JOINT VENTURE AGREEMENT
BETWEEN
T/F PURIFINER, INC.,
T/F SYSTEMS, INC.,
CENTRAX LIMITED,
THE XXXX FAMILY
AND
A.N. DAVIES
Joint Venture Agreement
DATED: 18TH December 1995
-------------------------
(1) TF Purifiner, Inc.
(2) TF Systems, Inc.
(3) Centrax Limited
(4) The Xxxx Family
(5) A.N. Davies
THIS AGREEMENT is made this eighteenth day of December 1995 and is between:
(1) TF PURIFINER, INC. ("TF Inc."), a Delaware Corporation of 0000 Xxxx
Xxxxx Xxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxx 00000, Xxxxxx Xxxxxx
of America.
(2) TF SYSTEMS, INC. ("TFS"), a Delaware Corporation of 0000 Xxxx Xxxxx
Xxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxx 00000, Xxxxxx Xxxxxx of
America.
(3) CENTRAX LIMITED ("Centrax") whose registered office is at Xxxxx
Xxxxx, 00X Xxxxx Xxxxxxxx Xxxxxx, Xxxxxx, XxX 0XX.
(4) MR. R. H. H. XXXX on his own behalf and on behalf of Xx. X. X. Xxxx
and Xx. X. X. Xxxx c/o Centrax Ltd, Xxxxxxx Xxxx, Xxxxxx Xxxxx,
Xxxxx, XX00 0XX ("The Xxxx family").
(5) A.N. DAVIES ("AND") of Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxx, XX00 0XX
WHEREAS:
(a) TF Inc. and TFS are in the business of designing, developing,
manufacturing and marketing mobile bypass oil refining units and
filters under the trademark "Purifiner" (hereinafter referred to as
the "Products").
(b) TF Inc. is the exclusive licensee of the US patent Nos. 4,189,351;
4,227,969; 4,289,583; 4,943,352 and pending patent applications and
(TF Inc.) is the registered proprietor of the registered trademarks
in the Territory set out in the Appendix 4 the ("Xxxx").
(c) TF Inc. and TFS are the owners of the Rights as defined in Clause 2.
IT IS AGREED AS FOLLOWS:
CLAUSE 1. FORMATION OF JOINT VENTURE:
1.1 The parties hereby agree to establish a new Joint Venture Company
having the name TF Purifiner (Europe) Limited ("TF Ltd") and TF
Inc. agrees to make such name available for use by TF Ltd with
it's Articles of Association in the form annexed as Appendix 3 or
such other form of Articles as TF Ltd may from time to time
resolve.
1.2 The business of TF Ltd shall be the exploitation of the Rights in
the Territories or such other activities as TF Ltd may from time
to time resolve.
CLAUSE 2. RIGHTS:
2.1 TF Inc. and TFS jointly and severally warrant to Centrax, to the
Xxxx family and to AND that they have all necessary rights to
make possess market or dispose of in any way whatever and to
import to and to commercially exploit the Products in the
Territories referred to in Clause 14 ("xxx Xxxxxxxxx") together
with the right to offer to do any of the foregoing together with
the right to use the Xxxx ("the Rights") and that they have the
right to assign to Ltd the Rights contained in Clause 2.2.
2.2 By and subject to the terms of this Agreement, TF Ltd is hereby
assigned by TFS and TF Inc. the irrevocable and exclusive rights
to exploit the Rights free of charge in respect of all of the
Products of TF Inc. and TFS (as now existing and developed in the
future) in perpetuity except for royalty payments as defined in
10.2.
2.3 For the avoidance of doubt, TF Inc. and/or TFS shall not be
entitled to exercise their Rights, in the Territory covered by
this Agreement, unless TF Ltd otherwise agrees.
CLAUSE 3. APPROVAL OF MEMBERS:
The provisions of this Agreement are conditional on and will not
take effect until the terms of this Agreement are approved by an
ordinary resolution of the Board members of TF Inc. and TFS in
general meeting and TF Inc. and TFS shall use best endeavors to
procure this as expeditiously as possible and, once obtained, the
provision hereof will apply and in the event that approval is not
obtained by 1st January 1996 this Agreement shall be of no
further force or effect.
CLAUSE 4. SHARE STRUCTURE:
The shareholding in TF Ltd shall be structured as follows:
(1) There shall be an authorized and issued share capital of
55,000 shares, value (pound)1 sterling each to be paid up
by Centrax to be issued in three classes carrying the
rights set out in the Articles of Association as follows:
2
25,000 'A' shares to Centrax, the Xxxx Family or a
company representing the Xxxx family (voting)
25,000 'B' shares to be held by TF Inc.(voting)
5,000 'C' shares to AND (non-voting)
For a shareholder which is a corporation, it shall be
permitted for any class of share to be registered in the
name of an individual provided that such individual holds
the shares as nominee of the shareholder concerned and
written evidence acceptable to the Board of Directors is
produced demonstrating that appointment.
CLAUSE 5. FUNDING:
5.1 If additional financing in excess of the original paid up capital
of(pound)55,000 is needed such additional financing can be
provided either by bank borrowing by TF Ltd or directly or
indirectly by Centrax or the Xxxx family or a company
representing the Xxxx family either as capital, non interest
bearing loans or interest bearing loans as determined and agreed
by the voting Directors of the TF Ltd Board and the Centrax Ltd
Board for commercially sound reasons.
5.2 Subject to Clause 5.1, Centrax or the Xxxx family agree to
support and fund present and future TF Ltd operations until TF
Ltd is self-funding. "Self Funding" shall mean a situation where
TF Ltd is trading without indebtedness to Centrax, or with other
financial support, security or guarantee provided by Centrax or
the Xxxx family. It is the intention of the parties that TF Ltd
should become self funding as soon as practicable.
CLAUSE 6. DURATION:
6.1 In the event that:- TF Inc. or TFS cease to trade or enters into
liquidation then the Rights assigned under Clause 2.2 shall
continue as the property of TF Ltd including the ownership of all
patents, copyright, design and trademarks relevant to the
Territory.
6.2 In the case of TF Ltd liquidation or closure the Rights will
revert to TF Inc. and TFS.
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CLAUSE 7. OWNERSHIP:
7.1 If Centrax ceases to trade or if the Xxxx family transfers the
whole of their shares in Centrax (more than 50%) as part of a
disposal of Centrax's undertaking, it is agreed by the parties
that those members of the Xxxx family, or a company representing
the Xxxx family, who have signed Appendix 6, shall purchase from
Centrax it's shareholding in TF Ltd and take an assignment and
novation of Centrax's rights and obligations under this
Agreement. Thereafter, if any member of the Xxxx family or a
company representing the Xxxx family wish to sell their shares in
TF Ltd it will be in accordance with the Articles of Association.
7.2 In the event that the Ford family's holding in TF Inc. falls
below 50% of the voting shares in TF Inc. for whatever reason AND
the Ford family loses executive control of the Board of TF Inc.,
then the 'A' shareholders will have the right to appoint three
voting Directors in respect of the 'A' shares and the 'B'
shareholders will have the right to appoint two voting 'B'
Directors.
CLAUSE 8. DIVIDEND POLICY:
Dividend Policy will be at the discretion of the Directors but
with a minimum payment of 30% of post tax profit after deducting
losses in prior years.
CLAUSE 9. INTELLECTUAL PROPERTY:
Such continued patent copyright design and trademark protection
incurred since May 24, 1995 and agreed by the parties for all
current and future Products in the Territories (as defined in
Appendix 1) will be paid for by TF Ltd. All such rights in the
Territory will be assigned to TF Ltd in perpetuity on the same
basis as in Clause 2.2.
CLAUSE 10. TECHNICAL DEVELOPMENTS:
10.1 The intellectual property rights to any improvements to the
Products produced by TF Ltd shall be the property of TF Ltd. TF
Ltd agrees that the irrevocable exclusive rights to manufacture
and market such improvements outside the Territory will ~e
assigned back to TF Inc. on a similar royalty free basis to the
assignment granted herein save that TF Ltd gives no warranty as
to it's ability to grant such rights or that the exploitation of
the same will not infringe the rights
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of third parties save for a warranty that it has not licensed any
third party to exploit the same.
10.2 The rights of all present or future developed designs or improve-
ments or replacement for Products produced by TF Inc. or TFS
shall be conferred to TF Ltd. on the same basis as set out herein
save that in respect of the present royalty agreement that TF
Inc. has in respect to filter elements with Xxxxx Xxxxxxxx and
royalty payments to Xxxxxx " Malt, TF Ltd agrees not to act in
any manner to cause TF Inc. to breach those agreements.
CLAUSE 11. INDEMNITY:
TF Inc. and TFS hereby indemnify TF Ltd against all and any loss
costs claim or demand in relation to the use of the Rights and in
relation to any claims regarding the manufacturing or marketing
or intellectual property in the Products in the Territory that
may be made by any third party.
CLAUSE 12. ADMINISTRATION OF TF LTD:
Will be initially as listed hereunder subject to change from time
to time as approved by the Board of TF Ltd.
The auditors shall be:- KPMG, Xxxxxxx Xxxxx, Xxxxxxxxxxx Xxxx,
Xxxxxx, Xxxxx, Xxxxxxx The bankers shall be:- Barclays Bank PLC,
00 Xxxxxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxx, Xxxxxxx The solicitors
shall be:- Messrs Xxxxx Xxxxxxx, Xxxxxx Xxxxx, Xxxxxxxxxxx Xxxx,
Xxxxxx, Xxxxx, XX0 0XX, Xxxxxxx The Registered Office shall be:-
C/O Messrs Xxxxx Xxxxxxx, Curzon House, Southernhay West, Exeter,
Devon, EX4 3LY, England The Company Secretary shall be:- To be
appointed
The Accounting Reference Date shall be:- December 31st 1996
Secretarial and personnel services shall be provided by TF Ltd.
The following shall be the Directors of TF Ltd.
Xxxxxxx Xxxxx Xxxxxx Xxxx Xxxxxxx Xxxxxxx Xxxx
Xxxxxxx Xxxxxx Xxxx Xxxxxxxx Xxxxxx Xxxxxxxx
Xxxxxx Xxxx Xxxxxx
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Unless otherwise determined by the Board, the business premises
of TF Ltd shall be located at:- X/X Xxxxxxx, Xxxxxxx Xxxx, Xxxxxx
Xxxxx, Xxxxx, XX00 0XX, Xxxxxxx
CLAUSE 13. MANUFACTURE OF THE PRODUCTS:
13.1 The manufacture of the Products will commence in the Territory,
through TF Ltd as soon as the Board of TF Ltd deem it
appropriate. All design detail drawings and production processes
will be passed to TF Ltd on the signing of this Agreement to
allow production to proceed in the Territory as appropriate.
Until such time as the manufacture of the Products by TF Ltd
occurs in the Territory, TF Inc. will supply the Products against
an agreed schedule and price structure as stated in Appendix 2.
13.2 On signing of this Agreement, TF Ltd shall have the right to
purchase individual items direct from the established US sourcing
which TF Inc. and TFS will make available to TF Ltd as TF Ltd
deems desirable and shall have the right to use TF Inc. and TFS
existing tooling associated thereto on a no charge basis.
13.3 On this Agreement coming into effect by the passing of the reso-
lutions required by Clause 3, the terms of payment requiring 100%
of the purchase price of the units, as defined in Appendix 2
attached, purchased from TF Inc., to be paid by wire transfer
upon the placing of orders, will become valid providing that this
amount will at no time exceed the outstanding balance of $100,000
of unfilled orders and until such time as production commences in
the Territory or an alternative source of supply is agreed.
CLAUSE 14. THE TERRITORY:
The Territory covered by the Agreement is specified in Appendix I
attached.
CLAUSE 15. SUPPORT SERVICES:
TF Inc. and TFS undertake to fully support TF Ltd in all
technical and commercial matters. When TF Ltd requests a visit
from TF Inc. or TFS personnel to it's Territory, TF Ltd will pay
such personnel's reasonable out of pocket expenses.
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CLAUSE 16. COSTS:
16.1 Subject to Clause 16.2, the parties shall bear their own costs of
and incidental to the preparation, execution and implementation
of this Agreement.
16.2 Centrax will be entitled to charge TF Ltd all reasonable costs
and expenses incurred arising by virtue of Centrax's investment
and expenditure in setting up an outlet for the Products in the
Territory and in particular those items or heads of cost set out
in Appendix 5 but credit being given for revenue received.
Reasonable costs to be approved by the Board of Directors of TF
Ltd.
CLAUSE 17. CONFIDENTIALITY AND RESTRICTED INFORMATION:
Each Director of each of the parties hereto and of TF Ltd shall
be entitled, whilst he holds office, to make full disclosure to
any shareholder appointing him of any information relating to TF
Ltd which that Director may acquire, but the shareholder and the
Director receiving such information shall, for the duration of
the Agreement and for one year thereafter, keep the same in
strict confidence unless otherwise agreed.
CLAUSE 18. DUTY OF ACTION:
Each party shall, from time to time, do all such acts and execute
all such documents as may reasonably be necessary in order to
give effect to the provisions of this Agreement.
CLAUSE 19. NOTICES AND SERVICE:
Any notice or other information required or authorized under this
Agreement shall be given by hand, telex, cable, facsimile or
prepaid registered first class post (or datapost in the case of
notices on any party outside the UK) to the relevant parties at
the address of the registered or principal office of the relevant
party (or to any such address as may be given by that party in
writing from time to time).
Service shall be deemed to have occurred and been effected two
working days after the date of sending.
CLAUSE 20. ANNOUNCEMENTS:
Except as required by law or the requirements of any stock
exchange, no party shall make any press or public announcements
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concerning any aspect of this Agreement without first obtaining
the agreement of the other parties to the text of that
announcement.
CLAUSE 21. NATURE OF AGREEMENT:
Nothing in this Agreement shall create or be deemed to create a
partnership or the relationship of principal and agent between
the parties or any of them. This Agreement contains the entire
Agreement between the parties with respect to it's subject matter
and may not be modified except by an instrument in writing signed
by the duly authorized representatives of the party.
If any provision of this Agreement is held by any court or other
competent authority to be invalid or unenforceable in whole or in
part, this Agreement shall continue to be valid as to it's other
provisions and the remainder of the effected provision.
No failure or delay by any part in exercising any of it's rights
under this Agreement shall be deemed to be a waiver thereof and
no waiver of a breach of any provision of this Agreement shall be
deemed to be a waiver of any subsequent breach of the same of any
other provision.
CLAUSE 22. ARBITRATION:
Any dispute between the parties arising from this Agreement shall
be referred to and determined by arbitration under the
International Arbitration Rules of the London Court of
International Arbitration.
This Clause shall not preclude the making of an application to
the Court for injunctive relief.
CLAUSE 23. JURISDICTION:
This Agreement shall be governed by and construed in accordance
with the Laws of England.
The parties hereby agree to submit to the non-exclusive
jurisdiction of the English Courts.
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CLAUSE 24. BINDING NATURE:
The benefit and burden of this Agreement shall be binding on any
permitted transferee of the shares in TF Ltd.
CLAUSE 25. BREACH OF AGREEMENT:
If any of the parties hereto fails to fulfill any obligation
hereunder any injured party may give written notice of the breach
to the defaulting party and if the breach is not remedied within
30 days the injured party may take whatever legal action is
available to enforce the terms of this Agreement and to recover
damages for breach provided always that rescission or termination
shall not be a remedy available to any party. The election of any
one or more remedy by any of the parties hereto shall not
constitute a waiver by such party of the right to pursue any
other available remedy.
CLAUSE 26. ARTICLES OF ASSOCIATION
In the event of conflict the terms of Clause 7.2 hereof will
prevail over those of the Articles of Association.
AS WITNESS whereof the parties have signed this Agreement the day and year first
before hand
SIGNED BY: XXXXXXX X. XXXX )
------------------------------
/s/conformed )
for and on behalf of TF Purifiner, Inc. )
in the presence of:
SIGNED BY: XXXXXXX X. XXXX )
------------------------------
/s/conformed )
for and on behalf of TF Systems, Inc. )
in the presence of:
SIGNED BY: XXXXXXX XXXXXXX XXXX )
for and on behalf of Centrax Limited )
in the presence of: )
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SIGNED BY: XXXXXXX XXXXX XXXXXX XXXX )
for and on behalf of Xxxx family )
in the presence of: )
SIGNED BY: XXXXXX XXXX XXXXXX )
in the presence of: )
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APPENDIX
--------
TERRITORY
---------
COMPRISING OF THE FOLLOWING COUNTRIES:
--------------------------------------
E.E.C. COUNTRIES E.F.T.A COUNTRIES SOVIET UNION
---------------- ----------------- ------------
(former)
Belgium Austria Comprising:-
Denmark Finland Armenia
France Iceland Belarus
Germany Norway Estonia
Greece Sweden Georgia
Irish Republic Switzerland Xxxxxxxxxx
Xxxxx Xxxxxxxxxx
Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxx Lithuania
Portugal Moldova
Spain Russia
United Kingdom Tajikistan
Ukraine
Uzbekistan
EASTERN EUROPEAN MIDDLE EAST YUGOSLAVIA
---------------- ----------- ----------
(former)
Albania Arab Emirates Comprising:-
Bulgaria Bahrain Bosnia
Cyprus Iran Croatia
Czech Republic Iraq Herzegovina
Gibraltar Israel Macedonia
Hungary Jordan Serbia
Malta Kuwait Slovenia
Poland Lebanon
Romania Oman
Slovakia Qatar
Turkey Saudi Arabia
Syria
Yemen
AFRICA
------
Egypt
S. African Republic
All other territories world-wide, with the exception of USA and Mexico, to be
open to supply by Agreement with TF Inc.
Appendix 2
TF PURIFINER, INC. 1995/1996 PRICES TO TF PURIFINER (EUROPE) LTD
----------------------------------------------------------------
Batch
UNITS TF-8 TF-12 TF-24 TF-40 TF-60 TF-240 Refiner
----- ---- ----- ----- ----- ----- ------ -------
Suggested W/D
Selling Price $134 $278 $308 $359 $384 $539 $3,521
Cost TF (RM, Labour
and Malt Royalty) $58.30 $96.05 $109 $124.10 $129.45 $148.85 $1,250.30
Current J.V. Cost/Unit $86 $141 $160 $182 $189 $217 $1,826
FILTERS (PER CASE)
------------------
Current W/D Selling Price $97 $87 $53 $74 $85 $119
Cost TF (RM, Labour and
Malt Royalty) $57.65 $21.32 $13.20 $17.26 $22.33 $27.41
J.V. Cost/Case $65.15 $31.80 $19.70 $25.75 $33.35 $40.90
Filter Royalty (5.75%)
plus* $3.99 $2.63 $2.00 $2.40 $2.86 $3.31
J.V. Cost/Case $69.14 $34.43 $21.70 $28.15 $36.21 $44.21
* Additional cost for changes to filter for increased cotton ($.50, improved
felt pads ($.20) and additive cost (for $.48 case to $.96 case) Subject to
normal future price increases related to inflation and supported cost
increases
APPENDIX 3
----------
Draft 11 December 1995:
The Companies Act 1985 - 1989
----------------------
COMPANY LIMITED BY SHARES
----------------------
ARTICLES OF ASSOCIATION
OF
T.F. PURIFINER (EUROPE) LIMITED
(adopted by Special Resolution passed on [_______________]
199___)
================================================================================
PRELIMINARY
1. The regulations contained in Table A in the Companies (Tables A to F)
Regulations 1985 (as amended so as to affect companies first registered
on the date of the adoption of these Articles) shall, except as
hereinafter provided and so far as not excluded by or inconsistent with
the provisions of these Articles, apply to the Company to the exclusion
of all other regulations or Articles of Association. References herein
to regulations in the said Table A unless otherwise stated.
SHARE CAPITAL
2. The share capital of the Company at the date of the adoption of these
Articles is(pound)55,000 divided in 25,000 'A' Shares of (pound)1 each
and 5,000 'C' Shares of(pound)1 each. In the event that any 'A' Shares
are transferred to a holder of 'B' Shares they shall automatically
become denominated as 'B' Shares as the case may be and vice versa. The
said 'A' 'B' and 'C' shares shall carry the respective voting rights
and rights to appoint and remove Directors and be subject to the
restrictions on transfer hereinafter provided, but in all other
respects shall be identical and rank pari passu in all respects.
ISSUE OF SHARES
3. Subject to Section 80 of the Companies Xxx 0000, all unissued shares
shall be at the disposal of the Directors and Section 89(1) of the
Companies Xxx 0000 shall not apply.
TRANSFER OF SHARES
4.1 Subject to the provisions of Regulation 24 any shares may at any time
be transferred:-
(a) by any individual member to the spouse mother father sister
brother child or grandchild "privileged relation" of such member;
or
(b) by any such individual member to trustees to be held upon trust
for such member and/or any privileged relation of such member
("the family trusts")
(c) by any member being a company to a member of the same group of
companies as the transferor company;
(d) by any person entitled to shares in consequence of the death or
bankruptcy of an individual member to any person or trustee to
whom such individual member, if not dead or bankrupt, would be
permitted hereunder to transfer the same; or
4.2 If a person to whom shares have been transferred pursuant to Article
4.1(b) shall cease to be a privileged relation or trustee, such person
shall be bound, if and when required in writing by the Directors so to
do, to give a transfer notice in respect of the shares concerned
4.3 If a transferee company ceases to be a member of the same group as the
transferor company from which (whether directly or by a series of
transfers under Article 4.1 shares derived) it shall be the duty of the
transferee company to notify the Directors of the Company in writing
that such event has occurred and the transferee company shall be bound,
if and when required in writing by the Directors so to do, to give a
transfer notice in respect of those Shares
4.4 Except as provided in paragraphs 4.1 to 4.3 no share in the Company
shall be transferred by any member or other person entitled to transfer
the same otherwise than in accordance with the following provisions:-
(a) Any member or other person proposing to transfer any share
(hereinafter referred to as "the proposing transferor") shall
2
give notice in writing
(hereinafter called "the transfer notice") to the Company that he
desires to transfer the same. A transfer notice shall, on receipt
by the Company, constitute the Company the agent of the proposing
transferor for the sale to any member of the Company or any
person approved by the Directors as eligible to be a member of
the Company of the shares referred to therein at the fair value
to be determined in accordance with sub Article (b) hereof. A
transfer notice shall not be revocable except with the sanction
of the Directors
(b) The fair value of the shares included in a transfer notice shall
be determined within 30 clear days of the transfer notice by the
Auditor for the time being of the Company who shall at the
request and expense of the Company certify in writing the sum
which in his opinion is the fair value of the shares included int
he transfer notice as at the date of the transfer notice. In
certifying the fair value of the shares the Auditor shall be
considered to be acting as an expert and not as an arbitrator and
accordingly any provisions of law or statute relating to
arbitration shall not apply
(c) Within 10 clear days of the receipt of the Auditor's certificate
any share included in any transfer notice shall in the first
place be offered at the fair value by written notice (hereinafter
called "the offer notice") to the other shareholders pro-rata
amongst those other Shareholders their respective shareholdings.
The offer notice shall specify the date of receipt by the Company
of the transfer notice and the fair value of the shares as
certified by the Auditor and shall invite the offeree to accept
all or any of the shares so offered. The offer notice shall
further limit the time in which the offer may be accepted (being
not more than twenty clear days from the date of the offer
notice) and if any person does not before expiry of such limit
accept by notice in writing any share offered to him the offer in
respect of any such share shall lapse
(d) In the event any share comprised in the offer notice is not
agreed to be purchased within the time for acceptance of the
offer contained in the offer notice any share not so taken by the
offeree named in the offer notice shall forthwith be offered by
notice in writing at the fair value (hereinafter called "the
option notice") to the members (other than the proposing
transferor or to
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the member who did not accept the offer notice) as nearly as
maybe in proportion to the shares held by them respectively. The
option notice shall limit the time in which the offer may be
accepted (being not more than 10 clear days from the date of the
option notice) and if any member does not before expiry of such
limit claim by notice in writing any share offered to him it
shall be applied in accordance with sub Article (e) below. The
Directors shall apply any share representing fractional
entitlements in such manner as they shall think fit
(e) If any share comprised in the option notice is not agreed to be
purchased the member serving the transfer notice may forthwith
offer any such share at not less than the fair value to any other
person
(f) The Directors may refuse to register a transfer of a share under
this Article 4.4 if the transferee is not an existing member of
the Company.
(g) The provisions of this Article 4.4 shall not apply if all of the
'A' Members and 'B' Members of the Company consent in writing
PROCEEDING AT GENERAL MEETINGS
5. Unless agreed by the holders of a majority of the issued 'A' Shares and
'B' Shares all general meetings of the Company shall be held in the UK.
6. The quorum at any General Meeting shall be two or more members present
in person or by proxy including one person being or representing a
holder of any of the 'A' Shares and one person being or representing a
holder of any of the 'B' Shares provided that if within thirty minutes
of the time appointed for the meeting such quorum is not present such
meeting shall be adjourned in accordance with Regulation 41. Regulation
40 shall be modified accordingly.
7. Subject to the provisions of the Act a resolution in writing signed by
all the members for the time being entitled to receive notice of and
attend and vote at General Meetings of the Company shall be as
effective as if the same had been passed at a General Meeting of the
Company duly convened and held and may consist of several documents
signed by one or more persons. In the case of a corporation a
resolution in writing may be signed on its behalf by a Director or the
Secretary thereof or by its duly appointed attorney or duly authorised
representative. Regulation 53 shall be extended accordingly.
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VOTE OF MEMBERS
8. On a show of hands every member who is the holder of 'A' Shares or the
holder of 'B' Shares present in person shall have one vote, and on a
poll every member who is the holder of 'A' Shares or the holder of 'B'
Shares present in person or by proxy shall have one vote for every
share of which he is the holder. Any Shareholder being the holder of
'C' Shares shall have no right to vote in respect of those 'C' Shares
whether on a show of hands or on a poll. Regulation 54 shall not apply.
9. An instrument appointing a proxy (and, where it is signed on behalf of
the appointor by an attorney, the letter or power of attorney or a duly
certified copy thereof) must either be delivered at such place or one
of such places (if any) as may be specified for that purpose in or by
way of note to the notice convening the meeting (or, if no place is so
specified, at the registered office) at least one hour before the time
appointed for holding the meeting or adjourned meeting or (in the case
of a poll taken otherwise than at or on the same day as the meeting or
adjourned meeting) for the taking of the poll at which it is to be used
or be delivered to the Secretary (or the chairman of the meeting) on
the day and at the place of, but in any event before the time appointed
for holding, the meeting or adjourned meeting or poll. An instrument of
proxy shall not be treated as valid until such delivery shall have been
effected. Regulation 62 shall not apply.
NUMBER OF DIRECTORS
10. The maximum number of Directors shall be five and shall consist of two
persons who shall be designated as 'A' Directors (and shall be deemed
to have been appointed under Article 12 by the holders of the 'A'
Shares) and two persons who shall be designated at 'B' Directors (and
shall be deemed to have been appointed under Article 12 by the holders
of the 'B' Shares) and one person who shall be designated as the 'C'
Director (and shall be deemed to have been appointed under Article 12
by the holders of the 'C' Shares). Regulation 64 shall not apply.
ALTERNATE DIRECTORS
11. The holders of a majority of any one class of shares may at any time
appoint any person (including another Director) to be the alternate
Director of any Director of the relevant class and may at any time
terminate such appointment. Any such appointment or termination of
appointment shall be effected in like manner as provided in Article 14
hereof. The same person may be appointed as the alternate Director of
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more than one Director. Regulations 65 to 68 shall not apply.
11.1 The appointment of an alternate Director shall determine on the
happening of any event which if he were a Director would cause him to
vacate such office or if the Director of whom he is the alternate
ceases to be a Director.
11.2 An alternate Director shall be entitled to receive notices of all
meetings of the Directors and of all committees of Directors of which
the Director of whom he is the alternate is a member to attend and vote
and be counted in the quorum at any such meeting at which the Director
of whom he is the alternate is not personally present and generally to
perform all the functions of the Director of whom he is the alternate
in his absence and the provisions of these Articles shall apply as if
he were a Director of the relevant class. If he shall be himself a
Director or shall attend any such meeting as an alternate for more than
one Director his voting rights shall be cumulative.
APPOINTMENT AND REMOVAL OF DIRECTORS
12. The holders of a majority of the 'A' Shares may from time to time
appoint up to two persons to be Directors, and the holders of a
majority of the 'B' Shares may from time to time appoint up to two
persons to be Directors and the holders of the majority of the 'C'
Shares may from time to time appoint one person to be a non-voting
Director. In these Articles the expressions 'A' Director and 'B'
Director and 'C' Director respectively designate Directors according to
the class of shares holders of a majority of which have appointed or
are deemed to have appointed them. The Directors shall not be subject
to retirement by rotation. Regulations 73 to 80 shall not apply.
13. The office of a Director shall be vacated in any of the events
specified in Regulation 81 and also if he shall be removed from office
by the holders of a majority of the relevant class of shares.
14. Any such appointment or removal by the holders of a majority of the
relevant class of shares shall be in writing served on the Company and
signed by the holders of a majority of the issued 'A' Shares or 'B'
Shares or 'C' Shares (as the case may be). In the case of a corporation
such documents may be signed on its behalf by a Director or the
Secretary thereof or by its duly appointed attorney or duly authorised
representative.
6
PROCEEDINGS OF DIRECTORS
15. The 'A' Directors and the 'B' Directors and the 'C' Director shall be
entitled to receive notice in accordance with these Articles and to
attend meetings of the Board of Directors. Only the 'A' Directors and
the 'B' Directors will be entitled to vote on resolutions of the Board
of Directors and otherwise conduct the business affairs of the Company
and the 'C' Director shall have no such rights as aforesaid.
16. Unless otherwise agreed by a majority for the time being of the 'A'
Directors and of the 'B' Directors Board Meetings shall be held no less
than two times in every year and twenty-one days' notice shall be given
to each of the Directors of all meetings of the Board, at the address
(within or outside the United Kingdom) notified from time to time by
each Director to the Secretary of the Company and all such meetings
(unless otherwise agreed) shall be held in the United Kingdom. Each
such notice shall contain, inter alia, an agenda specifying in
reasonable detail the matters to be discussed at the relevant meeting,
shall be accompanied by all relevant papers for discussion at such
meeting and, if sent to an address outside the United Kingdom, shall be
sent by courier or by telefax.
17. A quorum at a meeting of Directors shall be two of which one shall be
an 'A' Director and one a 'B' Director, provided that if within thirty
minutes of the time appointed for the holding of any meeting of the
Directors either an 'A' Director or a 'B' Director shall not be present
the Directors present shall resolve to adjourn that meeting to a
specified place and time (which shall not be earlier than three nor
later than seven days after the date originally fixed for the meeting).
An alternate Director shall be counted in the quorum in the same
capacity as his appointor but so that not less than two individuals
will constitute the quorum. Regulation 89 shall not apply.
18. No Director shall be appointed otherwise than as provided in these
Articles. Regulation 90 shall be modified accordingly.
19. Unless the parties otherwise agree there shall be no chairman of the
Board. If a chairman is appointed the person appointed shall not have
a casting vote.
20. All business arising at any meeting of the Directors or of any
committee of the Directors shall be determined only by resolution
provided that if at any quorate meeting an 'A' Director is not present
in person or represented by an alternate the votes of the 'A' Directors
present in person represented by an alternate director shall be pro
tanto increased so that such 'A' Directors shall be entitled to cast
7
the same aggregate number of votes as would be cast by all 'A'
Directors if they were all present this proviso also applying to the
'B' Directors mutatis mutandis.
21. On any matter in which a Director is in any way interested provided
that he declares his interest in the manner provided by Section 317 of
the Act he may nevertheless vote and be taken into account for the
purposes of a quorum and (save as otherwise agreed) may retain for his
own absolute use and benefit all profits and advantages directly or
indirectly accruing to him thereunder or in consequence thereof.
Regulations 94 and 98 shall be modified accordingly.
22. A resolution determined on without any meeting of the Directors and
evidenced by writing signed by all the Directors entitled to vote shall
be valid and effective for all purposes as a resolution of the
Directors passed at a meeting duly convened, held and constituted and
the resolution may be contained in several documents in like form each
signed by one or more Directors. Regulation 93 of Table A shall not
apply.
23. Any director enabled to participate in the proceedings of a meeting by
means of a telephone or other communication device which allows all the
other Directors present at such meetings whether in person or by means
of such communication device, to hear at all times such Director and
such Director to hear at all times all other Directors present at such
meeting (whether in person or by means of such type of communication
device) shall be deemed to be present at such meeting and shall be
counted when reckoning a quorum.
INDEMNITY
24. Subject to the provisions of and so far as may be permitted by law,
every Director, Auditor, Secretary or other officer of the Company
shall be entitled to be indemnified by the Company against all costs,
charges, losses, expenses and liabilities incurred by him in the
execution and discharge of his duties or in relation thereto including
any liability incurred by him in defending any proceedings, civil or
criminal, which relate to anything done or omitted or alleged to have
been done or omitted by him as an officer or employee of the Company
and in which judgment is given in his favour (or the proceedings are
otherwise disposed of without any finding or admissions of any material
breach of duty on his part) or in which he is acquitted or in
connection with any application under any statute for relief from
liability in respect of any such act or omission in which relief is
granted to him by the Court. Regulation 118 shall not apply.
8
DIRECTORS' LIABILITY INSURANCE
25. Without prejudice to any other provision of these Articles the
directors may purchase and maintain insurance for or for the benefit of
any persons who are or were at any time directors, officers or
employees of the Company, or of any company which is a subsidiary or
subsidiary undertaking of the Company, or of any other company in which
the Company has any interest whether direct or indirect or which is in
any way allied to or associated with the Company or any such
subsidiary, or of any of the predecessors in business of the Company or
any such other company as aforesaid, or who are or were at any time
trustees of any pension fund in which any employees of the Company or
of any such predecessor or other company or subsidiary undertaking as
aforesaid are or have been interested. Including (without prejudice to
the generality of the foregoing) insurance against any liability
incurred by such persons in respect of any act or omission in the
actual or purported execution and/or discharge of their duties and/or
in exercise or purported exercise of their powers and/or otherwise in
relation to their duties, powers, or offices in relation to the Company
or any such predecessor or other company or subsidiary undertaking as
aforesaid or any such pension fund. No director or former director
shall be accountable to the Company or its members for any benefit
provided pursuant to this Article 21 and the receipt of any such
benefit shall not disqualify any person from being or becoming a
director of the Company.
SEAL
26.1 In the first sentence of Regulation 101 of Table A, the words "Any seal
adopted by the Company" shall be substituted for the words "The Seal".
26.2 Every share certificate shall be sealed with the seal (if any) of the
Company or may be signed by a director and the secretary or by two
directors, and the second sentence of Regulation 6 of Table A shall be
amended accordingly.
9
APPENDIX FOUR
TRADEMARK DETAILS
REGISTERED/FILED APPLICATION NO. REGISTRATION NO.
---------------- --------------- ----------------
Benelux 1/4/94 798438 532234
CIS (Russia 2/10/94 157571 115666
Xxxxxxxxxxxxxx 0/00/00
Xxxxxxx 7/22/94 03666/1993 04816/1994
Finland 9/5/94 2521/93 000000
Xxxxxx 6/8/93 93/471240
Germany 10/15/91 T31320/7WZ 2005055
Hungary 6/10/93 135039 M9202203
Italy 6/11/93 93C001089
Xxxxxxxxx 00/00
Xxxxxx 6/8/93 932711
Poland 4/15/94 108799 75,922
Portugal 6/16/93 000000
Xxxxx 6/10/93 0000000
Xxxxxx 3/31/94 93-5373 256993
Switzerland 6/18/93 8276/1993 413956
United Kingdom 1/5/91 1451914 1451914
APPENDIX 5
NOT APPLICABLE
APPENDIX 6
NOT APPLICABLE
