Regarding joint ownership in Entrepedia AS, Org. no 919725109
THIS SHAREHOLDERS’ AGREEMENT (the "Agreement") is made on this [=DATE] by and between:
(hereinafter jointly referred to as the "Founders" or, and individually referred to as a "Founder")
(hereinafter together with Founders jointly referred to as the "Shareholders" or, and individually referred to as a "Shareholder", which shall also include any person who becomes a shareholder in the Company after the Effective Date and who accedes this Agreement as a Shareholder by duly executing and delivering the Deed of Adherence.)
NOW, THEREFORE, the Shareholders have agreed as follows:
As used in this Agreement, unless expressly otherwise stated or evident in the context, the following terms shall have the following meaning:
shall have the meaning ascribed to such term in the introductory section.
"Articles of Association"
shall mean the articles of association of the Company.
shall have the meaning ascribed to such term in Clause 4.4.
shall mean the Norwegian limited liability companies act of 13 June 1997 no. 44.
shall have the meaning ascribed to such term in Clause 4.2.
“Founder” or “Founders”
Shall have the meaning ascribed to such term in the introductory section.
shall mean the general meeting of the Company.
shall have the meaning ascribed to such term in Clause 4.5.
"Sales Notice Period"
shall mean shares of any class in the share capital of the Company.
"Shareholder" or "Shareholders"
shall mean any company or entity which from time to time is directly or indirectly controlled by the Company through ownership interests of more than 50 %, or whether the Company directly or indirectly controls more than 50 % of the voting rights.
shall have the meaning ascribed to such term in Clause 2.1.
shall have the meaning ascribed to such term in Clause 4.3.
shall mean any sale or other voluntary or involuntary transfer of Shares.
The Company's board of directors (“Board”) shall consist of 3-7 board members. Each Shareholder holding more than 10% of all Shares shall have the right to appoint one board member. The rest of the board members will be elected by the general meeting of the Company.
Directors appointed by the employees will come in addition to the directors appointed by the Shareholders pursuant to this Clause 2.1, cf. Section 6-4 of the Companies Act.
Each of the Shareholders shall instruct their respective representative(s) in accordance with the terms and conditions of this Agreement and shall be obligated to immediately remove and replace any directors appointed by such Shareholder or Shareholders not acting in accordance with such instructions, subject only to such director's fiduciary legal obligations as a director.
The terms and conditions set out above shall to the extent practical and possible, apply mutatis mutandis to the board of directors of any potential Subsidiary (the "Subsidiary Boards") and the Shareholders shall take necessary actions to implement this.
All transactions between (a) the Company and any of its direct or indirect subsidiaries, and (b) either of the Shareholders and their respective affiliates, as defined by the Companies Act Section 1-5, shall be based on arms’ length terms.
The shareholders in the Shareholder shall procure that the relevant Shareholder complies with its contractual obligations hereunder and are also directly bound by certain provisions set out herein.
Any Transfer shall be subject to the restrictions set out in this Agreement and the Articles of Association. In case of any conflict between the Agreement and the Articles of Association, the provisions set out in the Agreement shall prevail.
The restrictions set out in Clause 4.2 (Right of first refusal) and Clause 4.3 (Co-sale right (tag-along right)) shall not apply to Transfers by any of the Shareholders to any company or other legal entity, or any relative who is an affiliate within the meaning of the Companies Act Section 1-5.
The Shareholders agree that the restrictions set forth in this Clause 4 shall apply mutatis mutandis to any transfer of shares in any of the Shareholders directly.
Without prejudice to the provisions set forth in Clause 4.3, and other than in respect of a Transfer pursuant to Clauses 4.4 (Drag-along right for the Shareholders) or 4.5 (Listing of the Shares) any Transfer of Shares (the "Transferring Shares") by any of the Shareholders (the "Transferring Party") shall trigger a right of first refusal for the other Shareholders to purchase the Transferring Shares. If more than one Shareholder wishes to purchase Shares, the Shares shall be divided among them according to their pro rata shareholding of the Company at the time of exercising the right.
The Transferring Party shall in writing notify the Board of any intended Transfer and its terms and conditions. The notice shall include, without limitation, (i) the name and address of the proposed transferee, (ii) the total number of Transferring Shares, and (iii) the consideration and the terms and conditions of payment contemplated by the proposed transfer (the "Sales Notice"). The Board shall as soon as practicably possible forward the Sales Notice to the other Shareholders.
If any other Shareholder wishes to exercise its right of first refusal pursuant to this Clause 4.2, it must so notify the Board and the Transferring Party within 21 days from the receipt of the Sales Notice (the "Sales Notice Period"), by a written notice setting forth its irrevocable election to exercise its right of first refusal ("Exercise Notice").
The redemption amount to be paid for the Transferring Shares shall be equal to what is defined in the Sales Notice and be due and payable on the date falling 14 days after the Exercise Notice was sent.
If the right of first refusal is not exercised within the expiration of the Sales Notice Period, the Transferring Party shall for a period of 60 days following the expiration of the Sales Notice Period be entitled to transfer the number of Transferring Shares set out in the Sales Notice. Any Transfer of Shares subsequent to this period may only take place following the issuance of a new Sales Notice in accordance with this Clause 4.2.
Without prejudice to the provisions set forth in Clause 4.2 (Right of first refusal), and other than in respect of a Transfer pursuant to Clause 4.4 (Drag-along right for the Shareholders or Clause 4.5 (Listing of the Shares), any Transfer of Transferring Shares by a Transferring Party shall trigger a right for the other Shareholders to, together with the Transferring Party, sell in such a transfer, at the same price and on the same terms as the Transferring Party, a portion of their Shares calculated as the percentage of their Shares in the share capital corresponding to the percentage of the Transferring Shares in respect to the entire shareholding of the Transferring Party (the "Tagged Shares"), or, if the proposed purchaser do not wish to purchase all the Tagged Shares in addition to the Tagged Shares, to sell, in such a transfer, at the same price and on the same terms as the Transferring Party, a pro rata number of such Transferring Shares as the third party transferee proposes to purchase from the Transferring Party calculated on the Shareholders total shareholding in the Company. The Transferring Party shall have an obligation to inform the prospective third-party transferee of the tag-along right pursuant to this Clause 4.3 prior to entering into an agreement with the third party transferee.
The Transferring Party shall in writing notify the Board through issuance of a Sales Notice with respect to any intended Transfer of Shares that may trigger a co-sale right pursuant to this Clause 4.3. The Board shall as soon as practicably possible forward the Sales Notice to the other Shareholders.
If any of the other Shareholders wishes to exercise its co-sale right pursuant to this Clause 4.3, or right of first refusal in accordance with Clause 4.2, it must so notify the Board and the Transferring Party in writing within expiry of the Sales Notice Period, by a written notice setting forth its irrevocable decision to either require the Transferring Party to add the Tagged Shares to the proposed transaction, or to exercise its right of first refusal pursuant to Clause 4.2.
If the co-sale right is not exercised within the expiration of the Sales Notice Period, the Transferring Party shall for a period of 60 days following the expiration of the Sales Notice Period be entitled to Transfer the number of Transferring Shares set out in the Sales Notice. Any Transfer of Shares subsequent to this period may only take place following the issuance of a new Sales Notice.
In the event that, by the end of the Sales Notice Period, either of the other Shareholders have notified its intention to add the Tagged Shares in the proposed transfer pursuant this Clause 4.3, any transfer by the Transferring Party of the Transferring Shares and the sale by the other Shareholders of the Tagged Shares shall take place, subject to the compliance with any applicable antitrust law or regulation, simultaneously and on the closing date and place which shall be communicated in writing by the Transferring Party.
The Tagged Shares shall be delivered to the applicable third party transferee, free and clear of all liens or other encumbrances, together with such other documents and instruments of transfer as the Transferring Party and the third party transferee may reasonably agree on or request, including documents providing for pro rata representations, warranties and indemnifications for the benefit of the third party transferee, as well as indemnities and payment obligations to the third party transferee. All costs and expenses in connection with such transfer shall be borne by the Shareholders on a pro rata basis, to the extent that such costs and expenses are not borne by the purchaser according to the relevant sale and purchase agreement. For avoidance of doubt, any individual cost including legal and advisory fees will be borne by the relevant Shareholder.
In the event of an offer to buy all the Shares in the Company, put forward by an external party not being a Shareholder, one or several Shareholders who together represents more than two thirds (2/3) of the total amount of Shares in the Company shall have the right to demand the sale of all the outstanding Shares for cash, cash equivalents or consideration shares listed on an internationally recognised stock exchange in accordance with the terms of this Clause 4.4 (the "Drag-along Right").
The Drag-along Right is exercised by written notice (a "Buyout Notice") to the Company and the other Shareholders, notifying the other Shareholders of the bona fide offer to purchase all the outstanding Shares and that the Shareholders wishes to exercise the Drag-along Right.
Upon receipt of a Buyout Notice, each Shareholder receiving such notice shall be under an immediate obligation to (i) sell all its Shares in the transaction contemplated by the Buyout Notice on the same terms and conditions; and (ii) otherwise to take all necessary action to cause the consummation of such transaction, including voting its Shares in favour of such transaction, accepting reasonable representation and warranties, non-competition restrictions and other undertakings in connection with such sale and not exercising any appraisal rights in connection therewith.
In the event that the transaction contemplated by the Buyout Notice has not been completed within 90 days after the date of delivery of the Buyout Notice, the obligations of the Shareholders under this Clause 4.4 with respect to such Buyout Notice shall terminate, subject, however, to the right to deliver further Buyout Notices.
Potential buyers of all the outstanding shares in the Company shall, subject to undertaking satisfactory confidentiality obligations, be given the opportunity to perform a legal, financial, technical and commercial due diligence review of the Company, as well as access to relevant information and documentation.
All costs and expenses in connection with such transfer shall be borne by the Shareholders on a pro rata basis, to the extent that such costs and expenses are not borne by the purchaser according to the relevant sale and purchase agreement. For avoidance of doubt, any individual cost including legal and advisory fees will be borne by the relevant Shareholder.
If any of the Shareholders fail to comply with the terms of this Clause 4.4 (a "Defaulting Party"), the Company represented by the Chairman of the board of directors shall be constituted the agent of each Defaulting Party for the sale of the Shares in accordance with the Buy-out Notice and the Chairman of the board of directors may authorise any person to execute and deliver on behalf of such Defaulting Party the necessary transfer documents and the Company may receive the purchase consideration in trust for each Defaulting Party and cause the proposed purchaser to be registered as the holder of such Shares. The receipt by the Company of the purchase consideration shall constitute a good and valid discharge of the obligations of the proposed purchaser to pay such purchaser price to the Defaulting Party. The Company shall not pay the consideration to the Defaulting Party until it has delivered to the Company a written confirmation of its acceptance of the transaction as set out in the Buy-out Notice. Failure to comply with this Clause 4.4 shall always be considered a material breach of the Agreement.
One or several Shareholders who together represents more than two thirds (2/3) of the total amount of Shares in the Company shall have the right to demand a listing of the Shares on a Norwegian or an internationally recognised stock exchange, regulated market or multilateral trading facility (including without limitation Oslo Børs, Euronext Expand and Euronext Growth) in accordance with the terms of this Clause 4.5 (an "IPO").
The Shareholders accept to use all reasonably efforts in the preparation and completion of an IPO in accordance with the terms of this Agreement, including to contribute to make changes in the capital structure of the Company to facilitate an IPO or participate and contribute to the transfer of the business of the Company of or the Shares to a new company that shall be used as the company to be listed in the IPO, and at the same time participate actively in the process and influence the decisions that are made.
On the extraordinary general meeting the Shareholders shall resolve the issuance of new shares and other amendments necessary to satisfy the requirements by law and from the market at the time of an IPO, including the removal of the restrictions on share transfers contained in the articles of association.
The Shareholders undertake to accept customary and reasonable lock-up provisions as long as this is recommended by the arranger.
Notwithstanding anything to the contrary in this Agreement, a Shareholder shall not Transfer any Shares unless and until the transferee has signed a deed of adherence in the form set out in Appendix 1, pursuant to which the transferee shall assume all rights and obligations of the selling Shareholder pursuant to this Agreement. The obligation to sign and deliver the deed of adherence shall also apply to any person who becomes an owner of Shares in the Company otherwise than through a Transfer, including subscription of new shares.
If a transferor only transfers part of its Shares, the transferee shall assume the rights and obligations of the transferee in relation to such part of the Shares. The transferor shall still be subject to the rights and obligations of this Agreement as for the remaining Shares.
Certain special claw back conditions apply for Shares owned by each Founder (“Founder Shares”)
The Founder Shares held directly or indirectly by each Founder, shall vest as follows: 25% to vest one year from the date of this agreement and the remaining 75% to vest in equal monthly installments over the following 36 months (one forty-eight per month). Those Shares that are vested is defined as “Vested Founder Shares”, the Shares that are not vested is defined as “Unvested Founder Shares”. The purchase right of the Shareholders specified in this Clause shall apply only to unvested Founder Shares.
If the employment relationship of any Founder is terminated with effect before 4 years from the date of this Agreement by the Founder, or by the Company as a consequence of material breach of the Founder’s duties according to its employment agreement which qualifies for termination according to the Norwegian Work Environment Act Section 15-14 (Avskjed), then the Company or, if decided by the Board, alternatively the other Shareholders, shall have the right, but no obligation, to buy all Unvested Founder Shares of the terminating Founder. In case of such termination of the employment of a Founder, the Boardcan either buy the Unvested Founder Shares on behalf of the Company (which then the Shares becomes treasury Shares) or inform the other Shareholders in writing about the option to buy the Unvested Founder Shares. Those of the Shareholders who wants to exercise their option are required to give notification to the Board within 1 (one) month after reception of information from the Board. If the option is exercised by more than one Shareholder, the Unvested Founder Shares shall be divided among them according to their pro rata shareholding of the Company at the time of exercising the right. The purchase price under this clause shall be the subscription price the Founder originally paid for the Unvested Founder Shares.
If the employment relationship of any Founder is terminated with effect before 4 years from the date of this agreement for other reasons than those described in Clause 22.214.171.124, then the Company or, if decided by the Board, alternatively the other Shareholders, shall have the right, but no obligation, to buy all Unvested Founder Shares of the terminating Founder. In case of such termination of the employment of a Founder, the Boardcan either buy the Unvested Founder Shares on behalf of the Company (which then the Shares becomes treasury Shares) or inform the other Shareholders in writing about the option to buy the Shares. Those of the Shareholders who wants to exercise their option are required to give notification to the Board within 1 (one) month after reception of information from the Board. If the option is exercised by more than one Shareholder, the Unvested Founder Shares shall be divided among them according to their pro rata shareholding of the Company at the time of exercising the right. The purchase price under this clause shall be equal to the subscription price per share used in the latest share capital increase in the Company
The Company may acquire shares without triggering Right of first refusal as defined in Clause 4.2.
The Company may Transfer Shares (treasury shares) without triggering the Co-Sale right as defined in Clause 4.3.
In the event that any of the Shareholders is in material breach of its obligations pursuant to this Agreement, and such breach has not been remedied by the defaulting Shareholder within 21 days of written notice from the Board, then the other Shareholders shall be informed and have a right, but no obligation, to acquire the Shares held by such defaulting Shareholder. The rights may be enforced individually. The redemption amount to be paid for the Shares shall be equal to the lower of (i) 75% of fair market value determined by one or more independent experts, or (ii) 75% of the subscription price per share used in the latest share capital increase in the Company. This right is exercised by written notice to the Board and the defaulting Shareholder within 21 days following the expiry of the 21 days notice period. If the right is exercised by more than one Shareholder, the Shares shall be allocated among the Shareholders who have exercised their rights to acquire the Shares of the defaulting Shareholder on a pro rata basis in accordance with their ownership interest in the Company as per the date when the right is exercised.
If any of the Shareholders is in material breach of its obligations pursuant to this Agreement, such Shareholder shall be considered a Defaulting Party and the terms and conditions set out in Clause 4.4 seventh paragraph shall apply mutatis mutandis to any material breach of this Agreement.
With respect to a Shareholder selling all of its Shares in compliance with this Agreement, this Agreement shall for such Shareholder terminate when such sale has been lawfully completed. The Agreement shall furthermore terminate upon (i) the earlier of an occurrence of an IPO or completion of a private or public placement of Shares managed by the Company in connection with an IPO, (ii) the occurrence of a sale of all of the Shares to a third party, (iii) if one Shareholder becomes the owner of 90 % of more of the Shares, or (iv) by mutual agreement among the Shareholders. The termination of the Agreement pursuant to this Clause 6 shall not release a Shareholder from any obligation or liability incurred by it by reason of a breach of its obligations under this Agreement or otherwise prior to the termination.
The Shareholders agree that the content of this Agreement and information of any kind or nature whatsoever (whether orally or in writing) regarding financial information, trade secrets, know-how and other proprietary business information regarding the Company, the Target Company, the Subsidiaries, the Shareholders or their subsidiaries shall be deemed to be confidential and proprietary.
The Shareholders shall treat, and shall cause its officers, directors, employees, advisors and auditors to treat, such information as strictly confidential and shall not divulge or disclose (directly or indirectly) such information to any other person or entity (other than to its officers, directors, employees, advisors and auditors who reasonably require access to such confidential information for the purpose for which it was disclosed), except when obliged to do so based on invariable law or a valid court order.
To the extent any of the Shareholders or their respective shareholders who are also employees of the Company or any Subsidiary makes any inventions or establishes any new business concepts, ideas, plans etc., within the domain of documentation and analytics systems, the Company shall be the owner of such rights made during employment, and have a first right to utilize and exploit such inventions, either in the Company or any Subsidiary designated for such purpose by the Company.
The Shareholders hereby accept that the Company uses e-mail and other electronic communication when communicating with its shareholders, cf. Section 18-5 of the Companies Act.
No Shareholder may at any time assign or transfer any of its legal, beneficial or other rights, benefits and/or obligations under this Agreement without the prior written consent of the other Shareholder hereto.
This Agreement may be amended by written approval by Shareholders jointly representing a minimum of 90 % of the aggregate number of the Shares, provided, that individual consent shall be required from each Shareholder with respect to any amendment involving (a) increased obligations for a Shareholder towards the Company, (b) that Shares can be subject to compulsory redemption, or (c) a change in the relationship between currently equal Shares.
If any of the provisions of this Agreement is found by any competent authority to be void or unenforceable, it shall be deemed to be deleted from this Agreement, and the remaining provisions of this Agreement shall remain in force and effect. Notwithstanding the foregoing, the Shareholders shall negotiate in good faith in order to agree the terms of a mutually satisfactory provision to be substituted for the provision so found to be void or unenforceable.
Each Shareholder shall bear its own costs arising out of or in connection with the preparation, negotiation and implementation of this Agreement. In no event shall any such cost be carried by the Company.
All notices, requests, demands, and other communications required or permitted by this Agreement shall be in writing in the English language and transmitted in writing.
This Agreement shall be governed by and construed in accordance with Norwegian law.
Any disputes that may arise from this Agreement shall be referred to the ordinary courts of Norway, with Oslo city court as agreed venue.
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This Agreement is executed by in one (1) original copy, of which the Shareholders shall receive a certified copy.
APPENDIX 1 - DEED OF ADHERENCE – SHAREHOLDERS
The undersigned by signature of this deed of adherence, agree to be bound, perform and comply with the terms and conditions of the shareholders’ agreement of [=Date] relating to Entrepedia AS with organization number 919725109 (the “Shareholders' Agreement”), as such agreement may have been amended from time to time, as if the undersigned was at that date a "Shareholder" as defined in the Shareholders' Agreement and a party thereto.
Any notice, request, instruction or other document to be delivered to undersigned in connection with the Shareholders' Agreement should be delivered to the undersigned at the e-mail address set forth below:
Shareholders Agreement, Rev 1.2
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