SHAREHOLDERS’ AGREEMENT
SHAREHOLDERS’
AGREEMENT
THIS
AGREEMENT dated this 6th
day of
June 2008 by and between
| 1. |
Xx.
Xxxxxx Xxxxx Xxxxx, Xx. Xxxx Xxxxx Xxxxx, and Xx. Xxxx Xxxxxx
Xxxxx
residing at
X-0000 Xxxxxxxxxxx Xxxx, Xxx XxXxx-000000
(hereinafter collectively referred to as “Dr. Xxxxxx which expression
shall, subject to the terms of this Agreement, include their successors,
nominees, legal representative and permitted assigns) of the First
Part.
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AND
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2.
|
Xxxxx
Xxxxxxxxxx, and Xxxxxx Xxxxxx the majority shareholders of SFH1
Acquisition Corp.,
(hereinafter collectively referred to as “the
Shareholders”
which expression shall subject to the terms of this Agreement, include
their heirs, legal representatives, successors and permitted assigns)
of
the Second Part.
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AND
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3.
|
SFH
Acquisition Corp., a Delaware corporation, incorporated under the
laws of
U.S. and having its registered office at 0000 XX 000xx
Xxxxxx Xxxxx 000, Xxxxx
Xxxxx Xxxxx, Xxxxxxx (hereinafter referred to as “the
Company”
which expression shall, subject to the terms of this Agreement, include
its successors-in-business and permitted
assigns).
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WHEREAS
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A.
|
The
Company had an authorized share capital of 100,000,000 shares of
common
stock
of which
10,793,650 par value $.0001 are issued and outstanding as of June
2, 2008 of which the Shareholders own a total of 5,000,000 shares
of
Common
Stock.
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|
B.
|
The
Company acquired from Dr.
Xxxxxx
one hundred percent (100%) of the shares
of Protech Biosystems Pvt. Ltd, a company incorporated in India,
and in
exchange
agreed to allot six million one hundred thousand (6.1 million) shares
of
the
Company to
Dr. Xxxxxx.
Following issuance of the 6.1 million shares of common
stock, Dr.
Xxxxxx
will own approximately 36.1% of the issued and outstanding
common stock of the Company.
|
| C. |
For
the aforesaid purpose, the parties had executed a Share Exchange
Agreement
dated the same date in June 2008, summarizing the proposed terns
of the
transaction and have on this date authorized the issuance of six
million
one hundred thousand (6.1 million) shares of the Company to Dr.
Xxxxxx.
|
NOW
IT IS
HEREBY AGREED BETWEEN THE PARTIES AS FOLLOWS:
Article
I
Definitions
In
this
Agreement the expressions mentioned below shall have the following
meaning:--
| 1.1 |
“Act”
means the Securities Act of 1933 as amended from time to
time.
|
| 1.2 |
“Affiliate”
means companies within the same “group”, and any entity, which controls,
is controlled by, or is under the common control of any of the Parties
to
this Agreement. The term “control” being used in the sense of power to
elect, appoint or remove either singly by itself or together with
other
Affiliates a majority of its directors or to direct and control the
management of a company, or to hold in excess of 50% of the voting
interest. The term Common Control being used in the sense that the
shareholder and the other person are both ultimately controlled by
the
same person. Common Control shall mean the predominant ultimate beneficial
interest and/or effective control being exercised by the same person
or a
group of persons over third parties, any Party to this Agreement
and/or
any of their Affiliates.
|
2
| 1.3 |
“Closing
Date”
means the date of execution of this
Agreement;
|
| 1.4 |
“Law”
includes all applicable statutes, enactments, acts of legislature
or
Parliament, laws, ordinances, rules, bye-laws, regulations, notifications,
guidelines, policies, directions, directives and orders of any Government,
statutory authority, tribunal, board, court or recognized stock
exchange.
|
|
1.5
|
“Parties”
means the parties to this Agreement when referred to collectively
and
“Party”
when referred to individually.
|
|
1.6
|
“Related
Person”
means and includes:-
|
| (i) |
any
company in which any Shareholder holds more than 10% of the equity
share
capital of such company;
|
| (ii) |
any
company which is under the control and management of a
Shareholder;
|
| (iii) |
any
holding or subsidiary company of the Company or of a
Shareholder;
|
| (iv) |
any
firm or company in which a Shareholder is, or was within the six
months
immediately preceding the concerned date, a director or partner or
has any
control or ownership interest in excess of 10% of the shareholding
or the
share as the case may be;
|
3
|
(v)
|
any
director of the
or
of
any
Shareholder or of any holding or subsidiary company of the Company
or of a
Shareholder.
|
|
1.7
|
“Senior
Management”
means any officer or director of either the Company
or personnel of the Company or Protech or any other individual drawing
emoluments or salaries in excess of $10,000 or more per month or
a person
functionally heading a department.
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|
1.8
|
“Stock
Option(s)”
or
“ESOP”
means the equity shares of the Company which may be issued in favor
of the
Employees of the Company.
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|
1.9
|
“Third
Party”
means any party which is not a party to this
Agreement.
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1.10
|
Headings
are used for convenience only and shall not affect the meaning or
interpretation of this Agreement.
|
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1.11
|
In
this Agreement, (unless the context requires
otherwise):--
|
|
(i)
|
reference
to the singular includes a reference to the plural and vice
versa,
|
|
(ii)
|
reference
to any gender includes a reference to all other
genders.
|
|
(iii)
|
reference
to any person includes any legal or natural person, partnership,
firm,
trust, company, government or local authority, department or other
body
(whether corporate or
unincorporated).
|
| (iv) |
reference
to an individual shall include his legal representative, successor,
legal
heir, executor and administrator.
|
4
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(v)
|
words
and expressions used but not defined in this Agreement shall have
the same
meaning as in the Act.
|
|
(vi)
|
reference
to statutory provisions shall be construed as meaning and including
references also to any amendment or re-enactment (whether before
or after
the date of this Agreement) for the time being in force and to all
statutory instruments or orders made pursuant to statutory
provisions.
|
|
(vii)
|
references
to any statute or regulation made using a commonly used abbreviation
shall
be construed as a reference to the title of the statute or
regulation.
|
| (viii) |
references
to any Article, Clause or Annexure shall be deemed to be a reference
to an
Article, Clause or Annexure of or to this
Agreement.
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1.12
|
The
Schedules to this Agreement shall form an integral part of this
Agreement.
|
| 1.13 |
For
the purpose of this Agreement, “Confidential Information” shall include
all:
|
| (a) |
Production
process, marketing techniques and arrangements, mailing lists, purchasing
information, pricing policies, quoting procedure, financial information,
customer and prospect names and requirements, employee, customer,
supplier
and distributor data, price lists and other materials or information
relating to the Company’s business and activities and the manner in which
the Company does business;
|
| (b) |
Computer
software, whether, existing or hereafter developed for use on any
operating system or machine, all modifications, enhancements and
versions
and all options available with respect thereto, and all future products
developed or derived therefrom;
|
5
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(c)
|
Source
and object code, flowcharts, algorithms, coding sheets, routines,
subroutines, compilers, assemblers, design concepts and related
documentation and manuals.
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|
(d)
|
Discoveries,
concept and ideas including, without limitation, the nature and results
of
research and development activities, processes, formulas, inventions,
computer-related equipment or technology, techniques, “know--how”,
designs, drawings and
specifications.
|
|
(e)
|
All
other materials or information related to the business or activities
of
the Company which are not generally known to others engaged in similar
business or activities.
|
|
(f)
|
All
ideas which are derived from or related to the access to or knowledge
of
any of the enumerated materials and information;
and
|
|
(g)
|
All
information about or belonging to suppliers and clients of, and all
parties to any agreement with the Company which would be confidential
information pursuant to the above definition if such other parties
were in
the position of the Company.
|
The
term
Confidential Information shall not include
| a) |
information
or knowledge which may become available to the public
generally;
|
| b) |
any
disclosure or use required by law or the order of a court or tribunal
of
competent jurisdiction or by any appropriate regulatory
authority;
|
| c) |
any
disclosure or use with the consent of the
Board.
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6
Article
2.
Representations
and Warranties of the Shareholders;
Dr. Xxxxxx and the Company
(a) The
Shareholders and the Company hereby jointly and severally represent and warrant
to Dr. Xxxxxx
that the
following statements are true, accurate and not misleading as on the date of
this Agreement:
|
2.1
|
The
Company is a corporation legally organized and validly existing under
the
laws of USA;
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|
2.2
|
This
Agreement has been validly executed by the Shareholders and by the
Company
through its representative Xx. Xxxxx Xxxxxxxxxx, duly authorized
by the
Board Resolution of the Company, and constitutes a valid agreement
binding
on the Shareholders and the Company and enforceable in accordance
with the
laws of USA.
|
|
2.3
|
The
Shareholders and the Company have obtained all approvals and other
authorizations required under the Laws of USA or any other agreements
entered into by the Shareholders and the Company to carry out their
business and to enter into this
Agreement.
|
(b)
Dr.
Xxxxxx, and Protech Biosystems Pvt. Ltd, (“Protech”) hereby jointly and
severally represent and warrant to the Shareholders and the Company that the
following statements are true, accurate and not misleading as on the date of
this Agreement:
|
2.1
|
Protech
is a legally constituted and validly existing limited liability company
in
India.
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|
2.2
|
This
Agreement has been validly executed by Dr. Xxxxxx and by Protech
and
constitutes a valid agreement binding on Dr. Xxxxxx and
Protech.
|
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2.3
|
Dr.
Xxxxxx and Protech have obtained all approvals and other authorizations
required under the Laws of India or any other agreements entered
into by
Dr. Xxxxxx and Protech to carry out their business and to enter into
this
Agreement.
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7
Article
3
Management
and Control of the Company
|
3.1
|
The
Board of Directors of the Company (“the
Board”)
shall initially consist of two directors of which one shall be nominated
by the Shareholders and one shall be nominated by Dr.
Xxxxxx,
The Shareholders agree to cast all votes represented by the number
of
shares of common stock each of the Shareholders own in favor of Dr.
Xxxxxx
or his designee. Dr. Xxxxxx agrees to cast all votes represented
by the
number of shares of common stock owned by Dr. Xxxxxx in favor of
Xxxxx
Xxxxxxxxxx or his designee.
|
The
Shareholders and the Dr.
Xxxxxx will
be
entitled to nominate the alternate directors of their respective nominated
Directors in accordance with the provisions of the Act; The position of Chairman
of the Board will be nominated by Dr.
Xxxxxx.
The
Parties hereto agree that in ease a Director dies, resigns or is otherwise
removed prior to the completion of his term, then his position shall be filled
at the next annual meeting of the Company’s shareholders and each of the parties
shall vote their shares of common stock as set forth herein.
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3.2
|
The
Parties will use their best efforts to insure that at any board meeting
of
the Company shall include at least one nominee director each, or
such
nominated director’s alternate, nominated by Dr.
Xxxxxx
and the Shareholders respectively.
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|
3.3
|
The
Company shall bear all reasonable expenses incurred by the Directors
of
the Company, in connection with the Directors’ travel to the place of the
meeting for attending board meetings or committee meetings as may
be
approved by the Board.
|
8
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3.4
|
Dr.
Xxxxxx shall not be entitled to transfer his Shares until after the
expiry
of a period of one year from the date of signing of this Agreement.
Since
the Shareholders have already owned their shares for more than one
year,
this restriction shall not apply to the Shareholders. At such time
as the
Shareholder is permitted
to transfer their equity interest, any Party wishes to sell their
Shares
or any of them (“the Sale Shares”) it shall first by a written notice
(“the Sale Notice”) serve on the other Party their offer to sell the Sale
Shares, in accordance with the provisions of this Article (“the Offer”).
The Sale Notice shall specify the number of Sale Shares, the price
at
which they are proposed to be sold, the name of the proposed purchaser,
the terms and conditions of the proposed sale, the time within which
the
Offer must be accepted, which is fifteen days from and including
the date
of receipt by the other Party of the Sale Notice (‘the Offer Period”), and
following which the Offer shall be deemed to have lapsed; Provided
that
the Offer Period shall not be less than thirty days from and including
the
date of receipt by the other Party of the Sale Notice. It is agreed
that
the Offer shall be irrevocable during the Offer Period. The restrictions
set forth above shall not apply to any sales of the parties shares
conducted in market transactions through a
broker.
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|
3.5
|
The
other Party
shall be entitled to respond to the Sale Notice by serving a written
notice (“the Response
Notice”)
on the Party prior to the expiry of the Offer Period whereby the
other
Party may accept the Offer to purchase all or a part of the Sale
Shares
from the Party at the same price and on the same terms stated in
the Sale
Notice.. The other Party shall be entitled to purchase part of the
Sale
Shares only in the event the proposed purchaser is willing to accept
the
balance of the Sale Shares at the same price and on the same terms
as
stated in the Sale Notice
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3.6
|
In
the event of a Response Notice under Clause 3.6(a) above, the other
Party
shall pay the purchase price for the Shares desired to be purchased
by the
other Party within a period of 15 days from the date of delivery
of the
Response Notice to the Party against the delivery of Share certificates
and execution and delivery of the requisite transfer forms. The period
of
15 days shall be extended by such number of days as may be required
for
obtaining all Regulatory Approvals required for the sale/purchase
of the
Shares. The Parties agree that in the event that the Regulatory Approvals
are declined, it shall be deemed that the Offer had not been made
and that
the shares may be sold or otherwise transferred in the sole and
absolute discretion of the selling
stockholder.
|
9
| 3.7 |
The
Shareholders undertake to authorize an offering of the Company’s
securities to secure additional working capital. The terms of any
underwriting, the appointment of any manager, underwriter or other
financial advisor for such offering shall be subject to the approval
of
the Board of Directors.
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| 3.8 |
From
the date of execution of this Agreement and during such time this
Agreement remains in force and for a period of two years thereafter,
without the express written consent of the other Party, neither Party
shall engage in any business, directly or indirectly, that is in
competition with the business of the
Company.
|
| 3.9 |
For
so long as either of the Shareholders own at least five percent (in
total)
of the issued and outstanding shares of common stock of the Company,
neither the Company nor Protech Biosystems Pvt. Ltd will increase
any
salaries payable to its officers without the unanimous consent of
the
Company’s Board of Directors.
|
Article
4
Term
&Termination
| 4.1 |
This
Agreement becomes effective upon execution by all
Parties.
|
| 4.2 |
This
Agreement can be terminated by mutual
consent.
|
10
Article
5
Confidentiality
|
5.1
|
Each
of the Parties herein agree that Confidential Information exchanged
to
date and which maybe exchanged during the term of this Agreement
and any
technical information in any form provided to the Parties or by the
Parties is confidential and proprietary and shall not be reproduced,
copied or disclosed to any third parties, unless there is mutual
agreement
to disclose certain terms, in which case the disclosure may be made
but
only in such manner and to such extent as the Parties may
agree,
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5.2
|
The
Parties hereto shall at all times cause their partners, directors,
officers, employees, agents, representatives, advisors, associates
and any
other person acting on their behalf to refrain from disclosing
Confidential Information and shall ensure that such Confidential
Information is only used for the purposes of Shareholders and the
Company,
irrespective of whether the Confidential Information was provided
in
writing or orally or whether the written embodiment of the Confidential
Information has been marked as
confidential.
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|
5.3
|
None
of the Parties shall make any public announcement regarding this
Agreement
without prior consent of all Parties except as may be required to
be filed
with the Securities and Exchange
Commission.
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5.4
|
The
confidentiality obligations shall survive the expiry of this Agreement
and
is legally binding on the Parties and shall always be in full force
and
effect.
|
11
Article
6
Validity
and Enforceability
|
6.1
|
In
the event that any provision of this Agreement is legally proved
to be
wholly or partly invalid or unenforceable, such event shall not affect
the
validity or enforceability of the remaining provisions
hereof.
|
|
6.2
|
In
such event the Parties shall replace such invalid or unenforceable
provision by a new one approximating the ineffective provision as
closely
as possible.
|
Article
7
Arbitration
and Dispute Resolution
|
7.1
|
In
the event any of any claim, controversy, dispute or difference between
the
Parties hereto, arising out of or in connection with or in relation
to
this Agreement, the Party raising the dispute will be entitled refer
the
same to arbitration in accordance with the American Arbitration
Association. Any arbitration proceeding shall be held at the AAA
office
located closest to Miami-Dade County,
Florida
|
|
7.2
|
The
notice should accurately set out the disputes between the Parties
and the
intention of the aggrieved Party to refer such disputes to arbitration
as
provided herein. All notices by one Party to the others in connection
with
the arbitration shall be in writing and shall be made as provided
in this
Agreement.
|
Article
8
Miscellaneous
|
8.1
|
12
| 8.2 |
Nothing
herein contained in this Agreement shall constitute or be deemed
to
constitute a partnership or a joint venture, technical or financial
collaboration between the Parties, and no Party shall hold himself
out as
an agent for the other Party, except with the express prior written
consent of the other Party.
|
| 8.3 |
Any
date or period as set out in any Clause of this Agreement may be
extended
with the written consent of all the Parties hereto failing which
time
shall be of the essence.
|
| 8.4 |
Each
of the rights of the Parties hereto under this Agreement are independent,
cumulative and without prejudice to all other rights available to
them,
and the exercise or non-exercise of any such rights shall not prejudice
or
constitute a waiver of any other right of the Parties hereto, whether
under this Agreement or otherwise.
|
| 8.5 |
This
Agreement may be executed in any number of documents or counterparts,
each
in the like form and all of which when taken together shall constitute
one
and the same document, and any Party may execute this Agreement by
signing
any one or more of such documents or
counterparts.
|
| 8.6 |
No
variation of this Agreement shall be binding on any Party unless,
and to
the extent that, such variation is mutually agreed and recorded in
a
written document executed by all the Parties, but where any such
document
exists and is so signed such Party shall not allege that such document
is
not binding by virtue of an absence of
consideration.
|
| 8.7 |
This
Agreement is personal to the Parties and shall not be capable of
assignment, except with the prior written consent of the non-assigning
Party.
|
13
|
8.8
|
Except
in matters of statutory compliance by the company, whenever a provision
of
this Agreement requires an approval or consent by a Party to this
Agreement and notification of such approval or consent is not delivered
within the applicable time limit, then, unless otherwise specified,
the
Party whose consent or approval is required shall be conclusively
deemed
to have withheld its approval or
consent.
|
|
8.9
|
All
notices required and permitted under the provisions of this Agreement
or
by law to be served upon or to be given to a Party hereto by any
other
Party hereto shall be in English language and shall be deemed duly
served
or given:--
|
| (i) |
on
the date of service, if served personally against receipt or sent
by
facsimile transmission with appropriate confirmation of or receipt,
only
if immediately followed up by sending a copy of the same via Registered
Post with acknowledgement due; or
|
| (ii) |
on
the 7th day after service, if sent by —Speed Post courier against receipt
and addressed as follows:-
|
This
Agreement shall be effective upon execution by the last signatory
hereto.
14
This
Agreement executed the date set forth above.
————————
Xxxxxx
Xxxxx Xxxxx
Date: June
—,
2008
————————
Xxxx
Xxxxx Singh
Date:
June —, 2008
—————————
Xxxx
Xxxxxx Xxxxx
Xxxxx
Karapetuan
Date:
June —, 2008
—————————
Xxxxxxx
Xxxxxx
Date:
June
____,
2008
Protech
Biosystems Pvt. Ltd,
————————————
—————————
By
Xxxxx Xxxxxxxxxx
Date:
June ——, 2008
Its:
President
15
