BULGARIA Law and Practice Contributed by: Yordan Naydenov, Mihail Vishanin and Hristian Gueorguiev, Boyanov & Co.
Meeting, including electing members of the Board of Directors or the Supervisory Board, which, in turn, elects the Managing Board’s members, adoption of the annual financial statements and distribution of dividends, amending the statutes of the public company, etc; • the holding of two-thirds of the votes present at the General Meeting enables a shareholder to make the decision to delist the public company from the regulated market subject to certain conditions; and • the holding of three-quarters of the votes present at the General Meeting enables a shareholder to make the decision to con - clude transactions which involve disposal or acquisition of a certain percentage of the company’s assets or enter into a joint venture contract. 6.6 Requirement to Obtain Financing In private M&A transactions, the securing of financing may be included in the transaction documents as a condition (condition precedent) to completion of the transaction. However, the sellers would rarely agree to such a condition. In public M&A transactions, the tender offer can be made only after providing an opportunity for full payment or exchange of the shares to the shareholders that have accepted the offer. Furthermore, the tender offer must contain the terms and conditions under which the offeror is to finance the acquisition of the shares and pro - vide proof of availability of the resources neces - sary for the purchase, or of the securities neces - sary for the exchange. 6.7 Types of Deal Security Measures Security measures in M&A transactions may be negotiated during any stage of the deal process, to the extent that they do not contradict the law
or morals. Outside the security measures which represent collaterals in the strict sense of that concept (such as participation bonds in the form of bank guarantees or pledges) and which are listed in the law, the parties may negotiate other provisions which provide certain security to one of the parties as to the safeguarding of its inter - est. Examples of such provisions are exclusiv - ity clauses, standstill obligations, break-up fees and non-solicitation provisions. 6.8 Additional Governance Rights If the shares in a company are held by at least two shareholders, additional governing rights may be negotiated in a shareholder agreement. Such rights may include the right to appoint a certain number of Board members (including members with certain functions, eg, CFO, COO, etc). The additional governance rights may comprise certain minimum quorum and majority require - ments (including veto rights) in the Boards and the General Meeting, which are higher than the requirements under the law. Most of those addi - tional rights, in order to be enforceable, must be replicated in the company’s by-laws (articles of association, deed of incorporation, statutes). However, not all additional governance rights may be replicated in the company’s by-laws, in which case only contractual remedies, such as liquidated damages, may be used to make them enforceable towards the counterparty to the shareholder agreement. 6.9 Voting by Proxy Voting by proxy in a General Meeting is allowed. The power of attorney must be issued in writing. The members of the Boards cannot represent a shareholder, except in a General Meeting of a public company where the shareholder has expressly stated how such shareholder wishes to vote on each item on the agenda. In addition to being issued in writing, the power of attor -
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