Shareholders agreement: Google is not your best friend
A shareholders’ agreement reflects the dynamics of the shareholders’ relationship. A shareholders’ agreement typically sets out clauses relating to appointment of directors, quorum required for a shareholders’ or board meeting to be valid, procedures for directors or shareholders to decide on matters relating to the company, whether there are any …
Exclusivity period
Parties in M&A transactions may sometimes enter into heads of agreement to set out the key terms and conditions on how they intend the transactions to proceed, prior to the negotiation and execution of sale and purchase agreements. The buyer should request the heads of agreement to include an exclusivity …
It is not just about the money
The consideration for any sale and purchase of shares or business is likely to be one of the most important matters to be agreed between the seller and buyer. However, it should not be-all and end-all. The seller and buyer may need to do certain acts or obtain third parties’ …
Shares sale and purchase: What to do with guarantee?
In a sale and purchase of shares, the buyer will typically require any guarantee given by the target company for the benefit of any company in the seller’s group to be released. If the guarantee has been given for the benefit of a company which will not be wholly owned …
Pre-IPO restructuring: Declaration of director’s interest
Prior to an IPO, it is common for promoters of IPO to restructure the assets, business or corporate structure of the group of companies undertaking the IPO i.e. the listing group. The promoters are usually the owners of the assets and business as well as the shareholders and directors of …
Company to prepare for IPO
The following are some of the steps a company preparing for an initial public offering (“IPO“) needs to take: Get banks’ consent if there is any declaration of dividend prior to the IPO by the borrower company which is part of the listing group and there is covenant to obtain …
Who should be parties to the agreement?
I occasionally come across the following oversight in shareholders’ agreements and joint venture agreements. Scenario 1 The cover page and signing page of the agreement state that the parties to the agreement are Party A and Party B only. However, the recital states Party A, Party B and the company …
Defined terms in agreements
When drafting or reviewing an agreement, it is important to check the defined terms carefully. I have seen a sale and purchase agreement (“SPA”) for a M&A transaction which defined the term “Company” twice. It was first defined in the definition section in clause 1 to refer to the company …
Grit
“…doing one thing better and better might be more satisfying that staying an amateur at many different things.” “…greatness is doable. Greatness is many, many individual feats, and each of them is doable.” The above are some of my favourite quotes from the book “Grit: The Power of Passion and …
IPO: Managing responsibilities within the company
An initial public offering (“IPO”) is a major corporate exercise which requires commitment from all parties involved. To ensure the IPO proceeds smoothly, a company seeking for listing may consider: 1. Identify the relevant persons within the company who are responsible for providing information relating to legal, secretarial, financial, accounting …