SGS 10 PA
Who are the parties to the deal?
1) 1. Seller (Eurolearn Limited) 5) 5. Senior debt provider (bank)
2) 2. Buyer (NewCo2) 6) 6. Private Equity Fund
3) 3. Any subsidiary of the Seller 7) 7. Management team
4) 4. Investment vehicle (NewCo1)
Sharing solicitors: ensure mgt team is advised separately
Newco1 and equity fund will normally share solicitors
Overall risk CONFLICT OF INTEREST
Documents
1) Loan agreement between NewCo2 and bank
2) Intra-company loan between NewCo1 and NewCo2
3) Debentures (fixed + floating charges for all entities on facts)
4) Investment/Subscription Agreement
5) Acquisition [Asset sale agreement] (NewCo2 and Seller)
6) Disclosure Letter to AA
7) Investment Agreement (PEF, MGT Team and NewCo1)
8) Disclosure Letter to IA
9) Articles of Association (NewCo 1 and NewCo 2)
10) Service Agreements (employment re Management Team)
General questions
1. What is the purpose of key-man insurance and why is it important to the Investor?
The purpose of key man insurance is to ensure that a key employee’s life is insured. The proposer and
premium player is the company. This is where the employer of a company plays a major role in the
company’s development, such as, Steve Jobs.
2. Clause 8 of the agreement places restrictions on what actions can be taken in relation to the Company. Is there
anything additional which should be covered by this clause from the perspective of the Investor?
Allow investor to have control over NewCo2 (it only has control over NewCo1)
3. What is the purpose of the Deed of Adherence?
Investment Agreement = btw Managers, Investor and Newco 1
o sets out how Newco 1 and the companies in its group are to be governed
AoA for each group company -> when a new SH comes on board, he is automatically bound by the
provisions set out in the articles but not Investment Agreement
Deed of Adherence requires the incoming shareholder to sign up to and be bound by the provisions of the
Investment Agreement.
4. Warranties
“All informatio contained in the Disclosure Letter is true, complete and accurate in all material respects.”
turns info contained in the Disclosure Letter into warranties
Who are the parties to the deal?
1) 1. Seller (Eurolearn Limited) 5) 5. Senior debt provider (bank)
2) 2. Buyer (NewCo2) 6) 6. Private Equity Fund
3) 3. Any subsidiary of the Seller 7) 7. Management team
4) 4. Investment vehicle (NewCo1)
Sharing solicitors: ensure mgt team is advised separately
Newco1 and equity fund will normally share solicitors
Overall risk CONFLICT OF INTEREST
Documents
1) Loan agreement between NewCo2 and bank
2) Intra-company loan between NewCo1 and NewCo2
3) Debentures (fixed + floating charges for all entities on facts)
4) Investment/Subscription Agreement
5) Acquisition [Asset sale agreement] (NewCo2 and Seller)
6) Disclosure Letter to AA
7) Investment Agreement (PEF, MGT Team and NewCo1)
8) Disclosure Letter to IA
9) Articles of Association (NewCo 1 and NewCo 2)
10) Service Agreements (employment re Management Team)
General questions
1. What is the purpose of key-man insurance and why is it important to the Investor?
The purpose of key man insurance is to ensure that a key employee’s life is insured. The proposer and
premium player is the company. This is where the employer of a company plays a major role in the
company’s development, such as, Steve Jobs.
2. Clause 8 of the agreement places restrictions on what actions can be taken in relation to the Company. Is there
anything additional which should be covered by this clause from the perspective of the Investor?
Allow investor to have control over NewCo2 (it only has control over NewCo1)
3. What is the purpose of the Deed of Adherence?
Investment Agreement = btw Managers, Investor and Newco 1
o sets out how Newco 1 and the companies in its group are to be governed
AoA for each group company -> when a new SH comes on board, he is automatically bound by the
provisions set out in the articles but not Investment Agreement
Deed of Adherence requires the incoming shareholder to sign up to and be bound by the provisions of the
Investment Agreement.
4. Warranties
“All informatio contained in the Disclosure Letter is true, complete and accurate in all material respects.”
turns info contained in the Disclosure Letter into warranties
