Відкрита дискусія «Міфи про Делавер VS особистий досвід. Частина 2», організована Комітетом АПУ з питань телекомунікацій, інформаційних технологій та Інтернету, 23.03.2017, м. Київ

1. MAIN TERMS OF
SHAREHOLDERS`
AGREEMENT
NATALIA SOLOMAKHINA
MARCH 23, 2017

2. Shareholders’ agreement
A shareholders' agreement is an arrangement among a
company's shareholders describing how the company
should be operated and the shareholders' rights and
obligations. It also includes information on the
regulation of the shareholders' relationship, the
management of the company, ownership of shares and
privileges and protection of shareholders

3. Term sheet
A term sheet is a nonbinding agreement setting forth
the basic terms and conditions under which an
investment will be made. A term sheet serves as a
template to develop more detailed legal documents.
Once the parties involved reach an agreement on the
details laid out in the term sheet, a binding agreement
or contract that conforms to the term sheet details is
then drawn up

4. “The term sheet is critical. What's in it
usually determines the final deal
structure. Don't think of it as a letter of intent.
Think of it as a blueprint for your future
relationship with your investor”
Brad Feld, Jason Mendelson
Venture deals. Be smarter than your lawyer and venture
capitalist

5. Protective provisions
The consent of the holder of the Series A Preferred Shares
shall be required for any action that (i) amends the
Certificate of Incorporation or Bylaws if it would
adversely alter the rights, preferences, privileges or
powers of Series A Preferred Shares; (ii) changes the
number of directors from current number; or (iii)
approves any merger, asset sale, liquidation or other
corporate reorganization or acquisition

6. Information rights
The Company shall furnish the holder of Series A
Preferred Shares with an annual budget and quarterly
and annual financial statements and shall furnish an
Investor with monthly financial statements. Initially,
all such financial statements shall be unaudited, but,
upon the request, the Company shall deliver annual
financial statements audited by an agreed independent
service provider. The Investor shall also be entitled to
standard inspection and visitation rights. These
obligations shall terminate upon IPO

7. Pre-emptive rights
The holder of Series A Preferred Shares shall
have pre-emptive right to purchase its pro rata
share (based on their ownership of the
outstanding Common Stock, on an as-converted
basis) of any future equity offering by the
Company, subject to customary exclusions. Such
rights will terminate upon IPO

8. Tag-Along (Co-Sale Rights)
In the event that any shareholder (“Selling Party”)
proposes to sell their shares to a third party (“Third
Party”), the Selling Party agrees not to make the
sale unless Third Party includes an offer to
purchase the shares of the Investors on the same
terms. If Third Party has specified a maximum
number of shares that they are willing to buy, then
the Selling Party and interested Investors may sell
their pro-rata share of the amount to be purchased
by Third Party

9. Drag-Along
In the event of a proposed purchase of 51+% of the
shares of the Company, the shareholder that received
and introduced such proposition to other shareholders
(“Initiating Shareholder”) shall be entitled to require
all of the remaining shareholders (and option holders)
to sell their shares to the third party at the same price
and on the same terms as the Initiating Shareholder

10. Right of First Refusal
In the event that a Founder or Investor (or other
shareholders, if any) shall propose to sell any shares
(the “Offered Shares”) except for Permitted Transfers,
the other shareholders shall be entitled to a right of
first refusal to purchase its pro rata portion (based on
their ownership of the outstanding shares of Series A
Preferred or Common Stock) of such Offered Shares. If
this right of refusal is not exercised, the
Investor/Founder shall have co-sale rights with respect
to such Offered Shares. Such rights will terminate
upon IPO

11. Non-Participating
Liquidation Preference
In the event of any liquidation or winding up of the Company, the
holder of the Series A Preferred Shares shall be entitled to receive in
preference to the holders of Common Stock, an amount equal to the
Purchase Price per share plus any declared but unpaid dividends.
After payment of such sum to the holder of the Series A Preferred
Shares, the remaining assets shall be distributed ratably to the
holders of the Common Stock on a common equivalent basis. A
merger, consolidation (other than one in which the holders of capital
stock of the Company prior to such merger or consolidation continue to
hold at least 51% by voting power of the capital stock of the surviving
entity), sale of voting control, or sale or exclusive license of all,
substantially all or a significant portion of the assets or intellectual
property of the Company shall be deemed to be a liquidation event
(“Deemed Liquidation Event”).

12. Participating Liquidation
Preference
1. Fully Participating Preferred Stock
After the payment of the Liquidation Preference to the holders of the Series A
Preferred, the remaining assets shall be distributed ratably to the holders of
the Common Stock and the Series A Preferred on a common equivalent basis
2. Participating Preferred Stock Subject to a Cap
After the payment of the Liquidation Preference to the holders of the Series A
Preferred, the remaining assets shall be distributed ratably to the holders of
the Common Stock and the Series A Preferred on a common equivalent basis,
provided that the holders of Series A Preferred will stop participating once
they have received a total liquidation amount per share equal to [X] times the
Original Purchase Price, plus any declared but unpaid dividends. Thereafter,
the remaining assets shall be distributed ratably to the holders of the
Common Stock.

13. Antidilution Protection
The conversion price of the Series A Preferred Shares
will be subject to a [full ratchet/broad-based/narrow-
based weighted average] adjustment to reduce dilution
in the event that the Company issues additional equity
at a purchase price less than the applicable conversion
price. In the event of an issuance of stock involving
tranches or other multiple closings, the antidilution
adjustment shall be calculated as if all stock was
issued at the first closing. The conversion price will
also be subject to proportional adjustment for stock
splits, stock dividends, combinations, recapitalizations,
and the like

14. “In deals, a great lawyer can be a huge help and a
bad lawyer can be a disaster ”
Brad Feld, Jason Mendelson
Venture deals. Be smarter than your lawyer and venture
capitalist

15. THANK YOU
NATALIA SOLOMAKHINA
www.facebook.com/nata.solomakhina