Articles of Association (investor-ready)

ARTICLES OF ASSOCIATION

of ____________________ LIMITED Company number: ____________ Private company limited by shares

1. Interpretation and exclusion of model articles

1.1 The regulations in the Companies (Model Articles) Regulations 2008 (SI 2008/3229) do not apply to the Company. These are the Company’s articles of association.

1.2 In these Articles: “Act” means the Companies Act 2006; “A Shares” means A ordinary shares of £ ______ each; “Ordinary Shares” means ordinary shares of £ ______ each; “Shares” means shares of any class; “Board” means the board of directors; “Investor Director” has the meaning in Article 6.2; “Investor Majority” means the holders of more than ______ % of the A Shares; “Founder” means each person named as a founder in the Shareholders’ Agreement; “Shareholders’ Agreement” means any agreement between all or some of the shareholders and the Company relating to the Company that is stated to be a shareholders’ agreement; “Exit” means a Sale, a Listing or a sale of all or substantially all of the business and assets of the Company; “Sale” means the transfer of Shares giving the buyer (and persons connected with it) control (more than 50% of votes) of the Company; “Listing” means the admission of the Company’s shares to trading on a recognised investment exchange; “Fair Value” means as determined under Article 4.6; “Leaver” has the meaning in the Shareholders’ Agreement or, if none, means a Founder or employee shareholder who ceases to work for the Company; “Bad Leaver”, “Good Leaver” and “Leaver Shares” have the meanings in the Shareholders’ Agreement.

1.3 Unless the context requires otherwise, words defined in the Act have the same meaning in these Articles. Headings do not affect interpretation. A reference to a statute includes it as amended or re-enacted.

2. Share capital and rights

2.1 The Ordinary Shares and the A Shares rank equally (“pari passu”) in all respects, except as set out in these Articles. The rights of each class are as follows.

2.2 Income. Profits that the Company decides to distribute are distributed among the holders of the Ordinary Shares and the A Shares pro rata to the number of shares held (as if they were one class), but subject to any rights stated in the Shareholders’ Agreement. No dividend is payable except as the Board recommends and the shareholders declare.

2.3 Capital (liquidation preference). On a return of assets on a liquidation, or on an Exit, the proceeds shall be distributed: (a) first, in paying to each holder of A Shares, in priority to any other class, an amount per A Share equal to the amount paid up or credited as paid up on it (including any premium) (the “Preference Amount”) (or, if the proceeds are not enough, pro rata to the Preference Amounts); and (b) the balance among the holders of all Shares pro rata to the number of Shares held, as if they were one class, ☐ provided that A Shares holders may instead elect to take the amount they would receive if all A Shares were converted into Ordinary Shares immediately before the distribution, if greater (non-participating preference) / ☐ without that election (participating preference).