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Shareholders' Agreement

Parties
Name
[insert name] (Company)
ACN
[insert ACN]
Address
[insert address]

Name
The parties set out in Schedule 1.
Background
A

As at the date of this agreement, the Shares in the Company are held in the manner
set out in Schedule 1.

All parties have agreed to enter into this agreement for the purpose of recording the
terms of this arrangement and their respective relationships with each other.

Operative provisions
Composition of the Board

1
The Board
1.1

Subject to clause 1.2, the Shareholders are entitled to appoint the following number of
Directors:
Shareholder

Number of Directors

Shareholders individually or acting


together for the purposes of this clause
holding more than 20% of the Shares

1.2

Shareholders referred to in the table above will continue to be entitled to appoint that
number of Directors so long as they hold such shareholdings in the Company.

1.3

The Shareholders may remove any Director appointed by them under clause 1.1 and
replace that Director or fill any vacancy in respect of any of their appointees with
another nominee by notice in writing to the Company and each other Shareholder. The
appointee must not be disqualified from acting as a Director under the Corporations Act.

1.4

Otherwise, the Directors are to be appointed in accordance with the terms of the
Constitution.

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Director is nominee of the appointing Shareholder


1.5

Each party acknowledges that a Director appointed by a Shareholder under clause 1.1
is the nominee of such Shareholder.

1.6

So long as an honest and reasonable director can form the view that they are acting in
good faith and in the best interests of the Company as a whole, a Director appointed by
Shareholders under clause 1.1 may do each of the following:
1.6.1 have regard to and represent the interests of those Shareholders and
1.6.2 act on the wishes of those Shareholders in performing any of the Director's duties
or exercising any power, right or discretion as a Director.

No removal of a party's appointee by the other parties


1.7

A Shareholder must not put forward or instigate a resolution for the removal from the
Board of a Director appointed by other Shareholders. A Shareholder must vote against a
resolution proposed at a meeting of the Shareholders for the removal of a Director
appointed by other Shareholders. This does not apply if the appointee is disqualified
from acting as a director under the Corporations Act or the Constitution.

Information

Auditor Appointment
1

Before the end of the Financial Year in which this Agreement is executed and at all
times thereafter, the Company must have an Auditor appointed.

Basic financial information


2.1

By 25 September of each year, the Company must provide to each Major Investor:
2.1.1 annual audited financial statements for each Financial Year, including an audited
balance sheet as of the end of such Financial Year, an audited statement of
operations and an audited statement of cash flows of the Company for such year,
all prepared in accordance with generally accepted accounting principles and
practices; or
2.1.2 a statement, prepared in accordance with accepted accounting principles and
practices and audited by the Auditor, showing the total value of the Companys
current and non-current assets.

2.2

Upon request, the Company will provide promptly to each Major Investor quarterly
unaudited financial statements for each quarter of a Financial Year of the Company
(except the last quarter of the Companys Financial Year), including an unaudited
balance sheet as of the end of such quarter, an unaudited statement of operations and
an unaudited statement of cash flows of the Company for such quarter, all prepared in
accordance with generally accepted accounting principles and practices, subject to
changes resulting from normal year-end audit adjustments.

Confidential information
2.3

Notwithstanding anything in this agreement to the contrary, no Investor by reason of this


agreement shall have access to any trade secrets or confidential information of the
Company.

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Competitor
2.4

The Company shall not be required to comply with any information rights in respect of
any Investor whom the Company reasonably determines to be a competitor or an
officer, employee, director or holder of 10% or more of the equity of a competitor.

Investor obligations
2.5

Each Investor agrees that such Investor will keep confidential and will not disclose,
divulge, or use for any purpose (other than to monitor its investment in the Company)
any confidential information obtained from the Company pursuant to the terms of this
agreement other than to any of the Investors legal advisers, accountants, consultants,
and other professionals, to the extent necessary to obtain their services in connection
with monitoring the Investors investment in the Company.

Inspection rights
2.6

The Company shall permit each Major Investor to visit and inspect the Companys
properties, to examine its books of account and records and to discuss the Companys
affairs, finances and accounts with its officers, all at such reasonable times as may be
requested by such Investor.

Powers of decision

Decisions requiring special resolution of the Shareholders


3.1

An amendment to the Constitution can only be made by a special resolution of the


Shareholders.

Decisions requiring special majority resolution


3.2

The following matters can only be undertaken with prior approval given by passing a
special majority resolution in accordance with clause 3.3:
3.2.1 any alteration of the rights of holders of Investor Shares;
3.2.2 creation of any new class of Shares having rights senior to or on parity with the
Investor Shares;
3.2.3 redeem, buy back (other than in accordance with clause 5), cancel or undertake a
capital reduction of any share capital or other securities of the Company;
3.2.4 declare or pay any dividend;
3.2.5 issue any securities other than in accordance with clause 4;
3.2.6 appoint any Directors other than in accordance with clause 1.1;
3.2.7 apply for voluntary liquidation, winding-up or de-registration of the Company
except as permitted under this agreement;
3.2.8 make a material change in the nature of the Company's business;
3.2.9 a Sale Event;
3.2.10 start or settle any legal or arbitration proceedings, except in the ordinary course
of business.

3.3

For a resolution to be passed by a special majority it must satisfy both the following
criteria:
3.3.1 it is passed by a majority of Directors; and

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3.3.2 it is approved by the Shareholders holding more than 50% of the Investor Shares.
Sale Event
3.4

If a proposed Sale Event is approved in accordance with this agreement, each party to
this agreement must:
3.4.1 give such co-operation and assistance, as the Company and the shareholders
who proposed the Sale Event, may request; and
3.4.2 exercise all such rights and powers each party has in relation to the Company and
any of its subsidiaries, whether as shareholder or otherwise,

so as to ensure that the Sale Event is achieved in accordance with the proposal.
Subsidiaries
3.5

If the Company has any Subsidiaries then this clause will have application to each
Subsidiary so that no Subsidiary may take an action specified in clause 3.2 unless there
has been a special majority resolution in favour of it.

Issues of New Securities

4.1

If the Board resolves to make an issue of New Securities, it must give written notice of
such intention to the Shareholders setting out the terms of the proposed issue of New
Securities.

4.2

Within 10 Business Days, and subject to clause 4.6, each Shareholder may give written
notice to the Company that it wishes to acquire its Respective Proportion of the New
Securities on the same terms.

4.3

Within 120 days thereafter the Company may issue on the same terms as offered to the
Shareholders any New Securities not acquired by the Shareholders pursuant to clause
4.2 to a third party.

4.4

In the event that the Company has not issued the New Securities within such one 120
day period, then the Company shall not thereafter issue or sell any New Securities
without again first offering such New Securities to the Shareholders pursuant to this
clause 4.

4.5

In the event that the Company issues New Securities to a third party under clause 4.3
and such New Securities have rights, preferences or privileges that are more favourable
to the Shareholder than the terms of the Investor Shares, the Company shall take such
action in accordance with all laws to provide substantially equivalent rights for the
Investors in relation to the Investor Shares as are attached to the New Securities (with
appropriate adjustment for economic terms or other contractual rights and subject to
such Investors execution of any relevant documents executed by the holders of the
New Securities in subscribing for the New Securities).

4.6

For the purposes of this clause 4:


4.6.1 an Investor Affiliate may subscribe for an Investors Respective Proportion; and /
or
4.6.2 an Investor Affiliate may subscribe for, in addition to the Respective Proportion of
its related Investor (First Investor), the Respective Proportion entitlement of the
other Investor (Other Investor) (for the avoidance of doubt the total number of
New Shares that may be subscribed for in this clause 4.6 is equal to the

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Respective Proportion of each relevant Investor). Blackbird or an Investor Affiliate


of it may subscribe for the Respective Proportion entitlement of Startmate.
5

Share Vesting, Buy-Back Rights, Accelerated Release and Sale


Preference

Vesting of Unvested Shares


5.1

As at the date of this agreement, 100% of the Ordinary Shares held by a Founder or a
Founder Nominee (together the Founder Group) are subject to the buy-back right of
the Company set out in clauses 5.2 to 5.11.

5.2

Provided the Founder remains engaged by the Company, whether as an employee or


contractor, the Ordinary Shares held by each member of the Founder Group will vest as
follows:
5.2.1 1/4 will vest immediately one year after the date of this agreement (One Year
Anniversary);
5.2.2 the remaining Ordinary Shares will vest at a rate of 1/36 monthly after the One
Year Anniversary.

5.3

Any Ordinary Shares that have not vested pursuant to clause 5.2 or clause 5.11 shall be
referred to in this agreement as "Unvested Shares".

Buy-back right on Unvested Shares


5.4

If a Founder ceases to be engaged by the Company, whether as an employee or


contractor and is a Bad Leaver or if a member of the Founder Group attempts to
transfer any of its Unvested Shares (other than as permitted by this agreement), or if the
Founder is a Good Leaver who holds Unvested Shares, the Company shall have the
option to buy-back all of the Unvested Shares (as defined below) held by the Founder
Group in accordance with the remaining terms of this clause 5.

5.5

A buy-back of Unvested Shares under this clause will be implemented by the Company
and the Founder as a selective share buy-back of shares in accordance with Division
2.1 of Part 2J.1 of the Corporations Act.

5.6

Any fraction of an Unvested Share arising from the calculation set out in clause 5.2 shall
be rounded up to the nearest whole number of shares.

Exercise of buy-back by Company


5.7

The Company will exercise its share buy-back right under clause 5,4, by giving written
notice to the Founder Group setting out:
5.7.1 the number of Unvested Shares of the Founder Group (Buy-Back Shares);
5.7.2 the purchase price for the Buy-Back Shares, which will be equal to $0.001 for
each Buy-Back Share; and
5.7.3 enclosing a share buy-back agreement for the purchase of the Buy-Back Shares
executed by the Company (which shall be conditional on shareholder approval in
accordance with section 257D of the Corporations Act) (Buy-Back Agreement).

5.8

The Founder (or Founder Nominee as the case may be) shall duly execute and return
the Buy-Back Agreement to the Company within five Business Days of the date of the
notice issued by the Company under clause 5.7.

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Completion of share buy-back


5.9

Subject to the Company having received shareholder approval in accordance with


section 257D of the Corporations Act, on the date specified in the Buy-Back Agreement
for completion of the share buy-back:
5.9.1 the Founder (or the Founder Nominee as the case may be) shall deliver a duly
executed share transfer in favour of the Company of the Buy-Back Shares being
acquired by the Company and the share certificates representing those shares;
and
5.9.2 upon completion of those matters, the Company shall pay the purchase price for
the Buy-Back Shares being acquired by the Company to the Founder (or the
Founder Nominee as the case may be).

Power of Attorney
5.10

In consideration of the Founder, the Founder Nominee (if relevant) and the Company
entering into this agreement, each member of the Founder Group irrevocably appoints
each Director for the time being of the Company to be his or her attorney for the
purpose of executing and delivering to the Company, in the name of the Founder
member and on its behalf, all documents required to be executed by the Founder Group
under this clause 5.

Accelerated Vesting
5.11

If an Accelerated Vesting Event occurs, all remaining Unvested Shares of a Founder


Group member shall immediately vest and the provisions of clauses 5.2 to 5.10 will
cease to apply to those Ordinary Shares.

Sale Preference
5.12

If there is a sale of all of the Shares to a third party, the Shareholders agree that they
will take all necessary actions so that out of the proceeds of the purchase price for all of
the Shares, the holders of the Investor Shares may elect by notice in writing to the other
Shareholders to receive an amount, in priority to payments from such purchase price to
any other Shareholders, equal to the aggregate of the following:
5.12.1 the amount paid up on the Investor Shares; and
5.12.2 the amount of all dividends declared but unpaid in respect of the Investor
Shares.

Issue of Employee Options

6.1
The Board may issue Employee Options up to the Employee Option Maximum on
such terms as the Board approves from time to time.

Restrictions on transfer of Shares

General
7.1

A Shareholder must not Dispose of any Shares, except:


7.1.1 in accordance with this agreement; or
7.1.2 with the consent of each other Shareholder.

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7.2

A Founder Group member must not transfer (nor take any action to transfer) any
Unvested Share.

7.3

A Shareholder may transfer all of its Shares:


7.3.1 to another member of its Wholly-owned Group or to an incorporated trustee of a
trust which it controls; or
7.3.2 to a person approved in writing by all of the Founders and Major Investors.

7.4

If a Shareholder holding Shares transferred to it under clause 7.3.1 above is about to


cease to be a member of the Wholly-owned Group which it currently belongs or is about
to no longer control the corporate trustee of the trust holding the Shares, it shall without
delay and prior to it so ceasing to be a member, or losing control, notify the Company,
the Founders and the Major Investors that such event will occur and shall procure the
transfer of those Shares to the Shareholder, a member of its current Wholly-owned
Group or a new corporate trustee of a trust which it controls.

7.5

Any transfer not in accordance with this clause 7 has no effect.

General pre-emptive rights


7.6

If this clause 7 applies, where a Shareholder (Selling Shareholder) seeks to Dispose


of some or all of its Shares, it must first give to the Company written notice that it wishes
to do so (Transfer Notice).

7.7

The Transfer Notice must state:


7.7.1 the total number of Shares for sale by the Selling Shareholder (Sale Shares);
7.7.2 the price per Sale Share;
7.7.3 whether the sale is conditional or not and, if conditional, the conditions;
7.7.4 the period during which the invitation to the other Shareholders (Remaining
Shareholders) to make an offer to purchase the Sale Shares is open (Offer
Period), which (unless otherwise agreed by all Shareholders) must not be less
than 20 Business Days; and
7.7.5 if applicable, the name of any proposed buyer of the Sale Shares and a statement
that the proposed sale to the buyer is on an arm's length basis.

7.8

A Transfer Notice:
7.8.1 is an offer to the Remaining Shareholders to agree to buy the Sale Shares on the
terms of the Transfer Notice;
7.8.2 is irrevocable (unless otherwise agreed by all Shareholders); and
7.8.3 constitutes the appointment of the Board as the agent of the Selling Shareholder
for the transfer of the Sale Shares in accordance with this agreement.

7.9

When the Company receives a Transfer Notice, the Board must promptly give written
notice (Board Offer Notice) to all other Shareholders offering the Sale Shares as
follows:
7.9.1 if the Sale Shares comprise all the Shares in a Class, they must be offered to the
holders of the Shares in all other Classes in proportion to their existing holdings in
the other Class or Classes and in accordance with this clause 7;
7.9.2 if the Sale Shares are only part of the Shares in a Class of Shares, they will first
be offered to the holders of the remaining Shares in that Class in proportion to

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their existing holding in that Class. If any of the Sale Shares remain unallocated,
they will be offered to the holders of Shares in all other Classes, in each case, in
proportion to their existing holdings in the other Class or Classes and in
accordance with this clause 7.
7.10

Any Board Offer Notice must include a copy of the Transfer Notice and must contain the
following additional information:
7.10.1 the number of Sale Shares that the Shareholder is entitled to purchase;
7.10.2 the date by which the Company requires a response, after which time the Board
Offer Notice is automatically revoked; and
7.10.3 if the Shareholder wishes to purchase Shares in excess of the Shareholder's
entitlement, the Shareholder must, when accepting the offer, state the number of
excess Shares that the Shareholder wishes to purchase.

7.11

The Remaining Shareholder may, during the Offer Period, accept the offer for it to buy
some or all of the Sale Shares on the terms of the Board Offer Notice by giving to the
Company, at its registered office, an acceptance notice (Acceptance Notice).

7.12

An Acceptance Notice given by the Remaining Shareholder constitutes an acceptance


by the Remaining Shareholder of the offer by the Selling Shareholder to buy Sale
Shares as set out in the Acceptance Notice.

7.13

The Board must allocate the Sale Shares in accordance with the principles set out in
clause 7.7.

7.14

If all the Remaining Shareholders do not claim their full entitlements, the unclaimed Sale
Shares must first be used to satisfy any requests for excess Shares made by the
accepting Remaining Shareholders in that Class.

7.15

If there are insufficient unclaimed Sale Shares to satisfy such requests, the unclaimed
Sale Shares must be allocated to the accepting Remaining Shareholders in the Class
who requested excess Shares in proportion to their existing holdings in the Class.
However, no accepting Remaining Shareholder may be allocated more excess Shares
than the number requested by that accepting Remaining Shareholder.

7.16

If any Sale Shares remain unallocated after this process, the remaining unclaimed Sale
Shares must then be used to satisfy requests for excess Shares made by accepting
Remaining Shareholders in the other Class or Classes. If there are insufficient
remaining Sale Shares to satisfy such requests, the unclaimed Shares must be
allocated to the accepting Remaining Shareholders in the other Class or Classes in
proportion to their existing holdings in the other Class or Classes. However, no
accepting Remaining Shareholder may be allocated more excess Shares than the
number requested by that accepting Remaining Shareholder.

7.17

The Shareholders and the Company must ensure that completion of the transfers of the
Sale Shares takes place within 20 Business Days of the date of the Acceptance Notice.

7.18

On completion:
7.18.1 the Remaining Shareholders must buy their accepted Sale Shares and pay the
price for those accepted Sale Shares in immediately available funds to the Selling
Shareholder;
7.18.2 the Selling Shareholder must transfer to the Remaining Shareholders their
accepted Sale Shares free from any Encumbrances and with all rights, including
dividend rights, attached or accruing to those Sale Shares as at the date of the

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Acceptance Notice, and deliver to the Remaining Shareholders executed


transfers for their respective accepted Sale Shares; and
7.18.3 the Company must register the Remaining Shareholder as the holder of its
accepted Sale Shares.
7.19

If:
7.19.1 the Transfer Notice contains a condition that, unless all Sale Shares are sold,
none of the Sale Shares will be sold (Condition); and
7.19.2 the Condition is not satisfied,
then the Company must inform the Selling Shareholder of this within 2 Business Days
of the end of the Offer Period and the Selling Shareholder is not obliged to transfer any
Sale Shares to the Remaining Shareholders. The Selling Shareholder may waive the
Condition, provided the waiver is:
7.19.3 for the benefit of the Remaining Shareholders; and
7.19.4 given to the Company.

7.20

If:
7.20.1 the Transfer Notice contains the Condition; and
7.20.2 the Condition is not satisfied,
then the Selling Shareholder may within 120 Business Days of the date of the Transfer
Notice sell some or all of the Sale Shares (or of the remaining Sale Shares, if the
Condition has been waived) to any person at a price not less than and on terms no
more favourable to that person than the price or terms contained in the Transfer Notice.

7.21

If the Transfer Notice does not contain the Condition and the Remaining Shareholders
have accepted less than all of the Sale Shares then the Selling Shareholder may within
120 Business Days of the date of the Transfer Notice sell some or all of the balance of
the Sale Shares to any person at a price not less than and on terms no more favourable
to that person than the price or terms contained in the Transfer Notice.

7.22

For the purpose of this clause 7:


7.22.1 an Investor Affiliate may acquire an Investors Respective Proportion; and / or
7.22.2 an Investor Affiliate may acquire, in addition to the Respective Proportion of the
related Investor, the Respective Proportion entitlement of the other Investor (for
the avoidance of doubt, the total number of Sale Shares that may be acquired for
under this clause 7.22 is equal to the Respective Proportion of each Investor).
Blackbird or any on Investor Affiliate of it may acquire the Respective Proportion
entitlement of Startmate.

Tag Along Option


7.23

Each Shareholder may within 10 Business Days after receiving a Transfer Notice give
notice (Tag Along Notice) to the Selling Shareholder of its wish to sell such number of
Shares (of the same Class as the Sale Shares) as represents a percentage of the
Shareholders total holding of Shares up to a percentage equal to the percentage that
the Sale Shares offered for sale pursuant to the Transfer Notice represent of the Selling
Shareholder's total holding of Shares, on the terms contained in the Transfer Notice
(calculated in each case as at the date on which the Transfer Notice was served and on

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the basis and assumption that all Shares have been converted into Ordinary Shares in
accordance with the terms of issue of those Shares).
Restriction
7.24

If a Shareholder gives a Tag Along Notice to the Selling Shareholder, the Selling
Shareholder must not sell any of the Sale Shares, unless contemporaneously with the
sale of the Sale Shares or, all Shares specified in the Tag Along Notice (Tag Along
Shares) are also sold at the specified price per Share and on the same terms and
conditions as the Sale Shares are sold.

Completion
7.25

At completion of the sale of any Shares under this clause 7:


7.25.1 each buyer must pay the purchase price to each Selling Shareholder for the
Shares that it has agreed to purchase from that Selling Shareholder; and
7.25.2 each Selling Shareholder must transfer title to the Shares it is selling to the
buyer free from all Encumbrances.

No revocation
7.26

A Transfer Notice once given cannot be revoked or withdrawn unless a majority of


Shareholders consent to the revocation or withdrawal in writing.

Attorney
7.27

Each Shareholder hereby severally and irrevocably appoints the Company as its agent
and attorney with power to complete a sale as contemplated in this clause 7, (including
the power to execute all necessary documentation to complete the sale on behalf of the
Shareholder (as the case may be)). If the Company executes a document on behalf of a
Shareholder under this clause 7, the Company must provide a copy of that document to
that Shareholder.

Permitted Transfers
7.28

The provisions of this clause 7 do not apply to a transfer by a Shareholder that is


approved in writing by the Shareholders.

Drag Along

Drag Along Notice


8.1

Subject to clause 8.3, if the Company or any Shareholder receives a bona fide offer
from a third party to purchase all of the Securities in the Company for a cash amount
(Third Party Offer) and the holders of [insert]% or more of the issued Shares
(calculated on the basis and assumption that all Securities as at the date of the Third
Party Offer have been converted into Ordinary Shares) accept the Third Party Offer
(Dragging Shareholders), any Dragging Shareholder is entitled to issue to some or all
of the remaining Shareholders (Other Shareholders) a notice (Drag Along Notice)
requiring each Other Shareholder to sell to the Third Party specified in the Drag Along
Notice some or all of the Other Shareholders Securities upon the terms and conditions
specified in the Drag Along Notice.

8.2

Despite any other provision of this agreement:

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10

8.2.1 the Dragging Shareholders are not required to comply with the pre-emption
procedure set out in clauses 7.6 to 7.22 prior to accepting a Third Party Offer or
issuing the Other Shareholders a Drag Along Notice; and
8.2.2 the pre-emption procedure set out in clauses 7.6 to 7.22 does not apply to the
relevant Securities once a Drag Along Notice has been issued.
Investor Drag Along
8.3

[Alt 1] Each Investor must be a Dragging Shareholder. [Alt 2] If the Third Party Offer is
received prior to the [insert] anniversary of the date on which the Investor Shares are
issued to the Investors, an Investor may only be a issued with a Drag Along Notice if
that Investor will receive cash consideration of an aggregate value of at least [insert]
times the amount paid by the Investor for their Investor Shares. [end Alt 2]

Terms of Offer
8.4

The terms upon which the Dragging Shareholders require the Other Shareholders to
sell their Securities must be no less favourable to the Other Shareholders than the
terms on which the Dragging Shareholders are selling their Securities.

8.5

The Drag Along Notice must specify:


8.5.1 the details of the third party who provides the Third Party Offer;
8.5.2 the consideration payable for each Security (which must be a cash amount); and
8.5.3 any other key terms and conditions upon which the Other Shareholders Securities
will be purchased pursuant to the Drag Along Notice provided that the Other
Shareholders cannot be required to give to the Dragging Shareholders or the
Third Party any representations, warranties and/or indemnities relating to the
Company or its business, except for title warranties in respect of its Securities.

8.6

Subject to clause 8.7, each Other Shareholder must, within 10 Business Days of service
of the Drag Along Notice, sell all of their Securities to the third party specified in the
Drag Along Notice in accordance with the key terms and conditions of the Drag Along
Notice.

8.7

The Other Shareholders are not obliged to sell their Securities in accordance with
clause 8.6 if the Dragging Shareholders do not complete the sale of all their Securities
to the third party on the same terms and conditions as set out in the Drag Along Notice.

Deed of Accession

9.1

The Company must not allot or issue or register a transfer of any Shares to any person
who is not a party to this agreement until that person has executed and delivered to the
Company a Deed of Accession.

9.2

Any allotment, issue or transfer is void and of no effect unless and until the relevant
Deed of Accession has been delivered.

10

Non-competition

Enforceability and severance


10.1

This clause has effect as if it were separate and independent clauses, each one being
severable from the others and consisting of the covenants set out in clause 10.3

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11

combined with each separate period referred to in clause 10.4, and each combination
combined with each separate area referred to in clause 10.5.
10.2

If any of these separate clauses are void, invalid or unenforceable for any reason, it will
be deemed to be severed to the extent that it is void or to the extent of voidability,
invalidity or unenforceability and will not affect the validity or enforceability of any other
separate clause or other combinations of the separate provisions of clauses 10.3, 10.4
and 10.5.

Prohibited activities
10.3

Each member of the Founder Group (Restrained Shareholders) undertakes to the


Company and all other Shareholder that it will not:
10.3.1 supply, canvass or solicit orders for Restricted Goods or Restricted Services
from any person who, at any time in the last 12 months in which the Restrained
Shareholder held Shares, transacted business with the Company or who was
identified as a prospective customer or client of the Company with a view to
obtaining their custom;
10.3.2 use or register a name or trade mark which includes substantially all of any
business name, trade mark or the name of the Company or any confusingly
similar word or words in a way capable of or likely to be confused with a business
name, trade mark or name of the Company;
10.3.3 hinder, object to, resist or interfere in any way with the Company registering or
using its intellectual property by using any name which is similar to intellectual
property currently used or registered by the Company;
10.3.4 solicit or persuade any person who is a customer, supplier, manufacturer or
client of the Company, to cease doing business with the Company or to reduce
the amount of business that the customer, supplier, manufacturer or client would
normally do with the Company;
10.3.5 engage In a business or activity that is the same or similar to the Business or
any material part of the Companys business;
10.3.6 employ, solicit or entice away from the Company an officer, manager, consultant
or employee of the Company or a person who was an officer, manager, consultant
or employee of the Company in the 12 months before the Restrained Shareholder
ceased to hold Shares; or
10.3.7 attempt, counsel, procure or otherwise assist a person to do any of the acts
referred to in this clause.

Duration of prohibition
10.4

The undertakings in clause 10.3 begin on the date of this Agreement and end:
10.4.1 2 years after the date on which the Restrained Shareholder ceased to hold
Shares;
10.4.2 1 year after the date on which the Restrained Shareholder ceased to hold
Shares; and
10.4.3 6 months after the date on which the Restrained Shareholder ceased to hold
Shares.

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12

Geographic application of prohibition


10.5

The undertakings in clause 10.3 apply if the activity prohibited by clause 10.3 occurs in:
10.5.1 Australia, or if that area is unenforceable; then
10.5.2 New South Wales, Victoria, South Australia and Queensland, or if that area is
unenforceable; then
10.5.3 New South Wales and Victoria, or if that area is unenforceable; then
10.5.4 New South Wales,
during the periods set out in clause 10.4.

10.6

Nothing in this clause prevents a Restrained Shareholder from:


10.6.1 performing any employment or consulting agreement with the Company;
10.6.2 directly or indirectly holding Shares in the Company; or
10.6.3 holding in aggregate less than 5% of the issued shares of a body corporate
listed on a recognised stock exchange.

Restraints are reasonable


10.7

The Restrained Shareholders acknowledge that the covenants given in this clause are:
10.7.1 material to the Companys decision and each Shareholders decisions to enter
into this agreement;
10.7.2 fair and reasonable as to period, territorial limitation and subject matter
recognising the markets in which the business of the Company operates and the
geographic spread of the Companys customer base; and
10.7.3 necessary for the maintenance and protection of the goodwill of the business,
financial and proprietary interests of the Company and the business of the
Company and the value of the Shareholders Shares.

Legal advice
10.8

Each Restrained Shareholder acknowledges that in relation to this agreement and in


particular this clause, the Restrained Shareholder has received independent legal
advice or has had the opportunity to obtain independent legal advice.

Injunction
10.9

Each Restrained Shareholder acknowledges and agrees that monetary damages alone
are not an adequate remedy if the Restrained Shareholder breaches this clause and
that any other party to this agreement is entitled to seek injunctive relief from a court of
competent jurisdiction if:
10.9.1 a Restrained Shareholder fails to comply with any obligation under this clause or
threatens to do so; or
10.9.2 it is reasonable to suspect that a Restrained Shareholder will not comply with
any obligation under this clause.

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13

11

Confidential Information

Confidentiality
11.1

Each party must keep confidential the terms of this agreement, the contents of all
negotiations leading to its preparation and any other information relating to the
Company or to another Shareholder that it obtains as a result of this agreement or
anything done under it (Confidential Information), and must not disclose or permit
the disclosure of such Confidential Information to any other person. If a party becomes
aware of a breach of this obligation, that party will immediately notify the other parties.

Further permitted use and disclosure


11.2

This agreement does not prohibit the disclosure of Confidential Information by a party in
the following circumstances:
11.2.1 the other parties have consented to the disclosure of the relevant Confidential
Information;
11.2.2 the disclosure is to a professional adviser in order for it to provide advice in
relation to matters arising under or in connection with this agreement and the
party disclosing the Confidential Information ensures that the professional adviser
complies with the terms of this clause; or
11.2.3 the disclosure is required by applicable law or regulation.

Obligations to continue after agreement ends


11.3

All obligations of confidence set out in this agreement continue in full force and effect
after this agreement ends.

12

Notices

Giving notices
12.1

Any notice or communication given to a party under this agreement is only given if it is
in writing and in English and sent in one of the following ways:
12.1.1 delivered to the street address of the addressee;
12.1.2 sent by prepaid ordinary post (airmail if outside Australia) to the street address
of the addressee; or
12.1.3 sent by email to the email address of the addressee,

in each case marked for the attention of the relevant department or officer (if any) set out below,
or in the case of the Shareholders or Investors, as set out in Schedule 1.
Company
Name:

[insert name] ACN [insert ACN]

Address:

[insert]

Email
address:

[insert]

Attention:

[insert name]

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14

Change of address or email address


12.2

If a party gives the other party three Business Days' notice of a change of its address or
email address, any notice or communication is only given by that other party if it is
delivered, posted or emailed to the latest address or email address.

Time notice is given


12.3

Any notice or communication is to be treated as given at the following time:


12.3.1 if it is delivered, when it is left at the relevant address;
12.3.2 if it is sent by post, two (or, in the case of a notice or communication posted to
another country, nine) Business Days after it is posted; or
12.3.3 if it is sent by email, on the day and at the time that the recipient confirms the
email is received.

12.4

However, if any notice or communication is given on a day that is not a Business Day or
after 5pm on a Business Day, it is to be treated as having been delivered at the
beginning of the next Business Day.

13

Miscellaneous

Approvals and consents


13.1

Unless this agreement expressly provides otherwise, a party may give or withhold an
approval or consent in that party's absolute discretion and subject to any conditions
determined by the party. A party is not obliged to give its reasons for giving or
withholding a consent or approval or for giving a consent or approval subject to
conditions.

Assignments and transfers


13.2

A party must not assign or transfer any of its rights or obligations under this agreement
without the prior written consent of each of the other parties.

Costs
13.3

Except as otherwise set out in this agreement, each party must pay its own costs and
expenses in relation to preparing, negotiating, executing and completing this agreement
and any document related to this agreement.

Entire agreement
13.4

This agreement contains everything the parties have agreed in relation to the subject
matter it deals with. No party can rely on an earlier written document or anything said or
done by or on behalf of another party before this agreement was executed.

Execution of separate documents


13.5

This agreement is properly executed if each party executes either this document or an
identical document. In the latter case, this agreement takes effect when the separately
executed documents are exchanged between the parties.

Further acts
13.6

Each party must at its own expense promptly execute all documents and do or use
reasonable endeavours to cause a third party to do all things that another party from
time to time may reasonably request in order to give effect to, perfect or complete this

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15

agreement and all transactions incidental to it (including, without limitation, voting in


favour of any resolution to approve a buy-back of Ordinary Shares under clause 5).
Governing law and jurisdiction
13.7

This agreement is governed by the law of New South Wales, Australia. The parties
submit to the non-exclusive jurisdiction of its courts and courts of appeal from them. The
parties will not object to the exercise of jurisdiction by those courts on any basis.

Inconsistency with Constitution


13.8

If there is any inconsistency between this agreement and the Constitution then the
parties agree to abide by this agreement and to do everything required to change the
Constitution so that it is consistent with this agreement.

No partnership or agency
13.9

Nothing contained or implied in this agreement will create or constitute, or be deemed to


create or constitute, a partnership between the parties. A party must not act, represent
or hold itself out as having authority to act as the agent of or in any way bind or commit
the other parties to any obligation.

Variation
13.10 No variation of this agreement will be of any force or effect unless it is in writing and
signed by the parties to this agreement.
Waivers
13.11 A waiver of any right, power or remedy under this agreement must be in writing signed
by the party granting it. A waiver is only effective in relation to the particular obligation or
breach in respect of which it is given. It is not to be taken as an implied waiver of any
other obligation or breach or as an implied waiver of that obligation or breach in relation
to any other occasion.
13.12 The fact that a party fails to do, or delays in doing, something the party is entitled to do
under this agreement does not amount to a waiver.
14

Definitions and interpretation

Definitions
14.1

In this agreement the following definitions apply:


Accelerated Vesting Event means a Sale Event.
Affiliate means any fund or vehicle managed or advised by a party to this agreement or
any Related Body Corporate of that party.
ASX means ASX Limited (ACN 008 624 691) or the market it operates (as the context
requires).
Bad Leaver is a person who is not a Good Leaver.
Board means the board of directors for the time being of the Company.
Auditor means:
a) a person registered as an auditor under a law in force in a State or a Territory; or
b) if the Company is no longer an Australian residenta person registered as an
auditor under a law in force in the country of which the company is a resident.

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16

who is appointed to act as the Companys auditor pursuant to clause 1


Business Day means a day on which banks are open for general banking business in
Sydney, NSW, excluding Saturdays and Sundays.
Business Sale means the completion of a sale or series of sales by the Company (or
any Subsidiary) of all or substantially all of the business and assets of the Company and
its Subsidiaries to one or more third parties.
Class means a class of Shares having attached to them identical rights, privileges,
limitations and conditions.
Confidential Information has the meaning set out in clause 11.1.
Constitution means the constitution of the Company.
Corporations Act means the Corporations Act 2001 (Cth).
Deed of Accession means a deed of accession in the agreed form pursuant to
which a person who acquires Shares agrees to be bound by the terms of this
agreement.
Directors means the directors for the time being of the Company.
Dispose means any dealing with a Share or with any interest in or rights attaching to a
Share including rights to grant options or rights of pre-emption over, sell, transfer,
assign, part with the benefit of, declare a trust over, or deal with an ownership interest in
a Share.
Employee Options means Ordinary Shares or options to acquire Ordinary Shares
granted or issued after the date of this agreement to employees, officers, directors,
contractors, consultants or advisers to the Company or any Subsidiary of the Company
pursuant to incentive agreements, share purchase or share option plans, or similar
arrangements that are approved by the Board, the number of which Ordinary Shares or
options to acquire Ordinary Shares shall not exceed the Employee Option Maximum.
Employee Option Maximum means the number which is equal to [fifteen] per cent of
the issued Shares in the Company.
Encumbrance means any mortgage, lien, charge, pledge, assignment by way of
security, security interest, title retention, preferential right or trust arrangement, claim,
covenant, easement or any other security arrangement or any other arrangement
having the same effect.
Founder Group means, in relation to a Founder, the Founder and its Nominee.
Financial Year means the period of 12 months ending on 30 June in each year.
Good Leaver means any Founder who ceases to be engaged by the Company, whether
as an employee or contractor, for any of the following reasons:
(i)

death;

(ii)

compulsory retirement;

(iii)

becoming permanently incapable of discharging efficiently the duties of his


engagement or any other comparable engagement with the Company or a
Subsidiary by reason of ill health or infirmity of mind or body, injury or
disability (evidenced to the satisfaction of the Board);

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17

(iv)

Redundancy; or

(v)

dismissal in circumstances which have resulted in a claim against the


Company for unfair dismissal where the claim is successful on the grounds
that the dismissal was unfair pursuant to Chapter 3, Part 3-2, Divisions 2
and 3 of the Fair Work Act 2009 (Cth).

Investor means each of Startmate and Blackbird or any other person designated as an
investor at the date on which they subscribe for Shares (in accordance with the
procedure set out in clause 4).
Investor Affiliate means, in relation to an Investor, any fund or vehicle managed or
advised by that Investor or any Related Body Corporate of that Investor.
Investor Share means an "A" Preference Share in the Company.
IPO means the admission of all or any of the Company's Shares (or any holding
company's shares) to trading on ASX, NASDAQ or any other major exchange.
Major Investor means a holder of Investor Shares who has paid at least $[15,000]
as the total issue price for all of their Shares.
New Securities means any securities (including convertible securities) in the
Company unissued at the date of this agreement but excluding:
(a)

Securities issued as part of an IPO;

(b)
Shares issued or issuable upon conversion of Investor
Shares to Ordinary Shares;
(c)Shares issuable upon exercise of any options or rights to
purchase any Securities outstanding as of the date of this agreement and
any Securities issuable upon the conversion thereof (including, for the
avoidance of doubt, any Employee Options up to the Employee Option
Maximum); or
(d)

Shares issued pursuant to a share split.

Nominee means, in relation to a Shareholder, such person or entity nominated by that


Shareholder to hold Shares on their behalf and, as at the date of this agreement, in
relation to each Founder, means the entity listed opposite the respective Founders
name in column 1 of the table in Schedule 1.
Ordinary Share means an ordinary share in the Company.
Redundancy means in respect of a Founder the termination of the Founders
employment with the Company or any Subsidiary by reason of a restructure or a state
of affairs within the Company or the Subsidiary whereby the position previously
occupied by that person no longer exists within the Company or the Subsidiary and
where the Board in its absolute discretion determines that such an event qualifies as a
redundancy for the purposes of determining whether a Founder is a Good Leaver.
Related Body Corporate has the meaning given to that term in the Corporations Act.
Respective Proportion means the number of Shares held by a Shareholder divided by
the total number of Shares in the Company.
(a)
goods

Restricted Goods means any goods that compete or may compete with any
developed, manufactured or supplied by the Company.

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18

Restricted Services means any services that compete or may compete with any
services provided or supplied by the Company
Sale Event means a Share Sale, a Business Sale or an IPO.
Sale Shares has the meaning given to that term in clause 7.7.
Security means a security of the Company and includes the Shares, options, any
convertible notes, warrants or other securities capable of conversion into Shares.
Selling Shareholder has the meaning given to that term in clause 7.6.
Shareholders means the shareholders in the Company and includes any person
who subsequently becomes a shareholder and who adheres to this agreement.
Shares means shares in the Company, including the Ordinary Shares and the Investor
Shares.
Share Sale means an acquisition of Shares by way of transfer which results in one or
more third parties holding Shares having a right to exercise more than 50% of the votes
which may be cast on a poll at a general meeting of the Company on all, or substantially
all, matters.
Subsidiary has the meaning given to that term in the Corporations Act but also
includes an entity that would be considered a subsidiary under generally accepted
accounting principles.
Unvested Shares has the meaning set out in clause 5.3.
Wholly-owned Group means a person's ultimate holding company and each
wholly-owned Subsidiary of that person's ultimate holding company.
Interpretation
14.2

In the interpretation of this agreement, the following provisions apply unless the context
otherwise requires:
14.2.1 Headings are inserted for convenience only and do not affect the interpretation
of this agreement.
14.2.2 A reference in this agreement to a Business Day means a day other than a
Saturday or Sunday on which banks are open for business generally in Sydney.
14.2.3 If the day on which any act, matter or thing is to be done under this agreement is
not a Business Day, the act, matter or thing must be done on the next Business
Day.
14.2.4 A reference in this agreement to dollars or $ means Australian dollars and all
amounts payable under this agreement are payable in Australian dollars.
14.2.5 A reference in this agreement to any law, legislation or legislative provision
includes any statutory modification, amendment or re-enactment, and any
subordinate legislation or regulations issued under that legislation or legislative
provision.
14.2.6 A reference in this agreement to any agreement or document is to that
agreement or document as amended, novated, supplemented or replaced.
14.2.7 A reference to a clause, part, schedule or attachment is a reference to a clause,
part, schedule or attachment of or to this agreement.

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19

14.2.8 An expression importing a natural person includes any company, trust,


partnership, joint venture, association, body corporate or governmental agency.
14.2.9 Where a word or phrase is given a defined meaning, another part of speech or
other grammatical form in respect of that word or phrase has a corresponding
meaning.
14.2.10A word which denotes the singular denotes the plural, a word which denotes the
plural denotes the singular, and a reference to any gender denotes the other
genders.
14.2.11References to the word 'include' or 'including' are to be construed without
limitation.
14.2.12Any schedules and attachments form part of this agreement.
14.2.13Neither this agreement nor any part of it is to be construed against a party on
the basis that the party or its lawyers were responsible for its drafting.

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20

Schedule 1 Parties
Column 1

Column 2

Column 3

Column 4

Column 5

Column 7

Name of

Founder

Contact Details

Class of

Number of

Shareholding

Share

Shares

Percentage

Shareholder
Startmate Pty Ltd

240 Riley Street,

ACN 146 852

N/A

Surry Hills NSW

Preference

511 as trustee for

2010

Shares

240 Riley Street,

Ventures 2015,

Surry Hills NSW

Preference

LP, a NSW

2010

Shares

[insert]

[insert]

[insert]

]%

[insert]

]%

[insert]

[insert]

the Startmate
Exploration
Holdings Fund
(Startmate)
Blackbird

N/A

limited
partnership
Registration
Number
ILP0000141
(Blackbird)
[insert]

[insert]

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21

Execution and date


Executed as an agreement.
Date:

Executed by [Company] ACN [insert] in


accordance with s127 of the Corporations Act
2001:

................................

................................

Signature of director

Signature of director/company secretary

................................

................................

Name of director (print)

Name of director/company secretary (print)

Executed by Startmate Pty Ltd ACN 146


852 511 as trustee for the Startmate
Exploration Holdings Fund in accordance
with s127 of the Corporations Act 2001:

................................

................................

Signature of director

Signature of director/company secretary

................................

................................

Name of director (print)

Name of director/company secretary (print)

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22

Executed by Blackbird Ventures 2015, LP, a


NSW limited partnership Registration
Number ILP0000141 in accordance with s127
of the Corporations Act 2001:

................................

................................

Signature of director

Signature of director/company secretary

................................

................................

Name of director (print)

Name of director/company secretary (print)

Executed by [insert] ACN [insert] in


accordance with s127 of the Corporations Act
2001:

................................

................................

Signature of director

Signature of director/company secretary

................................

................................

Name of director (print)

Name of director/company secretary (print)

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23

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