156/264 RELATED PARTY TRANSACTIONS Luxembourg law prescribes certain procedures for related party transactions with directors, and our articles of association will mandate that directors with a direct or indirect personal interest in any transaction that conflicts with the Company’s interest shall make that interest known and recorded in the board minutes and shall not participate in discussing and voting on such transaction. In addition, our articles of association will provide that any such conflict of interest must be reported to the next general meeting of shareholders of the Company prior to any resolution taking place at such meeting. Below is a summary of other related­party transactions. On March 24, 2016, we entered into a convertible note purchase agreement, pursuant to which, on April 1, 2016, we issued and sold Convertible Notes to, among others, Rivers Cross Trust, an entity wholly owned by Mr. McCarthy. The original principal amount purchased by Rivers Cross Trust was $174,952.66. In January 2018, we entered into an exchange agreement with, among others, Rivers Cross Trust, pursuant to which we exchanged the aggregate remaining Convertible Notes, plus accrued interest, for ordinary shares. Pursuant to this exchange agreement, subject to certain conditions, if we fail to list our ordinary shares on or prior to July 2, 2018, we have agreed to offer to each noteholder, including Rivers Cross Trust, the option to unwind the transaction such that we purchase back the ordinary shares that were issued to such noteholder pursuant to the exchange and we will issue such noteholder a new note that is materially identical to its note prior to the exchange. The Convertible Notes are described in further detail under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Indebtedness—Description of Convertible Notes.” During the year ended December 31, 2016, Messrs. Ek and Lorentzon purchased, through D.G.E. Investments and Rosello, respectively, entities indirectly wholly owned by them, 3,200,000 and 1,920,000 warrants, respectively, in the Company pursuant to subscription agreements. Each warrant was purchased for $5.76. Additionally, on July 13, 2017, Mr. Ek purchased, through D.G.E. Investments, 1,600,000 warrants in the Company pursuant to a subscription agreement. Each warrant was purchased for $6.23. The warrants are subject to adjustment upon certain corporate events. The warrants are described in further detail under “Management—Board of Directors Practices—Warrants.” On December 15, 2017, pursuant to the Tencent Transactions, D.G.E. Investments, an entity indirectly wholly owned by Mr. Ek, entered into an Investor Agreement with Spotify Technology S.A., TME, TME Hong Kong, Tencent, and Image Frame (collectively, the “Tencent Investors”). Pursuant to this agreement, D.G.E. Investments shall have the sole and exclusive right to vote, in its sole and absolute discretion, any of our securities beneficially owned by the Tencent Investors or their controlled affiliates on all proposals, resolutions, and other matters for which a vote, consent, or other approval (including by written consent) of the holders of our securities is sought or upon which such holders are otherwise entitled to vote or consent. After giving effect to the Share Split, our shareholders have authorized the issuance of up to 1,400,000,000 beneficiary certificates to shareholders of the Company without reserving to our existing shareholders a preemptive right to subscribe for the beneficiary certificates issued in the future. Our beneficiary certificates may be issued at a ratio of between one and 20 beneficiary certificates per ordinary share as determined by our board of directors or its delegate at the time of issuance. We have issued ten beneficiary certificates per ordinary share held of record (excluding warrants, options, and RSUs, as applicable) to entities beneficially owned by our founders, Daniel Ek and Martin Lorentzon, for a total of 379,201,200 beneficiary certificates. The beneficiary certificates carry no economic rights and are issued to provide the holders of such certificates additional voting rights. Each beneficiary certificate entitles its holder to one vote. The beneficiary certificates, subject to certain exceptions, are non­transferable and shall be automatically canceled for no consideration in the case of sale or transfer of the ordinary share to which they are linked. See “Description of Share Capital and Articles of Association.” On or prior to the effectiveness of the Registration Statement, we intend to enter into an indemnification agreement with each of our directors and senior management. The indemnification agreements and our articles of association will require us to indemnify our directors and officers to the fullest extent permitted by Luxembourg law. In addition, in the ordinary course of business, from time to time, we carry out other transactions and enter into other arrangements with other related parties, none of which are considered to be material. See Note 24 to our consolidated financial statements included elsewhere in this prospectus for additional information regarding related party transactions. 149