Special terms and conditions for transaction advisory services

23.1 General terms and conditions

23.1.1. Financial advisory

These terms and conditions apply separately for services related to financial advisory in connection with capital raisings, acquisitions, disposals and mergers/demergers of companies (lead advisory services), due diligence services and valuation and modelling services, where the nature, scope and delivery of the Engagement is separately agreed in the Engagement Agreement.

The services do not include advice related to tax and VAT, accounting or regulatory issues, technical or legal matters that may be handled by other professional advisers.


23.1.2 Independence

Prior to accepting an Engagement, we will check whether there is a conflict of interest with respect to the Client, the target company or other third parties in a transaction and whether the Engagement will constitute dual representation or in another way be in conflict with respect to another Client. In cases where actual or potential conflicts of interest are discovered we may be prevented from accepting the Engagement.

In accordance with the ethical guidelines, we have implemented procedures for identifying situations where questions regarding independence may arise. However, we cannot be entirely sure that our procedures will identify all possible situations. If the Client becomes aware of a possible conflict of interest in connection with our delivery of the service, the Client is obliged to inform BDO immediately.

If a conflict of interest has been identified and we believe that by implementing appropriate measures we can safeguard the Client's interests in a satisfactory manner, we will inform the Client (irrespective of obligations to third parties), explain the measures we have implemented and obtain the Client's consent. However, circumstances may arise where the Client's position cannot be protected. In such cases, the Engagement may be terminated without it affecting our right to a fee for the work carried out by us up to and including the termination date for the Engagement.


23.1.3 Terms of reference

We may refer to the Client and our role in the transaction on a general and overarching basis in connection with the sale and marketing of our services, as well as when creating records in BDO's internal transaction databases and on our website.


23.1.4 Liability for supporting documentation and corporate decisions

The Client understands and agrees that information we receive from the Client or on behalf of the Client, from other parties involved in the transaction, or which we obtain or receive from other sources, may be essential for the quality of the services we provide. As a part of our work, we will assess whether the information is reasonable, but we will not, unless otherwise specifically agreed, undertake any form of verification of the correctness or completeness of the information or undertake or obtain any independent assessments of the business. In any event, we have no liability for any deficiencies and/or errors in the delivery of services to the Client that may be a result of information that has been obtained or received being incomplete, incorrect or not updated.

The Client is responsible for the content of materials for investors or third parties being correct, complete and not misleading. The Client is required to inform us immediately of any errors or incomplete items that have been communicated to BDO or others in company presentations, reports, tender documents or similar.

The Client is required to indemnify BDO for any loss arising from incorrect or incomplete information that BDO receives from the Client or its representatives, including, but not limited to, information communicated in Information memorandums, company presentations, due diligence reports, tender documents, etc. The indemnification is not contingent on negligence on the part of the Client or its representatives.

The Client is itself responsible for carrying out necessary and binding corporate resolutions in connection with the transaction in accordance with the law applicable at the time.


23.2 Lead advisory services

23.2.1 Restrictions on use of our models and reports

Spreadsheet models and any reports and presentations that may be created as part of the Engagement have been prepared to meet the needs expressed by the Client, company and or board of directors in connection with the transaction. The models and reports have only been prepared for this purpose and for internal use by the Client only, unless otherwise specifically agreed as part of the scope of the Engagement described in the Engagement Agreement. The exception may be appendices which may be prepared as part of the contractual framework in the transaction.

We assume no liability to anyone other than the Client for the content of reports, presentations and models.


23.2.2 Success fee

For Engagements where a success fee has been agreed, this will be calculated on the basis of the Enterprise Value corresponding to 100 per cent of the shares/assets of the company subject to the transaction, irrespective of the share that is actually disposed, acquired, merged, demerged or otherwise part of the transaction in another manner (100 per cent basis).

The Enterprise Value is defined as the value of the company on a cash and debt-free basis in the transaction and consists of the total value of (i) all the shares (equity), (ii) net liabilities, (iii) minority interests (if any) and (iv) preference capital (if any), plus other compensation in the form of ‟earn-outs" or similar, ref. the paragraph below.

Any future additional payments (earn-outs or similar) are to be included when calculating the Enterprise Value that will form the basis for the calculation of our success fee. In those instances where the transaction is not carried out as a sale of shares but as an asset sale, our success fee is to be calculated on the basis of the gross value of those assets in the transaction (without other deductions).

The success fee is due for payment upon completion of the transaction, without any assessment of whether BDO has performed all the services under the Engagement.

If no transaction is completed because the Client chooses to terminate the process before acceptance of an indicative offer, the signing of a letter of intent or a final offer, even though the Client and/or BDO has received an (indicative) offer at or above a pre-defined level, BDO is entitled to invoice the success fee on the basis of the highest (indicative) offer that has been received. If negotiations on a letter of intent do not succeed or the process is ended because of disagreement concerning other negotiation items later in the process, BDO is not entitled to invoice the success fee on this basis.

If a transaction (disposal, acquisition, merger/demerger or conveyance in another manner) occurs within 12 months after the Engagement was effectively terminated to a party BDO has identified in the transaction process, or through use of services provided by BDO during the Engagement, the transaction will be regarded as completed as a result of this Engagement and the success fee will be paid as set forth in the Engagement Agreement. However, the Client is not obliged to pay the success fee after the conclusion of the Engagement if the conclusion of the Engagement is due to BDO's material breach of the Engagement.


23.2.3 Limitation of liability

The Client will actively participate in the transaction process and will be responsible for all decisions. BDO will lead the process, act as the exclusive financial adviser and assist with necessary expertise and resources. We will not make decisions on behalf of the Client or guarantee completion of the transaction and we disclaim all liability for any losses that may arise on the basis of decisions that have been taken in the process and/or based on erroneous or incomplete information, irrespective of source.


23.2.4 Exclusivity

The Engagement is exclusive to BDO. The Client may not engage other financial advisers concerning the same transaction, unless BDO has given written consent. Neither may the Client itself perform services that fall under the Engagement nor complete the transaction on its own.


23.3 Due diligence services

23.3.1 Scope

Unless our instructions are later amended, our work will be restricted to the scope of work described in the Engagement Agreement. It is possible that there may be matters which you would consider material to your assessment of the transaction that we will not discover because they are outside our terms of reference.

Our findings shall not in any way constitute recommendations regarding completion of the Transaction. You are responsible for determining whether the scope of our work is sufficient for your purposes in the context of your wider due diligence.


23.3.2 Basis for our work

We will prepare our report from information supplied by and from discussions with the management of the target company and/or the auditor and/or accountant of the target company without verifying the information supplied and without performing audit procedures that would enable us to express an opinion on information included in our report. We will design our procedures to address all matters we believe to be significant within the scope described in the Engagement Agreement (as described in more detail in the relevant due diligence report).


23.3.3 Delivery

We will have no responsibility to update our report for events which take place after the date on which it has been issued.

Our timeline, our estimated fees and completion of our report presuppose that the information we require to carry out our work is made available in good order on a timely basis and that we are provided with satisfactory answers to our requests regarding the provided information.


23.4 Valuation and modelling services

23.4.1 Basis for our work

We will prepare our spreadsheet models and reports based on information received and conversations with the owners and/or management of the business or assets to be appraised.

We will supplement with our own information and materials (when considered appropriate) obtained through our own investigations. We will only use sources we consider reliable and credible.

We will not carry out any form of verification, due diligence, agreed upon audit procedures, control measures or audit measures according to generally accepted auditing practice.

Our review is intended to include all important matters as described in the scope in the Engagement Agreement.


23.5 Technical assistance

In those instances where BDO is the auditor of the Client, our assistance will be limited by the statutes and rules on other services delivered  to an audit client.

This means, among other things, that the Client defines and determines which assumptions shall form the basis for the appraisal and that the Client makes all decisions on values. Our assistance is limited to assisting with spreadsheet models and methodology as well as summarising the results in a report.