Shareholders Agreement Kela Holdings Pty Ltd · BONELLE ENTERPRISES PTY LTD AS TRUSTEE FOR THE TIMOTHY ELLIOTT ... all drawings, designs, inventions or innovations produced by any

Shareholders

Agreement

Kela Holdings Pty Ltd

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Shareholders Agreement Kela Holdings Pty Ltd 04.04.17 2

TABLE OF CONTENTS

1 Definitions ................................................................................................................................................... 5

2 Interpretation.............................................................................................................................................. 8

3 Acknowledgements ..................................................................................................................................... 9

4 Objectives .................................................................................................................................................... 9

5 Company Structure .................................................................................................................................. 10

6 Funding ..................................................................................................................................................... 10

7 Board of Directors of the Company ........................................................................................................ 10

8 Decision Making ....................................................................................................................................... 14

9 Management.............................................................................................................................................. 14

10 Accounts and records ............................................................................................................................... 14

11 Distribution Policy .................................................................................................................................... 15

12 Transfer of Shares and pre-emptive rights ............................................................................................ 15

13 Right of First Refusal ............................................................................................................................... 15

14 Acceptance of Offers ................................................................................................................................ 16

15 Change in Effective Control .................................................................................................................... 18

16 Trigger Event ............................................................................................................................................ 18

17 Drag Along Rights and Tag along Rights ............................................................................................... 18

18 Resolution of Disputes .............................................................................................................................. 19

19 Rights to Information ............................................................................................................................... 20

20 Confidentiality .......................................................................................................................................... 20

21 Termination .............................................................................................................................................. 21

22 Restraint of Trade .................................................................................................................................... 21

23 Default ....................................................................................................................................................... 21

24 Conflict with Company Constitution ...................................................................................................... 22

25 Relationship .............................................................................................................................................. 22

26 Further action ........................................................................................................................................... 23

27 Costs ........................................................................................................................................................... 23

28 Waiver ....................................................................................................................................................... 23

29 Government Law and Jurisdiction ......................................................................................................... 23

30 Notice ......................................................................................................................................................... 24

31 Severability................................................................................................................................................ 24

32 Alteration .................................................................................................................................................. 24

33 Enforceability............................................................................................................................................ 24

34 Counterparts ............................................................................................................................................. 24

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35 Independent Legal Advice ....................................................................................................................... 25

36 Assignment ................................................................................................................................................ 25

37 No Merger ................................................................................................................................................. 25

38 Entire Agreement ..................................................................................................................................... 25

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This Agreement is made the day of 2017

BETWEEN

CATALDO MICCIO AS TRUSTEE FOR THE APRIL TRUST

of 82 del Rio Drive, Copacabana NSW 2251

(MICCIO)

And

HAIR CHARMS BY KELA PTY LTD ACN 600 694 077

of 11 Daly Circle, Langford WA 6147

(HCBK)

And

DAVID LITTERICK AND KELLY ANNE LITTERICK AS TRUSTEES FOR THE LITTERICK

FAMILY TRUST

of 11 Daly Circle, Langford WA 6147

(LFT)

And

KIPLING ANDREW WOOD-SMITH AND LISA SONIA WOOD-SMITH (jointly)

Of 7 Hyam Street, Hamilton Hill WA 6163

(WOOD-SMITH)

And

HAGARTY ENTERPRISES PTY LTD AS TRUSTEE FOR HAGARTY FAMILY TRUST No. 1

Of 17 Kookaburra Place, Brookwater Qld 4300

(HAGARTY)

And

ARCHELAUS RONALD ISHERWOOD AND RUBINA MAREE ISHERWOOD (jointly)

Of 4 Lupin Close, Thornlie WA 6108

(ISHERWOOD)

And

RAYMOND SHARP AND BARBARA SHARP AS TRUSTEES FOR THE SYDROAR PROPRIETORY

LTD STAFF SUPERANNUATION FUND

Of 37 Blackwattle Place, Cherrybrook NSW 2126

(SHARP)

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And

REGAN DOMENICO DONATO DE CESARE AND LISA MAREE DE CESARE (jointly)

Of 9 Getting Street, Lathlain WA 6100

(DE CESARE)

And

BONELLE ENTERPRISES PTY LTD AS TRUSTEE FOR THE TIMOTHY ELLIOTT

SUPERANNUATION FUND

Of 48 Henry Lawson Walk, East Perth WA 6004

(ELLIOTT)

And

LUTHER DAVID BURTON

Of 1316 Simmons Street, Enmore NSW 2042

(BURTON)

And

ERNEST BOON CHENG TAN

Of 61 Thomas Street, Nedlands WA 2009

(TAN)

RECITALS

A. The Parties are Shareholders in the Company.

B. The Parties intend that this Agreement will govern their relationship in regards to the Company.

C. The Parties wish to record the commercial terms of their agreement for the funding, activities, succession,

exit strategies and general management of the Company on the terms and conditions set out in this

Agreement.

IT IS AGREED AS FOLLOWS

1 Definitions

Agreement means this agreement.

Associated Entity has the same meaning as the Corporations Act.

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Balance Transfer Shares means the Shares held by a Shareholder that are offered for transfer by that

Shareholder to the Investor Shareholders in accordance with clauses 13 and 14 of this Agreement.

Bankruptcy means official management, appointment of an administrator and /or receiver, compromise,

arrangement, merger, amalgamation, reconstruction, winding up, dissolution, assignment for the benefit

of creditors, scheme of composition or arrangement of creditors, insolvency, bankruptcy or any similar

procedure).

Board means the Board of Directors of the Company.

Budget means the budget for the Business as approved by the Board from time to time.

Business means any business conducted by the Company from time to time.

Business Day means a day (excluding Saturday and Sunday) on which banks are open for general

banking business in Sydney, New South Wales, Australia.

Company means Kela Holdings Pty Ltd ACN 617 928 060.

Company Secretary means the secretary of the Company from time to time.

Confidential Information means information that is inherently confidential in nature or which is

disclosed in confidence and includes, without limitation:

(a) trade secrets;

(b) confidential know-how;

(c) client database lists;

(d) client histories;

(e) any business, financial, technical or other confidential information concerning the Company and

the Subsidiary Companies;

(f) confidential information provided by clients;

(g) all drawings, designs, inventions or innovations produced by any person or employee in the

course of operating the Business;

(h) confidential information provided by suppliers;

(i) information concerning the terms of supply agreements; and

(j) all internal policies and operations or procedure manuals.

Constitution means the constitution of the Company a copy of which is attached hereto as Annexure

“A”.

Corporations Act means the Corporations Act 2001 (Cth).

Deed of Accession means the Deed of Accession in the form of Schedule 1 of this Agreement.

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Defaulting Party means a Party who is responsible for an event of default in accordance with clause

23.1 of this Agreement.

Determined Value means the market value of the Shares (which are the subject of a transfer)

determined by an independent valuer having expertise in the valuation of businesses of the nature of the

Business conducted by the Company, such independent valuer to be nominated by the President of the

Institute of Valuers.

Director means a director for the time being of the Company.

EBITDA means earnings before interest, taxes, depreciation and amortization.

Effective Date means the date of this Agreement.

Encumbrance means an interest or power:

(a) reserved in or over any interest in any asset including, without limitation, any Security Interest

or retention of title; or

(b) created or otherwise arising in or over any interest in any asset under a bill of sale, mortgage,

charge, lien, pledge, trust or power, and whether existing or agreed to be granted or created.

Financial Year means each period of twelve (12) months commencing on 1 July and ending on 30 June

or such other period as the Board determines and includes:

(a) the period commencing on the date of execution of this Agreement and ending 30 June 2017;

and

(b) the period commencing on the last 1 July before the date of termination of this Agreement and

ending on that date of termination.

Investors means Shareholders other than the Original Shareholders.

Investor Shares means Shares issued to anyone other than an Original Shareholder.

Investor Shareholders are Shareholders other than the original Shareholders.

Majority Vote in respect of:

(a) Shareholder meetings, means 51% of votes made in favour of a resolution or vote; and

(b) Board meetings, means 50% of votes made in favour of a resolution or vote.

Original Shareholder means MICCIO, HCBK and LFT.

Parties means the Shareholders and any other person, who after the date of this Agreement becomes a

party to this Agreement, as from time to time.

Party means any one of the Parties.

PPSA means the Personal Property Securities Act 2009 (Cth).

Related Bodies Corporate has the same meaning in section 50 of the Corporations Act.

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Security Interest means a security interest as defined in section 12 of the Personal Property Securities

Act 2009 (Cth) and the Personal Property Securities Regulations 2010 (Cth).

Share means a share in the Company.

Shareholder means the holder of at least one (1) Share.

Special Vote in respect of:

(a) Shareholder meetings, means a 67% majority of votes made in favour of a resolution or vote;

and

(b) Board meetings, means a 75% majority of votes made in favour of a resolution or vote.

Transfer Notice means a notice given by a Shareholder stating the offering of its Shares for sale and

containing the information required in accordance with clause 13.2 of this Agreement.

Transfer Respective Portion in relation to a Shareholder means the proportion that the number of

Shares from time to time held or beneficially owned by a Shareholder bears to the total number of all the

issued Shares from time to time excluding the Shares of the Transferor.

Transfer Shares means the Shares held by a Shareholder that are offered for transfer by that

Shareholder to the Original Shareholders in accordance with clauses 13 and 14 of this Agreement.

Trigger Event means Bankruptcy.

2 Interpretation

In this Agreement, unless the context otherwise requires:

(a) headings are for convenience only and do not affect the interpretation of this Agreement;

(b) words importing the singular include the plural and vice versa;

(c) a reference to this Agreement includes every attachment and schedule;

(d) a reference to a right includes a remedy, power, authority, discretion or benefit;

(e) a reference to an agreement or document is to the agreement or document as amended, varied,

supplemented, novated or replaced from time to time, except to the extent prohibited by this

Agreement;

(f) a reference to a party to this Agreement or another agreement, deed or document includes the

party’s successors, permitted substitutes and assigns (and, if applicable, the party’s legal

personal representatives);

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(g) a reference to legislation or to a provision of legislation includes a modification or re-enactment

of it, a legislative provision substituted for it and a regulation or statutory instrument issued

under it;

(h) a reference to an agreement includes any undertaking, deed, agreement and legally enforceable

arrangement whether or not in writing;

(i) no provision of this Agreement will be construed adversely to a party solely on the ground that

the party was responsible for the preparation of this Agreement;

(j) a reference to dollars and $ refers to amounts in Australian currency;

(k) a reference to time is a reference to Eastern Australian Time;

(l) if an event must occur on or by a stipulated day which is not a Business Day then the stipulated

day will be taken to be the preceding Business Day; and

(m) an expression importing a natural person includes any company, partnership, joint venture,

association, corporation or other body corporate and any government agency.

3 Acknowledgements

The Parties hereby acknowledge and agree that the Company will be operated in accordance with the

provisions of this Agreement from the Effective Date.

4 Objectives

4.1 Objectives

The objectives of the Parties, in entering this Agreement include:

(a) outlining the decision making procedures for the Board;

(b) ensuring that the Business is developed and managed in such a manner as to facilitate the

continued development of the Business; and

(c) protecting succession of the Business and outlining exit strategies for the Parties.

4.2 Carrying out objectives

To carry out the objectives, each Shareholder must:

(a) be just and faithful and provide full information to each other in relation to the affairs and

activities of the Business;

(b) do or cause to be done, or not do or not cause to be done, as the case may be, all things necessary

or desirable to carry out this Agreement including causing their nominees to the Board to carry

out this Agreement; and

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(c) not unreasonably delay any action, approval, direction, determination or decision required under

this Agreement or for the conduct of the Business.

5 Company Structure

5.1 Incorporation of the Company

The Company is a registered proprietary company limited by shares incorporated on 13 March 2017.

5.2 Shareholding

The total issued capital of the Company is, or will be held in the following manner:

Name of Shareholder Class of Shares Number of Shares

MICCIO ORD 75 (paid $75)

KCBK ORD 240 (paid $240)

LFT ORD 185 (paid $185)

WOOD-SMITH ORD 10 (paid $25,000)

HAGARTY ORD 10 (paid $25,000)

ISHERWOOD ORD 20 (paid $50,000)

SHARP ORD 50 (paid $125,000)

DE CESARE ORD 50 (paid $125,000)

ELLIOTT ORD 100 (paid 250,000)

BURTON ORD 40 (paid $100,000)

TAN ORD 20 (paid $50,000)

Subject to clause 5.3, the Company will also issue additional Investor Shares from time to time as

directed by the Board.

6 Funding

6.1 Contributing funds - loans

(a) The Shareholders are not obliged to contribute additional funds, extend credit, and otherwise

make financial accommodation available in relation to the Company

(b) Despite clause 6.1(a), any Shareholder may from time to time contribute additional funds,

extend credit, and otherwise make financial accommodation available in relation to the

Company on such terms as agreed between the lending Shareholder and the Company.

7 Board of Directors of the Company

7.1 Number of Directors

The Parties agree that there will be no more than four (4) Directors of the Company, unless the Board

determines otherwise.

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7.2 Board Composition

The Directors will be appointed by the Shareholders from time to time provided that as from the

Effective Date Kelly Litterick will be a Director and Cataldo Miccio will be a Director and the Company

Secretary.

The Directors will elect a chairman of the Board from time to time. The chairman will not have a casting

vote.

7.3 Votes – Board meetings

Each Director is entitled to cast one vote and unless otherwise stipulated in this Agreement, decisions are

required to be made by way of Majority Vote.

7.4 Alternate Directors

Each Director is entitled to appoint an alternate director, provided such alternative director is approved

by the Board.

7.5 Board Meetings

The Parties agree that:

(a) the Board will meet every two (2) months, and one (1) of those meetings will coincide with the

Shareholders Annual General Meeting.

(b) Board meetings will be convened at the written request of any Director;

(c) meetings of the Board, other than those conducted as described in paragraph (d) will be located

at the Company office, or such other place determined by the Board;

(d) Board meetings may be conducted by telephone conference, video conference or any similar

means of audio or audio-visual communication;

(e) at least ten (10) Business Days prior written notice of Board meetings must be given to all

Directors by the Company Secretary, unless otherwise agreed by the Board;

(f) at least two (2) Business Days prior to a Board meeting an agenda and all material working

papers must be given to all Directors by the Company Secretary, unless otherwise agreed by the

Board;

(g) the agenda for Board meetings must be determined by the Chairman (if a Chairman has been

nominated by the Board), or failing which by the Board. When a Board meeting is convened at

the request of a Director the agenda must include items specified by that Director;

(h) no resolution of the Board can be passed in respect of any matter of which notice was not given

in the agenda for that meeting, unless otherwise agreed by the Board;

(i) the Chairman shall promptly cause minutes of the meeting at which he was Chairman to be kept

and signed by the Chairman and distributed to each of the Directors; and

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(j) a minute signed by each Director or an exchange of letters signed by each Director entitled to

vote confirming mutual agreement on any question, shall be as effectual and binding on the

Parties as a resolution reached and recorded at a duly convened meeting of the Board.

7.6 Director Fees and Expenses

Unless the Original Shareholders otherwise determine by Unanimous Vote:

(a) Directors will not be paid Director’s fees; and

(b) Directors will not be reimbursed for expenses incurred by the Directors in attending Board

meetings.

7.7 Quorum – Director Meetings

A quorum for meetings of the Board will be constituted by the attendance in person of at least the

number of Directors who when combined must constitute at least 75% of the voting rights on the full

Board.

7.8 Shareholder Meetings

The Parties agree that one (1) meeting of Shareholders will take place each Financial Year, at or around

the time of sign-off on the Company accounts, unless otherwise agreed.

Additional Shareholder meetings will be convened at the written request of a Shareholder holding at

least 25% (twenty five percent) of the Ordinary Shares.

The Shareholders will elect a Chairman for each meeting of the Shareholders.

7.9 Representatives at Shareholder Meetings

Each Shareholder may appoint a representative to attend and vote at Shareholders meetings in their

place.

7.10 Votes - Shareholders Meetings

Each Shareholder will be entitled to vote and unless otherwise stipulated in this Agreement, decisions

are required to be made by Majority Vote.

7.11 Proxy

Each Shareholder may appoint one proxy.

A proxy need not be a Shareholder.

An instrument appointing a proxy must be in writing and signed by the appointing Shareholder.

An instrument appointing a proxy, unless the contrary is stated, is valid for any adjournment of the

meeting, as well as for the meeting to which it relates.

An instrument appointing a proxy may specify the manner in which the proxy is to vote in respect of a

particular resolution and, where an instrument of proxy so provides, the proxy is not entitled to vote on the

resolution except as specified in the instrument.

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An instrument appointing a proxy is deemed to confer authority to speak on behalf of the appointing

Shareholder to the extent permitted by law.

7.12 Shareholder Approval

Without limiting any other clause in this Agreement;

(a) no action may be taken, and no resolution may be passed, in respect of any of the matters listed

in Schedule 2 except with the consent of the Shareholders by Special Vote; and

(b) the Board shall not take any action or pass any resolution in respect of any of the matters listed

in Schedule 3 except by Special Vote.

7.13 Quorum - Shareholders Meetings

A quorum at meetings of Shareholders will be constituted by the attendance (in person or by proxy) of at

least the number of Shareholders who when combined must constitute at least 50% of the voting rights

in the Company.

7.14 Quorum Not Present

If a quorum is not present within thirty (30) minutes of the time specified for a meeting of the Board or a

meeting of Shareholders the meeting will be adjourned to a date and time seven (7) days after the

original time and at the same location as the original meeting without the need to give written notice of

the date, time and place of the meeting to all Directors or Shareholders, as the case may be.

7.15 Shareholders Restrictions

Except as otherwise specified in this Agreement, none of the Shareholders shall, without the consent

and approval of all the Shareholders in writing:

(a) give any credits or lend any monies on behalf of the Company to any person, firm, company or

entity other than in the ordinary course of the Business conducted in a normal and proper

manner;

(b) sell, assign, transfer, mortgage, discharge, pledge, deal with or otherwise Encumber or dispose

of any of its Shares in the Company other than in compliance with this Agreement;

(c) assign, draw, accept or endorse any negotiable instrument on account of the Company;

(d) compound, release or discharge any debt which shall be due or owing to the Company without

receiving the full amount thereof;

(e) guarantee, become bailee, surety or security for any person, firm, company or entity or do or

knowingly suffer to be done anything whereby the Company's property or the Business may be

endangered, attached or taken in execution; or

(f) incur any liabilities on behalf of the Company.

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8 Decision Making

8.1 Powers of the Board

Except as otherwise specified in this Agreement and to the extent permitted by the provisions of the

Corporations Act, the Board will have full power to direct the activities of the Company.

8.2 Majority Vote

Except as otherwise specified in this Agreement or the Act, all decision of the Shareholders and all

decisions of the Board, will be made by Majority Vote.

9 Management

9.1 Day to Day Control

The Business will be managed by the Board which will report and be responsible to the Shareholders for

the activities and operations of the Business.

9.2 Cheque Signatory

The signatories on the Company bank accounts will be as determined by the Board from time to time.

9.3 Employees

The Company may employ employees, including any or all of the Directors, to work in the Business on

such terms as agreed between the employee and the Company and those terms may be set out in an

employment agreement for each employee.

10 Accounts and records

10.1 Account and records

The Board must ensure that the accounts, records and accounting information of the Company:

(a) maintained in accordance with the Corporations Act and all other applicable laws;

(b) reviewed annually by the Company's accountant;

(c) audited by the Company's auditor, if (and only if) so determined by the Shareholders; and

(d) reflect generally accepted accounting principles, procedures and practices in Australia which

have been consistently applied.

The Board will prepare year to date management accounts for each Board meeting.

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10.2 Access to records

Each Director is entitled to full access during normal business hours and at its own cost to inspect all the

books, accounts and records of the Company. Access may be exercised through an employee of,

consultant or adviser to, the Director, subject to the requirements of confidentiality set out in this

Agreement.

Subject to the requirements of confidentiality set out in this Agreement, a copy of the Company’s

quarterly management accounts and reports will be distributed by the Board to each Shareholder on a

quarterly basis after they have been approved by the Board.

11 Distribution Policy

The Board must procure that the Company adopt a policy of not distributing the net income of the

Company until the Board believes that it is consistent with prudent financial management having regard

to the Board’s recommendations, the business plan, if any, and the Budget, the taxation, working capital,

banking covenants and operational requirements of the Company and the terms of all loan agreements

under which the Company has borrowed funds.

Unless otherwise agreed, the Company intends to declare and pay 50% of EBITDA as an unfranked

dividend each year.

12 Transfer of Shares and pre-emptive rights

12.1 Transfers

A Shareholder must not sell or transfer any legal or beneficial interest in their Shares, except:

(a) in accordance with clause 13 or clause 14;

(b) with the written approval of all the Shareholders; or

(c) otherwise in accordance with this Agreement.

12.2 Encumbrances

A Shareholder must not provide its Shares as security or create any Encumbrance over them in favour of

any person, except with the prior written approval of all the Original Shareholders.

13 Right of First Refusal

13.1 Permitted transfer

A Shareholder (Transferor) may sell all or some of its Shares (Transfer Shares) in accordance with

this clause 13.

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13.2 Transfer Notice

(a) The Transferor must give a Transfer Notice, by way of offer, to the Original Shareholders

offering the Transferor’s Transfer Shares to the Original Shareholders in their Transfer

Respective Portion stating that it wishes to sell the Transfer Shares and must specify in the

Transfer Notice:

(i) the number of Transfer Shares it wishes to sell;

(ii) confirmation that the purchase price will be the Determined Value of the Shares; and

(iii) the closing date of the offer (Closing Date) being 5.00pm on the date which is 30 days

after the date that the Determined Value is determined.

(b) If all the Transfer Shares are not purchase by the Original Shareholders under clause 14 then the

Transferor must give a second Transfer Notice, by way of offer, to the Investor Shareholders

offering the Transferor’s Transfer Shares that have not been purchase by the Original

Shareholders (Balance Transfer Shares) to the Investor Shareholders in their Transfer

Respective Portion stating that it wishes to sell the Transfer Shares and must specify in the

Transfer Notice:

(i) the number of Balance Transfer Shares it wishes to sell;

(ii) confirmation that the purchase price will be the Determined Value of the Shares; and

(iii) the closing date of the offer (Closing Date) being 5.00pm on the date which is 60 days

after the date that the Determined Value is determined.

14 Acceptance of Offers

14.1 Acceptance of Offers

An Original Shareholder may accept the offer for some or all of the Transfer Shares or reject the offer by

giving written notice to the Transferor on or before the Closing Date. An acceptance of the offer shall

be deemed to be unconditional and irrevocable. If an Original Shareholder does not give notice of

acceptance of the offer as stated in this clause that Original Shareholder is deemed to have rejected the

offer.

An Investor Shareholder may accept the offer for some or all of the Balance Transfer Shares or reject the

offer by giving written notice to the Transferor on or before the Closing Date. An acceptance of the

offer shall be deemed to be unconditional and irrevocable. If an Investor Shareholder does not give

notice of acceptance of the offer as stated in this clause that Investor Shareholder is deemed to have

rejected the offer.

14.2 Completion

(a) Completion of the transfer of the Transfer Shares, or Balance Transfer Shares as the case may

be, must take place 30 days after the Closing Date at the Company's registered office.

(b) At completion:

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(i) the Original Shareholders or Investor Shareholders, as the case may be, that accepted the

offer must, by delivering a bank cheque in payment of the purchase price for the

Transfer Shares or Balance Transfer Shares, as the case may be, to the Transferor,

purchase the Transfer Shares or Balance Transfer Shares, as the case may be, allocated

to that Original Shareholder or Investor Shareholder; and

(ii) the Transferor must deliver to the Original Shareholders or Investor Shareholders, as the

case may be, the certificate(s) relating to the Transfer Shares or Balance Transfer Shares,

as the case may be, duly executed transfers of the Transfer Shares or Balance Transfer

Shares, as the case may be and any statutory declarations or associated forms required

for the stamping of the Transfer Shares or Balance Transfer Shares, as the case may be.

14.3 Default

If a Transferor defaults in transferring the Transfer Shares or Balance Transfer Shares, as the case may

be, in accordance with clause 14.2 the Board must, on written direction from the Original Shareholder or

Investor Shareholders, as the case may be, that accepted the offer:

(a) receive the purchase price for the Transfer Shares or Balance Transfer Shares, as the case may

be, from the Original Shareholders or Investor Shareholders, as the case may be, on behalf of the

Transferor;

(b) give to the Original Shareholders or Investor Shareholders, as the case may be, a valid receipt for

the purchase price for the Transfer Shares or Balance Transfer Shares, as the case may be, on

behalf of the Transferor;

(c) authorise on behalf of the Transferor a person to execute transfers of the Transfer Shares or

Balance Transfer Shares, as the case may be, in favour of the Original Shareholders or Investor

Shareholders, as the case may be;

(d) register the Original Shareholders or Investor Shareholders, as the case may be, as the holders of

the Transfer Shares or Balance Transfer Shares, as the case may be; and

(e) take all further action necessary to complete the transfer of the Transfer Shares or Balance

Transfer Shares, as the case may be.

14.4 Withdrawal of Transfer Notice

The Transferor may not withdraw the Transfer Notice until after the Closing Date (and if all the Transfer

Shares are not purchased by the Original Shareholders then until after the Closing Date for the Investor

Shareholders.

14.5 Third Party Transfer

If, after the procedure set out in this clause 14 has been complied with and all or any of the Transfer

Shares and Balance Transfer Shares have not been purchased, the Transferor may transfer the remaining

Transfer Shares and Balance Transfer Shares to a third party on terms and conditions no less favourable

to the Transferor than the terms and conditions set out in the Transfer Notice, at any time before the

expiry of six (6) months after the date of the Transfer Notice subject to:

(a) the proposed transferee agreeing to execute, adopt and abide by the provisions of this Agreement

(which provisions will apply to the proposed transferee mutatis mutandis as they applied to the

Transferor) and the Constitution of the Company; and

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(b) the proposed transferee being approved by the Board (such approval may not be withheld

unreasonably).

15 Change in Effective Control

15.1 Meaning of change in effective control

In this clause 15, if the Shareholder is an entity with issued share capital, a change in the effective

control of a Shareholder occurs if:

(a) any single person who held directly or indirectly more than fifty percent (50%) of the share

capital of that Shareholder on the date that the Shareholder first became a Shareholder, ceases to

hold the beneficial interest in at least fifty percent (50%) of the share capital; or

(b) any person who on the date that the Shareholder first became a Shareholder did not have an

interest in more than fifty percent (50%) of the share capital of the Shareholder, acquires an

interest in more than fifty percent (50%) of the share capital of the Shareholder.

15.2 Change in the effective control

If there is a change in the effective control of Shareholder, that Shareholder:

(a) must immediately notify the Board; and

(b) whether or not it so notifies, is deemed to have given a Transfer Notice that it wishes to sell all

of its Shares and the provisions of clauses 13 and 14 will apply mutatis mutandis.

16 Trigger Event

If there is a Trigger Event in respect of a Shareholder the affected Shareholder (Transferor) the

Transferor is deemed to have given a Transfer Notice that it wishes to sell all of its Shares and the

provisions of clauses 13 and 14 will apply mutatis mutandis.

17 Drag Along Rights and Tag along Rights

17.1 Drag Along Rights

If at any time a bona fide written offer (Offer) is made by any other person (Offeror) to purchase all of

the Company’s Shares at a price and on terms and conditions which are acceptable to the Original

Shareholders, the Investor Shareholders will be obliged at the written request of Original Shareholders to

sell their Shares to the Offeror at the same price and on the same terms set out in the Offer, provided that

Original Shareholders simultaneously sells all of their Shares to the Offeror at the same price and on the

same terms set out in the Offer.

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17.2 Tag Along Rights

If at any time a Shareholder (“Transferor”) proceeds with the sale of its Shares to a bona fide third party

purchaser (“Offeror”) for value then:

(a) the Transferor must, in addition to any other obligations imposed by this clause, give each other

Shareholder (“Non-Transferring Shareholder”) a written notice “Co Sale Notice”) of its

intension to proceed with the sale and the likely completion date of the transfer; and

(b) within 14 Business Days of receipt of the Co Sale Notice each Non-Transferring Shareholder

may by further written notice to the Transferor exercise the right in pari passu to require the

Transferor to procure from the Offeror an offer in the same terms in favour of the Non-

Transferring Shareholder to acquire a Percentage of their Shares in lieu of a corresponding

proportion of the Transferor’s Shares. A reference to “Percentage” in this clause shall mean that

portion the Non-Transferring Shareholder’s interest bears to the total number of Shares to be

acquired by the Offeror.

18 Resolution of Disputes

18.1 No proceedings

A Party must not start court proceedings, except proceedings seeking interlocutory relief, in respect of a

dispute arising out of this Agreement (Dispute) unless it has complied with this clause 18.

18.2 Notification of Dispute

A Party claiming that a Dispute has arisen must notify the other Party of the Dispute in writing (the

Dispute Notice) giving details of the Dispute.

18.3 Best efforts to resolve Dispute

During the five (5) Business Day period after the Dispute Notice is given under clause 18.2, or such

longer period unanimously agreed in writing by the parties to the Dispute, (Initial Period) each party to

the Dispute (Disputant) must use its best efforts and negotiate in good faith to resolve the Dispute.

18.4 Referral to Mediator and Arbitrator

(a) If the Disputants are unable to resolve the Dispute within the Initial Period, each Disputant

agrees that the Dispute may be referred at the request of any Disputant, to an independent

Mediator determined by the Board no later than two (2) days after the end of the Initial Period

or, in the absence of agreement, the Mediator is to be appointed by the President of the

Queensland Law Society, and the Disputants must act in the utmost good faith and co-operate

with the Mediator and the other Disputants in a genuine attempt to resolve the Dispute within 10

days after it is referred to the Mediator (Mediation Period).

(b) If the Disputants are unable to resolve the Dispute within the Mediation Period, each Disputant

agrees that the Dispute must be referred to an independent Arbitrator determined by the Board

no later than two (2) days after the end of the Mediation Period or, in the absence of agreement,

the Arbitrator is to be appointed by the President of the Queensland Law Society.

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(c) Despite clause 18.4(a), any Disputant may decline the mediation and request that the Dispute be

referred directly to arbitration in terms of clause 18.4(b).

(d) The arbitration shall be conducted in accordance with the Rules for the Conduct of Commercial

Arbitration of the Institute of Arbitrators of Australia and, subject to those rules, in accordance

with the provisions of the Commercial Arbitration Act 2013 (Qld). The Arbitrator’s findings will

be final and binding on the Disputants.

(e) Each Disputant will bear their own costs in preparation for and participation in mediation in

terms of clause 18.4(a). The mediator’s costs will be paid for by the Company.

(f) The Arbitrator will be at liberty to make such finding as to costs as the Arbitrator deems

appropriate.

18.5 Confidentiality

Complete confidentiality will be adhered to by the Parties and the terms of any resolution of a Dispute,

whether it be by consent, mediation or arbitration, will remain confidential.

19 Rights to Information

19.1 Rights to information

Subject to clause 20 the Parties agree that only the Directors are entitled to copies of all information in

relation to the Business (Business Information).

The Shareholders are not entitled to copies of Business Information.

20 Confidentiality

20.1 Confidentiality

The Shareholders and Directors must:

(a) keep the Confidential Information in strict confidence;

(b) not disclose, or cause or permit the disclosure of, the Confidential Information, except as

permitted under this Agreement and with the prior written consent of the Board.

20.2 Exceptions

The obligations of confidentiality under this Agreement do not extend to information that, whether

before or after this Agreement is executed:

(a) is disclosed to a Party under this Agreement, but at the time of disclosure is rightly known to that

Party and not subject to an obligation of confidentiality on that Party;

(b) at the time of disclosure is within the public domain or after disclosure comes into the public

domain other than by a breach or breaches of any obligation under this clause 20; or

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(c) is required by law or the rules of any securities exchange, whether in Australia or elsewhere, to

be disclosed and the Party required to make the disclosure ensures that information is disclosed

only to the extent required.

21 Termination

21.1 Termination

This Agreement will terminate:

(a) by mutual agreement of the Shareholders;

(b) in respect of a Shareholder when it does not hold any Shares;

(c) if the Company is wound up by resolution of the Original Shareholders or an order of a court,

only insofar as the Agreement regulates the relationship between the Shareholders in the

Company.

21.2 Without prejudice

Termination of this Agreement under clause 21.1 will be without prejudice to any accrued rights of the

Parties.

21.3 Continuing obligations

Each Party agrees that after termination of this Agreement, the obligations under clauses 10, and 22 will

remain in force.

22 Restraint of Trade

There is no restraint of trade on the Shareholders.

23 Default

23.1 Events of Default

An event of default occurs in relation to a Party if:

(a) the Party breaches any provision of the Agreement; and:

(i) does not remedy that breach within thirty (30) days after receiving a notice in writing of

that breach from another Party; or

(ii) the breach is incapable of being remedied; or

(b) the Party has:

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(i) a petition presented against it that is not discharged or withdrawn within 10 Business

Days of its presentation, an order made, a resolution passed or a meeting summoned or

convened to consider a resolution for its winding up;

(ii) a receiver appointed over its assets or undertaking or any part of them;

(iii) any execution of other process of any court or authority issued against or levied upon

any of its material assets and that execution or process is not discharged or withdrawn

within sixty (60) Business Days of the date of issue;

(iv) ceased to pay its debts or suspended payment generally or would cease or threaten to

cease to carry on its business or become insolvent or become or be unable to pay its

debts as and when they become due and payable;

(v) an official manager, trustee, voluntary administrator, liquidator or provisional liquidator

appointed for all or any part of its assets or undertaking; or

(vi) entered into or resolved to enter into an arrangement, composition or compromise with

or assignment for the benefit of its creditors generally or any class of creditors or

proceedings are commenced to sanction such an arrangement, composition or

compromise other than for the purposes of a bona fide scheme of solvent reconstruction

or amalgamation.

23.2 Consequence of default

If any event of default occurs in relation to a Party, at the election of any Shareholder by giving written

notice to all Parties:

(a) all rights attaching to Shares held by the Defaulting Party will be suspended until the default is

remedied and, if the default is not capable of remedy, will be suspended indefinitely; and

(b) the Defaulting Party will be deemed to have given a Transfer Notice that it wishes to sell all of

its Shares and the provisions of clauses 13 and 14 will apply mutatis mutandis.

23.3 Other remedies

Clause 23.2 is in addition to and not to the exclusion of any other rights or remedies that the other

Parties may have against a Defaulting Party.

24 Conflict with Company Constitution

If there is any conflict between the provision of this Agreement and the Constitution of the Company,

the provisions of this Agreement prevail. On receipt of a written request from any Party, all Parties must

take all necessary steps to amend any inconsistency in the Company’s Constitution.

25 Relationship

This Agreement does not create a relationship of employment, franchisee or franchisor, agency or

partnership between the Parties.

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26 Further action

Each Party must use reasonable efforts to do all things necessary or desirable to give full effect to this

Agreement.

27 Costs

The Company will bear the entire legal costs for the negotiation, preparation and execution of this

Agreement.

28 Waiver

28.1 No waiver

The failure of or delay by a Party at any time to require performance of any obligation under this

Agreement is not a waiver of that Party's right:

(a) to claim damages for breach of that obligation; and

(b) at any other time to require performance of that or any other obligation under this Agreement,

unless written notice to that effect is given.

28.2 Waiver in writing

Waiver of any provision of or right under this Agreement:

(a) must be in writing signed by the Party entitled to the benefit of that provision or right; and

(b) is effective only to the extent set out in any written waiver.

29 Government Law and Jurisdiction

29.1 Governing Law

This Agreement is governed by the law applicable in New South Wales.

29.2 Jurisdiction

Each Party submits to the non-exclusive jurisdiction of the courts of New South Wales.

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30 Notice

30.1 Manner of giving notice

A Party giving notice or notifying under this Agreement must do so in writing directed to the recipient's

address specified in this Agreement or as varied by a Party from time to time.

30.2 Receipt of notice

A notice given in accordance with clause 30.1 is taken to be received:

(a) if hand delivered, on delivery; or

(b) if sent by prepaid post, three (3) days after the date of posting.

31 Severability

If reading down a provision of this Agreement would prevent the Agreement being invalid or voidable it

shall be read down to the extent that it is necessary and capable of being read down.

Where, notwithstanding the above, a provision of this Agreement is still invalid or voidable:

(a) if the provision would not be invalid or voidable if a word or words were omitted, that word or

those words shall be deleted; and

(b) in any other case, the whole provision shall be deleted;

and the remainder of this Agreement shall continue to have full force and effect.

32 Alteration

This Agreement may only be amended or altered in writing by all the Parties.

33 Enforceability

The provisions of this Agreement constitute legally binding relations between those Parties who have

executed this Agreement, notwithstanding that this Agreement may not have been executed by some

Parties listed as Shareholders.

34 Counterparts

This Agreement may be executed in original form and/or by facsimile transmission in any number of

counterparts and all counterparts taken together shall constitute one and the same instrument.

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35 Independent Legal Advice

Each Party warrants and covenants in favour of the other Parties, that they have received, or have

waived their right to receive, independent legal advice with respect to all matters contemplated by this

Agreement.

36 Assignment

A Party must not assign or deal with any right under this Agreement without the written consent of all

the other Parties.

37 No Merger

Notwithstanding completion or termination of this Agreement, all covenants, undertakings and

representations given or made by any Party under or by this Agreement and all obligations of any Party

under this Agreement which are of a continuing nature or are not fully satisfied and discharged on

completion or termination shall not merge on completion or termination and shall remain in full force

and effect.

38 Entire Agreement

This Agreement constitutes the entire understanding and agreement of the Parties in relation to the

subject matter hereof and supersedes all prior negotiations, understandings and agreements between the

Parties in relation to the subject matter. Each of the Parties hereby declares that save for the provisions

herein expressly contained there is no other understanding, agreement, warranty, undertaking or

representation whether express or implied which in any way extends or defines limits or otherwise

relates to the express provisions contained in this Agreement.

________________________________________________________________________________________________________________


EXECUTED AS AN AGREEMENT

Signed by CATALDO MICCIO AS TRUSTEE FOR THE APRIL TRUST in the presence of:

CATALDO MICCIO

Witness

Witness Name (please print)

Signed by HAIR CHARMS BY KELA PTY LTD ACN 600 694 077 in accordance with Section 127 of the

Corporations Act:

David Litterick - Director

Kelly Anne Litterick – Director and

Company Secretary

Signed by DAVID LITTERICK AS TRUSTEE FOR THE LITTERICK FAMILY TRUST in the presence

of:

DAVID LITTERICK

Witness


________________________________________________________________________________________________________________


Signed by KELLY ANNE LITTERICK AS TRUSTEE FOR THE LITTERICK FAMILY TRUST in the

presence of:

KELLY ANNE LITTERICK

Witness


Signed by KIPLING ANDREW WOOD-SMITH in the presence of:

KIPLING ANDREW WOOD-SMITH

Witness


Signed by LISA SONIA WOOD-SMITH in the presence of:

LISA SONIA WOOD-SMITH

Witness


________________________________________________________________________________________________________________


Signed by HAGARTY ENTERPRISES PTY LTD AS TRUSTEE FOR HAGARTY FAMILY

TRUST No. 1 in accordance with Section 127 of the Corporations Act:

Giovanna Agnese Hagarty – Company

Secretary and Director

Michael Patrick Hagarty - Director

Signed by ARCHELAUS RONALD ISHERWOOD in the presence of:

ARCHELAUS RONALD ISHERWOOD

Witness


Signed by RUBINA MAREE ISHERWOOD in the presence of:

RUBINA MAREE ISHERWOOD

Witness


________________________________________________________________________________________________________________


Signed by RAYMOND SHARP AS TRUSTEE FOR THE SYDROAR PROPRIETORY LTD STAFF

SUPERANNUATION FUND in the presence of:

RAYMOND SHARP

Witness


Signed by BARBARA SHARP AS TRUSTEE FOR THE SYDROAR PROPRIETORY LTD STAFF

SUPERANNUATION FUND in the presence of:

BARBARA SHARP

Witness


Signed by REGAN DOMENICO DONATO DE CESARE in the presence of:

REGAN DOMENICO DONATO DE CESARE

Witness


________________________________________________________________________________________________________________


Signed by LISA MAREE DE CESARE in the presence of:

LISA MAREE DE CESARE

Witness


Signed by BONELLE ENTERPRISES PTY LTD AS TRUSTEE FOR THE TIMOTHY ELLIOTT

SUPERANNUATION FUND in accordance with Section 127 of the Corporations Act:

Timothy Gilbert Elliott – Company Secretary

and Director

Alexandra Maria Bossoff - Director

Signed by LUTHER DAVID BURTON in the presence of:

LUTHER DAVID BURTON

Witness


________________________________________________________________________________________________________________


Signed by ERNEST BOON CHENG TAN in the presence of:

ERNEST BOON CHENG TAN

Witness


Schedule 1

Deed of Accession

THIS DEED POLL is made the day of

By [ ]

Of [ ]

(Acceding Party)

BACKGROUND

This deed poll is supplemental to a Shareholders Agreement dated [ ] between [ ] and [ ] (“Shareholders

Agreement”).

Terms

1. The Acceding Party confirms that it has been supplied with a copy of the Shareholders Agreement.

2. The Acceding Party covenants with all present parties to the Shareholders Agreement (whether original

or by accession) to observe, perform and be bound by all the terms of the Shareholders Agreement to the

intent and effect that the Acceding Party is deemed with effect from the date on which the Acceding

Party is registered as a Shareholder of the Company or approved as a Shareholder’s Nominated Director

(as that them is defined in the Shareholders Agreement) to be a party to the Shareholders Agreement.

3. The Acceding Party's address for the purposes of the Shareholders Agreement is, until substituted in

accordance with the Shareholders agreement, as set out above.

Executed as a Deed

Signed, sealed and delivered by [ ]

In the presence of [ ]

Schedule 2

The following matters require the approval of the Shareholders by Special Vote in accordance with clause

7.12

Share capital and issues -

(a) the issue of any Shares in the capital of the Company, or the granting of an option or right to subscribe in

respect of any of those Shares or to convert any instrument into those Shares, including for this purpose

the issuance of any bonds or debt instruments or warrants, which carry a right for the holder to convert

debt into Shares in the Company or which calls for any further Shares issuances;

(b) the cancellation, abrogation, suspension or variation of any rights attaching to the Shares of the

Company;

(c) an increase, reduction or alteration of or any change to any part of the issued share capital, or the capital

structure, of the Company; or

(d) any redemption, repurchase or the return or buy-back of any capital on account of Shares in the capital

of the Company,

in all cases, other than as permitted by this Agreement.

Winding up - the making of an application or the commencement of any proceedings or the taking of any

other steps for the winding up or dissolution of the Company or the entering into by the Company of an

arrangement, compromise or composition with or assignment for the benefit of its creditors, a class of them

or any of them.

Transactions with related parties - the making, variation or termination of a contract or arrangement

(whether legally binding or not) by the Company with, or the payment of moneys to:

(a) any of its Directors or a Shareholder or a Related Bodies Corporate of a Shareholder (other than the

appointment and removal of Directors as provided for in this Agreement); or

(b) any person acting in concert with any of them;

in all cases other than as permitted or provided for in this Agreement.

Cessation or change in business –

(a) the cessation of the Business operation of the Company or a material change in the nature or scope of the

Business of the Company;

(b) the acquisition of any shares, interest in a trust, partnership or any other entity by the Company, or any

merger or acquisition of the Company, or any part of its assets, business or undertakings, by or with

another entity.

Reorganisation event - undertake or undergo any pro rata bonus issue of Shares, subdivision or

consolidation of Shares or any other reorganisation of share capital.

Financial assistance - provide any loans or other financial assistance to any Director or their associates or

vary the terms of any loans or other financial assistance previously provided to any Director or their

associates (as defined in the Corporations Act).

________________________________________________________________________________________________________________


Schedule 3

The following matters require the approval of the Board by Special Vote in accordance with clause 7.12

General Manager – the removal or appointment of the general manager.

Disposal of assets - other than in the ordinary course of the Business, the sale or other disposal of any

material capital assets (including intellectual property, business undertaking, freehold and leasehold

property) of the Company whether in one transaction or a series of related transactions ( a material capital

asset is an asset which has a book value or market value, whichever is the greater, of more than 15% of the

aggregate book value of all the Company’s assets).

Security interest - the creation of a security interest over all or part of all the assets of the Company

securing an amount in excess of $500,000.

Financial accommodation - the lending of money or provision of financial accommodation or guarantees to

any person other than:

(a) by way of deposit with a bank or other institution the normal business of which includes the acceptance

of deposits; or

(b) the granting of credit to customers in the ordinary course of the Business.

Share capital and issues -

(a) the issue of any Shares in the capital of the Company, or the granting of an option or right to subscribe in

respect of any of those Shares or to convert any instrument into those Shares, including for this purpose

the issuance of any bonds or debt instruments or warrants, which carry a right for the holder to convert

debt into Shares in the Company or which calls for any further Shares issuances;

(b) the cancellation, abrogation, suspension or variation of any rights attaching to the Shares of the

Company;

(c) an increase, reduction or alteration of or any change to any part of the issued share capital, or the capital

structure, of the Company; or

(d) any redemption, repurchase or the return or buy-back of any capital on account of Shares in the capital

of the Company,

in all cases, other than as permitted by this Agreement.

Constitution, name

(a) the making of any amendment to its Constitution,

(b) a change of name of the Company;

(c) a change in the financial year-end of the Company; or

(d) any material amendment, departure or deviation to or in the Company's accounting policies and

practices.

________________________________________________________________________________________________________________


Transactions with related parties or on non-commercial terms - the making, variation or termination of a

contract or arrangement (whether legally binding or not) by the Company with, or the payment of moneys

to:

(a) any of its Directors or a Shareholder or a Related Bodies Corporate of a Shareholder (other than the

appointment and removal of Directors as provided for in this Agreement);

(b) any person acting in concert with any of them; or

(c) which is not on commercial arm’s length terms or of any unusual or onerous nature or which is outside

the ordinary course of the Business;

in all cases other than as permitted or provided for in this Agreement.

Cessation or change in business –

(a) the cessation of the Business operation of the Company or a material change in the nature or scope of the

Business of the Company;

(b) the acquisition of any shares, interest in a trust, partnership or any other entity by the Company, or any

merger or acquisition of the Company, or any part of its assets, business or undertakings, by or with

another entity.

Reorganisation event - undertake or undergo any pro rata bonus issue of Shares, subdivision or

consolidation of Shares or any other reorganisation of share capital.

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Annexure “A” – Copy of Constitution.

Documents

Shareholders Agreement Kela Holdings Pty Ltd · BONELLE ENTERPRISES PTY LTD AS TRUSTEE FOR THE TIMOTHY ELLIOTT ... all drawings, designs, inventions or innovations produced by any