Document:

EX-4.5

 Exhibit 4.5 

 
  

 
 RULES OF THE

 RELX GROUP PLC 

LONG-TERM INCENTIVE PLAN 2013 
  

 

 
 Adopted by
the directors of RELX Group plc on 25 April 2013 
 Approved by the shareholders of RELX PLC in general meeting on 25 April
2013 
 Approved by the shareholders of RELX NV in general meeting on 24 April 2013 

(Plan and company names changed in connection with the structure simplification and listed entity name changes completed on 1 July
2015) 
 Minor amendments to benefit the administration of the Plan, to take account of a change in legislation or to obtain or
maintain favourable tax, exchange control or regulatory treatment approved by the directors of RELX Group plc on 14 February 2017 

Amendments to reflect the Remuneration Policy approved by the directors of RELX Group plc on 14 February 2017 and approved by the
shareholders of RELX PLC in general meeting on 20 April 2017 and approved by the shareholders of RELX NV in general meeting on 19 April 2017 

Minor amendments to benefit the administration of the Plan approved by a committee of the directors of RELX Group plc on 22 August 2018
to take effect on the effective date of the corporate simplification, which is expected to be 8 September 2018 
 Minor
amendments to take account of a change in legislation approved by the Remuneration Committee on 25 September 2018 
  

 
 

 
 Freshfields Bruckhaus Deringer LLP 

 THE RELX GROUP PLC 

LONG-TERM INCENTIVE PLAN 2013 
  

	1.	 DEFINITIONS 

1.1     In these Rules and the schedules and appendices to these Rules (each a Schedule or Appendix, as
the case may be), unless the context otherwise requires, the following words and expressions have the following meanings: 
 Adoption Date
means 25 April 2013 being the date approval of the Plan by shareholders was obtained; 
 Award means a Performance Share Award or
Performance Share Option; 
 Board means the board of directors for the time being of the Company; 

Capital Reorganisation means any variation in the share capital or reserves of RELX PLC (including, without limitation, by way of
capitalisation, rights issue, consolidation, sub-division or reduction); 
 Committee means the
remuneration committee of the Board, or other duly authorised committee of the Board; 
 Company means RELX Group plc registered in England
No. 2746616 by whatever name known from time to time; 
 Control has the meaning given to it by section 995 of the Income Tax Act 2007;

 Date of Grant means the date on which an Award is granted in accordance with the terms of Rule 4; 

Dealing Day means any day on which the London Stock Exchange and the Amsterdam Stock Exchange are open for the transaction of business; 

Dealing Restrictions means any restrictions on, or requirement for approvals for dealing in Shares whether under applicable law, under the
Company’s or RELX PLC’s share dealing rules (as applicable), the provisions of the Listing Rules of the UK Listing Authority or the City Code on Takeovers and Mergers or any of their equivalents in any applicable jurisdiction; 

Dividend Equivalent means a right to a cash payment or Shares in accordance with Rule 7; 

Employee means any employee (including an executive director) or a corporate officer of a member of the Group or RELX PLC; 

Employees’ Share Scheme has the meaning given by section 1166 of the Companies Act 2006; 

Financial Year means an accounting reference period as determined in accordance with section 391 of the Companies Act 2006; 

Group means the Company and every company which is under the Control of the Company and member of the Group will be construed
accordingly; 

  
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 Market Value means the middle-market quotation for a Share (as derived from the Daily Official
List of the London Stock Exchange in the case of an ordinary share in the capital of RELX PLC priced in Pounds Sterling or from the equivalent such records of Amsterdam Euronext in the case of an ordinary share in the capital of RELX PLC priced in
Euros or of the New York Stock Exchange in the case of an American Depositary Share representing an ordinary share in the capital of RELX PLC) immediately preceding the Date of Grant or, if the Committee so determines, the average of the
middle-market quotations for a Share (as derived from the Daily Official List of the London Stock Exchange in the case of an ordinary share in the capital of RELX PLC priced in Pounds Sterling or from the equivalent such records of Amsterdam
Euronext in the case of an ordinary share in the capital of RELX PLC priced in Euros or of the New York Stock Exchange in the case of an American Depositary Share representing an ordinary share in the capital of RELX PLC) for the three Dealing Days
ending on the Dealing Day immediately preceding the Date of Grant; 
 Normal Vesting Date means the date, following the end of the Performance
Period, on which the Committee determines the extent to which the Performance Condition has been satisfied or such later date as the Committee may at any time determine, or, if there are Dealing Restrictions in place on that date, such later date
when all Dealing Restrictions have been lifted; 
 Participant means any person who has been granted an Award which has not lapsed in
accordance with the provisions of these Rules and includes, where the context permits, the legal personal representatives of a deceased Participant; 

Performance Condition means the condition or conditions determined by the Committee in accordance with Rule 5, measured after the end of the
Performance Period or such other period as may be permitted under the Rules, which must be satisfied in order for an Award to Vest; 
 Performance
Period means the period after which the Performance Condition is measured which will be, unless the Committee determines otherwise at the Date of Grant or as otherwise provided in the Rules, the period of three consecutive Financial Years of
the Company starting with the Financial Year in which the Date of Grant falls; 
 Performance Share Option means, unless Schedule 3 applies, a
right in the form of an option granted under Rule 4 to acquire Shares without payment (other than under Rule 18.15) or for a nil or nominal exercise price; 

Performance Share Award means, unless Schedule 3 applies, a right granted under Rule 4 to receive Shares without payment (other than under
Rule 18.15); 
 Plan means this RELX Group plc Long-Term Incentive Plan 2013 as amended from time to time; 

Pro-rated Number means such whole number of Shares (rounded down, as necessary) as is determined by
multiplying the number of Shares comprised in an Award by A/B where (i) for the purposes of Rule 8 (Cessation of Employment), A is the number of complete months from the start of the Financial Year in which the Award was granted
to the Termination Date, but not exceeding the number of complete months in the Performance Period and B is the number of complete months in the Performance Period and (ii) for the purposes of Rule 10 (Change of

  
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Control of RELX PLC), A is the number of complete months from the start of the Financial Year in which the Award was granted to the relevant event, but not exceeding the number of complete
months in the Performance Period and B is the number of complete months in the Performance Period. For the purposes of this definition, the Performance Period will be the period determined by the Committee at the Date of Grant; 

Remuneration Policy means the RELX directors’ remuneration policy approved, from time to time, by Shareholders, in accordance with the
Companies Act 2006 and the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410), as amended; 

Rules means these Plan rules and any reference to a Rule will be construed accordingly; 

Share means an ordinary share in the capital of RELX PLC or shares representing those shares following any Capital Reorganisation of RELX PLC
and includes an American Depositary Share representing a Share and Shareholder will be construed accordingly; 
 Termination
Date means the date on which a Participant ceases to be an Employee; 
 US Participant means a Participant who is subject to United
States taxation under United States law including by reason of being a United States national, or resident in the United States for United States tax purposes; 

Vesting means the Participant becoming absolutely entitled to receive the Shares comprised in his Performance Share Award or to exercise his
Performance Share Option in each case in accordance with these Rules and Vest and Vested will be construed accordingly. 

1.2     Where the context permits the singular will include the plural and vice versa and the masculine will include the feminine.
Headings will be ignored in construing the Plan. 
 1.3     Any references to a statutory provision will include that provision as
it may from time to time be amended, modified or re-enacted. 
  

	2.	 ELIGIBILITY 

2.1     No person will be entitled as of right to participate in the Plan. The Committee may select any Employee to participate in the
Plan, except any Employee who is under notice of termination of employment at the Date of Grant, unless the Committee determines otherwise. 
  

	3.	 INDIVIDUAL LIMIT 

3.1     The Committee may not grant an Award to an Employee if the Market Value of the Shares under that Award when aggregated with
the Market Value of Shares under any other Award granted to that Employee under the Plan in the same Financial Year exceeds: 
  

	(a)	 in the case of an Employee who is the Chief Executive Officer of the Company: 

  
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	 	(i)	 where the Date of Grant is on or before 18 April 2017 or where the Date of Grant falls in 2017 and such
Employee was granted an Award on or before 18 April 2017, 250% of his basic salary from the Group as at the Date of Grant; and 

  

	 	(ii)	 in all other cases, the individual grant limit for the Chief Executive Officer of the Company as stipulated by
the Remuneration Policy; and 

  

	(b)	 in the case of any other Employee: 

 

	 	(i)	 where the Date of Grant is on or before 18 April 2017 or where the Date of Grant falls in 2017 and such
Employee was granted an Award on or before 18 April 2017, 200% of his basic salary from the Group as at the Date of Grant; and 

  

	 	(ii)	 in all other cases, the individual grant limit for Executive Directors of the Company other than the Chief
Executive Officer of the Company as stipulated by the Remuneration Policy. 

 3.2     For the avoidance of doubt,
for the purposes of Rule 3.1, Market Value is to be determined as at the Date of Grant of the relevant Awards. 
  

	4.	 GRANT OF AWARDS 

4.1     Subject to any Dealing Restrictions, the Committee may, during any period specified in Rule 4.3 below, grant Awards to any
Employees selected by the Committee. The Committee will determine whether an Award will be granted as a Performance Share Award or a Performance Share Option or both. 

4.2     Awards will be granted by deed. Each Participant will receive information (electronically or in hard copy) following the Date
of Grant summarising the main terms of the Award. This summary may include the following information: 
  

	(a)	 whether the Award is a Performance Share Award or a Performance Share Option or both; 

 

	(b)	 the number and type of Shares subject to the Award; 

 

	(c)	 details of the Performance Condition applicable to the Award; 

 

	(d)	 the Performance Period; 

 

	(e)	 the terms of any other conditions imposed pursuant to Rule 5; 

 

	(f)	 whether or not the Award carries a right to Dividend Equivalents; 

 

	(g)	 the exercise period or periods applicable to a Performance Share Option; 

 

	(h)	 which (if any) Schedules to the Plan will apply to the Award; 

 

	(i)	 any other information as the Committee may determine. 

  
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 4.3     Awards may only be granted within the period of 42 days commencing on any
of the following: 
  

	(a)	 the Adoption Date; 

  

	(b)	 the release of RELX PLC’s interim (half-yearly) and/or final results in any year; 

 

	(c)	 the release by RELX PLC of any trading update or (if applicable to RELX PLC at the time) its quarterly results
for any year; 

  

	(d)	 the day on which the Committee resolves that circumstances exist which justify the grant of Awards outside the
periods referred to in (a) to (c) above; or 

  

	(e)	 the day following the lifting of any Dealing Restrictions which prevented the grant of the Award during the
periods referred to in (a) to (d) above. 

 4.4     The Committee may, at any time between the Date of Grant
and the Vesting Date, determine that an Award granted as a Performance Share Award should instead be treated as if it had been granted as a Performance Share Option and vice versa. The Committee will arrange for a Participant to be notified as soon
as reasonably practicable of any determination pursuant to this Rule 4.4 and to receive revised information on the terms of his Award in accordance with Rule 4.2. Any Award subject to a determination pursuant to this Rule 4.4 will not be treated as
a grant of a new Award for the purposes of these Rules so that the Date of Grant, number of Shares under the Award, Performance Period, Performance Condition and Vesting Date will be unaffected. 

4.5     A Participant may surrender his Award in whole or in part within the period of 30 days following the Date of Grant; and, if
so surrendered, the Award (or part of the Award, as applicable) shall be deemed for all purposes not to have been granted. 
  

	5.	 PERFORMANCE AND OTHER CONDITIONS

 5.1     Awards will be granted subject to a Performance Condition which, unless otherwise permitted in the
Rules, must be satisfied before the Vesting of Awards. Awards granted in 2013 under the Plan will be subject to the Performance Condition as set out in the Appendix. Awards granted in 2014 or subsequent years will be subject to a Performance
Condition determined by the Committee at the relevant Date of Grant. 
 5.2     The Committee may make the grant or Vesting of
Awards subject to any other conditions it determines appropriate including, but not limited to, requiring a Participant to agree to comply with certain post-employment restrictive covenants, to meet shareholding requirements or to agree to
post-Vesting or post-exercise sale restrictions. 
 5.3     The Committee may make such adjustments to the Performance Condition
applicable to outstanding Awards as it considers appropriate to take account of any factors which are relevant in the opinion of the Committee and in particular if there is an event which causes it to consider that the Performance Condition, or any
part of it, is no longer a fair measure of performance. The amended Performance Condition will not be materially less or more challenging than the one originally set. 

5.4     In determining the level of Vesting of an Award under the Plan, the Committee will take into account the overall business
performance of RELX PLC and 

  
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the Group over the Performance Period and any other factors that it considers appropriate and may modify the Vesting level if it considers that such a modification would result in a fairer
outcome. In exercising any such discretion, the Committee will have due regard to the value created for Shareholders and the underlying business performance. 

5.5     Without prejudice to Rule 5.3 and Rule 5.4, there will be no retesting of any Performance Condition. 

 

	6.	 NORMAL VESTING OF AWARDS

 6.1     Except as otherwise permitted in the Rules, the number of Shares, if any, which Vest under an Award
will be determined by the Committee by reference to the extent to which (i) the Performance Condition has been satisfied and (ii) any other conditions to which the Award is subject have been satisfied or waived in accordance with these
Rules. 
 6.2     Except as otherwise provided in these Rules, Awards will Vest, in accordance with Rule 6.1, on the Normal Vesting
Date and any part of an Award which does not Vest will immediately lapse. 
 6.3     Where an Award takes the form of a Performance
Share Award, any Vested Shares will be issued or transferred to the Participant as soon as reasonably practicable after the Normal Vesting Date, subject to any Dealing Restrictions. 

6.4     Where an Award takes the form of a Performance Share Option, subject to any Dealing Restrictions, a Participant may exercise
his Performance Share Option in whole or in part by giving notice in the manner prescribed by the Company following the Normal Vesting Date. The Participant will specify in the notice of exercise the number of Shares in respect of which the
Performance Share Option is being exercised and will provide any required documentation and payment of any exercise price (or appropriate undertaking to pay any exercise price) in respect of the Shares over which the Performance Share Option is
being exercised. A notice of exercise will take effect on the date it is validly received by the Company or, if there are any Dealing Restrictions in place on that date, such later date when all Dealing Restrictions have lifted. Subject to any
Dealing Restrictions, Vested Shares will be issued or transferred to the Participant as soon as reasonably practicable following the date the notice of exercise takes effect. 
  

	7.	 ENTITLEMENT TO DIVIDEND EQUIVALENTS

 7.1     If an Award has been granted on the basis that it carries Dividend Equivalents, the Participant
will, subject to Rule 7.3, be entitled to a cash payment equal in value to the ordinary dividends (excluding any associated tax credit) which would have been paid on the Vested Shares during the period commencing at the start of the Performance
Period and ending on the earlier of (i) the end of the Performance Period and (ii) the Vesting of the Award. 

7.2     The cash payment to which the Participant becomes entitled under Rule 7.1: 

 

	(a)	 will be calculated (in such manner as the Committee sees fit) by reference to the currency of payment of the
underlying dividend (and paid in such currency as the Committee sees fit); 

  
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	(b)	 will be calculated without any entitlement to interest (or other type of investment return) in the period
between the dividend payment date and Vesting; 

  

	(c)	 will be paid (subject to such deductions as are required by law) within one month of Vesting; and

  

	(d)	 will be calculated by reference to ordinary dividends and without regard to special dividends or distributions
or dividends-in-specie. 

7.3     Instead of making a cash payment, the Committee may in its discretion satisfy any entitlement to Dividend Equivalents arising
in accordance with Rule 7.1 by issuing or transferring Shares with an equivalent value as determined at the time of Vesting. 

7.4     For the avoidance of doubt, any payment referred to in this Rule 7 does not represent an entitlement to actual dividends on
the underlying Shares, by reason of the Participant not being the beneficial owner of the Shares at that time. 
  

	8.	 CESSATION OF EMPLOYMENT 

Participant gives or receives notice 

8.1     Except as otherwise provided in these Rules, in the event that a Participant gives or receives notice of termination of
employment for any reason other than those set out in Rule 8.2 (Approved Leaver), an Award (whether Vested or not) will automatically lapse on the date on which notice is given or received. 

Approved Leaver 

8.2     Except as otherwise provided in these Rules, if a Participant ceases to be an Employee before the Normal Vesting Date by
reason of: 
  

	(a)	 injury, disability or ill-health; 

 

	(b)	 redundancy (as defined in section 139 of the Employment Rights Act 1996); 

 

	(c)	 retirement with the consent of the Company; 

 

	(d)	 death; 

  

	(e)	 the sale of the company or business in which the Participant is employed out of the Group; or

  

	(f)	 any other reason the Committee (acting fairly and reasonably), in its absolute discretion, determines:

 the Award will continue in force over a Pro-rated Number of Shares until the end of the
Performance Period and will lapse as to the balance on the Termination Date. The Award will Vest, if at all, on the Normal Vesting Date in accordance with Rule 6. 

8.3     The Committee has discretion to vary the application of Rule 8.2 and determine that an Award will instead Vest as at the
Termination Date over a Pro-rated Number of Shares to the extent the Performance Condition is satisfied. The 

  
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Performance Condition will be assessed based on progress made against targets at the Termination Date as determined by the Committee in its absolute discretion. Such determination will take place
as soon as reasonably practicable after the Termination Date and to the extent that an Award does not Vest as at the Termination Date, it will immediately lapse. Any Vested Shares will be issued or transferred to the Participant as soon as
reasonably practicable after the date of determination, subject to any Dealing Restrictions. 
 8.4     The Committee also has
discretion, if it considers it appropriate in the particular circumstances, to determine that an Award will Vest on some other basis. 
 Exercise
Period – Approved Leaver 
 8.5     Where an Award takes the form of a Performance Share Option and Vests pursuant to
this Rule 8, the Committee will determine the period during which the Participant (or the personal representatives of a deceased Participant) may exercise that Performance Share Option (and any other Vested Performance Share Options held by him at
the Termination Date to the extent not previously exercised) at the end of which period it will immediately lapse to the extent it has not been exercised. 

Intra-Group Transfer of Employment 

8.6     For the avoidance of doubt, a Participant will not cease to be an Employee for the purposes of this Rule 8 if he ceases to be
employed by a member of the Group or RELX PLC but continues to be or is immediately afterwards employed by another member of the Group or RELX PLC. 
  

	9.	 CLAW-BACK ARRANGEMENTS 

Breach of Restrictive Covenants 

9.1     If a Participant breaches any term of his post-termination restrictive covenants (such breach to be determined by the
Committee acting fairly and reasonably), any Awards (whether Vested or unvested) held by him will lapse on the date of the Committee’s determination as to the breach and the Committee may require him to pay to the Company or any other member of
the Group, within seven days after a written demand from the Company, the Relevant Amount (as defined in Rule 9.2 below). 

9.2     The Relevant Amount is an amount equal to A minus both B and C where:

 A is an amount equal to the pre-tax gain realised by the Participant in respect of any Awards and
Dividend Equivalents in the period beginning six months before the Termination Date and ending on such date as the Participant’s post-termination restrictive covenants are stated to expire. For these purposes, the gain will be the sum of the
market value of the Vested Shares when received or acquired by the Participant and the related Dividend Equivalents (as determined by the Committee), and such gain will be determined irrespective of whether the Participant has sold or retained the
Shares so received or acquired; 
 B is an amount equal to the tax and social security charges and liabilities incurred by the Participant in
respect of A which the Participant is unable to recover or for which he is otherwise unable to claim relief from the applicable tax authority notwithstanding his obligation to make a payment pursuant to Rule 9.1; and 

  
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 C is the total aggregate amount of any Claw-back Amount (as defined in Rule 9.4) and any
Specified Amount (as defined in Rule 9.8) paid by the Participant that the Committee determines (acting fairly and reasonably) should be deducted from the Relevant Amount. 

Vesting Determined on the Basis of Materially Mis-stated Data 

9.3     If the Committee, at any time up to two years after the Vesting of an Award, considers in good faith that the Vesting of the
relevant Award and/or the payment of Dividend Equivalents was determined on the basis of materially mis-stated financial or other data (the Incorrect Award), it will, unless determined otherwise
at the sole discretion of the Committee, recover the Claw-back Amount (as defined in Rule 9.4 below) by taking one or more of the following actions: 
  

	(a)	 take the Claw-back Amount (or the balance thereof) into account when determining the quantum of any future
Awards; and/or 

  

	(b)	 scale back any outstanding unvested Awards to take account of the Claw-back Amount (or the balance thereof);
and/or 

  

	(c)	 require the Participant to pay to the Company (or any member of the Group), within thirty days of a written
demand from the Company, the Claw-back Amount (or the balance thereof). 

 9.4     The Claw-back
Amount is the difference in value between (i) the Incorrect Award and (ii) the Award and Dividend Equivalents (as the case may be) which could or would have Vested or been payable had the correct data been used, as determined by
the Committee acting fairly and reasonably. This may be expressed as a number of Shares or a monetary amount or a combination thereof as the Committee considers appropriate. In determining the Claw-back Amount, the Committee may take into account
such matters as it sees fit including, but not limited to: 
  

	(a)	 the difference between the number of Shares that actually Vested under the Incorrect Award and the number of
Shares over which the Committee considers the Award should have Vested had the correct data been used; 

  

	(b)	 any gain made by the Participant on the sale of Shares received from the Incorrect Award;

  

	(c)	 any tax and/or dealing costs incurred by the Participant in connection with the Incorrect Award which the
Participant is unable to recover or for which he is otherwise unable to claim relief from the applicable tax authority notwithstanding his obligation to make a payment pursuant to Rule 9.3, and 

 

	(d)	 the extent and timing of any payment made by the Participant pursuant to Rule 9.1 and/or Rule 9.6.

 9.5     By accepting an Award, a Participant will be bound by this Rule 9 notwithstanding (i) that it may
only be applicable after the transfer of Shares under these Rules and (ii) whether or not all or any of the terms of this Rule 9 have been separately notified to each Participant. 

  
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 Serious Misconduct1 

9.6     In the event of Serious Misconduct by a Participant, any Awards (whether Vested or unvested) held by the Participant will
lapse on the date of the Committee’s determination that Serious Misconduct has occurred and the Committee may require the Participant to pay to the Company or any other member of the Group, within seven days after a written demand from the
Company, the Specified Amount (as defined in Rule 9.8 below). 
 9.7     Serious Misconduct is an act or omission by
a Participant that the Committee will, acting fairly and reasonably, consider to be serious misconduct, which may include but not be limited to the following: 
  

	(a)	 a material breach by a Participant of any of his employment terms with any member of the Group;

  

	(b)	 a breach by a Participant of any contractual post-termination obligation that is not covered by Rules 9.1 and
9.2; 

  

	(c)	 a serious violation of law by a Participant; 

 

	(d)	 a serious breach of Group policy (such as the Code of Ethics and Business Conduct) by a Participant or
behaviour by a Participant which fails to reflect the Company’s governance and business values or has a detrimental impact on the reputation of any member of the Group; 

 

	(e)	 gross misconduct by a Participant; and/or 

 

	(f)	 fraud effected by or with the knowledge of a Participant. 

9.8     The Specified Amount is an amount equal to A minus both B and C
where: 
 A is an amount equal to the pre-tax gain realised by the Participant in respect of any
Awards and Dividend Equivalents in the period beginning on the date on which such Serious Misconduct is determined by the Committee (acting fairly and reasonably) to have first occurred and ending on the date on which the Committee makes its
determination in accordance with Rule 9.6. For these purposes, the gain will be the sum of the market value of the Vested Shares when received or acquired by the Participant and the related Dividend Equivalents (as determined by the Committee), and
such gain will be determined irrespective of whether the Participant has sold or retained the Shares so received or acquired; 
 B is an
amount equal to the tax and social security charges and liabilities incurred by the Participant in respect of A which the Participant is unable to recover or for which he is otherwise unable to claim relief from the applicable
tax authority notwithstanding his obligation to make a payment pursuant to Rule 9.6; and 
 C is the total aggregate amount of any Relevant
Amount (as defined in Rule 9.2) and any Claw-back Amount (as defined in Rule 9.4) paid by the Participant that the Committee determines (acting fairly and reasonably) should be deducted from the Specified Amount. 

 
  

	1 	 The provisions of Rules 9.6 to 9.8 inclusive (and any consequential changes to other provisions) only apply to
Awards granted on or after 14 February 2017. 

  
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	10.	 CHANGE OF CONTROL OF RELX PLC

 10.1   Except as otherwise provided in these Rules, if any person: 

 

	(a)	 obtains Control of RELX PLC as a result of making an offer to acquire Shares which is either unconditional or
is made on a condition such that if it is satisfied the person making the offer will have Control of RELX PLC; 

  

	(b)	 becomes bound or entitled to acquire Shares under sections 979 and 983 of the Companies Act 2006; or

  

	(c)	 obtains Control of RELX PLC in pursuance of a compromise or arrangement sanctioned by the Court under section
899 of the Companies Act 2006, 

 then any unvested Awards over Shares in RELX PLC will subject to satisfaction of the Performance
Condition Vest in respect of the Pro-rated Number of Shares on a date within 30 days of the relevant event determined by the Committee. The Performance Condition will be assessed based on progress made against
targets as at the date of the relevant event as determined by the Committee in its absolute discretion. Any Vested Shares will be issued or transferred to the Participant as soon as reasonably practicable after the date they Vest. 

10.2   Any Award over Shares in RELX PLC to which Rule 10.1 applies which does not Vest as a result of the relevant event will lapse on the
relevant event. Where a Vested Award takes the form of a Performance Share Option, the Committee will determine the period during which it may be exercised, at the end of which period it will immediately lapse. 

 

	11.	 INTERNAL REORGANISATION 

11.1   Rule 10 will not apply if the purpose and effect of the change of Control or scheme of arrangement is to create a new holding company for
RELX PLC, such company having substantially the same Shareholders and proportionate shareholdings as those of RELX PLC immediately before the scheme of arrangement. 

11.2   If Rule 11.1 applies: 
  

	(a)	 Awards will not Vest as a result of the relevant event; 

 

	(b)	 an Award will instead be exchanged for an equivalent award over such shares as the Committee determines
appropriate; and 

  

	(c)	 the Committee may make any modifications to the Performance Condition as it determines appropriate.

 11.3   Where this Rule 11 applies, a Participant will not be treated as ceasing to be an Employee until he ceases to be
employed by a company which is either the relevant holding company or a subsidiary of the holding company (within the meaning of section 1159 of the Companies Act 2006). 

  
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	12.	 ROLLOVER ON A CHANGE OF
CONTROL 

 12.1   The Committee may determine that Rule 10 will not apply on a change of
Control of RELX PLC and may, with the consent of the person obtaining Control, (i) determine that the Awards will be rolled over in accordance with either the provisions of Rule 11.2 or Rule 12.2 or (ii) allow the Participants to choose
between the Vesting of Awards (if at all) under Rule 10 and rollover in accordance with, as determined by the Committee, Rule 11.2 or Rule 12.2. 

12.2   The Committee can determine that Awards are rolled over in accordance with the following terms: 

 

	(a)	 the Performance Condition will be assessed based on progress made against targets as at the date of the
relevant event as determined by the Committee in its absolute discretion; 

  

	(b)	 to the extent that the Performance Condition has been met, the Award will be exchanged for an equivalent award
over such shares as agreed between the Committee and the person obtaining Control, and will Vest on the Normal Vesting Date subject only to the Participant remaining in employment within the acquirer group of companies (unless Rule 8.2 applies) and
will be subject to the Rules as they last had effect in relation to the Award that was rolled-over; and 

  

	(c)	 to the extent that the Performance Condition has not been met, the Award will immediately lapse.

 12.3   For the avoidance of doubt, in Rule 10, Rule 11 and Rule 12, “Committee” means the Committee as
constituted immediately before the event by virtue of which the applicable Rule applies. 
  

	13.	 VOLUNTARY WINDING UP 

13.1   The provisions of Rule 10 will apply with such changes as may be necessary in the event that notice is duly given of a resolution for a
voluntary winding up of RELX PLC PROVIDED THAT, all references in that Rule to the date of the relevant event will be treated as references to the date on which notice is given for the voluntary winding-up of RELX PLC. 
  

	14.	 ADJUSTMENT OF AWARDS 

14.1   In the event of: 
  

	(a)	 any Capital Reorganisation; or 

 

	(b)	 the implementation by RELX PLC of a demerger or the payment by RELX PLC of a super-dividend which would
otherwise materially affect the value of an Award, 

 the number of Shares comprised in an Award may be adjusted in such manner as the
Committee may determine. 

  
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	15.	 SOURCE OF SHARES 

15.1   An Award may be satisfied by the issue or transfer of Shares. 

15.2   No Award will be granted under the Plan to the extent that the result of that grant would be that the aggregate number of Shares that
could be issued on the exercise or vesting of that Award and any other Award granted at the same time, when added to the number of Shares that: 
  

	(a)	 could be issued on the exercise or vesting of any subsisting Awards or exercise or vesting of any subsisting
awards granted during the preceding ten years under the Plan or any other Employees’ Share Scheme established by RELX PLC or the Company; and 

  

	(b)	 have been issued on the exercise or vesting of any Awards or exercise or vesting of any subsisting awards
granted during the preceding ten years under the Plan or any other Employees’ Share Scheme established by RELX PLC or the Company, 

would exceed 10 per cent. of the ordinary share capital of RELX PLC for the time being in issue. 

15.3   No Award may be granted under the Plan to the extent that the result of that grant would be that the aggregate number of Shares that
could be issued on the exercise or vesting of that Award and any other Award granted at the same time, when added to the number of Shares that: 
  

	(a)	 could be issued on the exercise or vesting of any subsisting Awards or exercise or vesting of any subsisting
awards granted during the preceding ten years under the Plan, or any other discretionary share scheme established by RELX PLC or the Company; and 

  

	(b)	 have been issued on the exercise or vesting of any Awards or exercise or vesting of any subsisting awards
granted during the preceding ten years under the Plan or any other discretionary share scheme established by RELX PLC or the Company, 

would exceed 5 per cent. of the ordinary share capital of RELX PLC for the time being in issue. 

15.4   Reference in this Rule 15 to the issue of Shares means, for the avoidance of doubt, the issue and allotment (but not transfer) of
Shares. The delivery of Shares from treasury also counts towards the percentage limits set out in Rule 15.2 and Rule 15.3 above for so long as institutional shareholder guidelines recommend this. 

15.5   In determining the above limits no account will be taken of any Shares attributable to an Award which was released, lapsed or otherwise
became incapable of exercise or vesting, but, for the avoidance of doubt, account will be taken of any shares in RELX NV issued pursuant to an Employees’ Share Scheme or discretionary share scheme prior to 8 September 2018 in the relevant
five or ten year period. 

  
 Page 13 

	16.	 RIGHTS ATTACHING TO SHARES

 16.1   All Shares issued or transferred on the Vesting of a Performance Share Award will rank pari passu in all respects
with the Shares in issue at the date of Vesting except in respect of any rights attaching to such Shares by reference to a record date prior to the date of Vesting and all Shares issued or transferred on the exercise of a Performance Share Option
will rank pari passu in all respects with the Shares in issue at the date of exercise except in respect of any rights attaching to such Shares by reference to a record date before the date of exercise. 

16.2   Any Shares acquired by a Participant under this Plan will be subject to the articles of association of RELX PLC from time to time. 

 

	17.	 ADMINISTRATION AND AMENDMENT 

17.1   The decision of the Committee will be final and binding in all matters relating to the Plan including the exercise of any discretion
under these Rules, the interpretation of the Rules and any dispute relating to any matter in connection with the Rules. 
 17.2   The
Committee may at any time discontinue the grant of further Awards or amend any of the provisions of the Plan in any way it thinks fit provided that: 
  

	(a)	 the Committee will not make any amendment that would materially prejudice the interests of existing
Participants except with the prior consent of the Participants; 

  

	(b)	 no amendment which in the reasonable opinion of the Committee is to the advantage of Employees or Participants
may be made to: 

  

	 	(i)	 the definition of Employee; 

 

	 	(ii)	 the maximum entitlement of an Employee under the Plan; 

 

	 	(iii)	 the maximum limit on the number of Shares which can be awarded under the Plan; 

 

	 	(iv)	 the basis for determining an Employee’s entitlement to Shares under the Plan and the terms on which Shares
can be acquired; 

  

	 	(v)	 the adjustment provisions of Rule 14; 

 

	 	(vi)	 the amendment provisions of this Rule 17; 

without the prior approval of RELX PLC in general meeting except (a) in the case of minor amendments to benefit the administration of the
Plan, to take account of a change in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for Employees and/or Participants or RELX PLC or any member of the Group or (b) as otherwise permitted under
these Rules; and 
  

	(c)	 without prejudice to any provision of the Plan which provides for the lapse of an Award, the Committee may not
cancel an Award unless the Participant agrees to such cancellation. 

  
 Page 14 

 17.3   Notwithstanding any other provision of the Plan, the Committee may make appropriate
amendments to the Plan and/or establish schedules to the Plan for the purpose of granting Awards to Employees, based on the Plan but modified to take account of such factors as the Committee determines appropriate including, but not limited to,
local tax, exchange control or securities laws in any territory. 
  

	18.	 GENERAL 

Trustee Funding 
 18.1   Any member
of the Group may provide money to the trustee or trustees of any trust or any other person or persons to enable any such person or persons to acquire or subscribe for Shares to be held for the purposes of satisfying Awards, or enter into any
guarantee or indemnity for those purposes, to the extent permitted by the Companies Act 2006. 
 Discretionary Nature of the Plan 

18.2   Subject to Rule 18.5, the rights and obligations of a Participant under the terms and conditions of his office or employment will not be
affected by his participation in the Plan or any right he may have to participate in the Plan. 
 18.3   Participation in the Plan does not
imply any right to receive Awards on the same or any other basis in any other year. 
 18.4   The terms of the Plan do not entitle the
Participant to the exercise of any discretion in his favour. 
 18.5   Each Participant waives all and any rights to compensation or damages
in consequence of the termination of his office or employment with any member of the Group or RELX PLC for any reason whatsoever (whether such cessation is lawful or unlawful) insofar as those rights arise, or may arise, from his ceasing to have
rights or be entitled to Shares under the Plan as a result of such termination or from the loss or diminution in value of such rights or entitlements. If necessary, the Participant’s terms of employment will be varied accordingly. 

Changes to RELX PLC’s capital structure 

18.6   The existence of any Award will not affect in any way the right or power of the Company, RELX PLC or its Shareholders to make or
authorise any or all adjustments, recapitalisations, reorganisations or other changes in the Company’s or RELX PLC’s capital structure, or any merger or consolidation of the Company or RELX PLC, or any issue of shares, bonds, debentures,
preferred or prior preference stocks ahead of or convertible into, or otherwise affecting the Shares or the rights thereof, or the dissolution or liquidation of the Company or RELX PLC or any sale or transfer of all or any part of their assets or
business, or any other corporate act or proceeding, whether of a similar character or otherwise. 
 Notices 

18.7   Any notice or other document which has to be given to a Participant under or in connection with the Plan may be (i) delivered or
sent by post to him at his home address according to the records of his employing company, (ii) sent by email or fax to any email address or fax number according to the records of his employing 

  
 Page 15 

 
company or, in either case, such other address as may appear to the Company to be appropriate, or (iii) provided electronically through a website hosted by the Company or an agent of the
Company, provided that the Participant is notified by email, fax or post that such notice or document has been or will be provided in this manner. 

18.8    Notices sent by post to a Participant in the UK or US will be deemed to have been given two days after the date of posting.
However, notices sent to a Participant in other countries will be deemed to have been given on the seventh day after the date of posting. 

18.9    Notices sent by email or fax, in the absence of evidence to the contrary, will be deemed to have been received on the day after
sending. 
 18.10  Notices provided through a website will be deemed to have been received on the day they are posted on the website or, if later,
the day the Participant is deemed in accordance with Rule 18.8 or Rule 18.9 to have received the notification that it has been provided there. 

18.11  Any notice or other document required to be given to the Company under or in connection with the Plan may be delivered or sent by post to it
at its registered office (or such other place or places as the Committee may from time to time determine and notify to Participants) or sent by email or fax to any email address or fax number notified to the sender. 

18.12  All Share certificates, Award certificates and other communications relating to the Plan will be sent at the Participant’s risk. 

No transfer of Awards 
 18.13  A
Participant may not transfer, assign, charge or otherwise dispose of Awards, or any rights in respect of them, except (i) on the transmission of Awards on the death of a Participant to his personal representatives or (ii) with the consent
of the Committee. Any such attempted non-approved transfer will result in the lapse of the Award. 
 Awards Non-Pensionable 
 18.14  Awards and Dividend Equivalents under the Plan are not pensionable. 

Taxation 
 18.15  Any liability of a
Participant to taxation in respect of an Award will be for the account of the relevant Participant. By accepting an Award, a Participant agrees to comply with any arrangements specified by the Company for the reporting and payment of tax, duty and
social security contributions in any jurisdiction in respect of any Award and any Shares to which he is or may become entitled under the Plan including, without limitation, (i) arranging the sale of sufficient Shares on the Participant’s
behalf to enable the Company or any member of the Group to satisfy its obligations in respect of deduction or withholding of tax, duty or social security contributions at source and (ii) entering into any election specified by the Company under
Chapter 2 of Part 7 of the Income Tax (Employment & Pensions) Act 2003. 

  
 Page 16 

 Stamp Duty 

18.16  The Company or, where the Committee so directs, any member of the Group, will pay the appropriate stamp duty on behalf of Participants in
respect of any transfer or issue of Shares on the Vesting of a Performance Share Award or exercise of a Performance Share Option under the Plan. 

Expiry of Plan 
 18.17  No Awards will be
granted under the Plan after the tenth anniversary of the Adoption Date. 
 Data Protection 

18.18  By accepting the grant of an Award, a Participant acknowledges that the Company or any member of the Group may hold, process and transfer
personal data relating to them to other members of the Group or to any third parties engaged by them for any and all purposes related to the operation and administration of the Plan in accordance with Company privacy and data protection policies and
notices and where the processing is necessary for: 
  

	(a)	  the operation of the Plan; 

 

	(b)	  the Company or any member of the Group to comply with its legal obligations; or 

 

	(c)	  the purposes of the legitimate interests pursued by the Company or any member of the Group.

 18.19  A Participant also acknowledges that the Company or any member of the Group may, in accordance with Company privacy
and data protection policies and notices and applicable law, transfer or store personal information outside the European Economic Area (EEA), and that personal data may also be processed outside the EEA by the Company or any member of the Group or
for one or more of its or their service providers. 
 Governing Law 

18.20  This Plan will be governed by, and construed in accordance with, the laws of England and Wales and the courts of England and Wales will have
exclusive jurisdiction in relation to any dispute arising in connection with the Plan. 

  
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 APPENDIX

Performance Condition2 

General 
  

	1.	 The following provisions apply to Awards granted under the Plan in 2013. 

2.       Except as otherwise provided for in the Rules, the Performance Condition applicable to Awards will be measured
after the end of the Performance Period for such Award. 
 3.       There are three separate measures of equal weighting:
a Relative Total Shareholder Return measure (TSR Measure), a Return on Invested Capital measure (ROIC Measure) and an Adjusted Earnings per Share measure (EPS Measure). 

4.       The Performance Period is the period of three consecutive Financial Years of the Company starting with the
Financial Year in which the Date of Grant falls. 
 5.       Awards will Vest (if at all) over a whole number of Shares
(rounded down, as necessary). To the extent that the Performance Condition is not satisfied and, as a result an Award does not Vest, the Award will lapse. 

The TSR Measure 
 6.1     The
Vesting of one third of the Award is subject to the TSR ranking of RELX Group measured over the Performance Period. The portion of an Award subject to the TSR Measure is referred to as the “TSR Tranche”. 

6.2     Three distinct comparator groups will be used - a Sterling Comparator Group, a Euro Comparator Group and a US Dollar
Comparator Group. The TSR 
  
  

	2 	 Following minor amendments to benefit the administration of the Plan approved by a committee of the directors
of RELX Group plc on 22 August 2018 to take effect on the effective date of the corporate simplification, which is expected to be 8 September 2018, several definitions used in this Appendix were deleted or modified. Before such deletion or
modification, these definitions were as follows: 

 Capital Reorganisation means any variation in the share
capital or reserves of a Qualifying Company (including, without limitation, by way of capitalisation, rights issue, consolidation, sub-division or reduction); 

Dutch Share means an ordinary share in the capital of RE NV or shares representing those shares following any Capital
Reorganisation of RE NV and includes an American Depository Share representing a Dutch Share; 
 Qualifying Company means each
of RE PLC and RE NV; 
 RE NV means RELX NV; 

RE PLC means RELX PLC; 

Share means a UK Share and/or a Dutch Share as the context may require and Shareholder will be construed
accordingly; and 
 UK Share means an ordinary share in the capital of RE PLC or shares representing those shares following any
Capital Reorganisation of RE PLC and includes an American Depository Share representing a UK Share. 

  
 Page 18 

 
performance of RE PLC ordinary shares (based on RE PLC’s London listing) will be measured against the Sterling Comparator Group, the TSR performance of RE NV ordinary shares (based on RE
NV’s Amsterdam listing) will be measured against the Euro Comparator Group; and the TSR performance of RE PLC ADRs and RE NV ADRs (based on the New York listing) will be measured against the US Dollar Comparator Group. The TSR performance
will be measured separately against each comparator group and each ranking achieved will produce a payout, if any, in respect of one third of the TSR Tranche. The proportion of the TSR Tranche which Vests will be the sum of the payouts achieved
against the three comparator groups. 
 6.3     TSR will be measured in local currency. 

6.4     TSR for any company will be the percentage increase or decrease in the market value of a share over the relevant Performance
Period and shall take account of dividends and other distributions paid in the course of that period (each such dividend being deemed to be reinvested in the shares of each relevant company from the date of payment of the dividend to the last day of
the Performance Period). 
 6.5     Each comparator group comprises companies which were selected on the following basis: 

 

	•	 	 They are included in a relevant market index or are the largest companies listed on relevant exchanges as at
31 December 2012: FTSE100 for the Sterling Comparator Group; AEX, NYSE Euronext and Frankfurt Stock Exchange for the Euro Comparator Group; and the S&P500 for the US Dollar Comparator Group; 

excluding: 
  

	 	•	 	 companies with mainly domestic revenues (as they do not reflect the global nature of the Qualifying
Companies’ customer base); 

  

	 	•	 	 those engaged in extractive industries (as they are exposed to commodity cycles); and

  

	 	•	 	 financial services companies (as they have a different risk/reward profile). 

 

	•	 	 The remaining companies are ranked by market capitalisation and for each comparator group the 20 companies above
and below RELX Group are taken; and 

  

	•	 	 Relevant listed global peers operating in businesses similar to those of RELX Group not otherwise included are
added to the relevant comparator group. 

 Set out below are the comparators included in each comparator group: 

 

					
	 STERLING COMPARATOR GROUP
	  	 EURO COMPARATOR GROUP
	  	 US DOLLAR COMPARATOR GROUP

	 VODAFONE GROUP
	  	 LVMH
	  	 EBAY

	 GLAXOSMITHKLINE
	  	 BASF
	  	 3M

	 BRITISH AMERICAN TOBACCO
	  	 L’OREAL
	  	 CATERPILLAR

	 SABMILLER
	  	 BAYER
	  	 COLGATE-PALM.

	 DIAGEO
	  	 UNILEVERCERTS.
	  	 ACCENTURE

  
 Page 19 

					
	 STERLING COMPARATOR GROUP
	  	 EURO COMPARATOR GROUP
	  	 US DOLLAR COMPARATOR GROUP

	 ASTRAZENECA
	  	 DAIMLER
	  	 MONDELEZ INTERNATIONAL CL.A

	 UNILEVER (UK)
	  	 BMW
	  	 EI DU PONT DE NEMOURS

	 RECKITT BENCKISER GROUP
	  	 GDF SUEZ
	  	 DOW CHEMICAL

	 NATIONAL GRID
	  	 DEUTSCHE TELEKOM
	  	 DANAHER

	 IMPERIAL TOBACCO GP.
	  	 SCHNEIDER ELECTRIC
	  	 EMERSON ELECTRIC

	 ROLLS-ROYCE HOLDINGS
	  	 AIR LIQUIDE
	  	 NIKE ‘B’

	 COMPASS GROUP
	  	 VOLKSWAGEN PREF.
	  	 BAXTER INTL.

	 ASSOCIATED BRIT. FOODS
	  	 HEINEKEN
	  	 TEXAS INSTS.

	 WPP
	  	 LINDE
	  	 LYONDELLBASELL INDS. CL.A

	 BAE SYSTEMS
	  	 EADS
	  	 PRAXAIR

	 SHIRE
	  	 PERNOD-RICARD
	  	 PRICELINE.COM

	 EXPERIAN
	  	 FRANCE TELECOM
	  	 YUM! BRANDS

	 PEARSON
	  	 ASML HOLDING
	  	 ILLINOIS TOOL WORKS

	 CRH
	  	 DEUTSCHE POST
	  	 HEWLETT-PACKARD

	 WOLSELEY
	  	 PHILIPS ELTN. KONINKLIJKE
	  	 EATON

	 KINGFISHER
	  	 CONTINENTAL
	  	 THOMSON REUTERS (NYS)

	 SMITH & NEPHEW
	  	 SAINT GOBAIN
	  	 CARNIVAL

	 BURBERRY GROUP
	  	 ESSILOR INTL.
	  	 JOHNSON CONTROLS

	 INTERTEK GROUP
	  	 ADIDAS
	  	 PPG INDUSTRIES

	 JOHNSON MATTHEY
	  	 LAFARGE
	  	 CUMMINS

	 SMITHS GROUP
	  	 CARREFOUR
	  	 ADOBE SYSTEMS

	 AGGREKO
	  	 SAFRAN
	  	 CORNING

	 ICTL. HTLS. GP.
	  	 MICHELIN
	  	 HJ HEINZ

	 CARNIVAL
	  	 FRESENIUS
	  	 ALEXION PHARMS.

	 WEIR GROUP
	  	 RENAULT
	  	 SPECTRA ENERGY

	 REXAM
	  	 AKZO NOBEL
	  	 DELL

	 GKN
	  	 HENKEL PREF.
	  	 AIR PRDS. & CHEMS.

	 G4S
	  	 AHOLD KON.
	  	 BROADCOM ‘A’

	 TATE & LYLE
	  	 DASSAULT SYSTEMES
	  	 MOSAIC

	 IMI
	  	 SODEXO
	  	 PACCAR

	 INTL. CONS. AIR. GP. (CDI)
	  	 PUBLICIS GROUPE
	  	 TE CONNECTIVITY

	 BUNZL
	  	 BUREAU VERITAS INTL.
	  	 BECTON DICKINSON

	 CRODA INTERNATIONAL
	  	 ALSTOM
	  	 MCGRAW-HILL

	 TUI TRAVEL
	  	 SOLVAY
	  	 AGILENT TECHS.

	 MEGGITT
	  	 WOLTERS KLUWER
	  	 ESTEE LAUDER COS. ‘A’

	 INFORMA
	  	 LAGARDERE GROUP
	  	 APPLIED MATS.

	 DAILY MAIL ‘A’
	  		  	 TYCO INTERNATIONAL

	 UBM
	  		  	 DUN & BRADSTREET DEL.

		  		  	 WILEY JOHN & SONS ‘A’

		  		  	 FAIR ISAAC

 6.6     Any changes in the comparator groups as a result of mergers, demergers, delistings or other
corporate events over the Performance Period will be treated in accordance with the methodology agreed by the Committee at its sole discretion from time to time. In determining the methodology to be applied, the Committee will have due regard to
market practice and will apply its agreed methodology in an appropriate manner. 
 6.7     The TSR ranking against the
US Dollar Comparator Group will be calculated by reference to the TSRs of the RE PLC ADRs and the RE NV ADRs over the relevant period of measurement. 

  
 Page 20 

 6.8     The number of Shares in each third of the TSR Tranche which Vest will be
calculated as follows and will be added together to determine the total number of Shares within the TSR Tranche which are capable of Vesting: 
  

					
	
Percentile TSR ranking within the
relevant TSR Percentile 
comparator group
	  	Vesting percentage of
each third of the
TSR Tranche	 
	 Below Median (below 50th percentile)
	  	 	0	% 
	 Median (50th percentile)
	  	 	30	% 
	 60th percentile
	  	 	58	% 
	 Upper quartile (equal to or greater than 75th
percentile)
	  	 	100	% 

 6.9     Vesting is on a straight-line basis for ranking between median and upper quartile. 

6.10   The averaging period applied for TSR measurement purposes is the six months before the start of the Performance Period and the last six
months of the Performance Period. 
 The ROIC Measure 

7.1     The Vesting of one third of the Award relates to the percentage return on invested capital of the combined businesses of the
Qualifying Companies. Vesting relates to the percentage ROIC for the last financial year of the relevant Performance Period. The portion of an Award subject to the ROIC Measure is referred to as the ‘ROIC Tranche’. 

7.2     The following definitions are relevant for ROIC: 
  

	 	(i)	 Invested capital = arithmetic average of the opening and closing capital employed for the financial year
with all cumulative amortisation and impairment charges for acquired intangible assets and goodwill added back and excluding all the gross up to goodwill in respect of deferred tax liabilities established on the acquisition of intangible assets. In
addition, any exceptional restructuring and acquisition integration charges (net of tax) are capitalised for these purposes and changes in exchange rates and movements in the net pension deficits are excluded. 

 

	 	(ii)	 Return = adjusted operating profit for the combined businesses of the Qualifying Companies before
amortisation and impairment of acquired intangible assets and goodwill, exceptional restructuring and acquisition integration charges, after applying the effective rate of tax used for adjusted earnings calculations and using exchange rates to match
those used in the calculation of invested capital. 

 7.3     In order to ensure that the performance score
achieved is a fair reflection of underlying business performance, the Committee retains discretion to determine the treatment of major disposals and acquisitions which require board approval. Any significant adjustments made to the final performance
score will be disclosed to Shareholders. 

  
 Page 21 

 7.4    The number of Shares in the ROIC Tranche which are capable of Vesting will be
determined as follows: 
  

					
	 Percentage ROIC for the last financial
year of the Performance
Period
	  	Vesting percentage of
ROIC Tranche	 
	 Below 11.2%
	  	 	0	% 
	 11.2%
	  	 	33	% 
	 11.45%
	  	 	52.5	% 
	 11.7%
	  	 	65	% 
	 11.95%
	  	 	75	% 
	 12.2%
	  	 	85	% 
	 12.45%
	  	 	92.5	% 
	 12.7% or above
	  	 	100	% 

 7.5     Vesting is on a straight-line basis for performance between the stated ROIC percentages. 

The EPS Measure 
 8.1     The
Vesting of one third of the Award relates to the average growth in Adjusted Earnings per Share per annum at constant currencies of the Qualifying Companies measured over the Performance Period. The portion of the Award subject to the EPS Measure is
referred to as the ‘EPS Tranche’. 
 8.2     The following definitions apply in respect of Adjusted EPS: 

 

	 	(i)	 Adjusted EPS Growth = the arithmetic mean of the growth in Adjusted EPS at constant currencies achieved
by the Qualifying Companies over a relevant financial year; 

  

	 	(ii)	 Average Adjusted EPS Growth = the average of the annual Adjusted EPS Growth over the relevant period of
measurement; 

  

	 	(iii)	 Adjusted Earnings = adjusted reported earnings measured at constant currencies. Adjustments include
amortisation and impairment of acquired intangible assets and goodwill, exceptional restructuring and acquisition integration charges, gains/losses on business disposals and other non-operating items and tax
rate anomalies (principally deferred tax); 

  

	 	(iv)	 Adjusted Earnings Per Share = Adjusted Earnings divided by the Number of Shares; 

 

	 	(v)	 Number of Shares = weighted average number of shares in issue excluding shares held in treasury or by
the RELX Group plc Employee Benefit Trust; and 

  

	 	(vi)	 Constant currencies = refers to measurement at constant rates of exchange using the prior full year
average and hedge rates. 

 8.3     The number of Shares in the EPS Tranche which are capable of Vesting will be
determined as follows: 

  
 Page 22 

					
	 Average Adjusted EPS Growth
	  	Vesting percentage of
EPS Tranche	 
	 Below 5%
	  	 	0	% 
	 5%
	  	 	33	% 
	 6%
	  	 	52.5	% 
	 7%
	  	 	65	% 
	 8%
	  	 	75	% 
	 9%
	  	 	85	% 
	 10%
	  	 	92.5	% 
	 11% or above
	  	 	100	% 

 8.4     Vesting is on a straight-line basis for performance between the stated Average Adjusted EPS
Growth percentages. 
 Determining satisfaction of targets at end of Performance Period 

9.1     Following the end of the Performance Period (or as otherwise required under the Rules) the Committee will: 

 

	(a)	 calculate and confirm with the auditors the Average Adjusted EPS Growth and ROIC in respect of the relevant
period of measurement; and 

  

	(b)	 arrange for a reputable provider of such information to calculate and report to the Committee on the TSR
performance. If at the end of the Performance Period (or at such earlier date as may be required under the Rules), any of the companies in the comparator groups have undergone a change in circumstances (such as delisting, the cessation of trading or
merger with another company), the Committee may determine the appropriate treatment for such companies in accordance with its stated methodology for the purpose of determining their TSR and TSR ranking. 

Adjustments 
 10.     The
Committee may make such adjustments to the Performance Condition applicable to outstanding Awards as it considers appropriate to take account of any factors which are relevant in the opinion of the Committee and in particular if there is an event
which causes it to consider that the Performance Condition, or any part of it, is no longer a fair measure of performance. The amended Performance Condition will not be materially less or more challenging than the one originally set. 

11.     The Committee has discretion to adjust the definition or method of calculation of Adjusted EPS and ROIC (or any other
applicable term or measure) as set out in this Appendix to take account of any changes in recognised accounting standards or practice, fiscal regime or capital structure, to ensure consistent measurement and accountability. 

12.     Without prejudice to the generality of paragraphs 10, 11 and 13, the Committee may, in consultation with the auditors, make
the following adjustments in relation to the calculations to be carried out in accordance with this Appendix: 
  

	(a)	 any adjustments it considers appropriate if an event occurs giving rise to an adjustment of Awards under Rule
14 of the Plan; 

  
 Page 23 

	(b)	 any adjustments it considers appropriate to the calculation of TSR for each of the companies in the comparator
group to take account of local market factors; and 

  

	(c)	 any adjustments it considers appropriate if there is any modification in the calculation of TSR or in relation
to the relevant international accounting standard used to calculate EPS or ROIC. 

 Overriding Power 

13.     In determining the level of Vesting of an Award under the Plan, the Committee will take into account the overall business
performance of the Qualifying Companies and the Group over the relevant performance period and any other factors that it considers appropriate and may modify the Vesting level if it considers that such a modification would result in a fairer
outcome. In exercising any such discretion, the Committee will have due regard to the value created for Shareholders and the underlying business performance. 

  
 Page 24 

 SCHEDULE 1 

Awards to US Participants 
 This Schedule
was adopted by the directors of RELX Group plc on 25 April 2013. 
 The Rules of the Plan apply to Awards granted to US participants subject to the
modifications contained in this Schedule. 
  

	(A)	 In this Schedule, terms shall have the same meaning as in Rule 1 of the Rules unless modified by this Schedule.

  

	(B)	 Retirement means, for the purposes of the application of Rule 8.2(c) of the Plan in relation to a
US Participant, circumstances which the Committee determines on a case by case basis and in its absolute discretion to constitute retirement (irrespective of whether or not applicable retirement eligible criteria have been met);

  

	(C)	 Normal Vesting - Release of Shares. Rule 6.3 shall have the additional requirement that if Shares
are to be released to a US Participant, they shall in all instances be released no later than March 15 of the year following the year in which Vesting occurs. 

 

	(D)	 Dividend Equivalent - Cash Payment. Rule 7.2(c) shall have the additional requirement that any
cash payment to the US Participant under this Rule shall in all instances be released no later than March 15 of the year following the year in which Vesting occurs. 

 

	(E)	 Dividend Equivalent - Shares in Lieu of Cash. Rule 7.3 shall have the additional requirement that
if Shares are to be released to a US Participant in lieu of cash, they shall in all instances be released no later than March 15 of the year following the year in which Vesting occurs. 

 

	(F)	 Approved Leaver. Rule 8.2 shall have the additional requirement that the Shares released to a US
Participant shall in all instances be transferred to the US Participant on or before March 15 of the year following the year in which Vesting occurs. 

  

	(G)	 Committee Adjustments. Rules 8.3 and 8.4 shall have the additional requirement that the Shares
released to a US Participant or to a US Participant’s personal representative following the US Participant’s cessation of employment by reason of death, injury, disability or ill-health shall in all
instances be transferred to the US Participant or the Participant’s personal representative on or before March 15 of the year following the year in which the US Participant’s cessation of employment occurs. 

 

	(H)	 Limitation on Exercise Period. Notwithstanding anything contained in the Rules to the
contrary, including without limitation, Rules 4.2, 8.5 and 10.2, a Performance Share Option granted to a US Participant must be exercised (but only to the extent Vested), and Shares transferred to the US Participant in settlement thereof (or if
Schedule 3 applies, the payment of cash in lieu of Shares) on or before 15 March of the year following the year in which Vesting occurs. 

  
 Page 25 

	(I)	 Award Rollover. Except to the extent consistent with the requirements of Section 409A of the United
States Internal Revenue Code (“Code”) for the deferral of compensation without penalty or additional tax or unless an exception to the application of Code Section 409A applies, Rule 12 shall not apply to any Award held by a US
Participant if, at the time the election provided by Rule 12 is available to the US Participant, it has Vested. In such case, the Rules of the Plan shall apply to the Award without regard to Rule 12. 

 

	(J)	 Service Recipient Stock. The Shares underlying any Option granted to a US Participant will in all
instances constitute “service recipient stock,” and will be issued or transferred by RELX PLC, which is, with respect to such US Participant, an “eligible issuer of service recipient stock” for purposes of Code Section 409A
and the regulations promulgated thereunder. 

  

	(K)	 Application of Code Section 409A. Although neither the Committee
nor any member of the Group guarantees any particular tax treatment to a US Participant, awards granted pursuant to this Schedule are intended to be exempt from Section 409A of the Code under the exception for short-term deferrals set forth in Section 1.409A-1(b)(4) of the United States Income Tax Regulations (which requires, in the case of an employer with a fiscal year ending 31 December, that Shares in satisfaction of an award be transferred
to the US Participant no later than March 15 of the calendar year following the calendar year in which the award is no longer subject to a substantial risk of lapsing) and shall be limited, construed and interpreted in accordance with such
intent. 

  

	(L)	 Withholding. Notwithstanding anything contained herein to the contrary, all Share releases and
cash payments to US Participants contemplated hereunder shall be subject, to the extent applicable, to all applicable tax and withholding rules. 

  

	(M)	 Effective Date. This Schedule will be effective on the Adoption Date. 

  
 Page 26 

 SCHEDULE 2* 

Plan applicable to Elsevier Reed Finance BV 

If the Committee wishes to grant Awards to employees of Elsevier Reed Finance BV (ERF), or to
employees of companies under the Control of ERF, it may grant Awards pursuant to this Schedule and the following provisions will apply. 
  

	(A)	 The Rules of the Plan will apply to the grant of Awards under this Schedule, subject to the
modifications contained in the following paragraphs. 

  

	(B)	 In this Schedule, terms will have the same meaning as in Rule 1 of the Rules unless modified by this
Schedule. 

  

	(C)	 The definition of Group will be construed as including ERF and every company which is under the Control
of ERF. 

  

	(D)	 Rule 16 will be amended so that it applies in respect of an Employees’ Share Scheme established by
RE PLC, the Company or ERF. 

  

	(E)	 Awards will not be granted under this Schedule without the agreement of the supervisory board of
ERF. 

  

	*	 No longer applicable following the Group structure simplification changes announced on 26 February 2015
and completed on 1 July 2015. See footnote to Appendix for definitions that have now been deleted. 

  
 Page 27 

 SCHEDULE 3 

Cash Alternative 
 If deemed necessary in
order to ensure compliance with tax, regulatory or legal country specific requirements (e.g. exchange control and securities laws) in the countries in which the Plan operates then, notwithstanding any provision to the contrary in these Rules: 

 

	(A)	 The Committee may decide to satisfy an Award by paying to the Participant an amount equal to the market value
(as determined in its discretion) of the number of Shares which would otherwise be issued or transferred following vesting or exercise (as applicable) or an amount determined on such other reasonable basis as the Committee may decide (which could
for example, allow for the deduction of any applicable expenses). 

  

	(B)	 The Committee may grant an Award on the basis that it will be satisfied in cash, as opposed to Shares, as set
out in (A) above. 

 Unless the Committee determines otherwise, the Rules will apply as if any Award granted or to be satisfied
pursuant to this Schedule involves a right to, or interest in, Shares for the purposes of determining whether Dealing Restrictions are in place at the Date of Grant, Vesting, exercise, release or surrender of any such Award. 

  
 Page 28 

 SCHEDULE 4 

Australia 
 All Rules of the Plan shall
apply to Awards granted under the Plan to Employees resident in Australia except to the extent amended, or added to, by this Schedule. 
 In the event that
(i) a Participant becomes an Australian tax resident, including a temporary tax resident, subsequent to the Date of Grant of an Award to such Participant under the Plan, (ii) such Award has been granted on terms that it is to be satisfied
in Shares, and (iii) the Participant is to become an Approved Leaver in accordance with Rule 8.2, such Award shall immediately be amended in a manner consistent with this Schedule unless the Committee determines otherwise. 

 

	1.	 IMPORTANT OFFER INFORMATION 

 

	 	1.1.	 Any information given by or on behalf of the Company in relation to the Plan is general information only and
does not take into account individual investment objectives, financial situation or particular needs of Employees. 

  

	 	1.2.	 Before making an investment decision, Employees should consider their personal circumstances, and the
information in the Rules and this Schedule in relation to the Plan, and consider obtaining their own independent financial product advice from a person who is licensed by ASIC to give such advice. 

 

	 	1.3.	 The Rules and this Schedule do not constitute a disclosure document within the meaning of the Australian
Corporations Act 2001 (Cth) and has not been lodged with ASIC. 

  

	 	1.4.	 Further important information for your consideration is set out below in clause 8 (General Risks).

  

	2.	 INTERPRETATION AND DEFINITIONS 

Unless otherwise defined below, words and expressions defined in the Rules shall have the same meanings where used in this Schedule. 

ASIC means the Australian Securities and Investments Commission; 

Australian Dollar means the lawful currency of Australia; 

Employee means any individual who: 
  

	 	(A)	 is resident in Australia; and 

 

	 	(B)	 is an employee (including an executive director) of a member of the Group or RELX PLC; 

Euro means the lawful currency of the Eurozone; 

Pound Sterling means the lawful currency of the United Kingdom; and 

  
 Page 29 

 US Dollar means the lawful currency of the
United States of America. 
  

	3.	 GENERAL 

Any reference in the Plan to an “Employee” shall be deemed a reference to an Employee as defined in this Schedule. 

 

	4.	 NO PRICE PAYABLE AT GRANT

 The following wording shall be inserted as Rule 4.6: 

 

	 	“Rule 4.6	 No price shall be payable by a Participant upon the grant of an Award.” 

 

	5.	 CASH EQUIVALENT - APPROVED LEAVER
AND CONVERSION EXCHANGE RATE 

  

	 	5.1.	 Rule 8.2 shall be amended by the inclusion of the sentence “Unless the Committee determines otherwise
and notwithstanding any provision to the contrary in these Rules, the continuing Award will be satisfied by paying the Participant an amount equal to the market value (as determined in its discretion) of the number of Shares which would otherwise be
issued or transferred following vesting or exercise (as applicable) or an amount determined on such other reasonable basis as the Committee may decide (which could for example, allow for the deduction of any applicable expenses).” after the
sentence “The Award will Vest, if at all, on the Normal Vesting Date in accordance with Rule 6”. 

  

	 	5.2.	 The exchange rate to be used to convert any cash payment amount in Rule 8.2 and Schedule 3 from a Euros amount,
Pounds Sterling amount or US Dollar amount (as applicable) into an Australian Dollar amount will be the rate as determined by Group Compensation, as at the close of business in London, United Kingdom on the day that the relevant Award vests or
is exercised (as applicable). For further information on how the exchange rate is determined, Participants should contact the Company by email to group.compensation@relx.com at any time prior to the conversion. 

  

	6.	 AMENDMENT AND ADMINISTRATION 

 

	 	6.1.	 For the avoidance of doubt, the Committee and/or the Board have the full authority, consistent with the Rules,
to administer this Schedule, including authority to interpret and construe any provision of this Schedule, to identify Employees and Participants with respect to whom the provisions of this Schedule may apply, and to adopt any regulations for
administering this Schedule and any documents it thinks necessary or appropriate. 

  

	 	6.2.	 The Committee and the Board may delegate any of its powers to any
sub-committee. Any delegation may be made subject to such conditions as the Committee or the Board (as applicable) may specify, and may be revoked or altered. The membership of any sub-committee will be determined by the Committee or the Board (as applicable) and may consist in whole or in part of persons other than directors, who may enjoy voting rights in the
sub-committee. 

  
 Page 30 

	 	6.3.	 The decision of the Committee, the Board or any sub-committee of the
Committee or the Board, as applicable, on any matter concerning this Schedule will be final and binding on all parties. 

  

	7.	 TRUSTEE 

 

	 	7.1.	 An Award may be satisfied by the issue or transfer of Shares, including a transfer of Shares from the RELX
Employee Benefit Trust (the Trust). 

  

	 	7.2.	 The Trust was settled by the Company on 3 April 1997 for a period of 80 years for the benefit of employees
and former employees of the Group, RELX NV and RELX PLC (the Beneficiaries). The trustee of the Trust is Computershare Trustees (Jersey) Limited, a professional trustee company. The Company may appoint a new or additional trustee provided
that it has the consent of a committee of employees comprising the Company Secretary, the Group Treasurer and the Deputy Company Secretary from time to time. The Trust property comprises shares and ADRs in RELX PLC and cash, all of which are held on
discretionary trust (i.e. on an unallocated basis). The activities of the Trust are limited to purchasing and holding Shares for Beneficiaries who may become entitled to those shares under the Plan or another employee share scheme operated by the
Company. 

  

	 	7.3.	 The Company has covenanted to indemnify the trustee, to the extent that the trustee does not so recover out of
the Trust, in respect of any costs, expenses or liabilities which they incur by virtue of their role as trustee unless it is attributable to negligence, fraud or wrongdoing on the part of the trustee. The Company and the trustee have agreed that the
trustee shall not levy any fees or charges for administering the Trust that are directly payable by a Participant or Beneficiary or out of the assets of the Trust (other than reasonable disbursements including brokerage and taxes in connection with
the Trust). 

  

	 	7.4.	 The Company will provide a copy of the deed constituting the Trust within a reasonable time and at no cost to
any Participant who so requests it by email to group.compensation@relx.com. 

  

	8.	 GENERAL RISKS 

 

	 	8.1.	 Every investment involves an element of risk and Employees should be aware that there are risks associated with
share ownership. Shares should be considered a long-term investment. Ordinary shares in the capital of RELX PLC and American Depository Shares representing RELX PLC ordinary shares evidenced by American Depository Receipts (ADRs), are subject
to the general market risk that is inherent in all securities listed on a stock exchange. This may result in fluctuations in its share price that are not explained by its fundamental operations and activities. 

  
 Page 31 

	 	8.2.	 RELX PLC is a limited liability company which means that people holding Shares in RELX PLC are not required to
contribute any more capital for their Shares once those Shares have been fully paid for, even in the event of losses by RELX PLC. However, it is possible that if there are losses, or profits fall, holders of Shares may not receive dividends or
dividends may be reduced and the value of their Shares may fall. The prices of Shares (excluding ADRs) as quoted on the London Stock Exchange and Euronext Amsterdam and ADRs as quoted on the New York Stock Exchange are volatile and move up and down
with market sentiment as well as factors which are specific to RELX PLC. The price at which the Shares (excluding ADRs) trade on the London Stock Exchange and Euronext Amsterdam and the ADRs trade on the New York Stock Exchange may be higher or
lower than historical prices. If investors decide to sell their Shares, the amount which may be received on the sale may be higher or lower than their present market price. RELX PLC’s latest annual report contains details of its performance and
the factors which have impacted upon this performance during the period to which the report relates. This document may be viewed on RELX PLC’s website at the following link: http://www.relx.com/investors/results/2018 

 

	 	8.3.	 RELX PLC is also required to notify the London Stock Exchange, Euronext Amsterdam and the New York Stock
Exchange of information about specified events and matters as they arise for the purposes of making that information available to the stock market conducted by the London Stock Exchange, Euronext Amsterdam and the New York Stock Exchange
respectively. The most recent annual report and announcements of the London Stock Exchange, the Euronext Amsterdam and the New York Stock Exchange should be referred to for details of these matters. 

 

	 	8.4.	 In the future, RELX PLC may elect to issue Shares or other securities. While RELX PLC will be subject to the
constraints of the rules of the London Stock Exchange, Euronext Amsterdam and the New York Stock Exchange regarding the issue of Shares or other securities, security holders may be diluted as a result of such issues of Shares or other securities.

  

	 	8.5.	 Some of the factors which may affect the price of the Shares include fluctuations in the domestic and
international market for listed securities, general economic conditions, including interest rates, inflation rates, exchange rates, consumer sentiment, commodity and oil prices, changes to government fiscal, monetary or regulatory policies and
settings, changes in legislation or regulation, inclusion in or removal from market indices, the nature of the markets in which RELX PLC operates and general operational and business risks. Other factors which may negatively affect investor
sentiment and influence RELX PLC specifically or the stock market more generally include acts of terror, an outbreak of international hostilities or fires, floods, earthquakes, labour strikes, civil wars and other natural disasters.

  
 Page 32 

	9.	 CURRENCY CONVERSION 

 

	 	9.1.	 The trading price of RELX PLC’s Shares is shown in Pounds Sterling on the London Stock Exchange website
under the code REL at http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/prices-search/stock-prices-search.html?nameCode=rel&page=1
and in Euros on the Euronext Amsterdam website under the code REN at https://www.euronext.com/en/products/equities/NL0006144495-XAMS. 

  

	 	9.2.	 The trading price of RELX PLC’s ADRs is shown in US Dollars on the New York Stock Exchange website under
the code RELX at https://www.nyse.com/quote/XNYS:RELX. 

  

	 	9.3.	 These prices are all also available on RELX PLC’s website at
http://www.relx.com/investorcentre/sharepriceinformation/Pages/default.aspx. 

  

	 	9.4.	 Participants can ascertain, from time to time, the market price of RELX PLC’s Shares in Australian Dollars
by checking the trading price in Pounds Sterling, Euro or US Dollars on one of the websites set out above and then converting that Pounds Sterling, Euro or US Dollar price into an Australian Dollar amount based on the relevant foreign currency
exchange rate at that time. Useful places to find foreign currency exchange rates include the Australian Taxation Office’s (ATO) website at https://www.ato.gov.au/rates/foreign-exchange-rates/ and the Reserve Bank of Australia’s (RBA)
website at http://www.rba.gov.au/statistics/frequency/exchange-rates.html. 

  
 Page 33Exhibit 4.1

 

SHAREHOLDERS AGREEMENT

 

DATED AS OF

 

[   ], 2018

 

AMONG

 

OSMOTICA PHARMACEUTICALS PLC

 

ACP HOLDCO (OFFSHORE), L.P.

 

ACP III AIV, L.P.

 

ALTCHEM LIMITED

 

ORBIT CO-INVEST A-I LLC

 

ORBIT CO-INVEST 1 LLC

 

ORBIT CO-INVEST II LLC

 

ORBIT CO-INVEST III LLC

 

AND

 

THE MANAGEMENT SHAREHOLDERS IDENTIFIED HEREIN

 

 

TABLE OF CONTENTS

 

	
ARTICLE 1   DEFINITIONS
    	
1
    
	
 
    	
 
    
	
Section 1.01.
    	
 
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 2   CORPORATE GOVERNANCE
    	
8
    
	
 
    	
 
    
	
Section 2.01.
    	
 
    	
Composition of the   Board
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
Section 2.02.
    	
 
    	
Additional Provisions
    	
9
    
	
 
    	
 
    	
 
    	
 
    
	
Section 2.03.
    	
 
    	
Exculpation
    	
9
    
	
 
    	
 
    	
 
    	
 
    
	
Section 2.04.
    	
 
    	
Indemnification
    	
10
    
	
 
    	
 
    	
 
    	
 
    
	
Section 2.05.
    	
 
    	
Primary Obligation
    	
11
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 3   TRANSFERS AND RESTRICTIONS ON TRANSFER
    	
12
    
	
 
    	
 
    
	
Section 3.01.
    	
 
    	
Co-Invest Vehicle   Participation; Aggregation of Interests
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
Section 3.02.
    	
 
    	
General Restrictions on   Transfer
    	
13
    
	
 
    	
 
    	
 
    	
 
    
	
Section 3.03.
    	
 
    	
Restrictions on   Transfer by Management Shareholders
    	
13
    
	
 
    	
 
    	
 
    	
 
    
	
Section 3.04.
    	
 
    	
Management Permitted   Transferees
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 4   REGISTRATION RIGHTS
    	
15
    
	
 
    	
 
    
	
Section 4.01.
    	
 
    	
Demand Registration
    	
15
    
	
 
    	
 
    	
 
    	
 
    
	
Section 4.02.
    	
 
    	
Piggyback Registration
    	
17
    
	
 
    	
 
    	
 
    	
 
    
	
Section 4.03.
    	
 
    	
Shelf Registration
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
Section 4.04.
    	
 
    	
Lock-Up Agreements
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
Section 4.05.
    	
 
    	
Registration Procedures
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
Section 4.06.
    	
 
    	
Indemnification by the   Company
    	
25
    
	
 
    	
 
    	
 
    	
 
    
	
Section 4.07.
    	
 
    	
Indemnification by the   Participating Shareholders
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
Section 4.08.
    	
 
    	
Conduct of   Indemnification Proceedings
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
Section 4.09.
    	
 
    	
Contribution
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
Section 4.10.
    	
 
    	
Cooperation by the   Company
    	
28
    
	
 
    	
 
    	
 
    	
 
    
	
Section 4.11.
    	
 
    	
Restriction on Company   Grants of Subsequent Registration Rights
    	
28
    
	
 
    	
 
    	
 
    	
 
    
	
Section 4.12.
    	
 
    	
Assignment of   Registration Rights
    	
28
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 5   ACCOUNTING AND TAX MATTERS
    	
29
    
	
 
    	
 
    
	
Section 5.01.
    	
 
    	
Books and Records;   Financial Reports
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
Section 5.02.
    	
 
    	
Tax Returns
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
Section 5.03.
    	
 
    	
Accounting Methods;   Elections
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
Section 5.04.
    	
 
    	
United States Federal   Income Tax Classification
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 6   CERTAIN COVENANTS AND AGREEMENTS
    	
30
    
	
 
    	
 
    
	
Section 6.01.
    	
 
    	
Confidentiality
    	
30
    

 

i

 

	
Section 6.02.
    	
 
    	
Directors’ and   Officers’ Insurance
    	
31
    
	
 
    	
 
    	
 
    	
 
    
	
Section 6.03.
    	
 
    	
No Exclusive Duty to Company
    	
31
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 7   MISCELLANEOUS
    	
33
    
	
 
    	
 
    
	
Section 7.01.
    	
 
    	
Binding Effect;   Assignability; Benefit
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
Section 7.02.
    	
 
    	
Notices
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
Section 7.03.
    	
 
    	
Waiver; Amendment;   Termination
    	
34
    
	
 
    	
 
    	
 
    	
 
    
	
Section 7.04.
    	
 
    	
Non-Recourse
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
Section 7.05.
    	
 
    	
Governing Law; Venue
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
Section 7.06.
    	
 
    	
WAIVER OF JURY TRIAL
    	
36
    
	
 
    	
 
    	
 
    	
 
    
	
Section 7.07.
    	
 
    	
Specific Enforcement;   Cumulative Remedies
    	
36
    
	
 
    	
 
    	
 
    	
 
    
	
Section 7.08.
    	
 
    	
Entire Agreement
    	
36
    
	
 
    	
 
    	
 
    	
 
    
	
Section 7.09.
    	
 
    	
Severability
    	
36
    
	
 
    	
 
    	
 
    	
 
    
	
Section 7.10.
    	
 
    	
Counterparts; Effectiveness
    	
37
    

 

ii

 

THIS SHAREHOLDERS AGREEMENT (this “Agreement”), dated as of [   ], 2018, is entered into by and among Osmotica Pharmaceuticals plc, a public limited company incorporated under the laws of Ireland with registration number 607944 and registered office at 25-28 North Wall Quay, Dublin 1, Ireland (together with its successors, the “Company”), ACP Holdco (Offshore), L.P., a Bermuda exempted limited partnership (“ACP Offshore”), ACP III AIV, L.P., a Bermuda exempted limited partnership (the “VCOC”, and together with ACP Offshore, the “Avista Shareholder”), Altchem Limited (the “Altchem Shareholder”), and each of Altchem, on the one hand, and the Avista Shareholder, collectively, on the other hand, a “Sponsor”), Orbit Co-Invest A-I LLC, a Delaware LLC (“Orbit A-1”), Orbit Co-Invest I LLC, a Delaware LLC (“Orbit 1”) and Orbit Co-Invest III, LLC (“Orbit 3”, and together with Orbit A-1 and Orbit 1, the “Co-Invest Vehicles”), the shareholders listed on Annex A hereto as Management Shareholders, and the Persons who on becoming shareholders of the Company execute and deliver a Joinder Agreement, substantially as set forth on Annex A hereto (a “Joinder Agreement”) (each of the foregoing a “Shareholder” and collectively, the “Shareholders”).

 

WHEREAS, the Company was formed pursuant to the Irish Companies Act 2014 on July 13, 2017;

 

WHEREAS, in connection with the contemplated initial public offering (the “Offering”) of the Company’s Ordinary Shares (as defined below), the board of directors of the Company (the “Board”) has approved this Agreement at a meeting of the Board on August 14, 2018;

 

WHEREAS, this Agreement shall be effective upon the consummation of the IPO (as defined below) (the “Effective Time”);

 

WHEREAS, Schedule A hereto sets forth the names of and the number of Equity Securities owned by each Shareholder as of the date hereof, and the Company shall update Schedule A from time to time to reflect any issuances or Transfers of Equity Securities;

 

WHEREAS, the parties believe that it is in the best interests of the Company and the Shareholders to set forth herein their agreements on certain matters relating to the governance of the Company and the rights and obligations of the Shareholders; and

 

NOW, THEREFORE, in consideration of the promises and mutual agreements contained herein and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

Section 1.01.                          Definitions.

 

(a)                                 The following terms, as used herein, have the following meanings:

 

“Affiliate” means, with respect to any Person, any other Person who, directly or indirectly, Controls such first Person or is Controlled by said Person or is under common Control 

 

 

with said Person; provided, that no Shareholder shall be deemed an Affiliate of any other Shareholder solely by reason of an investment in, or holding Equity Securities of, the Company.

 

“Altchem Co-Invest Vehicles” means Orbit A-I LLC (to the extent that it remains Controlled by the Altchem Shareholder or one of its Controlled Affiliates) or any other co-investment vehicle controlled by the Altchem Shareholder or one of its Controlled Affiliates and that holds Equity Securities from and after the Effective Date, collectively referred to as “Altchem Co-Invest Vehicles”; provided, that the Altchem Shareholder and its Permitted Transferees shall in no event be deemed to be an Altchem Co-Invest Vehicle.

 

“Avista Co-Invest Vehicle” means any of Orbit 1, Orbit 3 and any other co-investment vehicle controlled by the Avista Shareholder or one of its controlled Affiliates and that holds Equity Securities from or after the Effective Date, collectively referred to as “Avista Co-Invest Vehicles”; provided, that the Avista Shareholder and their Permitted Transferees shall in no event be deemed to be an Avista Co-Invest Vehicle.

 

“Business” means, from time to time, the marketing, distribution, manufacturing or sale of branded and generic pharmaceutical products of the Company and/or of Subsidiaries of the Company at such time or which products have been presented to the Board or board of directors of the Subsidiaries of the Company for future marketing, distribution, manufacturing or sale at prior to such time; provided, that “Business” includes any business that develops or commercializes osmotic-based drug delivery technology in the United States or Canada.

 

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York City, New York and Dublin, Ireland are authorized or required by applicable law to close.

 

“Company Competitor” means (a) any Person that is reasonably determined by the Board to be a competitor of the Company or any of its Subsidiaries in any material respect and (b) any Affiliate of any such Person specified in clause (a).  For purposes hereof, without limiting the foregoing, any Person with, or whose Affiliate has, substantial operations in the Business shall be presumed to be a Company Competitor unless the Board otherwise determines; provided, however, that for purposes of this Agreement, no private equity fund, including the Sponsors (or any of their respective Affiliates), shall be deemed a Company Competitor solely due to its direct or indirect investment in a portfolio company of such Person where such portfolio company would be deemed a Company Competitor.

 

“Constitution” means the constitution of the Company, as the same may be amended from time to time, a copy of which is attached as Exhibit B hereto, as the same may be amended from time to time as permitted hereunder.

 

“Control,” “Controlled” and “Controlling” mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Equity Securities’’ means, without duplication, (i) the Ordinary Shares, and (ii) any other securities convertible into or exchangeable or exercisable for, or options, warrants or other 

 

2

 

rights to acquire, Ordinary Shares, or any other equity or equity-linked security issued by the Company.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Family Member” means, with respect to any Person who is an individual, any spouse (or partner by civil union or registered domestic partnership), lineal descendants (including adoptive relationships), or siblings.

 

“FINRA” means the Financial Industry Regulatory Authority, Inc.

 

“Governmental Authority” means any federal, state, local or foreign governmental authority, department, commission, board, bureau, agency, court, instrumentality or judicial or regulatory body or entity.

 

“Incentive Plan” means the Company’s 2018 Equity Incentive Plan, as the same may be amended, modified or supplemented.

 

“IPO” means the initial Public Offering registered on Form S-1 (or any successor form under the Securities Act).

 

“Management Affiliated Entity” means, as to any Management Person, (i) any vehicle or entity (excluding a Co-Invest Vehicle) that holds Equity Securities on behalf or for the direct or indirect benefit of such Management Person or their Permitted Transferee, and (ii) any Shareholder that would be or qualify as a Permitted Transferee of such Person if such Person was a Shareholder.

 

“Management Person” means any current or former employee, officer, director or consultant of the Company or any of its Subsidiaries that holds Equity Securities of the Company, either directly or indirectly through a Management Affiliated Entity or a Co-Invest Vehicle.

 

“Management Shareholders” means (a) the shareholders listed on Annex A hereto and (b) any Shareholder in its capacity as (i) a Management Person, (ii) a Management Affiliated Entity, or (iii) any Permitted Transferee of (i) or (ii).

 

“Option” means an option to purchase Ordinary Shares granted pursuant to the Incentive Plan.

 

“Ordinary Shares” means the ordinary shares of $0.01 each in the capital of the Company, with such rights and preferences as set forth in the Constitution.

 

“Permitted Transferee” means, (a) with respect to any Management Person, (i) any executor, administrator or testamentary trustee of such Management Person’s estate if such Management Person dies, (ii) any Family Member receiving Equity Securities of such Management Person by will, intestacy laws or the laws of descent or survivorship, (iii) any trustee of a trust (including an inter vivos trust) of which there are no principal beneficiaries 

 

3

 

other than such Management Person or one or more Family Members of such Management Person or (iv) any investment vehicle which is 100% wholly owned by a Management Person, one or more Family Members of such Management Person, or a trust described in clause (iii) above, (b) with respect to any Management Affiliated Entity, the employee, officer, director or consultant of the Company or any of its Subsidiaries that qualifies such Shareholder as a Management Affiliated  Entity, (c) with respect to the Altchem Shareholder or its Permitted Transferees, (i) as to any individual owner of the Altchem Shareholder or such Permitted Transferee, the Persons described in clause (a)(i) through (iv) of this definition, mutatis mutandis; provided, that, any such Permitted Transferee of the Altchem Shareholder pursuant to this subsection (i) shall hold Equity Securities in the Company indirectly through the Altchem Shareholder or through a vehicle Controlled by the Altchem Shareholder; and (ii) any Affiliate of the Altchem Shareholder or such Permitted Transferees, (d) with respect to the Avista Shareholder or its Permitted Transferees, an investment fund that is a parallel fund (but not a successor fund) or alternative investment vehicle of the Avista Shareholder with the same or Affiliated general partner as the Avista Shareholder or a direct or indirect wholly-owned Subsidiary of the Avista Shareholder or such parallel fund or alternate investment vehicle, (e) with respect to the Avista Co-Invest Vehicles, the Avista Shareholder, its Permitted Transferees and any other Avista Co-Invest Vehicle, (f) with respect to the members of the Avista Co-Invest Vehicles, (i) any Affiliate of such member other than a Company Competitor; (ii) the Avista Shareholder; and (iii) any current or prospective limited partners of the Avista Shareholder or of other investment funds managed by the Avista Shareholder or any of its Affiliates; provided, that, any such Permitted Transferee of the members of the Avista Co-Invest Vehicles pursuant to this clause (f) shall hold Equity Securities in the Company indirectly through the Avista Shareholder or through a vehicle Controlled by the Avista Shareholder (except in the case that the Avista Shareholder is the Permitted Transferee, in which case it shall be permitted to hold Equity Securities in the Company directly), and (g) with respect to the Altchem Co- Invest Vehicle, the Altchem Shareholder and its Permitted Transferees and any other Altchem Co-Invest Vehicle; provided, however, that no “portfolio company” (as such term is customarily used among institutional investors) of the Avista Shareholder or any entity Controlled by any portfolio company of the Avista Shareholder shall constitute a Permitted Transferee of the Avista Shareholder, an Avista Co-Invest Vehicle, or the members of an Avista Co-Invest Vehicle; provided, further, however, that in no event shall (A) the Company or any of its Subsidiaries, or (B) any Company Competitor (whether or not an Affiliate of the transferring Shareholder), constitute a “Permitted Transferee”.

 

“Person” means any individual, corporation, limited liability company, partnership, association, trust or other entity or organization, including a Governmental Authority and, where the context so permits, the legal representatives, successors in interest and permitted assigns of such Person.

 

“Proceeding” means an investigation, action, suit, arbitration or other proceeding, whether civil or criminal.

 

“Proportion” means the percentage derived by dividing the amount of Ordinary Shares to be transferred by any Sponsor or its Affiliates, by the total amount of Ordinary Shares held by all of the Sponsors and their Affiliates before such proposed Transfer.

 

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“Public Offering” means an underwritten public offering of Ordinary Shares pursuant to an effective registration statement under the Securities Act, other than pursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form.

 

“Registrable Securities” means at any time, any equity securities (other than non-participating, non-convertible preferred share) of the Company held by any other Shareholders;  provided, that Registrable Securities shall not include any shares (i) the sale of which has been registered pursuant to the Securities Act and which shares have been sold pursuant to such registration, (ii) which have been sold or are eligible to be sold or distributed pursuant to Rule 144 or Rule 145 without limitation, (iii) which have been registered for resale pursuant to an effective Registration Statement on a Form S-8 (or any successor or similar form), or (iv) which represent less than 1% of the outstanding Ordinary Shares of the Company.

 

“Registration Expenses” means any and all expenses incident to the performance of or compliance with any registration or marketing of securities, including all (i) registration and filing fees, and all other fees and expenses payable in connection with the listing of securities on any securities exchange or automated interdealer quotation system, (ii) fees and expenses of compliance with any securities or “blue sky” laws (including reasonable fees and disbursements of counsel in connection with “blue sky” qualifications of the securities registered), (iii) expenses in connection with the preparation, printing, mailing and delivery of any Registration Statements, prospectuses and other documents in connection therewith and any amendments or supplements thereto, (iv) security engraving and printing expenses, (v) internal expenses of the Company (including all salaries and expenses of its officers and employees performing legal or accounting duties), (vi) fees and disbursements of counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company (including the expenses relating to any comfort letters or costs associated with the delivery by independent certified public accountants of any comfort letters to be provided pursuant to Section 4.05(h) hereof), (vii) fees and expenses of any special experts retained by the Company in connection with such registration, (viii) fees and out-of-pocket expenses of one counsel for each of the Sponsors (including the reasonable fees and expenses of one counsel collectively for the Avista Co-Invest Vehicles and one counsel for the Altchem Co-Invest Vehicle), and any other “local” counsel required to render legal opinions on behalf of any such Sponsor, (ix) fees and expenses in connection with any review of the underwriting arrangements or other terms of the offering, and all fees and expenses of any “qualified independent underwriter” required to participate in any offering, including reasonable fees and expenses of any counsel thereto, (x) fees and disbursements of underwriters customarily paid by issuers or sellers of securities, but excluding any underwriting fees, discounts and commissions attributable to the sale of Registrable Securities, (xi) costs of printing and producing underwriting agreements, any “blue sky” or legal investment memoranda and any selling agreements and other documents in connection with the offering, sale or delivery of the Registrable Securities, (xii) transfer agents’ and registrars’ fees and expenses and the fees and expenses of any other agent or trustee appointed in connection with such offering, (xiii) expenses relating to any analyst or investor presentations or any “road shows” undertaken in connection with the registration, marketing or selling of the Registrable Securities, (xiv) fees and expenses payable in connection with any ratings of the Registrable Securities, including expenses relating to any presentations to rating agencies, and (xv) all other reasonable costs and expenses incurred by the Company or its officers in connection with their compliance with Section 4.01 and Section 4.11 hereof.

 

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“Registration Statement” shall mean any registration statement of the Company, under the Securities Act which permits the public offering of any of the Registrable Securities pursuant to the provisions of this Agreement, including the prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

 

“Requisite Consent” means the prior written consent of each of the Sponsors, for so long as such Sponsor holds at least ten (10%) of the shares of Ordinary Shares then outstanding.

 

“Rule 144” means Rule 144 (or any successor provision) under the Securities Act.

 

“Rule 145” means Rule 145 (or any successor provision) under the Securities Act.

 

“SEC” means the Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Subsidiary” means, with respect to any specified Person, any other Person in which such specified Person, directly or indirectly through one or more Affiliates or otherwise, beneficially owns at least fifty percent (50%) of the ownership interest (determined by equity or economic interests) in, or the voting control of, such other Person.

 

“Transfer” means, with respect to any Equity Securities, (i) when used as a verb, to sell, assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise transfer such Equity Securities or any participation or interest therein, whether directly or indirectly, or agree or commit to do any of the foregoing, and (ii) when used as a noun, a direct or indirect sale, assignment, disposition, exchange, pledge, encumbrance, hypothecation, or other transfer of such Equity Securities or any participation or interest therein or any agreement or commitment to do any of the foregoing.

 

(b)                                 Each of the following terms is defined in the Section set forth opposite such term:

 

	
TERM
    	
 
    	
SECTION
    
	
Agreement
    	
 
    	
Preamble
    
	
Altchem Shareholder
    	
 
    	
Preamble
    
	
Altchem Designees
    	
 
    	
Section 2.01(a)
    
	
Altchem DIK
    	
 
    	
Section 3.01(b)
    
	
Avista
    	
 
    	
Preamble
    
	
Avista Designees
    	
 
    	
Section 2.01(a)
    
	
Avista DIK
    	
 
    	
Section 3.01(a)
    
	
Avista Shareholder
    	
 
    	
Preamble
    
	
Board
    	
 
    	
Recitals
    
	
Company
    	
 
    	
Preamble
    
	
Confidential Information
    	
 
    	
Section 6.01(a)
    
	
Confidentiality Affiliates
    	
 
    	
Section 6.01(a)
    

 

6

 

 

	
TERM
    	
 
    	
SECTION
    
	
Coordination Committee
    	
 
    	
Section 3.02(a)
    
	
Damages
    	
 
    	
Section 4.06
    
	
Demand Maximum Offering Size
    	
 
    	
Section 4.01(d)
    
	
Demand Registration
    	
 
    	
Section 4.01(a)
    
	
Determination Time
    	
 
    	
Section 3.03(a)
    
	
Effective Time
    	
 
    	
Recitals
    
	
Indemnified Party
    	
 
    	
Section 4.08
    
	
Indemnifying Party
    	
 
    	
Section 4.08
    
	
Indemnity Obligations
    	
 
    	
Section 2.05
    
	
Inspectors
    	
 
    	
Section 4.05(g)
    
	
IPO Lock-Up Period
    	
 
    	
Section 4.04(a)
    
	
Joinder Agreement
    	
 
    	
Preamble
    
	
LuxCo
    	
 
    	
Section 5.02
    
	
Offering
    	
 
    	
Recitals
    
	
Piggyback Maximum Offering Size
    	
 
    	
Section 4.02(b)
    
	
Piggyback Registration
    	
 
    	
Section 4.02(a)
    
	
Records
    	
 
    	
Section 4.05(g)
    
	
Registering Shareholders
    	
 
    	
Section 4.01(a)(ii)
    
	
Relative Ownership Percentage
    	
 
    	
Section 3.03(a)
    
	
Requesting Shareholders
    	
 
    	
Section 4.01(a)
    
	
Shelf Registration
    	
 
    	
Section 4.03(a)
    
	
Shelf Request
    	
 
    	
Section 4.03(a)
    
	
Shareholder
    	
 
    	
Preamble
    
	
Shareholders
    	
 
    	
Preamble
    
	
Sponsor Designees
    	
 
    	
Section 2.01(a)(ii)
    
	
Sponsor Parties
    	
 
    	
Section 2.05
    
	
Sponsors
    	
 
    	
Preamble
    
	
Underwritten Shelf Take-down
    	
 
    	
Section 4.03(b)
    
	
Unrestricted Securities
    	
 
    	
Section 3.03(b)
    
	
Unwinding Event
    	
 
    	
Section 3.04(b)
    
	
Withdrawing Holders
    	
 
    	
Section 4.04(c)
    

 

(c)                                  Other Definitional and Interpretive Matters.  Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:

 

Calculation of Time.  When calculating the period before which, within which or after which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded.  If the last day of such period is a non- Business Day, the period in question shall end on the next succeeding Business Day.

 

Dollars.  Any reference in this Agreement to “$” means U.S. dollars.

 

Annexes/Exhibits/Schedules.  The Annexes, Exhibits and Schedules to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement.  Any 

 

7

 

capitalized terms used in any Annex, Exhibit or Schedule but not otherwise defined therein shall be defined as set forth in this Agreement.

 

Gender and Number.  Any reference in this Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa.

 

Headings.  The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement.  All references in this Agreement to any “Article” or “Section” are to the corresponding Article or Section of this Agreement unless otherwise specified.

 

Herein.  The words such as “herein” “hereinafter” hereof” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.

 

Other.  The words “include” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.” The phrases “provided to” “furnished to” and phrases of similar import when used herein, unless the context otherwise requires, shall mean that a true, correct and complete copy of the information or material referred to has been provided to the party to whom such information or material is to be provided.  The word “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends, and such phrase does not mean simply “if.”

 

ARTICLE 2

 

CORPORATE GOVERNANCE

 

Section 2.01.                          Composition of the Board.

 

(a)                                 Subject to the applicable law, the Avista Shareholder, shall have the right to nominate two directors to the Board of the Company (the “Avista Designees”).

 

(b)                                 Subject to the applicable law, the Altchem Shareholder shall have the right to nominate two directors for appointment to the Board of the Company (the “Altchem Designees” and, together with the Avista Designees, the “Sponsor Designees”).

 

(c)                                  (i) In the event that any Sponsor (and its Affiliates) ceases to beneficially own Ordinary Shares that equal at least twenty percent (20%) of the Ordinary Shares then outstanding, such Sponsor shall no longer have the right to nominate for appointment two Sponsor Designees and shall have the right to nominate for appointment only one Sponsor Designee, and (ii) in the event that any Sponsor (and its Affiliates) cease to beneficially own Ordinary Shares that equal at least ten percent (10%) of the Ordinary Shares then outstanding, such Sponsor shall no longer have the right to nominate any Sponsor Designees.

 

(d)                                 The Company shall use all reasonable efforts to facilitate the appointment of the Sponsor Designees pursuant to this Section 2.01 to be elected as members of the Board, and to permit the Sponsors to remove, replace or change their Sponsor Designees from time to

 

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time and fill vacancies created by reason of death, removal or resignation of such Sponsor Designees, including by calling a general or special meeting of shareholders of the Company for the purpose of voting on any appointment, removal, replacement or change.

 

(e)                                  Until such time as any of the Sponsors (together with its Affiliates) individually ceases beneficially to own Ordinary Shares that equal at least ten percent (10%) of the Ordinary Shares then outstanding, each Sponsor and each Co-Invest Vehicle shall, at any time it is then entitled to vote for the election of directors to the Board, vote all of its Equity Securities that are entitled to vote or execute proxies or written consents, as the case may be, and take all other necessary action (including causing the Company to call a special meeting of Shareholders) in order to ensure that the composition of the Board is as set forth in this Section 2.01.

 

(f)                                   The Company shall reimburse each Sponsor Designee for all reasonable out-of-pocket expenses incurred in connection with the attendance by such Sponsor Designee at meetings of the Board or any committee thereof, including, without limitation, travel, lodging and meal expenses.

 

Section 2.02.                          Additional Provisions.

 

(a)                                 Subject to the confidentiality obligations of Shareholders pursuant to Section 6.01 of this Agreement and to the fiduciary duties of each of the Sponsor Designees, the Company agrees and acknowledges that the Sponsor Designees may share confidential, non-public information about the Company with the Sponsors.

 

(b)                                 (i)                                     The Company covenants and agrees to, until such time as such Sponsor ceases to beneficially own Ordinary Shares that equal less than ten percent (10%) of the outstanding Ordinary Shares, (i) deliver to each of the Sponsors with reasonable promptness, such information and data, including, but not limited to, any information necessary to assist each of the Sponsors in preserving its qualification as a “venture capital operating company” as defined in the regulations promulgated under the Employment Retirement Income Security Act of 1974 by the United States Department of Labor, with respect of the Company and each of its subsidiaries from time to time may be reasonably requested by such Sponsor and (ii) cause its and its Subsidiaries’ officers, directors, employees, auditors and other agents to (a) afford the officers, employees, auditors and other agents of such Sponsor, during normal business hours and upon reasonable notice, reasonable access and consultation rights at all reasonable times to its officers, employees, auditors, legal counsel, properties, offices, plants and other facilities and to all books and records, and (b) afford such Sponsor the opportunity to discuss the Company’s affairs, finances and accounts with the Company’s officers from time to time as each such Sponsor may reasonably request.

 

(c)                                  At the Effective Time, the limited partnership agreement of LuxCo, as in effect immediately prior to the Effective Time, shall be amended and restated to reflect a wholly-owned subsidiary of the Company and substantially in the form attached hereto as Exhibit C.

 

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Section 2.03.                          Exculpation.

 

(a)                                 Without limiting the scope or application of Section 2.04 and to the full extent permitted by applicable law, no Indemnified Party (as defined below) shall be liable, in damages or otherwise, to the Company, the Shareholders or any of their Affiliates for any act or omission performed or omitted by any of them in good faith (including any act or omission performed or omitted by any of them in reliance upon and in accordance with the opinion or advice of experts, including of legal counsel as to matters of law, of accountants as to matters of accounting, or of investment bankers or appraisers as to matters of valuation), except with respect to (i) any act taken by such Indemnified Party purporting to bind the Company that such Indemnified Party did not reasonably believe to have been taken in accordance with this Agreement (or authorized by the Board), or (ii) any act or omission with respect to which such Indemnified Party was grossly negligent or engaged in intentional misconduct.

 

(b)                                 The provisions of this Agreement, to the extent that they restrict, modify or eliminate the duties and liabilities of an Indemnified Party otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Indemnified Party, to the maximum extent permitted by applicable law.

 

Section 2.04.                          Indemnification.

 

(a)                                 To the fullest extent permitted by applicable law, the Company shall and does hereby agree to indemnify and hold harmless and pay all judgments and claims against (i) each director of the Company and (ii) each officer of the Company, and their respective Affiliates, officers, directors, employees, shareholders, partners, managers and members (each, an “Indemnified Party”), each of which shall be a third-party beneficiary of this Agreement solely for purposes of this Section 2.04 and Section 2.05), from and against any loss or damage incurred by such Indemnified Party, for any act or omission taken or suffered by such Indemnified Party in good faith (including any act or omission taken or suffered by any of them in reliance upon and in accordance with the opinion or advice of experts, including of legal counsel as to matters of law, of accountants as to matters of accounting, or of investment bankers or appraisers as to matters of valuation) in connection with the Board or the Company’s business, including costs and reasonable attorneys’ fees and any amount expended in the settlement of any claims or loss or damage, except with respect to (i) any act taken by such Indemnified Party purporting to bind the Company that has not been authorized pursuant to this Agreement or (ii) any act or omission with respect to which such Indemnified Party was grossly negligent or engaged in intentional misconduct.

 

(b)                                 The satisfaction of any indemnification obligation pursuant to Section 2.04(a) shall be from and limited to Company assets (including insurance and any agreements pursuant to which the Company, the Board and their respective officers or employees are entitled to indemnification) and no Shareholder, in such capacity, shall be subject to personal liability therefor.

 

(c)                                  Expenses reasonably incurred by an Indemnified Party in defense or settlement of any claim that may be subject to a right of indemnification hereunder shall be advanced by the Company prior to the final disposition thereof upon receipt of an undertaking by or on behalf of such Indemnified Party to repay such amount to the extent that it shall be

 

10

 

determined upon final adjudication after all possible appeals have been exhausted that such Indemnified Party is not entitled to be indemnified hereunder.

 

(d)                                 The Company may purchase and maintain insurance, on behalf of all Indemnified Parties and other Persons against any liability which may be asserted against, or expense which may be incurred by, any such Person in connection with the Company’s activities, whether or not the Company would have the power to indemnify such Person against such liabilities under the provisions of this Agreement.

 

(e)                                  Promptly after receipt by an Indemnified Party of notice of the commencement of any Proceeding, such Indemnified Party shall, if a claim for indemnification in respect thereof is to be made against the Company, give written notice to the Company of the commencement of such Proceeding; provided, however, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Company of its obligations under this Section 2.04, except to the extent that the Company is actually prejudiced by such failure to give notice.  In case any such Proceeding is brought against an Indemnified Party (other than a derivative suit in right of the Company or the Board), the Company will be entitled to participate in and to assume the defense thereof to the extent that the Company may wish, with counsel reasonably satisfactory to such Indemnified Party.  After notice from the Company to such Indemnified Party of the Company’s election to assume the defense of such Proceeding, the Company will not be liable for expenses subsequently incurred by such Indemnified Party in connection with the defense thereof.  The Company will not consent to entry of any judgment or enter into any settlement of such Proceeding that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party a release from all liability in respect of such Proceeding and the related claim.

 

(f)                                   The right to indemnification and the advancement of expenses conferred in this Section 2.04 shall not be exclusive of any other right which any Person may have or hereafter acquire under any statute, agreement, bylaw, vote of the Board or otherwise.  The rights conferred upon any Indemnified Party in Section 2.03 and Section 2.04 shall be contract rights that vest upon the occurrence or alleged occurrence of any act or omission giving rise to any Proceeding or threatened Proceeding and such rights shall continue as to any Indemnified Party who has ceased to be a director or officer and shall inure to the benefit of such Indemnified Party’s heirs, executors and administrators.  Any amendment, alteration or repeal of Section 2.03 and Section 2.04 that adversely affects any right of any Indemnified Party or its successors shall be prospective only and shall not limit or eliminate any such right with respect to any Proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment, alteration or repeal.

 

Section 2.05.                          Primary Obligation.  With respect to any Indemnified Party who is employed, retained or otherwise associated with, or appointed or nominated by, the Board, any Sponsor or any of their respective Affiliates and who acts or serves as a director, officer, manager, fiduciary, employee, consultant, advisor or agent of, for or to the Board, the Company or any of its Subsidiaries, the Company or its Subsidiaries shall be primarily liable for all indemnification, reimbursements, advancements or similar payments (the “Indemnity Obligations”) afforded to such Indemnified Party acting in such capacity or capacities on behalf or at the request of the Board, the Company or any of their respective Subsidiaries, in such 

 

11

 

capacity, whether the Indemnity Obligations are created by law, organizational or constituent documents, contract (including this Agreement) or otherwise.  Notwithstanding the fact that such Sponsors or any of its Affiliates, other than the Company (such Persons, together with its and their heirs, successors and assigns, the “Sponsor Parties”), may have concurrent liability to an Indemnified Party with respect to the Indemnity Obligations, the Company hereby agrees that in no event shall the Company or any of their respective Subsidiaries have any right or claim against any of the Sponsor Parties for contribution or have rights of subrogation against any Sponsor Parties through an Indemnified Party for any payment made by the Company or any of its Subsidiaries with respect to any Indemnity Obligation.  In addition, the Company hereby agrees that in the event that any Sponsor Parties pay or advance to an Indemnified Party any amount with respect to an Indemnity  Obligation, the Company will, or will cause its Subsidiaries to, as applicable, promptly reimburse such Sponsor Parties for such payment or advance upon request.

 

ARTICLE 3

 

TRANSFERS AND RESTRICTIONS ON TRANSFER

 

Section 3.01.                          Co-Invest Vehicle Participation; Aggregation of Interests.

 

(a)                                 Notwithstanding anything in this Agreement to the contrary, in connection with any Transfer of Equity Securities by the Avista Shareholder or its Permitted Transferees (including under Section 4.01, Section 4.02 or Section 4.03), such Transfers shall (and the Avista Shareholder shall cause such Transfer to) include a number of Equity Securities held by each of the Avista Co-Invest Vehicles equal to Avista’s Proportion multiplied by the number of Equity Securities held by such Avista Co-Invest Vehicle as of immediately prior to such Transfer, and any and all references to Transfers by the Avista Shareholder or Sponsor (as such term relates to or refers to the Avista Shareholder) shall be deemed to refer to both the Avista Shareholder and the Avista Co-Invest Vehicles; provided, that this Section 3.01(a) shall not apply to Transfers by the Avista Shareholder to its Permitted Transferees or a “distribution-in-kind” made by an Avista Shareholder or its partners or members (an “Avista DIK”).

 

(b)                                 Notwithstanding anything in this Agreement to the contrary, in connection with any Transfer of Equity Securities by the Altchem Shareholder or its Permitted Transferees (including under Section 4.01, 4.02 or 4.03), such Transfers shall (and the Altchem Shareholder shall cause such Transfer to) include a number of Equity Securities held by each of the Altchem Co-Invest Vehicles equal to Altchem’s Proportion multiplied by the number of Equity Securities held by such Altchem Co-Invest Vehicle as of immediately prior to such Transfer, and any and all references to Transfers by the Altchem Shareholder or Sponsor (as such term relates to or refers to the Altchem Shareholder) shall be deemed to refer to both the Altchem Shareholder and the Altchem Co-Invest Vehicles; provided, that this Section 3.01(b) shall not apply to Transfers by the Altchem Shareholder to its Permitted Transferees or a “distribution-in-kind” made by an Altchem Shareholder or its partners or members (an “Altchem DIK”).

 

(c)                                  All Equity Securities held by a Shareholder and its Permitted Transferees shall be aggregated together for purposes of determining the availability of any rights under this 

 

12

 

Agreement (and for the avoidance of doubt, Permitted Transferees will be subject to the restrictions and obligations under this Agreement, and the applicable Shareholder shall (without limiting any liability a Permitted Transferee may have) be responsible for its Permitted Transferees’ compliance therewith).  In addition, other than for purposes of Section 3.01, (i) Equity Securities held by the Avista Co-Invest Vehicles shall be attributed or aggregated together for purposes of determining the rights and obligations of the Avista Shareholders and any such Equity Securities held by the Avista Co-Invest Vehicles shall be included in the numerator or denominator for purposes of determining the rights or obligations of the Avista Shareholder, and (ii) Equity Securities held by the Altchem Co-Invest Vehicles shall be attributed or aggregated together for purposes of determining the rights and obligations of the Altchem Shareholder and any such Equity Securities held by the Altchem Co-Invest Vehicles shall be included in the numerator or denominator for purposes of determining the rights or obligations of the Altchem Shareholder.

 

Section 3.02.                          General Restrictions on Transfer.

 

(a)                                 Each Shareholder understands and agrees that the Equity Securities held by it have not been registered under the Securities Act and are restricted securities under the Securities Act.  No Shareholder shall Transfer any Equity Securities (or solicit any offers in respect of any Transfer of any Equity Securities), except in compliance with the Securities Act, any other applicable securities or “blue sky” laws and any restrictions on Transfer contained in this Agreement or any other provisions set forth in any other agreements or instruments pursuant to which such Equity Securities were issued.

 

(b)                                 Following the IPO, the Sponsors shall create a coordination committee (the “Coordination Committee”), which shall not be a committee of the Board, and will maintain such committee until the earlier of (i) the first anniversary of the IPO or (ii) until such time as the Sponsors have consummated a first registered secondary sale after the IPO of any of their respective Registrable Securities.  During the one (1) year period following the IPO, the Coordination Committee shall facilitate coordination of dispositions by the Sponsors of any Equity Securities held by the Sponsors, and any Sponsor wishing to Transfer any Equity Securities during such period shall consult with and obtain the approval of the Coordination Committee prior to taking such action or entering into any definitive agreement with respect to such action; provided, however, that the foregoing shall not apply to an Avista DIK or an Altchem DIK.  Each Sponsor shall be permitted to designate one representative (who may, but need not, be a director of the Company) to participate on the Coordination Committee, and shall be permitted to remove and replace such designee from time to time.  The procedures governing the conduct of the Coordination Committee shall be established from time to time by consent of the Sponsors; provided, that such procedures shall not discriminate against any particular designee or designees in any material way.  For the avoidance of doubt, for the purposes of this Section 3.02(b), references to Sponsors shall include their respective Permitted Transferees.

 

Section 3.03.                          Restrictions on Transfer by Management Shareholders.  Notwithstanding anything in this Agreement to the contrary:

 

(a)                                 Following the IPO, until such time as the Sponsors have Transferred at least 50% of the Equity Securities owned by the Sponsors immediately prior to the IPO, no 

 

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Management Shareholder shall Transfer any Equity Securities (other than to Permitted Transferees pursuant to Section 3.04 or with the Requisite Consent) to the extent that such Transfer would result in the Relative Ownership Percentage (as defined below) of such Management Shareholder immediately following the effective time of such Transfer (the “Determination Time”) being less than the Relative Ownership Percentage of the Sponsors immediately following the Determination Time.  For purposes of this Section 3.03(a), “Relative Ownership Percentage” means:

 

with respect to a Management Shareholder, a fraction (expressed as a percentage), (A) the numerator of which is the number of Equity Securities other than unvested options to purchase Ordinary Shares (“Unrestricted Securities”) owned by such Management Shareholder immediately following the Determination Time, and (B) the denominator of which is the sum of (x) the number of Unrestricted Securities owned by such Management Shareholder immediately following the IPO and (y) the number of Equity Securities owned by such Management Shareholder that were not Unrestricted  Securities immediately following the IPO but that have subsequently become Unrestricted Securities; and

 

with respect to the Sponsors and each of their respective Co-Invest Vehicles, a fraction (expressed as a percentage), (A) the numerator of which is the aggregate number of Equity Securities owned by the Sponsors and the Co-Invest Vehicles immediately following the Determination Time and (B) the denominator of which is the aggregate number of Equity Securities owned by the Sponsors and the Co-Invest Vehicles immediately following the IPO.

 

(b)                                 Any attempt by a Management Shareholder to Transfer any Equity Securities not in compliance with this Section 3.03 shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in the Company’s share records to such attempted Transfer.  The parties hereto acknowledge that the transfer restrictions contained herein are reasonable and in the best interests of the Company.

 

Section 3.04.                          Management Permitted Transferees.

 

(a)                                 Subject to Section 3.01, any Management Shareholder may at any time Transfer any or all of its Equity Securities to a Permitted Transferee without the consent of any Person and without compliance with Section 3.03, so long as such Permitted Transferee shall have agreed in writing to be bound by the terms of this Agreement by executing a Joinder Agreement.  Such Management Shareholder must give prior written notice to the Company of any proposed Transfer to a Permitted Transferee, including the identity of such proposed Permitted Transferee and such other documentation reasonably requested by the Company, to ensure compliance with the terms of this Agreement.

 

(b)                                 If, while a Permitted Transferee holds any Equity Securities, a Permitted Transferee ceases to qualify as a Permitted Transferee in relation to the initial transferring Management Shareholder from whom or which such Permitted Transferee or any previous Permitted Transferee of such initial transferring Management Shareholder received such shares (an “Unwinding Event”), then:

 

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(i)                                     The relevant initial transferor Management Shareholder shall forthwith notify the other Shareholders and the Company of the pending occurrence of such Unwinding Event; and

 

(ii)                                  immediately following such Unwinding Event, without limiting any other rights or remedies, such initial transferor Management Shareholder shall take all actions necessary to effect a Transfer of all the Equity Securities held by the relevant Affiliate either back to such Management Shareholder or, pursuant to this Section 3.04, to another Person that qualifies as an Affiliate of such initial transferring Management Shareholder.

 

ARTICLE 4

 

REGISTRATION RIGHTS

 

Section 4.01.                          Demand Registration.

 

(a)                                 At any time after the six month anniversary of the consummation by the Company of the IPO, if the Company shall receive a written request from either or both Sponsors holding outstanding Registrable Securities for itself and its respective Co-Invest Vehicles (such requesting Persons, the “Requesting Shareholders”) that the Company effect the registration under the Securities Act of all or any portion of such Requesting Shareholders’ Registrable Securities, and specifying the intended method of disposition thereof, then the Company shall promptly give notice of such requested registration (each such request shall be referred to herein as a “Demand Registration”) at least  ten (10) days prior to the anticipated filing date of the Registration Statement relating to such Demand Registration to the other Sponsor, if applicable, and any other Shareholder that holds Registrable Securities, and thereupon shall use its reasonable best efforts to effect, as expeditiously as possible, the registration under the Securities Act of:

 

(i)                                     all Registrable Securities for which the Requesting Shareholders have requested registration under this Section 4.01, and

 

(ii)                                  subject to the restrictions set forth in Section 4.01(d), all other Registrable Securities that any other Shareholders that hold Registrable Securities (all such Shareholders, together with the Requesting Shareholders, the “Registering Shareholders”) have requested the Company to register by request received by the Company within five (5) Business Days after any non-initiating Sponsor received the Company’s notice of the Demand Registration, or any other Shareholder pursuant to and in accordance with Section 4.02, all to the extent necessary to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to be registered; provided that no Person may participate in any Registration Statement pursuant to this Section 4.01(a) unless such Person agrees to sell their Registrable Securities to the underwriters selected as provided in Section 4.05(f) on the same terms and conditions as apply to the Requesting Shareholders; provided, further, that no such Registering Shareholders shall be required to make any representations or warranties, or provide any indemnity, in connection with any such registration other than representations and warranties (or indemnities with respect thereto) as to (i) such Person’s ownership of his, her or its Registrable Securities to be transferred free and clear of all liens,

 

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claims, and encumbrances, (ii) such Person’s power and authority to effect such transfer, and (iii) such matters pertaining to compliance with securities laws by such Registering Shareholders as may be reasonably requested; provided, further, that the obligation of such Person to indemnify pursuant to any such underwriting arrangements shall be several, not joint and several, among such Persons selling Registrable Securities, and the liability of each such Person will be in proportion thereto; provided, further, that such liability will be limited to the net proceeds received by such Person from the sale of his, her or its Registrable Securities pursuant to such registration; provided, further, that, notwithstanding anything to the contrary herein, the number of Registrable Securities that a Shareholder may request to include in a Demand Registration (including pursuant to Section 4.02) cannot exceed the number of Registrable Securities, determined by multiplying the aggregate number of Registrable Securities held by such Shareholder by a fraction, the numerator of which is the number of Registrable Securities that the Requesting Shareholder proposes to sell in such Demand Registration and the denominator of which is the total number of Registrable Securities held by such Requesting Shareholder prior to such Demand Registration, and provided, further, that the Company shall not be obligated to effect a Demand Registration unless the aggregate gross proceeds expected to be received from the sale of the Registrable Securities requested to be included by all Registering Shareholders in such Demand Registration are at least $25,000,000.

 

(b)                                 At any time prior to the effective date of the Registration Statement relating to such registration, a majority of the Requesting Shareholders (measured by the number of Registrable Securities proposed to be sold by all Requesting Shareholders and not by the number of Requesting Shareholders) may revoke such request without liability to any of the other Registering Shareholders, by providing a notice to the Company revoking such request.  The decision as to whether to consummate and as to the terms of any Demand Registration shall be made by a majority of the Requesting Shareholders (measured by the number of Registrable Securities proposed to be sold by all Requesting Shareholders and not by the number of Requesting Shareholders) in their sole and absolute discretion.

 

(c)                                  The Company shall be liable for and pay all Registration Expenses in connection with each Demand Registration, regardless of whether such Registration is effected; provided that holders of Registrable Securities shall pay all underwriting discounts, selling commissions and share transfer taxes applicable to the sale of their respective Registrable Securities, but fees and disbursements of their respective counsel shall be borne and paid by the Company as a Registration Expense.

 

(d)                                 If a Demand Registration involves a Public Offering and the managing underwriter advises the Company and the Requesting Shareholders that, in its view, the number of Registrable Securities that the Registering Shareholders and the Company propose to include in such registration exceeds the largest number of Registrable Securities that can be sold without having an adverse effect on such offering, including the price at which such Registrable Securities can be sold (the “Demand Maximum Offering Size”), the Company shall include in such registration, in the priority listed below, up to the Demand Maximum Offering Size:

 

(i)                                     first, all Registrable Securities requested to be registered by the Registering Shareholders (the Registrable Securities in this clause (i) allocated, if necessary for the offering not to exceed the Demand Maximum Offering Size, pro rata among the Requesting 

 

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Shareholders and the other holders of Registrable Securities on the basis of the relative number of Registrable Securities so requested to be included in such registration by each); and

 

(ii)                                  second, all Registrable Securities proposed to be registered by the Company.

 

(e)                                  The Company may defer the filing (but not the preparation) of a Registration Statement, or suspend the continued use of a Registration Statement, required by Section 4.01 for a period of up to sixty (60) days after the request to file a Registration Statement if at the time the Company receives the request to register Registrable Securities, the Company or any of its Subsidiaries are engaged in confidential negotiations or other confidential business activities, disclosure of which would be required in such Registration Statement (but would not be required if such Registration Statement were not filed), and the Board determines in good faith, after consultation with external legal counsel, that such disclosure would have a material adverse effect on the Company or its business or on the Company’s ability to effect a proposed material acquisition, disposition, financing, reorganization, recapitalization or similar transaction.  A deferral of the filing of a Registration Statement, or the suspension of the continued use of a Registration Statement, pursuant to this Section 4.01(e), shall be promptly lifted, and the requested Registration Statement shall be filed as expeditiously as possible, in the case of a deferral, if the negotiations or other activities are disclosed or terminated.  In order to defer the filing of a Registration Statement, or suspend the continued use of a Registration Statement, pursuant to this Section 4.01(e), the Company shall promptly (but in any event within five (5) days), upon determining to seek such deferral or suspension, deliver to each Requesting Shareholder a certificate signed by Board stating that the Company is deferring such filing, or suspending the continued use of a Registration Statement, pursuant to this Section 4.01(e) and a general statement of the reason for such deferral or suspension, as the case may be, and an approximation of the anticipated delay.  The Company may defer the filing, or suspend the continued use of, a particular Registration Statement pursuant to this Section 4.01(e) no more than twice in any twelve month period; provided, that there must be an interim period of at least sixty (60) days between the end of one deferral or suspension period and the beginning of a subsequent deferral or suspension period.  In the event the Company exercises its rights under this Section 4.01(e), the Company shall, within ten (10) days following receipt by the holders of Registrable Securities of the notice of deferral or suspension, as the case may be, update the deferred or suspended Registration Statement as may be necessary to permit the holders of Registrable Securities to resume use thereof in connection with the offer and sale of their Registrable Securities in accordance with applicable law.

 

Section 4.02.                          Piggyback Registration.

 

(a)                                 If the Company proposes to register any Equity Securities under the Securities Act (whether for itself or otherwise in connection with a sale of securities by another Person (including a Demand Registration by a Sponsor), but other than (i) in connection with a Shelf Registration and any resale of Registrable Securities by a Sponsor pursuant to a Shelf Registration, which shall be governed by the terms of Section 4.03, (ii) a registration on a Form S-4 in connection with a direct or indirect acquisition by the Company of another Person, (iii) a registration on a Form S-8, or (iv) the IPO (unless the Sponsors are participating therein as selling equityholders), the Company shall at each such time give prompt written notice at least 

 

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ten (10) days prior to the anticipated filing date of the Registration Statement relating to such registration to each Shareholder holding Registrable Securities hereunder, which notice shall set forth such Shareholder’s rights under this Section 4.02 and shall offer such Shareholder the opportunity to include in such Registration Statement all or any portion of the Registrable Securities held by such Shareholder (a “Piggyback Registration”), subject to the restrictions set forth herein, including the second to last proviso in Section 4.01(a)(ii) above.  Upon the request of any such Shareholder made within ten (10) days after the receipt of notice from the Company (which request shall specify the number of Registrable Securities intended to be registered by such Shareholder), the Company shall use its reasonable best efforts to effect the registration under the Securities Act of all Registrable Securities that the Company has been so requested to register by all such Shareholders (subject to the last proviso of Section 4.01(a)(ii) above) with rights to require registration of Registrable Securities hereunder, to the extent required to permit the disposition of the Registrable Securities so to be registered; provided, that if such registration involves a Public Offering, all such Shareholders requesting to be included in the Company’s registration must sell their Registrable Securities to the underwriters selected as provided in Section 4.05(f) on the same terms and conditions as apply to the Company or any other selling equityholders; provided, however, that no such Person shall be required to make any representations or warranties, or provide any indemnity, in connection with any such registration other than representations and warranties (or indemnities with respect thereto) as to (i) such Person’s ownership of his, her or its Registrable  Securities to be transferred free and clear of all liens, claims, and encumbrances, (i) such Person’s power and authority to effect such transfer, and (ii) such matters pertaining to compliance with securities laws by such Person as may be reasonably requested; provided, further, that the obligation of such Person to indemnify pursuant to any such underwriting arrangements shall be several, not joint and several, among such Persons selling Registrable Securities, and the liability of each such Person will be in proportion thereto, and provided, further, that such liability will be limited to, the net proceeds received by such Person from the sale of his, her or its Registrable Securities pursuant to such registration.  If, at any time after giving notice of its intention to register any Registrable Securities pursuant to this Section 4.02(a) and prior to the effective date of the Registration Statement filed in connection with such registration, the Company or the initiating holders, as applicable, shall decide for any reason and in its sole and absolute discretion not to register such securities, the Company shall give notice to all such Shareholders and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration.  No registration effected under this Section 4.02 shall relieve the Company of its obligations to effect a Demand Registration to the extent required by Section 4.01.  The Company shall be liable for and pay all Registration Expenses in connection with each Piggyback Registration, regardless of whether such registration is effected.

 

(b)                                 If a Piggyback Registration involves a Public Offering (other than any Demand Registration, in which case the provisions with respect to priority of inclusion in such offering set forth in Section 4.01(d) shall apply) and the managing underwriter advises the Company that, in its view, the number of Registrable Securities that the Company and all selling equityholders propose to include in such registration exceeds the largest number of Registrable Securities that can be sold without having an adverse effect on such offering, including the price at which such Registrable Securities can be sold (the “Piggyback Maximum Offering Size”), the Company shall include in such registration, in the following priority, up to the Piggyback Maximum Offering Size:

 

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(i)                                     first, such number of Registrable Securities proposed to be registered for the account of the Company, if any, as would not cause the offering to exceed the Piggyback Maximum Offering Size; and

 

(ii)                                  second, all Registrable Securities requested to be included in such registration by any Shareholders pursuant to this Section 4.02 (the Registrable Securities in this clause (ii) allocated, if necessary for the offering not to exceed the Piggyback Maximum Offering Size, pro rata among such Shareholders based on their relative number of Registrable Securities requested to be included in the Piggyback Registration).

 

Section 4.03.                          Shelf Registration.

 

(a)                                 At any time after the 12 month anniversary of the consummation by the Company of the IPO, upon receipt of a written request (the “Shelf Request”) from either or both Sponsors (for themselves and their respective Co-Invest Vehicles) that the Company file a “shelf” Registration Statement pursuant to Rule 415 under the Securities Act (the “Shelf Registration”) on Form S-3 (or any successor form to Form S-3, or any similar short-form registration statement), covering the resale of Registrable Securities, the reasonably anticipated gross proceeds from all resales covered thereunder of which would exceed $25,000,000, the Company shall (i) within five (5) days of the receipt by the Company of such notice, give written notice of such proposed registration to any non-requesting Sponsor, and (ii) use its reasonable best efforts, consistent with the terms of this Agreement, to cause the Shelf Registration to be filed with the SEC as soon as practicable (but in no event later than thirty (30) days following its receipt of the Shelf Request) and to include all Registrable Securities held by such requesting Sponsor to be registered on such form for the offering together with all or such portion of the Registrable Securities of any non-requesting Sponsor joining in such request as are specified in a written request received by the Company within ten (10) days after receipt of such written notice from the Company and (iii) use its reasonable best efforts, consistent with the terms of this Agreement, to cause such Shelf Registration to be declared effective by the SEC as soon as possible.  As soon as reasonably practicable after the IPO, the Company will use its reasonable best efforts, consistent with the terms of this Agreement, to qualify for and remain eligible to use Form S-3 registration or a similar short-form registration.  The provisions of Section 4.05 shall be applicable to each sale of Registrable Securities from a Shelf Registration initiated under this Section 4.03 and any subsequent resale of Registrable Securities pursuant thereto; provided, that the gross proceeds from such sales equal at least $25,000,000.

 

(b)                                 In connection with any proposed firmly underwritten resale of Registrable Securities, including by underwritten “block trade”, which is not pursuant to a Demand Registration under Section 4.01 and with respect to which such Shelf Registration is expressly being utilized to effect such resale (an “Underwritten Shelf Take-down”) pursuant to a Shelf Registration, each Sponsor agrees, in an effort to conduct any such Underwritten Shelf Take-Down in the most efficient and organized manner, to coordinate with the other Sponsor participating in such Shelf Take-Down prior to initiating any sales efforts and cooperate with such other Sponsor as to the terms of such Underwritten Shelf Take-Down, including the aggregate amount of securities to be sold and the number of Registrable Securities to be sold by each participating Sponsor.  In furtherance of the foregoing, the Company shall give prompt notice to the non-initiating Sponsor (if such Sponsor’s Registrable Securities are included in the 

 

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Shelf Registration) of the receipt of a request from the initiating Sponsor (whose Registrable Securities are included in the Shelf Registration) of a proposed Underwritten Shelf Take-Down under and pursuant to the Shelf Registration and, notwithstanding anything to the contrary contained herein, will provide such non-initiating Sponsor a period of two (2) Business Days to participate in such Underwritten Shelf Take-Down, subject to the terms negotiated by and applicable to the initiating Sponsor and subject to “cutback” limitations set forth in Section 4.01(d) as if the subject Underwritten Shelf Take-Down was being effected pursuant to a Demand Registration.  All such Sponsors electing to be included in an Underwritten Shelf Take-down must sell their Registrable Securities to the underwriters selected as provided in Section 4.05(f) on the same terms and conditions as apply to any other selling equityholders; provided, however, that no such Person shall be required to make any representations or warranties, or provide any indemnity, in connection with any such registration other than representations and warranties (or indemnities with respect thereto) as to (i) such Person’s ownership of his, her or its Registrable Securities to be transferred free and clear of all liens, claims, and encumbrances, (ii) such Person’s power and authority to effect such transfer, and (iii) such matters pertaining to compliance with securities laws by such Person as may be reasonably requested; provided, further, however, that the obligation of such Person to indemnify pursuant to any such underwriting arrangements shall be several, not joint and several, among such Persons selling Registrable Securities, and the liability of each such Person will be in proportion  thereto, and provided, further, that such liability will be limited to the net proceeds received by such Person from the sale of his, her or its Registrable Securities pursuant to such registration.

 

(c)                                  The Company shall be liable for and pay all Registration Expenses in connection with each Shelf Registration, regardless of whether such Shelf Registration is effected, and any Underwritten Shelf Take-Down; provided, that holders of Registrable Securities shall each pay their pro rata portion of all underwriting discounts, selling commissions, and share transfer taxes applicable to the sale of Registrable Securities, but fees and disbursements of their respective counsel shall be borne and paid by the Company as a Registration Expense.

 

(d)                                 Notwithstanding anything to the contrary contained herein, no Management Shareholder will be entitled to participate with respect to any shelf registration effected pursuant to this Section 4.03 or with respect to any resales of securities pursuant to any shelf registration.  For the avoidance of doubt, this Section 4.03(d) shall not apply to any Management Shareholder to the extent of any such Person’s interests held in a Co-Invest Vehicle.

 

Section 4.04.                          Lock-Up Agreements.

 

(a)                                 In connection with each underwritten Public Offering, including any Underwitten Shelf Take-down, and if reasonably requested by the applicable managing underwriter, each of the Company and the Shareholders agree not to effect any public sale or private offer or distribution (other than a distribution-in-kind pro rata to all shareholders, limited partners or members, as the case may be, of such Shareholder) of any Registrable Securities during the ten (10) days prior to the consummation of such Public Offering and during such time period after the consummation of such Public Offering, not to exceed ninety (90) days (one-hundred and eighty (180) days in the case of the IPO (the “IPO Lock-Up Period”)) as may be

 

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requested by the managing underwriter; provided, that such lock-up agreements are also required from all directors and executive officers and from all Shareholders who hold at least five percent (5%) of the Registrable Securities; provided, further, that each such director, executive officer or Shareholder referenced in the foregoing proviso, shall enter into such lock-up agreements if so required.  Notwithstanding the foregoing, this Section 4.04 shall not apply to any sale by a Shareholder or a director or officer of a Shareholder of Equity Securities acquired in open market transactions or block purchases by such Shareholder or its Affiliates subsequent to the IPO or with respect to any Rule 10b5-1 sale program approved by the Board for the benefit of any director or officer of the Company.  Any discretionary waiver or reduction of the requirements under the foregoing provisions made by the Company or the applicable lead managing underwriters shall apply to each Shareholder on a pro rata basis.

 

(b)                                 Notwithstanding anything herein to the contrary, if the Company shall, at any time, register under the Securities Act an offering and sale of Registrable Securities held by the Shareholders for sale to the public pursuant to an underwritten Public Offering, the Company shall not, without the prior written consent of the lead underwriters for such offering, effect any public sale or distribution of securities similar to those being registered, or any securities convertible into or exercisable or exchangeable for such securities, for such period as shall be determined by the lead underwriters and that is for the same period and on substantially similar terms as agreed to by the Sponsors.

 

(c)                                  At any time following the IPO, either Sponsor that, together with its Affiliates, holds less than five percent (5%) of the then outstanding vested Equity Securities may elect (on behalf of itself and its Affiliates (collectively, the “Withdrawing Holders”), by written notice to the Company, to withdraw from the provisions of this ARTICLE 4 and as a result of such withdrawal, such Withdrawing Holders shall no longer be entitled to the rights, nor be subject to the obligations, of Section 4.01 through Section 4.12 and the Equity Securities held by the Withdrawing Holders shall conclusively be deemed thereafter not to be “Registrable Securities” under this Agreement.  No withdrawal pursuant to this Section 4.04(c) shall release or limit any Withdrawing Holder from its indemnification and contribution rights and obligations, if any, pursuant to Sections 4.06, 4.07, 4.08 and 4.09 herein.

 

Section 4.05.                          Registration Procedures.  Whenever any Shareholders request that any Registrable Securities be registered pursuant to Sections 4.01, 4.02 or 4.03 hereof, subject to the provisions of such Sections, the Company shall use its reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof as quickly as practicable, and, in connection with any such request:

 

(a)                                 The Company shall, as expeditiously as possible, and, if the Company is not qualified for the use of Form S-3, no later than thirty (30) days from the date of receipt by the Company of the written request, prepare and file with the SEC a Registration Statement on any form for which the Company then qualifies and the managing underwriter, if any, and the holders of a majority of the Registrable Securities to be registered thereunder shall deem appropriate and which form shall be available for the sale of the Registrable Securities to be registered thereunder in accordance with the intended method of distribution thereof, and use its reasonable best efforts to cause such filed Registration Statement to become and remain effective for a period of not less than one-hundred and eighty (180) days or in the case of a Shelf 

 

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Registration, not less than two years (or such shorter period in which all of the Registrable Securities of the Registering Shareholders included in such registration statement shall have actually been sold thereunder); provided, however, that such one-hundred and eighty (180) day period or two year period, as applicable, shall be extended for a period of time equal to the period any Shareholder refrains from selling any securities included in such registration at the request of an underwriter and in the case of any Shelf Registration, subject to compliance with applicable SEC rules, such two year period shall be extended, if necessary, to keep the Registration Statement effective until all such Registrable Securities are sold.

 

(b)                                 Prior to filing a Registration Statement or prospectus or any amendment or supplement thereto, the Company shall furnish to each participating Shareholder and each underwriter, if any, of the Registrable Securities covered by such Registration Statement copies of such Registration Statement as proposed to be filed, and thereafter the Company shall furnish to such Shareholder and underwriter, if any, such number of copies of such Registration Statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 or Rule 430A under the Securities Act and such other documents as such Shareholder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Shareholder.

 

(c)                                  After the filing of the Registration Statement, the Company shall (i) promptly notify each Shareholder holding Registrable Equity Securities covered by such Registration Statement of the time when such Registration Statement has been declared effective or a supplement or amendment to any prospectus forming a part of such Registration Statement has been filed, (ii) cause the related prospectus to be supplemented by any required prospectus supplement, and, as so supplemented, to be filed pursuant to Rule 424 under the Securities Act and shall incorporate such information as the managing underwriter or underwriters and each of the Sponsors agree should be included therein relating to the plan of distribution; provided, that in the event the Registrable Securities being sold for either of the Sponsors are less than 50% of the Registrable Securities of the other Sponsor, then the agreement of the Sponsor who holds such lesser amount of Registrable Securities being sold, shall not be required under this Section 4.05(c), (ii) comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such registration statement during the applicable period in accordance with the intended methods of disposition by the Registering Shareholders thereof set forth in such Registration Statement or supplement to such prospectus and (iii) promptly notify each Registering Shareholder holding Registrable Securities covered by such Registration Statement of any stop order issued or threatened by the SEC or any state securities commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered.

 

(d)                                 The Company shall use its reasonable best efforts to (i) register or qualify the Registrable Securities covered by such Registration Statement under such other securities or “blue sky” laws of such jurisdictions in the United States as any Registering Shareholder holding such Registrable Securities reasonably (in light of such Shareholder’s intended plan of distribution) requests and (ii) cause such Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business 

 

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and operations of the Company and do any and all other acts and things that may be reasonably necessary or advisable to enable such Shareholder to consummate the disposition of the Registrable Securities owned by such Registering Shareholder; provided that the Company shall not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 4.05(d), (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction.

 

(e)                                  The Company shall immediately notify each Registering Shareholder holding such Registrable Securities covered by such Registration Statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and promptly prepare and make available to each such Registering Shareholder and file with the SEC any such supplement or amendment.

 

(f)                                   Except for a Demand Registration and Underwritten Shelf Take-down, the Board shall have the right to select the underwriter or underwriters in connection with any Public Offering.  In connection with the offering of Registrable Securities pursuant to a Demand Registration or Underwritten Shelf Take-down, the holders of a majority of the Registrable Securities to be registered in a Demand Registration or Underwritten Shelf Take-down shall select the underwriter or underwriters.  In connection with any Public Offering, the Company shall enter into customary agreements (including an underwriting agreement in customary form, provided that the scope of the indemnity contained in such underwriting agreement on the part of the selling Shareholders is not more extensive than the indemnity described in Section 4.07 hereof), provided that such agreements are consistent with this Agreement, and take all such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities in any such Public Offering, including the engagement of a “qualified independent underwriter” in connection with the qualification of the underwriting arrangements with FINRA.  The Company shall make such representations and warranties to the holders of Registrable Securities being registered, and the underwriters or agents, if any, in form, substance and scope as are customarily made by issuers in secondary underwritten public offerings and take any other actions as the Sponsors, or the managing underwriter or underwriters, if any, reasonably request in order to expedite or facilitate the registration and disposition of such Registrable Securities.  Each Shareholder participating in such underwriting shall also enter into such agreement, provided that the terms of any such agreement are consistent with this Agreement.

 

(g)                                  Upon execution of confidentiality agreements in form and substance reasonably satisfactory to the Company, the Company shall make available for inspection by any Registering Shareholder and any underwriter participating in any disposition pursuant to a Registration Statement being filed by the Company pursuant to this Section 4.05 and any attorney, accountant or other professional retained by any such Registering Shareholder or underwriter (collectively, the “Inspectors”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”) as shall be reasonably necessary or desirable to enable them to exercise their due diligence responsibility, and cause the 

 

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Company’s officers, directors and employees to supply all information reasonably requested by any Inspectors in connection with such Registration Statement.  Records that the Company determines, in good faith, to be confidential and that it notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such Registration Statement or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction or is otherwise required by law.  Each Shareholder agrees that at the time that such Shareholder is a Registering Shareholder, information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it or its Affiliates as the basis for any market transactions in Equity Securities unless and until such information is made generally available to the public, and further agrees that, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, it shall give notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential.

 

(h)                                 The Company shall cause to be furnished to each Registering Shareholders and to each such underwriter, if any, a signed counterpart, addressed to such Registering Shareholder or underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) a comfort letter or comfort letters from the Company’s independent public accountants, each in customary form and covering such matters of the kind customarily covered by opinions or comfort letters, as the case may be, as a majority of such Shareholders or the managing underwriter therefor reasonably requests.

 

(i)                                     The Company shall otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earnings statement or such other document that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.  The Company shall cooperate with each seller of Registrable Securities and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings to be made with FINRA.

 

(j)                                    The Company may require each such Registering Shareholder, by written notice given to each such Registering Shareholder not less than ten (10) days prior to the filing date of such Registration Statement, to promptly, and in any event within seven (7) days after receipt of such notice, furnish in writing to the Company such information regarding the distribution of the Registrable Securities as the Company may from time to time reasonably request and such other information as may be legally required in connection with such registration.  Each holder of Registrable Securities agrees to furnish such information to the Company and cooperate with the Company as reasonably necessary to enable the Company to comply with the provisions of this Agreement.

 

(k)                                 Each Shareholder agrees that at the time that such Shareholder is a Registering Shareholder, upon receipt of any written notice from the Company of the occurrence of any event requiring the preparation of a supplement or amendment of a prospectus relating to the Registrable Securities covered by a registration statement that is required to be delivered under the Securities Act so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state 

 

24

 

any material fact required to be stated therein or to make the statements therein not misleading, such Shareholder shall forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Shareholder’s receipt of the copies of a supplemented or amended prospectus, and, if so directed by the Company, such Shareholder shall deliver to the Company all copies, other than any permanent file copies then in such Shareholder’s possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice.  If the Company shall give such notice, the Company shall extend the period during which such Registration Statement shall be maintained effective (including the period referred to in Section 4.05(a)) by the number of days during the period from and including the date of the giving of notice pursuant to Section 4.05(e) to the date when the Company shall make available to such Shareholder a prospectus supplemented or amended to conform with the requirements of Section 4.05(e).

 

(l)                                     The Company shall use its reasonable best efforts to list all Registrable Securities covered by such Registration Statement on any securities exchange or quotation system on which any of the Registrable Securities are then listed or traded and if none of the Registrable Securities are so listed, on any securities exchange or quotation system on which similar securities issued by the Company are then listed, and if no such similar securities are listed, on any national securities exchange.

 

(m)                             The Company shall have appropriate officers of the Company (i) prepare and make presentations at any “road shows” and before analysts and rating agencies, as the case may be, (ii) take other reasonable actions to obtain ratings for any Registrable Securities and (iii) otherwise use their reasonable best efforts to cooperate as requested by the underwriters in the offering, marketing or selling of the Registrable Securities.

 

Section 4.06.                          Indemnification by the Company.  The Company shall indemnify and hold harmless each Shareholder, its officers, directors, employees, managers, members, partners and agents, and each Person, if any, who controls any such Persons within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses) (“Damages”) caused by or relating to any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or prospectus relating to the Registrable Securities (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary or free writing prospectus, or caused by or relating to any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or caused by or related to any violation or alleged violation of the Securities Act or Exchange Act, except insofar as such Damages are caused by or related to any such untrue statement or omission or alleged untrue statement or omission so made in reliance upon and in conformity with information furnished in writing to the Company by such Shareholder or on such Shareholder’s behalf expressly for use therein, provided that, with respect to any untrue statement or omission or alleged untrue statement or omission made in any preliminary prospectus, or in any prospectus, as the case may be, the indemnity agreement contained in this paragraph shall not apply to the extent that any Damages result from the fact that a current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) was not sent or given to the Person asserting any such Damages at or prior to the written confirmation of 

 

25

 

the sale of the Registrable Securities concerned to such Person if it is determined that the Company has provided such prospectus to such Shareholder and it was the responsibility of such Shareholder to provide such Person with a current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) and such current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) would have cured the defect giving rise to such Damages.

 

Section 4.07.                          Indemnification by the Participating Shareholders.  Each Shareholder, at the time that such Shareholder is a Registering Shareholder holding Registrable Securities included in any Registration Statement agrees, severally but not jointly, to indemnify and hold harmless from and against all Damages the Company, its officers, directors and agents and each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act (i) with respect to information furnished in writing to the Company by such Shareholder or on such Shareholder’s behalf expressly for use in any Registration Statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto, or any preliminary prospectus or (ii) to the extent that any Damages result from the fact that a current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) was not sent or given to the Person asserting any such Damages at or prior to the written confirmation of the sale of the Registrable Securities concerned to such Person if it is determined that it was the responsibility of such Shareholder to provide such Person with a current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) and such current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) was available to such Shareholder and would have cured the defect giving rise to such Damages.  As a condition to including Registrable Securities in any Registration Statement filed in accordance with Section 4.01 through Section 4.12, the Company may require that it shall have received an undertaking reasonably satisfactory to it from any underwriter to indemnify and hold it harmless to the extent customarily provided by underwriters with respect to similar securities.  No Shareholder shall be liable under this Section 4.07 for any Damages in excess of the net proceeds realized by such Shareholder in the sale of Registrable Securities of such Shareholder to which such Damages relate.

 

Section 4.08.                          Conduct of Indemnification Proceedings.  If any proceeding (including any governmental investigation) shall be instituted involving any Indemnified Party in respect of which indemnity may be sought pursuant to Sections 4.01 through 4.12, such Indemnified Party shall promptly notify the Person against whom such indemnity may be sought (the “Indemnifying Party”) in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all fees and expenses, provided that the failure of any Indemnified Party so to notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure to notify.  In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) in the reasonable judgment of such Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  It is understood that, in connection with any proceeding or related proceedings in the same jurisdiction, the Indemnifying Party shall not 

 

26

 

be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred.  In the case of any such separate firm for the Indemnified Parties, such firm shall be designated in writing by the Indemnified Parties.  The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any Damages (to the extent stated above) by reason of such settlement or judgment.  Without the prior written consent of the Indemnified Party, no Indemnifying Party shall effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding.

 

Section 4.09.                          Contribution.

 

(a)                                 If the indemnification provided for in Section 4.06 to Section 4.08 is unavailable to the Indemnified Parties or insufficient in respect of any Damages (other than by reason of the exceptions provided herein), then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Damages, as between the Company on the one hand and each such Shareholder on the other, in such proportion as is appropriate to reflect the relative fault of the Company and of each such Shareholder in connection with such statements or omissions, as well as any other relevant equitable considerations.  The relative fault of the Company on the one hand and of each such Shareholder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

(b)                                 The Company and the Shareholders agree that it would not be just and equitable if contribution pursuant to this Section 4.09 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph.  The amount paid or payable by an Indemnified Party as a result of the Damages referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this Section 4.08, no Shareholder shall be required to contribute any amount in excess of the amount by which the net proceeds realized by such Shareholder in the sale of Registrable Securities of such Shareholder to which such Damages relate exceeds the amount of any Damages that such Shareholder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.  Subject to the foregoing and as among the Shareholders, each Shareholder’s obligation to contribute pursuant to this Section 4.08 is several in the proportion 

 

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that the proceeds of the offering received by such Shareholder bears to the total proceeds of the offering received by all such Registering Shareholders and not joint.

 

Section 4.10.                          Cooperation by the Company.  With a view to making available to the Shareholders the benefits of certain rules and regulations of the SEC that may at any time permit the sale of securities to the public without registration, the Company agrees to use its reasonable best efforts to:

 

(a)                                 make and keep public information available, as those terms are defined in Rule 144, at all times after the effective date that the Company becomes subject to the reporting requirements of the Securities Act or the Exchange Act;

 

(b)                                 file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements);

 

(c)                                  furnish to any Shareholder, so long as such Shareholder owns any Registrable Securities, upon request by such Shareholder, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company for a Public Offering), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements) or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and (iii) such other reports and documents of the Company and other information in the possession of or reasonably obtainable by the Company as a Shareholder may reasonably request in availing itself of any rule or regulation of the SEC allowing a Shareholder to sell any such securities without registration; and

 

(d)                                 upon the reasonable request of any Shareholder, and subject always to the fiduciary duties of the directors to the Company and to applicable law, instruct the transfer agent in writing that it shall rely on the written legal opinion of such Shareholder’s counsel, and that the transfer agent shall act in accordance with the reasonable written instructions of such Shareholder’s counsel, with respect to any transfer of Equity Securities.

 

Section 4.11.                          Restriction on Company Grants of Subsequent Registration Rights.  So long as any Sponsor holds any Registrable Securities in respect of which registration rights provided for in Section 4.01 of this Agreement remain in effect, the Company will not, directly or indirectly, without the Requisite Consent, grant to any Person or agree to otherwise become obligated in respect of (i) the rights of registration in the nature or substantially in the nature of those set forth in Section 4.01 of this Agreement that would have priority over or parity with the Registrable Securities with respect to the inclusion of such securities in any registration or (ii) demand registration rights exercisable prior to such time as the Sponsors can first exercise their rights under Section 4.01.

 

Section 4.12.                          Assignment of Registration Rights.  Following the IPO, the registration rights granted pursuant to Section 4.01 through Section 4.10 shall not be assignable, except to a Permitted Transferee.

 

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ARTICLE 5

 

ACCOUNTING AND TAX MATTERS

 

Section 5.01.                          Books and Records; Financial Reports.  At all times during the existence of the Company, the Company shall maintain, at its registered office, books of account for the Company.  Subject to reasonable confidentiality restrictions and other reasonable standards, in each case established by the Board, and subject at all times to the fiduciary duties of the directors and officers of the Company and to applicable law, the Company shall, and shall cause its and its Subsidiaries’ officers, directors, employees, auditors and other agents to, for as long as any Sponsor’s Relative Ownership Percentage is at least ten percent (10%), (a) afford the officers, employees, auditors and other agents of such Sponsor, during normal business hours and upon reasonable written notice to the Company, reasonable access and consultation rights at all reasonable times to the officers, auditors, legal counsel of the Company and its Subsidiaries, employees, properties, offices, plants and other facilities of the Company’s Subsidiaries, and to all books and records of the Company and its Subsidiaries, and (b) afford such Sponsor the opportunity to discuss the Company’s and its Subsidiaries’ affairs, finances and accounts with the officers of the Company and its Subsidiaries from time to time as each such Sponsor may reasonably request and such officers shall give due consideration to any advice or views provided by such Sponsor.

 

Section 5.02.                          Tax Returns.  The Board, at the expense of the Company, shall cause Osmotica Holdings S.C.SP., a special limited partnership (société en commandite spéciale) pursuant to the Luxembourg law dated 10 August 1915 on commercial companies (art. 22-1 et seq., as amended from time to time) (“LuxCo”) to endeavor to cause the preparation and timely filing (including extensions) of all tax returns for any period prior to the Effective Time.  Each Shareholder shall furnish to the Company all pertinent information in its possession that is necessary to enable LuxCo’s tax returns to be prepared and filed.

 

Section 5.03.                          Accounting Methods; Elections.  The Board shall cause LuxCo to determine the accounting methods and conventions to be used in the preparation of LuxCo’s tax returns and shall cause LuxCo to make any and all elections under the tax laws of the United States and any other relevant jurisdictions as to the treatment of items of income, gain, loss, deduction and credit of LuxCo, or any other method or procedure related to the preparation of LuxCo’s tax returns, in each case, for any period prior to the Effective Time; provided, however, that the Company shall elect to be classified as an association taxable as a corporation pursuant to United States Treasury Regulations Section 301.7701-3(a) for United States federal and applicable state and local income tax purposes, and none of the Board, the Shareholders or LuxCo shall take any action inconsistent therewith.

 

Section 5.04.                          United States Federal Income Tax Classification.  The Shareholders intend, and the Company shall cause LuxCo, not to take any position inconsistent with, treating LuxCo  as an association taxable as a corporation for United States federal, state and local income and franchise tax purposes for any period prior to the Effective Time.

 

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ARTICLE 6

 

CERTAIN COVENANTS AND AGREEMENTS

 

Section 6.01.                          Confidentiality.

 

(a)                                 Each Shareholder agrees that it shall (and shall cause its Affiliates, and its and their officers, directors, employees, partners, legal counsel, accountants, tax advisors, agents and representatives (collectively, the “Confidentiality Affiliates”) to) (i) hold confidential and not disclose (other than by a Shareholder to its Confidentiality Affiliates having a reasonable need to know in connection with the permitted purposes hereunder), without the prior approval of the Board, all confidential or proprietary written, recorded or oral information or data (including research, developmental, engineering, manufacturing, technical, marketing, sales, financial, operating, performance, cost, business and process information or data, know how and computer programming and other software techniques) provided or developed by the Company and any of its Subsidiaries, another Shareholder or its Confidentiality Affiliates in connection herewith or with the Business, whether such confidentiality or proprietary status is indicated orally or in writing or in a context in which any of the Company and any of its Subsidiaries or the disclosing Shareholder or any of their Confidentiality Affiliates reasonably communicated, or the receiving Shareholder or its Confidentiality Affiliates should reasonably have understood, that the information should be treated as confidential, whether or not the specific words “confidential” or “proprietary” are used (“Confidential Information”) and (ii) use such Confidential Information only for the purposes of performing its obligations hereunder to which it is a party and carrying on the business of the Company and monitoring its investment in the Company; provided, however, that Shareholders may disclose any such Confidential Information on a confidential basis to (x) current and prospective lenders in connection with a loan or prospective loan to the Company, after such lender has entered into a non-disclosure agreement reasonably acceptable to the Board, (y) and, in connection with a Transfer of Equity Securities in the Company permitted under this Agreement, to prospective purchasers of such Equity Securities, after such prospective purchaser has entered into a non-disclosure agreement reasonably acceptable to the Board, as well as to such prospective purchaser’s legal counsel, auditors, agents and representatives, and (z) to the Sponsor’s respective Co-Invest Vehicles and to the members of such Co-Invest Vehicles; provided, further, that any Person to which a Sponsor discloses Confidential Information pursuant to clause (z) shall be deemed a Confidentiality Affiliate of such Sponsor.  Notwithstanding the foregoing, the Avista Shareholder may disclose any such Confidential Information on a confidential basis to limited partners or prospective limited partners or investors of the Avista Shareholder or its Confidentiality Affiliates (including any prospective investors in one of its Co-Invest Vehicles), subject to such limited partners or prospective limited partners or investors having an obligation or having agreed to, maintain the confidentiality of any such Confidential Information; provided, however, that the Avista Shareholder shall not (and shall cause its Confidentiality Affiliates and its limited partners or prospective limited partners or investors of such Shareholder or its Confidentiality Affiliates not to) disclose any Confidential Information to any Person that is a Company Competitor.  Each Shareholder agrees that it shall be responsible and liable for any breach of this Section 6.01 by its Confidentiality Affiliates and its limited partners or prospective limited partners or investors of such Shareholder or its Confidentiality Affiliates (as if such

 

30

 

Confidentiality Affiliates, limited partners or prospective limited partners or investors were parties to and bound by the provisions of this Section 6.01 by which such Shareholder is bound), and that, subject to the fiduciary duties of the directors of the Company, either Sponsor may direct the Company in its enforcement of such obligations without the need for any consent or approval of the other Sponsor or the Board where the breach or alleged breach involves the other Sponsor or its Confidentiality Affiliates.

 

(b)                                 The obligations contained in Section 6.01(a) shall not apply, or shall cease to apply, to Confidential Information if or when, and to the extent that, such Confidential Information (i) was, or becomes through no breach of the receiving Shareholder’s obligations hereunder, known to the public, (ii) becomes known to the receiving Shareholderr or its Confidentiality Affiliates from other sources under circumstances not involving any breach of any confidentiality obligation between such source and the disclosing Shareholder’s or discloser’s Confidentiality Affiliates or a third party, (iii) is independently developed by the receiving Shareholder or its Confidentiality Affiliates, or (iv) is required to be disclosed by law, governmental regulation or applicable legal process; provided, that to the extent permitted by law, such Shareholder shall notify the Company promptly of such request or requirement so that the Company may seek an appropriate protective order or other appropriate relief (it being understood that either Sponsor may direct the Company in such efforts of such obligations without the need for any consent or approval of the other Sponsor or the Board where the other Sponsor or one of its Confidentiality Affiliates is the disclosing party); provided, further, that in the absence of a protective order or other appropriate relief, such Shareholder shall use commercially reasonable efforts to obtain an order or other assurance that confidential treatment will be accorded to such portion of the information required to be disclosed as the Company shall designate.

 

Section 6.02.                          Directors’ and Officers’ Insurance.  The Company shall purchase, within a reasonable period following the date of this Agreement, and maintain for such periods as the Board shall in good faith determine, at its expense, insurance in an amount determined in good faith by the Board to be appropriate, on behalf of any person who after the date of this Agreement is or was a director, manager or officer of the Company or any Subsidiary, or is or was serving at the request of the Board, the Company or any Subsidiary as a director, manager, officer, or agent of another limited company, corporation, partnership, joint venture, trust or other enterprise, including any direct or indirect subsidiary of the Company, against any expense, liability or loss asserted against such Person and incurred by such Person in any such capacity, or arising out of such Person’s status as such, subject to customary exclusions.  The provisions of this Section 6.02 shall survive any termination of this Agreement.

 

Section 6.03.                          No Exclusive Duty to Company.  In recognition that the Sponsors and their respective Permitted Transferees currently have, and will or may in the future have or will consider acquiring, investments in numerous companies with respect to which the Sponsors (or their Affiliates, associated investment funds, portfolio companies or employees, as applicable) and their respective Permitted Transferees may serve as an advisor, a director or in some other capacity, and in recognition that the Sponsors (or their Affiliates, associated investment funds, portfolio companies or employees, as applicable) and their respective Permitted Transferees may have a myriad of duties to various investors and partners, and in anticipation that the Company, on the one hand, and a Sponsor (or their Affiliates, associated investment funds, portfolio 

 

31

 

companies or employees, as applicable) and its Permitted Transferees on the other hand, may engage in the same or similar activities or lines of business and have an interest in the same areas of corporate opportunities, and in recognition of the benefits to be derived by the Company hereunder and in recognition of the difficulties which may confront the Sponsors and their respective Permitted Transferees in determining the full scope of its duties in any particular situation, subject to and to the fullest extent permitted by applicable law, the provisions of this Section 6.03 are set forth to regulate, define and guide the conduct of certain affairs of the Company as they may involve the Sponsors and their respective Permitted Transferees.  Subject to and to the full extent permitted by law, and notwithstanding any other provision of this Agreement or in any agreement contemplated herein or applicable provision of law or equity or otherwise, except as a Sponsor may otherwise agree in writing after the date hereof:

 

(a)                                 the Sponsors (or their one or more Affiliates, associated investment funds, portfolio companies or employees, as applicable) and their respective Permitted Transferees will have the right:

 

(i)                                     to directly or indirectly engage in any business (including any business activities or lines of business that are the same as or similar to those pursued by, or competitive with, the Sponsors or any of its Subsidiaries) or invest, own or deal in equity securities of any other Person so engaged in any business;

 

(ii)                                  to directly or indirectly do business with any client or customer of the Sponsors or any of its Subsidiaries;

 

(iii)                               to take any other action that a Sponsor (or their Affiliates, associated investment funds, portfolio companies or employees, as applicable) and its Permitted Transferees believe in good faith is necessary or appropriate to fulfill their obligations as described in the first sentence of this Section 6.03; and

 

(iv)                              not to present potential transactions, matters or business opportunities to the Company or any of its Subsidiaries, and to pursue, directly or indirectly, any such opportunity for itself, and to direct any such opportunity to another Person.

 

(b)                                 the Sponsors (or their Affiliates, associated investment funds, portfolio companies or employees, as applicable) and their respective Permitted Transferees will have no duty (contractual or otherwise) to communicate or present any corporate opportunities to the Company or any of its Subsidiaries or to refrain from any actions specified in Section 6.03(a), and the Company, on their own behalf and on behalf of their respective Affiliates, hereby renounces and waives any right to require the Sponsors (or their Affiliates, associated investment funds, portfolio companies or employees, as applicable) and their Permitted Transferees to act in a manner inconsistent with the provisions of this Section 6.03.

 

(c)                                  the Sponsors (or their Affiliates, associated investment funds, portfolio companies or employees, as applicable) and their respective Permitted Transferees shall not be liable to the Company or any of its Subsidiaries for breach of any duty (contractual or otherwise) by reason of any activities or omissions of the types referred to in this Section 6.03 or by reason of its or their participation therein.

 

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ARTICLE 7

 

MISCELLANEOUS

 

Section 7.01.                          Binding Effect; Assignability; Benefit.

 

(a)                                 This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors, legal representatives and permitted assigns.  Any Shareholder that ceases to beneficially own any Equity Securities shall cease to be bound by the terms hereof (other than as expressly set forth herein or with respect to Section 6.01 or ARTICLE 7).

 

(b)                                 Other than as expressly set forth herein, neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by any party hereto pursuant to any Transfer of Equity Securities or otherwise.

 

(c)                                  Except for Sections 4.06, 4.07, 4.08, 4.09, 6.02, 6.03, Section 7.04, 7.05, 7.06 and 7.07, nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties hereto, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

 

Section 7.02.                          Notices.

 

(a)                                 In the event a notice or other document is required to be sent hereunder to the Company, the Board, or any Shareholder or legal representative of a Shareholder, such notice or other document shall be made in writing by hand-delivery, registered or certified first-class mail, facsimile, email, or air courier guaranteeing overnight delivery to such party at the following addresses (or at such other address as shall be given in writing by any party to the others):

 

(i)                                     in the case of the Company:

 

Osmotica Pharmaceuticals plc

[   ]

Attention: [   ]

Facsimile No.: [   ]

 

with a copy (which shall not constitute notice) to:

 

Ropes & Gray LLP

Prudential Tower, 800 Boylston Street

Boston, MA 02199-3600

Attention: Craig Marcus

Email: Craig.Marcus@ropesgray.com

 

33

 

And

 

[   ]

Attention: [   ]

Facscimile: [  ]

 

(ii)                                  in the case of the Board:

 

Board of Directors of Osmotica Pharmaceuticals plc

[   ]

Attention: [   ]

Facsimile No.: [   ]

 

with a copy (which shall not constitute notice) to:

 

Ropes & Gray LLP

Prudential Tower, 800 Boylston Street

Boston, MA 02199-3600

Attention: Craig Marcus

Email: Craig.Marcus@ropesgray.com

 

And

 

[   ]

Attention: [   ]

Facscimile: [  ]

 

(iii)                               if to any Shareholder, to the address, e-mail address or facsimile set forth on the books of the Company or any other address or facsimile number as a party may hereafter specify for such purpose to the Company.

 

(b)                                 The Company, the Board, or any Shareholder or their respective legal representatives may effect a change of address for purposes of this Agreement by giving notice of such change to the Company, and the Company shall, upon the request of any such Person, notify the other parties hereto of such change in the manner provided herein.  Until such notice of change of address is properly given, the addresses set forth herein shall be effective for all purposes.

 

(c)                                  All notices given in accordance with this Section 7.02 shall be deemed to have been duly given: when delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when sent, if sent via email; when transmission confirmation is received, if sent by facsimile; and on the next business day, if timely delivered to an air courier guaranteeing overnight delivery.

 

Section 7.03.                          Waiver; Amendment; Termination.

 

(a)                                 No provision of this Agreement may be waived, amended or otherwise modified except by an instrument in writing executed by (i) the Company and (ii) with the 

 

34

 

Requisite Consent; provided, however, that any waiver, amendment or modification that adversely affects Management Shareholders disproportionately as compared to the Sponsors (taking into account and considering the rights of Management Shareholders prior to such amendment or modification), shall require the prior written consent of the holders of a majority of the Ordinary Shares then held by the Management Shareholders; provided, further, that any waiver, amendment or modification that materially and adversely affects a Shareholder disproportionately as compared to all other Shareholders, shall require the prior written consent of a majority-in-interest of such Shareholders so adversely affected; provided, further, that no update of any Schedule hereto shall be deemed to constitute an amendment to this Agreement.

 

(b)                                 This Agreement shall terminate at such time that there are no Registrable Securities, except for the provisions of Sections 4.06, 4.07, 4.08 and 4.09 and all of this ARTICLE 7.

 

Section 7.04.                          Non-Recourse.  Notwithstanding anything that may be expressed or implied in this Agreement, the Company and each Shareholder covenant, agree and acknowledge that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement in respect of each Shareholder’s obligations under this Agreement or any documents or instruments delivered in connection with this Agreement shall be had against any current or future director, officer, employee, general or limited partner or member or equity holder of any Shareholder or of any Affiliate or assignee thereof (in their capacity as such and not, as the case may be, in their capacity as a director or officer of the Company), whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any current or future officer, agent or employee of any Shareholder or any current or future member or equity holder of any Shareholder or any current or future director, officer, employee, partner or member or equity holder of any Shareholder or of any Affiliate or assignee thereof (in their capacity as such and not, as the case may be, in their capacity as a director or officer of the Company), as such for any obligation of any Shareholder under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.

 

Section 7.05.                          Governing Law; Venue.  All issues and questions concerning the construction, validity, interpretation and enforceability of this Agreement and the exhibits and schedules hereto, and their negotiation, execution, performance or nonperformance, interpretation, termination, construction and all matters based upon, arising out of or related to any of the foregoing, whether arising in law or equity, shall be governed by, and construed in accordance with, the laws of the New York, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.  Any legal action or proceeding with respect this Agreement shall be brought in the courts of the United States District Court for the Southern District of New York or any other competent court of the State of New York, and, by execution and delivery of this Agreement, each party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of such courts.  Each party irrevocably waives any objection which it may now or hereafter have to the laying of venue of the aforesaid actions or proceedings arising out 

 

35

 

of or in connection with this Agreement in the courts referred to in this paragraph and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.  Each party agrees that service of process upon such party in any action shall be effective if notice is given in accordance with Section 7.02.

 

Section 7.06.                          WAIVER OF JURY TRIAL.  EACH OF THE SHAREHOLDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING (INCLUDING COUNTERCLAIMS) RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS OR RELATIONSHIPS HEREBY CONTEMPLATED OR OTHERWISE IN CONNECTION WITH THE ENFORCEMENT OF ANY RIGHTS OR OBLIGATIONS HEREUNDER.

 

Section 7.07.                          Specific Enforcement; Cumulative Remedies.  The parties hereto acknowledge that money damages may not be an adequate remedy for violations of this Agreement and that any party, in addition to any other rights and remedies which the parties may have hereunder or at law or in equity, may, in his or its sole discretion, apply to a court of competent jurisdiction for specific performance or injunction or such other relief as such court may deem just and proper in order to enforce this Agreement or prevent any violation hereof and, to the extent permitted by applicable law, each party waives any objection to the imposition of such relief.  All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such rights, powers or remedies by such party.

 

Section 7.08.                          Entire Agreement.  This Agreement, together with all agreements referenced to herein and any schedules, exhibits and other documents referred to herein or therein constitute the entire agreement and understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.

 

Section 7.09.                          Severability.

 

(a)                                 If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.  Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner so that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

 

(b)                                 To the extent the terms of the Constitution or any other constitutive documents of the Company are contradictory to, or inconsistent with, the terms of this 

 

36

 

Agreement, the terms of this Agreement shall, to the extent permitted by law, supersede such conflicting or inconsistent terms.  All terms of the Constitution and any other constitutive documents not contradictory to, or inconsistent with, the terms of this Agreement shall remain in full force and effect.

 

Section 7.10.                          Counterparts; Effectiveness.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

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37

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

	
 
    	
OSMOTICA PHARMACEUTICALS PLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Page to Shareholders Agreement]

 

 

	
 
    	
ALTCHEM LIMITED
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Page to Shareholders Agreement]

 

 

	
 
    	
ACP HOLDCO (OFFSHORE), L.P.
    
	
 
    	
By: ACP III AIV   GP, Ltd.
    
	
 
    	
Its: General Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Page to Shareholders Agreement]

 

 

	
 
    	
ACP III AIV, L.P.
    
	
 
    	
By: ACP III AIV   GP, Ltd.
    
	
 
    	
Its: General   Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Page to Shareholders Agreement]

 

 

	
 
    	
ORBIT CO-INVEST I, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Page to Shareholders Agreement]

 

 

	
 
    	
ORBIT CO-INVEST III, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Page to Shareholders Agreement]

 

 

	
 
    	
ORBIT CO-INVEST A-I LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Page to Shareholders Agreement]

 

 

	
 
    	
 
    
	
 
    	
Jarret Miller
    

 

[Signature Page to Shareholders Agreement]

 

 

	
 
    	
HARPUA, L.L.C
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Page to Shareholders Agreement]

 

 

	
 
    	
 
    
	
 
    	
Brian Markison
    

 

[Signature Page to Shareholders Agreement]

 

 

	
 
    	
 
    
	
 
    	
JD Schaub
    

 

[Signature Page to Shareholders Agreement]

 

 

	
 
    	
ALASKA TRUST COMPANY, AS
   TRUSTEE OF THE STEVEN SQUASHIC
   2013 NON-GRANTOR ALASKA TRUST
   DATED SEPTEMBER 11, 2013
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Page to Shareholders Agreement]

 

 

	
 
    	
PREMIER TRUST, INC.,   AS TRUSTEE
   OF THE KEVIN HUDY 2013 NON-
   GRANTOR NEVADA TRUST DATED
   SEPTEMBER 18, 2013
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Page to Shareholders Agreement]

 

 

	
 
    	
 
    
	
 
    	
Christopher Klein
    

 

[Signature Page to Shareholders Agreement]

 

 

	
 
    	
 
    
	
 
    	
David Purdy
    

 

[Signature Page to Shareholders Agreement]

 

 

	
 
    	
 
    
	
 
    	
Rich Buecheler
    

 

[Signature Page to Shareholders Agreement]

 

 

Annex A

 

Management Shareholders

 

1.              Brian Markison

2.              JD Schaub

3.              Alaska Trust Company, as Trustee of the Steven Squashic 2013 Non-Grantor Alaska Trust dated September 11, 2013

4.              Premier Trust, Inc., as Trustee of the Kevin Hudy 2013 Non-Grantor Nevada Trust dated September 18, 2013

5.              Christopher Klein

6.              David Purdy

7.              Rich Buecheler

8.              Jarret Miller

9.              Harpua, L.L.C

 

[Signature Page to Shareholders Agreement]

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