Notes

Question 1

Drag right drafting considerations

Answer 1

SAME PRICE & SAME TERMS

1 - Trigger - selling all / proportion
2 - Time restriction - initial holding period
3 - Price restriction - minimum price / IRR
4 - Warranties - FW?
5 - Cooperation / PoA - eg need antitrust info
6 - Completion - mandatory & suspensory regulatory / antitrust approvals
7 - Disenfranchisement - of non-compliant SH

Question 2

What key rights would a minority shareholder want to have?

Answer 2

1 - Board - representation and quorum
2 - Reserved matters
3 - Information rights
4 - Tag along right
5 - Anti-dilution protection

Question 3

5 key rights in control transactions

Answer 3

1 - Board
2 - Indemnification
3 - Non-compete
4 - Exit - provisions to facilitate an exit
5 - Drag - deliver 100% to the buyer

Question 4

What rights might a co-investor have to block a sale?

Answer 4

BRIT

Question 5

Potential options to deal with director conflicts of interest

Answer 5

1 - suspension of voting / quorum requirement
2 - removal from meetings (or part)
3 - internal information barriers

Question 6

How could a deadlock arise

Answer 6

1 - SH / board reserved matter
2 - SH / board resolutions
3 - X quorum at SH / board meetings

Question 7

Options for dealing with a deadlock

Answer 7

1 - escalation (most common)
2 - independent expert / arbitrator

Question 8

Options for what happens if a deadlock issue cannot be resolved

Answer 8

1 - no approval /action taken
2 -

Question 9

What information rights would a minority SH / PE house want?

Answer 9

1 - financial

• audited FS, management accounts, budget

2 - non-financial

• reg / tax authorities, litigation, potential acquirers

3 - tax/regulatory requirements

4 - information reasonably requested

+ right to share - LPs, SHs, affiliates, lenders, potential purchasers