Sample Subscription and Shareholder Agreement
Sample Subscription and Shareholder Agreement in United Kingdom
DATED 18 NOVEMBER 2013
THE INVESTORS
and
THE FOUNDERS
and
THE COMPANY
_________________________________________________________
SUBSCRIPTION AND SHAREHOLDERS’ AGREEMENT
relating to COMPANY LTD
(as amended by amendment and restatement agreements dated … and …)
__________________________________________________________
THIS AGREEMENT IS MADE THIS … AND AS AMENDED AND
RESTATED ON … AND …
PARTIES
(1) The persons whose names and addresses are set out in Part 1 of Schedule 1 (the
“Investors” and each an “Investor”, subject to Clause 1);
(2) The persons whose names and addresses are set out in Part 2 of Schedule 1 (together the
“Founders” and each a “Founder”); and
(3) COMPANY LTD (company number …) whose registered office is at …, London (the “Company”).
INTRODUCTION
(A) The Company is a company limited by shares, brief particulars of which are set out in Part
1 of Schedule 2. The Company is engaged in the business of operating and further
developing the … platform known as “COMPANY
…”, together with ancillary activities, as more fully described in the Business Plan
(the “Business”).
(B) Details of the legal and beneficial ownership of the share capital of the Company are set
out in Parts 1 and 2 of Schedule 3.
(C) The Investors wish to subscribe for shares in the capital of the Company on and subject to
the terms of this agreement.
AGREED TERMS
1. DEFINITIONS
In this agreement, except where a different interpretation is necessary in the context, the
words and expressions set out below shall have the following meanings:
“Accounts” means the balance sheet and profit and loss account of the Company for the
period ended on the Accounts Date in the agreed form;
“Accounts Date” means 30 June 2012;
“Act” means the Companies Act 2006;
“Additional Disclosure Letter” means the letter (together with the related disclosure
bundle) in the agreed form from the Warrantors to the Company B Funds executed and
delivered immediately before Second Completion;
“Board” means the board of Directors as constituted from time to time;
“Books and Records” has its common law meaning and includes, without limitation, all
notices, correspondence, orders, inquiries, drawings, plans, books of account and other
documents and all computer disks or tapes or other machine legible programs or other
records;
“Business” has the meaning given in Recital (A);
“Business Day” means a day on which banks are ordinarily open for the transaction of
normal banking business in London and Paris (other than a Saturday or Sunday);
“Business Plan” means the business plan for the Company in the agreed form;
“Buyback” means, following the Conversion, the buyback by the Company pursuant to
article 11 of the New Articles and on the terms of the Buyback Agreement of the 1,975
Deferred Shares (as defined in the New Articles) from the Company B Funds for a total
consideration of £0.01 on the Second Completion Date;
“Buyback Agreement” means the buyback agreement to be entered into by the Company
and the Company B Funds on the Second Completion Date in relation to the Buyback;
“Company C” shall have the meaning given in Part 1 of Schedule 1;
“Claim(s)” means any claim(s) for breach of any Warranty;
“company employee” shall have the meaning given in paragraph 24.2 of Schedule 5;
“Completion” means completion by the parties of their respective obligations in
accordance with Clause 4 (Completion);
“Completion Conditions” means the conditions set out in Part 1 of Schedule 4;
“Completion Date” means the date on which Completion occurs;
“Conversion” means the conversion of 3,669 of the Purchased Shares into Series A Shares
and 1,975 of the Purchased Shares into Deferred Shares (as defined in the New Articles) on
the Second Completion Date;
“CTA 2010” means the Corporation Tax Act 2010;
“Data Protection Legislation” means the Data Protection Acts of 1984 and 1998, and the
EU Data Protection Directive 95/46/EC;
“Data Protection Principles” has the same meaning as the term “Data Protection
Principles” under the Data Protection Legislation;
“Deed of Adherence” means the deed of adherence substantially in the form set out in
Schedule 9;
“Disclosed” means fairly disclosed to the Investors (other than Company B) in the Disclosure
Letter and to Company B in the Additional Disclosure Letter (as the case may be) with
sufficient explanation and detail to enable the relevant Investors to identify clearly the
nature, scope and implications of the matters disclosed;
“Disclosure Letter” means the letter (together with the related disclosure bundle) in the
agreed form from the Warrantors to the Investors (other than Company B) executed and
delivered immediately before Completion;
“Disposal” in relation to a Share includes, without limitation:
(a) sale, assignment or transfer;
(b) creating or permitting to subsist any pledge, charge, mortgage, lien or other
security interest or Encumbrance;
(c) creating any trust or conferring any interest;
(d) any agreement, arrangement or understanding in respect of votes or the right to
receive dividends;
(e) the renunciation or assignment of any right to subscribe or receive a Share or any
legal or beneficial interest in a Share;
(f) any agreement to do any of the above, except an agreement to transfer Shares
which is conditional on compliance with the terms of this agreement; and
(g) the transmission of a Share by operation of law,
and “Dispose” shall be construed accordingly;
“Encumbrance” means any mortgage, charge, security interest, lien, pledge, assignment by
way of security, equity, claim, right of pre-emption, option, covenant, restriction,
reservation, lease, trust, order, decree, judgment, title defect (including retention of title
claim), conflicting claim of ownership or any other encumbrance of any nature whatsoever
(whether or not perfected other than liens arising by operation of law);
“EUR” or “€” means the official currency of the member states of the European Union;
“FCA” means the Financial Conduct Authority and any successor body from time to time;
“Financial Year” means a financial year as determined in accordance with section 390 of
the Act;
“Founder Director” means the Director (if any) appointed in accordance with Clause 11.8;
“Governmental Authority” means any: (a) nation, region, state, country, city, town,
village, district or other jurisdiction; (b) federal, state, local, municipal, foreign or other
government; (c) governmental or quasi-governmental authority of any nature (including
any governmental agency, branch, department, or other entity and any court or other
tribunal); (d) body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, policy, regulatory or power of any nature; (e) Taxing Authority; (f) any
stock exchange or listing authority; and (g) officials of any of the foregoing.
“Government Official” means any civil servant or executive, official, employee or agent
of a Governmental Authority; a director, officer, employee or agent of a wholly or partially
government-owned or -controlled company or business; a political party or official thereof,
or candidate for political office; or an executive, official, employee or agent of a public
international organization (e.g., the International Monetary Fund or the World Bank).
“Group” means the Company and the Subsidiary for the time being, and “Group
Company” means any one of them;
“HMRC” means HM Revenue & Customs;
“IHTA 1984” means the Inheritance Tax Act 1984;
“Company B” means the Company B Funds represented by Company B Partners;
“Company B Fund(s)” shall have the meaning given in Part 1 of Schedule 1;
“Company B Partners” means a corporation organised and existing under the laws of France,
having its registered offices at 117, avenue des Champs-Élysées, 75008, Paris, France.
“Independent Director” has the meaning given in Clause 11.1(f);
“Intellectual Property” means copyrights, trade and service marks, including the Trade
Marks, trade names, rights in logos and get-up, inventions, confidential information, trade
secrets and know-how, registered designs, design rights, patents, utility models, semiconductor
topographies, all rights of whatsoever nature in computer software and data, all
rights of privacy and all intangible rights and privileges of a nature similar or allied to any
of the foregoing, in every case in any part of the world and whether or not registered; and
including all granted registrations and all applications for registration in respect of any of
the same;
“Investor Director Consent” means the prior written consent of all Investor Directors,
provided that there is at least one appointed;
“Investor Director” means the Directors (if any) appointed in accordance with Clauses
11.6 and 11.7;
“Investor Majority” means the written consent of the holders of more than 75 per cent. of
the Series A Shares, including … and Company B;
“Investors” means (i) from the Completion Date, the persons whose names and addresses
are set out in Part 1 of Schedule 1 (excluding the Company B Funds); and (ii) from the Second
Completion Date, all the persons whose names and addresses are set out in Part 1 of
Schedule 1, in each case, and any other person to whom any of them transfer their shares
and who becomes a party as an “Investor” by signing a Deed of Adherence in accordance
with Clause 16.2 and is named therein as an “Investor”.
“Investors’ Solicitors” means Morgan, Lewis & Bockius of Condor House, 5-10 St Paul’s
Churchyard, London EC4M 8AL, United Kingdom;
“IPO” means the admission of all or any of the Shares or securities representing those
shares (including without limitation depositary interests, American depositary receipts,
American depositary shares and/or other instruments) to or the grant of permission by any
like authority for the same to be traded or quoted on the Nasdaq National Stock Market of
the NASDAQ OMX Group Inc. or on the Official List of the United Kingdom Listing
Authority or on the AIM Market operated by the London Stock Exchange Plc or any other
recognised investment exchange (as defined in section 285 of the Financial Services and
Markets Act 2000);
“ITEPA” means the Income Tax (Earnings and Pensions) Act 2003;
“IT Systems” means all computer hardware (including network and telecommunications
equipment) and software (including associated preparatory materials, user manuals and
other related documentation) of whatsoever nature owned, used, leased or licensed by or to
any Group Company;
“Key Employee” means any employee who is or was during the Period employed by any
Group Company in a senior capacity;
“Listing Rules” means the listing rules made by the United Kingdom Listing Authority as
the competent authority pursuant to Part VI of the Financial Services and Markets Act 2000
as amended from time to time and including any guidance or guidance manual issued by
the United Kingdom Listing Authority from time to time relating to or connected with the
listing rules;
“Loans” means the loans to the Company of EUR 526,000 in aggregate from …
and …;
“Loan Shares” means the shares subscribed by the Investors by way of conversion of the
Loan pursuant to Clause 3.3, at a conversion rate of EUR … per share;
“Management Accounts” means the management accounts of the Company for the period
starting on the Accounts Date and ending on 30 September 2013, in the agreed form;
“Managers” means any senior Employee of the Company regarded as management but
excluding the Founders and other Directors;
“New Articles” means the new articles of association of the Company in the agreed form to
be adopted on or prior to Completion as amended or superseded from time to time;
“New Shares” means the shares subscribed by the Investors pursuant to Clause 3.1 and
Clause 5.1 at a price of EUR … per share;
“Ordinary Shares” means ordinary shares of £1.00 each in the capital of the Company
having the rights set out in the New Articles;
“…” shall have the meaning given in Part 1 of Schedule 1;
“Payment” shall have the meaning given in paragraph 24.1 of Schedule 5;
“Period” means the period of two years immediately preceding the Termination Date;
“Permitted Transferees” shall have the same meaning as set out in the New Articles;
“Personal Data” has the same meaning as the term “personal data” under the Data
Protection Legislation;
“Properties” means the properties described in Schedule 8;
“Purchased Shares” means any Shares acquired by an Company B Fund pursuant to any Share
Purchase Agreements on the date hereof;
“Purchase Price” means four hundred twelve thousand, four hundred sixty-one Euros
(€412,461);
“Regulatory Authority” means the FCA and any other governmental or regulatory body
(whether in the UK or otherwise) which is responsible for the authorisation, regulation,
licensing and/or supervision of persons carrying on financial services business of any kind;
“Resolutions” means the resolutions in agreed form to be passed by the Company by
written resolution as specified in Schedule 4;
“Sale” means a Share Sale or an Asset Sale;
“Second Completion” means the completion by the parties of their respective obligations
in accordance with Clause 5 (Second Completion);
“Second Completion Conditions” means the conditions set out in Schedule 4;
“Second Completion Date” means the date upon which Second Completion occurs;
“Series A Shares” means series A shares of £1.00 each in the capital of the Company
having the rights set out in the New Articles;
“Service Agreements” means:
(a) the agreement dated … made between … and the Company;
and
(b) the agreement dated … made between … and the Company
; and
(c) the agreement date… made between … and the Company;
“Share Option Plan” means the share option plan to be established by the Company
pursuant to Clause 10;
“Shareholders” means each of the Founders and the Investors and the other members of
the Company from time to time who are a party to this agreement;
“Share Purchase Agreement” means an agreement for the sale and purchase of Shares in
the agreed form;
“Shares” means Ordinary Shares, Series A Shares and any other classes of shares in the
capital of the Company existing from time to time;
“Social Obligations” means:
(a) any common or statutory law, regulation, directive, code of practice or other law
in any jurisdiction relating to the relationship between any Group Company and
its employees, any potential employee and any trade unions and/or the health
and safety of its employees; and
(b) any agreements or arrangements between any Group Company and its
employees and/or any trade union or other organisation which represents some
or all of its employees;
“Subsidiary” means a subsidiary of the Company as defined in section 1159 of the Act,
brief particulars of which are set out in Part 2 of Schedule 2;
“Taxation” or “Tax” means (a) all forms of taxation, including (without limitation) any
charge, tax, levy, impost, duty, contribution liability or withholding wherever chargeable or
imposed by any national, state federal, municipal or local government or any other Taxing
Authority and whether in the UK or any other jurisdiction, and (b) all penalties, charges,
fines, surcharges, costs or interest relating to any tax falling within paragraph (a) of this
definition payable in connection therewith;
“Taxing Authority” means any governmental, local, state, federal, fiscal, revenue,
customs, excise or other authority, body, agency or official whatsoever competent to
impose any Tax, or responsible for the administration and/or collection of Tax or
enforcement of any law in relation to Tax in any jurisdiction;
“Tax Warranties” means the Warranties set forth in section 7 of Schedule 5;
“Tax Warranty Claim” means any claim for breach of any Tax Warranty;
“Tenancies” means the occupational interests in the Properties as set out in Part 2 of
Schedule 8;
“Termination Date” means the date upon which the Founder concerned ceases to be a
Director or Employee, whichever is the latest;
“Trade Marks” means the trade and service marks and applications, together with
associated logos, owned by the Company;
“VAT” means value added tax chargeable under Directive 2006/112/EC and any national
implementing legislation including VATA 1994 and any similar, replacement or additional
tax;
“VATA” means the Value Added Tax Act 1994;
“Warranties” means the warranties given pursuant to Clause 6 (references to a particular
warranty being to a statement set out in Schedule 5); and
“Warrantors” means the Company and each of the Founders.
2. INTERPRETATION
2.1 Words and expressions which are defined in the New Articles shall have the meanings
attributed to them therein when used in this agreement unless otherwise defined or the
context otherwise requires.
2.2 Words and expressions which are defined in the Act (to the extent applicable) shall have
the meanings attributed to them therein when used in this agreement unless otherwise
defined or the context otherwise requires.
2.3 The Clause and paragraph headings and the table of contents used in this agreement are
inserted for ease of reference only and shall not affect construction.
2.4 References to a Director shall include any alternate appointed to act in his place from time
to time.
2.5 References to persons shall include bodies corporate, unincorporated associations and
partnerships, in each case whether or not having a separate legal personality.
2.6 References to documents “in the agreed form” are to documents in terms agreed on behalf
of the Company and the Investors and initialled on behalf of each such party for the
purposes of identification only.
2.7 References to those of the parties that are individuals include their respective legal personal
representatives.
2.8 References to “writing” or “written” includes any other non-transitory form of visible
reproduction of words.
2.9 References to the word “include” or “including” (or any similar term) are not to be
construed as implying any limitation and general words introduced by the word “other” (or
any similar term) shall not be given a restrictive meaning by reason of the fact that they are
preceded or followed by words indicating a particular class of acts, matters or things.
2.10 Except where the context specifically requires otherwise, words importing one gender shall
be treated as importing any gender, words importing individuals shall be treated as
importing corporations and vice versa, words importing the singular shall be treated as
importing the plural and vice versa, and words importing the whole shall be treated as
including a reference to any part thereof.
2.11 References to statutory provisions, enactments or EC Directives shall include references to
any amendment, modification, extension, consolidation, replacement or re-enactment of
any such provision, enactment or EC Directive (whether before or after the date of this
agreement), to any previous enactment which has been replaced or amended and to any
regulation, instrument or order or other subordinate legislation made under such provision,
enactment or EC Directive unless any such change imposes upon any party any liabilities
or obligations which are more onerous than as at the date of this agreement.
2.12 Section 1122 of the CTA 2010 shall apply to determine whether one person is connected
with another for the purposes of this agreement.
2.13 References in Clauses 7 (Warranties), 11 (The Board and the Investor Directors), 12
(Information rights), 13 (Consent matters), 14 (Business undertakings), 17 (Restrictive
covenants), 19 (Confidentiality), Schedule 5 (Warranties), Schedule 6 (Consent matters)
and Schedule 7 (Undertakings) to the Company and the Board shall include the Subsidiary
of the Company and the directors for the time being of the Subsidiary respectively.
3. SUBSCRIPTIONS
3.1 Subject to the provisions of Clause 4, the Investors apply for the allotment and issue to
them at Completion of the following Shares as set out in the table below and the Company
accepts such applications:
Investor No. of
Series A Shares
Total subscription monies (€)
Total subscription monies (€)
TOTAL …
3.2 By no later than the date which is four weeks after the Completion Date, …
shall subscribe for the issue and allotment to it of … Series A Shares at a
price per share of EUR … for a total of EUR …, and the Company accepts
such application.
3.3 In addition, subject to the provisions of Clause 4, each of … and … shall subscribe, by way
of conversion of the amounts advanced under the Loans (including any accrued but unpaid
interest) into Series A Shares as set out opposite their respective names in the table below
and the Company accepts such applications:
Investor No. of
Series A
Shares
Total Loan amount
(€)
Excess (€) to be
repaid to the
lender
Total …
and on such conversion the Loans shall be fully and finally satisfied in all respects.
3.4 Upon conversion of the Loans into the Loan Shares pursuant to Clause 3.3, the outstanding
balance remaining on the Loans shall be repaid in cash at Completion to the relevant lender
in the amount set out in column 4 of the table at Clause 3.3.
3.5 Subject to Clause 32, each party agrees to comply with the terms of the New Articles.
3.6 Each of the Founders hereby irrevocably waives or procures the waiver of all or any preemption
rights he or his nominees may have pursuant to the Company’s articles of
association or otherwise so as to enable the issue of any shares in the capital of the
Company contemplated by this agreement to proceed free of any such pre-emption rights.
3.7 … shall be entitled to waive any or all of the Completion Conditions (to the extent
permitted by applicable law) by written notice to the Founders, the Company and the other
Investors.
3.8 No Investor (including those listed in Clause 3.3) shall be obliged to complete any of the
transactions or do any of the things referred to in this agreement unless all other
transactions and things are completed in accordance with this agreement. If … shall
default in the performance of its obligations, the non-defaulting Investors (including those
listed in Clause 3.3) shall, at their option (and without prejudice to any rights which they
may have in respect of such default) determine to fix another time for Completion or that
they shall cease to be liable to perform their obligations under this agreement including
reimbursement of funds previously paid by the non-defaulting party in relation with the
investment and retroactive termination of all acts related to the investment.
4. COMPLETION
4.1 Subject to the Completion Conditions being satisfied or waived by … in accordance
with Clause 3.7 on or prior to Completion, Completion of the subscription by the Investors
of the New Shares and the conversion of the Loan shall take place at the offices of the
Investors’ Solicitors (or at such other place as the Company and the Investors shall agree)
on the date of this agreement (or such other date as is agreed between the Parties) when the
events set out in Clause 4.2 shall take place in such order as … may require.
4.2 The following events shall occur on the Completion Date:
(a) each Investor shall pay the sum set out against its name in the third column of the
table in Clause 3.1 above (being the aggregate subscription price for the New
Shares) by electronic funds transfer to the bank account of the Company as set out
below and payment made in accordance with this Clause 4.2 shall constitute a good
discharge for the Investor of its obligations under this Clause 4.2:
Account name : COMPANY Limited Eur
Beneficiary : COMPANY Ltd
Bank : …
Account : …
Sort Code : …
BIC : …
IBAN : …
(b) a meeting of the Board shall be held at which the Company:
(i) issue the New Shares and Loan Shares credited as fully paid to the relevant
Investors and enter their names in the register of members in respect
thereof;
(ii) execute and deliver to the Investors certificates for the relevant New Shares
and Loan Shares;
(iii) appoint …. and ….
as Directors;
(iv) pass any such other resolutions as may be required to carry out the
obligations of the Company under this agreement.
5. SECOND SUBSCRIPTION
5.1 Subject to the provisions of this Clause 5, the Company B Funds each apply for the allotment
and issue to it at Second Completion of the following Shares as set out in the table below
and the Company accepts such application:
Company B Fund No. of
Series A Shares
Total subscription monies (€)
Company B ….
5.2 Each of the Founders and Investors (save for Company B) hereby irrevocably waives or
procures the waiver of all or any pre-emption rights he or his nominees may have pursuant
to the Company’s articles of association or otherwise so as to enable the issue of any shares
in the capital of the Company contemplated by this agreement to proceed free of any such
pre-emption rights.
5.3 Each of the Company B Funds shall be entitled to waive any or all of the Second Completion
Conditions (to the extent permitted by applicable law) by written notice to the Founders,
the Company and the other Investors.
5.4 No Company B Fund shall be obliged to complete any of the transactions or do any of the
things referred to in this agreement unless all other transactions and things are completed in
accordance with this agreement.
5.5 Subject to the Second Completion Conditions being satisfied or waived by each Company B
Fund in accordance with Clause 5.3 on or prior to Second Completion, Second Completion
of the subscription by each Company B Fund shall take place at the offices of Company B’s
solicitors (or at such other place as the Company and the Company B Funds shall agree) on the
Second Completion Date (or such other date as is agreed between the Parties) when the
events set out in Clause 5.6 shall take place in such order as Company B may require.
5.6 The following events shall occur on the Second Completion Date:
(a) each of the Company B Funds shall pay the sum set out against its name in the third
column of the table in Clause 5.1 above (being the aggregate subscription price for
the New Shares which shall be issued to such Company B Fund) by electronic funds
transfer to the bank account of the Company as set out below and payment made in
accordance with this Clause 5.6 shall constitute a good discharge for the Investor of
its obligations under this Clause 5.6:
Account name : COMPANY Limited Eur
Beneficiary : COMPANY Ltd
Bank :
Account :
Sort Code :…
BIC :
IBAN :
(b) a meeting of the Board shall be held at which the Company shall:
(i) subject to the receipt of the subscription monies, issue the New Shares to
be issued to each of the Company B Funds credited as fully paid to the relevant
Company B Fund and enter the relevant Company B Fund’s name in the register of
members in respect thereof;
(ii) subject to receipt of the subscription monies, execute and deliver to each of
the Company B Funds certificates for the relevant New Shares;
(iii) appoint Company B Partners as a Director;
(iv) approve, subject to stamping, the transfer of the Purchased Shares;
(v) approve the Conversion;
(vi) approve the Buyback and the entry into the Buyback Agreement; and
(vii) pass any such other resolutions as may be required to carry out the
obligations of the Company under this agreement.
5.7 Each of the Shareholders hereby irrevocably and unconditionally consents to the
transactions contemplated by the Share Purchase Agreements to be entered into between
certain of the Company B Funds and each of …
and agrees that article 16 of the Company’s articles of association shall not apply to such
transactions.
5.8 The Investor Majority hereby irrevocably and unconditionally consents to the transactions
contemplated by this Clause 5, the Conversion and the Buyback and agrees that any
prohibitive provisions of this agreement and the Company’s articles of association shall not
apply to such transactions.
6. POST COMPLETION OBLIGATIONS
The following insurance policies have been effected for the benefit of the Company:
(a) … and critical illness insurance; and
(b) directories and officers insurance.
7. WARRANTIES
7.1 The Warrantors acknowledge that the Investors have been induced to enter into this
agreement and to subscribe for the New Shares and Loan Shares on the basis of and in
reliance upon the Warranties amongst other things.
7.2 The Warrantors jointly and severally (but subject to the provisions of Clause 7.6) warrant to
the Investors (other than the Company B Funds) that each and every Warranty set out in
Schedule 5 is true and accurate and not misleading as at the Completion Date and, for the
benefit of the Company B Funds only, as at the Second Completion Date, subject only to:
(a) the matters Disclosed in the Disclosure Letter and, in the case of the Company B Funds
only, the Additional Disclosure Letter; and
(b) any exceptions expressly provided for under this agreement.
7.3 Each Warranty is a separate and independent warranty, and, save as otherwise expressly
provided, no Warranty shall be limited by reference to any other Warranty or by the other
terms of this agreement, the Disclosure Letter and the Additional Disclosure Letter (if
applicable).
7.4 The rights and remedies of the Investors in respect of any breach of any of the Warranties
shall not be affected by Completion, or Second Completion, as the case may be, any
investigation made by or on behalf of the Investors into the affairs of the Company or any
other event or matter whatsoever which otherwise might have affected such rights and
remedies except a specific and duly authorised written waiver or release.
7.5 No information relating to the Company of which the Investors have knowledge (actual,
constructive or imputed) other than by reason of it being disclosed in accordance with
Clause 7.2(a) shall prejudice any Claim which the Investors shall be entitled to bring or
shall operate to reduce any amount recoverable by the Investors under this agreement.
7.6 The Investors shall have the right (at their discretion) to claim in respect of any breach of
the Warranties either against the Company or against any of the other Warrantors and/or
partly against the Company and partly against any of the other Warrantors. In the case of a
Claim against the Company no counterclaim or right of contribution or indemnity shall lie
against the other Warrantors and in the case of a Claim against any or all of the other
Warrantors no counterclaim or right of contribution or indemnity shall lie by any of them
against the Company or any other Warrantor.
7.7 Any information supplied by the Company, its officers, employees or agents to the
Founders or their agents, representatives or advisers in connection with, or which forms the
basis of, any of the Warranties or any matter covered in the Disclosure Letter or the
Additional Disclosure Letter or otherwise in relation to the business and affairs of the
Company (whether before or after the date hereof) shall be deemed not to include or have
included a representation, warranty or guarantee of its accuracy by the Company to the
Founders and shall not constitute a defence to any Claim by the Investors. The Founders
hereby irrevocably waive any and all claims against the Company, its officers, employees
or agents in respect of any information so supplied (and undertakes that no other person
claiming under or through it will make any such claim).
7.8 The Investors agree among themselves that the following provisions shall (unless they
subsequently agree amongst themselves to the contrary acting by way of an Investor
Majority) apply in relation to the enforcement of any of the obligations of the Warrantors
owed to the Investors under this agreement (the “Obligations”):
(a) no claim in respect of any breach of the Obligations shall be brought by any of the
Investors without the prior written consent of an Investor Majority provided that all
Investors have been informed of the breach of the Obligations and consulted prior
to an Investor Majority decision being made;
(b) the costs incurred by any Investors in bringing a claim in respect of any breach of
the Obligations shall be borne by all of the Investors proportionately to their
holding of Series A Shares in the capital of the Company at that time; and
(c) any damages obtained as a result of any claim in respect of any breach of the
Obligations will, after deduction of all costs and expenses, be divided amongst the
Investors in such proportions.
Any Investor shall be entitled to waive the Obligations owed to it at any time prior to the
issue of proceedings with the consequence that it shall not be liable to bear its proportion of
the costs referred to in (b) above (which costs per Investor shall increase rateably for the
remaining Investors) nor entitled to any of the damages referred to in (c) above.
7.9 Without prejudice to any other remedy available to the Investors, the Founders shall hold
and keep the Investors and the Group indemnified on an after-Tax basis, without reference
to the general rule of law relating to damages for breach of warranty, from and against all
losses, damages, costs, or other expenses arising out of or in connection with any Claims in
respect of paragraphs 14 and 15 of Schedule 5.
7.10 Warranties qualified by the expression so far as the Warrantors are aware (or any similar
expression) are deemed to be given to the best of the knowledge, information and belief of
the Warrantors and the management of the Company, after having made all reasonable and
careful enquiries.
8. LIMITATIONS ON WARRANTY CLAIMS
8.1 The limitations set out in this Clause 8 shall not apply to any Claim which is:
(a) the consequence of fraud, dishonesty, wilful concealment or wilful
misrepresentation by or on behalf of the Warrantors; or
(b) which is a result of a breach of warranty statements 1 (share capital) of Schedule 5.
8.2 No Claim may be made against the Warrantors unless written notice of such Claim is
served on the Warrantors giving reasonable details of the Claim within 45 days of the
Investor(s) becoming aware that any fact or matter will entitle it or them to bring a Claim
and, with respect to Claims in respect of the Warranties and the Tax Warranties, in any
event by no later than the date which is two years after the Warranties and the Tax
Warranties were given to the Investors (other than the Company B Funds) on the Completion
Date and to the Company B Funds, on the Second Completion Date.
Failure to give reasonable details of any Claims shall not prevent the Investors from
proceeding with any Claim otherwise made properly under this agreement.
8.3 The aggregate liability of the Warrantors to the Investors in respect of all and any Claims
brought by the Investors shall be limited to:
(a) in the case of the Company, an amount equal to 60 per cent. of the amount
subscribed by the Investors, and in addition and in the case of the Company B Funds
only, an amount equal to 60% of the Purchase Price, together with the proper and
reasonable costs of recovery in respect of any Claim incurred by or on behalf of the
Investors; and
(b) in the case of the Founders, an amount equal to 40 per cent. of the amount
subscribed by the Investors, and in addition and in the case of the Company B Funds
only, an amount equal to 40% of the Purchase Price.
8.4 The Warrantors shall not be liable in respect of any Claim unless the aggregate liability for
all Claims exceeds €50,000, in which case the Warrantors shall be liable for the entire
amount and not merely the excess.
8.5 No liability of the Warrantors in respect of any breach of any Warranty shall arise:
(a) if such breach occurs by reason of any matter which would not have arisen but for
the coming into force of any legislation not in force at: (i) the Completion Date;
and (ii) in the case of the Company B Funds only, the Second Completion Date, or by
reason of any change to the Taxing Authority’s practice or extra-statutory
concession occurring after: (i) the Completion Date; and (ii) in the case of the
Company B Funds only, the Second Completion Date;
(b) to the extent that specific allowance, provision or reserve has been made in the
Accounts or in the Management Accounts (other than any allowance, provision or
reserve with respect to Tax which shall be determined solely by reference to the
Accounts) specifically in respect of the matter to which such liability relates;
(c) to the extent that such breach or claim arises as a result of any change after the
Completion Date, and in the case of the Company B Funds only, the Second
Completion Date, in the accounting bases or policies in accordance with which the
Company values its assets or calculate its liabilities or any other change in
accounting practice from the treatment or application of the same used in preparing
the Accounts (save to the extent that such changes are required to correct errors or
because relevant generally accepted accounting principles have not been complied
with);
(d) to the extent that the Company is entitled to claim against the loss or damage
suffered which is the object of the Claim under the terms of any insurance policy
for the time being in force and the loss and damage has actually been recovered by
the Company under such insurance policy; and
(e) to the extent that no Claim would have arisen (or the amount of any Claim would
not have increased) but for a transaction or arrangement entered into after: (i) the
Completion Date; and (ii) in the case of the Company B Funds only, the Second
Completion Date, with the written consent of the Investor Majority.
8.6 The Investors shall be entitled to make a Claim in respect of liability which is contingent or
unascertained provided that written notice of the Claim (giving as far as practical the
amount and details of the Claim) is given to the Warrantors before the expiry of the
relevant periods specified in Clause 8.2.
8.7 The Warrantors shall not be liable for any Claim if the alleged breach which is the subject
of the Claim is capable of remedy and is remedied to the reasonable satisfaction of the
Investor Majority by the Warrantors within 30 days of the date on which the notice in
Clause 8.2 above is received by the Warrantors.
8.8 Nothing in this agreement shall prejudice each Investor’s duty under common law to
mitigate any loss or liability which is the subject of a Claim.
8.9 The liability of the Warrantors for any Claim notified under Clause 8.2 shall (if it has not
been previously satisfied, settled or withdrawn) cease 9 months after the date on which the
Claim was notified (or, in the case of a claim under Clause 8.6, 9 months after the
contingent or unascertained liability ceases to be contingent or unascertained), unless court
proceedings have been started in respect of it or it has been submitted to arbitration and the
proceedings or submission to arbitration has not been withdrawn or terminated.
8.10 Subject to Clause 8.5(d), the liability of the Warrantors for a Claim shall be reduced if any
Group Company actually receives any recoveries from any third party (including a Taxing
Authority or insurer) in respect of the loss suffered by a Group Company giving rise to the
Claim and the proportion by which such liability shall reduce shall be the proportion that
the amount recovered (less the Group Company’s costs and expenses of recovery and any
amount in respect of Taxation payable in respect of the amount recovered) bears to the loss
suffered by the Group Company.
8.11 If, subsequent to any payment to any of the Investors in respect of any Claim, any Group
Company actually receives any payment from any third party directly in respect of the loss
suffered by a Group Company which resulted in the Claim, the relevant Investors shall,
except to the extent that any direct or indirect loss of the Investors has not been
compensated or would, following such reimbursement, not be compensated, reimburse to
the Warrantors an amount equal to the proportion of such payment which the amount paid
by the Warrantors to such Investors bears to such loss (less the Investors’ and the Group
Company’s costs and expenses of recovery and any amount in respect of Taxation payable
in respect of the amount recovered).
8.12 No claim for breach of any of the Warranties shall be brought after a Sale or an IPO.
9. SATISFACTION OF CLAIMS
9.1 For the purposes of this Clause 9, a “Substantiated Claim” is a claim for breach of
Warranties in respect of which:
(a) a settlement has been reached by the party against whom such Claim is brought
and the Investor(s) bringing the Claim;
(b) which has been adjudicated on by a Court of competent jurisdiction and no right of
appeal lies in respect of such adjudication; or
(c) the parties are debarred by passage of time or otherwise from making an appeal.
9.2 If any claim against any of the Founders or the Company becomes a Substantiated Claim,
then the relevant Founder(s) or the Company shall satisfy that Substantiated Claim within
seven days of the time when the claim became a Substantiated Claim.
9.3 Provided always that the first €50,000 of liability of each Founder shall be settled in cash,
each Founder shall in respect of a Substantiated Claim against him, shall satisfy any
liability thereafter (at the election of the relevant Founder) the Substantiated Claim either:
(a) by the payment of a cash settlement to the relevant Investor(s);
(b) by the transfer to the relevant Investor(s) of such number of Shares held by him
valued at the Fair Value of the Shares on the date the relevant claim became a
Substantiated Claim equal to the value of the Substantiated Claim; or
(c) a combination of cash and Share transfers in accordance with Clause 9.3(b);
provided that any Substantiated Claim with respect to Tax shall be capable of settlement by
the payment of cash only.
9.4 For the purposes of Clause 9.3, “Fair Value” shall mean such value as may be agreed by
(on the one hand) the relevant Founder(s) and (on the other hand) the relevant Investor(s)
and, in the absence of agreement, shall be such value as shall be certified by the Expert
Valuer in accordance with Clause 9.5.
9.5 The Expert Valuer shall determine the Fair Value in accordance with the provisions of
article 17.3 of the New Articles. The Expert Valuer shall act as an expert and not as an
arbitrator and his certificate shall (save in the case of manifest error or fraud) be final and
binding on the parties. The costs of the Expert Valuer shall be borne as he shall direct and
in the absence of any direction, equally between the relevant Investor(s) and the relevant
Founder(s).
10. EMPLOYEE SHARE OPTIONS
10.1 By no later than …, the Company shall adopt a Share Option Plan in a form
satisfactory to the Investor Majority whereby options over Ordinary Shares may be granted
to:
(a) the Managers (subject to a maximum option pool of … Ordinary Shares
representing five per cent. of share capital of the Company); and
(b) the Employees (excluding Managers, Founders and other Directors) (subject to a
maximum option pool of … Ordinary Shares representing seven per cent. of
share capital of the Company),
pursuant to the Share Option Plan in such number as may be decided by the Board (with the
consent of the Investor Directors not to be unreasonably withheld or delayed).
10.2 The key terms of the Share Option Plan shall be as follows:
(a) Shares shall vest over a period of 48 months; and
(b) an Employee who leaves within the first 12 months of the vesting period shall
forfeit all Shares granted within the Share Option Plan whether vested or otherwise.
11. THE BOARD AND THE INVESTOR DIRECTORS
11.1 The members of the Board immediately following Second Completion shall be:
(a) … appointed as chief executive officer of the Company;
(b) … appointed as chief operating officer of the Company;
(c) …, who is nominated by the Founders acting jointly (the “Founder
Director”) and appointed pursuant to Clause 11.8;
(d) …, represented by … being the
first Investor Director appointed pursuant to Clause 11.6;
(e) Company B Partners, represented by …, being the first Investor
Director appointed pursuant to Clause 11.7; and
(f) such third party as is nominated for appointment by the Founders, … and
Company B acting unanimously (the “Independent Director”).
11.2 At least six Board meetings will be held in each calendar year at intervals of not more than
three months.
11.3 Save with Investor Director Consent no business shall be transacted at any meeting of the
Board (or committee of the Board) save for that specified in the agenda referred to in
Clause 11.12.
11.4 For so long as Company C and …
hold Shares, Company C and … shall have the right to receive notice of
and to jointly appoint one observer to attend Board meetings provided that such observer
shall not have the right to vote on any matters at Board meetings.
11.5 For so long as … hold Shares, … shall have the
right to receive notice of and to appoint one observer to attend Board meetings. The
observer appointed pursuant to this Clause 11.5 shall not have the right to vote on any
matters at Board meetings. The Observer shall not be related in any manner (including
under employment, shareholding, board membership or advisory role) with any of the
following business areas: banking, money business services, money remittance, stock
brokerage or any other financial regulated activity.
11.6 For as long as … or its Permitted Transferees each hold not less than five per cent. of
the Shares in issue, … shall have the right to appoint and maintain in office such
natural person as … may from time to time nominate as a Director (and as a member
of each and any committee of the Board) and to remove any Director so appointed and,
upon his removal whether by … or otherwise, to appoint another Director in his place.
… shall be deemed to be the first Director appointed
pursuant to this Clause 11.6.
11.7 For as long as any Company B Fund or its Permitted Transferees hold not less than five per
cent. of the Shares in issue, Company B shall have the right to appoint and maintain in office
such natural person as Company B may from time to time nominate as a Director (and as a
member of each and any committee of the Board) and to remove any Director so appointed
and, upon his removal whether by Company B or otherwise, to appoint another Director in his
place. Company B Partners shall be deemed to be the second Director appointed pursuant to
this Clause 11.7.
11.8 For so long as the Founders or their respective Permitted Transferees each hold Shares, the
Founders shall have the right, acting jointly, to appoint and maintain in office such natural
person as the Founders, may from time to time acting jointly nominate as a Director (and as
a member of each and any committee of the Board) and to remove any Director so
appointed and, upon his removal whether by the Founders (acting jointly) or otherwise, to
appoint another Director in his place. Marek Fodor shall be deemed to be the first Founder
Director appointed pursuant to this Clause 11.8.
11.9 Appointment and removal of an Investor Director shall be by written notice to the
Company which shall take effect on delivery at its registered office or at any meeting of the
Board or committee thereof.
11.10 Appointment, removal and replacement of the Independent Director shall be by written
notice to the Company signed by each of the Founders, … and the Company B Funds
which shall take effect on delivery at its registered office or at any meeting of the Board or
committee thereof.
11.11 Appointment, removal and replacement of the Founder Director shall be by written notice
to the Company signed by each of the Founders which shall take effect on delivery at its
registered office or at any meeting of the Board or committee thereof.
11.12 The Company shall send to the Directors (in electronic form if so required):
(a) reasonable advance notice of each meeting of the Board (being not fewer than ten
Business Days) and each committee of the Board, such notice to be accompanied
by a written agenda specifying the business to be discussed at such meeting
together with all relevant papers. If necessary the agenda and relevant papers for
each such meeting may be provided separately to the notice, but in any event no
later than five Business Days before each such meeting; and
(b) as soon as practicable after each meeting of the Board (or committee of the Board)
a copy of the minutes.
11.13 The Company will reimburse the Directors and any observers appointed by the Investors
with the reasonable cost and out of pocket expenses properly incurred by them in respect of
attending meetings of the Company or carrying out authorised business on behalf of the
Company.
11.14 The parties agree that an Investor Director shall be under no obligation to disclose any
information or opportunities to the Company except to the extent that the information or
opportunity was passed to him expressly in his capacity as a Director.
12. INFORMATION RIGHTS
12.1 The Company shall for each month prepare management accounts (in a form approved by
the Investor Majority) with comparisons to budgets and containing trading and profit and
loss accounts, balance sheets, cash flow statements and forecasts and shall deliver them to
the Investors within 15 days after the end of each month. The first management accounts
shall be delivered to the Investors within 15 days after the end of the month in which
Completion takes place.
12.2 The Company shall at least 30 days prior to the beginning of each financial year prepare
and deliver to each Investor a detailed operating and capital budget and cash flow forecast
in respect of the next financial year in such form as the Investor Majority shall reasonably
require from time to time.
12.3 The audited accounts of the Company and audited consolidated accounts of the Group in
respect of each accounting period together with the relative audit and management letters
and all correspondence between the Company and the auditors of the Company concerning
the accounts, shall be completed and approved by the Board and delivered to the Investors
within three months after the end of the accounting period to which such audited accounts
relate. The first audited accounts will be produced by 31 March 2014. The audited
accounts shall be prepared by an accounting firm of international standing it being
understood that … is considered as such an accounting firm of
international standing.
12.4 The Company shall prepare a quarterly profit and loss, simplified balance sheet, cash flow
statement and a management report within 15 days after the end of each quarter in the
Company’s financial year.
12.5 The Company shall prepare a schedule of the Company’s issued share capital and any
warrants and/or options to acquire shares and/or convertible securities, broken down by
shareholder, optionholder, warrant holder and convertible securities holder (as appropriate)
and including the percentage of the fully diluted issue share capital held by each holder and
shall deliver such share capital schedule to the Investors within 21 days after the end of
each quarter in the Company’s financial year.
12.6 The Company shall provide the Investors promptly with such other information concerning
the Company and its business as the Investor Majority may reasonably require from time to
time.
12.7 Both the Company and the Founders shall promptly provide the Investors with full details
of any offer or proposed offer from any person wishing to enter into any Sale or purchase
any of the Company’s assets or share capital or loan capital which may from time to time
be brought to its or their attention.
12.8 Upon reasonable notice (being not less than five Business Days) and subject to the
provisions of Clause 19, any Investor, any Investor Director or any of their representatives
or professional advisers will be entitled to attend the Company’s premises to examine the
Books and Records of the Company and to discuss the Company’s affairs, finances and
accounts with its Directors, officers and senior employees.
12.9 If the Company does not comply with its obligations in Clauses 12.1 to 12.8, the Investors
shall be entitled to nominate a firm of accountants at the Company’s expense, who will be
entitled to attend the Company’s premises to examine the Books and Records of the
Company and to discuss the Company’s affairs, finances and accounts with its Directors,
officers and senior employees. Each Founder and the Company separately undertakes to
the Investors to co-operate with any accountants or representatives appointed by them
pursuant to this Clause 12.8.
12.10 Any Investor Director and any observers appointed by the Investors shall be at liberty from
time to time to make full disclosure to its appointing Investor of any information relating to
the Company.
12.11 Each Investor shall be at liberty from time to time to make such disclosure:
(a) to its partners, trustees, shareholders, unitholders and other participants and/or to
any Member of the same Group as an Investor for the purposes of, but not limited
to, reviewing existing investments and investment proposals;
(b) to any lender to the Company and/or to any shareholder of the Company;
(c) about the Company as shall be required by law and any regulatory authority to
which any Investor is subject;
(d) to the Company’s auditors and/or any other professional advisers of the Company;
(e) to the Investor’s professional advisers and to the professional advisers of any
person to whom the Investor is entitled to disclose information pursuant to this
Clause 12.11,
in relation to the business affairs and financial position of the Company as it may in its
reasonable discretion think fit.
13. MATTERS REQUIRING CONSENT OF THE INVESTORS OR THE INVESTOR
DIRECTORS
13.1 Each of the Shareholders (who are a party to this agreement) shall exercise all voting rights
and powers of control available to him in relation to the Company to procure that:
(a) save with Investor Director Consent, the Company shall not effect any of the
matters referred to in Part 1 of Schedule 6; and
(b) save with the prior written consent of the Investor Majority, the Company shall not
affect any of the matters referred to in Part 2 of Schedule 6.
13.2 As a separate obligation, severable from the obligations in Clause 13.1, the Company
agrees that:
(a) save with Investor Director Consent, the Company shall not effect any of the
matters referred to in Part 1 of Schedule 6; and
(b) save with the prior written consent of the Investor Majority, the Company shall not
affect any of the matters referred to in Part 2 of Schedule 6.
13.3 An Investor Director shall be authorised to communicate in writing the consent of the party
which he represents to any of the matters referred to in Part 2 of Schedule 6.
14. BUSINESS UNDERTAKINGS
14.1 The Founders will promote the best interests of the Company and, so far as it lies within
their respective power to do so, ensure that the Business is conducted in accordance with
the Business Plan and with good business practice.
14.2 The Company shall apply the proceeds of the subscription by the Investors for the New
Shares in the furtherance of the Business in accordance with the Business Plan and the
budgets adopted pursuant to Clause 13 on the terms of this agreement.
14.3 Each of the Founders and the Company undertake to the Investors to procure, so far as it
lies within their respective power to do so, that the Founders and the Company will comply
with the requirements set out in Schedule 7.
15. SALE OR IPO
15.1 It is the parties’ intention to effect a Sale or IPO as soon as practicable and, in any event, no
later than 31 July 2018. The parties agree to keep one another informed of all and any
developments which might lead to any Sale or IPO.
15.2 Each party acknowledges and agrees that upon a Sale or IPO, the Investors shall not be
obliged to give warranties or indemnities (except a warranty as to title to the shares held by
such Investor).
15.3 If a Sale or IPO is not achieved by 31 July 2018 then the Company shall, if required by the
Investor Majority at the Company’s expense, appoint an investment bank (to be agreed
between the Investor Majority and the Founders) to report on exit opportunities and
strategy and copies of such reports shall be made available to the Investors (at the
Company’s cost).
15.4 It is hereby agreed by the parties that, on an IPO, the holders of Ordinary Shares shall be
required to enter into an agreement requiring them to:
(a) retain such number of their shares in the Company held at the time of the IPO for
such period after the IPO (being no more than 180 days) as is required by the
Listing Rules or the rules and requirements of the relevant recognised investment
exchange or as is otherwise required by …, Company B and/or the Company’s
brokers on the IPO; and
(b) have regard to the recommendation of the Company’s brokers on an IPO in
determining their respective sale of shares upon the Company’s IPO and shall
make such determination with a view to ensuring the success of the IPO.
15.5 It is agreed that in the event of an initial public offering of the Company’s shares on a US
stock exchange (including NASDAQ) the Investors shall be entitled to registration rights
on terms to be agreed which shall include:
(a) two demand registration rights commencing six months after the Company’s initial
public offering;
(b) unlimited piggy back registrations on all registrations by the Company for its own
account; and
(c) all expenses of a registration will be payable by the Company including the legal
costs of one professional firm appointed to act on behalf of the Investors.
16. FURTHER ISSUE AND TRANSFER OF SHARES
16.1 During the four year period commencing on the Completion Date, each of the Founders
undertakes to the Investors that he shall not Dispose of any shares in the capital of the
Company to any person except:
(a) in the case of a Founder, where such Disposal is of not more than 10 per cent. of
the total Shares held by such Founder and his Permitted Transferees as at the
Completion Date, subject to the article 16 of the New Articles;
(b) pursuant to articles 15 (Permitted Transfers), 19 (Compulsory Transfer – Founders),
20 (Mandatory Offer on Change of Control) or 22 (Drag-Along) of the New
Articles;
(c) with the prior written consent of the Investor Majority; or
(d) where required so to do pursuant to the New Articles or this agreement.
16.2 Without prejudice to Clause 16.1, unless agreed otherwise by Investor Director Consent,
none of the Founders shall effect any Disposal described in Clause 16.1 nor shall the
Company issue any shares or equity securities (as defined in section 560 of the Act), to any
person who is not a party to this agreement without first obtaining from the transferee or
subscriber a Deed of Adherence save in respect of the grant or exercise of an option
pursuant to the Share Option Plan.
16.3 The Deed of Adherence shall be in favour of the Company, the Investors and any other
parties to this agreement and shall be delivered to the Company at its registered office and
to the Investors. Subject to Clause 16.2, no share transfer or issue of shares shall be
registered unless such Deed of Adherence has been delivered.
16.4 Any Shareholder to whom Shares have been transferred to in accordance with the
provisions of this agreement and the New Articles and who has executed and delivered a
Deed of Adherence in accordance with Clause 16.3 shall be entitled to rely on the
provisions of this agreement as if it were a party hereto.
17. RESTRICTIVE COVENANTS
17.1 For the purpose of assuring to the Investors the value of the Business and the full benefit of
the goodwill of the business of the Company, each of the Founders hereby undertakes and
covenants with the Investors and the Company that (save for any interest in the shares or
other securities of a company traded on a securities market so long as such interest does not
extend to more than one per cent. of the issued share capital of the company or the class of
securities concerned or save with the written consent of … and Company B) he shall not:
(a) while he is a Director or Employee carry on or be concerned, engaged or interested
directly or indirectly (in any capacity whatsoever) in any trade or business
competing with the trade or business of the Company as carried on at the time or,
in relation to any trade or business of the Company that he has been engaged or
involved in, at any time during the Period; or
(b) during the period of 18 months commencing on the Termination Date:
(i) within the following countries (i) Austria; (ii) Belgium; (iii) Bulgaria; (iv)
Croatia; (v) Cyprus; (vi) Czech Republic; (vii) Cyprus; (viii) Denmark; (ix)
Estonia; (x) Finland; (xi) France; (xii) Germany; (xiii) Greece; (xiv)
Hungary; (xv) Ireland; (xvi) Italy; (xvii) Latvia; (xviii) Lithuania; (xix)
Luxembourg; (xx) Malta; (xxi) Netherlands; (xxii) Poland; (xxiii) Portugal;
(xxiv) Romania; (xxv) Slovakia; (xxvi) Slovenia; (xxvii) Spain; (xxviii)
Sweden; (xxix) United Kingdom; (xxx) the United States of America;
(xxxi) Canada; (xxxii) Australia; (xxxiii) New Zealand; (xxxiv) Hong
Kong; (xxxv) South Africa; (xxxvi) Mexico; (xxxvii) Switzerland; and
(xxxviii) Norway, carry on or be concerned, engaged or interested directly
or indirectly in any capacity whatsoever in any trade or business competing
with the business carried on by the Company in which he shall have been
engaged or involved at any time during the Period;
(ii) either on his own behalf or in any other capacity whatsoever directly or
indirectly do or say anything which may lead to any person ceasing to do
business with the Company on substantially the same terms as previously
(or at all);
(iii) either on his own behalf or in any other capacity whatsoever directly or
indirectly endeavour to entice away from the Company or solicit any
person, firm or company who was a client, customer, supplier, agent or
distributor of the Company during the Period with whom he shall have
been engaged or involved by virtue of his duties during the Period;
(iv) either on his own behalf or in any other capacity whatsoever directly or
indirectly have any dealings with any person, firm or company who was a
client, customer, supplier, agent or distributor of the Company during the
Period with whom he shall have been engaged or involved by virtue of his
duties during the Period; or
(v) either on his own behalf or in any other capacity whatsoever directly or
indirectly employ, engage or induce, or seek to induce, to leave the service
of the Company any person who is or was a Key Employee with whom he
shall have had dealings during the Period whether or not such person
would commit any breach of his contract of employment by reason of so
leaving the service of the Company or otherwise; or
(c) at any time after the Termination Date represent himself as being in any way
currently connected with or interested in the business of the Company (other than
as a Shareholder, Director, or Employee if that be the case).
17.2 Each of the restrictions contained in each paragraph of Clause 17.1 is separate and distinct
and is to be construed separately from the other such restrictions. Each of the Founders
hereby acknowledges that he considers such restrictions to be reasonable both individually
and in the aggregate and that the duration extent and application of each of such restrictions
are no greater than is necessary for the protection of the goodwill of the businesses of the
Company and that the consideration paid by the Investors for the New Shares applied for in
this agreement takes into account and adequately compensates him for any restriction or
restraint imposed thereby. However, if any such restriction shall be found to be void or
unenforceable but would be valid or enforceable if some part or parts thereof were deleted
or the period or area of application reduced, each of the Founders hereby agrees that such
restriction shall apply with such modification as may be necessary to make it valid.
18. WITHHOLDINGS, DEDUCTIONS, ETC
18.1 To the extent permitted by law, the subscription price payable by any Investor for the
Shares shall be deemed to have been reduced by the amount of any payment made by the
Warrantors to such Investor for the breach of any Warranty or any indemnification
obligation under this agreement.
18.2 All sums payable by any Warrantor under this agreement (including the Schedules) shall be
paid free and clear of all deductions or withholdings unless the deduction or withholding is
required by law, in which event the Warrantor shall pay such additional amount as shall be
required to ensure that the net amount received by the Investors under this agreement
(including the Schedules) will equal the full amount which would have been received by it
had no such deduction or withholding been required to be made.
19. CONFIDENTIALITY
19.1 Subject to Clauses 12.10 and 12.11, each of the parties agrees to keep secret and
confidential and not to use disclose or divulge to any third party or to enable or cause any
person to become aware of (except for the purposes of the Company’s business) any
confidential information relating to the Company including but not limited to Intellectual
Property (whether owned or licensed by the Company), lists of customers, reports, notes,
memoranda and all other documentary records pertaining to the Company or its business
affairs, finances, suppliers, customers or contractual or other arrangements but excluding
any information which is in the public domain (otherwise than through the wrongful
disclosure of any party) or which they are required to disclose by law or by the rules of any
regulatory body to which the Company is subject.
19.2 The provisions of Clause 19.1 shall not apply to:
(a) an Investor in regards of the disclosure of confidential information to a bone fide
potential purchaser of the Shares held by such Investor and its Permitted
Transferees; or
(b) any party regarding the disclosure of confidential information to its professional
advisors or lenders or any Taxing Authority,
in each case (other than in the case of any disclosure required to be made to any Taxing
Authority) provided that the recipient of such confidential information has entered into a
confidentiality agreement such that it is bound by the same obligations as set forth in
Clause 19.1, notwithstanding however that the disclosing party shall remain liable for any
breach of confidentiality by the recipient of such confidential information.
20. ANNOUNCEMENTS
20.1 Except in accordance with Clauses 12.10, 12.11 or 20.2, the parties shall not make any
public announcement or issue a press release or respond to any enquiry from the press or
other media concerning or relating to this agreement or its subject matter (including but not
limited to the Investors’ investment in the Company) or any ancillary matter.
20.2 Notwithstanding Clause 20.1, any party may:
(a) make any press release to the effect that it has made an investment in the Company
and/or that it is a shareholder in the Company without obtaining the prior approval
of any other parties;
(b) after consultation with the other parties and with the prior written approval of the
Investor Majority and the Board; or
(c) if and to the extent required by:
(i) law;
(ii) any securities exchange on which either party’s securities are listed or
traded; or
(iii) any regulatory or governmental or other authority with relevant powers to
which either party is subject or submits, whether or not the requirement has
the force of law,
make or permit to be made an announcement concerning or relating to this agreement or its
subject matter or any ancillary matter.
21. COSTS AND EXPENSES
21.1 At Completion, the Company shall pay all legal and due diligence fees of … in
relation to the negotiation, preparation and execution of this agreement and each document
referred to in it and other agreements forming part of the transaction, subject to a maximum
amount of €30,000, exclusive of VAT.
21.2 At Second Completion, the Company shall pay all legal and due diligence fees of the
Company B Funds in relation to the negotiation, preparation and execution of this agreement
and each document referred to in it and other agreements forming part of the transaction,
subject to a maximum amount of €30,000, exclusive of VAT.
21.3 The Company, the Founders and the other Investors shall bear their own costs and
disbursements incurred in the negotiations leading up to and in the preparation of this
agreement and of matters incidental to this agreement.
22. SURVIVAL AND CESSATION OF OBLIGATIONS OF THE FOUNDERS
The obligations on a Founder under Clauses 6 (Warranties), 17 (Restrictive Covenants), 19
(Confidentiality) and Schedule 5 (Warranties) shall survive any transfer by him of all or
any Shares and shall survive him ceasing to be a Director or Employee of or consultant to
the Company but otherwise upon a Founder and his Permitted Transferees ceasing to hold
Shares and ceasing to be a Director or Employee he shall have no further obligation or
liability hereunder but without prejudice to the due performance by him of all obligations
up to the date of such cessation.
23. EFFECT OF CEASING TO HOLD SHARES
A party shall cease to be a party to this agreement for the purpose of receiving benefits and
enforcing his rights with effect from the date he and his Permitted Transferees cease to hold
or beneficially own any Shares (but without prejudice to any benefits and rights enjoyed
prior to such cessation).
24. TERMINATION
24.1 This agreement shall terminate with immediate effect:
(a) upon written notice from … to the other Investors, the Founders and the
Company if Completion has not occurred by …, subject to
payment by the Company of the fees detailed in Clause 20.1;
(b) upon the liquidation or dissolution of the Company, subject to distribution of the
proceeds from such Exit or Sale in accordance with the New Articles; or
(c) upon the occurrence of an Exit or Sale, subject to distribution of the proceeds from
such Exit or Sale in accordance with the New Articles.
24.2 The termination of this agreement will be without prejudice to the benefits and rights
accumulated by each party prior to its termination.
24.3 The provisions of this Clause 24.3 and Clauses 1, 2, 7, 17, 19 20, 22, 24.2, 25, 26, 27, 30,
32, 34, 35, 36, 37 shall survive termination of this agreement.
25. CUMULATIVE REMEDIES
The rights, powers, privileges and remedies conferred upon the Investors in this agreement
are cumulative and are not exclusive of any other rights, powers, privileges or remedies
provided by law.
26. WAIVER
The express or implied waiver by any party to this agreement of any of its rights or
remedies arising under this agreement or by law shall not constitute a continuing waiver of
the right or remedy waived or a waiver of any other right or remedy.
27. ENTIRE AGREEMENT
27.1 This agreement and the documents referred to or incorporated in it constitute the entire
agreement between the parties relating to the subject matter of this agreement and
supersedes and extinguishes any prior drafts, agreements, undertakings, representations,
warranties and arrangements of any nature whatsoever, whether or not in writing, between
the parties in relation to the subject matter of this agreement.
27.2 Each of the parties acknowledges and agrees that it has not entered into this agreement in
reliance on any statement or representation of any person (whether a party to this
agreement or not) other than as expressly incorporated in this agreement and the documents
referred to or incorporated in this agreement.
27.3 Without limiting the generality of the foregoing, each of the parties irrevocably and
unconditionally waives any right or remedy it may have to claim damages and/or to rescind
this agreement by reason of any misrepresentation (other than a fraudulent
misrepresentation) having been made to it by any person (whether party to this agreement
or not) and upon which it has relied in entering into this agreement.
27.4 Each of the parties acknowledges and agrees that the only cause of action available to it
under the terms of this agreement and the documents referred to or incorporated in this
agreement shall be for breach of contract.
27.5 Nothing contained in this agreement or in any other document referred to or incorporated in
it shall be read or construed as excluding any liability or remedy as a result of fraud.
28. VARIATION
Any variation of this agreement is valid only if it is in writing and signed by the Company
and by Shareholders holding between them at least 95 per cent. of the issued share capital
of the Company (including … and the Company B Funds), in which event such change
shall be binding against all of the parties hereto provided that if such change would impose
any new obligations on a party or increase any existing obligation, the consent of the
affected party to such change shall be specifically required.
29. NO PARTNERSHIP
Nothing in this agreement is intended to or shall be construed as establishing or implying
any partnership of any kind between the parties.
30. ASSIGNMENT AND TRANSFER
30.1 Subject to Clause 30.3, this agreement is personal to the parties and no party shall:
(a) assign any of its rights under this agreement;
(b) transfer any of its obligations under this agreement;
(c) sub-contract or delegate any of its obligations under this agreement; or
(d) charge or deal in any other manner with this agreement or any of its rights or
obligations.
30.2 Any purported assignment, transfer, sub-contracting, delegation, charging or dealing in
contravention of Clause 30.1 shall be ineffective.
30.3 An Investor may assign the whole or part of any of its rights in this agreement to any
person who has received a transfer of Shares from such Investor in accordance with the
New Articles and has executed a Deed of Adherence.
31. RIGHTS OF THIRD PARTIES
31.1 Subject to Clause 31.2, this agreement does not confer any rights on any person or party
(other than the parties to this agreement) pursuant to the Contracts (Rights of Third Parties)
Act 1999.
31.2 The general partner of an Investor or the management company authorised from time to
time to act on behalf of an Investor or another person or persons nominated by an Investor,
shall be entitled to enforce all of the rights and benefits under this agreement at all times as
if party to this agreement.
32. CONFLICT BETWEEN AGREEMENTS
Subject to any applicable law, in the event of any ambiguity or conflict between this
agreement and the New Articles, the terms of this agreement shall prevail as between the
Shareholders and in such event the Shareholders shall procure such modification to the
New Articles as shall be necessary to resolve any such ambiguity or conflict as soon as
reasonably possible.
33. COUNTERPARTS
This agreement may be executed in any number of counterparts, each of which shall
constitute an original, and all the counterparts shall together constitute one and the same
agreement.
34. NOTICES
34.1 Any communication and/or information to be given in connection with this agreement shall
be in writing in English and shall be: (i) delivered by hand or sent by courier; and (ii) with a
copy sent by email, to the address or facsimile number and email address set forth against a
party’s name in Schedule 1 (or in each such case such other address as the recipient may
notify on five Business Days’ notice to the other parties for such purpose).
34.2 A communication sent according to Clause 34.1 shall be deemed to have been received at
the time of delivery except that if a communication is received between 5.30 pm on a
Business Day and 9.30 am on the next Business Day, it shall be deemed to have been
received at 9:30 am on the second of such Business Days.
35. SEVERANCE
35.1 If any provision of this agreement is held to be invalid or unenforceable by any judicial or
other competent authority, all other provisions of this agreement will remain in full force
and effect and will not in any way be impaired.
35.2 If any provision of this agreement is held to be invalid or unenforceable but would be valid
or enforceable if some part of the provision were deleted, the provision in question will
apply with the minimum modifications necessary to make it valid and enforceable.
36. GOVERNING LAW
This agreement (and any dispute or claim relating to it or its subject matter (including noncontractual
claims)) is governed by and is to be construed in accordance with English law.
37. JURISDICTION
The parties irrevocably agree that the courts of England and Wales shall have exclusive
jurisdiction to settle any claim, dispute or issue (including non-contractual claims) which
may arise out of or in connection with this agreement.
38. CONFIRMATION BY FOUNDERS
Each of the Founders confirms to the Investors that, for the purposes of entering into the
transactions contemplated by this agreement:
(a) he has entered into such transactions entirely on the basis of his own assessment of
the risks and effect thereof;
(b) he is owed no duty of care or other obligation by the Investors; and
(c) insofar as he is owed any such duty or obligation (whether in contract, tort or
otherwise) by the Investors he hereby waives, to the extent permitted by law, any
rights (save in the case of any fraudulent misrepresentation) which he may have in
respect of such duty or obligation.
39. CORPORATE SOCIAL RESPONSIBILITY
39.1 The Company acknowledges that the Company B Funds make their investments and monitor
their shareholdings in consideration of environmental, social, corporate and good corporate
governance standards, such as:
(a) use of the natural resources;
(b) environmental impact;
(c) employment;
(d) social dialogue;
(e) human resources;
(f) attention paid to people;
(g) relationship with suppliers and clients;
(h) relationship with the region and “stakeholders” in general;
(i) governance; and
(j) management.
39.2 The Founders and the Company undertake to adopt a progress-making approach so that
the Company and its Subsidiary, as the case may be, operate their business in a way
which reconciles economic interest and corporate social responsibility. In relation to the
Founders, this obligation is subject to their fiduciary and statutory duties as directors of
the Company.
39.3 The Company B Funds shall have the right, once a year at its own costs, to mandate a
reputable auditing firm for the purpose of conducting an audit of the Company’s and/or
the Subsidiary’s environmental, social and corporate governance matters.
39.4 In addition, the Company shall deliver to Company B an annual report, within the ninety (90)
days of the annual accounts closing, describing all specific actions taken in relation to the
environmental, social and corporate governance matters, to be drafted on the basis of a
framework attached hereto as Schedule 10 or under any other form mutually agreed
between the Company and Company B.
This agreement has been executed and delivered as a deed on the date shown on the first page.
EXECUTED and DELIVERED as a
DEED by … acting by …, managing director of
…
……………………………………………….
in the presence of:
……………………………………………
Witness’ signature
……………………………………………
Witness’ name
……………………………………………
……………………………………………
Witness’ address
……………………………………………
Witness’ occupation