MC-4564

# MC-4564 — Project Heron / Elysium SSHA + MOI consolidated comments Prepared by: iris-kanban-worker Scope: internal prep only. No external response sent; Elmar retains final sign-off. Documents reviewed: - `/home/lucienne/workspace/attachments/ticket-4564/Heron Elysium SSHA (Consolidated Comments) (25.05.2026).docx` - `/home/lucienne/workspace/attachments/ticket-4564/Heron Elysium MOI (Consolidated Comments) (25.05.2026).docx` ## Executive view The comments are not just drafting clean-up; they surface a small set of commercial/tax/legal decisions that should be explicitly closed before Elmar signs off. The main themes are: section 8C/tax sensitivity around “management” wording, leaver/restraint mechanics, whether the Harith/Preference Shareholder protections are too broad, and whether the preference share economics in the MOI accurately mirror the PSSA. ## Key commercial/legal issues ### 1. Section 8C / “management” sensitivity in the SSHA - The draft has moved away from “Management Subscriber” to “Subscriber”, and removes the defined “Relevant Management Employee”/employment agreement mechanics. - Pieter’s comments flag possible s8C exposure where employment status, bad-leaver style events, disposal restrictions, or restraint obligations make the equity look restricted. - Kristel’s tax comments are generally more comfortable: she notes the deemed offer is at market value, a restricted private-company market is not itself an s8C restriction, and the shares vest/unrestrict on day 1. But one comment remains “TBD” on the restraint/tax point. - Practical risk: even if tax advisers are comfortable, the documents should avoid unnecessary language tying shareholding rights to employment or “management” status. Recommended position: keep the “Subscriber” terminology, avoid importing employee/bad-leaver mechanics into the SSHA, and ask CDH/ENS/tax to confirm in writing that the remaining non-solicit/restriction language does not create or defer any s8C vesting event. ### 2. Deemed offer event / forced sale mechanics - The Deemed Offer Event is now tied to breach of a material term of the SSHA or MOI, not employment termination. - The breach cure period appears inconsistent in places: the definition text still says 10 Business Days, while related drafting now refers to 30 Business Days and the breach clause defines “material” more tightly. - The purchase price is fair value for ordinary shares and face value for shareholder loan claims; regulatory approvals may extend timelines. Recommended position: ask counsel to harmonise the cure period and cross-references, and ensure the deemed offer trigger cannot be read as an employment/bad-leaver trigger. ### 3. Disposal/pre-emption restrictions - A prior clause restricting Management Subscribers to dispose only to other Management Subscribers/Harith/Harith nominee has been deleted. Pieter flagged it as s8C risk; Kristel says restricted market/private-company transfer restrictions are not a tax problem. - The remaining SSHA still has general transfer controls: accession undertaking, pre-emptive rights, linked share/loan disposal, and MOI/Harith consent-type protections. Recommended position: commercially this looks acceptable if the intent is to preserve transfer discipline without bespoke “management only” restrictions. Ask CDH whether the remaining protections are sufficient for Harith and whether any deleted Harith-consent point is fully covered by MOI clause 5 / pre-emption / accession provisions. ### 4. Restraint / non-solicit architecture - The broader restraint clause in the SSHA has largely been deleted. CDH expressly comments that restraints should sit in individual employment agreements and apply for a fixed period after employment ends; shareholders who still hold shares should not necessarily remain subject to the same employee-style restraints. - A non-solicit remains: each Subscriber undertakes, while a shareholder and for 24 months thereafter, not to induce FlySafair employees to leave or assist with that outcome. Recommended position: accept the deletion of broad restraints from the SSHA if employment agreements pick them up separately. Ask CDH to confirm the intended non-solicit is enforceable, proportionate, and not inadvertently employment-contingent for s8C purposes. ### 5. MOI restrictive conditions / Preference Shareholder controls - MOI clause 5 tightly limits Elysium’s purpose and powers: essentially to hold Harith Aviation Subscription Shares and implement the MOI/SSHA/Harith/PSSA documents. - Until Final Discharge Date, Harith Aviation consent is required for major actions outside permitted agreements, and amendments to clause 5 require Harith Aviation consent, now qualified by “not unreasonably withheld or delayed”. - There are broad savings provisions ensuring the company can make required preference share payments/redemptions and PSSA actions despite distribution/issue/transfer restrictions. Commercial note: this is lender/preference-investor style ring-fencing. Elmar should be comfortable that ordinary shareholders will have limited flexibility until preference shares are redeemed / discharged. ### 6. Governance / voting changes - MOI shareholder protections include Part A reserved matters by Special Resolution, and Part B specially reserved matters requiring Preference Shareholder approval above 75% in clause 23. - However Annexure A Part B still states more than 90% Preference Shareholder voting rights. This is a drafting inconsistency with clause 23’s tracked change to 75%. - Board nomination mechanics changed: ordinary shareholders with at least 15% ordinary shares get a director/alternate nomination right; otherwise nomination moves to 1 director per complete 10%. Board quorum moved to 50% with no named-person quorum; director votes are now one director/one vote. Recommended position: confirm Elmar is commercially comfortable with the shift from proportional/named-person control to simpler one-director-one-vote governance, and require counsel to reconcile the 75% vs 90% Preference Shareholder approval threshold. ### 7. Director competition restriction in MOI - A disqualification/removal trigger for a director becoming interested in competing activity has been deleted, with CDH noting that an investment holding company’s directors may hold positions in family/asset-holding companies and the concept of “competing” is impractical here. Recommended position: deletion seems sensible. Ask counsel whether any narrower conflict-of-interest/confidentiality protection is still needed instead of a broad competition disqualification. ## Items needing CDH / legal counsel confirmation 1. Confirm the SSHA no longer creates an employment-linked leaver/bad-leaver forced-sale trigger. 2. Confirm all section 8C concerns are closed, especially remaining non-solicit wording and any continued use of “management” concepts. 3. Harmonise Deemed Offer Event and breach cure periods/cross-references: 10 vs 30 Business Days. 4. Confirm broad restraints are intentionally removed from the SSHA and will be captured, if needed, in individual employment agreements. 5. Confirm the deleted SSHA Harith-consent transfer restriction is adequately covered by the MOI restrictive conditions, pre-emption rights, and accession undertaking. 6. Reconcile MOI clause 23’s 75% Preference Shareholder approval threshold with Annexure A Part B’s 90% wording. 7. Confirm whether “not unreasonably withheld or delayed” on Harith consent to clause 5 amendments is acceptable to Harith and ordinary shareholders. 8. Confirm the MOI director competition deletion does not leave an unintended gap in conflicts/confidentiality protection. 9. Confirm all placeholder fields are completed before circulation/signature, including Preference Shareholder notice details, Andre email address, and any remaining [□] items. ## Calculations / PSSA dependencies - The MOI Preference Share Terms annexure is currently a summary table. Kristel’s comment says she prefers the full preference share terms per the PSSA, not only the summary. - The summary table shows three economic outcomes: - stay invested beyond 5 years + 1 day: 73% of Prime from day one, with prior 20% accruals/payments recalculated and excess clawed back; - holder exits early: 73% of Prime from day one, same retrospective recalculation/clawback; - company voluntary early redemption: 20%, no recalculation. - The SSHA fair market value clause now references the fair market value definition/formula in the Harith Aviation Subscription and Shareholders’ Agreement. That means any deemed offer/exit valuation depends on the Harith Aviation SSHA formula, not just Elysium’s standalone accounts. - Operational Shareholder Loan repayment for tax/admin costs is expressly subordinated/aligned to clause 11 of the PSSA and carved out from distribution prohibitions. Recommended position: do not approve the MOI annexure in summary form unless CDH confirms it precisely incorporates the PSSA. Prefer replacing Annexure B with the full PSSA preference share terms or adding a clear incorporation-by-reference with conflict precedence. ## Suggested reply / action checklist for Elmar 1. Ask CDH/ENS to produce a clean issues list closing the remaining comments, especially s8C, restraints, and deemed offer mechanics. 2. Tell counsel Elmar’s likely commercial position is: - avoid employment-linked share restrictions in the SSHA; - keep share transfer discipline through ordinary pre-emption/accession/MOI controls; - put employee restraints, if any, in individual employment agreements; - ensure the PSSA economics are reflected in full and consistently. 3. Request a revised clean + marked-up SSHA and MOI after counsel resolves: - 10 vs 30 Business Day cure periods; - 75% vs 90% Preference Shareholder threshold; - full preference share terms vs summary table; - any remaining placeholders. 4. Ask finance/tax to confirm the preference share table and any recalculation/clawback mechanics against the final PSSA model. 5. Ask legal to confirm signature readiness: correct parties/entities, Elysium RF status, Retiep/Retief spelling/entity details, subscription share table, preference share numbers/percentages, addresses/emails, and authority resolutions. 6. Do not send external acceptance until CDH/tax confirm the above in writing. ## Source notes from extracted comments SSHA comments reviewed: 15 comments, including Pieter/CDH/Kristel/ENS comments on s8C, deemed offer, restraints, disposal restrictions, and “Management Subscriber” wording. MOI comments reviewed: 5 comments, including CDH/ENS on pre-emption carve-out and director competition wording, and Kristel on pref share terms needing full PSSA terms. Local artifact: `/home/lucienne/.hermes/kanban/boards/mc-internal/workspaces/t_dfa309c4/MC-4564-heron-elysium-review-brief.md`

Controller action (2026-06-06T21:01:56+00:00): routed this document/review prep through Hermes Kanban mc-internal as t_dfa309c4 assigned to iris. MC remains visibility-only; no MC runtime/pickup/claim/send endpoint was used. Scope: prepare a brief/blocker from the listed attachment(s), append it back here, and take no external action/submission. Final decision/sign-off remains with Elmar.

Controller gate: Kanban prep t_dfa309c4 completed and Iris filed the SSHA + MOI consolidated-comments brief above. I moved this from `in_progress`/`kanban_active` to `waiting`; Luci prep is done and the remaining work is Elmar/CDH/tax sign-off. CTA: close the s8C/management wording point, harmonise deemed-offer cure periods, confirm transfer/pre-emption protections, accept or revise non-solicit/restraint architecture, and confirm the MOI preference-shareholder controls/economics match the PSSA.

Marked done from board — handled externally (was waiting).