DATED

[Date of Agreement]

SHAREHOLDERS’ AGREEMENT

Relating to:

[Company Name]
([Country] Company number: [Company Number])

Made and entered into by and between:

[Names of founding shareholders]

 Shareholders’ Agreement

INDEX

1. PARTIES................................................................................................................................................3
2. DEFINITIONS.........................................................................................................................................3
3. INTERPRETATION................................................................................................................................4
4. PREAMBLE............................................................................................................................................5
5. SHAREHOLDING..................................................................................................................................5
6. MAIN OBJECT OF THE COMPANY....................................................................................................6
7. DIRECTORS AND MANAGEMENT OF THE COMPANY..................................................................7
8. RESTRICTIVE COVENANTS AND OBLIGATIONS.........................................................................10
9. THE SHAREHOLDERS’ VOTING RIGHTS AND MEETINGS.........................................................13
10. MATTERS REQUIRING THE CONSENT OF A SPECIAL MAJORITY......................................13
11. DIVIDEND POLICY AND NET PROFITS......................................................................................17
12. BORROWING AND GUARANTEES.............................................................................................18
13. FINANCIAL MATTERS..................................................................................................................19
14. TRANSFER OF SHARES..............................................................................................................19
15. OBLIGATORY TRANSFER EVENTS...........................................................................................21
16. COMPLETION OF SHARE PURCHASE......................................................................................24
17. FAIR VALUE AND COMPULSORY PURCHASE OF SHARES.................................................26
18. ISSUE OF FURTHER SHARES.....................................................................................................27
19. DRAG ALONG................................................................................................................................28
20. TAG ALONG...................................................................................................................................30
21. CONFIDENTIALITY........................................................................................................................31
22. NOTICES.........................................................................................................................................32
23. SERIOUS DEADLOCKS: RESOLUTION OF DISPUTES...........................................................33
24. TERMINATION................................................................................................................................34
25. GOVERNING LAW AND JURISDICTION.....................................................................................35
26. UTMOST GOOD FAITH.................................................................................................................35
27. SEVERENCE...................................................................................................................................36
28. VARIATION AND WAIVER............................................................................................................36
29. ASSIGNMENT.................................................................................................................................37
30. COSTS.............................................................................................................................................37
31. CONFLICT WITH MEMORANDUM AND ARTICLES..................................................................37
32. ENTIRE AGREEMENT...................................................................................................................37
33. THIRD PARTIES.............................................................................................................................38
34. COUNTERPARTS..........................................................................................................................38
35. SIGNATORIES................................................................................................................................38
SCHEDULE 1.................................................................................................................................................41
SCHEDULE 2.................................................................................................................................................42
SCHEDULE 3.................................................................................................................................................44

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1. PARTIES

1.1. [Name and address of shareholder 1]

1.2. [Name and address of shareholder 2]

1.3. [Name and address of shareholder 3]

1.4. etc

1.5. [Company Name] Company Number ([Country] [Company number])

2. DEFINITIONS

2.1. “Agreement” means this Agreement together with any schedules and/or
attachments hereto;

2.2. “Business Day” means each day other than a Saturday, Sunday or public
holiday in the [Country];

2.3. “Company” means the Company referred to in clause 1.5 above;

2.4. “Equity” means, in relation to any of the Shareholders, such Shareholders’

Shares and Loan Account;

2.5. “Loan Accounts” means all non-liquidated, acknowledged claims of

whatsoever nature and howsoever arising which the Shareholders may have
against the Company and “Loan Account” in relation to any of the
Shareholders means that Shareholder’s claims of whatsoever nature and
howsoever arising against the Company;

2.6. “Parties” means the parties to this Agreement referred to in clause 1 above;

2.7. “Serious Deadlock” means any deadlock, disagreement or dispute, whether

at Shareholder or Board level, which relates to the core business activities of
the Company and which cannot be resolved within 10 (ten) Business days
after such deadlock, disagreement or dispute shall have arisen, by the

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exercise of voting powers or by discussion and debate amongst the

Shareholders and/or the Directors (as the case may be) of the Company.

2.8. “Shareholder 1” means [1st shareholder name] referred to in clause 1.1

above;

2.9. “Shareholder 2” means [2nd Shareholder name] referred to in clause 1.2

above;

2.10. “Shareholders” means Shareholder 1 and Shareholder 2, in their capacities

as members of the Company (the “Founder Shareholders”), and any other

person or company or corporation who becomes a member of the Company
(the “New Shareholders”), and who are specified in Schedule 2 and whose
rights and obligations as an Shareholder have not terminated as provided by
clause 24;

2.11. “Shares” means the issued Shares in the Company;

2.12. “Share Ratio” means the ratio in which the Shareholders hold Shares in the
Company;

3. INTERPRETATION

3.1. Where the context so indicates, reference to the singular shall be deemed to
include the plural and vice versa and reference to one gender shall be
deemed to include the other genders.

3.2. Clause headings shall not affect the interpretation of this Agreement.

3.3. References to a person shall include a natural person, as well as a corporate

or unincorporated body (whether or not they have separate legal personality).

3.4. References to “in writing” or “written” shall include faxes but not e-mails.

3.5. References to a particular law shall be deemed to be references to the law as

it is in force for the time being, taking into account any amendment,
extension, application or re-enactment, and shall include any subordinate
legislation for the time being in force made under it.

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3.6. This Agreement constitutes the sole memorandum of the agreement between
the parties relating to the subject matter hereof and no variation or addition
hereto or consensual cancellation hereof shall be of any force or effect unless
reduced to writing and signed by the relevant parties.

3.7. No indulgence granted by any party to any of the others in regard to the
enforcement of its rights under this Agreement shall be construed as a waiver
of such rights (unless expressed as such in a written document signed by the
indulgent party), nor shall it serve to prevent the indulgent party from strictly
enforcing its rights in the event of a subsequent breach thereof.

4. PREAMBLE

It is recorded that –

4.1. [The Company] is a private company limited by shares incorporated and

registered in [Country] with company number [Company Number] whose
registered office is at Registered office address of Company is [Company
Address];

4.2. This document sets out the terms of the Agreement between the
Shareholders, governing their relationship as Shareholders in the Company.

5. SHAREHOLDING

5.1. It is recorded that the Company was created on [incorporation date] and on
[date] had a share capital of [insert amount] made up by way of [insert
number] ordinary Shares of [insert value] each. The said issued Shares in
the Company are held as follows -

5.1.1. By Shareholder 1 - [insert amount] shares and [insert percentage]%

of total;

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5.1.2. Shareholder 2 - [insert amount] shares and [insert percentage] % of

total;

5.1.3. [Shareholder 3 etc]

5.2. No subsequent issue or transfer of Shares in the Company shall take place
otherwise than in accordance with this Agreement.

5.3. All ordinary Shares in the Company shall be issued, and shall remain, in
registered form.

5.4. Notwithstanding the terms applicable to clauses 10, 14 and 18 for the transfer
and issuance of Shares to any New Shareholders, all existing Shareholders
will be diluted in their percentage shareholdings in relation to each in the
Company on a pari passu basis.

6. MAIN OBJECT OF THE COMPANY

The main object of the Company shall be to carry on [Enter description of what the
Company does] (the “Business”).

7. DIRECTORS AND MANAGEMENT OF THE COMPANY

7.1. Management of the Company shall vest in the Board of Directors (the
“Board”).

7.2. The Founder Shareholders shall each be entitled to appoint themselves as a

Director onto the Board of Directors of the Company. Unless otherwise
agreed, [Insert name] shall be the Managing Director and CEO of the
Company and the Chairman shall be appointed by the Directors, from their
number, but on the basis that the Chairman will be someone other than the
Managing Director and CEO. In the initial instance [Insert name] shall be
appointed as the Chairman of the Company. The Founder Shareholders will
each lose the right to appoint themselves as Director or another party
pursuant to clause 7.2 if their Shareholding, falls below 20% of Shares.

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7.3. A quorum for a meeting of the Directors shall be shall be a simple majority of
Directors personally present, provided that the director appointed by the
largest shareholder is also present .

7.4. Should a quorum not be present within 30 (thirty) minutes after the time
appointed for the commencement of any meeting of the Directors of the
Company, that meeting shall stand adjourned to the same day in the following
week, at the same time and place, or such other date, time or place as the
chairman of the meeting shall decide, provided that it may not be sooner than
the same day in the following week and nor shall it be later than the same day
4 (four) weeks later. The adjourned meeting may only deal with the matters
which were on the agenda of the meeting which was adjourned. Where a
meeting has been adjourned as aforesaid, the Company shall be obliged to
inform the Directors who were not present at the meeting that was adjourned
of the time, date and place to which the meeting has been adjourned by
giving written notice of such adjourned meeting to those Directors. If at any
adjourned meeting a quorum is not present within 30 (thirty) minutes after the
time appointed for the commencement of such meeting on account of the
absence of a Director(s) representing the same Shareholders as was/were
absent at the previous meeting, the Directors present shall form a quorum. If
any meeting is adjourned on account of the absence of a Director(s)
representing 1 (one) Shareholder and at the adjourned meeting a quorum is
not present on account of the absence of a Director representing another
Shareholder, the Directors present shall not form a quorum and the meeting
shall be adjourned again on the same basis, and on the same terms, as
provided for herein.

7.5. None of the Directors shall have a casting vote.

7.6. A round-robin resolution, signed by all of the Directors, shall be as valid and
effective as a resolution of Directors taken at a properly constituted meeting
of the Directors

7.7. Meetings of the Board of Directors shall be held as and when needed but, in
any event, at least on a quarterly basis

7.8. Unless the Directors agree otherwise, the Directors shall be given at least 5
(five) Business days prior written notice of any Directors meeting, the object
being that the Directors should liaise in regard to proposed meeting dates,

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times and venues in order to accommodate the reasonable requirements of

the Directors. A notice of the meeting shall be accompanied by the agenda for
the meeting. The meeting shall be convened by the chairman of the Board of
Directors provided that a meeting of Directors must be convened within not
less than 5 (five) Business days nor more than 20 (twenty) Business days
after written request of any of the other Directors of the Company, which
request shall be delivered to the Company and to each of the Shareholders.

7.9. Directors of the Company may participate in and act at any Board meeting
through the use of a conference telephone or other communication equipment
by means of which all persons participating in the meeting can hear each
other. Such participation shall constitute attendance and presence in person
at the meeting by the person or persons so participating.

7.10. Subject to the provisions of this Agreement and any applicable legislation, the
Board shall have the exclusive responsibility for the management and control
of the Company’s Business and affairs and shall have the power and
authority to do all things necessary to carry out the purpose of the Company
and shall carry on and manage the same with the assistance from time to
time of the other Shareholders and of agents, servants or other employees of
the Company as they shall deem necessary. The Shareholders (otherwise
than in their capacity as Board members) shall have no right or authority to
act for the Company or to take any part in the management of the Company
or to vote on matters relating to the Company other than as provided in the
Act, the Regulations or any other statutory provision applicable to the
Company due, but not exclusively referred to in clauses 10, 13, 14, and 31,
and or as set forth in this Agreement, but they shall at all reasonable times,
subject to having given reasonable notice, have access to and the right to
inspect the books and records of the Company at its registered office or at
such other place as the Board shall designate. In the event that the Act or the
Regulations or any other statutory provision applicable to the Company shall
require a meeting of the Shareholders then such meeting shall be convened
by the Board.

7.11. Without prejudice to the generality of Clause 10, the Board shall have full
power and authority on behalf of the Company and with the power to bind the
Company thereby:-

7.11.1. To take such actions as they deem necessary or desirable to manage

the Business including, but not limited to, the opening of bank

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accounts, and the paying or authorising the payment of distributions

to the Shareholders and of the expenses incurred in relation to the
Business out of the funds of the Company;

7.11.2. To enter into, without limitation, discretionary investment

management agreements and distribution agreements with clients of
the Company and on behalf of such clients (whether as principal or
agent) and otherwise conduct the Business to the extent permitted by
any applicable law and the rules of any regulatory authority of which
the company is from time to time a member or by which it is
regulated;

7.11.3. To take such action as they deem necessary or desirable to promote

or develop the Business;

7.11.4. To engage and remunerate, on behalf of the Company, from funds of

the Company, such persons, firms, or corporations, including any
Associated Company, as the Board in their sole judgement shall
deem advisable or desirable for the conduct and operation of the
Business; and

7.11.5. To borrow money for any of the purposes of the Company pursuant to
Clauses 10 and 12 and to charge the assets of the Company as
security for money borrowed there under.

7.12. The Board members shall not be liable, responsible or accountable in

damages or otherwise to the Company or to any of the other Shareholders,
their successors, or assigns, except by reason of acts or omissions due to
bad faith, negligence or wilful default, by acts or omissions arising from
breaches of clause 8 and 26, or for not having acted in good faith in the
reasonable belief that their actions were in, or not opposed to, the best
interests of the Company.

8. RESTRICTIVE COVENANTS AND OBLIGATIONS

8.1. Each of the Shareholders undertakes to each of the other Shareholders that
they shall not (whether directly or indirectly, or whether solely or jointly with or
as agent, Director, Shareholder, partner, manager, employee, consultant or

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independent contractor of, in or to any other person) at any time whilst they
are a holder of any Shares in the Company and for a period of one year from
the date of ceasing to be a Shareholder in the Company (“the Relevant
Date”) without the prior written consent of all the Shareholders:

8.1.1. Compete, directly or indirectly, with the Business of the Company in

any territory in which the Company carried on such business at the
Relevant Date;

8.1.2. Solicit or endeavour to entice away from or discourage from dealing

with the Company any person who was at any time during the period
of one year preceding the Relevant Date a customer or client of the
Company;

8.1.3. Supply or provide any goods or services which are competitive with or
of the type supplied by the Company to any person who was at any
time during the period of one year preceding the Relevant Date a
customer or client of the Company to whom the Company had during
that period supplied or provided goods or services in the ordinary
course of its business; or

8.1.4. Solicit or endeavour to entice away from or discourage from being

employed by the Company any individual who was at the Relevant
Date an officer or employee of the Company.

8.1.5. Hold or participate in an Outside Interest that conflicts with clause

26.1.3 or that the Board has deemed to constitute a material
competition with the Company. In the event that the Outside Interest
is deemed to be in conflict, the Shareholder shall immediately resign
from such position or terminate such relationship.

8.1.6. Derive any benefit from the use of the name of the Company or the
property or the business connections of the Company not introduced
to the Company by the Shareholder as the result of a pre-existing
relationship, and in the event of any breach of this sub-clause the
Shareholder shall account to the Company for any profit derived by
him from the use in question;

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8.1.7. By his actions or omissions bring the name or reputation of the

Company into serious disrepute or seriously prejudices the interests
of the Business;

8.2. Each of the Shareholders undertakes to each of the other Shareholders that
they shall (whether directly or indirectly, or whether solely or jointly with or as
agent, Director, Shareholder, partner, manager, employee, consultant or
independent contractor of, in or to any other person) at any time whilst they
are a holder of any Shares in the Company:

8.2.1. Conduct himself in a proper and responsible manner and use his best
skill and endeavour to promote and conduct the Business;

8.2.2. By his actions or omissions not bring the name or reputation of the
Company into serious disrepute or seriously prejudice the interests of
the Business or Company;

8.2.3. Comply will all applicable statutes, regulations, professional

standards and other provisions as may govern the conduct of the
Business from time to time;

8.3. Each of the sub-clauses of this clause shall be treated as a separate

obligation and shall be severally enforceable as such.

8.4. Founder Shareholders will enter into and be bound by the terms of
employment contracts agreed with the Company

8.5. Each Shareholders at the time of entering into the Agreement represents and
warrants:

8.5.1. Factual information, including personal CVs and documentation

provided to the Company or other Shareholders, delivered for the
purposes of due diligence and entering into this Agreement, are to the
best of the Shareholder’s knowledge true and factual, legal or not
under any sanction but available for distribution, as at the date of
signing the Agreement;

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8.5.2. The Shareholder is not bankrupt, does not have an existing criminal
record or is not the subject of on-going criminal, civil or regulatory
proceedings or investigations;

8.5.3. The Shareholder has the authority to enter into and commit to be
bound by the Agreement;

8.6. The Shareholders undertake to abide by the undertakings of confidentiality

pursuant to clause 21.

8.7. The Shareholders undertake not to disparage or to comment negatively about

the Company, its officers and management, and/or current or former
employees.

8.8. The Shareholders consider the restrictions in this clause to be reasonable,

but if a court of competent jurisdiction finds any of them to be unenforceable,
the Shareholders agree to accept any modification as to the area, extent or
duration of the restriction concerned which the court sees fit to impose or
which is reasonably necessary to render the restriction enforceable.

9. THE SHAREHOLDERS’ VOTING RIGHTS AND MEETINGS

9.1. Written notice of Shareholders’ meetings shall be given in accordance with

the Articles of Association of the Company and a quorum for meetings of the
Shareholders shall be both Shareholders present in person or by proxy.

9.2. Save as is otherwise provided for in this Agreement (see especially clause 10
below) or in the Articles of Association or by any relevant law, all decisions at
Shareholders’ meetings shall be taken by a simple majority of eligible votes
from Shareholders deemed to be in attendance based each Shareholder
being eligible to cast one vote for each Share that they own.

9.3. Shareholders of the Company may participate in and act at any Shareholders’
meeting through the use of a conference telephone or other communication
equipment by means of which all persons participating in the meeting can
hear each other. Such participation shall constitute attendance and presence
in person at the meeting by the person or persons so participating.

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9.4. Shareholders of the Company who have elected to be Sellers or are holders
of Shares that are subject to the Compulsory Purchase of Shares by the
Company will lose any and all rights to representation and to voting
associated with those Shares that the Company has compulsory purchased.

10. MATTERS REQUIRING THE CONSENT OF A SPECIAL MAJORITY

10.1. Notwithstanding anything to the contrary contained in this Agreement, the

following matters (whether decided on at a meeting of the Board of Directors
or at a meeting of the Shareholders) will require the consent of the
Shareholders who together hold not less than 70% (seventy percent) of the
voting rights in the Company eligible for voting under this clause 10 and
clause 9, except when the Board has made a decision on the relevant matters
that has been recorded in Board minutes as having been agreed
unanimously:

10.1.1. Any special resolution of the Company;

10.1.2. The variance, in any respect, of the Company’s memorandum or

Articles of Association or the rights attaching to any of its Shares;

10.1.3. The permitting of the registration (upon subscription or transfer) of

any person as a member of the Company other than the parties
and/or permitted transferees;

10.1.4. The increasing of the amount of the Company’s authorised or

issued share capital, granting any option or other interest (in the
form of convertible securities or in any other form) over or in its
share capital, redeeming or purchasing any of its own Shares or
effecting any other reorganisation of its share capital;

10.1.5. The sale or disposal by the Company of the whole or the greater
part of its business or the whole or the greater part of its assets;

10.1.6. The employment by the Company of any employee in a managerial

position or higher;

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10.1.7. The issuing of any Shares in the share capital of the Company or
entering into any commitment with any person with respect to the
issue of any loan capital;

10.1.8. The entering into of any borrowing by the Company;

10.1.9. Applying for the listing or trading of any Shares or debt securities on
any stock exchange or market;

10.1.10. Passing of any resolution for the Company’s winding up or

presenting any petition for its administration (unless it has become
insolvent);

10.1.11. Altering the name of the Company or its registered office;

10.1.12. Adopting or amending the Business Plan in respect of each financial

year;

10.1.13. Encumbering any of the assets of the Company otherwise than in

the ordinary course of business;

10.1.14. Executing a Deed of Suretyship by the Company;

10.1.15. The Advancing by the Company of any loan(s) to any of the

Directors or employees of the Company in an aggregate amount(s)
in excess of [Insert amount];

10.1.16. Any changes in the nature of the main business of the Company or
the commencement of any new business by the Company, which is
not ancillary to the business;

10.1.17. The acquisition, disposal or lease of any immovable property by the

Company;

10.1.18. The disposal of any of the Company’s assets otherwise than in the
normal course of business;

10.1.19. The establishment by the Company of any new business or

subsidiary or acquiring Shares in any other Company or
participating in any partnership or joint venture (incorporated or not);

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10.1.20. Amalgamating or merging with any other Company or business

undertaking;

10.1.21. Making any loan (otherwise than by way of deposit with a bank or
other institution the normal business of which includes the
acceptance of deposits or in the ordinary course of business) or
granting any credit (other than in the normal course of trading) or
giving any guarantee (other than in the normal course of trading) or
indemnity;

10.1.22. Altering any mandate given to the Company’s bankers relating to

any matter concerning the operation of the Company’s bank
accounts;

10.1.23. Entering into any arrangement, contract or transaction outside the

normal course of its business or otherwise, other than on arm’s
length terms;

10.1.24. Giving notice of termination of any arrangements, contracts or

transactions which are material in the nature of the Company’s
business, or materially varying any such arrangements, contracts or
transactions;

10.1.25. Adopting or amending any standard terms of business (including

prices) on which the Company is prepared to provide goods or
services to third parties;

10.1.26. Granting any rights (by license or otherwise) in or over any

intellectual property owned or used by the Company;

10.1.27. Factoring or assigning any of the book debts of the Company;

10.1.28. Changing the auditors of the Company or its financial year end;

10.1.29. Making or permitting to be made any material change in the

accounting policies and principles adopted by the Company in the
preparation of its audited (and management) accounts (except as
may be required to ensure compliance with relevant accounting

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standards under the Companies Acts or any other generally

accepted accounting principles in the United Kingdom);

10.1.30. Declaring or paying any dividend or making any other distribution

(by way of capitalisation, repayment or in any other manner) out of
the Company’s distributable profits or any of its reserves;

10.1.31. Establishing or amending any profit-sharing, share option, bonus or

other incentive scheme of any nature for Directors or employees;

10.1.32. Establishing or amending any pension scheme or granting any

pension rights to any Director, officer, employee, former Director,
officer or employee, or any member of any such person’s family;

10.1.33. Dismissing any Director, officer or employee in circumstances in

which the Company incurs or agrees to bear redundancy or other
costs in excess of [Insert amount] in total;

10.1.34. Agreeing to remunerate (by payment of fees, the provision of

benefits-in-kind or otherwise) any officer of or consultant to the
Company at a rate in excess of [Insert amount] per annum or
increasing the remuneration of any such person to a rate in excess
of [Insert amount] per annum;

10.1.35. Entering into or varying any contract of employment providing for

the payment of remuneration (including pension and other benefits)
in excess of a rate of [Insert amount] per annum or increasing the
remuneration of any staff (including pension and other benefits) to a
rate in excess of [Insert amount] per annum;

10.1.36. Instituting, settling or compromising any material legal proceedings

(other than debt recovery proceedings in the ordinary course of
business) instituted or threatened against the Company or
submitting to arbitration or alternative dispute resolution over any
dispute involving the Company;

10.1.37. Making an agreement with any revenue or tax authorities or making

any claim, disclaimer, election or consent exceeding [Insert amount]
for tax purposes in relation to the Company or its business;

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10.1.38. Changing the financial year end of the Company;

10.1.39. The appointment of additional Directors to the Board over and

above those provided for in clause 7.

10.2. The parties shall ensure that any Directors appointed by them shall comply
with the provisions of this clause.

11. DIVIDEND POLICY AND NET PROFITS

11.1. The dividend policy of the Company shall be determined from time to time by
the Board of Directors of the Company. In this respect unless the Board agree
unanimously to a different policy, [at least one third of the Net Profits] of
the Company shall be declared as dividends subject always, however, to the
overriding considerations of the financial commitments and gearing of the
Company.

11.2. The net profits of the Company after taxes (the “Net Profits”) are deemed as
those annual Company’s profits, after deduction for but not limited to all its
direct and indirect costs, employee bonuses, preferred dividends, interest and
debt repayments, and taxes, and as agreed by the Board having voted
acceptance of the Company’s Accounts as prepared and presented by the
Company’s Auditors for the relevant financial year.

11.3. It is recorded that it is the intention of the parties that Net Profits are
anticipated to result from applying a waterfall of decreasing priority and
subject to the Company having available profits to make such payments:

11.3.1. First priority payment of all direct and indirect costs, including taxes
and employee salaries and benefits; then

11.3.2. Second priority payment of an Employee Bonus Pool, from which

the Founder Shareholders will not be entitled to receive any
payments; then

11.3.3. Third priority payment of Dividends to Shareholders

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12. BORROWING AND GUARANTEES

12.1. The Shareholders undertake to use their best endeavours and good offices
with appropriate financial institutions in order to borrow funds if and when
such are reasonably required by the Company for the purposes of its
business.
12.2. To the extent that the Shareholders are asked to guarantee the obligations of
the Company in order to procure finance or any other contractual
arrangement with the Company, then, provided that the Shareholders agree
with each other to execute any such guarantees, they shall endeavour to do
so, firstly, on the basis that their liability to the creditor shall be joint, in
proportion to the Share Ratio. If, however, any of the Shareholders provides a
guarantee, approved of by the other, or if all Shareholders provide a
guarantee on the basis of which their liability is joint and several, the
Shareholders shall, as between them, be liable pro-rata to the Share Ratio
and accordingly shall indemnify each other to the extent necessary to ensure
that each shall have only been liable for their pro-rata share of the ultimate
liability.

13. FINANCIAL MATTERS

13.1. Once the business of the Company has commenced, it shall be a policy of the
Company to ensure that appropriate management accounts are produced on a
quarterly basis which accounts shall include an income and expenditure
statement.

13.2. An annual budget shall be prepared 6 (six) weeks prior to each financial year
end of the Company which budget shall be accompanied by a forecast of
income and expenditure for the 2 (two) years immediately following the
financial year which is the subject of the budget. Each of the Shareholders
shall be given a copy of such annual budget and forecast immediately such
budget is completed.

13.3. It shall be the policy of the Company to procure that [audited] financial
statements for the Company and its subsidiaries (if any) are completed within
4 (four) months of the end of each financial year of the Company.

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13.4. The Company shall adopt and comply with the principles of generally
accepted accounting practice.

14. TRANSFER OF SHARES

14.1. No Shareholder shall sell, transfer, assign, pledge, charge or otherwise

dispose of any share or any interest in any share in the Company (the
“Transfer of Shares”) except as permitted by this Agreement or with the prior
written consent of all the Shareholders or prior written consent of the Board
who have voted unanimously to agree to the Transfer of Shares.

14.2. A Shareholder wishing to transfer Shares (the “Seller”) shall give notice in
writing (the “Transfer Notice”) to the other parties (the “Ongoing
Shareholders”) specifying the details of the proposed transfer, including the
number of Shares they wish to transfer and either;

14.2.1. The identity of the proposed buyer(s) and the price for the Transfer
of Shares as agreed with the buyers; or

14.2.2. The Shares to be purchased by the Company as a Compulsory

Purchase of Shares pursuant to clause 17.

14.3. Within 20 (twenty) Business Days of receiving the Transfer Notice, the
Ongoing Shareholders shall be entitled to give written notice to the Seller
stating their intention to:

14.3.1. Purchase a proportion of the Shares in the Transfer Notice, which

the number of ordinary Shares held by him bears to the total
number of ordinary Shares held by the Ongoing Shareholders at the
price specified.

14.4. Completion of the sale of the Shares pursuant to clause 14.3.1 (as the case
may be) or as a Compulsory Purchase of Shares, shall take place in
accordance with clause 16.

14.5. If the Ongoing Shareholders fail to give notice under clause 14.3:

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14.5.1. The Seller is entitled to transfer his Shares to the third party buyer
identified in the Transfer Notice at a price not less than the price
specified in the Transfer Notice (or the Fair Value, if lower); or

14.5.2. The Seller shall procure that any buyer of Shares that is not a party
to this Agreement shall, at completion, enter into a Shareholders’
Agreement in relation to such Shares with the parties to this
Agreement on the same terms that apply to the Seller.

14.6. To enable the Shareholders and/or Directors to determine whether or not

there has been any disposal of Shares in the capital of the Company (or any
interest in Shares in the capital of the Company) in breach of this clause, the
Shareholders and/or Directors may require any holder or the legal personal
representatives of any deceased holder or any person named as transferee in
any transfer lodged for registration or any other person who the Shareholders
and/or Directors may reasonably believe to have information relevant to that
purpose, to provide to the Company and the Shareholders any information
and evidence that the Shareholders and/or Directors request regarding any
matter which they deem relevant to that purpose. If the information or
evidence is not provided to enable the Shareholders and/or Directors to
determine to their reasonable satisfaction that no breach has occurred, or that
as a result of the information and evidence the Shareholders and/or Directors
are reasonably satisfied that a breach has occurred, the Shareholders and/or
Directors shall immediately notify the holder of such Shares in the capital of
the Company in writing of that fact and the holder may be required, at any
time following receipt of the notice, to transfer some or all of its Shares to any
person(s) at the price that the Shareholders and/or Directors may require by
notice in writing to that holder.

15. OBLIGATORY TRANSFER EVENTS

15.1. If anything mentioned in this clause occurs in respect of a Shareholder, it will

be deemed an Obligatory Transfer Event and the provisions of clause 15.4
shall apply.

15.2. In the case of an individual:

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 Shareholders’ Agreement

15.2.1. Who in the following situations will be deemed to be a good leaver

(“Good Leaver”):

15.2.1.1. Death; or

15.2.1.2. A bankruptcy order being made against the

Shareholder or an arrangement or composition being
made with the Shareholder’s creditors, or where the
Shareholder otherwise takes the benefit of any
statutory provision for the time being in force for the
relief of insolvent debtors; or

15.2.1.3. The Shareholder suffers a physical or mental

deterioration which, in the opinion of the Board, is
sufficiently serious to prevent the Shareholder from
performing his normal duties or which seriously
prejudices the Shareholder's earning capacity;

15.2.1.4. The Shareholder has given notice under 14.2.2.

15.2.2. Who in the following situations will be deemed to be a bad leaver

(“Bad Leaver”)

15.2.2.1. If the Shareholder commits a material breach of any

obligation under this Agreement and fails to remedy
such breach within 25 (twenty-five) Business Days of
notice to remedy the breach being served by all the
other Shareholders: or

15.2.2.2. The Shareholder is guilty of any misconduct or neglect

in the discharge of his duties which, if he were an
employee of the Company, would justify his summary
dismissal or otherwise fails in any material respect to
fulfil the role and carry out the duties expected of a
Shareholder as agreed from time to time between the
Shareholder and the Board or to comply with the
directions and requirements of the Board to the extent
which could reasonably be expected if the Shareholder
were engaged as a full time employee in the Business.

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15.3. In the case of a body corporate:

15.3.1. Who in the following situations will be deemed to be a good leaver

(“Good Leaver”):

15.3.1.1. The liquidation (voluntary or otherwise) of the party,

other than a genuine solvent reconstruction or
amalgamation in which the new entity assumes (and is
capable of assuming) all of the obligations of the party;
or

15.3.1.2. A change of control of the party; or

15.3.1.3. An order made by a court of competent jurisdiction, or

a resolution is passed for the administration of a party,
or documents are filed with the court for the
appointment of an administrator, or notice of intention
to appoint an administrator is given by the party, or its
Directors, or by a qualifying floating charge holder (as
defined in paragraph 14 of Schedule B1 to the
Insolvency Act 1986); or

15.3.1.4. Any step is taken by any person other than a member

of the other party’s Group (and is not withdrawn or
discharged within 65 Business days to appoint a
receiver, administrative receiver or manager in respect
of the whole or a substantial part of the assets or
undertaking of the party; or

15.3.1.5. The party is unable to pay its debts as they fall due for
the purposes of section 123 of the Insolvency Act
1986; or

15.3.1.6. The party enters into a composition or arrangement

with its creditors; or

15.3.1.7. If a process has been instituted that could lead to the

party being dissolved and its assets being distributed
among the party’s creditors, Shareholders or other
contributors; or

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 Shareholders’ Agreement

15.3.1.8. The party ceases to carry on its business or

substantially all of its business.

15.3.2. Who in the following situations will be deemed to be a bad leaver

(“Bad Leaver”):

15.3.2.1. The party commits a material or persistent breach of

this Agreement which, if capable of remedy, has not
been so remedied within 25 (twenty-five) Business
Days of the other party requiring such remedy.

15.4. A Shareholder subject to an Obligatory Transfer Event shall immediately be

deemed to have become a Seller and given a Transfer Notice in respect of
the whole of his shareholding except that:

15.4.1. The deemed Transfer Notice takes effect on the basis that it does
not identify a proposed buyer or state a price for the Shares and the
parties shall refer the question of a valuation to the Valuation Agent
under clause 17 (Fair Value).

15.4.2. The price for the Shares shall be determined in accordance whether
the Seller is deemed to be a Good Leaver or a Bad Leaver pursuant
to clause 15.2 or clause 15.3:

15.4.2.1. In the case of a Good Leaver the price for the Shares
will be determined as the Compulsory Purchase
Consideration in clause 17: or

15.4.2.2. In the case of a Bad Leaver the price for the Shares
shall be the lesser of the Fair Value as determined in
accordance with clause 17 and the original subscription
price paid by the Seller for his Shares .

15.4.3. The Seller does not have a right of withdrawal of the Transfer
Notice.

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 Shareholders’ Agreement

15.5. On the completion of any sale in accordance with this clause, the Buyer is not
required to procure the discharge of any security given by the Seller or to
procure the release of any debts of the Company to him.

16. COMPLETION OF SHARE PURCHASE

16.1. Completion of the sale and purchase of Shares under clause 14 and clause
15 of this Agreement shall take place on 20 (twenty) Business Days after:

16.1.1. The day of delivery of the Transfer Notice, unless the Valuation
Agent has been requested to determine Fair Value; or

16.1.2. The day of delivery of the Valuation Agent’s Fair Value notice: or

16.1.3. The Board of the Company has confirmed it has agreed to the
Compulsory Purchase of Shares.

16.2. At such completion:

16.2.1. The Seller shall deliver, or procure that there is delivered to the
Ongoing Shareholders, a duly completed Share Transfer Form
transferring the legal and beneficial ownership of the relevant
Shares to the Ongoing Shareholders, together with the relevant
share certificates and such other documents as the Ongoing
Shareholders may reasonably require to show good title to the
Shares, or to enable them to be registered as the holders of the
Shares except in the case of the Compulsory Purchase of Shares
by the Company, when the Board will vote in determining if the
Shares purchased should be issued pro-rata to Ongoing
Shareholders, cancelled or held in Company treasury;

16.2.2. The Ongoing Shareholders shall deliver or procure that there is

delivered to the Seller a bankers’ draft made payable to the Seller to
his order for the purchase price, except in the case of the
Compulsory Purchase of Shares when payment will be made
pursuant to clause 17; and

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 Shareholders’ Agreement

16.2.3. If following the sale the Seller holds no further Shares in the
Company, the Seller shall deliver, or procure that there are
delivered to the Company, resignations from any Directors
appointed by the Seller, such resignations to take effect at
completion of the sale of the Shares.

16.3. The Shares are sold by the Seller with full title guarantee. For the avoidance
of doubt in the case of the Compulsory Purchase of Shares by the Company,
the Seller will retain no rights to those Shares sold to the Company, but retain
only the right to receive Partial Compulsory Purchase Payments from the
Company after completion and pursuant to clause 17.

16.4. If the Seller does not on completion deliver executed transfer(s) in respect of
all the relevant Shares held by it, the defaulting Seller shall be deemed to
have irrevocably appointed any person nominated for the purpose by the
Ongoing Shareholders to be his agent and attorney to execute all necessary
transfer(s) on his behalf, and to deliver such transfer(s) to the Ongoing
Shareholders as the holder thereof.

16.5. If any Ongoing Shareholder fails to pay the purchase price on the due date,
without prejudice to any other remedy which the Seller may have, the
outstanding balance of the purchase price shall accrue interest at a rate equal
to 2% above the official bank rate as set by the Bank of England from time to
time.

16.6. The parties shall procure the registration (subject to due stamping by the
Ongoing Shareholders) of the transfers of Shares in the Company effected
pursuant to this clause and each of them consents to such transfers and
registrations under this Agreement and the Articles of Association.

17. FAIR VALUE AND COMPULSORY PURCHASE OF SHARES

17.1. The Fair Value for any Shares to be transferred under this Agreement is that
proportion of the amount that an agreed valuing party (the “Valuation Agent”)
considers to be the Fair Value of the entire issued share capital of the
Company that the Seller’s Shares bear to the entire issued share capital of
the Company (with no discount for the size of the Seller’s shareholding).

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 Shareholders’ Agreement

17.1.1. In determining the Fair Value of the entire issued share capital of
the Company, the Valuation Agent relies on the following
assumptions:

17.1.1.1. The sale is between a willing Seller and a willing Buyer;

17.1.1.2. The Shares are sold free of all restrictions, liens, charges
and other encumbrances; and

17.1.1.3. The sale is taking place on the date the Valuation Agent
was requested to determine the Fair Value.

17.1.2. The Valuation Agent shall be that party agreed between the Board
of Directors and the Seller to undertake an independent valuation of
the Shares. Subject to clause 15, in the event that agreement
cannot be reached within 5 (five) business days after the parties
have failed to agree a price then the Company’s Auditors will be
appointed to undertake the valuation.

17.2. In the case of a Good Leaver, the consideration paid for a compulsory
purchase of Shares by the Company (the “Compulsory Purchase of
Shares”) to be transferred under this Agreement will comprise a total amount
paid to the Seller (the “Compulsory Purchase Consideration”) made as
follows:

17.2.1. A total of 10 (ten) payments in succeeding years, paid each year by

the Company to the Seller due Compulsory Purchase Consideration
(the “Partial Compulsory Purchase Payments”) and paid within
65 (sixty-five) business days of the Board having voted acceptance
of the Company’s Accounts as prepared and presented by the
Company’s Auditors; and

17.2.2. The respective year’s Partial Compulsory Purchase Payment to a

Shareholder being a percentage (“Seller’s Compulsory Payout
Percentage”) of the Net Profits declared for that year determined
such that:

17.2.2.1. Partial Compulsory Purchase Payment comprises that

proportion of the total of the entire issued share capital of
the Company that in the Transfer Notice the Seller’s

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 Shareholders’ Agreement

Shares bear to the entire issued share capital of the

Company; and

17.2.2.2. There is no discount for the size of the Seller’s

shareholding; and

17.2.2.3. The Seller’s Compulsory Payout Percentage has been

adjusted down in percentage size to reflect any pari
passu dilutions that Ongoing Shareholders may have
experienced to their holdings pursuant to clause 5; and

17.2.2.4. The Seller’s Compulsory Payout Percentage is reduced

each succeeding year in size on a linear basis by 10%
when a Compulsory Purchase Payment has been
declared for the previous year and paid (even when the
payment amount is £0) and in a manner such that for the
avoidance of doubt, in the 10th (tenth) and final year of
the Shareholder’s Compulsory Purchase Consideration,
the Seller’s Compulsory Payout Percentage is set to
10% (ten percent) of the Seller’s Compulsory Payout
Percentage in the first year as calculated from the
Seller’s Transfer Notice.

17.2.2.5. In the event of any Party becoming a Controlling

Shareholder or of a Controlling Shareholder ceasing to
be a Controlling Shareholder, the Seller may opt to have
their Compulsory Purchase of Shares accelerated such
that the remaining Partial Compulsory Purchase
Payments can be allowed to participate in the Tag Along
clause 21 as if his Shares had not been the subject of a
Compulsory Purchase of Shares. Any Shares not sold as
part of the Tag Along process will continue to be subject
to the Compulsory Purchase of Shares with all remaining
Partial Compulsory Purchase Payments will be reduced
to reflect the proportion of Shares sold under the Tag
Along agreement.

18. ISSUE OF FURTHER SHARES

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 Shareholders’ Agreement

18.1. If the Company wishes to issue further Shares, the Shareholders shall
procure (so far as is possible in the exercise of their rights and powers) that
the Company gives notice to each Shareholder stating the number of Shares
to be issued and the price of the Shares.

18.2. Except in those circumstances when Shares are only to be offered to a New
Shareholder, pursuant to clauses 10.1.4 and 18.4, each Shareholder shall
have the option, but not the obligation, to subscribe for, at the price stated in
the notice, that proportion of the Shares proposed to be issued which the
number of ordinary Shares held by him bears to the total number of ordinary
Shares in issue at the time the Company gives its notice. Each Shareholder
may exercise the option by giving notice to the Company, at any time within
15 (fifteen) Business Days following the Company’s notice, accompanied by a
banker’s draft made payable to the Company in respect of full payment for the
Shares to be subscribed for.

18.3. Any Shares referred to in the Company’s notice, in respect of which the
Shareholders do not exercise their options, may be issued by the Company in
accordance with its notice, provided that any such issue is completed within
15 (fifteen) Business Days after the Company’s notice.

18.4. No issue of ordinary Shares shall be made to any person who is not already a
party to this Agreement unless that person first enters into a Deed of
Adherence as a Shareholder.

18.5. Where a person who is already a party to this Agreement acquires ordinary
Shares he shall automatically be bound by, and entitled to the benefit of, the
continuing provisions of this Agreement relating to holders of ordinary Shares.

18.6. Where a New Shareholder has executed a Deed of Adherence pursuant to

clause 18.4, he shall become a party to this Agreement and shall agree to be
bound by and be entitled to the benefit of this Agreement as if an original
party hereto.

19. DRAG ALONG

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 Shareholders’ Agreement

19.1. Provided that the Company’s Valuation Agent certifies that the price intended
to be accepted is fair as contemplated in clause 17 of this Agreement, then if
the holders of 60% (sixty percent) of the Shares in issue for the time being
(“Selling Shareholders”) wish to transfer all of their interest in the Shares
(“Sellers’ Shares”) to a bona fide arm’s length purchaser (“Proposed
Buyer”), the Selling Shareholders may require all other Shareholders
(“Called Shareholders”) to sell and transfer all their Shares to the Proposed
Buyer (or as the Proposed Buyer directs) in accordance with the provisions of
this clause (“Drag Along Option”). The Selling Shareholders may exercise
the Drag Along Option by giving written notice to that effect (“Drag Along
Notice”) at any time before the transfer of the Sellers’ Shares to the Proposed
Buyer. The Drag Along Notice shall specify:

19.1.1. That the Called Shareholders are required to transfer all their
Shares (“Called Shares”) pursuant to this clause;

19.1.2. The person to whom the Called Shares are to be transferred;

19.1.3. The consideration payable for the Called Shares which shall, for
each Called Share, be an amount equal to the price per share
offered by the Proposed Buyer for the Sellers’ Shares; and

19.1.4. The proposed date of the transfer.

19.2. Once issued, a Drag Along Notice shall be irrevocable. However, a Drag
Along Notice shall lapse if, for any reason, the Selling Shareholders do not
sell the Sellers’ Shares to the Proposed Buyer.

19.3. No Drag Along Notice shall require a Called Shareholder to agree to any
terms except those specifically set out in this clause.

19.4. Completion of the sale of the Called Shares shall take place on the
Completion Date. Completion Date means the date proposed for completion
of the sale of the Sellers’ Shares unless:

19.4.1. All of the Called Shareholders and the Selling Shareholders agree
otherwise in which case the Completion Date shall be the date
agreed in writing by all of the Called Shareholders and the Selling
Shareholders; or

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 Shareholders’ Agreement

19.4.2. That date is less than 15 (fifteen) Business Days after the date on
which the Drag Along Notice is served, in which case the
Completion Date shall be the 5 (five) Business Days after delivery of
the Drag Along Notice.

19.5. The right of pre-emption set out in clause 15 shall not apply to any transfer of
Shares to a Proposed Buyer (or as it may direct) pursuant to a sale for which
a Drag Along Notice has been duly served.

19.6. Within 15 (fifteen) Business Days of the Selling Shareholders serving a Drag
Along Notice on the Called Shareholders, the Called Shareholders shall
deliver stock transfer forms for the Called Shares, together with the relevant
share certificates (or a suitable indemnity for any lost share certificates) to the
Company. On the Completion Date, the Company shall pay the Called
Shareholders, on behalf of the Proposed Buyer, the amounts they are due for
their Shares pursuant to clause 19.1.3 to the extent that the Proposed Buyer
has put the Company in the requisite funds. The Company’s receipt for the
price shall be a good discharge to the Proposed Buyer. The Company shall
hold the amounts due to the Called Shareholders pursuant to clause 19.1.3 in
trust for the Called Shareholders without any obligation to pay interest.

19.7. If any Called Shareholder does not, on completion of the sale of the Called
Shares, execute transfer(s) in respect of all of the Called Shares held by it,
the defaulting Called Shareholder shall be deemed to have irrevocably
appointed any person nominated for the purpose by the Selling Shareholders
to be his agent and attorney to execute all necessary transfer(s) on his behalf,
against receipt by the Company (on trust for such holder) of the consideration
payable for the Called Shares, to deliver such transfer(s) to the Proposed
Buyer (or as they may direct) as the holder thereof. After the Proposed Buyer
(or its nominee) has been registered as the holder, the validity of such
proceedings shall not be questioned by any such person. Failure to produce a
share certificate shall not impede the registration of Shares under this clause.

20. TAG ALONG

20.1. Except in the case of transfers pursuant to clause 15 (Obligatory Transfer

Events) and after going through the pre-emption procedure set out in clause
14 (Transfer of Shares) or where the drag along provisions of clause 19 have

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 Shareholders’ Agreement

been exercised, no sale or transfer of any of the Shares in issue, by one or

more Shareholder, to any person (the “Buyer”) shall be made or registered
unless the prior written consent of all the Shareholders is obtained or the
provisions of this clause are complied with.

20.2. Before making a Proposed Transfer, a Seller shall procure that the Buyer
makes an offer (the “Offer”) to the all Shareholders to purchase the total
number of Shares that the Buyer wishes to purchase for a consideration in
cash per Share that is equal to the highest price per Share offered or paid by
the Buyer (the “Specified Price”). All Shareholders may then choose to sell
up to their entire holding of Shares save that should the total number of
Shares offered to be sold by the Shareholders exceed the number of Shares
the Buyer wishes to purchase then each Shareholder will only sell up to a
maximum number of Shares which corresponds to their holding as a
proportion of the total holdings of the Shareholders wishing to sell of the
Shares the Buyer wishes to buy.

20.3. The Offer shall be given by written notice (the “Offer Notice”), at least 15
(fifteen) Business Days (the “Offer Period”) before the proposed sale date
(the “Sale Date”). To the extent not described in any accompanying
documents, the Offer Notice shall set out:

20.3.1. The identity of the Buyer;

20.3.2. The purchase price and other terms and conditions of payment;

20.3.3. The Sale Date; and

20.3.4. The number of Shares proposed to be purchased by the Buyer (the

“Offer Shares”).

20.4. If the Buyer fails to make the Offer to all holders of the Shares in the
Company in accordance with this clause, the Seller shall not be entitled to
complete the proposed transfer and the Company shall not register any
transfer of Shares effected in accordance with the proposed transfer.

20.5. If the Offer is accepted by any Shareholder (the “Accepting Shareholder”)

within the Offer Period, the completion of any sale of Shares by an Accepting
Shareholder shall be conditional on completion of the purchase of all the Offer
Shares held by Accepting Shareholders.

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 Shareholders’ Agreement

20.6. The sale of Shares by an Accepting Shareholder shall not be subject to the
pre-emption provisions contained in clause 14 of this Agreement.

21. CONFIDENTIALITY

21.1. Each Shareholder undertakes that he shall not at any time after the date of
this Agreement use, divulge or communicate to any person (except to his
professional representatives or advisers or as may be required by law or any
legal or regulatory authority) any Confidential Information concerning the
terms of this Agreement, the business or affairs of the other Shareholders or
the Company which may have (or may in future) come to his knowledge, and
each of the Shareholders shall use his reasonable endeavours to prevent the
publication or disclosure of any Confidential Information concerning such
matters.

21.2. All material written or encoded or in graphic or other tangible form delivered
or revealed by the Company to Shareholders shall be deemed Confidential
Information. Information may include, but is not limited to, intellectual
property, trade secrets, discoveries, ideas, concepts, know-how, techniques,
designs, specifications, drawings, diagrams, data, Company communications
both internal and external including emails, computer programs, computer
databases, algorithms, software programs, current and proposed products,
samples, inserts, research, experimental work, procurement requirements,
investors, employee information, forecasts business activities, facilities,
systems design, communications networks, finances, financial information,
product development plans, business directions, marketing plans, prospective
and existing customer names and operations, presentations, reports, studies
and other technical, business, trading statements and any other document
marked ‘confidential’, (collectively, “Confidential Information”).

22. NOTICES

22.1. Any notice given under this Agreement shall be in writing and shall be
delivered by hand, transmitted by fax, or sent by pre-paid first class post or
recorded delivery post to the address of the party as set out in clause 1, or to

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 Shareholders’ Agreement

such other address notified to the other parties. A notice delivered by hand is
deemed to have been received when delivered (or if delivery is not in
business hours, 09h00 on the first Business Day following delivery). A
correctly addressed notice sent by pre-paid first class post or recorded
delivery post shall be deemed to have been received at the time at which it
would have been delivered in the normal course of post. A notice sent by fax
to the fax number of the relevant party shall be deemed to have been
received at the time of transmission.

22.2. The addresses for service of notice of each Shareholder shall be the address
set out in Schedule 1 or such other address notified by any Shareholder to
the others.

23. SERIOUS DEADLOCKS: RESOLUTION OF DISPUTES

23.1. Should any Serious Deadlock arise as between the parties at any time,
whether in their capacities as Shareholders or Directors of the Company, the
dispute shall be submitted to and decided by summary arbitration as provided
for in this clause.

23.2. The arbitration referred to in clause 25.1 above shall be held:

23.2.1. At London;

23.2.2. In a summary manner; that is, on the basis that it shall not be
necessary to observe or carry out either the usual formalities or
procedures as prescribed by the Arbitrations Act;

23.2.3. As soon as is reasonably practicable in the circumstances and with

a view to it being completed within 20 (twenty) Business Days after
it is demanded.

23.3. The arbitrator shall be a person agreed between the disputing parties and,
failing agreement, (unless otherwise provided for in this Agreement) a suitably
qualified person having regard to the nature of the dispute, nominated for
such purpose by the Centre for Effective Dispute Resolution (CEDR).

23.4. The arbitrator shall determine:

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 Shareholders’ Agreement

23.4.1. The issue submitted to him according to what he considers just and
equitable in the circumstances and accordingly shall not be obliged
to adhere to the Strict Rules of Law;

23.4.2. Which party shall pay the costs of and incidental to the arbitration
or, if each is to contribute, the ratio of their respective contributions.

23.5. The said arbitrator shall be deemed to act as an arbitrator and not as an
expert.

23.6. The disputing parties shall be bound by the decision of the arbitrator and
agree that it shall be carried into effect and shall be capable of being made an
Order of any Court of competent jurisdiction.

23.7. In the event that the arbitrator fails to reach a decision, then either party is
free to register the dispute on www.disputesregister.org.

23.8. The parties agree that this clause shall be severable from the rest of this
Agreement and, accordingly, will remain effective between them even if this
Agreement is terminated.

24. TERMINATION

24.1. This Agreement terminates immediately upon the occurrence of any of the
following events:

24.1.1. A resolution is passed for the winding up of the Company; or

24.1.2. A receiver, administrator or administrative receiver is appointed over

the whole or any part of the assets of the Company or the affairs,
business and property of the Company is to be managed by a
supervisor under any arrangement made with the creditors of the
Company; or

24.1.3. All of the Shares become beneficially owned by any one party;

24.1.4. The admission to official listing on a stock exchange or any other

investment exchange; or

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 Shareholders’ Agreement

24.1.5. In respect of the rights and obligations of a Shareholder, upon that

person ceasing to hold any Shares in the Company.

24.2. Termination of this Agreement shall be without prejudice to the rights of

Shareholders’ accrued prior to such termination, or under any provision which
is expressly stated not to be affected by such termination including in respect
of any prior breach of this Agreement.

24.3. On a winding-up, the Shareholders shall endeavour to agree a suitable basis

for dealing with the interests and assets of the Company and shall endeavour
to ensure that:

24.3.1. All existing contracts of the Company are performed so far as

resources permit;

24.3.2. No new contractual obligations are entered into by the Company;

and

24.3.3. The Company is wound up as soon as practicable.

24.4. In the event that a Shareholder no longer holds any Shares in the Company,
the Shareholder agrees to represent and warrant in writing to the Company,
in the form of a Declaration of Continuing Confidentiality in Schedule 5, to be
delivered within 5 (five) working days of no longer holding Shares, that he has
returned and destroyed all Confidential Information he directly or indirectly
holds and has access to.

24.5. The provisions of clauses 8.1, 8.7, 21, 22, 23, 24.4 and 26 shall survive
Termination of this Agreement.

25. GOVERNING LAW AND JURISDICTION

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 Shareholders’ Agreement

25.1. This Agreement and any disputes or claims arising out of or in connection
with its subject matter are governed by and construed in accordance with the
laws of [insert country].

25.2. The parties irrevocably agree that the courts of [insert country] have exclusive
jurisdiction to settle any dispute or claim that arises out of or on connection
with this Agreement.

26. UTMOST GOOD FAITH

26.1. The Shareholders shall at all times:

26.1.1. Display the highest degree of good faith towards each other in all
matters relating to the Company;

26.1.2. Make full disclosure to each other of all information relating to the
affairs of the Company, including the furnishing of accounts and
explanations and any information as to any matter concerning the
Company which may be reasonably required of it by the other; and

26.1.3. Make full disclosure to each other of any relationship, employment,

partnership, advisory or directorship in any third party which may
reasonably be considered to directly or indirectly compete or which
may reasonably be expected in the future to compete directly or
indirectly with the business of the Company, each of which is
considered an “Outside Interest”.

27. SEVERENCE

27.1. If any provision (or party of a provision) of this Agreement is found by any
court or administrative body of competent jurisdiction to be invalid,
unenforceable or illegal the other provisions shall remain in force.

27.2. If any invalid, unenforceable or illegal provision would be valid, enforceable

and legal if some part of it were deleted, the provision shall apply with

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 Shareholders’ Agreement

whatever modification is necessary to give effect to the commercial intention

of the Shareholders.

28. VARIATION AND WAIVER

28.1. Any variation of this Agreement shall be in writing and signed by or on behalf
of all the Shareholders for the time being.

28.2. No failure or delay by a Shareholder to exercise any right or remedy provided

under this Agreement or by law shall constitute a waiver of that or any other
right or remedy, nor shall it preclude or restrict the further exercise of that or
any other right or remedy. No single or partial exercise of such right or
remedy shall preclude or restrict the further exercise of that or any other right
or remedy.

28.3. Unless specifically provided otherwise, rights and remedies arising under this
Agreement are cumulative and do not exclude rights and remedies provided
by law.

29. ASSIGNMENT

29.1. No Shareholder may assign, or grant any encumbrance over, or deal in any
way with, any of his rights under this Agreement or any document referred to
in it, or purport to do any of the same, without, in each case, the prior written
consent of all the Shareholders for the time being (such consent not to be
unreasonably conditioned, withheld or delayed).

29.2. Each Shareholder that has rights under this Agreement is acting on his own
behalf.

30. COSTS

The costs in respect of and incidental to the preparation of this Agreement shall be for the
account of the Company.

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 Shareholders’ Agreement

31. CONFLICT WITH MEMORANDUM AND ARTICLES

In the event of there being any conflict between the terms of this Agreement and any of
the terms of the Memorandum or Articles of Association of the Company then, as
between the Shareholders, the terms of this Agreement shall prevail.

32. ENTIRE AGREEMENT

32.1. This Agreement constitutes the whole agreement between the parties and
supersedes any previous arrangement, understanding or agreement between
them relating to the subject matter they cover.

32.2. Each party acknowledges that, in entering into this Agreement, he does not
rely on, and shall have no remedy in respect of, any statement,
representation, assurance or warranty of any person other than as expressly
set out in this Agreement or those documents.

32.3. Nothing in this clause operates to limit or exclude any liability for fraud.

33. THIRD PARTIES

A person who is not a party to this Agreement shall not have any rights under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement but
this shall not affect any right or remedy of a third party which exists or is available apart
from the Act.

34. COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of which when
executed and delivered shall constitute an original of that Agreement, but all the
counterparts shall together constitute the same Agreement. No counterpart shall be
effective until each party has executed at least one counterpart.

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 Shareholders’ Agreement

35. SIGNATORIES

SIGNED at [Insert place] on this [Insert day, month and year] in the presence of the
undersigned witnesses.

Witness: Shareholder 1:

(Signatures, Names & Addresses of witness) (Signature of shareholder 1)

SIGNED at [Insert place] on this [Insert day, month and year] in the presence of the
undersigned witnesses.

Witness: Shareholder 2:

(Signatures, Names & Addresses of witness) (Signature of shareholder 2)

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 Shareholders’ Agreement

SIGNED at [Insert place] on this [Insert day, month and year] in the presence of the
undersigned witnesses.

Witness: Shareholder 3:

(Signatures, Names & Addresses of witness) (Signature of shareholder 3)

SIGNED by the Company at [Insert place] on this [Insert day, month and year] in the
presence of the undersigned witnesses.

Witness: Company:

(Signature, Name & Title of person duly

(Signatures, Names & Addresses of witnesses)
authorized to sign on behalf of the Company)

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 Shareholders’ Agreement

SCHEDULE 1

Shareholders

Existing Shareholders

Name Address No. of Percentage of

Shares Issued Share
Capital

[name] [address] [no] [%]

[name] [address] [no] [%]

[name] [address] [no] [%]

New Shareholders

Name Address No. of Percentage of

Shares Issued Share
Capital

[name] [address] [no] [%]

[name] [address] [no] [%]

[name] [address] [no] [%]

[name] [address] [no] [%]

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 Shareholders’ Agreement

SCHEDULE 2

Form of Deed of Adherence

THIS DEED is made on • by • of • (the New Shareholder).

WHEREAS:

(A) The New Shareholder proposes to purchase/subscribe • • Shares of •

each in the capital of • (the Company) [from •].

(B) This deed is made by the New Shareholder in compliance with clause 17
of the Shareholders Agreement dated • made between (1) the Company,
and (2) certain persons referred to in that agreement as the New
Shareholders (the Agreement).

THIS DEED WITNESSES as follows:

1. The New Shareholder confirms that he has been supplied with a copy of
the Agreement.

2. [The New Shareholder hereby subscribes for • • shares of • each in the

capital of the Company at a subscription price of • per share and agrees to
hold the shares subject to the memorandum and articles of association of
the Company.]

3. The New Shareholder undertakes to be bound by the Agreement in all

respects as if the New Shareholder was a party to the Agreement and
named in it as an Investor and a Shareholder and to observe and perform
all the provisions and obligations of the Agreement applicable to or binding
on an Investor and a Shareholder under that agreement insofar as they fall
to be observed or performed on or after the date of this deed.

4. This deed is made for the benefit of (a) the parties to the Agreement and
(b) every other person who after the date of the Agreement (and whether
before or after the execution of this deed) assumes any rights or
obligations under the Agreement or adheres to it.

5. The address [and facsimile number] of the New Shareholder for the
purposes of clause [24] (Notices) of the Agreement is [as above] [as
follows:

[Address:

]
[Fax No: •]
(attention of •)

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 Shareholders’ Agreement

6. This deed and any non-contractual obligations arising out of or in

connection with it shall be governed by the laws of England.

IN WITNESS of which this deed has been executed and has been delivered on
the date which appears first on page 1.

[IF INDIVIDUAL:]

SIGNED as a deed by )
· )
in the presence of: )

Witness's Signature: ............................................

Name: ..................................................................

Address: ...............................................................

[OR IF COMPANY:]

EXECUTED as a deed by • )
acting by •, a director )
in the presence of: ) Director

Witness's Signature: ............................................

Name: ..................................................................

Address: ...............................................................

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 Shareholders’ Agreement

SCHEDULE 3

Form of Declaration of Continuing Confidentiality

THIS DEED is made on • by • of • (the Departing Shareholder).

WHEREAS:

(A) The Departing Shareholder no longer holds any Shares in the capital of • (the
Company) [from •].

(B) This deed is made by the Departing Shareholder in compliance with clause 24.5 of
the Shareholders Agreement [dated • ]

THIS DEED WITNESSES as follows:

1. The Departing Shareholder confirms that he no longer holds any Shares in the
Company as [from •].

2. The Departing Shareholder represents and warrants that he has returned and
destroyed all Confidential Information, as defined in clause 20 of the Agreement that
he directly or indirectly holds and has access to.

3. The Departing Shareholder undertakes to continue to be bound by the provisions of

clause 20 of the Agreement which will survive any termination of the Agreement,
pursuant to clause 24 of the Agreement.

4. This deed is made for the benefit of (a) the parties to the Agreement and (b) every
other person who after the date of the Agreement (and whether before or after the
execution of this deed) assumes any rights or obligations under the Agreement or
adheres to it.

5. The address [and facsimile number] of the Departing Shareholder for the purposes of
clause [22] (Notices) of the Agreement is [as above] [as follows:

[Address:

]
[Fax No: •]
(attention of •)

6. This deed and any non-contractual obligations arising out of or in connection with it
shall be governed by the laws of England.

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 Shareholders’ Agreement

IN WITNESS of which this deed has been executed and has been delivered on
the date which appears first on page 1.

[IF INDIVIDUAL:]

SIGNED as a deed by )
· )
in the presence of: )

Witness's Signature: ........................................................

Name: ..............................................................................

Address: ..........................................................................

[OR IF COMPANY:]

EXECUTED as a deed by • )
acting by •, a director )
in the presence of: ) Director

Witness's Signature: ........................................................

Name: ..............................................................................

Address: ..........................................................................

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