[insert Company name]
The parties set out in Part 1 of schedule1
Shareholders’ Deed
in relation to [insert Company name]
Ref: AJM/PBSABCD2000-1234567 14555008/17
© Corrs Chambers Westgarth
Corrs Chambers Westgarth
Contents
1Definitions
2Adoption of Constitution and interaction with this document
2.1Adoption of Constitution
2.2This document and the Constitution
3Board of Directors
3.1Number of Directors
3.2Appointment and removal of Directors
3.3[Appointment and removal of Director before Follow-On Raising
3.4Alternate Directors
3.5Chair
3.6Removal of Directors
3.7Effect of appointment or removal
3.8Director is nominee of Shareholder
3.9Observation right
3.10Fees and expenses
3.11Insurance
4Board meetings
4.1Quorum
4.2Meetings and materials
4.3Voting rights
5Management and decision making
5.1Overall direction of the Company
5.2Board decisions by Required Resolution
5.3Shareholder decisions by Special Resolution
6General restrictions on Disposal and issue
6.1General restriction on Security Interests
6.2Deed of Accession
6.3Treatment of new Shareholders
7Pre-emptive rights on issue of Securities
7.1Excluded issues
7.2Offer
7.3Acceptance
7.4Allocation
7.5Completion
7.6Issue to third parties
7.7Matching capital
8Employee Incentive Plan
9Permitted Disposals
9.1Disposal to Affiliates
9.2Ceasing to be an Affiliate
10Pre-emptive rights on Disposal
10.1Pre-emptive offer
10.2Acceptance
10.3Allocation
10.4Completion
10.5Fund’s Tag Along Option
10.6Exercise of Tag Along Option
11Drag along
11.1Drag Along Notice
11.2Terms of Offer
12Co-Investor’s Call Option over Fund’s Securities
12.1Grant of Call Option
12.2Exercise of Call Option
12.3Call Option over all of Fund’s Securities only
12.4Calculation of Call Option Exercise Price
12.5Treatment of Put Option
12.6Completion
13Fund’s Put Option
13.1Grant of Put Option
13.2Exercise of Put Option
13.3Put Option over all of Fund’s Securities only
13.4Treatment of Call Option
13.5Completion
14Founder Vesting
14.1Vesting of Founder Shares
14.2Right to purchase Unvested Shares
14.3Restriction
15Access to information and records
16Reporting and audit
16.1Reporting to the Fund
16.2Audit
16.3Valuation reports
17Bad leaver arrangements
17.1Bad Leaver
17.2Price for Default Shares
17.3Other remedies
17.4Suspension
17.5Fair Market Value
18Default
18.1Obligation to prevent defaults
18.2Notification of potential defaults
18.3Suspension of rights
19Non-competition
19.1Enforceability and severance
19.2Prohibited activities
19.3Duration of prohibition
19.4Geographic application of prohibition
20[Guarantee of Founder Shareholder’s obligations]
21Confidentiality
21.1Confidentiality
21.2Permitted disclosure
22Dispute resolution
22.1Disputes
22.2Notice of dispute
22.3Resolution
23Termination
23.1Termination events
23.2Accrued rights
24GST
24.1Recovery of GST
24.2Liability net of GST
24.3Adjustment events
24.4Definitions
25Costs and expenses
25.1Stamp duty
25.2Transaction costs
26Limitation on trustee’s liability and obligations
27General
27.1Notices
27.2Governing law and jurisdiction
27.3Invalidity
27.4Cumulative rights
27.5Entire agreement
27.6Counterparts
27.7Amendment
27.8Waiver and exercise of rights
27.9Relationship between parties
27.10Assignment
27.11Further assurances
27.12Construction
27.13Effect of execution
27.14Deed
Schedule 1 - Parties
Schedule 2 - Board
Schedule 3 - Critical Business Matters
Schedule 4 - Call Option Exercise Notice
Schedule 5 - Put Option Exercise Notice
Execution
Annexure A - Deed of Accession
Annexure B - Constitution
14555008/17page 1
Shareholders’ Deed
Corrs Chambers Westgarth
Date
Parties
[insert name of Company]ACN [insert] of [insert address] (Company)
The parties set out in schedule1
Background
AEach Shareholder holds Shares as described inschedule1.
B[The Founder holds beneficial interests in the Founder Shareholder and, in addition to the Shareholders, has agreed to the restraints set out in this document.] [Note: If all of the Founder’s Shares are held directly by the Founder, this clause can be deleted]
C[The Founder has agreed to guarantee the obligations of the Founder Shareholder under this document.] [Note: If all of the Founder’s Shares are held directly by the Founder, this clause can be deleted]
DThis document sets out the parties’ agreement on how the affairs of the Company will be conducted from the date of this document.
Agreed terms
1Definitions
In this document these terms have the following meanings:
Accepting Shareholder / The meaning given in clause 10.2.Accepting Subscriber / The meaning given in clause 7.3.
Affiliate / In relation to a person (first-mentioned person):
(a)a person that Controls or is Controlled by the first-mentioned person;
(b)a Related Body Corporate of the first-mentioned person;
(c)in the case of an Investor, includes any fund or other vehicle managed or advised by the Investor;
(d)in the case of a party that is a trustee of a trust, includes any replacement trustee of that trust where there is no change to the ultimate beneficial owner of the Securities; and
(e)in the case of the Fund, includes:
(i)the State of Queensland or its Government Agencies;
(ii)a Minister of the State of Queensland;
(iii)a person Controlled by a person referred to in paragraphs(i) or (ii); or
(iv)a trustee of a trust where the ultimate beneficial owner of the Securities is a person referred to in paragraphs(i) to (iii).
Allocation / The meaning given in clauses 7.4(a) and 10.3(b) as the context requires.
Bad Leaver / A person who ceases to be employed or engaged by a Group Company, as a result of their:
(a)resignation within [insert] years of the date of this document; or
(b)termination by the Company with cause, including because they have committed:
(i)fraud;
(ii)an indictable criminal offence;
(iii)a breach of a restrictive covenant; or
(iv)a material breach of their employment or consulting agreement.
Board / The board of Directors of the Company, which at the date of this document, comprises the persons set out in the table in schedule2.
Business / The business of the Group as at the date of this document being [insert] and as modified from time to time with the required approval of the Board and/or Shareholders.
BusinessDay / A day on which banks are open for general banking business in Brisbane, excluding Saturdays, Sundays and public holidays.
Call Option / An option for the Co-Investor to buy the Fund’s Securities which is granted by the Fund under clause12.
Call Option Completion Date / The date set out in the Call Option Exercise Notice which must be at least 10 Business Days after, but no later than 20 Business Days after, the date of the Call Option Exercise Notice.
Call Option Exercise Notice / A notice substantially in the form set out in schedule4.
Call Option Exercise Price / For each Security held by the Fund, the price payable by the Co-Investor for that Security on the Call Option Completion Date, being an amount equal to the Subscription Price for that Security as adjusted each day from the date of issue up to and including the Call Option Completion Date by:
(a)the prevailing market yield for a Queensland Treasury Corporation benchmark fixed rate bond closest to a 10 year maturity per annum; plus
(b)a margin of 2% per annum,
calculated and capitalised daily.
Call Option Period / The period commencing at 9.00am on the second anniversary of the date of this document and ending at 5.00pm on the fifth anniversary of the date of this document, but excluding the follow periods of time:
(a)from the time the Company, a Shareholder or their Representatives receive any enquiries from a third party in relation to (or that could be reasonably expected to lead to) a Third Party Offer until communication by that third party that no Third Party Offer will be forthcoming;
(b)from receipt of a Third Party Offer until clauses10 and 11 have been fully complied with (to the extent applicable); and
(c)from the time a meeting of the Board or Shareholders considers, and the Board or Shareholders adopt, a strategy to pursue a trade sale or IPO of the Company until any such strategy is abandoned or the relevant transaction is completed.
Chair / The chair of the Board.
Change in Control / In relation to any entity (the first mentioned entity):
(a)a change in the entity that Controls the first mentioned entity (other than if the Ultimate Holding Companyof the first mentioned entity remains the same following the change);
(b)an entity that Controls the first mentioned entity ceases to Control that entity (other than if the Ultimate Holding Company of the first mentioned entity remains the same following the change); or
(c)if the first mentioned entity is not Controlled, another entity acquires Control of the first mentioned entity.
Co-Investor / The party listed as a ‘Co-Investor’ inschedule1.
Confidential Information / Information disclosed by or on behalf of one party to another party in connection with this document which has been designated as confidential by the party disclosing the information, or information which by its nature should reasonably be considered to be confidential, but does not include:
(a)any information which is in the public domain at the time of its disclosure or subsequently becomes part of the public domain other than as a result of a breach by the person receiving the Confidential Information of clause 21.1;
(b)any information that was known to the party receiving the Confidential Information at the time of disclosure of the confidential information except as a result of a prior confidential disclosure by the party disclosing the Confidential Information; or
(c)any information that is disclosed to the party receiving the Confidential Information by any third party who is not known to the party receiving the Confidential Information to be acting in breach of a confidentiality obligation owed to the party disclosing the Confidential Information.
Constitution / The constitution of the Company from time to time.
Control / The same meaning given to it in section 50AA of the Corporations Act.
CorporationsAct / The Corporations Act 2001 (Cth) as amended.
Deedof Accession / A deed poll in a form attached as annexureA.
Default Shares / The meaning given in clause 17.1(a).
Director / A director of the Company and, as at the date of this document, means the Directors listed in the table in schedule2.
Dispose / To sell, assign, transfer, convey, exchange, create a Security Interest over or otherwise dispose of a legal or beneficial interest and ‘Disposal’ shall be construed accordingly.
Drag Along Notice / The meaning given in clause 11.1(a).
Dragging Shareholders / The meaning given in clause 11.1(a).
Employee Incentive Plan / The meaning given in clause 8(a).
ExcludedIssue / (a)An issue of Securities expressly contemplated under this document or the Subscription Agreement;
(b)Securities issued in connection with share splits or the issue of dividends which is approved by a Required Resolution of the Board;
(c)an issue of Securities under an Employee Incentive Plan;
(d)Securities issued as part of an IPO which is approved by a Required Resolution of the Board;
(e)Securities constituting all or part of the consideration for a bona-fide acquisition of assets or shares by the Group which is approved by the Required Resolution of the Board; or
(f)an issue of Securities approved in writing by all Shareholders.
Exercise Notice / The meaning given in clause 10.6(a).
Exercise Period / The meaning given in clause 10.5(b)(iv).
Fair Market Value / The amount determined in accordance with clause17.5.
Financial Year / A period of 12consecutive calendar months ending on 30 June or on another day decided by the Board.
Follow-On Raising / An issue of Securities after the date on which Securities are first issued under the Subscription Agreement other than an issue under paragraphs (a)-(c) of the definition of Excluded Issue.
Founder / Each party listed as a ‘Founder’ inschedule1.
Founder Shareholder / A Founder (if Shares are held directly by the Founder) or the party listed as the ‘Founder Shareholder’ inschedule1.
Fund / The party listed as the ‘Fund’ in schedule1.
Fund Director / The meaning given in clause3.6(b)(i).
Government Agency / Any government or governmental, semi-governmental, administrative, fiscal or judicial body, department, commission, authority, tribunal, agency or entity whether foreign, federal, state, territorial or local.
Group / The Company and the Subsidiaries, and Group Company means any one of them.
GST / The meaning given in the GST Law.
GST Law / The meaning given in the A New Tax System (Goods and Services Tax) Act 1999 (Cth).
Holding Company / The meaning given in the Corporations Act.
Independent Expert / A reputable and qualified independent expert who is independent of the relevant parties.
Intellectual Property Rights / All intellectual property rights whether now existing or created after the date of this document including copyright and neighbouring rights, registered and unregistered trade and service marks, business and domain names, all rights in relation to inventions (including patents and patent applications), designs, plant varieties, circuit layouts, confidential information, trade secrets, know how, research data, recipes, formulae, discoveries and any other intangible proprietary rights whether registered or not arising from intellectual activity.
Investor / The Fund[, the Panel Member[s]] and the Co-Investor, and any other person (other than a Founder Shareholder or an Affiliate) who becomes a Shareholder after the date of this document by subscribing for Shares for cash.
IPO / An initial public offering of Shares or shares in a holding company of the Company in conjunction with a listing or quotation on a recognised stock exchange.
Issue Acceptance / The meaning given in clause 7.3.
Issue Notice / The meaning given in clause 7.2.
Issue Securities / The meaning given in clause 7.2.
Law / Includes:
(a)any statute, regulation, rule, by-law, ordinance, proclamation, judgement, treaty, decree, convention, rule or principle of common law or equity, rule of any applicable stock exchange, or requirement or approval (including any Government Agency);
(b)any regulation, rule, by-law, ordinance, proclamation or judgement made under that law; and
(c)that law as amended, consolidated, supplemented, re-enacted or replaced.
Matching Capital / The meaning given in clause7.7(a).
Notice / The meaning given in clause 27.1.
Observer / A person who is not a Director but who is nominated under clause 3.9 to attend all meetings and proceedings of the Board as an observer and to receive all papers provided to the Board.
Other Shareholders / The meaning given in clause 11.1(a).
[Panel Member / [Each / The] party listed as a ‘Panel Member’ inschedule1.]
Put Option / The option for the Fund to sell its Securities which is granted by the Co-Investor and Founder Shareholder under clause13.
Put Option Completion Date / The date set out in the Put Option Exercise Notice which must be at least 10 Business Days after the date of the Put Option Exercise Notice.
Put Option Counterparty / The recipient of a Put Option Exercise Notice under clause13.2.
Put Option Exercise Notice / A notice substantially in the form set out in schedule5.
Put Option Exercise Price / For each Security held by the Fund, the price payable by the Co-Investor for that Security upon exercise of the Put Option, beingan amount equal to the Subscription Price for that Security as adjusted each day from the date of issue up to and including the Put Option Completion Date by:
(a)the prevailing market yield for a Queensland Treasury Corporation benchmark fixed rate bond closest to a 10 year maturity per annum; plus
(b)a margin of 2% per annum,
calculated and capitalised daily.
Put Option Period / The period on and after the date of this document.
QBDF / QBDF Pty Ltd ACN [insert].
Quarter / A period of three consecutive calendar months, with successive Quarters ending on 31 March, 30 June, 30 September and 31 December.
Related Body Corporate / The meaning set out in the Corporations Actand Related Bodies Corporate has a corresponding meaning.
Remaining Accepting Shareholder / The meaning given in clause10.3(c)(iii).
Remaining Sale Securities / The meaning given in clause10.3(c)(i).
Representative / In respect of a person means an officer, employee, contractor, auditor, banker or professional adviser of that person.
Required Form / The relevant financial reporting form published by the Fund on the Fund’s website.
Required Resolution / A resolution:
(a)approved by Directors with at least [insert – must be a minimum of 75% or, where a single Shareholder will have a Shareholding of 75% or more after completion of the Subscription Agreement, such higher percentage as is necessary to ensure the approval of at least two Shareholders is required]% of the votes entitled to be cast on the resolution, provided that such majority must include:
(i)at least one Director appointed by the Co-Investor; and
(ii)if the Fund has appointed a Director, that Director; or
(b)identified in a document sent to all Directors where Directors representing at least [insert figure included in paragraph (a)]% of the votes entitled to be cast on the resolutionsign a statement that they are in favour of the resolution set out in the document, provided that such majority must include:
(i)at least one Director appointed by the Co-Investor; and
(ii)if the Fund has appointed a Director, that Director.
Respective Proportion / In respect of each Shareholder, the proportion that the aggregate number of Shares held by that Shareholder bears to the aggregate number of Shares on issue at the relevant time, except that:
(a)if no offer is being made to the Fund, the Fund’s Shares are excluded from the number of issued Shares; and
(b)for the purposes of clause 10.3, the Seller’s Shares are excluded from the number of issued Shares.
Restrained Party / The meaning given in clause 19.2.
Sale Securities / The meaning given in clause 10.1(c)(i).
Security / A security of the Company and includes the Shares, options, any convertible notes, warrants or other securities capable of conversion into Shares issued by the Company.
Security Interest / (a)A ‘security interest’ as defined in the Personal Property Securities Act 2009 (Cth);
(b)any third party rights or interests including a mortgage, lien, charge, pledge, assignment by way of security, security interest, encumbrance, title retention, preferential right or trust arrangement, claim, covenant, easement or any other security arrangement or any other arrangement having the same effect;
(c)a right, interest or arrangement which has the effect of giving another person priority over creditors including any right of set-off;
(d)a right that a person (other than the owner) has to remove something from land (known as a profit à prendre), easement, public right of way, restrictive or positive covenant, lease, or licence to use or occupy; or
(e)an agreement to create any of them or allow them to exist.
Seed Preference Shares / Convertible preference shares issued by the Company.
Seller / The meaning given in clause 10.1(a).
Share / A fully paid ordinary share or Seed Preference Share (as relevant) in the capital of the Company, but excludes an Unvested Share.
Share Qualification / Any required holding of Shares set out in clauses 3.3 or 3.2 (as applicable) which entitles a Shareholder to appoint a Director.
Shareholder / A party who holds Shares and, at the date of this document, means a party listed as holding Shares in the table in schedule1(other than in respect of the unallocated Employee Incentive Plan).
Shareholder Associate / In relation to a Shareholder:
(a)an Affiliate;
(b)a ‘related entity’ (as that term is defined in the Corporations Act);
(c)a ‘relative’ (as that term is defined in the Corporations Act); or
(d)an ‘associate’ of the Shareholder in relation to the Company under any provision in Division 2 of Part 1.2 of the Corporations Actand, where necessary, as if the reference to associate was included in the relevant Chapter of the Corporations Act.
Shareholding / All or any of the Shares held by a Shareholder, as the context requires.
SpecialResolution / A resolution:
(a)approved by the holders of [insert – must be a minimum of 75% or, where a single Shareholder will have a Shareholding of 75% or more after completion of the Subscription Agreement, such higher percentage as is necessary to ensure the approval of at least two Shareholders is required]% or more of all issued Shares whether voting in person, by proxy, by attorney or by corporate representative; or
(b)identified in a document sent to all Shareholders where Shareholders holding [insert figure included in paragraph (a)]% of all Shares entitled to be voted on the resolution sign a statement that they are in favour of the resolution set out in the document.
Subscription Agreement / The subscription agreement dated [insert] under which the Investors agreed to subscribe for Shares.
Subscription Price / In respect of a Security, the subscription price paid by the Shareholder to the Company for the issue of that Security.
Subsidiary / A subsidiary of the Company as defined by section 9 of the Corporations Act.
Tag Along Notice / The meaning given in clause 10.5(a).
Tag Along Option / The meaning given in clause 10.5(b).
Third Party Buyer / The meaning given in clause11.1(a).
Third Party Offer / The meaning given in clause 11.1(a).
Transfer Acceptance / The meaning given in clause 10.2.
Transfer Notice / The meaning given in clause 10.1(a).
Ultimate Holding Company / The meaning given in the Corporations Act.
Unvested Shares / Any shares in the capital of the Company that have not vested pursuant to clause 14.
2Adoption of Constitution and interaction with this document
2.1Adoption of Constitution
By executing this document, each Shareholder confirms that they are in favour of the following special resolution of Shareholders, which will take effect upon the last Shareholder executing this document: