Share Mortgage

This document creates a mortgage over shares held by a shareholder in a private limited company incorporated in Ireland, together with a charge over all dividends, interest and other rights attaching to those shares. The person who is granting this mortgage is called the “Shareholder” and the person who receives the benefit of the mortgage is called the “Chargee”.

The mortgage is granted by the Shareholder to secure the obligations of the Shareholder to the Chargee under the terms of a specific agreement which is referred to as the “Relevant Agreement” in the Share Mortgage document. This agreement can be a guarantee, a share purchase agreement, an agreement to pay a debt, a loan agreement or any other agreement under which monies may be payable by the Shareholder to the Chargee. If the Shareholder fails to pay the amount owing to the Chargee under the terms of the agreement, then the Chargee can enforce the mortgage by either transferring the shares in the company to it or selling those shares and using the proceeds of sale to pay off the monies owing by the Shareholder to the Chargee under the Relevant Agreement.

Under the Share Mortgage, the Shareholder agrees to pay the amounts owing to the Chargee under the terms of the Relevant Agreement and grants an equitable mortgage over the Securities (which include the Shares in the Company) in favour of the Chargee pending payment in full of the amounts owing by the Shareholder to the Chargee under the Relevant Agreement.

An equitable mortgage is a mortgage in which the person granting it (i.e. the Shareholder) does not actually transfer the legal title to the securities (i.e. the Shares) to the Chargee but instead gives the Chargee the necessary documents to do so should the Shareholder default in its obligations under the mortgage. In this instance, the Shareholder will give the Chargee a signed but undated share transfer form which allows the Chargee to transfer the Shares in the event that the Shareholder defaults in its obligations to make payment under the terms of the Relevant Agreement. Once all of the amounts owing under the Relevant Agreement are repaid in full, and only then, the Chargee will return the undated share transfer form to the Shareholder and release the security over the Shares.

If the Chargee becomes entitled to enforce the security (see below) over the Shares, it will be entitled to do so without first being obliged to take action against any other person (such as another party to the Relevant Agreement or a guarantor, for example) to recover the monies owing to it under the terms of the Relevant Agreement. It can immediately enforce its security over the Shares.

For so long as the mortgage remains in place, the Shareholder shall be prohibited from transferring any interest in the Shares to any person or from creating any other mortgage, charge, encumbrance, or similar security interest over them.

Under the terms of the share mortgage, the Shareholder will give certain assurances (known as representations and warranties) to the Chargee in relation to the Shares and itself. It addition, in order for the Chargee to enforce its security, the Shareholder also agrees to provide certain documents to the Chargee including undated and signed share transfer forms, the share certificate in respect of the Shares that are being mortgaged and any other documents that may be required to transfer the Shares from the Shareholder to the Chargee.

The Shareholder shall be obliged to transfer any dividends it receives to the Chargee as part payment of the amounts owing under the Relevant Agreement.

For so long as the share mortgage remains in place, any votes attaching to the Securities or exercisable in connection therewith shall be exercised by the Shareholder in accordance with instructions received from the Chargee.

The share mortgage also contains standard ‘boiler plate’ clauses and other clauses typically found in share mortgages of this kind.

Detailed information in relation to each clause of this share mortgage and on how to complete the share mortgage are contained in the notes that accompany the mortgage.

Clauses Included in this Share Mortgage:

• Interpretation Clause
• Covenant to Pay Clause
• Security Clause
• Representations and Warranties Clause
• Covenants of the Shareholder Clause
• Enforcement of Security Clause
• Receivers Clause
• Dividends Clause
• Votes and Shareholder Rights Clause
• Issues of Shares Clause
• Power of Attorney Clause
• Costs, Charges and Expenses Clause
• Notices Clause
• Miscellaneous Clause
• Governing Law and Jurisdiction Clause

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