The Management Board of Summa Linguae S.A. based in Krakow (“Company”, “Issuer”) hereby announces that on 28 October 2019, an annex (“Annex”) to the heads of terms of 22 July 2019 (“Heads of Terms”) was concluded between V4C Poland Plus Fund S.C.A. SICAV-FIAR registered in Luxembourg (“Fund”), Mr Krzysztof Zdanowski, President of the Issuer’s Management Board and Ms Madhuri Hegde, Member of the Issuer’s Management Board (“Parties”).The Annex changes the original arrangements between the Parties regarding the possible acquisition of and subscription for the Issuer’s shares by the Fund in a number sufficient for the Fund to hold the majority stake in the Issuer’s share capital (“Transaction”), as announced by the Company in Current Report 38 of 28 October 2019. The Issuer discloses in this Current Report the current arrangements made by the Parties regarding the possible implementation of the Transaction.
Pursuant to the provisions of the Annex, the Parties undertook to conclude an investment agreement on 22 November 2019 (provided that the Fund obtains relevant corporate approvals), the Company committed to take steps to conduct its General Meeting, and Krzysztof Zdanowski and Madhuri Hegde (“Major Shareholders”) undertook to take measures to ensure that the Company’s General Meeting will adopt a resolution on increasing the Company’s share capital by 25 November 2019, in accordance with the assumptions described in paragraph 3 hereof.
The remaining key arrangements contained in the Heads of Terms altered by the Annex are as follows:
(1) An investment agreement shall be concluded between the Fund, the Issuer and Major Shareholders to specify the terms of the Transaction in detail (“Investment Agreement”).
(2) The Fund, the Issuer and Major Shareholders will conclude a shareholders’ agreement, specifying the rules for the parties’ cooperation after the Transaction has been effected (“Shareholders’ Agreement”).
(3) The Issuer’s General Meeting will be held, the agenda of which will provide for an increase in the Issuer’s share capital by issuing a total of 3,123,737 (three million one hundred twenty-three thousand seven hundred and thirty-seven) new shares, precluding the pre-emptive rights of the Issuer’s shareholders. The newly issued shares will be taken up as part of a private placement by private investors selected by the Issuer (“Investors”) and by the Fund. The shares in the increased share capital will be taken up in exchange for cash contributions.
(4) Another General Meeting of the Issuer will be held, the agenda of which will provide for amendments to the Issuer’s Articles of Association related to the Funds’ investment in the Company.
(5) The Company will conclude agreements on the acquisition of shares of entities operating in the American and Canadian markets, in accordance with the information provided in the Issuer’s Current Report 30/2019 of 3 July 2019 and Current Report 18/2019 of 24 May 2019 (“Takeover”).
(6) The Fund will conclude transactions of the sale of the Issuer’s shares with the Issuer’s shareholders that will intend to sell the Issuer’s shares and will be approved by the Parties, under which the Fund will acquire the existing shares of the Issuer.
(7) The final structure of the Transaction, the wording of the Investment Agreement and the Shareholders’ Agreement will be determined by the Parties in the course of further negotiations, whereby the Parties have agreed, among others, that:
(a) The Investment Agreement will contain provisions limiting the ability to make business decisions by the Issuer and its subsidiaries in the period between the conclusion of the Investment Agreement and the Transaction date;
(b) The Investment Agreement will specify the Fund’s investment compensation mechanism, in accordance with which, depending on the Company’s financial performance, the Fund will sell the Company’s shares to the Company or take up its newly issued shares;
(c) The Fund will be allowed to withdraw from the Investment Agreement as well as from the agreement to subscribe for the Issuer’s newly issued shares and the agreement on the acquisition of the Issuer’s existing shares if, e.g. the Issuer fails to effect the Takeover;
(d) In any case, the Fund will become the majority shareholder of the Issuer, by acquiring or subscribing for a total of at least 50% + 1 share in the Issuer’s share capital.
(8) The Heads of Terms is not a legally binding agreement, subject to the confidentiality and no-shop clauses as well as those regarding arbitrage, governing law and costs.
The Parties schedule the implementation of the Transaction stages specified in par. (1) – (6) hereof by 9 December 2019.
The Issuer considers this information material because if the Transaction is concluded, its value will exceed the materiality criterion specified in the Disclosure Policy published in Current Report 37/2019 of 24 November 2019.
Legal grounds: Article 17(1) of MAR – confidential information
The Company’s representatives,
Krzysztof Zdanowski, President of the Management Board