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Shareholder Agreements Part II

October 12, 2017

This week we’ve been working on a suite of documents.

One shareholder is leaving a company and another is buying in. The remaining two shareholders are buying twenty-five per cent of the leaving shareholder’s shares each. The new guy is buying fifty per cent, but has the option to buy the other fifty per cent from the other two, exercisable on or before 30 June 2019.

The outgoing shareholder has given various guarantees, which may or may not be able to be discharged, so there is a deed of indemnity in his favour until they are all discharged.

Finally, they are all entering a shareholder agreement to govern how the main holding company, in which they are the shareholders, and a wholly-owned subsidiary trading company, which takes all the risks, will be managed.

In looking at all this, we also noticed that one shareholder did not have as many dividend-entitled shares as he was meant to have, but the accountant is meant to be sorting that out.

For assistance with commercial documents, see Michael Paterson & Associates.


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