In May 2007 Enterprise Ireland (in conjunction with the Irish Software Association) gave a morning workshop on their investment process with the focus on making it clearer how it works. This is one of two presentations from the workshop which I have scanned in.

1. -1
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El InvestmentProcess- TheLegal
Element
v
TransforminglrishIndunry2008-2010

2. .--..-'
e,llffillJ'"
MENTEGORIESOFINVEST
EIOnlyInvestments
No CompanyValuation
StandardElAgreement
MatchingFundingRequirement
Co-lnvestments
Valuationset by ProfessionalInvestor
- GenerallyCo-lnvestorsAgreementusedElseek
similarterms
- Co-lnvestorsfulfil MatchingFundingRequirement
TransforminglrishIndustry2008-2010

3. ENTERPRISE
IRELAND
LY INVESTMENTSIN
- CumulativeConvertibleRedeemablePreference
Shares
"ccRP"
Cumulative- Dividendsaccumulateyearon year
(reducedto 3o/oon validationof expenditure)
Convertible- Capableof conversionintoa class
Redeemable- Re-purchaseby the companyout
reservesor the proceedsof a freshissueafter5
at rate of 8o/o
of ordinaryshare
of distributable
years
Preference- PriorityRightsin relationto dividends,repaymentor
capitaland redemption
NonVoting- No rightto voteat meetingsof the Company
TransforminglrishIndustry2008-2010

4. ENTERPRISE
IRELAND
forshares
sharesto
- theprice
beissued
E SUBSCRIPTIONAND
HAREHOLDERSAGREEMENT
Providesforsubscription
andnumberandclassof
Governstherelationshipbetweentheparties
goingforward
Thefollowingare
Subscriptionand
thecoretermsintheEl Share
ShareholdersAgreement
Transformin.Jlrishl.rdustry2008-2010

5. ENTERPRISE
IRELAND
RMATIONRIGHTS
AnnualAuditedandQuarterlyManagementAccounts
Infoon Sales,ExportsandEmployment
Any inforequiredto validateexpenditure
i.e.SubscriptionMoniesusedto implementBusinessPlan.
Onceexpenditurehasbeenvalidatedthecouponwillbe
reducedfrom8%to 3oh
ReasonableAccessRightsto validateexpenditure
Transfolminglrishlndustry2008-2010

6. ENTERPRISE
IRELAND
SACTIONS
- Contains13RestrictedTransactions
mainlycovering:
EligibleActivity
Furtherissueof Shares
Changesto M&A's
ChargeoverAssetsincludinglP
ChangeRightsattachingShares
TransforminolrishIndustry2008-2010

7. --1"---"
ENTERPRISE
IRELAND
IONBREACH
Rightof Eltoseek8%couponandearly
redemptionintheeventthata companybreach
anyof 3 specificRestrictedTransactions
- CeasetocarryonEligbleActivity
- lssuefurtherShares
ChangeMemorandum& Articles
21 dayCurePeriodto a
breach
lowcompanyto rectify
Tr.rnsforminqlrishIncJustrv2008-2010

8. ENTERPRISE
IRELAND
REHOLDERDISPOS
" El'sConsentRightoverthetransferof
sharesbytheShareholders
- Justification- investinginteamaswellas
company
- InformEl atanearlystageofanypotential
consentmattersto allowtimeto review
documentation.Elteamarecommittedto
meetingclients'deadlines.
TransforminolrishIndustrv2008-2010

9. ENTERPRISE
IRELAND
RANTIES
- Statementof Factatthetimeofcompletionofthe
investment
- StatementssetoutinAgreementandrelatemainlytotitle
andcapacitytotheshares,anyongoinglitigation,
BusinessPlanhonestlyanddiligentlypreparedetc.
Anyexceptionstothesestatementscanbehighlightedin
a DisclosureLetterwhichwillthenbesubmittedto El
alongsidetheWarrantiesandtogethertheywillrepresent
thetruepositionofthecompanyatthedateof completion
- Warrantors- CompanynotindividualsaswithmanyVC
Agreementsthereforenotpersonallyliable.
TransforminqirishIndustrv2008-2010

10. ENTERPRISE
IRELAND
- Convertibleontheoccurrenceofa fundinground
byfinancialortradeinvestorthatat leastmatches
thesizeof El'sinvestment
- ConvertibleintotheNewSharesbeingissuedat
thatround
- Convertibleat discounttothepriceoftheNew
Sharesthatincreasesfrom15o/oafteryear1to
55%inyear5
' SecondConversionOptionat4 years11 months
,,,jn[q"9;d[n9ry.,$hUaresata 55%discounttoFair
VERSION
Value

11. ENTERPRISE
IRELAND
PLETIONPROCESS
' 8 weektargetturnaroundtime
- DraftShareholdersAgreementissuedto
companyandadvisers
- Negotiations- largelynon-negotiable,limited
amendmentsmadeto provideforcompany
specificissues
- Pre-CompletionRequirementsmetand
CompletionDocumentationfurnished
' ChequeandExecutedAgreementreleasedto
r*'GOf,HpOilV"o 2oo8-zo1o

12. COMP ENTERPRISE
IRELAND
ShareSubscriptionand ShareholdersAgreement
executedby all partiesthereto
Articles of Association- Gonstitutionof the
Company,amendedto providefor the rights attaching
to the CCRP's
Tax ClearanceGertificate
ShareCapitalCertificate
Solicitors Gertificate
ShareGertificate
Gonfirmationof MatchingFundingand any other
conditionsimposedby the InvestmentCommittee.
Transforminql!'ishlnclustrv2008-2010

13. e/fl[IlTiJ'"
- Valuationset by professionalInvestor
- GenerallyGo-lnvestorsAgreementusedElseek
similarterms
Co-lnvestorsfulfil MatchingFundingRequirement
TransformingtrishIn6ig511y200g-2010