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Exhibit
10.2
GLOBAL GREEN
SOLUTIONS PTY LTD
SHAREHOLDERS OPERATING AGREEMENT
between
GLOBAL GREEN SOLUTIONS LTD.
2006/036844/07
and
C&C GREEN TECHNOLOGIES PTY LTD
2005/031487/07
DATED
19 th
March
2007
1
SHAREHOLDER
AGREEMENT
This SHAREHOLDER
AGREEMENT (this "Agreement")
is made
and entered into this day of 19 th
March
2007, by and between Global Green Solutions Ltd.
("Global
Green"), a private company
registered in the UK and having a registered address at 9 Kingsway,
London WC2B 6XF, England, United Kingdom and, a wholly owned
subsidiary of Global Green Solutions Inc, a company incorporated in
Nevada, USA and having its registered office at 789 West Pender
Street, Suite 1010, Vancouver, BC, Canada and C&C Green
Technologies Pty Ltd. ("C&C") a company incorporated in and
having its registered office at No 9 Fifth Avenue, Walmer, Port
Elizabeth, South Africa, hereinafter referred to as the "IV
Partner".
RECITALS
WHEREAS, Global
Green and C&C want to operate a joint venture entity called
"'Global Green Solutions Pty Ltd" (hereinafter referred to as the
"Company") whose purpose will be to enter into the renewable energy
and greenhouse gas emissions reduction and other related business
in South and Southern Africa and other directly related projects in
the area.
WHEREAS, Global
Green will act as the operating and technology partner with
responsibility for the operational management of the joint venture.
C&C will act as the local business development, sales and
marketing and, project and after sales services support
partner
WHEREAS, the
parties intend that with the execution and delivery of this
Agreement, Global Green will own sixty percent (60%) of the
outstanding capital stock of the Company, and C&C will acquire
forty percent (40%) of the Company's capital stock. `
WHEREAS, the
Parties have agreed to enter into this Agreement to set out the
terms upon which the Company will conduct its activities, and the
manner in which the relations between Global Green and C&C, as
Shareholders will be regulated.
NOW, THEREFORE, in
consideration of the foregoing premises and the mutual covenants
hereinafter contained, the receipt and adequacy of which are hereby
acknowledged, the parties hereto do agree as follows:
2
ARTICLE
I
DEFINITIONS
As used in this
Agreement, the following terms shall have the following
meanings:
"Accepting
Shareholder" has the meaning
assigned to such term in Section 6.2 hereof.
"Affiliate"
(including the term
"affiliated with") with respect to one Person, shall mean another
Person that, directly or indirectly through one or more
intermediaries, Controls or is Controlled by, or is under common
Control with, the first-mentioned Person.
"Appraiser"
has the
meaning assigned to such term in Section 8.1 hereof.
"Appraiser
Valuation" has the meaning
assigned to such term in Section 8.1 hereof.
"Bankruptcy"
means,
with respect to any Person, the happening of any of the following
events: (i) such Person shall commence a voluntary case or other
proceeding seeking winding up, liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part
of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due, or shall take
any action to authorize any of the foregoing; or (ii) an
involuntary case or other proceeding shall be commenced against
such Person seeking winding up, liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part
of its property, and such involuntary or other proceeding shall
remain undismissed and unstayed for a period of sixty (60)
consecutive days.
"Board"
means
the board of directors of the Company,
"Business
Day" means a day (other
than a Saturday or Sunday) on which banks are open for business in
South Africa.
"Change in
Control" of JV Partner shall
be deemed to have occurred upon any change in the ownership
interests, whether by one transaction or by the cumulative effect
of several transactions with the same or different parties, which
has the legal or practical effect of transferring the power to
determine JV Partner' business policies from the parties who are
the beneficial or record shareholders in JV Partner as of the date
of this Agreement. Such a Change in Control shall include, but not
be limited to (i) any sale, transfer, change of ownership or other
disposition in either the record or beneficial ownership of JV
Partner' voting stock that may represent the power to determine JV
Partner'
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business policies
from the JV Partner Shareholders (as defined below) or (ii) any
change in the equity ownership of JV Partner that results in any
competitor of Global Green owning, directly or indirectly, any
interest in JV Partner.
"Closing
Date" means the date on
which the closing of all of the transactions contemplated by the
Joint Venture Agreements shall occur, which date shall be the date
hereof,
"Company"
shall
mean Global Green Solutions Pty Ltd, a South African limited
liability company which was formed on the 27
th
November
2006 as a wholly owned subsidiary of Global Green Solutions Ltd, a
UK private company.
"Control"
(including the
terms "controlling," "controlled by" and "under common control
with") means any of the following:
(a) the ownership
(directly, or indirectly through one or more intermediaries) of
fifty percent (50%) or more of the issued and outstanding capital
or Partnership interests of a Person; the ability (directly, or
indirectly through one or more intermediaries) to designate or
cause the designation of fifty percent (50%) or more of the
directors of a Person, regardless of whether such ability is
exercised;
(b) the ability
(directly, or indirectly through one or more intermediaries) to
designate or cause the designation of the managing director,
general manager, or chief executive officer (regardless of actual
title) of a Person, regardless of whether such ability is
exercised; or
(c) the possession
of the power (directly, or indirectly through one or more
intermediaries) to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise, and regardless of whether
such power is exercised.
"Declining
Shareholder" has the meaning
assigned to such term in Section 6.2 hereof. "Financial
Statements" has the meaning
assigned to such term in Section 4.6 hereof. "Fiscal
Year" means each period
of twelve (12) calendar months ending on December 31st
"GAAP"
means,
in respect of any country, the generally accepted accounting
principles of that country,
"Joint
Venture" means the joint
venture between JV Partner and Global Green which is contemplated
by the Joint Venture Agreements.
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"Joint
Venture Agreements" means this
Agreement and any other agreements which are entered into pursuant
to any such agreement or in connection therewith.
"JV Partner
Director" means a director
who has been nominated to the Board by JV Partner pursuant to
Section 4.1 hereof.
"Parties"
means
the parties to this Agreement.
"Person"
means
any natural person and any legal entity, including without
limitation, a corporation, company, partnership, limited liability
Company, association and any other organization recognized under
the laws of the applicable jurisdiction.
"Remaining
Shareholder" has the meaning
assigned to such term in Section 6.2 hereof.
"Global
Green Director" means a director
who has been nominated to the Board by Global Green pursuant to
Section 4.1 hereof.
"Shareholder
Valuation" has the meaning
assigned to such term in Section 8.2 hereof.
"Shareholders"
means
Global Green and JV Partner and any successor or permitted assignee
of either such party.
"Shares"
means
the ordinary shares, having a par value of R 1.00 per share, in the
capital of the Company.
"Termination
Event" means, in respect
of a Shareholder, any of the following events:
(i)
a breach by such Shareholder of any of the material covenants
contained in this Agreement, the Share Purchase Agreement or [any
of the Joint Venture Agreements], which breach shall be effective:
(A) immediately upon written notice by the other Shareholder or the
Company to such Shareholder, if such breach cannot be cure within
thirty (30) Business Days, or (B) thirty (30) Business Days after
such notice, if such breach is capable of being cured and is not
cured within thirty (30) Business Days;
(ii)
the Bankruptcy of that Shareholder; or
(iii)
the Bankruptcy of any Person which Controls such
Shareholder. T
erritory"means
Sub-Sahara Africa and South Africa.
"Transferring
Shareholder" has the meaning
assigned to such term in Section 6.2 hereof.
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"Umpire
Valuation" has the meaning
assigned to such term in Section 8.2 hereof.
"Value"
means,
in respect of a Shareholder's and its Wholly-Owned Subsidiary's
Shares, the aggregate value of such Shares as determined subject to
and in accordance with the terms of Article VII hereof.'
"Valued
Shares" has the meaning
assigned to such term in Section 8.1 hereof.
"Wholly-Owned
Subsidiary" means:
(i)
with respect to the JV Partner, a Person with respect to which all
of the issued and outstanding voting share capital, voting
Partnership interests or other voting ownership interests are owned
(directly, or indirectly through one or more Subsidiaries) by the
JV Partner, and
(ii)
with respect to Global Green, a Person with respect to which all of
the issued and outstanding voting share capital, voting Partnership
interests or other voting ownership interests are owned (directly,
or indirectly through one or more Subsidiaries) by Global Green,
Inc., or, in the case that ail of the issued and outstanding voting
share capital of Global Green is not owned, directly, or
indirectly, by Global Green, Inc., Global Green or the Person who
owns, directly or indirectly, all of the issued and outstanding
voting share capital of Global Green.
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ARTICLE
II
PURPOSE OF THE
COMPANY
2.1
General
Purposes.
The principal
purposes of the Company will be: business development, sales and
marketing, project and after sales services in South and Southern
Africa for (a) biomass combustion steam generation units and (b)
biomass biofuel feedstock production units and (c) other carbon
credit generation business relating to these activities and, (d)
fibre optic sensing and detection technology applicable to
perimeter and pipeline security applications. (hereinafter the
"Products") in the Territory,
2.2
Cooperation.
The Parties agree
to cooperate with each other in good faith in the fulfillment of
the above purposes and activities and otherwise in the
implementation of the provisions of this Agreement.
2.3
Corporate
Documents.
The Articles of
Association of the Company shall be in the form attached hereto as
Exhibit A.
2.4
Future
Activities.
It is the intent of
the Parties to use their best efforts to promote the interests of
the Company and to attain maximum penetration of the Products in
the Territory while assuring acceptable profit and cash flow levels
and maintaining the quality standards.
2.5
Non-Competition.
JV Partner agrees
that, from and after the Closing Date and during the term of this
Agreement and for a period of three (3) years after the date on
which JV Partner or any Wholly-Owned Subsidiary of JV Partner
ceases to be a Shareholder of the Company, it will not, either
directly or indirectly, including through any of its Affiliates,
engage directly or indirectly, in any business which is competitive
with the business or the products of the Company
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ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
Each of JV Partner and Global Green hereby
represents and warrants to the other that:
(a)
it is validly existing and organized in accordance with the laws
and regulations of its jurisdiction of incorporation;
(b)
it has duly and validly authorized and executed each of the
Joint Venture Agreements to which it is a party in accordance with
the laws and regulations of its jurisdiction of incorporation and
in accordance with its own charter documents;
(c)
there is no conflict or inconsistency between (i) its obligations
under any of the Joint Venture Agreements to which it is a party
and (ii) any law or regulation of its jurisdiction of incorporation
or its own charter documents or any other agreement to which it is
a party;
(d)
there is no actual or, to its knowledge, threatened, claim,
litigation, regulatory action or investigation affecting it which,
if determined adversely to such Shareholder, would have a material
adverse effect on the Joint Venture or such Shareholder's ability
to perform its obligations under any of the Joint Venture
Agreements to which it is a party; and
(e)
No Global Green Termination Event (warranty by JV Partner) or JV
Partner Termination Event (warranty by Global Green) has
occurred.
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ARTICLE
IV
GOVERNANCE
MATTERS
4.1
Election and Number
of Directors.
Unless otherwise
agreed by the Shareholders and except as otherwise set forth in
Section 4.1(b) hereof, the Board shall be composed of five persons,
three of whom shall be nominated by Global Green and two of whom
shall be nominated by the JV Partner. Each Shareholder agrees to
vote (or cause to be voted), in person or by proxy, at any annual
or special shareholders' meeting called for such purpose or by
shareholders' written action or consent provided in lieu thereof,
the Shares owned of record or beneficially by such Shareholder
(including, for this purpose, any Shares held by any Affiliate of
such Shareholder) and entitled to vote thereon, for the election to
the Board of such five nominees, Except where authority is
specifically reserved for the Board pursuant to this Agreement, all
operational matters shall be delegated to Global Green in their
capacity as Management of the Company.
4.2
Board
Meetings.
(a)
Each director shall have one vote. Except as otherwise specifically
provided herein, all actions of the Board shall be taken by a
majority vote of the directors present at a duly notified and held
meeting or by the unanimous written consent of all of the Board
members.
(b)
Any director shall be entitled to require the Company Secretary to
convene a meeting of the Board. At least fifteen (15) Business
Days' notice of each meeting of the Board shall be given to each
director, at the address notified from time to time by each
director to the Company Secretary; provided
that, such period of
notice may be shortened for particular meetings by unanimous
written consent of all the directors entitled to attend and vote
thereat. Each such notice shall contain an agenda specifying in
reasonable detail the matters to be discussed at the relevant
meeting, shall be accompanied by any relevant papers for discussion
at such meeting and, if sent to an address outside [the territory],
shall be sent by courier or by legible facsimile (with a
confirmation copy delivered by courier).
(c)
The quorum at a meeting of the Board shall be three directors, at
least two of whom shall be Global Green Directors.
(d)
All notices to directors, minutes and other Board papers and
records shall be in English.
4.3
Supermajority Vote
Requirement.
The following
matters shall require the affirmative vote of at least four (4)
members of the Board at a duly noticed meeting of the Board (or the
unanimous written consent of all Board members) in order to
authorize the Company to act upon any of them:
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(a)
any amendment of the Company's Articles of Association;
(b)
the Company's dissolution, liquidation or winding up;
(c)
any merger, consolidation, share exchange, reorganization,
recapitalization or other, similar extraordinary transaction
involving the Company or its share capital; or the sale or other
disposition of all or substantially all of the property or assets
of the Company.
4.4
Shareholder
Approval.
The Shareholders
shall vote in favor of any shareholder resolutions which are
determined by the Board to be necessary or desirable in order to
authorize the Company to implement or otherwise give effect to any
action, decision or resolution which has been approved by the Board
in accordance with Sections 4.2 or 4.3 hereof. In addition, the
Shareholders shall cause their representatives on the Board to pass
appropriate Board resolutions, if necessary, to implement all
decisions made by the Shareholders.
4.5
Deadlock
Resolution.
If a decision in
respect of a matter referred to in Section 4.3 hereof, is not
approved pursuant to Section 4,3, then:
(a)
the Shareholders shall consult with each other in good faith
during a period of fifteen (15) Business Days to determine whether
they can resolve the matter;
(b)
if such consultation fails to resolve the deadlock then,
within a further period of fifteen (15) Business Days, the Managing
Director of JV Partner and the President of Global Green, as Global
Green' designated representative, shall discuss possible
resolutions;
(c)
if such process of consultation results in a mutual decision
that the relevant decision should be approved (whether in the
original or a modified form), the Shareholders shall cause such
decision to be approved;
(d)
if such process of consultation fails to resolve fails to
resolve the matter, Global Green shall be entitled to exercise its
rights under Section 7.1(b) hereof.
4.6
Financial
Statements
In addition to any
statutory obligations of the Company to prepare audited financial
statements, as soon as reasonably practicable after the end of each
Fiscal Year, the Company shall prepare complete and accurate
financial statements (including a statement of operations, a
balance sheet and a statement of cash flows) for the Company
("Financial
Statements") as of the last day
of and for such Fiscal Year, in accordance with South African GAAP.
Such Financial Statements shall be audited, as per law.
In
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addition, the
Company shall prepare, and deliver to the Shareholders as soon as
reasonably practicable after the end of each fiscal quarter,
Financial Statements as of the last day of and for such fiscal
quarter reviewed by the auditors of the Company.
4.7
Budgets and
Financial Information
Management of the
Company shall prepare and submit to the members of the
Board:
(a)
draft budgets for the Company and its subsidiaries (if any) for (i)
the following Fiscal Year and (ii) the following three (3) Fiscal
Years (on a rolling basis);
(b)
as soon as available, the Financial Statements referred to in
Section 4.6; and
(c) such
further information as the Shareholders or the Board may from time
to time reasonably require as to any and all matters relating to
the business or financial condition of the Company or of any of its
subsidiaries.
Each of the draft
budgets referred to in Section 4.7(a) above shall be approved by
the Board, with such changes therein or modifications thereto as
the Board shall deem necessary or appropriate, prior to the
commencement of any operations by the Company's management with
respect to such following Fiscal Years.
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ARTICLE
V
FINANCING FOR
THE COMPANY
Financing.
The Global Green
Solutions South Africa joint venture costs will be financed
and
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