LOAN AGREEMENT Agreement between: 1. The State of the Netherlands, hereinafter referred to as: the State, represented by the Minister of Economic Affairs; 2. «APPLICANT'S_NAME», hereinafter referred to as: the start-up fund; The parties have agreed as follows: Article 1. Definitions In this agreement, the following terms shall have the following meaning: a. Minister: the Minister of Economic Affairs; b. company limited by shares: 1°. a company as referred to in Article 1 of the First Council Directive 68/151/EEC of 9 March 1968 on coordination of safeguards which, for the protection of interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, with a view to making such safeguards equivalent throughout the Community (OJEC L 65), or 2°. a company limited by shares which, at the time of the first provision of risk- bearing capital, is structured pursuant to this regulation in accordance with the laws of one of the Member States of the European Union, which has legal personality, which has a separate capital that can be drawn on exclusively in order to pay the company’s debts, and which is subject under its national legislation to guarantee terms as referred to in Council Directive 68/151/EEC for the protection of interests of members and others; c. technostarter: a legal entity 1°. which, at its own expense and risk, sells and supplies products, processes or services – not being recommendations – that are based on a new technical invention or a new application of existing technology; 2°. whose enterprise has been listed in the Trade Register of a Chamber of Commerce and Industry for a maximum period of 5 years; 3°. whose enterprise meets the definition of a small or medium-sized enterprise as referred to in Article 2, opening words and under (b) of Commission Regulation (EC) No. 70/2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to State aid to small and medium-sized enterprises (OJEC L 10); d. technostarter company: a technostarter which 1°. runs an enterprise in the form of a company limited by shares, and 2°. carries out its principal business operations in the Netherlands, except where the enterprise pertains to the economic sectors of agriculture, fisheries or aquaculture; e. subordinated claim: a claim of the start-up fund against a technostarter company 1°. which the start-up fund obtained by lending money to the technostarter company, 2°. which is not covered by any form of security, and 3°. on which the debtor, pursuant to a provision to this effect in the loan agreement, will only be obliged to pay interest and make repayments in the event of dissolution, a composition following the grant of a moratorium or a composition in the context of the debtor’s liquidation, after all the debtor’s other debts existing at that moment have been paid, except for the debts arising from loans to which a provision of a similar nature as the aforesaid provision is attached, 4°. while the creditor has renounced all rights to settlement of the interest and repayments under the aforementioned loan agreement; f. group: an economic unit, in which the following entities are organisationally linked: 1º. a natural person or legal entity that directly or indirectly: - provides more than half of the issued capital to, - is a fully liable partner of, or - owns a controlling interest in one or more legal entities or companies, and 2º. the latter legal entities or companies; g. participation: risk-bearing capital in the form of 1°. shares in the capital of a technostarter company which the start-up fund acquired directly from the technostarter company on full payment of those shares in money, or by converting a subordinated claim; or 2°. shares in the capital of a technostarter company as referred to under 1° in combination with a subordinated claim; h. acquisition price of a participation: the monetary amount for which the start-up fund acquired the participation; i. fund plan: a plan of the start-up fund’s to carry out a coherent whole of activities comprising the acquisition, management and termination of participations and the supervision of the technostarter companies concerned; j. investment period: the period during which the start-up fund carries out activities aimed at acquiring participations; k. investment budget: the financial resources that are or will be available to the start-up fund and are intended for paying the acquisition price of participations; l. income: all advantages capable of being expressed in money which accrue to the start-up fund on account of the participation, including dividend, interest, repayments, options, the price for which the participation was disposed of, the price for which the participation was repurchased or repaid by the technostarter company concerned, and the liquidation dividend; m. management costs: all the costs incurred by the start-up fund in acquiring, retaining and terminating participations, including the costs of supervising technostarter companies, except for the acquisition price of the participations; n. fund party: a shareholder or full partner of the start-up fund; o. personal contribution: the monetary resources which were contributed by the fund parties to the investment fund and were effectively used towards the acquisition of participations. Article 2. Provision and repayment of loan 1. The State shall provide the start-up fund “«APPLICANT'S_NAME»”, for the purpose of acquiring participations, with an interest-free loan up to an amount of EUR «FILE_COMMITTED» with a term of .... years, from «FILE_COMMENCING_DATE» to <<fund termination date>>, given an investment budget of EUR «BUDGETED_COSTS». 2. At the start-up fund’s request, the State may extend the period referred to in Paragraph 1 if there are compelling economic reasons to do so. 3. The start-up fund may draw amounts in cash whenever the start-up fund makes a payment for the acquisition of a participation, insofar as the total sum of the amounts drawn does not exceed the maximum amount of the loan of EUR «FILE_COMMITTED». 4. Whenever the start-up fund has obtained income from a participation, it shall transfer a part of this income to the State, in accordance with the provisions of Article 4. 5. The start-up fund shall not be obliged to repay the principal sum outstanding otherwise than by means of the transfers referred to in Paragraph 4, unless the provisions of Article 10 apply or may reasonably be expected to take effect. Article 3. Drawdown of the loan 1. If the start-up fund has acquired a participation after submitting a subsidy application under the Regulation on Seed Capital for Technostarters (Regeling seed capital technostarters) and pays or has paid the acquisition price or a part thereof to the technostarter company, the State, at the fund’s request, shall make a payment to the fund that is equivalent to that amount multiplied by the percentage constituting the ratio between the maximum amount of the loan and the investment budget, on the understanding that the resources provided by a start-up fund to a technostarter company shall not exceed EUR 500,000 per half calendar year. 2. The start-up fund shall make the request for payment by using a form, in accordance with the model attached to this agreement as Appendix 1, while enclosing the agreement for the acquisition of the participation and any other documents specified in the model. 3. The State shall make the payment within two weeks of having received the application for payment, unless it takes the view that the start-up fund failed to fulfil the obligations applicable to it under this agreement, or the start-up fund has been declared insolvent or has been granted a moratorium, or the debt rescheduling arrangement for natural persons has been declared applicable in respect of the fund, or a request to this end has been submitted to the Court. 4. The State shall notify the start-up fund after the end of the investment period of the total amount drawn under this agreement. The investment period shall run from «FILE_COMMENCING_DATE» to «FILE_ORIGINAL_TERMINATION_DATE» inclusive. Article 4. Transferring income from participations 1. When the start-up fund receives income, the rightful share in this income shall be transferred to the State within one month if this rightful share is equal to or exceeds EUR 20,000. If the rightful share in the income is less than EUR 20,000, the balance shall be transferred within one month once the limit of EUR 20,000 is exceeded. In all other cases, the balance of the rightful share shall be transferred to the State once every half calendar year. 2. The rightful share in the income that is transferred to the State shall differ in accordance with the period in which the income is received, which can be any of the following: a. period A: from the establishment of this agreement until the moment when the total sum of the income obtained by the start-up fund from the participations, reduced by the total sum of the amounts transferred to the State, equals the personal contribution paid for the participations acquired; b. period B: from the moment referred to under (a) until the moment when the total sum of the amounts transferred to the State equals the total sum drawn under the loan agreement; c. period C: from the moment when the total sum of the amounts transferred to the State equals the total sum drawn under the loan agreement. 3. The share in the income transferred to the State shall be a. in period A: 20 percent of the income, multiplied by a fraction in which the numerator consists in the maximum amount of the loan and the denominator consists in the investment budget, excluding the loan from the State; b. in period B: 50 percent of the income, multiplied by a fraction in which the numerator consists in the maximum amount of the loan and the denominator consists in the investment budget, excluding the loan from the State; c. in period C: 20 percent of the income, multiplied by a fraction in which the numerator consists in the maximum amount of the loan and the denominator consists in the investment budget, excluding the loan from the State. 4. Whenever the start-up fund transfers an amount to the State, it shall inform the State of the nature of the income by using a form, in accordance with the model attached to this agreement as Appendix 2, while enclosing the documents specified in the model, including, in the event of capital gains from the disposal of the participation, the agreement for the disposal of the participation. 5. If the start-up fund receives non-monetary income from a participation, it shall realise this income before the period referred to in Article 2(1) expires. 6. As soon as the income referred to in Paragraph 5 has been realised, the start- up fund shall transfer these funds to the State in accordance with the provisions of Paragraph 3. 7. At every request from the State, the start-up fund shall provide an auditor’s report confirming that that the start-up fund acted in accordance with this agreement in the acquisition, ownership or disposal of the participation from which income was transferred to the State. Article 5. Acquisition of participations 1. When acquiring participations in technostarter companies, the start-up fund shall apply the following conditions: a. the participations shall be acquired during a maximum investment period of six years, or a shorter period if the investment budget has been used up in full, and shall be disposed of no later than six years after the end of the investment period, except in case of liquidation; b. the total acquisition price of the participations acquired in one technostarter company during the investment period shall be at least EUR 100,000 and no more than EUR 2,500,000; c. the average total acquisition price of the participations acquired by a start-up fund in one technostarter company during the investment period, measured across all the technostarter companies, shall not exceed EUR 800,000. 2. The start-up fund shall provide no goods other than money at the time of or in relation to the acquisition of a participation. 3. The start-up fund shall not acquire a participation in a technostarter company if, during the preceding twelve-month period, more resources were withdrawn from the technostarter company for the benefit of third parties than are necessary for operations considered reasonable, or if an obligation to make such a withdrawal was assumed. 4. The start-up fund shall not acquire a participation in a technostarter company if another start-up fund already owns a participation in this company, except where the maximum amounts referred to in Paragraph 1(b) and (c) are not exceeded as a result of the new participation. 5. The start-up fund shall not acquire or retain a participation in the company of a technostarter if a fund party, director, administrator or other party involved in the start-up fund runs a business that is identical or related to the technostarter’s business, while there is a regular customer relationship between the two businesses. 6. For the purpose of acquiring participations, the start-up fund shall contribute monetary resources of its own to the investment budget up to a maximum amount of <<EUR >>. 7. The start-up fund shall carry out no other activities than the implementation of the fund plan. Article 6. Disposal of participations 1. The start-up fund shall not dispose of a participation until two years after its acquisition, unless the State has consented, upon request, to disposal within this period. 2. The start-up fund shall ensure that the disposal of a participation is effected for a market-based price. 3. If the start-up fund disposes of a participation, either wholly or in part, to one of its fund parties, directors, administrators or other parties involved, it shall ensure that at least one third part of the participation is disposed of to independent third parties, or that the price for which the disposal is effected is based on a valuation by two experts classifying as independent in the opinion of the State. Article 7. Fund management in general 1. The start-up fund shall implement the fund plan, conduct an active and profit- oriented policy in acquiring, retaining and terminating participations, and in that context supervise technostarter companies in which a participation has been acquired. 2. The start-up fund shall follow an explicit line of conduct in order to prevent conflicts of interest, and shall also take the measures that are necessary in this connection. 3. If required, a person authorised for this purpose by the Minister may sit in on consultations held by a body of the start-up fund about the implementation of the fund plan. 4. The Advisory Committee on Seed Capital for Technostarters (Adviescommissie seed capital technostarters) shall visit the start-up fund every two years, which may entail recommendations and consequences. 5. The start-up fund guarantees that fund parties, directors, administrators or other parties involved in a start-up fund shall not cooperate in investments by anyone other than the start-up fund in a technostarter company in which the start- up fund has acquired a participation, if these investments are not made on market-based conditions. 6. The fee for advisory or supervisory services which the start-up fund demands from technostarters it advises or supervises in connection with participations shall not exceed what is customary in the market. 7. The start-up fund shall organise the management in such a way that the annual management costs, i.e. all the costs borne by the start-up fund, shall not exceed 5% of the investment budget. Article 8. Accounts and provision of information 1. The start-up fund shall ensure that accounts are kept which are organised in such a way, as to provide information at all times in a simple and clear manner about the acquisition, management and disposal of participations, about the income from these participations, about the trading results of the technostarters concerned and about the fund management costs. 2. After the end of each six-month period, the start-up fund shall inform the State in writing about the participation proposals received from technostarter companies during the preceding six months, and about the decisions made in this respect by the start-up fund. 3. Within six months after the end of each twelve-month period, the start-up fund shall report to the State in writing about the implementation of the fund plan, in particular providing a summary of the participations acquired and disposed of, the acquisition prices realised, the management costs and the income, which report shall be accompanied by an unqualified auditor’s report (including the management letters, where applicable) that was drawn up in accordance with the model attached to this agreement as Appendix 3, and by using the audit protocol attached to this agreement as Appendix 4. 4. Upon request, the start-up fund shall provide the State with data and documents concerning the management of the fund and the participations acquired. 5. After the end of the term of this agreement, the start-up fund shall issue a final report about the implementation and the results of the fund plan. 6. The State shall notify the start-up fund after the end of the term of this agreement whether, in its opinion, the start-up fund acted in accordance with this agreement in acquiring and disposing of participations. 7. The State shall have the right to have an audit performed at any time in order to check whether the start-up fund observes all the arrangements and contracts. Article 9. Status of the start-up fund 1. During the term of this agreement, the start-up fund shall not make any changes to the organisational structure, the fund management, members of relevant committees, the shareholders or the implementation of the fund plan, unless the State has consented to this upon request. 2. The start-up fund shall notify the State immediately of the submission to the Court of an application to grant it a moratorium, an application for a compulsory liquidation order in its respect or an application to declare the debt rescheduling arrangement for natural persons applicable in its respect. Article 10. Cancellation 1. The State shall be entitled to cancel this agreement in writing if a. the start-up fund fails to fulfil one of its obligations under this agreement, and if the start-up fund departs from the original fund plan and the numbers, extent and type of participations specified in this plan; b. the number of shareholders or full partners who do not pertain to the same group and/or have any other business and/or family relationship with each other has dropped below three, except where the State has consented to this upon request; c. an application for a moratorium, an application for a compulsory liquidation order or an application to declare the debt rescheduling arrangement for natural persons applicable in respect of the start-up fund was submitted to the Court, or if creditors are offered an out-of-court settlement; d. the start-up fund was dissolved; e. the Regulation on Seed Capital for Technostarters is no longer compatible with the rules of the European Communities with regard to State aid. 2. Cancellation pursuant to Paragraph 1(a) and (b) shall occur exclusively after the State has notified the start-up fund of its intention to cancel the agreement, and after the latter has been given the opportunity to rectify a rectifiable failure within a reasonable period. 3. In the event of cancellation as referred to in Paragraph 1(a), (b) and (c), the State may immediately reclaim the total amount which it paid to the start-up fund in accordance with Article 3, reduced by the amount which the start-up fund transferred to it in accordance with Article 5. 4. In the event of cancellation as referred to in Paragraph 1(a), a fine equalling 100% of the amount referred to in Paragraph 3 shall be charged on top of that amount. Article 11. Disputes 1. Every dispute in respect of this agreement shall only be submitted to the competent Court in the district of The Hague. 2. This agreement shall be governed by Dutch law. Article 12. Addressing of written documents Written documents implementing this agreement that are intended for the party referred to under 1 shall be addressed to Ministry of Economic Affairs, TechnoPartner, SenterNovem, PO Box 93144, 2509 AC The Hague. Written documents implementing this agreement that are intended for the party referred to under 2 shall be addressed to «APPLICANT'S_NAME», «CORRESP_STREET», «CORRESP_CITY» Article 13. Payments All payments by the start-up fund in connection with this agreement shall be made via a transfer of the amounts concerned to account number 18.104.22.168 with Rabobank, in the name of TechnoPartner/SenterNovem, stating ‘project number «FILE_REFERENCE»’. Article 14. Fund management The start-up fund guarantees that, during the term of the fund, the quality and time use of the fund management shall be in line with the representation made in the fund plan. Any changes in the team composition of the fund management shall be reported to the State immediately. Article 15. Conflicts of interest (optional) (Where appropriate, this article provides supplementary conditions with regard to the decision-making procedure or a particular code of conduct that should be made more explicit. This is because the wording of Article 7(2) is far too vague for some fund plans.) Article 16. Financing (optional) Before <<date (4 weeks)>> the start-up fund shall submit documentary evidence to the State which shows the financing of the personal contribution to the fund. Article 17. Documents By signing this agreement, the shareholders or full partners declare that they have provided the State with all relevant documents with regard to the manner of investment and financial administration of the start-up fund and that they shall submit any future relevant (final) documents to the State for approval. Article 18. Remuneration of fund managers An agreement shall be concluded between the professional fund management and the participating parties which shall provide that the remuneration of the fund managers will partly depend on their performance in relation to the fund result. Article 19. Separate accounts The start-up fund undertakes to keep the budget, finances and accounts separate from those of other funds (so-called “ring-fencing”). Article 20. Investments in technostarters Investments in technostarters shall be made by providing share capital only or via a combination of an unsecured loan (subordinated loan) and share capital, whereby a part of the investment is made by means of an unsecured loan and a different part by means of share capital. Funding by means of an unsecured loan shall make up no more than 35% of the total investments. The following principles shall apply to all investments in the form of a loan and/or a share capital contribution: all loans to technostarters shall be provided on a commercial basis on the form of unsecured loans for which the interest rate is determined on the basis of the reference and discount rates applicable to State aid in the EC, in combination with share investments on commercial terms. The part of the investment corresponding to the unsecured loan shall not be provided to the favoured technostarter at an interest rate which is below the EU reference rate for the Netherlands plus 400 basic points or more. Article 21. Accumulation of State aid for technostarters In order to prevent accumulation of State aid to the favoured technostarters, the start-up fund undertakes to point out to the technostarters that any additional right to government loans or other forms of investment subsidy which the European Commission would otherwise regard as compatible will be reduced by 20%. Article 22. Legal validity 1. This agreement shall take precedence over any other agreement between and with the parties in the start-up fund. 2. The provisions of the Regulation on Seed Capital for Technostarters shall apply to this loan agreement. Article 23. Expiry If the start-up fund has fulfilled all its obligations under this agreement by <<fund termination date>>, the start-up fund, in compliance with Article 2(5), shall not be required to repay the principal sum outstanding at that time. If a principal sum is outstanding by this date, the start-up fund shall submit a written application to the State for remission of the remaining amount of the loan. Article 23. Confirmation (optional if company is in formation) The start-up fund signatory guarantees a confirmation as referred to in the Dutch Civil Code (Burgerlijk Wetboek) by the company in formation of the juristic acts performed during the pre-formation stage. Through this confirmation, «APPLICANT'S_NAME» shall become a party to the present agreement. After the formation, the start-up fund signatory of this agreement shall remain bound by the provisions of this agreement. Article 24. Entry into force This agreement shall enter into force when it is signed by the shareholders or full partners of the start-up fund.
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