5.4.1 Those parties who have invested equity into the Company will need to enter into an agreement, a Shareholders' Agreement ("SHA"), to regulate how they will work together to manage the Contractor. HM Treasury intends to consult with the market on the form of the SHA (see Schedule 4). Key elements of the SHA will include the following:
Parties to the SHA
The initial parties to the SHA will be all of the equity investors as at financial close; the procuring Authority will not be a party to it. Each party will have to warrant that it has the authority and power to enter into the SHA. Any new shareholder who acquires shares4 will have to agree to be bound by the provisions contained in the SHA by entering into an agreed form Deed of Adherence.
Initial Subscriptions
The SHA will set out the type of shares each equity provider will receive. These are as follows:
• Public Sector Equity Provider CGU - A Shares;
• Developer Equity Provider - B Shares; and
• Third Party Equity Provider - C Shares.
together in each case with sub-debt.
Further Capital
The Company may decide that it needs to issue new shares in order to secure additional capital. Provisions will be set out in the SHA governing how this will be effected and they will specifically provide for pre-emption rights for existing shareholders.
Transfer of Shares
Transfers of shares will also be subject to the pre-emption rights set out in the Company's Articles of Association.
Tag along Rights
Tag along rights will be provided for the benefit of the CGU. Should another equity provider therefore propose to transfer its shareholding to a third party the CGU will have a right to require that it receives an offer at the same price for its shares from that third party
Lock Up Period
Shares can only be transferred after the expiry of a lock-in period. The suggested lock-in period under the SHA will mirror that contained in the Contract and will be a period which is usually up to the Service Commencement Date plus the defects liability period (see Section 6.4.1 (Change in Ownership)).
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4 This might happen because there is a need for the Company to raise additional capital or if an investor sells his investment..