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Shareholders Agreement, Investor Questionnaire and Subscription application Baltic Business Investments SPV4 OÜ


Here You will see again Shareholders Agreement with which You are joining. After that You will see all Questions (also those which You did not need to answer) and Your Answers. Please do not be distracted by unanswered questions – as those are not needed from You, we did not ask those and we don't need answers to those. Please move down to the end for signing!

BALTIC BUSINESS INVESTMENTS SPV4 OÜ SHAREHOLDERS’ AGREEMENT

The parties are all persons who have signed this agreement – hereinafter separately referred to as Shareholder or together as Shareholders, have agreed following conditions as acting Baltic Business Investments SPV4 OÜ (register code 16598034, hereinafter the Company) shareholder.

1. WARRANTIES

1.1. Each Shareholder hereby warrants that he is entitled to enter into the Agreement and that he is acting in good faith. 

1.2. The Shareholders shall become the shareholders of the Company as specified below:

Name

Nominal value of share

Percentage of shareholding

Main shareholder:
Baltic Business Investments OÜ
(register code 16073627)

3 329,55 EUR

33%

All other shareholders together
(hereinafter Investor or Investors)

6 760,00 EUR

67%

Total:

 10 089,55 EUR

100%

1.3. The Shareholders have to pay for the Shares the nominal value and reserve capital payment as assigned by the Shareholders meetings decision of the Company and by the Subscription application made by each Investor.

1.4. The minimum investment is 1000 EUR, of which the nominal capital is 8,00 EUR and the payment to the reserve capital is 992,00 EUR. In case of a larger investment, the investment can be a multiple of 1000 euros.

2. CAPITALIZATION

2.1. Capital Contributions

The Main Shareholder does not make a contribution to the reserve capital of the Company.

Investors will pay a total of 845 000 EUR to the Company's bank account.

The Capital shall be used following:

approximately 1 Euro to buy 100% of shares of empty, just started, company Kangasalan Automaattivarastot Oy (register code 3320846-5 in Finland, hereinafter the Finnish Company);

approximately 490 000 Euros shall be used via the Finnish Company to purchase the property Kaavakuja 6, 36220 Kangasala, Pirkanmaa, Finland / part of the registered parcel 211-452-14-0 (parcel will be divided during the purchase) (hereinafter the Property);

approximately 280 000 Euros shall be used to improve the property;
in case of when improvements take less than planned capital, then the rest of the capital shall be used as Renovation Fund for the future. If purchase and improvements costs are more than 20 000 EUR less than initial calculation, the Management Board has the right to propose to the shareholders to decide return such sum back to the Investors proportionally to payment to the reserve capital (as return of reserve capital);

approximately 7 000 Euros shall be used for initial marketing;

approximately 19 000 Euros shall be used for loss coverage during the period when operating costs are higher than sales revenue;

approximately 10 000 Euros shall be used for ongoing reserve.

2.2. Additional Capital Contributions

a) Additional Capital Contributions may be called for by the Main Shareholder by written demand upon the Investors only in such situations when the Company has not enough capital to realize its purpose to acquire, own, renovate, rent out, manage the Property and engage in actions necessary, convenient or incidental to all of the foregoing (hereinafter the Purpose of the Company).

b) In the event the Investors shall fail to make any such additional Capital Contribution within thirty (30) days of written demand from the Main Shareholder, the Main Shareholder shall have the right to take loans to cover the missing capital needs. Such loans and their interest shall be paid back before there will be any additional Distributions to the Investors.

2.3. Rules about Capital Contributions

No Shareholder shall demand or receive a return of such Shareholder's Capital Contributions or withdraw from the Company, except in case of selling his share.

No Shareholder shall receive any interest, salary, or drawings with respect to such Shareholder's Capital Contributions, except dividend.

2.4. Return of Capital Contributions

a) If the company's financial situation allows for the refinancing of the project with a bank loan, the management board has the right to raise money as a loan from the bank.
To take a loan more than 200 000 EUR, there must be a prior decision of the shareholders.

b) Upon receipt of the loan, the Management Board has the right to propose to the shareholders to decide the return of reserve capital or the reduction of the share capital in order to return the money to the Investors. In such a case, the reduction of the reserve or share capital in the amounts proposed by the Management Board shall be decided taking into account the need of the Company to maintain the net asset requirements specified by law.

c) If during the subscription period the purchase amount of the Property cannot be reached as of 31.12.2022, the Company will return the entire investment to Investors and the profit sharing according to Art 3.1. shall not apply in such case. The money will also be refunded if the third party purchases the Property listed in the Business Plan before the Finnish Company purchases it. The money will be returned within 7 days from the respective due date. The Management Board has the right to extend the subscription period by its written decision. The Management Board will inform all Investors and share the new deadline for subscription period with reasoning.

The calculation of the 7% return for investors will start from the day when the Finnish Company buys the Property (signing day).
The Investors who shall join later than the date of acquisition of the Property will be subject to 7% return from the moment of 1th date of next calendar month after payment.

d) The calculation of the 7% return for investors will stop on the day when the Finnish Company has sold the Property (signing day).

3. DISTRIBUTION OF PROFIT

3.1. Profit for any fiscal year shall be allocated among Shareholders as following:

3.1.1. The Investors will receive preferential right to receive dividends from cash flow from property operations until the Investors have received a preferred return equal to seven percent (7.00%) on their outstanding capital investment (total payment, both to nominal capital and reserve capital). In the event cash flow from operations is insufficient, the preferred return will accrue and shall be paid with the next dividend.

3.1.2. As a second step, rest of the profit will be used to pay back to the Investors sums paid as the reserve capital (not as dividend, but as return of the investment) according to possibilities of free cash flow.

3.1.3. As a third step, other profit shall be paid as dividend according to cash flow situation proportionally to all shareholders: 67% to the Investors and 33% to Baltic Business Investments OÜ.

3.1.4. Net proceeds from sale or refinance of the property will be distributed as follows:
a) Pay back loan to the Lender
b) 100% to the Investors until they have received a return of their unpaid capital investment (the reserve capital), plus any accrued but unpaid preferred return as dividend according to art. 3.1.1.
c) Thereafter proceeds will be distributed 67% to the Investors and 33% to Baltic Business Investments OÜ.

4. THE PROPERTY MANAGEMENT RULES

4.1. Management Fees

The Main Shareholder shall have the right to appoint the member of the Management Board of the Company and the Finnish Company. The Management Board of the Company and/or The Management Board of the Finnish Company has right to conclude management service agreement with Baltic Business Investments Management OÜ and/or its affiliated company (hereinafter BBIM) with following fees and hereby Shareholders give their consent to such fees:

4.1.1. One-time costs

a) the acquisition / sponsorship fee is 2% of the Total Project Cost (includes purchase and improvements costs, initial marketing and reserves to cover negative cash flow and unexpected costs)
(about 16 250 eur)

b) project management fee during Property renovation period, i.e. so that the Property can be ready for rent – 2% of the Total Project Cost (includes purchase and improvements costs, initial marketing and reserves to cover negative cash flow and unexpected costs)
(about 16 250 eur)

c) one-time marketing 7 000 eur (during and after renovation of building), from it 700 eur will be fee for BBIM and 6 300 in budget for Facebook, Google etc ads

d) loan negotiation fee 1% of the loan amount (in case of bank loan according Art 2.4)

e) managing the sales / disposition fee at the end of the project 1% of the Property sales amount. The project period is planned for 10 years.

4.1.2. Continuously throughout the project

a) managing the marketing and sales on the Internet (50 eur per month as initial price, the Board has the right to change if necessary).

b) real estate management 5% of sales revenue until ordered from a third party as a service

c) asset management / investor reports and cash flow control and accountant management – 2% of sales revenue

d) accounting service (max 200 eur per month) until ordered from a third party as a service

4.2. Insurance coverage

The Management Board of the Finnish Company shall procure and maintain, or cause to be procured and maintained, insurance sufficient to enable the Finnish Company to comply with applicable laws and requirements, including as a minimum and without limitation, the following:

a) protection in the event of fire and extended insurance cover for the main risks using the replacement cost method.

4.3. Management during renovations

During the renovations phase of the Business Plan the Main Shareholder shall organize works to complete the renovations necessary for the Finnish Company to operate the Mini Storage business on the Property.

The Main Shareholder shall make all needed decisions during renovations in the best interest of the Company using his best knowledge and experience. The Main Shareholder shall make all decisions for renovations without any further consent of the other Shareholders being required as long as total cost of renovations is 280 000 Euros or less. The Main Shareholder shall inform the Investors in reasonable time when he foresees that the renovations costs are going to be more than planned sum, in such case the Main Shareholder shall use Section 2.2 to call Additional Capital Contributions or take loan.

4.4. Implementation of Plan by the Main Shareholder

The Main Shareholder shall, subject to the limitations contained herein and the availability of operating revenues and other cash flow (as long as the Main Shareholder has used reasonable efforts to maximize the same), implement the applicable Business Plan. 

The Main Shareholder shall promptly advise and inform the Shareholders of any transaction, notice, event or proposal directly relating to the management and operation of the Property which does or could significantly affect the Property or the Company or cause a significant deviation from the Business Plan.

5. ACCOUNTING AND RECORDS

5.1. Books and Records. The Main Shareholder shall keep (or organize to be kept) complete and accurate books of account and records of the Company and the Finnish Company. The books and records of the Company and the Finnish Company shall be kept on the accrual basis of accounting and in accordance with generally accepted accounting principles.

5.2. Reports. The Main Shareholder shall prepare (or cause to be prepared) financial reports of the Company. Within one hundred eighty (180) days after the end of each fiscal year and within sixty (60) days of the end of any fiscal quarter, the Main Shareholder shall send each Shareholder a copy of the balance sheet of the Company as of the last day of the applicable period and a statement of income or loss for the Company for such period.

5.3. Tax declarations. The Main Shareholder shall organize the Company's and the Finnish Company’s accountants to prepare all tax declarations in a timely manner.

5.4. Fiscal Year. The fiscal year of the Company shall be the calendar year, unless otherwise approved by the Shareholders.

5.4.1. The first fiscal year shall be from founding day until the end of 2023 calendar year.

6. CONDITIONS OF TRANSFER OF SHARES

6.1. Shareholders shall not transfer, sell, donate, mortgage, pledge or otherwise encumber any of his shares unless allowed with this Agreement or by a resolution of the Shareholders. 

6.2. Shareholder has the right to freely transfer his or her share or part of the share to another shareholder.

6.3. The Shareholders hereby agree that if any of the Shareholders wishes to transfer any or all of his Shares to any third person not being shareholder, he shall inform the other Shareholders of the conditions of sale of the Shares in form which can be reproduced in writing (including number of shares he wishes to sell, price and terms of the sale, names of the proposed buyers, anticipated date of the sale). The other Shareholders shall be obliged to inform the transferring Shareholder whether they wish to exercise the right of pre-emption within 30 days of receiving the transfer notice. 

6.4. The Shareholder that wishes to exercise the right of pre-emption has to notify the transferring Shareholder in writing to what extent he wishes to exercise their right. The Shareholder accepting the offer shall be entitled and required to purchase some or all of the offered shares. If more than one Shareholder accepts the offer, the offered Shares shall be allocated between the accepting parties on a pro-rata basis in relation to their respective previous holdings of Shares.

6.5. If a Shareholder does not respond to the transfer notice within the notice time, this shall be considered as a lack of intention to purchase the Shares. If the other Shareholders do not accept, or if they have rejected the offer then the transferring Shareholder shall be entitled to transfer the Shares to a third party on the same terms as those offered to the other Shareholders, provided that such sale is completed within 60 days from the day the transferring Shareholder became entitled to sell the Shares to a third party and received respective consent under Shareholders resolution. 

6.6. The Shareholders agree to tag-along rights.

6.6.1. In the event that a third party wishes to buy more than 10% of the Shares belonging to a Main Shareholder, the Main Shareholder is obliged not to sell their share until they make a tag-along offer to the other Shareholders. The selling Shareholder must at least 30 days before any tag-along sale give in notice in form which can be reproduced in writing to the other Shareholders. The tag-along notice must state: (i) the name of the proposed buyer of the Shares; (ii) the number of shares to be transferred in excess of 10% of the Shareholder’s ownership of the Company as of the date hereof; (iii) the price of Shares to be transferred; (iv) any other material terms.

6.6.2. The other Shareholders are entitled to sell in proportion to their shareholding in the Company as follows:

6.6.2.1. The selling Shareholder sells the smallest part of the Share and the Shares of other Shareholders are added proportionally thereto;

6.6.2.2. Alternatively in addition to the Share offered by the Seller, the buyer proportionally buys shareholdings from another shareholder. 

6.6.3. A Shareholder who wishes to enact his tag-along right is obliged to inform the Seller within 30 days of receiving the notice as to whether he wishes to sell his Share. The Shareholder is entitled to waive the implementation of the tag-along right concerning their shareholding.

6.7. In the event that a third party as the buyer acquires a shareholding in the Company, the pre-condition of the sale is that the buyer becomes a Party to this Agreement. This has to take place prior or at the same time as the transaction as an appendix to this Agreement. 

6.8. The transfer of Share is allowed only together with the transfer of the right to reclaim the re-payment of the Reserve Capital, i.e. the entire unit of investment of 1000 EUR made into the Company is one integral part.

7. GOVERNING PRINCIPLES

7.1. Meeting of Shareholders

7.1.1. The Shareholders are invited to meetings through an invitation sent by e-mail to contacts given in the Shareholders’ list.

7.1.2. The notice of a Shareholders’ meeting shall be sent at least 7 days before the meeting takes place. Shareholders’ meeting can be participated via electronic means.

7.1.3. A resolution of the Shareholders shall be adopted if more than 50% of the votes represented at the meeting of shareholders are in favour unless the law or the articles of association prescribe a greater majority requirement.

7.1.3.1. Hereby all shareholders agree that the main Shareholder has specific right to appoint and remove members of the Management Board and other shareholders have no voting right in this issue. All shareholders hereby agree that member of the Management Board shall be Peeter Pärtel. Such specific voting right shall be regulated also in the articles of association.

7.1.3.2. Hereby all shareholders agree that the main Shareholder has specific right to appoint and remove members of the Finnish Company Management Board and other shareholders have no voting right in this issue. All shareholders hereby agree that member of the Finnish Company Management Board shall be Markus Kauppinen.

7.1.4. Decisions of Shareholders shall be made concerning the following issues related to the Company and the Finnish Company:

7.1.4.1. Deciding on the sale of the Property, the sale of the Finnish Company and/or taking loan for refinancing the Property more than 200 000 EUR;

7.1.4.2. Amending the articles of association;

7.1.4.3. Increasing and reducing the share capital, deciding on the issuance of debt obligations; deciding the transferring of Shares;

7.1.4.4. Electing and removing members of the Management Board while the voting right has the Main Shareholder;

7.1.4.5. approving the annual report and distribution of profit;

7.1.4.6. dividing shares, unless articles of association prescribe otherwise;

7.1.4.7. elect an auditor if necessary according to the law;

7.1.4.8. decide on conclusion and terms and conditions of transactions with the members of the Management Board, decide on the conduct of legal disputes with the members of the Management Board and appointment of the representative of the Company in such transactions and disputes;

7.1.4.9. Determining the salaries and bonuses of the Management Board.

7.1.4.10. Decide on other matters placed in the competence of the shareholders by law or the articles of association.

7.1.5. The following decisions shall be determined by 3/4 of the votes decision of the Shareholders:

7.1.5.1. Increasing and reducing the share capital;

7.1.5.2. Changing of the articles of Association

7.1.5.3. decide on dissolution, merger, division or transformation of the Company.

7.1.6. The shareholder shall not have right to vote in following cases: release of the shareholder from obligations or liabilities, consent for the transfer of the shareholder's share, conclusion of a transaction between the shareholder and the company, conduct of a legal dispute with the shareholder, issues related to the monitoring or evaluation of the activities of a shareholder.

7.2. The Management Board

7.2.1. The Management Board consists of one member, who shall be Peeter Pärtel.

7.2.2. There shall be no fee payable to the Management Board for its work unless the Shareholders decide otherwise. The Company shall compensate the Management Board for reasonable expenses if these are directly connected to the operations of the Company and do not exceed the limits approved by the Shareholders. There shall be no fee payable upon recalling a member of the Management Board unless the Shareholders decide otherwise.

8. ENTITLEMENT OF SHAREHOLDERS TO INFORMATION

8.1. Shareholders are entitled to receive information concerning the Company as follows:

8.1.1. Annual reports (inter alia the balance sheet and income statement) produced according to the laws within 180 days of the end of each financial year;

8.1.2. Financial reports of each quarter (in every three months) (inter alia the income statement) within 60 days of the end of each quarter.

8.2. The Shareholders are entitled to introduce with the documentation of the Company and obtain copies thereof.

9. CONFIDENTIALITY AND COMPETITION

9.1. The parties consider any information concerning the activities of the Company and the content of this Agreement as confidential and the information shall not be disclosed to any third parties without the prior written consent of the other parties. 

9.2. The parties are obliged to protect confidential information using all reasonable efforts in order to avoid the disclosure of the information to third parties. 

9.3. Confidential information does not include the following:

9.3.1. information disclosed in the course of the everyday business activities of the Company;

9.3.2. information publicly accessible to third parties or which becomes accessible due to actions or failure to act and that cannot be considered as a breach of the confidentiality obligation;

9.3.3. information the Party has acquired from third parties independently;

9.3.4. information that must be disclosed according to legislation, bearing in mind that such disclosure shall take place in the most appropriate way possible.

9.4. All shareholders are entitled to participate in other real estate projects also. Still, the Shareholders agree to act in good faith and in the economic interests of the Company, incl. not to make competitive rental offers to the Company’s tenants.

10. INTELLECTUAL PROPERTY

10.1. All the intellectual property of the Company is first and foremost used to the benefit of the Company's own marketing.

10.2. The Shareholders are not allowed to use intellectual property of the Company outside business activities of the Company, unless otherwise decided with the resolution of the Management Board.

11. LIABILITY

11.1. In the event that a Shareholder fails to comply with the conditions specified in this Agreement, the Company and/or other Shareholders shall be entitled to demand compensation for damages depending who has suffered respective damage.

11.2. Each Shareholder has a right to compensation of damage proportional to the shareholding in the Company.

12. NOTICES

12.1. All notices shall be forwarded to the other Party by e-mail unless the Agreement stipulates otherwise. Notice sent by e-mail shall also be deemed to be a written notice for the purposes of this Agreement.

12.2. A written notice is considered received against signature or forwarded to the other Party by registered mail to the address specified by the Party and the mail was sent 3 (three) calendar days previously or by e-mail. If the sender of the e-mail requests an acknowledgment of receipt, the recipient has to forward it.

12.3. The contact details of the Shareholders are given in the subscription Application. In the event that the Shareholders’ contact details change, the Shareholders are obliged to notify the Management Board of the Company thereof.

13. DATE TERMINATION OF AGREEMENT

13.1. The Agreement shall enter into force from the moment of its signing and remain valid while the Parties to the Agreement maintain ownership of the Company.

13.2. The Agreement shall terminate on any of the following events:

13.2.1. The Company is dissolved or makes an assignment in bankruptcy;

13.2.2. Unanimous agreement of the Shareholders;

13.2.3. Sale of the Company to another party.

13.3. The Liquidation of the Company shall be commenced when the Property and/or the Finnish Company is sold.

14. FINAL PROVISIONS

14.1. Hereby the Parties agree that if the Articles of Association and the Shareholders Agreement are in contravention, the provisions of the Shareholders Agreement shall remain in force and the Parties shall ensure that the Articles of Associates comply with the Agreement. 

14.2. In the event that any of the provisions of the Agreement is in contravention with the law, the other provisions of the Agreement shall remain valid and the Parties shall ensure that the Agreement complies with the law in such a way that the Agreement and its original ideas are amended as little as possible. 

14.3. Amendments to the Agreement shall only be made with the written agreement of all of the Parties. Such amendments shall enter force from the moment of their signing unless the Parties agree otherwise.

14.4. The agreement shall be governed by the laws of the Republic of Estonia.

14.5. All disputes arising between the Parties shall be resolved by way of negotiations. In the event that the Parties do not reach an agreement, the Parties shall file their claims to the court in Estonia, Harju Maakohus.

14.6. The Agreement shall apply to each Shareholder from signing by respective Shareholder and paying its contribution according to subscription agreement during 3 days after signing the Agreement. If payment is not made on time, the shareholder shall be deemed to have automatically withdrawn from the subscription and this Agreement shall not enter into force in respect of such Shareholder.

Signatures: /signed digitally/

Investor Questionnaire

Information about You

Name:

Phone:

Email:

Information about You as Individual Investor (was asked if You invest as Individual Investor)

Your Tax Residence Country?:

Personal Identification Code:

Physical Address where we can send You official information (for example invitation to Meeting of Shareholders):

Bank Account / IBAN:

Information about You as Company / Business (was asked if You invest as Company / Business)

Company ID / Registration number:

Company Name:

Company Tax Residence Country?:

Company Registration Address:

Company bank Account / IBAN:

Required information based on Estonian laws (if You invest as Individual Investor)

Please describe how You got the funds for this investment (sum / country / and source)?:

Who is the Actual Owner of the funds You plan to invest (it’s a person, who controls investment decision, or in who's interest the decision has been made, or who benefits from this investment.):

Please add the following information of all the beneficiaries: First Name | Last name | Personal Identity Code | Country of Residency:

Are any of the funds you planned to invest owned by a politically exposed person (a person who has performed in last 12 months prominent public functions.):

Are any of the funds you planned to invest owned by a politically exposed person (a person who has performed in last 12 months prominent public functions.) [2]:

Please add the following information of all politically exposed persons: First Name | Last name | Date of Birth | Country of Residency | Institution and Position:

I Confirm That My Field of Activity Is::

I Confirm That My Field of Activity Is [other]:

Required information based on Estonian laws (if You invest as Company / Business)

Company / Business field of activity:

Please describe how Your Company / Business got the funds for this investment (sum / country / and source)?:

Beneficiaries of this Company / Business: First Name | Last name | Personal Identity Code & Country of issuer of this code | Country of Residency | Size of the share or the number of shares (a natural person who directly or indirectly holds more than 25% or who otherwise has control or dominant influence over this Company / Business):

Board members and authorized reprentatives of this Company / Business: First Name | Last name | Personal Identity Code & Country of issuer of this code | Country of Residency:

Are any of the Beneficiaries / Board members or their family members a politically exposed person (a person who has performed in last 12 months prominent public functions.):

At least one of the Beneficiaries / Board members or their family members is::

Please add the following information of all politically exposed persons: First Name | Last name | Date of Birth | Country of Residency | Institution and Position:

Following confirmation is needed as we will forward this information to a notary when we buy the building::

Following declaration is needed, so we can accept You as an investor::

Your investment goals

Your planned investment period?:

Your planned investment period? [if less than 10 years]:

How much does this (amount You intend to invest) represent as a percentage of your investment portfolio?:

How would you rate yourself as an investor?:

What made You to decide to invest into this project? (Thank You in advance for sharing.):

Subscription application

According to the Baltic Business Investments SPV4 OÜ Shareholders Agreement I hereby request the subscription as following::

Leave this empty:

Signature arrow sign here

Signed by Peeter Pärtel
Signed On: November 2, 2022


Signature Certificate
Document name: Shareholders Agreement, Investor Questionnaire and Subscription application Baltic Business Investments SPV4 OÜ
lock iconUnique Document ID: b74df3fad6069844837d60997a8c6c0c185ca762
Timestamp Audit
October 31, 2022 4:17 pm EETShareholders Agreement, Investor Questionnaire and Subscription application Baltic Business Investments SPV4 OÜ Uploaded by Peeter Pärtel - investors@balticbusinessinvestments.com IP 46.131.22.229