom payment is requested fails to make the payment
within the period of 30 days, the other Major Shareholder shall be entitled to be paid interest by the
defaulting Major Shareholder on the amount due at the rate of 5 per cent above the base rate of
Lloyds Bank plc from time to time, to accrue on a daily basis from the date of the 30 day period to the
date of actual payment (after as well as before judgment).
9.4 If, at any time after one of the Major Shareholders has indemnified or made contribution to the i
other Major Shareholder, either of them recovers all or part of any sum of money or other i
consideration paid or provided to a claimant under any of the Guarantees, whether by right of |
indemnity or subrogation against TMH, by obtaining final judgment against the claimant in any action i
relating to any of the Guarantees or in any other way, the sum recovered (including any award for
costs previously borne by the Major Shareholders in the Agreed Proportions) shall be apportioned
between the Major Shareholders in the Agreed Proportions. The Major Shareholder making the
recovery shall account to the other Major Shareholder for his pro rata share as soon as practicable
after receipt.
9.5 Neither of the Major Shareholders shall take or receive from TMH or any other Person any
security in connection with the Guarantees without the prior written consent of the other Major
Shareholder. Any security taken or received (and any sum of money derived from it) shall be held by
the relevant Major Shareholder as trustee for both Major Shareholders so that they share the benefit
in the Agreed Proportions.
9.6 Nothing in this Agreement shall deprive either of the Major Shareholders of any rights or
remedies available to him at law against the other Major Shareholder as co-surety under the
Guarantees, except insofar as they are inconsistent with or excluded by the terms of this Agreement.
9.7 Each of the Major Shareholders shall upon request by the other Major Shareholder provide
such evidence as may be reasonably required to establish that he has sufficient financial resources
to meet his Agreed Proportion of any actual or contingent liability under the Guarantees or any liability
under this clause.
10 Disposal or charging of the shares
10.1. Neither of the Major Shareholders shall, except with the prior written consent of the other,
create or permit to subsist any pledge, lien or charge over, or grant any option or other rights over or
dispose of any interest in, any of the Shares held by him (otherwise than by a transfer in accordance
with the provisions of this Agreement).
1 Issue and transfer of shares
11.1. The issue of new Shares shall be regulated in accordance with the provisions in TMH’s articles
of association.
11.2 Notwithstanding the provisions of the articles of association of TMH no Share shall be
transferred save as provided in this Agreement.
11.3. Any Shareholder wishing to sell or transfer his Shares or any interest in his Shares shall serve
written notice of such wish (a "Sale Notice”) on all of the other Shareholders.
Thompson Smith & Puxon - 10 March 1997 - TMH.AG1
11.4 No transfer of any Shares held by any
of the Shareholders shall be permitted
Shareholder’s Shares are transferre unless all that
d at the same time
12 Transfer of Shares by Mr. J.C.Freeman
12.1 If Mr. J.C.Freeman serves a Sale Notic
e pursuantto clause 11.3 or if Mr.J.C.Freeman
becomes bankrupt then he, or the person dies or
entitled to his shares following his death
Transferor"), shall sell and Mr S.C. or bankruptcy ("the
Freeman shall purchase all his ‘B’
provisions shall apply: Shares and the following
12.1.1 The price to be paid for the ‘B’ Shares
shall be the Prescribed Price for those
the date of the Sale Notice Shares as at
12.1.2 Completion of the sale of the ‘B’ Sales
to Mr S.C.Freeman shall take place fourt
the date of the Prescribed Price being een days after
agreed or certified by the Auditors.
take place at the registered office of TMH Completion shall
when the Prescribed Price for the ‘B’ Shar
be paid by Mr S.C.Freeman to the Transferor es shall
by way of bankers draft and the Transferor
deliver to Mr S.C.Freeman a duly executed shall
transfer of all of the ‘B’ Shares the subje
sale. ct of the
12.2 All of the ‘B’ Shares which are transferre
d shall be deemed to be sold by the Trans
beneficial owner with effect from the date feror as
of the transfer, free from any lien, charg
and with all rights attaching to them as e or incumbrance
at the date of the Sale Notice
13 Exercise of voting rights
13.1 °° Each Shareholder shall:
13.1.1 exercise alt voting rights and powers avail
able to it in relation to TMH so as to give
to the terms of this Agreement full effect
including, where appropriate, the carry
terms as if they were embodied in TMH’s ing into effec t of the
memorandum and articles of association;
13.1.2 procure that the Directors nominated by it
support and implement ail reasonable prop
forward at Board and other meetings of osals put
TMH for the proper development and condu
Business as contemplated in this Agre ct of the
ement;
13.1.3 generally use his best endeavours to
promote the Business and the interests
Subsidiaries. of TMH and any
13.1.4 show the utmost good faith to the other Share
holders in all matters relating to the Busin
and to TMH ess
14 Non-competition restrictions
14.1 Neither of the Major Shareholders shall,
whilst it
is beneficially interested in any Shares
@ period of one year from the date on which or for
it ceases to be beneficially interested in
or permit any of the following without the any Shares, do
prior written consent of the other Major
Shareholder:
Thompson Smith & Puxon - 10 March 1997 - TMH.AG1
14.1.1 either solely or jointly with or on behalf of
any other Person directly or indirectly carry
be engaged or interested (except as the holder, for on or
investment, of securities dealt in ona
recognised stock exchange) in any business
Competing in the Territory with the Business;
14.1.2 solicit in the Territory the custom of any Perso
n who is or has been at any time whilst he
been interested in any of the Shares a custo has
mer of the Business for the purpose of offeri
to that Person goods or services similar to ng
or competing with those of the Business;
14.1.3 solicit or entice away, or endeavour to solicit
or entice away, any Director or employee
or of any Subsidiary of of TMH
TMH;
14.1.4 cause or permit any Person to do any of the
acts or things specified above.
14.2 Clause 14.1 shall not preclude or restrict any Share
holder from:
14.2.1 carrying on any activity carried on during the
period of 12 months immediately preceding
date of this Agreement: or the
14.2.2 offering any service or goods similar to those
previously supplied as part of the Business at
a time when they are no longer supplied by TMH
ora Subsidiary of TMH.
14.3. Each undertaking in clause 14.1 shail be treate
d as independent of the other undertakings so
that, if one or more is held to be invalid as an
unreasonable restraint of trade or for any other
the remai ning undertakings shall be valid to the extent that reason,
they are not affected.
14.4 Whilst the undertakings in clause 14.1 are consi
dered by the parties to be reasonable in all
the circumstances, if one or more is held invalid as an unreasonable restraint
of trade or for any other
14.5 Any restriction contained in this Agreement
by virtue of which
this Agreement is subject to
registration under the Restrictive Trade Pract
ices Act 1976 shall come into effect on the
the day in which partic day following
ulars of this Agreement have been furnished
on such iater date as may be permitted). The to the Office of Fair Trading (or
parties shall furnish the required particulars
months of the date of this Agreement. within 3
:
15 Warranties
15.1 The Shareholders warrant to each other
that except as fairly disclosed in writing
prior to the execution of this Agreement to each other
that they hold the Shares referred to in
own absolute beneficial Ownership and not Recital (A) for their
on behalf of any other person.
16 Dividend and distribution policy
16.1 If in respect of any accounting period TMH
has profits available for distribution (within the
meaning of Part VII of the Companies Act 195)
the Shareholders shail procure that in the absen
agreement to the contrary, at least fifty per ce of
cent of the same are distributed by way of
by TMH within six months after the end of cash dividends
such period. In deciding whether, in respect of any
accounting period, TMH had profits available
for distribution, the parties hereto shall procure
Auditors shail certify whether such that the
profits are available or not and the amoun
giving such certificate the Auditors shall t thereof (if any). In
act as experts and not arbitrators and their
be binding on the parties hereto. determination shail
Thompson Smith & Puxon - 10 March 1997 - TMH.AG1
10
17 Procedure in the event of deadlock
17.1 This clause applies in any case where:
17.1.1 a matter relating to the affairs of TMH or a Subsidiary has been considered by a meeting.
of
the Board; and
17.1.2 no resolution has been carried at the meeting in relation to the matter by reason of an equality
of votes for and against any proposal for dealing with it; and
17.1.3. the matter is not resolved within fourteen days from the date of the meeting.
Any such case is referred to as a "deadlock".
17.2 In any case of deadlock each of the Major Shareholders shall, within 7 days
of the deadlock
arising, prepare and circulate to the other Major Shareholder a memorandum or
other form of
statement setting out his position on the matter in dispute and his reasons for adopting
that position.
Each memorandum or statement shall be considered by the Major Shareholder to whom it is
addressed and the Major Shareholders shall endeavour to resolve the deadlock. If the
Major
Shareholders agree upon a resolution or disposition of the matter, they shall execute a statement
setting out the agreed terms. The Major Shareholders shall exercise the voting rights and other
powers
available to them in relation to TMH to procure that the agreed terms are fully and promptly carried
into effect.
17.3 If the deadlock is not resolved or disposed of in accordance with clause 17.2 within 30 days
after expiry of the 7 day period, or such longer period as the Major Shareholders agree in writing,
and
if it prevents TMH or any Subsidiary from continuing to achieve its business purposes, either
of the
Major Shareholders may by notice in writing to the other Major Shareholder (a “Deadlock
Notice")
require that the provisions of clause 18 be applied.
18 Major Shareholders’ Options
18.1 lf either of the Major Shareholders:
18.1.1 serves a Sale Notice pursuant to the provisions of clause 11.3:
18.1.2 serves a Termination Notice pursuant to the provisions of clause 22.4:
18.1.3 dies;
18.1.4 becomes bankrupt;
18.1.5 commits or suffers an event of default (as defined in clause 18.5)
18.1.6 serves a Deadlock Notice pursuant to the provisions of clause 17.3
The other Major Shareholder ("the Purchaser") shall be entitled, within 14 days of him being
served
with any Notice referred to in clauses 18.1.1, 18.1.2 or 18.1.6, or becoming aware
of any of the
circumstances listed in clauses 18.1.3, 18.1.4 or 18.1.5 to serve notice on that Major
Shareholder (the
Vendor") requiring the Vendor either (i) to sell to the Purchaser all (but not some only)
of the Shares
held or beneficially owned by the Vendor ("a Purchase Notice") or (ii) to place TMH in liquidation (a
“Liquidation Notice")
Thompson Smith & Puxon - 10 March 1997 - TMH.AGt
TO
18.2 Ifa Purchase Notice is served pursuant to clause 18.1 the Prescribed Price for the Vendor's
Shares as at the date of the Purchase Notice shall be agreed or certified by the Auditors as soon as
reasonably practicable. The Purchaser shall be entitled, by notice in writing given to the Vendor within
28 days of the Prescribed Price being agreed or so certified, to withdraw the Purchase Notice. {f the
Purchase Notice is withdrawn pursuant to the provisions of this clause a Liquidation Notice shall be
deemed to have been served by the Purchaser on the date of such withdrawal.
18.3 In the event that a Purchase Notice is served and not withdrawn the Vendor shall sell and the
Purchaser shall purchase all of the Vendor's Shares and the following provisions shall apply:
18.3.1. The price to be paid for the Vendor's Shares shall be the Prescribed Price for those Shares
as at the date of the Purchase Notice
18.3.2 Within fourteen days of the date of the Prescribed Price being agreed or certified by the
Auditors, a duly executed transfer of all of the Vendor's Shares shall be delivered to the
Purchaser upon payment of ten per cent of the Prescribed Price
18.3.3 The balance of the Prescribed Price shall be paid by the Vendor to the Purchaser by six equal
half yearly instalments carrying interest as from the date of the Purchase Notice at a rate
equivalent to the Base Rate of TMH’s Bankers from time to time calculated on a daily basis
and payable with each of the half yearly instalments of the Prescribed Price. The first of such
half yearly payments shall be made six months from the date of the Purchase Notice
18.3.4 All the Vendor's Shares which are transferred shall be deemed to be sold by the Vendor as
beneficial owner with effect from the date of the transfer, free from any lien, charge or
incumbrance and all rights attaching to them as at the date of the Purchase Notice
18.3.5 In the event that the Purchaser shall subsequently sell all or any of the Shares transferred to
him pursuant to the provisions of this clause 18 then the balance of the Prescribed Price then
outstanding shalt forthwith be paid to the Vendor with accrued interest
18.4 If a Liquidation Notice is served by the Purchaser then the Shareholders shall vote in favour
of a resolution for the liquidation of TMH and the appointment of a liquidator to the intent that the
assets of TMH shall be realised and such proceeds thereof as shall remain after the discharge of all
liabilities of TMH shall be distributed to the Shareholders in the same proportions in which they hold
the Equity Share Capital in TMH.
18.5 For the purpose of this clause:
18.5.1 an event of default is committed or suffered by a Major Shareholder if:
18.5.4.1 he commits a material breach of its obligations under this Agreement and, in the case
of a breach capable of remedy, fails to remedy it within 21 days of being specifically
required in writing to do so by the other Major Shareholder; or
18.6.1.2 a distress, execution, sequestration or other process is levied or enforced upon or
sued out against his property which is not discharged within 10 days; or
18.5.1.3 he commits an out of bankruptcy ;
18.5.1.4 he makes any arrangement or composition with his creditors
18.5.1.5 he becomes incapable within the meaning of the Mental Health Acts. 1959 to 1983
Thompson Smith & Puxon - 10 March 1997 ~ TMH.AG1
19 This Agreement not to constitute a Partnership
19.1. None of the provisions of this Agreement shall be deeme
d to constitute a partnership between
the Major Shareholders and neither of them has author
ity to bind the other in any way.
20 Costs
20.1 All costs, legal fees and other expenses incurred in the
preparation’
and execution of this
Agreement shall be borne by TMH.
21 Non-disclosure of information
21.1 None of the Shareholders shall divulge to any Person
(other than those whose province it is
to know it or with proper authority) or use for any purpose
any of the trade secrets or confidential
information or financial information relating to the other Shareho
lders, TMH or any of its Subsidiaries
which it has already acquired or acquired as a result of enterin
g into this Agreement. This restriction
shail continue to apply after the expiration or termination
of this Agreement without limit in point of time
but shall cease to apply to secrets or information which come into
the public domain through no fault
of the Shareholder concerned.
22 Duration
22.1 This Agreement shall continue until the first of the following
dates:
22.1.1 the date on which the Business ceases to be carried
on by TMH or its Subsidiaries;
22.1.2 the date of commencement of TMH’s winding-up; or
22.2 If this Agreement expires or
terminates under clause 22.1.1 or 22.1.2 a Liquidation
shall be deemed to have been served on the relevant date Notice
by one of the Major Shareholders to the
other and the provisions of clause 18.4 shall apply.
22.3 This Agreement shall be deemed to be terminated by mutual
consent with effect from the date
upon which the holders of one class of share in TMH
first hold more than 80% of the Equity Share
Capital.
22.4 The date of the expiration of not less than six months
notice (a "Termination Notice") (expiring
at any time) served by either of the Major Shareh
olders on the other Major Shareholder terminating
this Agreem ent.
22.5 Despite the termination of this Agreement, it shall contin
ue to bind the Major Shareholders to
such extent and for so long as may be necessary to
give effect to the rights and obligations embodied
in it.
23 Successors and assigns
23.1. This Agreement shall operate for the benefit of and
be binding on the successors in title and
permitted assigns of each Shareholder.
23.2 Before transferring any of its Shares in the Company,
the Shareholder Proposing to make the
transfer shall procure the transferee executes a deed
in favour of the other Shareholder by which the
v
Thompson Smith & Puxon - 10 March 1997 - TMH.AG1
transferee agrees to be bound by terms identical, mutatis mutandi
s, to the terms of this Agreement
(including the terms of this clause as regards any subsequent
transfer of the Shares).
23.3 If a Shareholder transfers some only of the Shares held or beneficially
by it, that owned
Shareholder and the transferee shall be treated as being the Shareho
lder in respect of all the Shares
held or beneficially owned by them. Accordingly, they shall jointly
and severally bear all liabilities and
obligations imposed by this Agreement, and jointly be entitled to exercis
e any rights conferred by this
Agreement, on a Shareholder in relation to those Shares.
24 Waiver, forbearance and variation
24.1 The rights which each
of the parties has under this Agreement shail not be prejudic
ed or
restricted by any indulgence or forbearance extended to another party.
No waiver by any party in
respect of a breach shall operate as a waiver in respect of any subsequent breach.
24.2 This Agreement shall not be varied or cancelled, unless the variation or cancellation is
expressly agreed in writing by each of the Major Shareholders.
25 Governing law
25.1 The construction, validity and performance of this Agreement shall be governe
d in all respects
by English law.
25.2 The High Court or (if agreed upon between the parties) the County
Court of England has
jurisdiction to settle any dispute which may arise between the parties
in respect of the construction,
validity or performance of this Agreement or as to the rights and liabilitie
s of the Major Shareholders
or in any way connected with TMH. In the event of any action in respect
of this Agreement being
begun, the process by which it is begun, may be served on the parties
in accordance with clause 29.
26 Severability
26.1 If any of the provisions of this Agreement is found by the court
or other competent authority
to be void or unenforceable, it shall be deemed to be deleted from
this Agreement and the remaining
provisions shall continue to apply. The Shareholders shall negotia
te in good faith in order to agree the
terms of a mutually satisfactory provision to be substituted for the provision found to be void or
unenforceable.
27 Previous Agreements
27.1 This Agreement supersedes any previous agreement between
the parties in relation to the
matters with which it deals and represents the entire underst
anding between the parties in relation to
those matters.
28 The terms of this Agreement to prevail
28.1 In the event of any ambiguity or conflict arising between the terms
of this Agreement and those
of TMH’s memorandum and articles of association, the terms
of this Agreement shall prevail as
between the Shareholders but not so as to amend the memora
ndum or articles of association.
Thompson Smith & Puxon - 10 March 1997 - TMK.AG1
14
29 Notices
29.1. Any notice to be given or served under this Agreement shall be either delivered personally or
sent by first class recorded delivery post (airmail if overseas). The address for service of each party
is (in the case of a company) its registered office and (in the case of an individual) his address stated
above or any other address for service previously notified to the other parties. A notice is deemed to
have been served as follows:
29.1.1 if personally delivered, at the time of delivery;
29.1.2 if posted, at the expiration of 48 hours or (in the case of airmail) 7 days after the envelope
containing it is delivered into the custody of the postal authorities.
In proving service it is sufficient to prove that personal delivery was made, or that the envelope
containing the notice was properly addressed and delivered into the custody office of the postal
authority as a prepaid first class recorded delivery or airmail letter (as appropriate).
IN WITNESS whereof the parties hereto have executed this Agreement as their Deed the day and year
first before written
Thompson Smith & Puxon - 10 March 1997 - TMH.AG1
SCHEDULE 1
(Board Minutes)
TMH TELEMEDIA SERVICES LIMITED - (in these Minutes called "the Company")
MINUTES of a Meeting of the Board of Directors held at 4/5 North Hill, Colchester, Essex
CO1 1EB
on, the day of 1997 at a.m./p.m.
Present: Mr.W.Smith
Mr.S.C.Freeman
Mr.J.C.Freeman
1. Mr.S.C.Freeman took the Chair, noted that a quorum was present and declared the
Meeting
open.
s
2. Shareholders Agreement and ancillary documents ip
L
The following documents were laid on the table: !
(1) a Shareholders’ Agreement proposed to be entered into on the day of ;
1997 between (1) IAN WILLIAN SMITH (2) STUART CARL FREEMAN (3)
'
JASON CARL FREEMAN and (4) TMH TELEMEDIA SERVICES LIMITED (“the
i
Shareholders’ Agreement");
i
j (2) a print of the new Articles of Association of the Company proposed to be adopted
on
the day of 1997. :
IT WAS REPORTED that Mr.J.W.Smith and Mr S.C.Freeman and Mr J.C.Freeman had
agreed the “
terms upon which they would participate in the Company. The directors considere
d that it was in the !
best interests of the Company that the Company co-operates in giving effect to
such arrangements.
IT WAS RESOLVED that each of the documents tabled be noted, approved or, as the case
may be,
adopted and that:
(1) any director be authorised to execute on behalf of the Company
any such documents which
required to be so executed:
(2) any such documents as required execution under the seal
of the Company be so executed;
(3) all steps to be taken by the Company pursuant to any of the documen
ts tabled to be taken
forthwith.
3. Adjournment and Resumption of Meetings
The meeting was thereupon adjourned. On the resumption of
the meeting it was reported that those
documents which required execution by the Company had been so
executed.
4, Extraordinary General Meeting
There was produced to the Meeting:
(a) a notice of extraordinary general meeting to be convened to consider a resolution for the
following purposes:
Thompson Smith & Puxon - 10 March 1997 - TMH.AG1
|
(i) to convert the fifty Shares of £1 each issued to Mr.I.W.Smith into fifty ‘A’ Shares of £1
each
(ii) to convert the thirty two Shares of £1 each issued to Mr S.C.Freeman into thirty two'B’
Shares of £1 each
(iit) to convert the eighteen Shares of £1 each issued to Mr J.C.Freeman into eighteen ‘B
Shares of £1 each
(iv) That forty nine thousand nine hundred and fifty of the remaining Shares of £1 each
unissued immediately prior to the passing of this resolution be and are hereby
converted into forty nine thousand nine hundred and fifty ‘A’ Shares of £1 each
(v) That forty nine thousand nine hundred and fifty of the remaining Shares of £1 each
unissued immediately prior to the passing of this resolution be and are hereby
converted into forty nine thousand nine hundred and fifty ‘B’ Shares of £1 each
(vi) to adopt new Articles of Association.
(b) Form of consent to short notice of extraordinary general meeting.
IT WAS RESOLVED that subject to notice being given to the members and the auditors and to the
the
consent of the members to short notice first being obtained, an extraordinary geneal meeting of
Company be convened and held forthwith on short notice for the purpose of considering and if thought
fit passing the resolution set out in the notice.
5. Adjournment and Resumption of Meeting
The meeting was thereupon adjourned for the holding of the extraordinary general meeting. On the
resumption of the meeting it was reported that the resolution set out in the notice of extraordinary
general meeting had been passed as a special resolution.
6. Chairman
It was resolved that Mr.S.C.Freeman be appointed Chaiman to hold that office until otherwise resolved.
7. Managing Director
It was resolved that Mr |.W.Smith be appointed Managing Director and to hold that office until
otherwise resolved
8. Directors’ Interest
Each of the directors present at the meeting laid upon the table a fist of other directorships held by him
and of companies or firms of which he was a member and which might in the future enter into
contracts, transactions or arrangements with the Company and declared in accordance with Section
317 of the Companies Act 1985 that he was to be regarded as interested in any such contract,
transaction or arrangement thereafter made with any such company or firm.
9. There being no further business the meeting terminated.
These Minutes were then read and signed
. Chairman
ene
Thompson Smith & Puxon - 10 March 1997 - TMH.AGi
ttt
lene
wade
SCHEDULE 2
(Notice of Extraordinary General Meeting).
"the Company")
TMH TELEMEDIA SERVICES LIMITED - (in this Notice called
l Meeting of the Company will be held at
NOTICE iS HEREBY GIVEN that an Extraordinary Genera 1997 at
the day of
4/5 North Hill, Colchester, Essex CO1 1EB on followi ng resolut ion
t fit passin g the
am/pm for the purpose of considering and if though
which will be proposed as a special resolution.
SPECIAL RESOLUTION
THAT:
immediately prior to the passing of this
1. The fifty Shares of £1 each in issue to Mr.1.W.Smith
‘A’ Shares of £1 each
resolution be and are hereby converted into fifty
reeman immediately prior to the passing
2. The thirty two Shares of £1 each in issue to Mr $.C.F
thirty two ‘B’ Shares of £1 each
of this resolution be and are hereby converted into
reeman immediately prior to the passing
3. The eighteen Shares of £1 each in issue to Mr J.C.F
eighteen ‘B’ Shares of £1 each
of this resolution be and are hereby converted into
of the remaining Shares of £1 each unissued
4. That forty nine thousand nine hundred and fifty
be and are hereby converted into forty nine
immediately prior to the passing of this resolution
thousand nine hundred and fifty ‘A’ Shares of £1 each
remaining Shares of £1 each unissued
5. That forty nine thousand nine hundred and fifty of the
and are hereby converted into forty nine
immediately prior to the passing of this resolution be
thousand nine hundred and fifty ‘B’ Shares of £1 each
ed to the metting and signed for
6. The regulations contained in the document produc
Articles of Association of the Company in
identification by the Chairman be adopted as the ate.
existing Articles of Associ
substitution for and to the entire exclusion of the
DATED: the day of 1997
Secretary
REGISTERED OFFICE:
1RX
Stane, House, Salmons Corner, Near Coggeshall, Essex CO6
meeting is entitled to appoint a proxy to attend
NOTE: A member entitled to attend and vote at the
be a member.
and on a poll vote in his place. A proxy need not also
Thompson Smith & Puxon - 10 March 1997 - TMH.AG1
*
CONSENT TO SHORT NOTICE
We, the undersigned, being a majority in number of the members together holding 95% or more in
nominal value of the shares giving a right to attend and to vote at the Meeting convened by the
attached Notice, hereby agree to it being convened for the date and place mentioned therein and to
the passing at the Meeting as a Special Resolution of the Company, of the Resolution set out in the
Notice notwithstanding that shorter notice that that specified in the Companies Act 1985 or the
Company’s Articles of Association has been given.
DATED 1997
t
Member Signature
LW.Smith
$.C.Freeman
J.C.Freeman
net eenaer
Thompson Smith & Puxon - 10 March 1997 - TMH.AG1
soo
2 19
SIGNED as a Deed by the said } =
IAN WILLIAM SMITH
in the presence of:
Fie,
Soller
Coledadee
Esus
SIGNED as a Deed by the said
STUART CARL FREEMAN
in the presence of:
a
Mn ee
As adn
SIGNED as a Deed by the said )
JASON CARL FREEMAN )
in the presence of: )
Hg g
Ay hue
THE COMMON SEAL of TMH TELEMEDIA _)
SERVICES LIMITED was hereunto )
affixed in the presence of: }
Director ACOA,
Thompson Smith & Puxon - 10 March 1997 - TMH.AG1